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Dave Beans

Tories admit that the housing market is broken

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Big news.

That is 'game over' as far as the Tories wanting a home-owning democracy.

Acknowledgement that it's no longer possible, that nothing will be done to encourage lower house prices.

The plebs can rent forever.

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This has happened sooner than even I thought it would.

A new re-energised and all conquering Tory government does what Tory governments have done since their inception - consolidate the power of the landed elite.

A sign - if any more were really needed that they will throw the economy under the bus to keep the price of land high. Thanks to Brexit your children will have nowhere to run.

Game, set and match to the rentiers.

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5 minutes ago, Tempus said:

Big news.

That is 'game over' as far as the Tories wanting a home-owning democracy.

Acknowledgement that it's no longer possible, that nothing will be done to encourage lower house prices.

The plebs can rent forever.

No. reluctant to face tbe future and that gidiot has put their skin in game.

They sgoukd have stepped aside and letbprices carry on falling, attacing blame rightly to brown. They didnt. they contunued browns lunancy and bought into it.

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The guardian reports it as: 
” They added that the government did not want to scare people off from renting out homes, but offer incentives to encourage best practice and isolate the worst landlords. By emphasising the rights of renters, as well as trying to boost house building, the white paper will mark a turning point for a party that since the 1980s, and the first council house sales, has promoted home ownership as a badge of success, while neglecting the interests of renters.

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No talk of building council houses though? Just extending the length of tenancies. Renters do need more rights, but as Futuroid has said I worry that these token increased rights are just the anaesthetic that will be used to turn the UK in to a land where everybody rents from a landlord. 

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A long tenancy does not address the fact that the rents are too high. I do prefer this policy over help to buy though. Higher interest rates are the only thing that will make a difference

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How can you judge that the market is "broken" when we have IRs at the current "emergency" level? We've had years of low IRs and lax lending standards compared to the past in the face of stagnant incomes; in these circumstances this move looks more like accommodating dysfunction than resolving a problem.

 

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30 minutes ago, Futuroid said:

This has happened sooner than even I thought it would.

A new re-energised and all conquering Tory government does what Tory governments have done since their inception - consolidate the power of the landed elite.

A sign - if any more were really needed that they will throw the economy under the bus to keep the price of land high. Thanks to Brexit your children will have nowhere to run.

Game, set and match to the rentiers.

That seems a little unfair. Give them some credit for trying. This site has been calling for longer tenancy agreements for years, and when they are proposed y'all whinge. Its a start...

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10 minutes ago, dryrot said:

That seems a little unfair. Give them some credit for trying. This site has been calling for longer tenancy agreements for years, and when they are proposed y'all whinge. Its a start...

Quite right. This should be seen as part of the rebalancing between landlords and tenants that began with the announcement of s24 back in July 2015

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21 minutes ago, assetrichcashpoor said:

No talk of building council houses though? Just extending the length of tenancies. Renters do need more rights, but as Futuroid has said I worry that these token increased rights are just the anaesthetic that will be used to turn the UK in to a land where everybody rents from a landlord. 

I thought the length of the tenancies an AST was a bank stipulation......Part of the BTL contract, so that the property could easily be repossed by the bank in a timely way if payments not made.

What is required is more safe and secure long-term rental property......Not everyone wants to buy, they would rather be happy to rent at the right price and be in control of how long they stay there knowing they will be protected by some sort of rent increase control or access to a rent tribunal.....;)

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Longer tenancies makes housing a less liquid investment and higher risk. This should, all other things being equal, reduce equilibrium house prices.

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It doesn't sound like longer tenancies will be mandatory, just that landlords will be "incentivised" to offer them. Could be some form of accreditation (e.g. Boris Johnson's completely pointless London Rental Standard that was taken up by less than 1% of the market) or a tax bung.

Also longer tenancies are not much of an improvement if the tenant is also locked in for 3-5 years. What if they want/need to move? A lot can change in your employment/household composition situation in 3-5 years, especially when you're in your 20s and 30s. Let's see if the blue team can handle the concept of asymmetric notice periods without their heads exploding.

Edited by Dorkins

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30 minutes ago, dryrot said:

That seems a little unfair. Give them some credit for trying. This site has been calling for longer tenancy agreements for years, and when they are proposed y'all whinge. Its a start...

Your optimism is touching.

