And before everyone starts yelling – let me quietly point out that if we want any young person to buy property before their parents die something will have to be done to get us out of the absurd inequality house prices have created. It’s either wealth taxes (including, of course, land value taxation) or market failure that will deliver the change. I think that tax is the better of the two options.
Why not just issue some more planning permission chittys to bring their price down? Ritchie does need to understand that more and higher tax is not the answer to each and every question.
Well, the government could stop pumping the housing market, couldn’t it? I mean, as well as the planning permission thing?
Things are so bad, might well be worth going back to 1970 and banning the banks from offering mortgages. Getting rid of that was what started the mayhem.
Actually, come to think of it, I’ll just suggest again my usual thing; let’s privatise banking. This nationalised system just isn’t working, is it?
As a saver who (by choice) has never bought any real estate, I would point up that the last five years of zero interest rates have meant that I have received essentially no return on my investments, and people with mortgages have paid much lower interest rates than are appropriate given the innate level of risk on their assets. (The fact that they believe that there should not be any risk at all is a huge part of the problem). This is a huge transfer of wealth to home buyers from everyone else, and this is deliberate government policy. Yes, I know this is basically what Ian B just said.
Restricting supply is amongst other things another way of ensuring that the value of people’s houses does not go down – something that they believe they have a god given right to not happen.
More houses on a particular market will not in necessarily decrease market prices. People have been building more houses in London for a thousand years and the price does not go down it goes up.
The trouble with housing in the UK is the shite rental sector. Of course everyone wants to own a house: most rentals involve not being allowed to keep pets, having your rent go up if you decorate the place (“Oo, this is much nicer than the place I rented you. I should charge more for it”), and the ever present threat of being asked to move out at short notice because the landlord’s changed his mind. Compare with, say, Germany, where people live in the same rented house their grandparents rented, where renting a place gives you a proper solid stable foundation for long-term family life, and where, unsurprisingly, people aren’t so obsessed with owning instead of renting.
If you want British people to have the easily available option to live somewhere decent, there are two solutions: make it easier for them to buy, and improve the rental sector. Why will our politicians only consider one of these options? Even now, when that one doesn’t work any more?
Ritche acts like an engineer who sees that the best method of solving any problem is with engineering. It’s because thats the only thing they know anything about. If anything it shows his lack of intelligence that he can’t even handle the fact that sometimes a problem can be solved in a different way, or even that the problem doesn’t really exist.
Actually the simplest and quickest solution is to make pro single mums share housing. It would provide 500,000 empty houses in a year and would save us money and make Britain a fairer place.
Tim- you forget that the purpose of taxation is to bring everything and everyone under the remit of ‘The Courageous State’ – which is why he’s advocating the Miliband government to which he is one of the chief advisors put in a starting top rate of 85%- don’t forget you diet to serve the state, not vice versa, at least in this man’s delusional (it wouldn’t be a stretch to say evil) mind
Just the other day, I was in a pub in the Sudbury area (not exactly a cheap part of the world to buy) chatting to the barmaid, and she was being inordinately proud of the fact that, as a single woman in her mid-20s, albeit without the burden of student loan debt (or, conversely any sort of graduate salary), she had just a couple of weeks earlier moved into her own home. How did she manage that? By working a day-job as well as behind the bar in the evenings, and not squandering cash on all the frivolous things (fancy holidays, fancy car, fancy TV, partying,…) that seem to be taken as necessities today.
So how much of the moaning is about self-inflicted injury I start to wonder.
The Sage>
It’s not impossible for a young person to save some money and buy a house, particularly outside London. It has become something that requires a much greater degree of dedication than has been the case in the past, though. It didn’t used to take working two jobs and spending nothing on leisure for years to afford a deposit.
Basically, lower earners can afford to buy a house if that’s their sole priority, to the exclusion of all else. That it requires a degree of commitment to one’s financial security is one thing, but requiring that someone live ‘on bread alone’ to afford a house is rather different.
@Squander Two,
Germans rent because buying a house here involves sunk costs of around €50,000 for basically bugger all. It takes a long long time for that to pay off in terms of saved rent.
