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Why Britain Today Is Home To A Major Housing Disaster

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http://www.heraldscotland.com/comment/iain-macwhirter/why-britain-today-is-home-to-a-major-housing-disaster-1.1064368

Under Labour, house prices tripled, thanks to low interest rates, easy credit and tax breaks given to property owners. Rents rose in line. Labour allowed house-building to dwindle and actually had a policy of demolishing houses in many areas to drive up prices.

Gordon Brown gave tax incentives to buy-to-let landlords who snapped up the few available houses and made indecent profits from a captive rental market. Labour also continued the Tory policy of council house sales, which destroyed the social housing stock and has left 160,000 Scots on the waiting list.

Housing is a disaster area in Britain. Many of our most intractable social problems are down to the lack of affordable housing, which traps people on benefits and destroys the incentive to work. An entire underclass is left stranded on bleak council estates which they can’t leave. Those who do make it into work often find themselves burdened by rents or mortgages they cannot afford and are trapped in a form of debt peonage. Meanwhile, the Government is using taxpayers’ money to subsidise high house prices by paying the mortgage interest of hundreds of thousands of often middle class families who can’t afford them any more. All the political parties seem to believe house prices must not be allowed to fall under any circumstances. The Bank of England has slashed interest rates to a 300-year low in a bid to increase asset prices.

Yet the only solution to the housing benefit crisis, and to getting people off benefits and into work and out of debt, is to reduce the cost of housing. Government needs to build more houses, public and private; tax land speculation; and end the tax breaks given to home ownership and buy-to-let. Along with tighter lending controls, this would rapidly bring house prices down to earth. Older people would have an incentive to sell houses that are too large for them – Britain has the lowest house occupancy rate in Europe. Young families would be able to buy without taking on ruinous debts. Everyone (except landlords) would have more to spend in the shops, which would help pull us out of recession.

Full article here:

http://www.heraldscotland.com/comment/iain-macwhirter/why-britain-today-is-home-to-a-major-housing-disaster-1.1064368

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Iain Macwhirter has published similar articles, he is right on the ball here again.

I might just have to drop him an email to thank him for being brave enough to put across such a sensible point of view.

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Many of our most intractable social problems are down to the lack of affordable housing, which traps people on benefits and destroys the incentive to work.

Yes, yes, a thousand times yes.

Tinkering around the edges of the benefit system is always a losing proposition. Get the incentives right however, and it will sort itself out.

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Iain Macwhirter has published similar articles, he is right on the ball here again.

The average bloke down the pubs been saying it since 2003 also, nothing more then stating the obvious ... it just shows how f'en out of touch those we elect are.

Pity bloke down the pub keeps voting for one of the 3 main ones.

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Iain Macwhirter has published similar articles, he is right on the ball here again.

The average bloke down the pubs been saying it since 2003 also, nothing more then stating the obvious ... it just shows how f'en out of touch those we elect are.

Pity bloke down the pub keeps voting for one of the 3 main ones.

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I agree with that article fully. Any idiot can see what the problem is

So why are all of the main political parties avoiding tacking the problem? The answer is because the problem is so vast and so inextricably bound up with our economy as a whole.

Hell, real estate and debt is our economy.

If they were to really tackle the housing problem, they know full-well our entire house-of-cards economy would collapse.

What a f*cking mess

Edited by tallguy

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It felt like a relief to read that, let's hope this is the start of some sanity.

Nope, he's a lone voice crying in the wilderness.

Good to read, but the banksters wouldn't let the main politicos start trotting out such things.

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+10

The full article should be on the front page of every news paper for a month ,at last some one in the media without a VI and its good to see him lay bare the folly of the last 20 odd years and the real reason this country is up sh it creek with out a paddle until housing costs come back to reality

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http://www.heraldscotland.com/comment/iain-macwhirter/why-britain-today-is-home-to-a-major-housing-disaster-1.1064368

"Under Labour, house prices tripled, thanks to low interest rates, easy credit and tax breaks given to property owners. Rents rose in line"

#

But they didn't.

In 99 I bought a BTL in Basingstoke for 43K I rented it out at 450pm.

In 2010 a flat in the same block sold for 135K and the (asking) rent in the block is now 725.

So that's a 210% price increase and a 60% rent increase over 11 years.

By no stretch of the imagination are these two figures "in line"

tim

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I agree with that article fully. Any idiot can see what the problem is

So why are all of the main political parties avoiding tacking the problem? The answer is because the problem is so vast and so inextricably bound up with our economy as a whole.

