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fru-gal

How to solve Britain’s housing crisis

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Quote -

"Mr Corbyn says the answer is a huge expansion of public housing, like the one in the Wilson and Callaghan governments in the 1970s. This would be expensive, especially if such housing was let at below-market rates. And few Britons aspire to rent from the council for life."

 

Who says few Britons aspire to rent from the council for life?

We are still seeing this nonsense about everyone aspiring to better, when it's this that got us into the current mess in the first place.

 

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The economist are surprisingly out of touch, they think that building a few extra houses each year will solve a problem caused by decades of lax lending and low interest rates.

Perhaps their readers are all bankers who don't want to hear the truth.

The comments are even worse, some idiot thinks council tax should be based on the last price paid for each house. Just imagine an old couple who have been in the same house for 50 years paying £2.50 a month council tax, and a young couple move into an identical house next door and pay 100X as much.

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4 minutes ago, Social Justice League said:

Quote -

"Mr Corbyn says the answer is a huge expansion of public housing, like the one in the Wilson and Callaghan governments in the 1970s. This would be expensive, especially if such housing was let at below-market rates. And few Britons aspire to rent from the council for life."

 

Who says few Britons aspire to rent from the council for life?

We are still seeing this nonsense about everyone aspiring to better, when it's this that got us into the current mess in the first place.

 

My neighbours rent from the council. Very nice it is too: newly refurbished with a new kitchen, carpets, repainted. Problems are fixed quickly. And the rent is much less than mine.

Yes, I do aspire to that.

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18 minutes ago, Habeas Domus said:

The economist are surprisingly out of touch, they think that building a few extra houses each year will solve a problem caused by decades of lax lending and low interest rates.

Perhaps their readers are all bankers who don't want to hear the truth.

Increase supply would partially help...after all cheap credit is available for cars furniture etc and we don't see hyper inflation in their prices (ie their supply keeps up with the new demand).  I always say restrictive planning laws are the fuel and low interest rates the spark. 

Like all such media, they do have to play to their audience and not shock or challenge their current thinking too much.

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4 minutes ago, RentingForever said:

My neighbours rent from the council. Very nice it is too: newly refurbished with a new kitchen, carpets, repainted. Problems are fixed quickly. And the rent is much less than mine.

Yes, I do aspire to that.

Not proud would aspire to that....it is not the house it is the community that matters, low wage means only possible to pay low rents......only concern is that the state pension if still able to work till collection would not cover the cost of any kind of rent....so plan for a huge shortfall for thousands of people in the future if things stay the same.....

We are in this mess because wages are so low in comparison to the increasing cost of rents (and hose prices) over and above general inflation and wage inflation, so they have decided to top up wages with housing benefit top-ups thus topping up private rents, thus benefiting private landlords, not the people that have no choice but to rent, they don't see or benefit from the benefits everyone says they benefit from......back to the new paradigm of profiteering from victims of the new alternative forced way of no choice but to live above means.

 

Most people do not want to be beholden to state benefits, they would prefer to work/earn so that they can pay their own way in life....for many now that is completely impossible, forever dependent and needy, the victims.;)

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Not everyone wants to be a mortgage slave.

Many, many working people just want cheap rented accommodation with secure tenure.

Nothing wrong with that, as everyone should have the choice, rather than being forced to pay the banks thousands in interest payments on a huge mortgage just to get shelter from the rain.

 

The current housing market is disgusting and completely corrupt imo.

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9 minutes ago, Social Justice League said:

Not everyone wants to be a mortgage slave.

Many, many working people just want cheap rented accommodation with secure tenure.

Nothing wrong with that, as everyone should have the choice, rather than being forced to pay the banks thousands in interest payments on a huge mortgage just to get shelter from the rain.

 

The current housing market is disgusting and completely corrupt imo.

I agree. My other half and I have only bought because we want the security of ownership, and in the long run the potential to have no rent to pay (a very long way to go until mortgage is cleared). I'd love to have the German model where rents are cheap, properties are owned and maintained by companies within a framework of regulation and have sufficient cash to spare to enjoy life. 

The huge stickiness of the Labour market in the UK is a constantly sited as one of the main drags on productivity and growth. 

My biggest issue with the way things stand in the UK is the contradiction of govt policy (especially left leaning governments) around the freedom of movement and migration for free market and enterprise, and the lack of regulation in the PRS, yet the crushing restrictions around the supply side of housing meaning that meeting those needs is millions of miles away from being a free market. All further exacerbated by paying people to do nothing while living in very expensive areas.  

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8 hours ago, fru-gal said:

Thanks for flagging that, fru-gal.

This passage in the final paragraph is quite telling:

Quote

Economically straightforward is not the same as politically easy. Even so, Theresa May, the prime minister, has so far failed to show any mettle over housing.

