Price, as you know, is determined by supply and demand. And that brings us to house prices.

These days prices are so high, that things for the first time buyer are nigh on impossible, and it seems hard to believe price can go on defying gravity forever.

But supposing supply is even lower, that the level of housing stock means supply still struggles to meet demand. Under those circumstances, price, of course, goes up.

Now, Kate Barker, she of the Bank of England Monetary Policy Committee member, not to mention guru on the UK’s shortage of housing – has spoken again.

In an interview with Bloomberg, she said: “The fundamental problem of housing supply will indeed take a long time to solve. It’s unlikely we will see it solved in the southeast.”

Ms Barker said: “We are going to have to think hard about the planning system. We all feel very crowded today, and one reason might be that we have built within urban boundaries. We’ve also been tending to live in places where the space is smaller than it used to be because of expensive land.’‘

© Investment & Business News 2013