Eight Radical Solutions To The Housing Crisis

[getknk]

http://www.bbc.co.uk...gazine-15400477

Pressure to address the UK's housing crisis grows ever stronger, with a number of radical solutions being put forward to ease the strain.

1. Encourage elderly out of big houses

2. Freestyle planning

3. Contain population growth

4.Force landlords to sell or let empty properties

5. Ban second homes

6.Guarantee mortgage payments

7. Live with extended family

8.Build more council homes

Anything else plz add ...

Edited October 25, 2011 by getknk

[Si1]

the first two are all that is needed

[200p]

What we'll get is...

1. Encouragement of more shared ownership schemes.

2. Increase availability of group mortgages.

3. Introduce 50 year mortgages.

4. Tax payer funded 20% deposits (0% loan).

5. 125% mortgages.

Edited October 25, 2011 by Money Spinner

[Lord Lister]

Only allow building companies to hold onto to land for 12 months without developing it, if they do not start development within that time (and complete in a reasonable time) make them sell the land to housing associations at agricultural prices. That would both encourage building and stop those companies hogging vast tracts of prime development land, and claiming agricultural subsidies from the EU on said land!

What we'll get is...

1. Encouragement of more shared ownership schemes.

2. Increase availabilty of group mortgages.

3. Introduce 50 year mortgages.

4. Tax payer funded 20% deposits (0% loan).

5. 125% mortgages.

[mikthe20]

Very simple;

- Max 3.5 single salary, 4.5 joint salary mortgages

- All mortgages repayment, ban IO

- Max 25 year mortgage

- Min 15%-20% deposit

- No other market subsidies or market manipulation

This will cause the market to correct and hoarders of property/landbanks will sell up or downsize. There is no shortage of property. Hardly radical - just like it used to be 40 years ago.

[Milton]

How many of the thousands of BBC executives each paid over six figure salaries, acquired BTL properties during the boom?

Im sick of the BBC. They are not the representative voice of Britain.

[Gone baby gone]

1,2,5 & 8 would be a good start.

I like Lord Lister's proposal - time-limited land banks. I would apply something similar to residential property as well, if unoccupied for more than 36 months, it becomes a forced sale, with the proceeds given to the owner.

[Milton]

The 'BIG LIE' perpetuated by all Vested Interest Parties, is to show mock sympathy at the plight of FTB's whilst pretending there is nothing to be done.

Grant Shapps

Member of Parliament

Minister for Housing.

Minister,

Raising Capital Gains Tax to the same level as income tax, and raising Interest Rates, was the litmus test as to whether the government was committed to tax changes that spread the pain of deficit reduction fairly. [same as happened under Thatcher.]

You have completely failed to do this.

But surely If any government were serious about helping FTB, there are many ways in which you could make houses affordable for us again.

One way would be to award FTB with cheap land.

State Owned Lloyds Banking Group have been left holding vast tracts of residential [and commercial] land banks.

What is to stop the Government *retaining these vast tracts of residential land from Lloyds and selling them to FTB for a vastly reduced rate?

[Everyone already knows that for houses to become affordable once again, a 50% + crash, must occur, but it seems they intend to draw it out over ten years. Stochastically speaking, the ten year cycle seems likely.]

[However that leaves FTB working for another decade for nothing. Which is completely unacceptable. That would be over 20 years working for nothing. No capital. Forced to pay off someone else's mortgage and retirement. Already forced to waste tens upon tens of thousands in wasted rent. ]

[There are historical precedents for states giving away land, or selling it cheaply, to their citizens, for different reasons, in a number of countries. Which has normally resulted in periods of economic growth]

Now would be the perfect time to consider it. Whilst the government own a stake in Lloyds, who hold huge land banks.

-------------------------------------------------------------

The government could set up a Development Trust for First Time Buyer's. Allowing just One FTB to buy just one plot of land, from Lloyds Land bank, for a vastly reduced rate, [60% off current land values.] This is only the long term affordability as a proportion of income anyway.

