Keyworker Homes - A bad idea?

On the face of it, the Guardian Headline, "Prescott plan to provide £60,000 homes" seems to offer a lot, especially to someone like me, who would need a hefty mortgage just to get my first step on the housing ladder.

But something doesn't quite feel right about it. I did not do much economics, but I remember the basics, the laws of supply and demand. It seems to me that if the demand and supply curve, say for, 2 bedroom terraced in Yeovil is like this:


Then if something happened that gave all potential purchasers an extra £20,000 spending power, then all that would happen is that the chart would shift £20,000 to the right, meaning that it would still be as difficult to buy a house.


Even if it was only given to "keyworkers" (a term I abhore, incidentally, why would I, being in the public sector be considered more important than say, a barman?. Then some of the demand curve would shift to the right (as they can afford more) then all that would mean is that "keyworkers" would find it slightly easier to afford a home while everyone else would have more difficulty.


What's the way to solve it? Instead of moving the demand curve, move the supply, we need more houses, forget about the nimbys, go and build them. Of course the local authorities around here are opposed to that. Guess I'll rent for a while yet.