Monday, Feb 22, 2010
Is it just me or are the media + readers really so dumb?
Southern Daily Echo: Southampton homes too expensive for young families
"Southampton Test MP Alan Whitehead said one of the key ways of increasing affordable housing stock was by increasing the availability of properties that could be part-bought and part-rented, from housing associations." Noooooo. Increase IRs to where they should be, thereby increasing supply of stock on the market.
Posted by voiceofreason @ 08:51 PM (1776 views) Add Comment
30 Comments
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1. drewster said...
If those housing associations are going to build more homes, then yes, it will increase the supply.
At least if the HA builds homes, BTL landlords can't buy them.
2. quiet guy said...
'A spokeswoman said: “Our schemes are now open to households earning up to £60,000 who wouldn’t otherwise be able to afford to buy"'
If the threshold to qualify for assistance with buying property is £60K houshold income, then the vast majority of couples starting a family are priced out. What sort of country have we become?
3. Cool_hand said...
Part buy / part rent does nothing to address the problem, it only fuels the inflation IMO.
4. mark wadsworth said...
Yes, people are that dumb. But problem with increasing IR's is, it only hits people with big mortgages, i.e. recent purchasers (glossing over MEWers).
Whereas Land Value Tax on the other hand, would (in relative terms) affect people with no mortgages more, who are probably better able to afford it (and yes, I've heard all about old widows on low pensions in the family mansion, bo-o-oring) and hence Land Value Tax would have a much better overall positive impact on supply (as well as enabling other taxes to be reduced, take your pick which).
QG, we have become a Home-Owner-Ist country, as I keep saying. This is not an unfortunate side effect, this is all intentional.
5. Crunchy said...
HPC, a free market website.
A dinosaur or a teased wild sabre tooth tiger?
6. cynicalsoothsayer said...
It's also temporary. The current state of the housing market is unsustainable.
7. Millaise said...
Political parties pander to the old and the elderly because they are far more likely to vote. If there were a sensible, single-issue party concerning housing, I would be very likely to donate my pencil cross to it. The robbed, impecunious younger half of Britain need some figure to rally around, to harness their collective power. Numpties like this MP,who either wilfully ignore or completely fail to understand the problem, cannot be re-elected. Mark Wadsworth for PM?
8. freemanphil said...
When Southampton is too expensive, you know we are in trouble! However, the new infusion of fluoride into Southampton "water" supply should provide the soma the "authorities need to avoid revolt. But this pisses me off, coz I come from Hampshire and some of my family suffer this.
9. This comment has been removed as it was found to be in breach of our Blog Policies.
10. Ingermany said...
Unsustainable... definitely.
It has only been propped up this long by the government borrowing nearly a trillion pounds to bail out over-stretched mortgage payers (just so they could boast fewer repossessions than the tories). The sooner the govt goes bankrupt the better, because it will mean a return to market forces. It's just a shame that defence, education and the nhs will be included in the collateral damage from this folly.
11. voiceofreason said...
Mark, "Home-Owner-Ist" is purely a side effect of being a country run by and for the banks.
Think about how land value tax would affect the bank's usurious business models.
That will provide an insight into the likelihood of a successful LVT introduction.
12. debtfree said...
The answer is to simply give up work, stop paying tax and drain the system via benefits.
What is the point of working if you can't afford a home for your family on a half decent salary ?
I have no intention of working (paying tax into the system) until the cost of housing is affordable again. The final straw was bailing out the banks with tax payers money and then banks paying bonuses to employees.
Well, they can suck my plums and pay my rent from now on, council tax and everything else cause I'm not taking part anymore in this stupid game.
13. mytimeisnigh said...
Housing Associations round by me have been buying up new build flats and undercutting buy to let landlord's rent. Anything that has a go at buy to let scum, I'm happy with.
14. Neil B said...
Part ownership is a rediculous idea thought up by someone who has more money than brains. The reason that people cannot own a property is because they dont earn enough money to be able to afford a mortgage. In part ownership schemes you still have to pay rent on the share youre not mortgaging. Where do they get the money from? Printing money out of thin air doesnt apply to members of the public!
15. bystander said...
.........but mytimeisnigh I thought that new builds were too small and badly built, amazing how many U-turns this government can make. It's no wonder the country is going to sh1te, the political class, or as the yanks like to call them, lawmakers, are all dizzy as hell
16. happy mondays said...
@ debtfree, i like your style..if only the rest of the nation would take your approach...Exept the sucking plums bit...lol, We are a country of PLUMS
17. Ndg said...
The water in Southampton is not so good since they started fluoridation there a few years back. You'll need a good water filtration system if you move there. Shame. I liked Southampton.
18. jallan said...
@ debtfree, I feel the same way, I relised a few years ago that no matter how hard I work, the two main things that people work for, a pension and a property were unabtainable. All work has to offer me is a bit of pocket money to buy trivial things until I am to old to work, at which point I will be a poverty stricken pensioner in rented accomodation. This is why so many people in this country choose not to work.
19. str 2007 said...
This is my patch so I can add something here.
The article makes out Winchester is more affordable than Southampton. It isn't atall. These figures are based on the earnings of the local population.
I'm not sure if the ratio is between average price or average repayment.
Sandra Ridley MP who makes out she cares about the situation is a total NIMBY who is in the process of opposing new housing development. Note in the article she talks of using the existing empty houses across the country.