Squander Two is absolutely correct to finger the malfunctioning UK rental sector as part of the problem. I would not have an issue with renting as much as I do were it for the current regime.
I rented for 23 years before I finally bought my house with my wife, and although it meant I saved money for a good deposit, those years of living like a student and not being the master of my domain in many ways was a pain.
I mean, when I invited women over, I often had to square that with my landlord. When you are an adult in your mid-thirites trying to have some semblance of a home life, that sucks. I would have to put up my parents in a hotel rather than being able to invite them over to stay.
So Richard Murphy is in favour of LVT. Well, it is not the worst of taxes, but it carries a lot of problems. No wonder he likes the idea.
JamesV,
Yes, but Germans also rent because renting in Germany isn’t shit.
slightly off topic, but this is a classic case of alignement of interests. The government likes high (and rising) property prices because they get about £20+ billion in revenue from stamp duty land tax. So what they want is rising prices with loads of turnover because that makes thier fiscal position better.
Rentals don’t create nearly as much revenue for the government. Imaging people living in houses thier whole lives and then thier children living in them for thier whole lives, always renting. There isn’t anything for HMRC in that sort of arrangment.
Still more houses means more turnover which means lower prices but the same revenue. So Tim is spot on this is a question of supply side and not demand side
Aha!
I found the comments.
(Tim knows what this is about).
And why is renting in the UK shit? Could the attitude of landlords be anything to do with the fact that they were shafted big style back in the 70s by the Rent Act of 1977, and don’t fancy going back to those days? And that there are as many (most likely more) tenants who leave the place looking like shit hole and owing months of rent as there are ones who want to improve their rented accommodation?
@Dave
Thirty years ago it took me and my lady wife our two incomes to afford a house (in Stevenage), and we expected the initial drop in living standards after leaving the parental nest. It was a few years before we could afford a holiday, a telly that wasn’t second hand, and a car that wasn’t the best part of a decade old when we got it.
It’s that drop when previously disposable income is no longer at your disposal that I think is the key factor here — it’s not something that should demand a “degree of committment”; it should be seen as part of the deal.
Renting in Germany is less shit for the tenant than in the UK. I am unconvinced that the landlords see it that way. I assume you’ve noticed the CDU openly debating rent caps? As in not whether to have a rent cap but how to do it.
Perhaps something halftway between the landlord-hating German system and the tenant-hating British system might be a good compromise.
Dave & The Sage,
Buying a modest property is entirely possible, given the constraints indicated. But what happens next is interesting.
The previous generation enjoyed higher wage inflation throughout the 1970s and 1980s. It didn’t feel great at the time, because price inflation was present too; but the impact on mortgages was significant. Over the course of a 25 year mortgage, the person enjoying 5% nominal wage increases can afford to pay off their mortgage five years earlier than the person getting only 2% increases.
Another issue is our young barmaid’s overtime. If house prices are only 3x salary, working overtime makes a real dent in the mortgage principal. By contrast if house prices are 6x salary, they may still be affordable with low interest rates, but working overtime has only half the impact.
Both these factors mean that moving up to the next rung of the ladder is going to be incredibly difficult for this generation of buyers.
There’s a lot in that Andrew. I think a lot of the issue is the fact it is now harder to pay off a mortgage today than in the 80’s. Back then inflation did the ‘heavy lifting’ and as long as you kept your head above water, you were on the winning side of the equation. These days you have to pay a lot more of a higher price in real cash, that’s a lot harder. I’m still surprised how how many people in the UK are on IO mortgages for long periods of time.
I think the other big change is the dual income thing. That has had a huge impact in people’s ability to pay more for houses.
Am I missing something, because I don’t intend wasting my time reading Richie’s moronic ramblings, but is he saying the way to get young people to buy houses is to make them more expensive by introducing another land tax?
Yes, you make things cheaper by taxing them more. Can’t you see the logic?!
Actually, land tax does lower prices – the amount of money people have to pay for the house is the same, so the amount available to pay for a mortgage drops by the amount of the tax.
