Tuesday, May 05, 2015

Things will only get worse

LSE: Deep-rooted vested interests are to blame for our housing crisis

the planning system does not allow the supply of homes to rise no matter how high prices rise, which essentially suggests that demand-focused policies proposed by the various parties are attacking symptoms but not causes of the problem. For instance, the Help-to-Buy scheme already mentioned effectively stimulates demand and, since supply is so severely constrained, simply pushes up prices without stimulating construction, exactly as predicted when the policy was first announced. So rather than help, it has effectively priced out young would-be-buyers from the market so that Hinder-to-Buy would have been a more appropriate name for the policy. And it’s not alone in doing more harm than good.

Posted by debtserf @ 01:45 PM (4577 views)
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7 Comments

1. britishblue said...

whilst I agree with much of this article he and many people have one thing wrong when referring to greenbelt. 'Homeowners have particularly nice views to protect and particularly expensive houses that rely, to a certain extent, on keeping the green belt land off-limits from development'.
In actual fact 37% of greenbelt around London is actually heavily intensive agriculture land . This means land that crops are grown on. There are no trees, and very little wild life just acres and acres of fields that are desolate and black wintertime. Greenbelt is such a misunderstood term. Many people have visions of old England, nature. trees beautiful scenery, ect. Whilst this may be true for some areas, it is rubbish for other areas of greenbelt and a staged building programme, which included parks, tree building programmes and wild life areas, would do much more for both the housing crisis, our heritage and wildlife, rather than this con of protecting farmers fields which are labelled greenbelt. If any political party had the will, this could be developed cheapily as the value is just agriculteral land

Tuesday, May 5, 2015 04:22PM Report Comment
 

2. clockslinger said...

This sh1te about green belt, again? It's like monomania on HPC. There is more accurate analysis of what's wrong with the housing market on Escape to the Country than in this article, which represents a comprehensively vacuous analysis missing every single main driver of HPI from negative interest rates and QE through BTL to tax policy (to name only the first most obvious things that come to mind.) This from a professor of economics? (Sorry, of COURSE it's from a professor of economics. They're the ones not bright enough to do maths or proper science nor good enough with abstract reasoning to do sociology or philosophy and too cack handed to be a plumber or tradesman...it's that or business studies.)
If you want a proper analysis of the housing market it takes reading a few more pages and is concisely set out by a Professor worthy of the title, Danny Dorling, in a book called "All That is Solid". Better than this website, sadly, too.

Tuesday, May 5, 2015 04:39PM Report Comment
 

3. Latterdaysinner said...

@2. Rather a lot of hating and rather little in the way of actual arguments.

Tuesday, May 5, 2015 05:13PM Report Comment
 

4. nickb said...

@2
Quite. Though I can think of some economists who actually understand things pretty well, e.g. Mason Gaffney in the US or Steve Keene who is now at Kingston University in London. The main institutional role for British economists has been, effectively, to provide cover for the bloated financial sector. So the news that the answer is to build more, and have more mortgages, and so we should relax planning and do away with greenbelt, is perfectly aligned to the system.
N

Tuesday, May 5, 2015 05:42PM Report Comment
 

5. nickb said...

Incidentally, Hilbert is an economic geographer (a breed of geographer), not an economist. Dorling is also a geographer. Economists are not the only toadies.
N

Tuesday, May 5, 2015 05:46PM Report Comment
 

6. pete green said...

I note Hilbert is only an Associate Professor (just an apprentice...)

I must say Mason Gaffney is my favorite economist - he is one very clever man and loved reading his work, His Book with Fred Harrison - The Corruption of Economics stimulated my interest in economics.



&



Also Stiglitz has been very vocal in his recent speeches on this issue. His latest one at the INET was very good

Starts at 1:50

Tuesday, May 5, 2015 06:08PM Report Comment
 

7. doomwatch said...

In Germany they charge 25% capital gains tax to vendors unless they have lived [properly, no funny business lettings relief etc like here in the UK] in it for 10 years. They have a sensible, stable and affordable housing market. There's your answer, no need to read some LSE article.

Wednesday, May 6, 2015 02:34PM Report Comment
 

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