Saturday, Apr 03, 2010
Boomers getting bashed
Guardian: Property market exposes the priced out generation
Decent article on the theme of the younger generation being shafted by the older boomer crows. Shame it trumpets PricedOut.org.uk, which is pretty much a dead site, rather than HPC.
Posted by little professor @ 01:16 AM (1994 views) Add Comment
27 Comments
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1. mark wadsworth said...
"No one speaks for first-time buyers," says Griffiths, who is concerned that government policy is locked in a stranglehold by lenders and developers: banks, building societies, landlords, estate agents and surveyors employ hundreds of PRs and lobbyists to push an agenda of high house prices and low taxes on property profits.
He's attacking symptoms, not causes.
While a lot of those groups did very well during the house price boom (and he forgot to mention Right To Buyers), they are all suffering during the downturn. What he should be attacking is the whole economic-political system I refer to as "Home-Owner-Ism". Ultimately, nobody locks the government in a stranglehold apart from us, the voters.
And we, collectively, want more reckless lending (that's why we begrudgingly bailed out the banks and shout hooray when a bank announces it will start lending at 90% LTV again), less new development (The Hallowed Greenbelt - which turns home builders into land price speculators), higher rents (as inflated by Housing Benefit), we want estate agents to quote us fancy prices when we are trying to sell; we imagine that high house prices make us richer (when as a matter of fact and logic they make us poorer) and we want low property taxes (hence the outcry that ensues if ever anybody is brave enough to call for taxes on property values, i.e. Uncle Vince's 'Mansion Tax').
PS, I don't mean "we the housepricecrashers", I mean "the majority of voters in this benighted isle".
2. dbc reed said...
What Mark W said.
Also: Priced out's comments about the language used in papers ("Hope for house price rises" )are to the point.All the more pointed because the papers get into a hopeless contradiction summed up by their unofficial slogan : Wage rises bad; house price rises good.But The Guardian is sticking to a very anti Home Ownerist line and has had a very good war.Patrick Collinson is the most bluntly anti, whereas Ashley Seager and Larry Elliott are more subtle and complex.
Priced out and HPC should be thinking of putting up election candidates on a single plank platform "House prices down ! " in areas of extortionate over-valuation and/or multi-occupation renting.The mainstream parties will be losing votes over corruption and all round walliness so will be mightily pissed off to lose even a couple of hundred votes to an HPC /PO
candidate.
3. tenant super said...
"It wants to take some of the pressure off demand, by removing tax breaks for buy-to-let speculation and limiting multiple home ownership and holiday homes, while improving supply by easing planning controls, building more social housing and encouraging developers to free up landbanks."
Let's accept LVT isn't going to happen in the forseeable future and look at these proposals with that resignation.
... removing tax breaks for buy-to-let speculation
Very good idea
while improving supply by easing planning controls,
Excellent idea
building more social housing and encouraging developers to free up landbanks.
Again all good..
But I take exception to "and limiting multiple home ownership and holiday homes". Firstly, I think the other three proposals will remove the need to limit multiple home ownership anyway. But really this proposal is tricky to enforce. One of the most common multiple home ownerships arrangements is a family home in an area with nice schools and so on, like Bath or Harrrogate and then a London flat for hubby to use Mon -Fri. If the family home is in her name and flat is in his name and both are occupied, there's not much you can do. Or do you limit the ownership per married couple and create yet another disincentive to marry?
Holiday homes in places like the West Country might be an easier target since you can see it is a second home even if they're in separate names (based on occupation) but you are going to have to define full time occupation (rather than just a holiday home) by a certain number of nights of the year the home is used by the owner and that will entail armies of beauracrats snooping to check up. Also for a lot of those wealthy city folk, adding a punitive tax on second homes isn't going to be much of a deterrent.
4. Dutch_renter said...
Lol, from one of te comments underneath:
"At least it is good to see 'priced-out.co.uk' getting a look-in here; the other site dedicated to the cause of lower house prices, 'housepricecrash.co.uk', is populated uniformly by people who owned homes at the top of the market and sold them to rent in a cynical attempt to pick-up a bargain at the bottom that they all felt was coming. Such people are worse than the BTL parasites that our foul government gives tax breaks to in an effort to keep houses out of the hands of those who simply want 'homes' (as opposed to investment vehicles)..."
5. will said...
One constantly forgotten point is that not only have average house prices risen hugely in recent years, but the size of an average home has reduced significantly over the same period. Thirty years ago an average home was a three bed semi, and now a one and a half bed flat.
We have all been taken in by the biggest fraud in history. Those who own at the top may feel smug but who will they sell their homes to?
Property investors from abroad I fear.
6. letthemfall said...
This article just rehearses the same old tired discussion that levels the blame on an arbitrary age band of the population, really no better than blaming it all on immigrants. The current housing problem is all about bubbles and inequality, both a result of govt allowing the obsession with housing in this country to get out of control through a flood of credit and transfers of wealth.
