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" Buyers Beware Of Britain’S Absurd Property Trap"

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"Buyers beware of Britain’s absurd property trap", by Martin Wolf.

Absolutely brilliant. A must read.

On the FT, but going through Google may allow non-subscribers to read it: https://www.google.co.uk/search?q=Buyers+beware+of+Britain%E2%80%99s+absurd+property+trap&ie=UTF-8#q=%22Buyers+beware+of+Britain%E2%80%99s+absurd+property+trap%22

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Edited by Tired of Waiting

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Some interesting comments. Here's one example....

I have lost respect for Osbourne on this issue ..and this issue alone. It is massively cynical and a crime against our young.

Our young need cheaper housing...pure and simple.

Anything that counters that is anti-social and storing up future long term problems. Something I was hoping this lot would avoid.

Time for UKIP I think. This current cabal of professional pols has to go

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Mr Wolf's main points: That the government’s Help to Buy scheme is really helping those who wish to keep housing costly: today’s owners, banks and housebuilders, a conspiracy to keep house prices exorbitant. A policy of increasing demand is absurd. The solution is evident, but politically unthinkable: make a large quantity of land available for development and impose a swingeing site value tax, to compel building. But this would be too unpopular and too dangerous because of stout resistance from the Nimbys, CPRE, owners of “land banks” and today’s homeowners. These lobbies are far too formidable for any government. Liberalisation might threaten UK banking. Unlike in Ireland, Spain or the US, house prices fall in the UK has been modest. Moreover, the constraints on supply that have kept prices up also curbed the pre-crisis building boom. Its egregious supply constraints (might have?) saved UK banks. The victims of this vile system are the young and upwardly mobile, who are either unable to buy at all or are trapped in a lifetime of debt serfdom. The political genius of the scheme is that it appears to help these hapless victims, while in fact helping the usual suspects: banks, homeowners, Nimbys and, if it creates another housing boom, the government. The government is committed to frighteningly expensive housing. It is a trap from which the UK may not now escape.

martin.wolf@ft.com

- - -

FWIW, I think I'll email him a "thank you very much indeed!" for this article.

Good man Mr. Wolf. Thank you!

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Edited by Tired of Waiting

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Except Wolf's solution is the usual rubbish one - build more.

No, instead #BringBackCapitalism and #hikeratesnow

If rates were hiked we would rapidly see that there is no housing shortage in the UK IMPO.

What we do have is knackered, exhausted stock much of which should have been knocked down decades again. Sadly, when we built we put up stuff that is often equally as rubbish.

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Except Wolf's solution is the usual rubbish one - build more.

No, instead #BringBackCapitalism and #hikeratesnow

Actually his solution is to work on both sides, stop over-inflating demand, and allow a supply increase, much needed in Britain. See below:

http://shrinkthatfootprint.com/how-big-is-a-house

Percapita.gif

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Some interesting comments. Here's one example....

I remember reading some very convincing posts here saying that UKIP's housing policies are cr@p. Though I don't remember details about it.

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If rates were hiked we would rapidly see that there is no housing shortage in the UK IMPO.

What we do have is knackered, exhausted stock much of which should have been knocked down decades again. Sadly, when we built we put up stuff that is often equally as rubbish.

....overall we do not have a housing shortage we have people living in smaller more expensive space, and many thousands of empty properties......housing has become a speculative tax efficient, store of international value, commodity.....see how much people would want to own one when/if the prices start falling.....you only have to look at other places not far away to see for yourself...can't sell for any price. ;)

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If rates were hiked we would rapidly see that there is no housing shortage in the UK IMPO.

What we do have is knackered, exhausted stock much of which should have been knocked down decades again. Sadly, when we built we put up stuff that is often equally as rubbish.

If rates were hiked I would be able to afford a cr@p house. But the evicted family would have to live in this cr@p rented house.

We could have better and bigger houses instead.

Countries like France and Germany manage that. Why can't we?

Wolf knows why: Because of the anti-building lobbies, like the CPRE, owners of land banks, and today’s homeowners.

Incredibly, their propaganda is so powerful that it even works in this forum!, of all places!

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Edited by Tired of Waiting

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Except Wolf's solution is the usual rubbish one - build more.