In itself a good point but I've seen nothing from her (other than that comment) to take any action. Her real motivation is not having more houses built.
I also not that her expenses (while were on the subject of Sandra Ridley) were £159,636. The highest out of 9 local MP's for 2008. Although most of the MP's managed to claim in excess of £100k. I'm sorry but a secretary and office with staionery shouldn't add up to more than £50k and 2 trips to London with subsitance shouldn't be more than £100-120 per week or £5-6k per annum.
So I digress, this article, typically, doesn't give any figures, but does highlight a terrible situation where by between Banks and Investors the local population are getting priced out.
There has been a large influx of people from Poland to the area which has added pressure.
Some locals might say - coming here taking our jobs.
But I'm with Jimmy Carr on that one. If they've come here not being able to speak the language and taken your job, then you must have been cr*p.
And I can't stand this part buy part share nonsense. You can build a detatached 4 bed house with garage for £100k (ex land cost) and 3/4 bed terraced town house with an integral garage would obviously come out less than that.
Why would you rent 1/2 a house from someone else when it would cost the same (it has to) as having 1/2 your mortgage for the whole thing on interest only. Which personally I don't agree with as houses should be affordable to the vast majority.
But what do you do .............??
20. str 2007 said...
P4AC
The flouride in the water is to help combat the lack of NHS dentists LOL.
Go on then, have you got a flouride in water link for me to watch ?
21. 51ck-6-51x said...
Voice said, "Think about how land value tax would affect the bank's usurious business models."
- Could you expand?
I would've thought that banks would be happy to have LVT, so long as it replaced other taxes they were paying. Are you referring to empty properties, as I'm sure the banks could secure themselves some kind of waiver on properties which lie empty between repossession and release from their books if they wanted to - mainly under the guise of 'not forcing asset sales'. Other property on their books would either have LVT due by the owner (mortgaged) or the tax would price itself into the market (leases).
22. jack c said...
@str 2007 - off topic, have now replied to your mail of last week.
23. hpsceptic said...
The solution *is* for IRs to rise (and for "special liquidity" schemes to end).
24. mark wadsworth said...
Voice Of Reason said: "Mark, "Home-Owner-Ist" is purely a side effect of being a country run by and for the banks. Think about how land value tax would affect the bank's usurious business models. That will provide an insight into the likelihood of a successful LVT introduction."
When talking about "banks", let us not confuse two distinct groups:
(a) 'bonus hungry mortgage salesmen and RMBS repackagers' (who run the bank for their own benefit) and
(b) 'the shareholders in the bank' (for whose benefit it is supposed to be run).
Group (a) have every interest in ever increasing house prices, as it makes it easy for them to earn oodles of cash at little risk (and they oppose ALL taxes, but especially LVT). So there is a lot of evidence to say that the economy (and especially the USA economy) is run for the benefit of BANKERS.
Group (b) have, to be fair, suffered quite badly from the credit crunch, credit bubbles are not in their medium or long term interests and they know it. So the economy is NOT run for the benefit of BANK SHAREHOLDERS.
So why wouldn't shareholders support LVT (especially bank shareholders), remembering always that in the long run, LVT will replace taxes on corporate profits as well? There appears to be popular support for punitive taxes on bonuses and a Tobin tax (however misguided these are, in practice IMHO) so why is there no popular support for a simple tax shift that will chop these fellows off at the knees?
To answer my own question, people will go along with Home-Owner-Ist policies like bank bailouts etc, because they know (in their heart of hearts) that they need an inflated banking system to keep house prices inflated.
25. hpsceptic said...
I am seeing increased supply In my area (Mid Sussex) already. Some aspirant sellers are trying to rent out their houses hoping for a better selling price in six months time. It won't happen. They are asking to much and will be forced to lower the price eventually.
26. hpsceptic said...
I meant "too much".
27. hpsceptic said...
The main point here is that the BoE has propped up the market artificially.
28. hpsceptic said...
All the special schemes (liquidity, mortgage guarantee) mislead sellers as well as buyers. Market signals are distorted.
Typical case in point:
We viewed a detached house to rent in Crowborough (£1150/month). The landlord cannot sell (at £380,000), so she wants to rent out the property for six months until "property prices improve".
For her, the current state of affairs is as good as it gets. It will not get better. Sooner or later, she (like all housing bulls) will capitulate.
29. 51ck-6-51x said...
hpsceptic said, "...£1150/month ...she cannot sell at £380,000"
Why not tell her that in the area rental yields are around 5% (I think, but you can confirm and plug in*) and that therefore she is valuing her home at £276,000.
Of course she may say something along the lines of I am undervaluing it in rental terms simply to get it let.
* i.e.
100% * monthsPerYear * monthlyRent / yield%
100 * 12 * 1150 / 5 = 276000.
30. voiceofreason said...
As MW says, bankers will oppose LVT as it competes for consumer's wallet space with their interest charges.
So let's play a hypothetical scenario.
Imagine the banker's ideal end game whereby all the population would take out the largest possible debt and pay the maximum interest they could afford without starving.
In other words, the whole populace would be in monetary enslavement to the owners of the capital.
But come to think of it, the largest land owners are the baby boomers who have the most equity and pay the least interest. So maybe the banks wouldn't have such cause for concern after all.