My jaded eyes see the Tories struggling to get votes with a decreasing proportion of the electorate owning their own home, so they have to offer a few "goodies" for perma-tenants. As I have posted in the past, it's looking a lot like 1960-2000 was an anomaly, a glitch in the matrix.

Rent your home (for life), pay to get an education, few rights at work, few rights when dealing with the state, die still working in your late 70s. The only thing missing if paying for healthcare... give that 5 years and you'll be begging them to privatise the NHS.

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There is another article on the guardian just below this one with hitting a totally different tone, saying major changes in planning + building on greenbelt will be allowed.

https://www.theguardian.com/commentisfree/2017/feb/05/housing-white-paper-green-belt-solution-to-housing-crisis

I suspect the "tories gave up on house ownership" comes only from the author of the article, but I'd wait that whitepaper on Tuesday.

Now that the market seems to slow, tax will increase some landlords might not want to sign up for a 3 year tenancy, so this could be another catalyst for selling. In 3 years time a lot can happen with interest rates, etc... even if the rent follows the "market" rent that won't compensate for houses losing value due to rising interest rate.

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There is a clear model in the scottish private housing (tenancies) (scotland) bill.

No minimum notice for tenant to give.

No end date to lease - indefinite

No 'no fault' route for landlord to end lease (cant simply end lease at end of defined contract). Can reclaim possesion if intend to sell.

Rent control in high pressure areas.

Rent boards to reject rent increases over certain parameters (avg local rents/cpi etc)

Sadly only applies to new agreements struck after implementation later this year...however with a downward pressure on rents you would hope people would be incentivised to move and that might be their last move for the forseeable future.

 

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40 minutes ago, dryrot said:

That seems a little unfair. Give them some credit for trying. This site has been calling for longer tenancy agreements for years, and when they are proposed y'all whinge. Its a start...

This. Lots of winghing going on here

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6 minutes ago, Futuroid said:

Your optimism is touching.

My jaded eyes see the Tories struggling to get votes with a decreasing proportion of the electorate owning their own home, so they have to offer a few "goodies" for perma-tenants. As I have posted in the past, it's looking a lot like 1960-2000 was an anomaly, a glitch in the matrix.

Rent your home (for life), pay to get an education, few rights at work, few rights when dealing with the state, die still working in your late 70s. The only thing missing if paying for healthcare... give that 5 years and you'll be begging them to privatise the NHS.

So you're supporting the Thatcher doctrine promoting home ownership?

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5 minutes ago, Si1 said:

This. Lots of winghing going on here

+1

We've also been suggesting a "use it or lose it" policy for builders.

I don't see this as an admission that the market cannot be fixed and home ownership will forever be unattainable for the vast majority, so screw house prices let them rise.

It's more an admission that the market isn't going to magically fix itself by keeping the status quo of allowing builders to control prices, renters feeling like ownership is the only way they'll ever feel secure, landlords being able to take short term positions on future house prices, lending extra cash to priced out renters so they can borrow with super low interest rates to buy at prices they shouldn't be able, token "affordable" houses among developments full of unaffordable ones, and everything else that's kept this bubble going on and on and on.

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13 minutes ago, Si1 said:

So you're supporting the Thatcher doctrine promoting home ownership?

I'm supporting home ownership - are you not?

I think my reasons for supporting home ownership are probably different to Margaret's. I would imagine she knew that home owners were more likely to vote to Tory. If they were ex-council tenants who had bought their home for a song, there was even MORE chance of them voting Tory. Even if they had been staunch Labour supporters in the past.

My own reasons are somewhat more selfish. I want my children to be able to live a decent life without having to pay extortionate rents (or mortgages, come to that). I'm also a sentimentalist who thinks that having a few people (or companies) owning vast swathes of the country is not as productive as having ownership distributed across a much wider cross section of the population.

A decent cost-effective alternative to owning is essential for the economy in general. It shouldn't however, be the booby prize. 

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Just on Peston. I was quite surprised he actually brought up the usual elephant in the room - immigration. 

Would Brexit bring down numbers easing pressure on housing ? 

Minister responds by saying immigration 'only' amounts to a small part of the demand. Then states it's about 30% .

Errrr that doesn't sound small to me. Just last year net immigration was almost 500,000. And that's the official figures.

Immigration puts huge pressure on housing in this country. 

 

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