ONE of the main of laws of economics is the law of supply and demand, that is if supply is reduced or demand increases the price of the item rises. I am therefore puzzled as to why the price of houses always goes up, even more than the rate of inflation.

Since I do not believe that demand is constantly rising, or that supply is reducing all the time, I suspect that the building societies and estate agents, who have a monopoly in advising and fixing prices for clients, also have a vested interest in ensuring that the price trend is upwards.

I also find it hard to understand why monthly figures of house prices are published by the building societies themselves and why they are accepted as part of any interest rate change decision made by the Bank of England.

So why do house prices go up in defiance of the laws of supply and demand?

DEREK RYDER,

Ainsworth Road, Bury.