"so people build c--p.”

[Tim Lund]

Some kind of explanation in the Telegraph today about why modern housing is so uninspiring, reporting an upcoming speech in which Nick Boles takes on the reactionaries.

Some selections follow ...

It is “immoral” that young people are being priced out of the housing market because of a lack of cheap homes [and] the housing shortage is a bigger threat to “social justice” than poor education and unemployment ...

“either they will spend their retirement propping up their kids and their grandkids, or they can accept more development so their grandkids don’t have the problem”.

“I genuinely think that the single biggest way in which we are failing to deliver social justice in this country at the moment is unaffordable housing – more than schools, more than jobs, more than benefits,” ...

it was simply “immoral” that young people had to wait for so long to save a large enough deposit to buy a home.

... we have a simple choice. We can decide to ignore the misery of young families forced to grow up in tiny flats with no outside space. We can pass by on the other side while working men and men in their twenties and thirties have to live with their parents or share bedrooms with friends.

inflation in house prices in recent decades has been unacceptable and was caused by artificial restrictions on building ... if the price of food had risen in line with housing over the past 30 years, a chicken would cost £47 and a jar of coffee £20.
“In the 1990s, the average person setting aside five per cent of their income each week could save up a deposit on a house after eight years,” he will say. “Today it would take the same person 47 years.”

“We have comprehensively failed to persuade people to embrace the level of house building that is required. We are in this terrible vicious circle where we have built ugly stuff, which does not involve local people and does not bring them any benefit in terms of improved local infrastructure or anything else. They hate it and so they fight any further proposals tooth and nail, perfectly understandably. And the process of fighting it means much less land gets planning permission and the value of land goes through the roof. So the cost of building becomes completely unaffordable, so people build c--p.”

Under plans to be announced on Thursday, local people would keep up to 25 per cent of revenues from a Community Infrastructure Levy which builders pay to win planning permission to spend on community projects,

“Work out what you want, where you want it, what you want it to look like, the money that enables you to reopen the municipal pool,”

...

“I was a Nimby once, and my entire family were,”

[Eagle]

tIM
i TO SAW THE ARTICLE.








Tim
I to saw article. Good you are reading a quality paper.

One thing I believe you have not considered is this. Mammoth new housing plans announced by HMG. First result existing prices slashed. Result hundreds of 1000's in negative equity and going bankrupt.

Unintended consequences

[leenewham]

Housing was ugly before the 1990's. Housing was built cheaply before the 1990's for maximum profit. Housing was made with no storage with rooms too small before the 1990's. Tower blocks made in the late 1960's collapsed. Thamesmead was built in the 1960's and 70's and is awful. The tower blocks at the back of Home park were built in the 1980's and are ugly.

In the boom years there were loads of properties on the market and prices rose. When we move to Sydenham there was a huge amount of choice. When the market crashed there was less choice yet prices went down.

Market forces push up house prices, housing is seen as an investment, a retirement fund, many are second homes or bought to let out. People want their house prices to go up to they can climb the ladder, there have been programs on TV about this, when a house breaks a certain price point, all other houses in the street go up, irrespective of their condition (certainly when I was looking to buy this was the case). Building more homes, flooding the market with new spaces for people to live wont force prices down. We have hundreds of new homes in Sydenham at Bell Green, yet houses in my road have sold recently for over 400k! They are going up, not down.

We need new homes and housing, but we also need nice places to live with space, slapping a huge block of flats on the old sorting office wont solve anything, wont bring house prices down, won't make any difference. We need a sensible approach to housing and a shift in peoples mindsets from them being investments to them being places to live. The cost of living in London is rising to bursting point.

I'd suggest house price are high because the mindset of it's 'free' market is the charge as much as possible and if you don't get the price, you sit on it until you do, which is one reason we have so many empty houses and why developers aren't building everywhere because in a few years they know they will get more when the market recovers. Compare that with other markets where price go down due to competition. The more houses of any price go up, the further they pull away from the bottom. Also houses tend to sell at set prices. You wont see many houses sell for £255k due to stamp duty. They normally jump a huge amount once they pass that threshold which is another issue. Then you have taxes etc.

It's a deeply complex issue. Perhaps the state should be a housebuilder again? But then you have snobbery against that. Fact is, we complain, but compaired to my parents upbringing, we really don't know how lucky we are these days. I've never lived in a shed, shared bathwater with 3 other people or sat under the stairs with a saucepan on my head in case a bomb landed on me.

Although I bet Eagle has.

[Tim Lund]

Lee:

Let's meet up - and Eagle, you'd be welcome to join us.

Tim
I to saw article. Good you are reading a quality paper.

Only on-line - I'm no keener on enriching those tax-avoiders on Sark than the Murdochs

One thing I believe you have not considered is this. Mammoth new housing plans announced by HMG. First result existing prices slashed. Result hundreds of 1000's in negative equity and going bankrupt.

