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Britain Is Suffering From A Housing Crisis - Who Is To Blame And How Can We Fix It?

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There is an excellent article in The Independent by Ben Chu which summarises all reasons for the UK housing crisis, it's really a neat summary of what we have been saying on here for years:

http://www.independent.co.uk/property/house-and-home/property/britain-is-suffering-from-a-housing-crisis--who-is-to-blame-and-how-can-we-fix-it-9113329.html

Maybe Ben Chu is a HPC lurker or even poster? He looks young which probably makes him someone who is personally affected:

http://www.independent.co.uk/biography/ben-chu

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Edited by The Eagle

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You cannot bring in huge numbers of immigrants, house them and not expect serious knock on effects. But, the Independent won't say this because it is not PC

So, Blame Osborne, Builders, Banks, Thatcher, Jack the Ripper, Julius Caesar etc.

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You cannot bring in huge numbers of immigrants, house them and not expect serious knock on effects. But, the Independent won't say this because it is not PC

So, Blame Osborne, Builders, Banks, Thatcher, Jack the Ripper, Julius Caesar etc.

You clearly didn't read the article properly (probably just skim read if at all)... :rolleyes:

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You cannot bring in huge numbers of immigrants, house them and not expect serious knock on effects. But, the Independent won't say this because it is not PC

So, Blame Osborne, Builders, Banks, Thatcher, Jack the Ripper, Julius Caesar etc.

you cannot print money and hand it out at 2% and provide tax payer backed guaranteed deposits and not expect serious knock on effect

the immigrants are financial pawns being used to props up gdp figures and the bankers housing pyramid.

what we are facing is much more than a housing crisis its an ongoing banking crisis. the crisis being the bankers are being handed everything we have now and in the future to keep them solvent and to keep them from facing the music they started playing.

Edited by TheCountOfNowhere

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Excellent article. I agree with his conclusion that the fundamental problem is that we're not building anywhere near enough.

With 250,000 new households being formed every year and just over 100,000 new properties being built every year (the journalist says 150,000 but that's a bit higher than other estimates I've seen) the problem is getting worse every day.

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Excellent article. I agree with his conclusion that the fundamental problem is that we're not building anywhere near enough.

With 250,000 new households being formed every year and just over 100,000 new properties being built every year (the journalist says 150,000 but that's a bit higher than other estimates I've seen) the problem is getting worse every day.

I guess i cant blame NIMBYs in some (most!) instances, though. The stuff they are throwing up nowadays is cramped, bad quality, ugly, and usually the required associated road and other improvements are ignored. If they were building modern versions of the 50s and 60s council estates (ie spacious, big gardens and plentiful parking) id be far more bothered about developments being blocked.

Id love to see more housing, but more often than not its difficult to get bothered when NIMBYs stop a load of barratt slave boxes.

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Excellent article. I agree with his conclusion that the fundamental problem is that we're not building anywhere near enough.

With 250,000 new households being formed every year and just over 100,000 new properties being built every year (the journalist says 150,000 but that's a bit higher than other estimates I've seen) the problem is getting worse every day.

the fundamental problem was/is the banker lending money they don't have to people who can't afford to pay it back all backed by our tax money and allowed by a bunch of mps who are at the top of the housing pyramid and many who get jobs at banks when they leave office.

our glorious leaders decided rather than sort out the banks to do everything to help them and to actual try to reignite the bubble that has caused all the problems they were voted in to fix.

take away the mmigrants and we would still have had the bubble.

take away the easy credit and where would house prices be.

stop the btl and property speculation and where would house prices be?

the government can stop this tomorrow. will they, NO, they currently don't want to help the people they claim to support. i fear they won't change until circumstances change dramatically.

what it seems to me we have is either a bunch of morons in charge or systematic corruption in government

take your pick at to which it is. or does anyone have a third option?

Edited by TheCountOfNowhere

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You clearly didn't read the article properly (probably just skim read if at all)... :rolleyes:

Have you?

The author of the article puts forward massive immigration as a possible cause of the housing crisis, but then laughs it off. Which is pretty much what Byron was saying...

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How did the Indo, much reviled in the HPC parish, publish such a good article? All it needed was a few oblique references to the shiny stuff and it could have been 'HPC Gold'. The HTB bit in particular deserves a mention in dispatches.