The problem is that the mechanism is to bankrupt lots of people who already have mortgages (which are not lowered when the prices crash).
Indeed, this is a general problem; a lowering of prices to an appropriate level will bankrupt lots of people who are placed in negative equity, followed by bankrupting lots of banks. This is why it will never happen.
Richard G. – There are a number of ways to avoid pushing recent buyers into negative equity. For example you could introduce the tax very slowly, with the stated intention to bring in the full whack within 20-30 years. That seems to be what’s happening in Ireland. Or you could have a transition period, exempting any houses that have changed hands in the last 20 years (on the principle that they’ve already paid their LVT in the form of Stamp Duty).
Of course the mere threat of any property tax would scare off overseas buyers, and inner London house prices would nosedive.
Banks, as you say, would be toast. LVT supporters generally consider that a positive feature of the system, not a flaw.
The shortage of houses (particularly in the south-east) pushes up the price to the point where enough people are frozen out of the market to make demand equal supply. So of course Tim is right – an increase in supply will lower prices because fewer will need to be frozen out. A partial alternative (or, preferably an addition) would be to abolish national wage rates so that industry could create more jobs in the north-east.
It was not the 1977 Rent Act that screwed up the private rental sector – it was the failure to repeal the Lloyd George rent freeze after the end of WWI: by the 1950s controlled rents failed to cover the cost of maintaining the properties, leading to Rachman et al buying houses for a pittance and choosing not to maintain them in order to gain a much higher income.
Michael Jennings, re. your transfer of wealth point: is it strictly true?
What I mean is, money is not actually taken from one group of people and given to another, is it?
All of these observations are of real value and I’ve learned a couple of things I didn’t know. However, Tim’s initial observation says it all really: we have increased our nation’s population by about 12% in 15 years and now our young people are priced out of the housing market; shocker!
Build houses. Privately! If the developer is prepared to carry the risk, there is the need demonstrated.
Even by his standards, Ritchie’s post is cretinous. His attempts to substitute length for depth are just sad.
Of course everyone wants to own a house
And of course, every Brit wants a “house” with a “garden”, the former being a 4m wide semi which sees no sun, and the latter a 4sqm patch of concrete. Housing is expensive in the UK largely because the Brits are fussy wankers when it comes to housing. Similarly, hookers are expensive in Japan.
Oh, and the fact that Brits see their houses as cock-extensions doesn’t help much either.
Yes, God forbid that the uppity proles should want a whole house. And a garden! Who to they think they are?!
Yes, God forbid that the uppity proles should want a whole house.
They can want a castle each for all I care.
Houses in Britain are nothing compared to what we see in America, so what, people want a nice house they can be proud of boohoo “cock extensions”.
What the fuck is it with you bastards, the exact attitude “they should not have it” & “control them” is born out of. Bastards are everywhere, currently in Wales there are plans for a race track development in the poorest and lowest employment area of wales, a 250 million investment the biggest in uk motorsports for 50 years, it would create around 12 thousand jobs and attract up to 750,000 people per year.
But the bastards must come out of their caves and try to stop it, “unacceptable” no doubt they see it as a “cock extension” to..300 square miles of tax payer funded protected land to look after is not enough for them..the world would be so much better without bastards.
Surely in a world with rational supply and demand, the cost of living in a house (rented or owned) will be a function of how many houses there are vs the number of people who want houses.
Moving people from ownership to rental isn’t going to affect this underlying number – it just means rents rise and house prices fall a bit.
For some reason it’s currently much cheaper to buy than rent anyway – if I were to rent a house the same as mine, in my street, it would cost me about £100 a month more than a repayment mortgage for the house’s full value, and about £300 more than an IO mortgage. That’s on a sub £100k house btw.
They just want a home, Tim Newman. You think that’s an unreasonable aspiration, do you?
You don’t think there may be something a teeny bit wrong with the State actively forcing the price of housing up faster than inflation? That’s all fine and dandy is it?
Sheesh.