But I have

People of all sorts will act irresponsibly if someone else will have to pay the bills, and sometimes for actually altruistic reasons. So not just bankers, but also politicians who promise generous benefits which will be paid by future tax payers, house buyers who feel confident that no government in its right mind would allow house prices to fall significantly, maybe even GPs signing off incapacity claims.

It's also why I asked why I wrote this:

I'm not sure if it's legitimate to ask about my share portfolio, but if it is, I guess I could ask others on this forum about whether they are tenants, or owner occupiers, with or without mortgages.

If governments are supposed to bail out people who have made bad investment decisions, where does it end? Why support the feckless middle-classes? Should people be responsible for their own actions?

Unintended consequences

Unintended in the sense that there's no-one I would wish negative equity on, but, on balance, I wish the sort of stagnation which comes from not facing up to this problem even less on the whole society, which is pretty well what happened to Japan when it bailed out all its banks which had over lent on property in the 1980s. The example of Ireland, where property prices were allowed to fall sharply, it rather happier, in that its economy is now rather healthier.

[14BradfordRoad]

It is “immoral” that young people are being priced out of the housing market because of a lack of cheap homes [and] the housing shortage is a bigger threat to “social justice” than poor education and unemployment ...

“either they will spend their retirement propping up their kids and their grandkids, or they can accept more development so their grandkids don’t have the problem”.

Both very poignant unescapable facts Tim.

------------------------------------------------------------------------------------------------------------

One thing I believe you have not considered is this. Mammoth new housing plans announced by HMG. First result existing prices slashed. Result hundreds of 1000's in negative equity and going bankrupt. Unintended consequences

I realise that negative equity can be a terrible situation if someone looses their home and
ends up indepted at the same time but too excessive positive equity is stopping our young
from buying in the first place. Equity has to 'ideally' be finely balanced in between.
In the current situation surely it can only be through cheaper/budget builds that the young
will ever stand any chance of getting a foot on the first rung of the property market.

Equity becomes a factor when you sell, borrow against or loose your home (especially when
equity is negative). If you stay in your home then equity shouldn't matter a great deal
other than (in theory) inheritance to relatives. If you sell during positive equity to buy
another then it is likely that the property you buy would have risen in value too. Then again
if you are a property owner these days then you are one of the fortunate ones compared to
many of our young who at the moment have little hope at all!

[Eagle]

Tim
No one doubts your motives and I agree the current situation is not at all good.

Programme last night on 3 about BTL'ers. There people are the scourge of the market.

They destroy communities all for their own gain.

Must be some formula for having two tier market. Cannot the tax system make it more difficult for these people living of others misery.

Re Negative Equity I agree it is not the sole problem and some people will have to take a loss.

[Mr_Sheen]

Programme last night on 3 about BTL'ers. There people are the scourge of the market.

They destroy communities all for their own gain.

Must be some formula for having two tier market. Cannot the tax system make it more difficult for these people living of others misery.

Spot on.

[Tim Lund]

Programme last night on 3 about BTL'ers. There people are the scourge of the market.

They destroy communities all for their own gain.

Must be some formula for having two tier market. Cannot the tax system make it more difficult for these people living of others misery.

Spot on.

Can anyone say what the difference is between a BTL'er and any other private sector landlord? If not, would you say that the private rental sector is the problem?

[dickp]

Oh, do they?

So, here's a scenario for you. Me and my partner own places, in different parts of London.

We might have to move to a new area for a year or so, because my partner's work contract requires it.

Seeing as it would cost us a fortune for us to sell our places, and we don't know exactly where in London we need to return to, we've both decided to let our places out for the duration of my partner's contract, and rent together in the new location.

Are we evil? Are we harming society? Or are we merely letting someone else lives in our properties for a year, so we can continue to cover our respective mortgages?

Pray tell.

[Mr_Sheen]

You're not evil, you're not harming society - it's just a situation you've found yourself in and what you're doing is a sensible option. You didn't set out to buy property after property after property with the sole aim of letting them out to make money, they were (I assume) your homes before you and your partner got together.

[dickp]

Yes. We'll be known as accident landlords. But we'll be owning homes we don't live in (even if we then rent out a third property ourselves).

The problem would be differentiating people like me from fully-blown BTLrs, if you wanted to change the tax system. How could you?

Just as importantly, why should you?

I don't have a company pension, partly because I've always been self-employed or worked for companies that didn't offer them. So I'm now wondering if rental income from my current place could actually be my pension, once the mortgage is paid off. It's a damned sight more tangible than a pension plan. Would that be evil of me?

Complicated issue, innit? Not always clear cut.

[Tim Lund]

Complicated issue, innit? Not always clear cut.

But still posssible to introduce some clarity.

It's the pressure of people looking for accommodation that matters, and there are two ways buy to let landlords can impact this. First, they could buy already existing property and keep it empty, either for speculative reasons, or incompetence, in which case there would be fewer habitable rooms for the same number of people. Or they could be the people who finance the construction of new houses, or the addition of habitable rooms to existing properties, in which case there will be more.

