Thursday, Jun 19, 2008
Labour attempting to prop up the property bubble
Times online: Britain's social housing industry suggests £1bn spree on empty stock
The group representing Britain's social housing industry is in talks with the Government to free £1 billion of public money to help to bail out the new homes market.
The funds would be used to buy tens of thousands of mostly inner-city flats and family homes at a heavy discount from beleaguered housebuilders.
Posted by sold out @ 06:30 AM (1048 views) Add Comment
20 Comments
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1. uncle tom said...
More gesture politics - will have about as much impact as a fortnight's activity by the BTLers at the height of the boom.
Hopefully, the government's inability to actually get anything done will prevent too much taxpayer's money from being wasted.
2. mark wadsworth said...
Big Numbers! As Uncle Tom says, £1 billion = 5,000 overpriced flats @ £200,000. Plus, this being Nulab, the money will never materialise.
3. sosoon said...
The implications of adopting this policy will affect developers for years. It’s a short-term fix that will create a long-term problem. Who would buy onto a new estate until sufficient stock had been sold privately?
I thought somehow developers were not reducing their pricing in new development so as to preserve future margins, selling to government, local councils or housing association will be more damaging to their businesses than selling privately at cost
I know Barrat have been selling stock of to housing associations for some time now.
4. str 2007 said...
I agree Sosoon
Who in their right mind will risk buying a new property in the future if the possibility exists that next door could become social housing.
5. nubbers said...
As a student, I used to live in some badly designed council flats in Hulme, Manchester, nicknamed the Bullrings. These have since been knocked down and replaced by much better housing.
Now the government propose recreating badly designed social housing by buying up developments that were only designed with a view to parting fools with their money.
6. uncle chris said...
I can just imagine the despair of the eejits who bought a 2-bed "exectuive" shoebox at the top of the market. If this goes through, then there is a chance that their development will go downhill rapidly. It must be horrible to make your way up and down graffiti-clad stairs, or worrying about what you might find in the lift, or being kept up all night with an impromptu drug and alcohol fuelled party downstairs. And if you are BTL in these blocks, your investment will lose even more money (i) because no one wants to rent there anymore and (ii) because the government purchase prices will appear (or should do) in the Land Registry figures, thus dragging down the valuation on the BTL property.
7. Sid Public said...
This probably isn't as bad an idea as we're are making out. Since councils can't afford to make much social housing anymore it makes sense to me to buy up unfinished housing projects.The alternative living in a country thats full of half-finished housing for the next 20 years.
Unfortunately the latter is actually most likely the case as the government has borrowed more money than we have...
8. Urine Trouble said...
I have seen new build flats for sale in Alsager on the Staffordshire / Cheshire border. They started at £139,950 about a year ago then went down to £99,950 and have now gone up to either £139,950 or £119,950 can't rembember. These are all flats above shops on the edge of a now largley ex council estate where most houses are around the £120,000 mark and local earnings for school leavers and 20 somethings ranges from £10,000 to £13,000 at these prices they are overpriced at £59,950. Flats like these should be selling in the mid to late £30,000 at most and to top it off they are within a stones throw of a ammunition factory, IMO a possible terror or bomb target, it would go up like a Chinese fireworks factory!
9. quiet guy said...
I understand and sympathise with the comments posted so far but would like to pose a question.
Do we want to build social housing or not?
Personally speaking, I would like to see more social housing even though I have always rented privately and will probably keep doing so. In comparison with some of the governments other pet projects such as ID cards and centralised NHS databases, this looks like a relatively useful way of spending taxpayers money. It's not a perfect solution but social housing makes more sense than buying for some people.
10. tyrellcorporation said...
Quiet Guy, I'd like to see zero taxation on earnings up to £10k so people could actually be in a position to free themselves from state control and give themselves some dignity. They could then afford to rent a flat off their own endeavours - IMO this is much better for them that forcing people to queue like communist serfs for a degrading handout. Social housing should be for people who are are in a desperate situation; a safety net. A guy I know earns £26k, has a great job running a gym at a local energy company and has been in a very nice council flat for over 20 years paying £46 a week! that can't be right.
We want less state intervention NOT MORE.
11. hpwatcher said...
Those tw@ts [uk government] don't have any money....
12. uncle tom said...
quiet guy,
The problem you've spotted is the appalling reputation social housing has gained. In the eyes of many (quite reasonable) people, social housing is equated with crime, vandalism and feral fatherless children.
Developers have been falling over themselves to avoid having to include a social housing element in their schemes, and when they have no option, go to great lengths to hide the fact from prospective purchasers.
You could call it social Apartheid, but the fact is that people are greatly deterred from buying a new property if it's going to be next door to a social tenant.
For some reason though, this seems to be less of an issue with older properties.
13. nubbers said...
Social housing is great - we really need to move away from the concept that you HAVE to buy. Just look at other countries like Denmark, where you can rent nice non privately owned flats, that are well designed and create pleasant communities. The problem here is that social housing creates ghettos because so much of it was very badly designed and because they are only for the desperate.
