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Housing Inaffordability Survey

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Very interesting paper which nails the causes of unaffordable housing, its all down to regulation of land use designed to combat "urban sprawl"

http://www.demographia.com/dhi.pdf

This paper goes through all markets in the developed world and shows that unafordability rises hand in hand with regulation to stop the spread of cities. Most interesting is the case of major cities which in Australia have gone from very affordable to impossible to afford as regulation has been put into effect to create greenbelt type policies ...

This is the best thing I have seen on the subject ...

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Very interesting paper which nails the causes of unaffordable housing, its all down to regulation of land use designed to combat "urban sprawl"

http://www.demographia.com/dhi.pdf

This paper goes through all markets in the developed world and shows that unafordability rises hand in hand with regulation to stop the spread of cities. Most interesting is the case of major cities which in Australia have gone from very affordable to impossible to afford as regulation has been put into effect to create greenbelt type policies ...

This is the best thing I have seen on the subject ...

nothing is impossible to afford if you have a strong banking sector, cleverly crafting "products" to ensure even the dead can afford a nice city centre flat.

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Here is an interesting nugget from the report

The Barker Report of Land Use Planning, commissioned by the Blair Labour government, found that residential land with planning permission was 400 times the value of agricultural land that lacks planning permission in the London Exurbs (Southeast England, outside London).

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Very interesting paper which nails the causes of unaffordable housing, its all down to regulation of land use designed to combat "urban sprawl"

http://www.demographia.com/dhi.pdf

This paper goes through all markets in the developed world and shows that unafordability rises hand in hand with regulation to stop the spread of cities. Most interesting is the case of major cities which in Australia have gone from very affordable to impossible to afford as regulation has been put into effect to create greenbelt type policies ...

This is the best thing I have seen on the subject ...

Great link catsick. Thanks for posting it. Planning restrictions here in the south-east of England are a major cause of high housing costs, along with loose finance, tax breaks, housing benefits for BTLs, etc. We need to lobby against all of them. Besides, we need better housing too, in terms of quality and size. The housing shortage around here meant that any cr@p would sell.

"United Kingdom: Housing in the United Kingdom remains severely unaffordable, which is consistent with its long history of more restrictive national land use policies.8
The Organization forEconomic Co-operation and Development has recommended that the United Kingdom reassess its land use policies to free the supply constraints that have driven up housing prices (see Section 3)"
(Page 16)

(...)

"OECD Call to "Ease Supply Restraints:" A report on international housing markets by the Organization for Economic Co-operation and Development (OECD) expressed concern about planning regulations and their role in driving up prices and increasing price volatility, recommending that nations:
"Increase responsiveness of new housing supply to market demand. Countries should reassess licensing procedures that limit new housing starts and reconsider land-use regulations that unduly prevent development. More responsive supply can limit price volatility, excessive price increases and encourage labour mobility." (OECD)
The OECD singled out Australia and the United Kingdom, recommending the need to ease land use restrictions because of their price inflation impacts. As this Demographia International Housing Affordability Survey indicates, the majority of metropolitan markets in Australia and the United Kingdom are severely unaffordable, while the others are seriously unaffordable."
(Page 5)
Edited by Tired of Waiting

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Looks like a promo for developers to get rid of already lax planning laws. I'm not sure that is the problem faced in the US.

Any mention of credit at all?

Indeed, its ********. Unlimited land availability didn't stop prices going crazy in US and Australia.

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Indeed, its ********. Unlimited land availability didn't stop prices going crazy in US and Australia.

I think what the report is really saying is that planning policies are forcing us to build small cramped houses on postage stamp sized plots.

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Indeed, its ********. Unlimited land availability didn't stop prices going crazy in US and Australia.

Unlimited land for residential building availability didn't stop prices going crazy in the US. But there was only one reason for that boom in the US - cheap and subprime mortgages. Now that that has disappeared, we the see rightful correction in house prices in the US.

Here in the UK we also had cheap mortgages and 125% LTVs boosting house prices. But it hasn't fallen as much as in the US because of the constrained land for new buildings regulations that we have in the UK.

Introducing more lax planning regulations in the UK, especially cities, will mean supply will increase, and therefore the supply-demand equilibrium will return to normal (especially in London) and prices will come down.

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I think what the report is really saying is that planning policies are forcing us to build small cramped houses on postage stamp sized plots.

Yep.

