Sigh

The Government have been accused of “failing” young people and families after it emerged that nearly half a million new homes proposed for development on Green Belt land will not be “affordable”, but will be built for the “top end of the market.”

Over 70 per cent of the 425,000 new homes expected to be built under regional planning policies will not be accessible for those struggling to get onto the housing ladder.

If there’re half a million new homes then all homes will be worth slightly less, won’t they? Less than they would be in the absence of half a million new homes at least. That’s just how markets work, increase supply at a constant demand and prices fall.

Sigh.

21 comments on “Sigh

  1. b) They’re clearly affordable, otherwise they wouldn’t sell.

    c) How do you think they are paid for? Without the profit from the higher priced ones, there’s either none of the subsidised ones or we’re relying on the magic money tree.

    I’m a trustee of a housing charity; 2 full-price for 1 subsidised is about the proportion we do.

  2. So manufacturing new Mercedes doesn’t mean the market in second hand Mercedes gets supplied a few years later.
    Amazing!

  3. Obviously if the government only allows half a million houses built while demand is well above that, the half a million houses that will be built will be at the top end.

    If we only allowed 500 cars to be sold every year, we can be pretty damn sure none of them would be affordable hatchbacks.

  4. If the government grants planning permission on a quarter-acre of land, the developer can either build one Australian-sized house or half a dozen British-sized houses. The latter both is more affordable and provides housing for more people.

    For those young and not-so-young folk who would dearly like a home of their own, building lots of small houses is preferable to building a few large houses.

    None of that bears any relation to what the government terms “affordable housing” though.

  5. “Obviously if the government only allows half a million houses built while demand is well above that, the half a million houses that will be built will be at the top end.”

    It’s an interesting thought. If the government allowed unrestricted housebuilding a house would no longer be regarded as an “investment” (It is, after all, just another consumer durable) This would remove the investment premium in the areas where house demand exceeds supply. You’d see a major collapse in the market prices of houses until the market stabilised. Providing a disincentive to house builders, in the short term. So “making houses affordable” would not immediately produce any more houses to afford

  6. Imagine the suburban landscape in 20 years time if we only built ‘affordable’ housing. All those urban boxes displaying the paucity of planners’ imagination yada yada etc. All that stuff spouted for decades to show their intrinsic aesthetic understanding by the very people now demanding ‘affordable’.

  7. The government has done enough damage to young people by artificially restricting the housing supply since 1948.
    It will take some years to undo that, and as SMFS above the top end of the market will be served first.
    And no I wouldn’t trust politicians who’ve got it wrong for decades to do better than the market.

  8. Everything sold is affordable. Else its not sold.
    What they mean is ‘cheaper’ – and what they want is for the developers to not cater to the customers like they currently do.

    Follow the ideological stance of a few rather than the actual buying decisions of the customers.

  9. That the left now demands is little boxes, little boxes, all made out of ticky-tacky, little boxes, little boxes, all made just the same.

  10. So some of these people buying posh new houses will be moving out of slightly less posh old houses and the chaps buying those will be moving up as well. And the next ones in the chain will also be moving up and so on down to the guys moving out of high rise council flats and making way for the denizens of the slums of Hyderabad.

    So everyone is gaining, even those moving out of caves and into the slums of Hyderabad.

  11. ‘The Government have been accused of “failing” young people and families’

    Government have ???

    It’s good young people learn government will fail them while they are still young.

  12. Tim, yes, you are right in overall terms, and yes, I get cross with the use of “affordable” too, but ISTM that it is still relevant to examine wht type of homes are being built. More cheaper houses would reduce those prices more, which is the objective here, rather than reducing prices overall. If we wanted to reduce the cost of motoring, we would seek to produce cars at the cheaper end of the range, raher than Jags and BMW’s and wait for the market to force the prices lower, wouldn’t we?

  13. “More cheaper houses”

    But “affordable homes” aren’t cheaper. They’re just allocated homes that are part of an overall deal with the developers. They use the same bricks, mortar and plaster and the same amount of labour.

  14. > Campaign for Protecting Rich Estateowners

    Also known as the Campaign to Protect Residential Equity.

  15. Good God, we can’t have nice houses being built! What will happen to the value of nice houses owned by Telegraph and Mail readers?

  16. We have a shortage of unaffordable housing imv. Build more of that, then everyone can move up one on the housing ladder and have a better life.
    I like the recent IMF suggestion of abolishing single person discounts – Band D upwards only might be sensible. Combine this with abolishing stamp duty and the allocation problem will start to solve itself.

  17. Development needs to be mixed.

    I don’t know how much the following things I’ve heard are true but it makes you think (even if they are potentially contradictory).

    1 – Milton Keynes had a homeless problem because all areas had a mix of housing which is all very egalitarian but if there’s no starter home / bedsit land area then there’s nowhere cheap to rent.

    2 – Ashford was disproportionately expensive because there was no mixed developments. The biggest houses were small three bed homes do there was nowhere for people to move up the ladder to which “house blocked” the people wanting to move out of flats and 2 bed terraces. That large (in all senses) landlord didn’t help.

  18. “Development needs to be mixed.”

    Bullshit. Development needs to be what the developer/marketplace want.

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