Fairyland Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
Fairyland Posted April 12, 2016 Author Share Posted April 12, 2016 (edited) Very good article. Well done Dominic Frisby! Wake up people, wake up! Edited April 12, 2016 by Fairyland Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted April 12, 2016 Share Posted April 12, 2016 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? Quote Link to comment Share on other sites More sharing options...
Errol Posted April 12, 2016 Share Posted April 12, 2016 No, Nixon did. With the closure of the gold window. Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted April 12, 2016 Share Posted April 12, 2016 It was the f**king Roman's fault Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted April 12, 2016 Share Posted April 12, 2016 P.S. If you want to know who's fault it is...look in the mirror. Quote Link to comment Share on other sites More sharing options...
t1234 Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted April 12, 2016 Share Posted April 12, 2016 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). Quote Link to comment Share on other sites More sharing options...
wonderpup Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted April 12, 2016 Share Posted April 12, 2016 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! Quote Link to comment Share on other sites More sharing options...
PopGun Posted April 12, 2016 Share Posted April 12, 2016 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....? Quote Link to comment Share on other sites More sharing options...
EUBanana Posted April 12, 2016 Share Posted April 12, 2016 Excellent article Frizzers, and in the Guardian too, the place it needs to be read the most. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
Blod Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
winkie Posted April 12, 2016 Share Posted April 12, 2016 Very good article. Well done Dominic Frisby! Wake up people, wake up! Quote Link to comment Share on other sites More sharing options...
Agentimmo Posted April 12, 2016 Share Posted April 12, 2016 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. . . . . Quote Link to comment Share on other sites More sharing options...
iamnumerate Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
winkie Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
canbuywontbuy Posted April 12, 2016 Share Posted April 12, 2016 It's so simple: if the base rate had remained at 4.5% since 2009 instead of plummeting to 0.5%, house prices would be 40-50% lower than they are today, maybe even lower. Quote Link to comment Share on other sites More sharing options...
Simon Taylor Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
Steppenpig Posted April 12, 2016 Share Posted April 12, 2016 (edited) Was 10th most popular article accross the guardian earlier, but seems to have dropped out of the top 10 now. Edited April 12, 2016 by Steppenpig Quote Link to comment Share on other sites More sharing options...
Guest Posted April 12, 2016 Share Posted April 12, 2016 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. Quote Link to comment Share on other sites More sharing options...
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