+1, I was wondering about that too! I guess all the HPI bullish (or should I say BS) writers were out of the office :P

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I don't know why Thatcher and Osborne both get their own entries, but none for Labour. Considering that the house price crisis didn't exist in 1997 - it was 10 years of Labour that created this mess, and it's looking like it could take decades to unravel.

Number 2 'foreigners' should in fact be Blair.

Number 3 'buy to let' should also be Blair/Brown..

Number 7 'banks' should also be Blair/Brown.

The boomer nimbies/CPRE are a natural result of an ageing population, but the flood of foreigners and the mismanagement of the banks under Labour wasn't inevitable at all.

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Housing now eats up around 20 per cent of the typical family's weekly outgoings, up from 16 per cent in 2000.

Anyone have an idea what the source is for those figures?

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A bit flawed in that it failed to point out the degree to which loose lending by the banks is largely responsible for the current price levels- instead the bankers were portrayed as rather frugal fellows who were concerned to restrain borrowing by 'the kids' lest the poor darlings get into trouble in the future- not a picture that works pre 2008.

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A good summary, id put far far far more blame on the banks and BTL, however.

I would agree.

He seems to have included the harebrained "Ban multiple home ownership" as a point of discussion, but he has ignored "Implement a Multiple Property Tax".

A multiple property tax would be extremely effective compared to some of the other ideas proposed. It should be engineered to allow people to legally own multiple properties but 'discourage' them from doing so instead.

There has been very little talk about this "Multiple Property Tax" because it would work too well, at re-aligning the properties away from the ownership of the various property investor/speculator/ landowner/landlord/ investment funds/ and property-is-my-pension people, and return the property to actual workers at a more affordable level. (At a more correct earnings-to-value ratio.)

All the major political parties are simply too close to those groups to be able to implement any such regulation. We need brave people to make it happen, and there is seemingly a complete absence of problem solvers or long term thinkers or 'bug fixers' in British politics. They simply don't exist.

Where a market cannot regulate itself (as we have seen with property), taxation can and should be used to regulate and encourage correct and productive use of the limited property resource, and keep the price of that resource at a point conducive to a productive economy.

To clarify, when I say productive, I don't mean productive to one individual rentseeking from that resource. I mean for example: when a worker in London or any major city has affordable property available to them, multiple things fall into place:

  • They spend less of their income on high rent or over-stretching high mortgage payments, so they have more disposable income. This disposable income which has diminished over recent years, is important for a consumption based economy such as ours, and would have a positive impact on domestic demand.

  • They can spend less time/money on transportation as there are properties 'freed up' in a more convenient area in the vicinity of their work. This time/money can improve the worker's life and work in various ways.

  • Shockingly, reversing side effects - what nobody ever mentions: workers would not demand such high salaries!!! Companies could employ people in positions where previously no worker thought it was economically viable to take up that position. Think of all those skilled engineer jobs where the skills exist but the workers currently feel compelled to jostle themselves into a managerial role instead.

  • Despite what people tell you, it's not just certain sectors of the market who would benefit from this discouragement of multiple property ownership. The increased flow of properties between LEGITIMATE occupiers would mean this effect should flow throughout the chain.

  • Central city communities are rebuilt and begin to thrive again, as properties are owned by people who live in them.

  • etc

These are all major factors surrounding our economic productivity. It may even become economically viable to manufacture more in this country again.

His article talks about standing up to NIMBYs, and more building being the answer, and yes that is a major part of the solution. However, I would ask you if it makes sense for a significant proportion of Central London to be owned by people who do not live in them, and do not work there (occupying 15+ properties such as this lady on AirBnB), and for everybody working in London to commute into London from newbuild developments in the home-counties, on an ancient and broken transport infrastructure?? It would take hundreds of billions of pounds, and many years to make the transport infrastructure truly effective at delivering workers to London in that way; by which time, the way we work may have changed completely. By all means, pursue the building problem, but do not expect improved supply itself to simply solve the core problems of an unregulated market.

Much like the article, this is only scratching the surface of the reforms and actual intervention required to correct the years of neglect and ignorance of these issues by successive governments.

