There's much talk that Philip Hammond will use tomorrow's Budget to address the problem of high housing costs.

I have little doubt that high housing costs are, on balance, a blight upon the economy. What's less clear to me, though, is whether increased housebuilding alone is sufficient to greatly reduce them. I don't think it is. Jonathan Eley and Ian Mulheirn agree with me, whilst Jonn Elledge and James Gleeson disagree.

So, what would cut house prices, especially in expensive areas?

Teleportation, that's what. If we could beam ourselves from one place to another Star Trek-stylee, nobody would need to pay a fortune in rents in high-cost areas such as London or Cambridge. They could buy somewhere cheap and simply teleport to London for work or nights out. Houses in (say) Burnley would become close substitutes for ones in Brixton. Prices of the latter would thus slump. Problem solved.

Pedants will object that teleportation won't be developed anytime soon.

True. But my point isn't wholly fictitious. There's a precedent. A team of German researchers estimate that house prices in south east England fell by a third between 1899 and 1938 - a path roughly matched in several other developed countries. In the 30s, impecunious writers and artists lived in areas of London that only oligarchs and hedge fundies can afford today.

A big reason for this fall was an improvement in public transport. The opening up of the Metropolitan line, for example, allowed houses to be built miles out of London. These became substitutes for central London homes, with the result that prices of the latter fell.

You could read this as a story of increased supply forcing down prices. But it's also a story of how technical progress reduced prices. The availability of suburban housing meant workers no longer needed to live in central London, so prices there fell.

This poses the question: what chance is there of a repeat of this? I suppose it's possible that HS2 might make Birmingham more feasible for commuters as the Metropolitan line made Amersham. A more obvious possibility, of course, is the internet. This allows me to - in effect - teleport my labours into London from Rutland. If enough people were like me, London property prices would have fallen as we sold up to telecommute.

But this hasn't happened even years after it has been feasible.

Of course, it isn't technically possible for everyone; baristas and chambermaids can't work from home. I suspect, though, that there are other barriers to doing so, among them:

- Agglomeration benefits. People need to live in London to benefit from knowledge spillovers. Personally, I'm conflicted here. I know the data is consistent with Londoners benefiting from such effects. But my experience of London is that the idea of cities as serendipity engines in which great ideas emerge from chance meetings in cafes is just bollocks.

- Social capital. Young workers in particular need to build contacts so they learn of better job matches. They do this by physical proximity to others.

- Uncertainty. Living near where there are lots of potential job opportunities gives you flexibility, which is necessary if your job is at risk. I on the other hand am tied to my job.

- Domination. Even if working from home is technically feasible, bosses might block it because they want direct oversight of their underlings. As Stephen Marglin famously pointed out (pdf), capitalist hierarchies can emerge and persist because they benefit bosses rather than because of their technical superiority.

- Time lags. Erik Brynjolfsson points out (pdf) that it can take decades for technical changes to affect working practices. For example although electric power was available in the 1890s most US factories did not make best use of it until the 1920s. This was because it only raised productivity once bosses learned that motors on every machine allowed them to re-organize production. Maybe we're living through a time lag now, and telecommuting will eventually become more common. As it does so, London's house prices should fall.

This, of course, is not really a story about house prices. It's a story about technology. On the one hand, this has unintended effects: the builders of the Metropolitan didn't intend to cut house prices. On the other hand, though, it's effects upon the economy are constrained by social, institutional and cultural factors. Technology alone doesn't determine our future.