I really would hate to live in some of these flats that were build at the height of the property boom, where the buyers were likely to buy to let without even seeing the development first. Somehow I suspect that these developments are going to be the next generation of problem flats.
14. harold said...
It's a backdoor government bailout, plain and simple.
15. denzil said...
Ok, so the taxpayer has to bail out Northern Rock and its high-risk GCSE grade business model and now we have to do the same with housebuilders. The people whom I really feel sorry for are those that scrimped and saved in order to get there foot on the ladder, who may find that their neighbours are simply living there at the council and taxpayers expense.
As for the bad press "social housing" or more precisely social housing tenents get, there is little smoke without fire. The majority of decent folk are sadly let down by a minority of anti-social bone idle scum who seem intent on making the life of those around them miserable.
16. str 2007 said...
@nubbers
Wouldn't it be far better that we have sensibly priced property in the first place that gives everyone a chance of owning there own place which would ultimately mean they wouldn't rely on the state for housing into their retirement.
Yes I accept there are some hopeless cases, but with the motivation of genuinely owning their own home wouldn't this give some families the get up and go they need to get themselves to work.
Ultimately it has to be better for the community.
I rent privately as my TAG suggests and don't like the stigma attached to it (although amusing in current state of affairs) I would hate and be de-motivated by living in a hand out. I don't see why other people would be made to feel happy by being housed on the State.
17. dude said...
Housing policy in this country is a joke. Everyone is encouraged to buy, we have moron TV telling us a lick of paint will gain you thousands, and a disgusting social policy that says sell off all those nasty council houses and life will be rosy. The Tories started it, and the labour muppets haven't reversed it.
Add to that our planning policy that means you can't build much needed homes, lest you upset the value of the houses currently on the edge of town by disturbing their views, and you have a recipe for disaster.
I agree that we need to build more (many more) homes. But if you can't even stick a wind farm on the neighbouring hill because some upset (4x4-driving?) numpty doesn't like it there is no hope for this country.
It's getting more and more like the US where the middle-class self interest far outweighs the needs of the many. Until that view changes the inequalities and selfishness will remain.
The answer -- build more social hosing, yet. That will take some of the strain off the private rented sector and help reduce housing costs all round. Remember, housing should be to live in, and be reasonable, and available to all those that want it at a price affordable to all. Fail to do that and you just perpetuate a society of winners and losers, as we have now. The thought of that persisting is a God-awful prospect.
18. str 2007 said...
Dude
If enough good houses were built (they're not expensive - it's the land) then we wouldn't have a need for social housing or private landlords (as they're only in it for capital gains anyway ie speculation).
19. Davip said...
I imagine that all the people on here that are hooting for social housing don't live near any and have never had to live in any, or indeed encountered the sort of people that inhabit them.
My parents rented on a council estate in Battersea, in London, only 200 yds from posh Chelsea. The estate was also the same distance from Battersea police station. In the seven years I lived there I never saw a single police officer on the beat -- not one. Yet, when I went across the bridge into Chelsea, there were coppers on most every street. Law for the wealthy, and the poor(er) can fend for themselves. The people who live on these estates -- and in Battersea, I surely lived on one of the better ones in the country -- know this, and it is reflected in the behaviour that occurs. In the 6 months before I finally left, I saw the following, all in broad daylight: a child savaged by an unleashed bull terrier outside our house (whose owner simply unhinged it from the child and walked away); people openly dealing and taking drugs not 4 yards from our front door; the owner of the corner shop held-up at gunpoint for cigarettes; chavs on scooters ram-raiding the garages attached to the flats for their contents -- and setting fire to them when they were empty; gangs of youths trying to kick the doors of the flats in or pelting the occupants with stones if they ventured into their gardens.
This is what life is like in 'social' housing. What should be a temporary safety net for those in need is a breeding ground for the worst elements of our society who are given financial encouragement by the State to create yet more copies of themselves. There's little doubt that we all become more conservative with advancing years, but I used to think that Thatcher and the Tories did this country a tremendous disservice in selling-off our social housing to its occupants. No more. The best thing we can do is tear all of these things down because they are in large part the source of all that ails our society.
I moved briefly to Milton Keynes before coming to the US, where I am now. MK was the same story -- beautifiul, small Bucks villages runined by multiple council estates, in our case just 500 yards away. Cars in the village set on fire, gangs of marauding teens at night attacking members of the public, even the local Spar the scene of an armed robbery.
I am watching the house price crash in the UK with some interest -- I might even return if prices fall to the level where I can afford to buy -- but only in an area far from social housing. and in the UK there is always the danger that some idiot council wil plonk a chav-infested hell-hole right on your front doorstep.
I miss my home, but here in the US things are very different -- for all this country's problems, people here have a sense of self- and communal-respect long-gone from much of Britain.
Prices are tumbling here too. I might stay...
20. Letsgetreadytotumble said...
@Davip,
Well said. With the economic turmoil around the corner, how are we going to afford the welfare state?