Or that planning policies are forcing us to live in small cramped houses on postage stamp sized plots and pay 2 arms and 2 legs for it, since we'll need to work for 25 years to pay for it. Actually, 4 arms and 4 legs, since we need double income to afford it.

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Unlimited land for residential building availability didn't stop prices going crazy in the US. But there was only one reason for that boom in the US - cheap and subprime mortgages. Now that that has disappeared, we the see rightful correction in house prices in the US.

Here in the UK we also had cheap mortgages and 125% LTVs boosting house prices. But it hasn't fallen as much as in the US because of the constrained land for new buildings regulations that we have in the UK.

Introducing more lax planning regulations in the UK, especially cities, will mean supply will increase, and therefore the supply-demand equilibrium will return to normal (especially in London) and prices will come down.

Exactly.

Good post.

It is really mind boggling that people don't get that.

Actually I think people do get it. It is too obvious. I think there must be other factors behind their "disagreement", like vested interest, or idyllic visions of the countryside (green pleasant land), Elgar! :lol: , the BBC, etc. After all, the dominant culture tends to be the culture of the dominant classes, and the silly serfs just buy into it. They just beg for housing from M'Lords - now Councils. Sad.

Edited by Tired of Waiting

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Very interesting paper which nails the causes of unaffordable housing, its all down to regulation of land use designed to combat "urban sprawl"

http://www.demographia.com/dhi.pdf

This paper goes through all markets in the developed world and shows that unafordability rises hand in hand with regulation to stop the spread of cities. Most interesting is the case of major cities which in Australia have gone from very affordable to impossible to afford as regulation has been put into effect to create greenbelt type policies ...

This is the best thing I have seen on the subject ...

This is just an abuse of statistics.

We've had planning restrictions for 40 years, we've only had unaordable housing for 10.

tim

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This is just an abuse of statistics.

We've had planning restrictions for 40 years, we've only had unaordable housing for 10.

tim

There are many factors affecting house prices: financing, planning, taxes, LHA to BTL, etc. In the mid 90s, inflation and interest rates went up considerably, crashing house prices. But that doesn't mean that finances are the only factor affecting prices.

Besides, in the south and south-east of England there is an acute housing shortage. We didn't have the construction boom that many northern cities had, helping bring housing costs down in the north. Here prices are still near peak levels, unfortunately.

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Very interesting paper which nails the causes of unaffordable housing, its all down to regulation of land use designed to combat "urban sprawl"

http://www.demographia.com/dhi.pdf

This paper goes through all markets in the developed world and shows that unafordability rises hand in hand with regulation to stop the spread of cities. Most interesting is the case of major cities which in Australia have gone from very affordable to impossible to afford as regulation has been put into effect to create greenbelt type policies ...

This is the best thing I have seen on the subject ...

Unaffordable due to stupid asking prices (they still ask for the stupid prices because the used all their equity on holidays and cars).

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Yep.

Or that planning policies are forcing us to live in small cramped houses on postage stamp sized plots and pay 2 arms and 2 legs for it, since we'll need to work for 25 years to pay for it. Actually, 4 arms and 4 legs, since we need double income to afford it.

Purely down to the over supply of cheap credit.

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Purely down to the over supply of cheap credit.

Undoubtedly the over supply of cheap credit was a major cause, and probably the strongest short term cause, but not the only cause. We also had tax incentives, LHA for landlords, and decades of planning blockage, leaving us with by far the worst housing stock amongst all developed countries in the world.

Planning blockage has been the strongest long-term, structural problem affecting, not only the quantity, but also the quality and size of our houses.

And totally self-inflicted. Mainly due to collective stupidity and NIMBYs' selfishness. Just unbelievable.

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Purely down to the over supply of cheap credit.

+1

If people are allowed to borrow 6 times their salary, then the average house will end up 6 times the average salary. Now most banks are sensibly restricting lending to 3 times a person's salary, prices will eventually fall to around this level.

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+1

If people are allowed to borrow 6 times their salary, then the average house will end up 6 times the average salary. Now most banks are sensibly restricting lending to 3 times a person's salary, prices will eventually fall to around this level.

Add in that salaries are falling too, HPC imminent?

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Add in that salaries are falling too, HPC imminent?

..and they are not allowing Gordo's bubble to deflate...it will harm the banks if they let the air out too quick.... :rolleyes:

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We've been doing this on another thread. To my mind the supply side is as much fubared by the level of prices and the perception that they should be at this level - developers have plenty of land banks much with outline or full planning permission, they basically stopped building once the credit tap dried up and the ludicrous prices couldn't be so easily met.