With the caveat that each FTB must borrow from Lloyds, to build a house on their plot. The Trust could include a clause which states that FTB'er's cannot sell the land/house for ten years. [if they need to move, they must sell it back to the Development Trust for a fair market value. As determined by the Trust].

--------------------------------------------------------------

Consider:

It would spread the pain of deficit reduction more equally, whilst still letting the air gradually out of the housing bubble. [House Prices rose threefold over ten years]

The gov's intention must not be to turn a profit……[Hence setting up a Development Trust.]

In one fell swoop the Coalition would win a lot of voters back on side. And it would not affect homeowners as much as an outright crash would. The House Building Industry would also be kickstarted.

Lloyds cannot sell their land anyway. This solution would be much 'fairer' and preferable to the millions of Lloyds shareholders, than governments plans to give away Lloyds shares for free indiscriminantly.

Lloyds could supply the mortgages for all the plots, via the trust, to FTB's.

Lloyds, in defiance of the monopolies commission, hold over 33% of UK mortgages.

Instead of giving away Lloyds shares to everyone, the government should be seeking to redress the balance in the housing market, by spreading the pain of deficit reduction more equally, between those who own property and those who do not. Especially considering it was systemic fraud which fuelled high house prices, resulting in a 300% increase in the average house price from the years 1996-2006. [Whilst the median wage rose by just 6.5k]

Surely this would be a much Fairer democratic balance, and a more equal spread of deficit reduction, than stealing FTB money to bail out Lloyds?

[FTB, are paying to keep 'everyone else's' property massively overinflated, ensuring FTB'ers can never afford their own property, and remain in 'debt slavery'. Forced to pay to keep the banks assets, other peoples houses massively overinflated against all historic measures of affordability. Why should the people who do not own property be forced to pay to keep Lloyds properties massively overinflated? Its ridiculous and criminal. Yet you alone persist with your attempt to suggest that we are in a free market.]

Whats stopping the government from doing this?

Surely this is a win win solution for the government? And it's a much more democratic, 'fairer' solution. There are Millions of 'Priced Out' voters.

[Any agreement would also have to entail relaxed planning, for those who wanted to build Eco/Straw bale/Cob style houses. Which have been built in the UK for centuries. And are cheaper to construct]

-----------------------------------------------------------

Rough Cost Estimate:

Development Trust Land: £200k

House: £50k

Present Open Market Value: £250k

FTB pays a 60% reduction on the land value: Borrows £130k from Lloyds. [£80k for land £50k for house.]

[House Prices are manipulated to drop by 50% over the next 10 years. Reverting to their long term affordability. As must happen anyway]

So in ten years that £250k house is now only worth £125k

Tenth year, the Trust pays the FTB the going market rate, 'or' allows the FTB to sell on the open market for the going rate of £125-£130k

-------------------------------------------------------------------------------------------------

It's a simple enough concept. Sell FTB land cheaply. [but do not allow FTB to sell it onto anyone else.] This way FTB's are actually working for capital. Something they can call their own. 'Private Property' The cornerstone of any real Democracy.

As the government gradually deflate's the housing bubble over the next decade, to become affordable once again, the prices of the trust's house's will gradually meet them.

[Hence FTB cannot sell for ten years, for a 'quick profit'.]

The alternative, Another ten years forced to work for nothing, as a direct consequence of government sponsored theft and fraud, or taking on debt, through schemes like shared ownership, which is a ticket to negative equity, would be like a life sentence.

Sincerely

The above is one [un-neccesarily complicated] solution. Which may curry political favour, as it helps FTB's.

House Prices will crash by 50% plus anyway. Or wage inflation will occur. Its just a question of how and when.

But The Establishment is not interested in a solution to the problem of affordable Housing. They just want to extend the debate, to give the appearance of doing something.

They could easily raise IR etc, to create a fairer playing field.

Articles like this BBC one are complete Bullsh1t.

And there is no point in working for another 12 years for nothing.

