I’m going to quote the following poster here, because they say almost exactly* what my first response would be:
Here’s the thing. It’s all connected. Yes, the housing market was overinflated before austerity. But before austerity, people were still able to service that debt (even if doing so meant they were banking on a future with no problems, but that’s another issue). Austerity meant that debt is no longer servicable as-is, so one of two things happens. The house is lost, or cuts are made elsewhere to cover the housing costs.
By rights, the housing market should’ve depressed as a result of austerity, but circumstances combined to fuck that up (pardon my French). You had the large number of people already on the ladder who were terrified of negative equity (so didn’t want to sell at a loss), you had the housebuilders who didn’t want to build and sell at lower numbers because why would they want to give up their old margins, and there was the fact that demand had been outstripping supply for a number of years. And that’s just the domestic factors; if you look further afield, you’ll see austerity gave much greater buying power to international buyers which is what allowed certain markets coughLondoncough to remain inflated by foreign buyers using their now greater buying power to maximise their investment opportunities.
The goverment didn’t help with ‘Help To Buy’. In theory, should’ve helped people on the market because house price = borrower’s money + help to buy. In reality what happpened was the help to buy money got tacked on the other end of the deal, so what should’ve been ‘house price’ became ‘house price = house price + help to buy’.
This is, incidentally, the same problem of using the bank of mum and dad to buy a house. The buyers can’t afford the houses, the market should drop - but. The top of the market get the bank of mum and dad to chip in, so the houses do sell at those higher prices, so the market doesn’t drop and people who can’t get help are fucked (again, pardon my French).
the tl;dr, for this section is, there are a lot of forces continuing to inflate the housing market above where it should be.
Now, taxes. Big news - the UK does not have insanely high taxes. They’re pretty fair, as taxes go. The VAT increase has been swallowed with barely a blip on the scale. Rather, the problem with taxes is this:
When central government takes taxes, it has massively reduced the amount of money it then distributes around the country to local government. And I mean, massively. We’re talking millions on millions of pounds here. And you know why, don’t you - austerity.
This has two broad effects. One way councils have to deal with the lack of money coming in every year is by making efficiencies (or rather, cuts). They can’t afford everything, so they have to cut things to the bone to make them work with the money they have. The other way is to cover a certain amount of the shortfall by raising council tax. Not because they want to, not because they’re being greedy, but because they have to cover the shortfall. The only alternative to raising council tax is cutting services even further!
Now, you may think that council tax is insanely high - but that’s because central government hasn’t cut tax but has cut what local government gets. Why? Because they’re filling holes in their own books. Why? Because they bailed out the banks.
So you see, it comes back to austerity again.
If there was no austerity, if the local government and the public sector was still being properly funded centrally, local taxes wouldn’t be going up as much as they have, then there wouldn’t be a perception of ‘insanely high taxes’.
(I haven’t even touiched on the complicated issue of how the superrich can avoid paying taxes and how just getting one company to pay their tax bill would actually fill in far larger gaps in the budget than any increase on us plebs would).
tl;dr, Austerity was the wrong decision to make, it sucked then, it sucked now, and it will continue to suck as long as those in power keep trying to flush everything down the drain.
*Only difference being I wouldn’t phrase it as a question