Round my way there are some ridiculously expensive houses, some of which are owned by boomers, but more by people born pre-1945 with a fair few by post-boomers - kiddy toys in the garden, etc. It is not an age thing: it's financial inequality, with more of the nation's wealth in the hands of fewer and fewer. Multiple home ownership is just one expression of this, and I agree that this should be stopped, probably through punitive taxation.
Don't blame the old, many of whom are hard up: blame the rich and the politics that allowed them to get that way at the expense of the rest of the nation.
7. mr g said...
Seeing that we are constantly being demonised, I think we boomers should now adopt the "victim culture" of the "I want it and want it now" generation who can't hack it when things get tough and they can't have it now.
Additionally I think we should form an unholy alliance with the other bete noires of some HPC'ers, the BTL'ers.
All said with irony to highlight the nonsense of boomer bashing, you should to start to "know your enemy" namely the banks, financial sector and politicians.
8. happy mondays said...
Mr g said... you should start to "know your enemy" namely the banks, financial sector and politicians....
well said..Adding also, Corporations / big business, bent politicians,war crimes..It needs to be stopped, it can be seen & felt by all, & festers down to our youth..! & so the cycle begins again..
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10. braindeed said...
Grumpy @ 6 said...
All said with irony to highlight the nonsense of boomer bashing, you should to start to "know your enemy" namely the banks, financial sector and politicians.
Wrong. The real enemy is the ignorance that believes high prices equals wealth......that's the electorates fault..
'The generation who can't hack it when things get tough ' are being shafted by us oldies. I live in a two hundred year old listed house worth seven figures (no mortgage), but its just adobe, and I still think the economy is being run for spivs, with the compliance of old gits who think their four walls is money in the bank.It's a HOUSE. Shame on you all.
11. wally said...
mmm.. divide and conquer - young/old, public/private
12. mark wadsworth said...
Braindeed: but its just adobe,
as in Acrobat or as in mud and straw?
13. layers said...
@10 Wally - exactly, they have finally found something to divide and conquer this site!
When did all of this 'blame the boomers' BS start here? Grow up, the lot of you, this total BS.
14. contrails are not a conspiracy (formerly npnh) said...
@layers
What, like the conspiraloons vs the sane you mean?
BS you say? Riiiiiiiiight.
15. powerofnow said...
@tenant super: But I take exception to "and limiting multiple home ownership and holiday homes".....
I take exception to this uninformed support for economic oppression of poor yet exquisitely beautiful coastal communities. Without a disincentive to speculate in the land which these communities sit on, places like St Ives in Cornwall will be have no community left. Local businesses can't afford the rents and those people who live here can't afford the houses.
A value needs to be placed on community, COMMUNITY needs to be supported by regulation and taxation so that we can defend ourselves against lazy thinking of people who do not really understand what is happening outside of the metropolitan bubble.
Just because you can't see a solution to HOW to fix the problem doesn't mean you have to support the continuation of the problem.
16. tenant super said...
Power of now, I agree that measures need to be taken to reduce the local earnings to house prices ratio in places like Cornwall.
My concern about attacking multiple ownership is that it is one more step towards forcing me to shack up with my other half because people invariably mean 'more than one home per couple'. It is a forced moderation of people's private living arrangements. What if the mythical housing shortage becomes a real shortage? Will there be a legal restriction on house size according to household composition (for every spare bedroom there's a financial penalty)? Penalising second ownership sets the moral precedent for regulating living arrangements.
If a home counts as a holiday home if it is unoccupied for more than say 100 days in a year, people will just arrange to spend more time there or send family and friends round, and how would you possibly monitor this? In Ireland there is a 200 euro tax on second home ownership but it relies almost solely on self-disclosure. My suspicion is that any small punitive tax will be no disuasion and a tax large enough to act as a deterrent will be avoided.
If you took the 0.2% or whatever it was of the greenbelt needed to build a million new homes that would be a good start towards a solution.
17. str 2007 said...
powerofnow
St.Ives benefits from a wonderful bit of coastline and some beautifl little cottages built by previous generations. (Mainly in Downalong) but also in other roads close the harbour and town centre.
IMO th eobvious holiday lets shouldn't have been sold off to private individuals but should be owned by a Council run holding company in which locals can buy shares.
This would allow all locals to benefit directly from the accomodation element (arguably the largest part) of holiday makers expenditure.
These cottages should be reserved for holiday makers IMO and more development carried out just back from the coast for locals.
The above goes for all holiday areas in the UK.
Essentially having seen what has happened I don't agree with the policy of the private rental sector, be it for holiday or BTL.
18. str 2007 said...
TS
(If you took the 0.2% or whatever it was of the greenbelt needed to build a million new homes that would be a good start towards a solution)
But what's to stop BTLers and property flippers moving straight in on that aswell.
I agree more land should be developed and be available for private individuals and small developers (at sensible rates).
A property search of a 10 mile radius of me (South Hampshire) turns up virtually no building plots. That IMO is unacceptable, there should always be plots available in every town and village.
But firstly some sort of taxes and restrictions need to be in lace for multiple property ownership for individuals over the age of 18. And property shouldn't be available for ownership to anyone under the age of 18. (that would stop me with 3 kids buying them each a house).
19. mark wadsworth said...