If every FTB had this 'down tools' attitude, it would happen sooner rather than later.

The bottom line is were F@cked. End of.

Edited October 25, 2011 by Milton

[Parkwell]

In what world is building more council houses something 'radical'? Do they think if we build too many suddenly everyone will have little pictures of Stalin on their underwear. Another problem with politics these days - steer five percent off the status quo and you're instantly a raving looney danger to society.

This would be far more radical to them but I agree with it. I might go one further and say

- Max 4.0 single salary, NO joint salary.

- Max 3.5 single salary, 4.5 joint salary mortgages

- All mortgages repayment, ban IO

- Max 25 year mortgage

- Min 15%-20% deposit

- No other market subsidies or market manipulation

[Bloo Loo]

Ban mortgages secured on the residential property in the UK.

Allow ONLY UK citizens to buy 1 property in the UK.

[leicestersq]

the first two are all that is needed

If you don't do 3), then nothing works.

[snowflux]

Allow ONLY UK citizens to buy 1 property in the UK.

I don't think you'd get that past the EU! Imagine if, say, Spain or France tried to ban Brits from buying properties in their countries.

[Bloo Loo]

I don't think you'd get that past the EU! Imagine if, say, Spain or France tried to ban Brits from buying properties in their countries.

wont get ANY of it past anything...the bankers are in charge.

[tomandlu]

I don't understand this obsession with 1). It's treating a symptom and can only give temporary relief.

[Gone baby gone]

I don't understand this obsession with 1). It's treating a symptom and can only give temporary relief.

I think it's because it doesn't cost anyone (well, anyone that matters like the government and the banks) anything.

[corevalue]

I think it's because it doesn't cost anyone (well, anyone that matters like the government and the banks) anything.

So how do you "encourage" them out then, if it's not to cost anything?

[Milton]

Ban mortgages secured on the residential property in the UK.

I'm completely in favour of this. In a few short years weve gone from 'normal' people who only wanted a job and a small home, which we were prepared to work for.

To justifiable anarchists.

Why should anyone work for their entire lives to pay for a shelter? A pile of bricks and mortar?

Paying multiple amounts in interest to [state Owned] bankers?

The thin veil has been lifted exposing the Feudal Evil society our 'Democracy' really is.

F@ck Parliament.

Edited October 25, 2011 by Milton

[fluffy666]

In what world is building more council houses something 'radical'? Do they think if we build too many suddenly everyone will have little pictures of Stalin on their underwear. Another problem with politics these days - steer five percent off the status quo and you're instantly a raving looney danger to society.

This would be far more radical to them but I agree with it. I might go one further and say

- Max 4.0 single salary, NO joint salary.

Apparently there's some obscure theory about supply and demand.. very radical.

[mikthe20]

I don't understand this obsession with 1). It's treating a symptom and can only give temporary relief.

It's purely a diversionary tactic. It creates another false "bad guy".

[Milton]

Apparently there's some obscure theory about supply and demand.. very radical.

Value and Scarcity are dressed up so no one would recognize them, and baptized as Supply and Demand.

In this guise they have befuddled people for ages.

And now, economists proclaim Supply and Demand to be natural laws that dictate prices.

Supply and Demand has been a useful myth. If you restrict the Supply and never allowed Demand a free avenue of expression.

Actually, there is no ceiling to Supply except ability to produce, and no limit to Demand except ability to consume.

A tiny minority exploits Britain at the expense of the rest of us.

Just 6,000 or so landowners -- mostly aristocrats, but also large institutions and the Crown -- own about two thirds of the UK. They have maintained their grip on the land right throughout the 20th century.

Just 1,252 of them own about 60% of Scotland.

[They pay no land tax. Instead the government gives them £2.3 billion a year and the EU gives them a further £2 billion. In subsidies.]

The poor are forced to subsidise the super rich.

As of 2001 landbanks to a value of 37 billion pounds were known to exist, with capacity to build an additional 3-4 million homes.