Prole-
In a genuine (hypothetical) free market, the cost of housing would, like everything else, gradually fall in real terms. That’s one straightforward way that we can know that something is skew with the market, though people have different ideas as to what that thing is.
TimN “Similarly, hookers are expensive in Japan.”
This is disappointing to learn…..
They just want a home, Tim Newman. You think that’s an unreasonable aspiration, do you?
Not at all. But for many, the *type* of home they want is an unreasonable aspiration, and wanting an expensive and impractical house as standard is a uniquely British trait.
I’ve lost count of the number of times I hear Brits – even those who live in London FFS – saying “No, I don’t want an apartment, I don’t like apartments, I want a house.” Well, I don’t want a Fiat, I don’t like Fiats, I want a Porsche.
That you equate having a “house”* with a “garden”* as the minimum aspiration “the proles” should have reinforces my point nicely.
*Neither of which would be recognised as such by most Europeans.
You don’t think there may be something a teeny bit wrong with the State actively forcing the price of housing up faster than inflation? That’s all fine and dandy is it?
And this? Yes, I think there is much wrong with this. But the Brits pathalogical obsession with housing and their bizarre minimum requirements doesn’t help.
Houses in Britain are nothing compared to what we see in America, so what, people want a nice house they can be proud of boohoo “cock extensions”.
Aye, and I want a nice car I can be proud of, and a yacht, and a Ducati motorbike. And I want to influence government policy so I can have all these things, and I want to be able to boast loudly about them to other people, particularly those who have chosen not to buy them.
In a genuine (hypothetical) free market, the cost of housing would, like everything else, gradually fall in real terms.
This assumes the standard of housing remains unchanged over time, which of course it doesn’t. Just as a soldier’s load will never decrease with improvements in kit weight (he’s merely given more to carry), people in the UK will spend on housing the maximum they can afford (or believe they can afford). So rather than enjoying cheaper housing, they’ll demand bigger and more expensive houses as a minimum.
Which was kinda the point I was making earlier.
“Housing is expensive in the UK largely because the Brits are fussy wankers when it comes to housing.”
My parents bought the house I grew up in when they were in their twenties, on the wages of a factory-worker and part-time cleaner. It had three bedrooms and a decent sized garden in a decent area to raise a family. Most of the neighbours were similar working-class home-owners.
To buy that house on the same multiple of incomes today, you’d need a couple earning a hundred thousand pounds a year, and the neighbours are likely to be half a dozen Eastern Europeans renting a house together and having parties until 2am. A typical income in that town for someone in their twenties is in the region of fifteen to twenty thousand, according to the job ads I saw last time I was there.
When I moved to Canada a few years ago I bought a place at almost the same time as a relative in the UK. We paid almost the same amount of money in small rural cities. I got a three bed, three bath detached house with a decent garden and double garage, they got a two-bed flat of about half the size in an old Victorian house.
Why should modern Britons have to settle for crap compared to the rest of the world, and their own parents?
This assumes the standard of housing remains unchanged over time, which of course it doesn’t. Just as a soldier’s load will never decrease with improvements in kit weight (he’s merely given more to carry), people in the UK will spend on housing the maximum they can afford (or believe they can afford). So rather than enjoying cheaper housing, they’ll demand bigger and more expensive houses as a minimum.
This is an argument I’ve had quite a lot with the ‘safe as houses’ crowd. I’ve never seen a decent bit of work than looked at house price inflation including the costs of maintenance and improvements over that time.
The off quoted ‘bought for 20k in 1980, solid for 300k in 2010’ stuff never details the fact that it’s not the same house at all except in rare circumstances.
“So rather than enjoying cheaper housing, they’ll demand bigger and more expensive houses as a minimum.
Which was kinda the point I was making earlier.”
If that point was true, you wouldn’t need a couple of doctors to buy a house that a working class couple were able to buy in the 70s.
Britain has some of the most expensive and awful housing in the Western world, due primarily to building restrictions and easy credit. There’s a reason there was a three year queue for Canadian emigration visas when I applied for mine.
