How will the reforms affect mortgages?

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House prices originally got so far out of reach because banks were able to create vast quantities of new money and pump it into mortgages (see this video).

Removing the power of banks to create money would make it harder for this to happen in the future, so it’s unlikely that house prices will increase further. But they’re unlikely to fall much either, as people simply don’t like to sell houses for a loss, so most people tend to sit and ‘wait for the market to recover’. So with average house prices being pretty much fixed, our only option is to wait for salaries to catch up. But don’t forget that home ownership is already out of reach for anyone who doesn’t own a home right now. That situation is unlikely to change under the existing system.

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