With the housing green paper, the government has at last recognised that an important factor behind Britain’s high house prices is a lack of supply. It is less clear that it has grasped the fact that high house prices are supported by the twin pressures of supply and demand. A coherent policy would address both blades of the scissors.

Much housing is under-taxed. Someone who buys shares has to pay income tax on the dividends and possibly capital gains tax on the capital appreciation. Someone who buys a house is able to live in it paying council tax but no other taxes. This creates a strong incentive for people to save by buying housing rather than by buying shares, with the consequence that house prices are driven up. People who bought their houses cheaply some years ago enjoy capital gains that are not, from the point of view of the country as a whole, additional saving, but simply a transfer from those who do not yet own houses to those who do.