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Why Has Generation Rent Walked Out Of The Homes For Britain Campaign ?

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Why Has Generation Rent walked out of the Homes for Britain campaign ?

You look down the list of members of the Homes for Britain campaign a little puzzled and then you go aaah...

...

No significant advance in housing policy has been achieved from any party in a year and, in fact, retrograde policies are now a reality.

We believe this is because HfB has taken a lowest-common-denominator approach when that denominator is the Residential Landlords Association.

In other words, Generation Rent argues, it's all very well creating a movement in which landlords and tenants and developers and land owners (and Labour and Tory and UKIP and Greens) can all come together and say that they want to end the housing crisis. But doing so doesn't change the fundamental fact that the housing market is a zero sum game. If we have enough homes, prices will fall. For renters to win, landlords must lose. Pretending they have a shared interest here is a recipe for inaction.....

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This is the problem in a nutshell. I went to the local housing hustings and asked each of the candidates if any of them had the balls to stop meddling with the housing market and let market force prevail. All of them wanted to do something the make housing affordable as long as it would not cause prices to drop - as this would create misery with the poor being the worst hit (I had to correct the Tory MP who actually said that). None of them could see how this might be a paradox.

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Generation Rent wants more action against the vested interests which stand to benefit from the crisis' continuation.

Very good - some blunt calling it as it is, rather than the constant nicey nicey and watching the authorities load more on to them under 'Because it's the right thing to do (yes; for VI)". For renters to win, landlords must lose. Pretending they have a shared interest here is a recipe for inaction.

Only real hope for rebalance to occur (HPC) is some other entities who are more powerful than the homeowner/BTL vested interests, and who stand to gain in a big prime HPC shakeup.

For the complacent it doesn't appear there are any such market participants, but it's the banks for me (and Gov), and many businesses. Banks writing a £1Tn volume of fresh debt, in big HPC, against current owner-side £Tns in equity. HPC; “My god, it’s full of stars.” Only new debt can defeat structural debt.

Just what pretext will it be for the authorities to stand aside, claim they're helpless, for unstoppable HPC to the shock of those VI owners/BTLers? I want to be around when it happens.

June 11, 2014

Deputy BoE Governor, Broadbent:

"Andy [Haldane] is the master of the colourful phrase but on this I disagree with him," said Broadbent, who instead identified risks in the UK's housing market as the greatest threat to the country's economic outlook. He went on to say that the Bank will not directly intervene on house prices, but is instead only interested in "the rate of growth of mortgages, which is today very low".

http://www.cityam.com/blog/1402493641/meet-ben-broadbent-latest-bank-england-staffer-face-mp-grilling

2 October 2014

Ben Broadbent agrees that interest rate rises will cause problems for "a certain number of borrowers" but is clearly of the view that the concern has been overdone.

He points out that the total amount of debt in the economy is actually lower than it was five years ago.

"I would lean against the view I think that any rise in interest rates would cause calamity for a very large number of households. I think that's an exaggeration of where we are at the moment," he told me.

Broadbent doesn't think higher interest rates will lead to a significant rise in the number of repossessions.

http://www.itv.com/news/2014-10-02/how-prepared-are-british-homeowners-for-a-rise-in-interest-rates/

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For renters to win, landlords must lose. 

Sure. But why do banks and the government care about landlords? Why not care about home buyers? Lower prices, increase aggregate volume = more money for banks and government. Why suppress activity by denying price discovery which promotes more business for all concerned? How very un-capitalistic!

Edited by canbuywontbuy

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For renters to win, landlords must lose. 

Sure. But why do banks and the government care about landlords? Why not care about home buyers? Lower prices, increase aggregate volume = more money for banks and government. Why suppress activity by denying price discovery which promotes more business for all concerned? How very un-capitalistic!

One day, when the government is really strapped for cash and need to raise taxes, they'll have a eureka moment and realise that landlords are fewer than voters and will therefore be sitting ducks for taxing.