There have been various threads on this forum about the amount of empty property in London, e.g. this, and when people come to put the numbers in proportion, there really isn't that much. This is what you would expect; prices are no longer racing away but rents are high, so a private sector landlord would be crazy to keep property deliberately empty.

I don't have figures to hand for how much of the increase in habitable rooms that we have seen has been financed by private landlords, but I am very confident it will dwarf any amount being kept empty, so for me, the fact that private sector landlords are part of the solution, not part of the problem, is pretty clear cut, and is backed up by the conclusion of researchers at the University of York Centre for Housing Policy

"The Private Rented Sector - its contribution and potential".

At the heart of the Review is the desire to see private renting as a less marginal, poorly‐regarded ‘third’ option that sits behind the preferred tenures of owner occupation and social renting. The Review concludes with a series of recommendations on policy ‘directions of travel’ that seek to maximise the full potential of the Private Rented Sector (PRS) as a flexible, well‐functioning element of England’s housing market.

...

Conclusion

The PRS is a key component of the housing market in England. The flexibility of the PRS needs to be protected, and policy interventions should flow with the market rather than seek to change its essential characteristics. High‐level co‐ordination of policy between government departments would contribute to the task of framing a ‘cross‐departmental’ culture for local‐level intervention in the PRS. A Ministerial statement of intent would help to underline the importance of the sector to the operation of housing and labour markets, and encourage local authorities to seek a 'private rented’ dimension to National Indicators.

[Eagle]

Imagine the cost to us , HMG , if the present retired generation lived mainly in rented accomodation.

The rents would bankrupt the country.

That is main reason houses become affordable for young couples.

[Tim Lund]

Imagine the cost to us , HMG , if the present retired generation lived mainly in rented accomodation.

The rents would bankrupt the country.

That is main reason houses become affordable for young couples.

Not sure what point you're making here, Eagle. There are various tax breaks for owner occupation, of which profits on sale being free of capital gains tax is the most important, but I'm not aware of any tax breaks on renting, so I'd have thought more renting would benefit HMG. In fact, if more private sector landlords were properly regulated, HMG revenues would increase as their income would be harder to hide.

[Edit - 10 March 2013. It has since been pointed out to me that buy to letters do have some significant fiscal privileges, e.g. that they, unlike ordinary buyers, can claim tax relief against rents on their interest payments, and also a wear and tear allowance of 10% of the rent.]

Rents in themselves wouldn't bankrupt the country, any more than any other payments between customers and suppliers - just part of a normal economy.

[Tim Lund]

So there's a housing shortage? Perhaps we should re-think the marketing of London as an international city?

We have a housing shortage precisely because London is an international city (where it's become difficult to increase the supply of habitable rooms). Not a problem faced by Stoke-on-Trent, for example.

[Tim Lund]

Precisely my point. In whose interests is this branding? Not mine.

I think that's a bit like asking in whose interest is pride and enjoyment, as in the pride and enjoyment some of us at least got from the Olympics, which will have added all the more to London's attraction. London's a great place because it's such an international city, and that's why people want to live here. Let's not be exclusive

[dickp]

Have you tried living outside london? It takes me, on average, about three days to get bored out my scull when i go home. Two pubs, one park, and basically a choice of working for two employers. You think services here are crap? We have no buses after about 9pm, and none on sundays. And one hospital in a 20 mile radius.

I flippin love london, grime, crowds and expensive housing an all. Because i experienced the alternative of small-minded parochialism for 18 tedious years.

[ Post made via Mobile Device ]

[Robin Orton]

In what sense has London been 'marketed as an international destination'? So far as I know,no recent attempts have been made to encourage foreigners to come here to work - quite the opposite, in fact. Obviously efforts have been made to persuade foreign companies to set up here and to attract tourists. That has had positive effects on the London economy and created job opportunities. Whether those opportunities will be taken up by indigenous Londoners or people who migrate from elsewhere in the UK (like me) or from overseas is surely a separate issue.

[dickp]

But thats the point. Housing costs may be high because of supply and demand, but transport costs arent. Outside london, cars are the default form of transport. Cars cost one hell of a lot more to buy and maintain than your average jo's travelcard.

A mate who moved out of london just bought his old car for about 2k. His first years insurance was ￡3k. Then maintenace. Then petrol. Then car tax. All to get to and from work on a lower wage than the london average.

Remind me the cost of a one year zone three travelcard again?

Londeners really dont know how lucky they are.

[ Post made via Mobile Device ]

[Eagle]

No one said live was easy. We cannot all live in London.

If a big housing programme is announced I doubt if that many will be built in London.

This is such a difficult programme and not black and white

Side issue if HMG did organise Marshall Plan of housing then most of the builders , plumbers etc would be immigrants. Our Dole queue will remain as long.