It had three bedrooms and a decent sized garden in a decent area to raise a family.
…
Why should modern Britons have to settle for crap compared to the rest of the world
This may come a surprise to you, but the rest of the world does not set a three bedroom house with a decent sized garden as the standard beneath which anything else is considered crap. And that goes for Europe, too.
If that point was true, you wouldn’t need a couple of doctors to buy a house that a working class couple were able to buy in the 70s.
Actually, what you’ve said reinforces my point: if they could afford it, the working classes would be living in the better house. They wouldn’t be spending less money by keeping the house they’re currently in, they’d simply upgrade their house.
Tim – I think the point as far as Ritchie is concerned, is that when all you have is a hammer (and sickle) everything looks like a nail…
In 1969, my parents (factory worker/secretary) bought a three bedroom semi-detached with good sized garden in a nice close, post war build.
The question Tim Newman seems to have missed that we are actually discussing is why, if there is economic growth it is now much harder to do that now than 44 years ago. And claiming that such an aspiration is some kind of excess is really missing that point.
As to the standard improving, this is piffle. On (aggregate) average, people are now living in smaller housing (fewer square metres per person). And, although there are more modern fixtures and fittings, a terraced two up two down (for example) is the basic same product as it was 50 years ago. Except now it’s vastly more expensive in real terms.
It probably now has double glazing and central heating with a combi boiler, but that isn’t actually a reason it would cost more, for the same reason as the computer I’m typing on being far better than the one I had in the 1980s, but not costing any more in real terms. Because technologies improve for the same, or a lesser price. Which is the whole danged point of economic growth; if it weren’t there be no justification for suffering all the creative destruction implicit to capitalism- it would just be destruction without creation.
So basically, people aren’t getting bigger, or better. They’re getting smaller and more expensive. Which as I said above, tells us at a fundamental level that the market is seriously out of whack.
The question Tim Newman seems to have missed that we are actually discussing is why, if there is economic growth it is now much harder to do that now than 44 years ago. And claiming that such an aspiration is some kind of excess is really missing that point.
Well, no. I think it’s you that’s missing the point. Yes, it is government policy which is driving the ridiculous house prices, but government policy is not divorced from the population, and especially not so in regard to housing policy. So what is driving this insane government housing policy? The obsessions of the population, that’s what: and they’re here, right on this board, for all to see. Just the slightest suggestion that the British standard of three bedroom house with a decent garden is perhaps a little excessive by European standards sends people into a froth about how I’m advocating people should not have aspirations, wanting to control people, and expecting people to live in substandard accommodation. Mulitply this across the whole population and you have a government which panders to it, with the result that ownership of a house with garden of ever increasing value is almost a human right.
I contrast this with elsewhere. I work for a French company, and hence most of my colleagues are French, with a few Dutch, Spanish, and every other nationality thrown in. None of them mention their house back home: not its size, what they paid for it, how much it is worth. It is a non-subject. They talk far more about the town it’s in, and the wider area. They certainly aren’t proud of their house, far from it. As an example, one of my colleagues is a 36 year old Frenchman, wife and 2 kids aged 4 and 5. They’ve just bought a 3-bed flat in Pau to serve as a family home in the future. There was no harrumphing that an apartment isn’t suitable to bring kids up in, or any other such middle-English nonsense. Sure, they would probably have bought a house if they wanted to spend more (they had the money to), but the attitude – which is typical in Europe – is that an apartment is good enough, and to spend more is unnecessary. Conversely, the Brits I know insist on buying a house, the biggest and best they can afford, and are willing to risk bankrucpy to do so.
You see the same in Thailand. Owning an apartment is easy in Thailand, so most nationalities take this option. Owning a villa requires Thai ownership, either in the form of a wife (look out!) or a frame company which is a pain to set up and maintain. Most Brits insist on owning a villa, shunning apartments completely, despite the complications of the former.
There’s nothing wrong with this, as I said I couldn’t care less if Brits want to live in castles. But you cannot separate the psychological attachment the British have to their houses (going so far as being proud of them) and the idea that one should buy the biggest and best they can afford from the government policy which no politician dare change.