No. It's because putting in a policy of lower house prices will lose you the next election (and probably the two after that).

tim

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+10

The full article should be on the front page of every news paper for a month ,at last some one in the media without a VI and its good to see him lay bare the folly of the last 20 odd years and the real reason this country is up sh it creek with out a paddle until housing costs come back to reality

+ extra 10.

They know, we know, about time people in the know started speaking the real truth instead of skirting around what is an impending housing crisis.

Edited by winkie

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+10

The full article should be on the front page of every news paper for a month ,at last some one in the media without a VI and its good to see him lay bare the folly of the last 20 odd years and the real reason this country is up sh it creek with out a paddle until housing costs come back to reality

Might forward the link to the Daily Diana - I am sure they could get a few front pages out of it ?!

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Might forward the link to the Daily Diana - I am sure they could get a few front pages out of it ?!

This is what ive been saying for years, even before the banking crisis, if they want the economy to move up again the only solution is a mass project in socail housing in this country, if not then economically tjhe UK is finished.

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This is all true, BUT the damage has already been done, banks have made the loans on ''assets" which should normally be tumbling in price, and for prices to fall as much as they should either the banks suffer or the population suffers.

We've already seen that Banks cannot be allowed to fail, in the opinion of the Government,(though to be fair lots of people would suffer, not just the banks, nice though that image is), and to go the other route, and let there be mass evictions, courts flooded, people dispossessed would likely lead to mass civil disturbance and suffering (I'm talking about a lot more than there is already)

It seems the Government is trying to keep the middle ground, talking up prices, hoping they slip slowly or maybe even keep the crumbling edifice up (UK Gov's approach to the property market frequently reminds my of the Disney Jungle Book film when I was a kid, trying to hold up a collapsing ancient temple that's falling to pieces over your head!) :unsure:

Edited by madpenguin

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#

But they didn't.

In 99 I bought a BTL in Basingstoke for 43K I rented it out at 450pm.

In 2010 a flat in the same block sold for 135K and the (asking) rent in the block is now 725.

So that's a 210% price increase and a 60% rent increase over 11 years.

By no stretch of the imagination are these two figures "in line"

tim

As much as I hate to say it, Tim's right on this one (I can only comment for the South East, particularly London). The example I gave yesterday:

1998 - £48k to buy, or £115 a week to rent

2010 - £215k to buy, or £170 a week to rent

Rents have no way soared more that house prices.

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As much as I hate to say it, Tim's right on this one (I can only comment for the South East, particularly London). The example I gave yesterday:

1998 - £48k to buy, or £115 a week to rent

2010 - £215k to buy, or £170 a week to rent

Rents have no way soared more that house prices.

when i bought it was far cheaper to buy than rent. Owning brings extra costs and decreased mobility. it should be cheaper than renting. if you rent anything it's ore expensive than buying outright. Rents have gone up by more than they should but it's still much cheaper than buying. the time to buy will be when it's cheaper - not making the misake that interest rates will so low forever

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Excellent article, thanks for posting it.

Why can't the mainstream English, LONDON media see the same thing?! It's so bleeding obvious!!

Another thread is discussing why housing in Europe is so much more affordable than here. I've just read this post there, and unfortunately, in the recent past, I too am considering this possibility:

People in Britain, as a nation, generally speaking, are greedy, selfish, mentally inept, devoid of scruples and family values, and to top it off, we are manic gamblers.

This differentiates us from most of Europe.

(...)

Could it be that the majority does understand that high housing costs are a bad thing - collectively - but as long as their own personal property is going up, they keep quiet? Or even go NIMBY?

Edited by Tired of Waiting

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Forgive me if this a daft question... what does the author of the article mean by the following line?

Britain has the lowest house occupancy rate in Europe

Does he mean "lowest number of occupants per house"?

:unsure:

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or that most of us now live in poxy shoebox flats?

That's going to be the next big scandal - there's nowhere near enough 3 and 4 bed property left.

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Why Britain today is home to a major housing disaster

Published on 28 Oct 2010

Many things get me annoyed.

Computer passwords, for example. Why have a system of digital security that depends on people sticking post-it notes all over their computers revealing their most sensitive privacy codes? The lack of way-marking on Scottish hills, which bewilders visitors from Europe and causes needless erosion on some of my favourite mountains. The way news reports always express elation when house prices go up and gloom when they go down. However, nothing, but nothing, gets me more throw-at-the-screen furious than the pig-headed myopia of the London media.

