Professor Philip Lane:

I do not think there can be any doubt that if one has additional capacity to enter that segment - new builds only, so it is a limited segment of the overall housing market - that is going to be the impact effect. Let me emphasise that that should moderate over time as it triggers a supply response, but the impact effect, by easing the ability of that cohort to buy homes, will of course drive up prices. Part of the mechanism is that by driving up prices, a strong feature is to trigger a supply response. That is part of what the building industry called for.