TS, the idea of some sort of arbitrary limits on how many homes you can own is intellectually questionable and in practice unenforceable.
1. Why should it be any difference between Family A owning one large detached house; and Family B owning a smaller house and a cottage by the sea (assuming the total value of either family's homes being the same)?
2. As others have pointed out above, you could just put different properties in different names, and what about properties owned by a limited company or a partnership? To whom do they get allocated?
3. As I've said before, while BTLers certainly pay less tax on their income and gains as do e.g. businesses or employees, but they still pay more tax than owner-occupiers. For sure, let's reduce taxes on productive activity and increase them on property income and gains, but far more importantly, let's increase taxes on owner-occupation as well (and reduce taxes on productive activity even further so that the average guy does not lose out).
4. Some people quite like renting rather than buying, if they're intending to move away or elsewhere in the near future. Ten per cent of all properties being rented privately looks 'about right' to me.
So as STR says, with tourist areas, the best way for a council to raise money is just to allow more properties to be built - whether they are council owned/let; or bought by hotel or B&B businesses is neither here nor there; and if they are all bought as second homes, so be it, the council just has to allow yet more to be built.
The only rational answers to all this (which, as has been pointed out to me often enough, will never happen under a Home-Owner-Ist majority) is more liberal planning; LVT; more council housing and ending bank bail-outs/introducing sensible mortgage rationing. Everything else is just tinkering with symptoms not causes.
And as to the 'pressure on local services' doolally, how about vouchers for schools (another key bit of the MW manifesto)? If it really happened that our population shifted to more attractive areas, then those schools would spring up out of nowhere. Do people worry about 'pressure on local supermarkets' or 'pressure on local pubs' if more people move to an area? No of course not, supermarkets and pubs just take on a few more staff (i.e. some of the people who have just moved there) and nobody notices any particular fall in service levels, and quite possibly it improves.
PS, I'm glad to see that the statistic "0.2% of farmland = one million new homes" is gaining traction.
20. mander said...
Priced Out not the strongest organization but it is good because it gets its views in the media. I think the problem lies with the people who own one property and these are most of the home owners. The fact that they have got their house prices inflated should not be considered inteligent economics but something their children will have to pay for and therefore they should vote for Vince this time arround in the coming election.
21. tenant super said...
"The only rational answers to all this (which, as has been pointed out to me often enough, will never happen under a Home-Owner-Ist majority) is more liberal planning; LVT; more council housing and ending bank bail-outs/introducing sensible mortgage rationing. Everything else is just tinkering with symptoms not causes"
Yes, but as it isn't going to happen (well the LVT bit at least), I think the next best thing would be increasing taxation on BTL (which answers str 2007 "But what's to stop BTLers and property flippers moving straight in on that as well". I have no argument against people owning multiple properties for their own use as this is self-limiting (most people will own no more than 2 in this country). However,I think there may be a strong case for a landlord levy to deter BTL, a non-productive and exploitative business. I know they pay more tax than owner occupiers but it still ain't enough.
Given that the government's recent report on the private rental sector paints BTL as part of the solution rather than the problem (their designation of cause and effect being completely inverted and therefore their conclusions and reality being woefully estranged) and therefore suggests even more tax breaks for BTL, the chances of this being addressed are marginally above the probability of Walt Disney's cryogenically frozen head being thawed out and taking over from Ben Bernanke.
22. alan_540 said...
Don't know why they're espousing 5x average salary as affordable... not much of a pressure group!
23. mark wadsworth said...
TS, enough with the BTL bashing already. Part of the reason for the increase in owner-occupation since the 1960 was rent controls, which made it unprofitable to be a landlord. So we had more owner-occupation and hence more Home-Owner-Ists. And hiking taxes on BTLers is about as pointless as hiking taxes on banks or bankers - it's tackling symptoms not causes. LVT would tackle causes, not symptoms.
By reverse logic, what if we went on a collective buyer's strike for a couple of decades? Sooner or later we'd be back to most people renting privately, so more people would win from shifting to LVT than would lose and we'd be in with a fighting chance
I suppose the key message is "Rising house prices makes us poorer, not richer" and then we can work from there.
24. tenant super said...
Is it worth treating symptoms when we know the patient is not yet ready to accept the diagnosis and therefore the cure?
I agree with you about causes and the action that needs to be undertaken but think this is going to be a very slow and painful education. I do actually believe the uk home owner ist philosophy will change in my lifetime. In Ireland, the people are learning very quickly and there is already a palpable consensus (reflected in most media reporting) that a return to rising prices would be bad. Even those in nequity get this and the banks have re-structured some 30,000 mortgages this year alone. We seem to be uniquely dim in this respect!
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27. Rustynuts said...
Triple council tax, second home taxes and all the other devices suggested, would only hurt the ordinary folk who have worked hard to get that weekend retreat, while the high-rollers would hardly bat an eyelid. The answer has to be to free up more of our precious countryside for affordable (prefferably council controlled) housing. Unfortunately, the government doesn`t want to tackle the problem, and the opposition are idealogically opposed to tinkering with the housing status quo.