There are too many winners under the present system and the losers' vote is not well-coordinated and lacks any kind of obvious political home. No improvement will come from policy until something essentially external shifts some of the dials. A big crash would open up some opportunities and with each passing year changing demographics shift the balance away from the winners and towards the losers.

Interesting to see the Economist linking the UK's dire productivity numbers with the so-called "housing crisis". Good also to see them (once again IIRC) putting the knife into the ridiculous London Green-belt (enough green-belt within Greater London to build "1.6m houses at average densities").

I think they're wrong about just "freeing the market". The house-building market is a creature of policy and will respond to the incentives that flow from the state. It may not have to be like that, but it definitely is exactly like that and a lot of things would have to change before it could be said that that description was off the mark.

Edited by Bland Unsight
typos: "loser's" and some others

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6 hours ago, nightowl said:

Increase supply would partially help...after all cheap credit is available for cars furniture etc and we don't see hyper inflation in their prices (ie their supply keeps up with the new demand).  I always say restrictive planning laws are the fuel and low interest rates the spark. 

Like all such media, they do have to play to their audience and not shock or challenge their current thinking too much.

yes I agree, increasing supply would help both in reducing prices (everything else being equal), but particularly in better housing the nation. It is obvious really. Without scarcity and competitive bidding there is no mechanism for inflation.

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Increasing the number of new builds by 300,000 per year is only equivalent to increasing capacity by 0.6% (thanks to immigration) so even doing that for 10 years will only add 6% to the UKs housing stock, I don't see that making a huge difference even if they are built in the areas of highest demand.

Also I don't see how any of our current mass builders could pull that off without lowering the already shockingly poor building standards to the levels seen in Ireland/Spain where a lot of them end up being uninhabitable.

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1 hour ago, maverick73 said:

Simply raise interest rates sand everything becomes affordable. Switch inflation calculations back to RPI and that favours those who save money for rainy days.

The problem with switching to RPI now is that if house prices fall so too would RPI and the BoE would have a mandate to jack up inflation. 

Be careful what you wish for. 

If only Labour had never switched it from RPI to CPI in the first place we might never be here. 

There is one alternative viewpoint I'd like to throw out there. Why should a saver be entitled to risk free returns on their cash any more than someone is entitled to HPI on their home? I find that viewpoint an interesting one. 

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4 minutes ago, Habeas Domus said:

Increasing the number of new builds by 300,000 per year is only equivalent to increasing capacity by 0.6% (thanks to immigration) so even doing that for 10 years will only add 6% to the UKs housing stock, I don't see that making a huge difference even if they are built in the areas of highest demand.

Also I don't see how any of our current mass builders could pull that off without lowering the already shockingly poor building standards to the levels seen in Ireland/Spain where a lot of them end up being uninhabitable.

Supply and demand are at work here but it's not really supply and demand of property, but that of cheap credit. 

If mortgages were abolished tomorrow how much would house prices fall by?

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8 hours ago, adarmo said:

The problem with switching to RPI now is that if house prices fall so too would RPI and the BoE would have a mandate to jack up inflation. 

Be careful what you wish for. 

If only Labour had never switched it from RPI to CPI in the first place we might never be here. 

There is one alternative viewpoint I'd like to throw out there. Why should a saver be entitled to risk free returns on their cash any more than someone is entitled to HPI on their home? I find that viewpoint an interesting one. 

This is a viewpoint moment. When at a 0.25% base rate and a stalling economy, if the consumer is the largest generator and they cannot afford the current prices then they have to decline.

The current choices are slow pragmatic approach and slice and dice approach.  

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10 hours ago, Bland Unsight said:

Thanks for flagging that, fru-gal.

This passage in the final paragraph is quite telling:

There are too many winners under the present system and the losers' vote is not well-coordinated and lacks any kind of obvious political home. No improvement will come from policy until something essentially external shifts some of the dials. A big crash would open up some opportunities and with each passing year changing demographics shift the balance away from the winners and towards the losers.

Interesting to see the Economist linking the UK's dire productivity numbers with the so-called "housing crisis". Good also to see them (once again IIRC) putting the knife into the ridiculous London Green-belt (enough green-belt within Greater London to build "1.6m houses at average densities").

I think they're wrong about just "freeing the market". The house-building market is a creature of policy and will respond to the incentives that flow from the state. It may not have to be like that, but it definitely is exactly like that and a lot of things would have to change before it could be said that that description was off the mark.

Theres not that many, just better connected then the non owners. For the moment.

 

 

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17 hours ago, Social Justice League said:

Not everyone wants to be a mortgage slave.

Many, many working people just want cheap rented accommodation with secure tenure.

Nothing wrong with that, as everyone should have the choice, rather than being forced to pay the banks thousands in interest payments on a huge mortgage just to get shelter from the rain.