This reserved land is almost wholly owned by aristocrats; with none of it on the land registry.

[This land is coming out of subsidised rural estates, land held by off-shore trusts and companies, and effectively untaxed.]

Shares have to be registered; but land doesn't. The Land Registry still DOES NOT KNOW who owns between 30% and 50% of land in the UK.

Landowners' wealth is a parasite on Britain.

Their wealth comes not from farming, nor even from renting, but from a trickling of land onto the urban housing market.

The clearing banks and building societies stripped our industries of investment capital, then supported their clients, the landowners, by running the rigged and overpriced land market.

70% of the Land in the UK is owned [via theft] by just 1% of the population. A third world statistic.

Edited October 25, 2011 by Milton

[rantnrave]

Pressure to address the UK's housing crisis grows ever stronger, with a number of radical solutions being put forward to ease the strain. Hardly a week goes by without some idea making the headlines. On Tuesday, the left-leaning IPPR think tank publishes a report on how to pay for new house building, which includes local authorities investing their own pension pots and freeing up their own land for developers in return for an equity stake. Researchers also think the government should focus more on bricks and mortar than housing benefit.

Last week, a charity suggested encouraging elderly people to move out of their big houses to make room for larger families.

Just 134,000 new homes were built in the UK in 2010, the lowest number since World War II. This is despite 230,000 new households being formed every year. By 2025 there will be a housing shortfall of 750,000 in England alone, according to the IPPR.

The shortage is hitting the younger generation hardest. A fifth of 18-to-34-year-olds has been forced to live with their parents because they can't afford to rent or buy a home, according to the charity Shelter.

Commentators across the political spectrum agree the country faces a growing crisis but there is no consensus on how to fix the problem. Here are some of the boldest remedies being prescribed.

Encourage elderly out of big houses

One solution is to free up family housing by offering elderly people tax breaks to move into smaller homes, says one pressure group. The Intergenerational Foundation says more than a third of the housing stock is under-occupied, which means they have at least two spare bedrooms.

More than half of the over 65s fall into this category and as a result are "hoarding housing", the charity argues. They say the elderly should be given tax incentives to downsize, and the government should also make sure there is more suitable housing for the elderly.

Many would argue that people who have worked hard to buy their own home can live in whatever sized house they want. Some of them say it is not just the elderly who live in houses that are too big for them. Guardian columnist George Monbiot says people who live alone in large houses should lose the 25% council tax discount available to single people.

Television property show presenter Kirstie Allsopp says it not fair to pick on the elderly as they usually want to hang on to their homes for their children's sake.

"It's not house hoarding. This is their home," she says. "A lot of that generation have done far more in life and taken far less than we have."

Freestyle planning

The government's proposed reform of the planning laws in England has generated much debate and attracted the anger of many groups, including the National Trust and the Campaign to Protect Rural England. Ministers want councils to adopt a "presumption in favour of sustainable development", making it harder for officials to reject proposals.

Steve Turner, a spokesman for the Home Builders Federation, says the planning system has been an obstacle for growth for years. "For decades the planning system has not been delivering enough land to meet the housing needs of our population," he says.

Alex Morton, research fellow at the right-leaning Policy Exchange think tank, says the answer is to reduce the cost of land by freeing up areas for development. "We must shake up our out-of-date planning system, which was designed for the government run-society of the 1940s," he says.

Land costs alone are between about £30,000 and £60,000 per home, he says. Not only does this price people out of the market, it means there is little money left for good quality design and construction. His alternative system would see planners as private consultants working with developers to deliver realistic proposals, rather than working in the public sector stopping development. It would be up to the local community to decide if the proposal was up to scratch.

But planners warn that such an approach is a recipe for disaster. "Whether you are buying a house or building a factory, you want a level of comfort about what can be built on your doorstep," says Richard Blythe, head of policy at the Royal Town Planning Institute.

"The planning system provides this by balancing economic, social and environmental considerations and by enabling democratic input into what is proposed."

