Jump to content
House Price Crash Forum
Fairyland

Theguardian, Why Younger People Can’T Afford A House: Money Became Too Cheap

Recommended Posts

Link:

Why younger people can’t afford a house: money became too cheap
There is perhaps no greater manifestation of the wealth gap in this country than who owns a house and who doesn’t, and yet it’s so unnecessary. Ignoring land prices for the moment, houses do not cost a lot of money to build – a quick search online shows you can buy the materials for a three-bed timber-framed house for less than £30,000; in China a 3D printer can build a basic home for less than £3,000 – and the building cost of the houses we already have has long since been paid. How can it be that, in the liberal, peaceful, educated society that is 21st-century Britain, a generation is priced out? These are not times of war, nor are they, for the most part, periods of national emergency, so why should one couple be able to settle down and start a family and another not, by virtue of the fact that one was born 15 years earlier than the other?
The 1947 planning act was founded on the laudable aim “that all the land of the country is used in the best interests of the whole people”. The opposite has happened. The act reinforced the monopoly of the landowner and we now have a situation where more than 70% of UK land is owned by just 6,000 or so landowners (the Crown, large institutions and a few rich families). The act has led to huge concentrations of capital and people in areas that are already built up – especially London – bringing vast unearned wealth to those who own at the expense of those who don’t. It has actually caused the wealth gap to grow.

Share this post


Link to post
Share on other sites

To answer

"These are not times of war, nor are they, for the most part, periods of national emergency, so why should one couple be able to settle down and start a family and another not, by virtue of the fact that one was born 15 years earlier than the other?"

Partly because of the Government the Guardian supported for 13 years.

FWIW Spain had cheap debt as well and it has fueled massive house building. Where my relatives live flats are so much cheaper than before.

Share this post


Link to post
Share on other sites

The 1947 planning act was founded on the laudable aim “that all the land of the country is used in the best interests of the whole people”. The opposite has happened. The act reinforced the monopoly of the landowner and we now have a situation where more than 70% of UK land is owned by just 6,000 or so landowners (the Crown, large institutions and a few rich families). The act has led to huge concentrations of capital and people in areas that are already built up – especially London – bringing vast unearned wealth to those who own at the expense of those who don’t. It has actually caused the wealth gap to grow.

Was it the evil Tories who did this?

Share this post


Link to post
Share on other sites

Excellent article, surprised the comments here are trying to belittle it as to me it is pointing out the very sad state of affairs with housing rather than pointing the finger.

I hope people aren't put off going and reading for themselves it by the comments here.

Share this post


Link to post
Share on other sites

Excellent article, surprised the comments here are trying to belittle it as to me it is pointing out the very sad state of affairs with housing rather than pointing the finger.

I hope people aren't put off going and reading for themselves it by the comments here.

Housing has been un affordable for some time but when I used to read the Guardian they didn't care because it was Labour in power. The Guardian always says "Labour created the NHS" but never "Labour created the 1947 planning act".

Saying that it is good that a sinner repents etc.

Of course the housing crisis is not that difficult to solve, build more houses and stop paying people to come to the UK. (I know people who have come here because friends of theirs have and they got given housing).

Share this post


Link to post
Share on other sites
Property owners became immensely wealthy without actually doing anything.

Is this capitalism, socialism or something else entirely?

It's kind of ironic that in a period where the ideology of free markets as an engine of meritocracy was the dominant meme we have seen an explosion of unearned wealth among those who just happened to be born at the right place and time- surely the very opposite of meritocratic wealth distribution.

When slowly decaying piles of bricks and mortar earn more per annum than people who work for a living something has gone horribly wrong with the system.

Share this post


Link to post
Share on other sites

Is this capitalism, socialism or something else entirely?

It's kind of ironic that in a period where the ideology of free markets as an engine of meritocracy was the dominant meme we have seen an explosion of unearned wealth among those who just happened to be born at the right place and time- surely the very opposite of meritocratic wealth distribution.

When slowly decaying piles of bricks and mortar earn more per annum than people who work for a living something has gone horribly wrong with the system.

Free markets are not perfect but I don't think housing in the UK is a free market neither demand (housing benefit) or supply (planning laws) have anything to do with a free market.

Share this post


Link to post
Share on other sites

No, Nixon did. With the closure of the gold window.