No, instead #BringBackCapitalism and #hikeratesnow

It's probably over emphasised the housing shortage. Rate hikes would soon free up a large proportion of the million plus empty homes, caused by hoarding or non motivated sellers. My mother-in laws house has sat empty for two years; they have finally got around to selling it, but I'm sure if they could actually have earned money on the sale proceeds they may have been more motivated sellers. You walk across the hottest areas of London property and you wonder if anybody actually lives there. Certainly a lot of speculation going on, part of an investment portfolio as opposed to somewhere to live, and many not even let out.

You can bring the market back to fair value either by building houses we may not need or unwind QE and stop these schemes such as help to boomers 2 designed to protect housing equity.

Edited by crashmonitor

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It's probably over emphasised the housing shortage. Rate hikes would soon free up a large proportion of the million plus empty homes, caused by hoarding or non motivated sellers. My mother-in laws house has sat empty for two years; they have finally got around to selling it, but I'm sure if they could actually have earned money on the sale proceeds they may have been more motivated sellers. You walk across the hottest areas of London property and you wonder if anybody actually lives there. Certainly a lot of speculation going on, part of an investment portfolio as opposed to somewhere to live, and many not even let out.

You can bring the market back to fair value either by building houses we may not need or unwind QE and stop these schemes such as help to boomers 2 designed to protect housing equity.

The myth of the "million empty properties": http://spatial-economics.blogspot.co.uk/2011/09/empty-homes-and-housing-crisis.html

Only around 100k empty for over 6 months in the SE + London + East.

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I remember reading some very convincing posts here saying that UKIP's housing policies are cr@p. Though I don't remember details about it.

True. The only reason that I would, and probably will, vote UKIP is to give the finger to the present crop of career politicians.

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Interest rate rises would certainly cause an exodus of the BTL brigade from property and back into bonds/savings, which would have an immediate and self-perpetuating downward effect on property values.

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The myth of the "million empty properties": http://spatial-economics.blogspot.co.uk/2011/09/empty-homes-and-housing-crisis.html

Only around 100k empty for over 6 months in the SE + London + East.

There is still an element of waste if houses are viewed as an investment as opposed to somewhere to live. How many people for example would have second homes (not classed as empty), how many co-habiting boomers would not have a house each (I know dozens of these), how many would live in houses far too big unless there was an investment angle to all this unutilised space.

If interest rates were not subject to manipulation trust me there would be genuinely a million empty homes and we would soon achieve price discovery.

Edited by crashmonitor

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I just don't understand why nobody has taken the opportunity to say to Cameron or Osborne:

"You are spending £130bn anyway. Why not build 130,000 new houses instead, thus creating 'x' new jobs and a little bit of profit for the taxpayer to fund new house building schemes?"

Because there's a question that they can't spin the answer to quite so easily. I know this has been said on here before but with all this negativity in the MSM, nobody seems to be suggesting realistic alternatives. Let's face it, those people reading the FT aren't the ones that really need to hear it. It's all well and good writing a blog, but there must be SOMEONE in the media able to get an official answer to that question.

I'm not saying it is the answer (I think most of us here would prefer the opportuniy to self-build and have local authorities providing the infrastructure) but it demands a logical answer rather than "Noah and Kimberly are aspirational bloggers and they can now aspire to a kitchen-cum-bathroom just two hours from Sunderland".

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I just don't understand why nobody has taken the opportunity to say to Cameron or Osborne:

"You are spending £130bn anyway. Why not build 130,000 new houses instead, thus creating 'x' new jobs and a little bit of profit for the taxpayer to fund new house building schemes?"

Because there's a question that they can't spin the answer to quite so easily. I know this has been said on here before but with all this negativity in the MSM, nobody seems to be suggesting realistic alternatives. Let's face it, those people reading the FT aren't the ones that really need to hear it. It's all well and good writing a blog, but there must be SOMEONE in the media able to get an official answer to that question.

I'm not saying it is the answer (I think most of us here would prefer the opportuniy to self-build and have local authorities providing the infrastructure) but it demands a logical answer rather than "Noah and Kimberly are aspirational bloggers and they can now aspire to a kitchen-cum-bathroom just two hours from Sunderland".

Sorry - can't edit so will reply.

Or ask them the question... "Why are high house prices good? What does it achieve?"

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If interest rates were not subject to manipulation trust me there would be genuinely a million empty homes and we would soon achieve price discovery.

Correct. Time was that people would allow for interest rate increases when assessing whether or not they could afford to buy something on credit, but not these days. A hard lesson will soon be learnt by many.