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One day, when the government is really strapped for cash and need to raise taxes, they'll have a eureka moment and realise that landlords are fewer than voters and will therefore be sitting ducks for taxing.

Only once the number of Mps who are BTL owners has dropped substantially. Turkeys, Christmas, and all that...

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Guest Jemmy Button

Although, I have leanings towards the aims of 'Generation Rent', I can't help thinking that most of these are a bunch of lefties who tend to turn a blind eye to Labour's role in making this heap of dung happen in the first place. Yes, Thatcher had a lot to do with selling off council houses but to me, 13 years of Labour in power was the real death knell to a sensible housing policy.

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It was Gordon Brown in the midst of the so called credit crunch who gave a speech say his priority and focus of all his efforts was 'to get house prices moving again'.

And he didn't mean downwards.

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The UK economy is the housing market. Even with the "recovery" in the housing market to price levels of pre the credit crunch the house builders aren't building. Why should they, they know that if they can wait and the value of their land bank will keep increasing and also simply they've priced their products out of the market. The banks obviously want HPI. High returns from higher levels of borrowing supported currently by lower numbers of defaults.

Lower prices = affordable housing end of. More house building, shared ownership, HTB, etc, have been used to distract from that simple truth.

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It was Gordon Brown in the midst of the so called credit crunch who gave a speech say his priority and focus of all his efforts was 'to get house prices moving again'.

And he didn't mean downwards.

Undoubtedly because that's what the focus groups wanted.

I agree with posters on here who say it's all about demographics. Once winners from a fall in house prices outnumber losers, and importantly those who would win actually vote, political parties will be willing to regard it favourably or at least neutrally (and the spin it as a Good Thing).

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It was Gordon Brown in the midst of the so called credit crunch who gave a speech say his priority and focus of all his efforts was 'to get house prices moving again'.

And he didn't mean downwards.

Yes, now it's all the politician sides know now, and older equity rich homeowner/BTL/developers wanting to sell at high prices. HPI HPI HPI... HPI HPI HPI.

Those in richest parts of London saw and continued to see epic HPI... renter hoping to buy there little look in (other than the victims those on HPC were claiming were victims when they paid £300K for 1 bed apartments.. same types now paying £500K-£600K same places and still the victim posts.. 'feel sorry for'). Why not let prices fall till people can afford, so their savings put them into better position

George Osborne's conference speech in full

Monday, 30 September 2013

[..] But too many people are still being denied the dream of owning their own home. So instead of starting the second phase of Help to Buy next year, we’re starting it next week.

There are some people - many living in the richest parts of London - who say we shouldn’t be doing these things. I have this to say: Take you arguments down the road to Nelson or Colne, where house prices have fallen for the past five years. Take your arguments to Bury, or Morecambe, where young working couples are still living at home with their parents.

Take your arguments to our great towns and cities where there are families who have saved for years, earning decent salaries, who can afford the mortgage repayments but can't possibly afford the deposit being asked by the banks these days. Take your arguments to those families and say: “This policy is not right. You shouldn't be allowed to get your home.” I tell you what they'll say back: “It's alright for you. You've got your own home. We’ve been saving for years. What about us?”

I know whose side this Party is on. We are the party of aspiration. The housebuilding party of Macmillan. The party of Thatcher's right to buy. And now the party of David Cameron’s Help to Buy. We are the party of home ownership and we’re going to let the country know it.

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Undoubtedly because that's what the focus groups wanted.

I agree with posters on here who say it's all about demographics. Once winners from a fall in house prices outnumber losers, and importantly those who would win actually vote, political parties will be willing to regard it favourably or at least neutrally (and the spin it as a Good Thing).

I disagree that things will change once the balance changes and more people are harmed by HPI than those that gain. Look at the issue of immigration. For the majority of people on middle or low wages, immigration reduces wages, increases rents and reduces quality of life. It increases incomes and quality of life for a minority of upper-income urban professionals and rentiers. Whose interests are catered to by the politicians?