Contain population growth

The number of households in England is projected to increase from 21.7m in 2008 to 27.5m by 2033, an increase of 5.8m or 27%. Over the same period, figures are projected to rise from 1.3m to 1.6m in Wales, and from 688,700 to 880,400 in Northern Ireland. The number of households in Scotland is projected to rise from 2.3m to 2.8m between 2008 and 2033 - an increase of 21%.

"There's been a remarkable silence on the impact of migration on housing demand," says Sir Andrew Green, chairman of Migration Watch.

Citing the government's figures, he argues that more than a third of new households in England in the next 25 years will be the result of immigration. Even if housebuilding were to increase by 25%, there would still be a shortage of 800,000 homes by 2033, the organisation claims.

"It's a third of the whole issue and no-one's talking about it," he adds. He believes it is possible to bring immigration down to David Cameron's target of "tens of thousands", but it will probably take two Parliaments rather than one to achieve.

But Monbiot says it's neither a practical nor humane way to deal with the problem. "It would be foolish to deny that immigration contributes to housing pressures," he says. "But to say we could solve this through controlling the population - that's the hardest way of doing it. And I'd be very reluctant to take this out on immigrants."

Force landlords to sell or let empty properties

There are nearly one million empty homes in the UK, and 350,000 of them have been empty for more than six months.

Turning them into liveable homes could make a massive difference, says David Ireland, chief executive of the Empty Homes Agency. "If you could suddenly build 350,000 homes you wouldn't sniff at that. So those empty properties are worth having."

The last government brought in orders allowing councils to force landlords to bring empty dwellings back into use, but only 60 have been issued.

It's time for bolder measures, Ireland argues. A significant number of the empty homes are publicly owned, such as the Heygate Estate in south London which has 1,200 empty flats.

The answer is to give people the right to buy or rent. They would be given reduced rent in return for doing up the property and their proposal would be overseen by an independent tribunal.

There are various reasons why landlords do not sell or let empty houses, such as property speculation and tax savings. There is zero VAT on building new homes, while converting or renovating properties attracts only a reduced rate. The main reason why properties lie empty is that landlords can't afford to do them up, says Ireland, and the answer to this would be to offer a loan to anyone wanting to refurbish them.

Ban second homes

In some parts of Britain holiday homes account for a substantial proportion of the housing stock. About one in 20 households across Cornwall is a second home and owners receive a council tax discount. There's a fundamental unfairness in the fact that there's no penalty on owning a second home, says Monbiot.

"Why are they doing this? We should be rewarding social good,"

The electoral roll makes it easy to work out whether someone owns two homes because you can only be registered to vote in one place. Local authorities should increase council tax on those with a second or third home, Monbiot says.

But TV property presenter Sarah Beeny says second homes are not responsible for the housing crisis and banning them is "quite extreme".

"It doesn't fall that far from banning people from having a second child," she says. "Maybe make a second home less appealing, but the tax benefits are not there already. Owning a second home is better in theory than in practice."

Guarantee mortgage payments

In these difficult economic times, a lack of mortgage availability is the short-term constraint on development, say house builders.

"If people can't buy, builders can't build," says Steve Turner from the Home Builders Federation.

Ways need to be found to encourage mortgage lenders to lend on terms that people can afford, he argues. The best way of doing this is for the government, house builders and mortgage lenders to club together to fund an insurance scheme that would underwrite mortgages where the lender defaults. Talks are in progress but these are complex negotiations, he admits.

But mortgage lenders are risk-averse and have imposed stricter lending criteria for obvious reasons. The first global financial crisis in 2007 was precipitated by the collapse of the sub-prime mortgage market in the US, where banks give high-risk loans to people with poor credit histories.

"Forget the nonsense about the 'mortgage drought'," says Alex Morton from the Policy Exchange. The real problem is not so much lack of finance for mortgages but the impact of high land costs, he argues.

Live with extended family

The general trend is for more people to live on their own rather than with a big family. But in southern European countries, such as Italy, it is much more common for families to live cheek-by-jowl.