Which means that it's all Lyndon B. Johnson's fault for escalating US involvement in Vietnam.

More seriously, nice work Frizzers!

Share this post


Link to post
Share on other sites

Indeed good article.

Although a tad contradictive regarding planning.

Oh well at least you renters opted out and never participated or contributed to this malady.

What's your pensions and funds invested in again....?

Share this post


Link to post
Share on other sites

And to the ***** in the comments section who refers to Bolton. It's an outlier, dumbass. The only region in England where buyers would have lost money since the year 2000 in cash terms. Every other town/region has see property rises, generally far in excess of inflation. In London and the South East, stratospherically so.

Share this post


Link to post
Share on other sites

As Spain has already been mentioned, and not forgetting Ireland. Its not "planning" or "building" that are too be blamed, look at how both countries had building booms whilst prices rose beyond the reach of their native populations. The simple truth is cheap money fuels house price inflation everything else is used by those who benefit from high house prices as camouflage to disguise this.

Look at average mortgage cost versus interest rates and the truth is laid bare.

Look at how Carney is refusing to raise rates, he knows that house prices will collapse just as soon as they rise.

Share this post


Link to post
Share on other sites

As Spain has already been mentioned, and not forgetting Ireland. Its not "planning" or "building" that are too be blamed, look at how both countries had building booms whilst prices rose beyond the reach of their native populations. The simple truth is cheap money fuels house price inflation everything else is used by those who benefit from high house prices as camouflage to disguise this.

Look at average mortgage cost versus interest rates and the truth is laid bare.

Look at how Carney is refusing to raise rates, he knows that house prices will collapse just as soon as they rise.

But in Spain the price boom led to a building boom which caused prices to be very cheap and believe me Spain has very loose lending now, you can get a mortgage without a job or a deposit.

Share this post


Link to post
Share on other sites

But in Spain the price boom led to a building boom which caused prices to be very cheap and believe me Spain has very loose lending now, you can get a mortgage without a job or a deposit.

Yes. However, the boom didn't provide cheap prices - - - the cheap prices didn't materialise for the average Jose until they had their HPC.

Pretty sure the Spanish govt didn't print a shed load of money to support their housing market, HTB, HTB2, etc. . . . .

Share this post


Link to post
Share on other sites

Yes. However, the boom didn't provide cheap prices - - - the cheap prices didn't materialise for the average Jose until they had their HPC.

Pretty sure the Spanish govt didn't print a shed load of money to support their housing market, HTB, HTB2, etc. . . . .

I like the term average Jose. True the Spanish didn't produce a shed load of money to support their housing market. However where my family live prices are about 30% of peak 2007 in London at 200% - I doubt that HTB etc are entirely responsible for this and I doubt in the UK you can get a job without a deposit or job as you can in Spain now.

Share this post


Link to post
Share on other sites

I think in Spain a lot of the property is owned by the banks......the mortgagors walked when the prices fell below the 5% or so deposits, doesn't take much.......who was left holding the baby?......some repayment is better than none at all. ;)

Share this post


Link to post
Share on other sites

Free markets are not perfect but I don't think housing in the UK is a free market neither demand (housing benefit) or supply (planning laws) have anything to do with a free market.

Housing is about as far from a free market it is possible to be. The state restricts demand through the T&CPA and devolves the power to allocate supply to local politicians. Demand thus restricted, the state stokes demand by encouraging unlimited lending and offers state protection to banks who lend too much and borrowers who borrow too much.

If we had a free market in housing, no-one would be signing away their most productive years to pay six times their salary for 110m2 of new build bivouac.

Share this post


Link to post
Share on other sites

I think I have to give up reading comment sections for my own mental health:

The young are understandably unhappy at how difficult it is to buy property, but they will of course inherit it all soon enough.

Why younger people can’t afford a house? Because they bought all the other stuff instead and you can't actually have everything even if you want it.

Wrong. House prices have never been included in anybody's inflation measure because what matters is not the nominal price of the asset but the cost of purchasing it. So it is interest rates that matter (and are included in inflation), not asset prices.

Admittedly there are a lot of sensible comments on that article too but it's infuriating to see the same 'I'm alright, Jack' arguments pop up again and again. A lot of people seem to see nothing wrong with a world where the only realistic way to obtain property is to inherit it - presumably their kids will be ok, and stuff everyone else.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   212 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.