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Very good - some blunt calling it as it is, rather than the constant nicey nicey and watching the authorities load more on to them under 'Because it's the right thing to do (yes; for VI)". For renters to win, landlords must lose. Pretending they have a shared interest here is a recipe for inaction.

Only real hope for rebalance to occur (HPC) is some other entities who are more powerful than the homeowner/BTL vested interests, and who stand to gain in a big prime HPC shakeup.

For the complacent it doesn't appear there are any such market participants, but it's the banks for me (and Gov), and many businesses. Banks writing a £1Tn volume of fresh debt, in big HPC, against current owner-side £Tns in equity. HPC; “My god, it’s full of stars.” Only new debt can defeat structural debt.

Just what pretext will it be for the authorities to stand aside, claim they're helpless, for unstoppable HPC to the shock of those VI owners/BTLers? I want to be around when it happens.

Has anyone worked out;

a ) What is the minimum house price drop necessary for the banks to make large profits on reissuing new debt (volume with lower mortgages, rather than low volume but higher mortgages?).

b ) What is the cost to the country in terms of loss from the various housing taxes that would lose out because of any fall (CGT, SDLT, IHT, Mansion tax) etc. Also need to factor in the inverse which is lower HB/LHA bills (probably). However, probably need some sort of mathematical model to work out exactly how this would effect each part of the system because housing/society is so heavily intertwined now.

c ) Whether the government would put the interests of the banks before the interests of the economy this time?

Edited by fru-gal

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I disagree that things will change once the balance changes and more people are harmed by HPI than those that gain. Look at the issue of immigration. For the majority of people on middle or low wages, immigration reduces wages, increases rents and reduces quality of life. It increases incomes and quality of life for a minority of upper-income urban professionals and rentiers. Whose interests are catered to by the politicians?

Mind you the moment they step out of the door they're met with the decline in quality of life through the increasing and getting still more intolerable congestion virtually everywhere, on the roads and in the shops, shopping centres etc etc. An issue rarely if ever addressed by politicians.

Perhaps it applies to those who can escape it on their estate (estate in the old fashioned sense of the word) or overseas to some idyll - or get servants to deal with it.

Edited by billybong

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Any opinions about generation rent? Worth supporting or not?

Although, I have leanings towards the aims of 'Generation Rent', I can't help thinking that most of these are a bunch of lefties who tend to turn a blind eye to Labour's role in making this heap of dung happen in the first place. Yes, Thatcher had a lot to do with selling off council houses but to me, 13 years of Labour in power was the real death knell to a sensible housing policy.

Broad answer is yes, worth supporting although Jemmy's point a worthwhile caveat if a little pedantic.

Thinking about it, this has got to be the first worthwhile 'official' protest at the stranglehold VI's have over this issue I can think of during the decade or so I've dipped in and out of this site. If it is the first, one swallow and all that, but its encouraging.

This episode also highlights that its also about time we stopped being coy about what people are really asking for (not on here obviously!) as this is what is causing the problem with politicians in the first place:

We want to build more homes because we think they are too expensive, and therefore believe prices will come down by building them.

I mean it sounds obvious but...

I had a look at the probable spectrum of attitudes within the members of the Homes for Britain campaign, a bit simplistic but be interesting to hear what others thought:

HPI - NO THANKS !

Generation Rent

Crisis
National House Building Council - Focussed on standards therefore neutral (but who are members..) ?
Chartered Institute of Housing - Focussed on standards therefore neutral (but who are members..) ?
National Housing Federation - Represents Housing Associations
Royal Town Planning Institute - in theory neutral but hpc not initially commercially good for members
Royal Institute of British Architects - in theory neutral but hpc not initially commercially good for members
Home Builders Federation - finger hovering over lumping them with the residential landlords...
Residential Landlords Association
HPI - YES PLEASE !

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