Where I live has basically doubled in size over 15-20 years with a planning free-for-all with developers (cosily co-toeing planners) falling over themselves to build anywhere - factories closed, social clubs and pubs went, all to make way for housing. The key driver was mortgage availability to support the bubble... on the tale end of it tax-payer/other resident schemes for 'affordable housing' FFS.

Nobody is sleeping on the street, there are hundreds of thousands of vacant properties. I actually like that there is an appreciation of urban sprawl. It might be better to favour small hold developments, infil building...

It's not a simple lack of supply issue. I just don't buy it that the big developers will build cheap houses. Something else has to force prices down. Had we actuially had a property crash it might be a different matter, i.e., starting afresh with the bubble burst.

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GREAT FIND CATSICK.

"Pervasive House Price Increases: This house price escalation

has occurred generally independent from varying demand levels.

For example, the Median Multiple has more than doubled in

Adelaide, the slowest growing major market in Australia. Liverpool and Glasgow, which have been

among the slowest growing metropolitan areas of the United Kingdom, exhibit median multiples

that have escalated at least two thirds."

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This is just an abuse of statistics.

We've had planning restrictions for 40 years, we've only had unaordable housing for 10.

tim

Unaffordable housing is just the end product - I think that what the OP is getting at is that planning restrictions introduce an artificial scarcity value (price rises) to bits of dirt which otherwise would be, well, cheap as dirt.

This is most noticeable in places like Perth (Aus), which is surrounded by thousands of miles of desert - but has sky-high house prices. The fault is partly due to "green belt" type policies. Before, any young couple who could not afford city-centre prices could drive to the edge of town, buy a plot of the edge of the desert, and commute in. With the "green belt", that is all of a sudden impossible - outside of the belt is just too far to commute in.

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Indeed, its ********. Unlimited land availability didn't stop prices going crazy in US and Australia.

There is lots of land...but there is not much land on which you are allowed to build. The release costs, especially for private individuals are prohibitive. e.g. My parents would like to cut our acre block into 2 so I can build a house on half of it. All ammenties are already connected. Council says "yes", provide we pay them $200,000...

Planning has, in conjunction with easy credit, driven house prices into the stratosphere.

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Unaffordable housing is just the end product - I think that what the OP is getting at is that planning restrictions introduce an artificial scarcity value (price rises) to bits of dirt which otherwise would be, well, cheap as dirt.

Exactly.

This is most noticeable in places like Perth (Aus), which is surrounded by thousands of miles of desert - but has sky-high house prices. The fault is partly due to "green belt" type policies. Before, any young couple who could not afford city-centre prices could drive to the edge of town, buy a plot of the edge of the desert, and commute in. With the "green belt", that is all of a sudden impossible - outside of the belt is just too far to commute in.

Really?!?!?! :o Unfeckingbelievable!!! Do the authorities+NIMBYs down there also justify that by "oh, we are a small crowded island..." ?!?!?!

Jeeez! I thought this country was alone in its collective stupidity level, but in this case Australia gets the gold medal, and by some fecking (thousands of empty) miles!!! :o:o:o

:o

:o

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Perth is very sprawled out though , the freeways are a nightmare now never mind about in 20 years.Theres no train line to the airport for gods sake , just a poorly planned city overall.

Still , the main problem here was a lack of affordable inner city flats/apartments , every developer was aiming for the high end market because that is where you make more money.

I'm all for green belts in cities as they allow for local fruit and vegetable production , thus keeping the cost of those essentials down.Once again i feel the problem was lack of affordable apartments and too many large bungalows being built.

Edited by Ruffneck

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(...) Mind you, given that most green field land is intensive farmland you could argue that what we're protecting is not exactly 'nature.' Some, indeed argue, that good eco-friendly housing with green spaces would be better for biodiversity.

I've blogged about it here:

Time to build on the green fields?

+ 1

Actually, good eco-friendly housing with green spaces ARE, UNDOUBTEDLY, MUCH better for biodiversity than monoculture agricultural fields. There is no controversy on this aspect.

At this point, people who are unaware of how little space human housing actually uses would try to argue "food security" arguments. But here just a little maths kills this argument, because a million houses would occupy less than 0.1% (a tenth of 1%) of Britain's surface.

.

Edited by Tired of Waiting

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  • 284 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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