One Banking Rule Locked a Generation Out of Housing. What Happens When It Goes?

Britain's housing crisis is a myth. Neil Woodford has run money for over 35 years, and in this episode he tests the UK housing market's most repeated story against 55 years of data: mortgage payments as a share of take-home pay are close to their long-run average, buying costs less per month than renting the same home, and real house prices have been falling for five years. So why can't young people buy? The average first-time buyer was 23 in 1960 and is 34 today. The answer is not affordability. It is a banking rule written after the financial crisis: capital requirements that make high loan-to-value mortgages uneconomic for banks to write. Nobody banned the 95% mortgage. It died of unprofitability, and UK mortgage approvals have run 40% below normal for 15 years. Then the investment question. Housebuilders trade at roughly 70p per pound of assets while the banks have re-rated back above book. Is the market right about the builders, or is it pricing a suppressed market as a dead one? Neil gives his position, what would change his mind, and what he is watching: the regulator's decision on loan-to-income caps, due within months.