Thursday, Jun 07, 2007
A 20 year housing boom??????
The Guardian: Britain faces 20-year house boom that will split nation, says report
The long housing boom is causing growing economic and social problems because it has made housing unaffordable for many people, particularly the young, according to a report from a new thinktank, launched today.
Strong demand and limited supply of housing means the problem of affordability is likely to get much worse over the next two decades, said the National Housing and Planning Advice Unit.
The report forecasts that by 2026 the cheapest 25% of houses will cost 10 times the average earnings of the poorest 25% of people. At the moment these houses cost seven times earnings; a decade ago they were only four times.
Posted by downsized and waiting @ 06:52 AM (150 views) Add Comment
10 Comments
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1. japanese uncle said...
Reminds me of the Third Reich said to propsper for millennium by Adlof H.
Propably London vicinity will remain quite expensive relative to other areas in UK even after the collapse of this bubble, particularly 'brand' areas such as Chelsea, Kensington, Notting Hill, as they are thiriving 'off shore'. But the entire rest of the country will be a wholly different story after the potential 60% reduction in the house prices, if Britain treads the similar path as Japan's. Many parts of Tokyo still remain very expensive albeit half the price they used to be, while in the countryside, you can buy fairly reasonable detached house in a reasonable neighborhood with just GBP 40,000, which used to cost GBP150,000 at the peak circa 1990, just reflecting the present level of inward investment in each area.
2. uncle chris said...
There are more than enough homes in this country sitting empty, so I don't see the case for increasing the supply above what is already proposed. We have hundreds (and I mean hundreds) of expensive new builds sitting empty in this area (10 mile radius), with no likellhood of being occupied as they are generally priced at 10-20 times the average local wage. I just wonder when people become so desperate that they head out to the West Country and start occupying empty holiday homes - which can make up 70% of some communities. Personally I wouldn't blame young British families if they decided to squat in properties owned by individuals who already have somewhere to live. A little bit of civil disorder may bring some sense to the establishment.
3. Orwell said...
'Disorder', Chris?
How does one define what that is?
4. Ides Of March said...
A little bit of civil disorder. It's happened in Britain before. The type of people who started the poll tax riots hopefully wouldn't get involved, it should be the type of thing Uncle Chris is suggesting. Gordon Brown, I think, is beginning to take note of the inequalities that his policies have (predictably) brought about. If he can (privately) admit his mistake and pull the country back into shape, he will achieve his place in history for the right reasons, rather than the debacle he seems to be headed for.
5. confused76 said...
Just let them talk and - more importantly - let them build... now the govt has launched the latest great idea, a new agency. you know what? reminds me of the hips fiasco.
but... but... in the intentions of the govt the agency could be just a spin / PR machine to sell the idea that we have to build more to the public. as long as that secures the winning votes at the next elections...
let me remind you of the key governmental f@*k ups:
- scrap any basic tenant protection to push rented property value up (at the time govt officially supported home ownership... Alastair Campbell would say "yes we supported home ownership, and the BTL investors are "home owners", arent they?")
- steal from pensions (stealth tax) and remove protections against being f@*ked up by the pension funds
- lower interest rates and create the property bubble
NOW:
- put the spin machine in reverse and support home ownership & affordability
- raise interest rates
NEXT:
- build more and flood the market with properties no one wants
- add to the rental supply (no one will want to own that sh@t)
- crash the BTL market
- then the rest of the property market
- last have a good, long recession
6. confused76 said...
get more from your government..
"Demand for housing is growing and unless action is taken, pressure on the market will only get worse," said Professor Stephen Nickell, chair of the NHPAU.
http://www.telegraph.co.uk/news/main.jhtml;jsessionid=JAFQJ4LK0C31TQFIQMFCFF4AVCBQYIV0?xml=/news/2007/06/07/nhouse107.xml
this is the spin I was talking about... build... build...
Sellers should pay stamp duty to help first-time buyers, says Hain
http://money.guardian.co.uk/property/firsttimebuyers/story/0,,2097159,00.html
How can this be a solution... any person with basic knowledge of economics should know that the stamp duty is ALREADY paid by the seller!! Because the supply is inelastic and the demand is very elastic. Otherwise why in the world would EA lobby for the scrapping of the stamp duty?
7. royston said...
Gordon Brown's preferred solution is to build our way out of this housing mess. I must admit, while I blame him for a lot of things, I don't blame him for that. While it is clear that something must be done, taking any steps to deliberately pop the bubble would be political suicide. Anyway, isn't it curious that this new think tank should make exactly that policy recommendation? Increasing the supply in the medium to long term will help deflate the housing bubble over a prolonged period, which is the best way out that politicians could hope for? So, look forward to decades of steadily declining house prices going forward!
8. royston said...
confused76,
Peter Hain is a prize idiot!
9. shipbuilder said...
Confused76, you're exactly right - these jokers are simply a quango to reinforce the sentiment that houses will just keep rising, to keep the bubble going as long as possible, while simultaneously making it look as if the government are doing something about it. As i've said before, IRs and the economy are irrelevant - the battle is for what the public believe will happen. The average Joe will do literally anything and pay any amount to get on the ladder if he believes prices will keep rising.
10. Wage Slave said...
It's not a bad thing to be building houses. I live in the south east and I can't point to any masses of empty properties around where I live.
It won't happen quick enough to stop the bubble bursting though. Don't forget that all these housebuilding projects will have to do battle with the planning system first. By the time it gets through that hurdle there will be the NIMBYS legal action to deal with. It'll be years before anything happens - if at all.
I'll be impressed if this quango can get the planning system to deliver properties that people actually want to live in, rather than properties that people have to live in because there's no other choice. But I won't be holding my breath !