All week we've been hearing about the "social cleansing" that will follow the Government's cap on housing benefits. Labour MPs forecast tens of thousands of ragged refugees sleeping under bridges when housing benefit is capped at £400 a week. Now, this Tory cap is arbitrary and crude, as we've come to expect from George Osborne. But what no-one seems to realise, at least in the BBC, is that this story is completely irrelevant in Scotland. Here the cap on housing benefit will, according to the Scottish Government, affect only six families in the whole country. This is because hardly anyone in Scotland, in or out of work, pays more than £20,000 a year in rent.

What will happen here is a complex mix of benefit changes that could throw thousands of Scots in the private rented sector into debt in a year. From next year, private tenants will get considerably less in housing benefit (local housing allowance) than the rent they actually pay to their landlords – around £40 a month less. Which doesn't sound a great deal, but since many weren't getting their rent paid in full before anyway, because of an earlier reform, many will find they are down by £100 a month, according to Shelter Scotland.

The Scottish Government says 97% of housing benefit claimants in the private sector will be affected – around 50,000 people. And, as if that wasn't enough, people on Jobseeker's Allowance will suffer a further cut of 10% in housing benefit after the first year. Finally, housing benefit is to rise with consumer price index (CPI) rather than retail price index (RPI) inflation.

Yes, it's complicated; it's meant to be. The devil is always in the detail. And it has nothing to do with the £400 cap, which only matters in London. Cynics like me suspect the Government has deliberately focused this £400 figure for presentational purposes – to suggest to working voters that everyone on housing benefit is living the life of Riley. The media rarely bother to look beyond the M25 so they do the Government's work for them. Labour leader Ed Miliband fell for it too. At PMQs, he was left appearing to defend a system that gives some people more than £20,000 a year in housing benefit alone.

Everyone accepts that housing benefit is crazy and needs reform. The cost doubled under Labour from £10bn to nearly £20bn, which is unsustainable. Nor is it acceptable that millions of young working families, who cannot afford to live in cities such as Glasgow and Edinburgh, are effectively subsidising people who don't work but can. And this happens here, even though no-one gets £400 a week. However, this isn't the claimants' fault, but the politicians', primarily Labour's. It pumped up the property bubble during its time in office and made housing unaffordable for many people either to buy or rent. Half a million Scots are dependent on housing benefit – the vast majority of them actually in work

Under Labour, house prices tripled, thanks to low interest rates, easy credit and tax breaks given to property owners. Rents rose in line. Labour allowed house-building to dwindle and actually had a policy of demolishing houses in many areas to drive up prices.

Gordon Brown gave tax incentives to buy-to-let landlords who snapped up the few available houses and made indecent profits from a captive rental market. Labour also continued the Tory policy of council house sales, which destroyed the social housing stock and has left 160,000 Scots on the waiting list.

Housing is a disaster area in Britain. Many of our most intractable social problems are down to the lack of affordable housing, which traps people on benefits and destroys the incentive to work. An entire underclass is left stranded on bleak council estates which they can't leave. Those who do make it into work often find themselves burdened by rents or mortgages they cannot afford and are trapped in a form of debt peonage. Meanwhile, the Government is using taxpayers' money to subsidise high house prices by paying the mortgage interest of hundreds of thousands of often middle class families who can't afford them any more. All the political parties seem to believe house prices must not be allowed to fall under any circumstances. The Bank of England has slashed interest rates to a 300-year low in a bid to increase asset prices.

Yet the only solution to the housing benefit crisis, and to getting people off benefits and into work and out of debt, is to reduce the cost of housing. Government needs to build more houses, public and private; tax land speculation; and end the tax breaks given to home ownership and buy-to-let. Along with tighter lending controls, this would rapidly bring house prices down to earth. Older people would have an incentive to sell houses that are too large for them – Britain has the lowest house occupancy rate in Europe. Young families would be able to buy without taking on ruinous debts. Everyone (except landlords) would have more to spend in the shops, which would help pull us out of recession.

It didn't take a genius to work out that doubling the price of houses every five years was unsustainable. Historians of this epoch will be mystified that political leaders actually based their policy on the presumption that house prices always go up. They will shake their heads at the huge amounts of public money poured into schemes that made the system even worse. But what will mystify commentators in the future is that so few of us got angry enough about housing to do anything about it. Well, I'm fuming and I don't care who knows it.

http://www.heraldsco...aster-1.1064368

Edited by Redhat Sly

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He appears to have missed the part about Scots electing Labour governments for most of years; without their votes Britain would have had Tory governments instead.

Edited by MarkG

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  • 146 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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