I'm confused by the assertion that home ownership "diverts finance away from productive uses". This implies that there is a fixed amount of capital available in the UK economy and a lot of it is wasted by people buying existing houses from their current owners. Yet, in the sale/ purchase of a house no capital is used (excluding transaction costs). The buyer receives a house, the seller receives the purchase price, which can be used for productive investment. In principle, this isn't any different from people buying equities in the secondary market on margin.