By following this model of grandparents, children and grandchildren all living under one roof, the housing stock would be more efficiently distributed. In 2008 the Skipton Building Society predicted numbers following this model would triple over the following 20 years from 75,000 to 200,000 people.

Several generations often have no choice but to squeeze into the one home to keep costs down. And the UK has its own "boomerang" generation, where young people have to move back home because they cannot afford to get on the property ladder. But where there is a choice, most people would prefer a more private and comfortable living arrangement.

Living with your family can create stress between the generations. The arts journalist Cosmo Landesman wrote in the Daily Mail of his experience of moving back in with his parents.

"We tend to sentimentalise the old, to see them as sweet lovable dears," he wrote. "But most people have no idea just how irritating, how utterly exasperating it is, living with two old people."

Build more council homes

Council homes have been part of British society for more than a century, from the "homes for heroes" cottages that were built in the wake of World War I to the much-maligned, monolithic high rises of the 60s and 70s.

But the "right-to-buy" phenomenon, started by Margaret Thatcher's Conservative government in 1979, led to a massive depletion in council housing stock, with more than two million tenants taking advantage of the scheme.

And the building of council houses to let has almost died off, sending waiting lists through the roof.

Government figures show nearly 168,000 local authority homes were built across the UK in 1950, 88,530 in 1980 and 17,710 in 1990. In 2000, just 280 were built and in 2010, the figure was 1,320.

Since 1990, the building of "social" housing has been mainly the preserve of housing associations, and since that year, they have built an average of 27,000 homes a year.

Abigail Davies, assistant director of policy and practice at the Chartered Institute of Housing, says there is a high demand for social housing across the UK.

"If you look at waiting lists, although a pretty crude measure, they are much higher and longer than could ever be matched by the turnover."

While building more affordable homes is always desirable, it will not solve the housing crisis on its own, she says. Davies believes the most radical solution involves making market prices come down and stay down.

"People often hark back to the 1960s when the state was paying for council houses to be built. I cannot see that happening again with all the other demands on its finances."

Sorry that the links in the article don't work!

[Gone baby gone]

Tax.

Note - the post did specifically mention the cost to banks and government.

In fact the government would like that (if it were a vote winner too).

Not sure it would be a vote winner for a while - IIRC the majority of people who actually bother to vote are over 50.

Which explains a lot.

[Garf]

So how do you "encourage" them out then, if it's not to cost anything?

Geriatricide.

[leicestersq]

http://www.bbc.co.uk...gazine-15400477

Pressure to address the UK's housing crisis grows ever stronger, with a number of radical solutions being put forward to ease the strain.

1. Encourage elderly out of big houses

2. Freestyle planning

3. Contain population growth

4.Force landlords to sell or let empty properties

5. Ban second homes

6.Guarantee mortgage payments

7. Live with extended family

8.Build more council homes

Anything else plz add ...

Just looking through these again.

1) Yes, agree. Best done through a progressive land value tax, with no reductions for pensioners.

2) We only have limited land and probably the highest housing density in Europe where people actually want to live. It would be nice to leave some green areas, though I guess that some compromises will have to be made.

3) Yes. And we need to leave Europe as unless we do this we cannot control immigration. Immigration to the UK is as restricted as the weakest link from other EU countries into Europe.

4) Yes, but a progressive land value tax achieves this goal.

5) Ban is a bit restrictive, a progressive land value tax makes second homes more expensive though, and reduces tax for those without.

6) Insane, if you guarantee mortgages, mortgage lending will expand until the losses on the loans overwhelm the guarantees. Strike this option out.

7) This is already being forced upon people anyway.

8) A definite no. Council housing is a very poor way to allocate housing, taking away choicing and hoisting extra tax on people who are not lucky enough to get a free house. Any new house building should be done by the market, and all council homes sold off to the highest bidder.

[SHERWICK]

1. Encourage elderly out of big houses