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Sorry - can't edit so will reply.

Or ask them the question... "Why are high house prices good? What does it achieve?"

Because it makes the biggest landowners in the UK very, very rich ?

Now look at the background of the current PM and Chancellor.

Which group in UK society do they really represent ?

On edit - Much has changed in Britain over the past 500 years but the main land holding have remained remarkably stable since after the Reformation and the dissolution of the monasteries when the Crown and the aristocracy divvied up the Church land between them. At the end of the day these people own and run most of Britain.

Edited by stormymonday_2011

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There is still an element of waste if houses are viewed as an investment as opposed to somewhere to live. How many people for example would have second homes (not classed as empty), how many co-habiting boomers would not have a house each (I know dozens of these), how many would live in houses far too big unless there was an investment angle to all this unutilised space.

If interest rates were not subject to manipulation trust me there would be genuinely a million empty homes and we would soon achieve price discovery.

Now I agree with you, there is a lot of "waste" in housing, but mainly by the older generations.

Edit: But most of them don't have mortgages any more, and would not be pushed out of their bungalows by high IRs. The only remaining hope is that if saving accounts were paying higher interests some would be tempted to downsize? Not sure if many would though.

Besides, our overall housing stock must improve, not only in numbers, but quality and size as well.

.

Edited by Tired of Waiting

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I remember reading some very convincing posts here saying that UKIP's housing policies are cr@p. Though I don't remember details about it.

The one thing that UKIP would try and solve is the number of people coming into the country.

There has been another boat gone down with hundreds of people on board trying to get to Europe we don't hear much about the ones that make it. Tragic as it is I am scared how the influx of people will affect Britain. Will we one day have to except that people will have to be left on are streets to die. Desperate people stealing food to live.

We have a handful of romanians in park lane. what happens when the numbers hit a few million.

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Now I agree with you, there is a lot of "waste" in housing, but mainly by the older generations.

Can't help it, brought up on playing Monopoly. A bit of stealing money from the bank and loading the dice in our favour. We may allow new players a look at the Old Kent Road.

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We could have better and bigger houses instead.

Countries like France and Germany manage that. Why can't we?

We wouldn't buy better houses thats the problem. As an island race for thousands of years we embrace the s*** cheap is best philosophy we do not act, think or live like our mainland neighbours and in in general life as people are finding is worse because of that.

Riots at the opening of a Primark, The wholesale embracing of the US fat food outlets, Our obsession with BOGOF offers, The adoption of zero hours contracts, the wrecking of a family life with 7 day trading, and dare I say the pure bile that anyone who dares to be married and have any form of religious faith is subjected to in the mainstream media. 99.9999% people of the Islam faith are normal folk same as you and I the abuse Islam gets now is just the anti church socialist state C*** from the sixties and seventies redirected.

So we have a nation of fat proles who worship at Tesco on a Sunday while buying cheap booze and feeding their fat uneducated offspring processed food.

With the exception of many of the people on here who are intelligent and get it and want a reasonably priced house to raise a family or have a life most of these proles don't realise how lucky they are.

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The one thing that UKIP would try and solve is the number of people coming into the country.

All of the evidence is that it simply can't be done. Every developed nation has experienced mass immigration from poorer countries over the last 15 years. It's even happening to Japan, probably the most homogenous and xenophobic (to the point of racist) countries in the world.

If UKIP promised to give everybody a mansion and a sports car, would anybody believe they could deliver that?

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We wouldn't buy better houses thats the problem. As an island race for thousands of years we embrace the s*** cheap is best philosophy we do not act, think or live like our mainland neighbours and in in general life as people are finding is worse because of that.

Riots at the opening of a Primark, The wholesale embracing of the US fat food outlets, Our obsession with BOGOF offers, The adoption of zero hours contracts, the wrecking of a family life with 7 day trading, and dare I say the pure bile that anyone who dares to be married and have any form of religious faith is subjected to in the mainstream media. 99.9999% people of the Islam faith are normal folk same as you and I the abuse Islam gets now is just the anti church socialist state C*** from the sixties and seventies redirected.

So we have a nation of fat proles who worship at Tesco on a Sunday while buying cheap booze and feeding their fat uneducated offspring processed food.

With the exception of many of the people on here who are intelligent and get it and want a reasonably priced house to raise a family or have a life most of these proles don't realise how lucky they are.

Edited by stormymonday_2011

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