 

The current housing market is disgusting and completely corrupt imo.

I agree, it is disgusting that someone can get off a plane and be given housing that others cannot afford.  Other EU countries don't feel the need to do this with us, so why are we so generous.

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18 hours ago, RentingForever said:

My neighbours rent from the council. Very nice it is too: newly refurbished with a new kitchen, carpets, repainted. Problems are fixed quickly. And the rent is much less than mine.

Yes, I do aspire to that.

Me, too. What's wrong with renting from the council? Or a housing association. A friend of mine in her seventies has a lovely little housing association flat - nothing fru-fru but well-built, clean and warm, for a reasonable rent, it's magic. Would much rather that than renting from a bank or private landlord. Isn't all most of us want a secure roof over our head? So sick of living in an economy in which it has become the ambition of a lifetime to have a secure home. I'm sure the ludicrous status quo suits Economist readers very well, so it's  bound to publish things like that, completely out of touch.

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19 hours ago, Social Justice League said:

Quote -

"Mr Corbyn says the answer is a huge expansion of public housing, like the one in the Wilson and Callaghan governments in the 1970s. This would be expensive, especially if such housing was let at below-market rates. And few Britons aspire to rent from the council for life."

 

Who says few Britons aspire to rent from the council for life?

We are still seeing this nonsense about everyone aspiring to better, when it's this that got us into the current mess in the first place.

 

I am fine with this as long as certain groups in the UK don't go on a mass breeding program while unemployed to get one.

If one of the prerequisites was at least 40 hours of work per work coming into a household with some form of payment for the rent out of their own pocket then it's good with me.

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4 minutes ago, wotsthat said:

I am fine with this as long as certain groups in the UK don't go on a mass breeding program while unemployed to get one.

If one of the prerequisites was at least 40 hours of work per work coming into a household with some form of payment for the rent out of their own pocket then it's good with me.

To be honest at the moment not working and not paying seems to help more than doing so.

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35 minutes ago, North London Rent Girl said:

Me, too. What's wrong with renting from the council? Or a housing association. A friend of mine in her seventies has a lovely little housing association flat - nothing fru-fru but well-built, clean and warm, for a reasonable rent, it's magic. Would much rather that than renting from a bank or private landlord. Isn't all most of us want a secure roof over our head? So sick of living in an economy in which it has become the ambition of a lifetime to have a secure home. I'm sure the ludicrous status quo suits Economist readers very well, so it's  bound to publish things like that, completely out of touch.

That's all I want Rent Girl

I was put in a postion  several years ago where most of my business was in one area and a terminially ill family family member(passed in now) was a good distance away. I picked a compromise and rented a lovely place in a lovely village that was half way between the two of them. and of course out of my own pocket.

It's been a few years now and I am still here for various reasons. But in all that time I still get that living out of a suitcase feeling, I have made great efforts to make friends here and will help anyone if they need my help in the village, but the truth is a large proportion just will not except me. It would be churlish of me to say "I don't give a f**k, because I do, I prefer to make bridges and get on with people, saying that I am still getting on with life and refuse to let snobs spoli my life.

I don't want this forever, I am a community person  who thinks all those silly community things that they do from local fetes to the local football team and scarecrow competions are important for the soul and wellbeing.

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17 minutes ago, wotsthat said:

I am fine with this as long as certain groups in the UK don't go on a mass breeding program while unemployed to get one.

If one of the prerequisites was at least 40 hours of work per work coming into a household with some form of payment for the rent out of their own pocket then it's good with me.

Then you'll be pleased to hear that the share of lone parents who were in employment has risen from 43.8% in 1996 to 66.5% in 2016.

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1 minute ago, Ah-so said:

Then you'll be pleased to hear that the share of lone parents who were in employment has risen from 43.8% in 1996 to 66.5% in 2016.

Depends on what employment means if it is 16 hours in a nail bar + masses in tax credits then no.

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5 minutes ago, Ah-so said:

Then you'll be pleased to hear that the share of lone parents who were in employment has risen from 43.8% in 1996 to 66.5% in 2016.

Yes of course I will be pleased, the welfare state was set up as a SAFETY NET, and I am it's worlds biggest fan

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Decades of deliberately lower than necessary interest rates encouraged the political classes to see high house price inflation as good. They saw how it made their electorate docile and pliable. 

Though I'd like to agree that we could/should all rent our declining birth rate indicates otherwise. When people own their homes our children won't have to pay to house them in old age. The liabilities to house those renting now are being ignored. Believing we can paper over the cracks caused by unsustainable high house price inflation with immigration is folly at at best if not criminal. How/where will the children of these newly arrived migrants find work and housing if at no point we don't/won't reduce the numbers arriving?

The current housing crisis is caused solely by miss-matched interest rates.    

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