:blink:

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His article talks about standing up to NIMBYs, and more building being the answer, and yes that is a major part of the solution. However, I would ask you if it makes sense for a significant proportion of Central London to be owned by people who do not live in them, and do not work there (occupying 15+ properties such as this lady on AirBnB), and for everybody working in London to commute into London from newbuild developments in the home-counties, on an ancient and broken transport infrastructure?? It would take hundreds of billions of pounds, and many years to make the transport infrastructure truly effective at delivering workers to London in that way; by which time, the way we work may have changed completely. By all means, pursue the building problem, but do not expect improved supply itself to simply solve the core problems of an unregulated market.

Much like the article, this is only scratching the surface of the reforms and actual intervention required to correct the years of neglect and ignorance of these issues by successive governments.

:blink:

+1

The rest of UK needs to demand that London addresses its property issues. Its causing too many knock on issues, namely London commuters forced to live further out, causes a ripple effect as workers in those towns are priced out and forced to live further out. Also a wave of wealthy London retiree's cashing in, is likely to further price out locals.

"They" won't of course. Its too nice an earner for them.

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You cannot bring in huge numbers of immigrants, house them and not expect serious knock on effects. But, the Independent won't say this because it is not PC

So, Blame Osborne, Builders, Banks, Thatcher, Jack the Ripper, Julius Caesar etc.

Well speaking as someone who supports a zero economic immigration policy, even I have to concede that immigrants predominantly on minimum wage arn't going to have a huge effect on house prices (although there are lots of other negative effects which have been discussed at length on here ....) . Remember that a "proper" crash was well under way in 2008-9 until TPTB intervened with -ve net IRs/£ devaluation/QE etc.

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Well speaking as someone who supports a zero economic immigration policy, even I have to concede that immigrants predominantly on minimum wage arn't going to have a huge effect on house prices (although there are lots of other negative effects which have been discussed at length on here ....) . Remember that a "proper" crash was well under way in 2008-9 until TPTB intervened with -ve net IRs/£ devaluation/QE etc.

I think you've hit the nail on the head there. the BTL-ers might get their business by packing 10 of them into a 4 bed terrace, but I can't see many Bulgarians buying a family home in Northampton for £400K when you might as well buy this at home:

http://www.rightmove.co.uk/overseas-property/property-44598020.html

3 bedroom house for sale

£6,723

Bulgaria - Draganovo, municipality Gorna Oryahovitsa

and get your benefits sent there.

( Thats not a typo, the price is £6723 ).

I'd like to compare London 2013/2014 to Bulgaria 2006/2007. All the Bulgarians in 2006 must have been thinking what nutters the brits were to be buying houses at 10 times what the locals were willing/able to pay and wondering if they'd ever be able to afford to buy a house themselves because of it.....role forward to 2014.....

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The high demand for housing has in the past been quelled by lowering interest rates, and shrinking the size of property...... Can not not go any lower or smaller comfortably, reached saturation point.

But the introduction of the buy to let mortgage and the changing of building societies into banks along with with borrowing equity from house to go shopping and using it as a deposit to buy another property for investment, so taking out of the system for potential owner occupiers to buy.........very few affordable first time buyer property left for people to buy in the places they wish to live, ie close to their place of work.

Far to few homes built to accmodate the influx of new permanent residents. ;)

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This article comes soon afer the Guardian's about journeying to 'the heart of the house price bubble'. It seems that far less of the MSM is on board for the bubble reflation than they were last decade. Even the Express hasn't been all over the recent Haliwide growth figures. Can only be a good thing and a very welcome development in my view. Enough priced-out journos starting to filter through the ranks?

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I think I would blame most BTL more on government changes to the pension system.

BTL is the enabler of massive immigration. Hences the tax perks, all government policy. without a large increase in the rented sector it would have been simply impossible for millions to arrive without spillng onto the streets.

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There is an excellent article in The Independent by Ben Chu which summarises all reasons for the UK housing crisis, it's really a neat summary of what we have been saying on here for years:

http://www.independent.co.uk/property/house-and-home/property/britain-is-suffering-from-a-housing-crisis--who-is-to-blame-and-how-can-we-fix-it-9113329.html

Maybe Ben Chu is a HPC lurker or even poster? He looks young which probably makes him someone who is personally affected:

http://www.independent.co.uk/biography/ben-chu

---

Could this be Ken Ichiwa?

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