The policy is fucked, and the solutions are obvious as Tim and others have pointed out. But you try implementing them and most of the country will be up in arms making noises srikingly similar to those I’m hearing on here. If you insist on having a certain standard of housing, don’t complain when the government enacts policies to ensure that standard is maintained: even if half the population bankrupts itself achieveing it and the other half are totally fucked over.
And, although there are more modern fixtures and fittings, a terraced two up two down (for example) is the basic same product as it was 50 years ago.
No, it’s not. The design, materials, and pretty much every aspect of the construction will be vastly different.
For sure, the construction quality might be shite in a modern house. But a well-built modern house will be vastly superior than a well-built house from the 60s or 70s.
Tim, you’re still not addressing the point. What you think is adequate for a family is not relevant; the question is one of differentials. Why is the standard falling?
And when was discussing terraced housing above, I was presuming that it is the same house 50 years later. Which costs vastly more, despite being the same (now crumbling) brickwork, but with a combi boiler instead of a back boiler.
I remember a discussion with Bloke In Spain here a while back; during the 90s I did some domestic sparking in London (spent most of my time in commercial/industrial) and one strong memory of that was the appalling state of much of the stock I was working on; walls with brickwork reverting to sand, covered in layers and layers of tarting up. For which people are paying a small fortune, if they can afford it at all.
As to why people are oibessed with their houses as you so disparage… could it be because they cost so fucking much?
@Ian B
I’d question whether people do actually have fewer square metres per person than in previous decades.
One of the biggest housing changes in recent years is more single occupancy housing due to divorce and single older people living longer.
A 3 bed new build may be smaller today than its 1930s equivalent but there may just be one divorced 50 year old living in it and not a family of 4 or 5.
What you think is adequate for a family is not relevant
So the perceptions of a population as to what is adequate housing is irrelevant to a debate on housing policy and housing standards? Got it.
Why is the standard falling?
I’m not so sure that it is. There was no golden age whereby everybody could afford a 3-bed house with decent garden in a nice area. That people working in manufacturing (say) could afford this standard in the 70s and now they can’t reflects a change in relative earning power, not housing standards.
As to why people are oibessed with their houses as you so disparage… could it be because they cost so fucking much?
I believe it is the other way around: houses cost so much partly because people are so psychologically attached to them. “And Englishman’s home is his castle” and all that guff.
Tim, I don’t know why you’re flogging this dead horse. It’s generally accepted that property values have for a long time been rising faster than inflation. It is thus inescapable that they are less affordable. It’s not “relative earning power” it’s *absolute* earning power. You’re arguing against facts here, not opinions, which means you can’t win the argument however hard you try.
Not so fast. Nobody is saying that housing is not getting more expensive. My point was that the premium housing is now bought by a different set of people, so referring to what a certain couple could have bought a generation ago doesn’t tell us much.
Well, it does seem to tell us that people doing useful productive jobs like factory work, secretarial work, cleaning etc have not done well out of the Neoliberal Era, and makes us wonder who the “different set” who can afford “premium” housing are, and where there income comes from.
And since when was a three bed semi “premium”?
Tim
The values in planning position dwarf Prince Charles’ tax bills. I agree with your previous post advocating more “planning permission chittys” to counter these monopolistic position that create this “value”.
In York, I have made a proposal to issue lots and lots more “planning permission chittys”. See a plan for York.
Since I made this proposal, York Council has issued it’s draft plans for 22,000 new homes in York, which gives away planning permission worth about £1 billion because a new home in York is worth about £50k.
This amounts to more than £5,000 for every citizen of York. I believe only a few people control the land, which has been allocated under the draft plans, enabling monopolistic prices to be extracted
The amazing thing is that hardly anyone has noticed.
Perhaps Margaret, Lady Hodge, should ask the beneficiaries of this largesse and York Council to appear before her committee.
Correction
“because a new home in York is worth about £50k”.
should read
“because planning permission for a new home in York is worth about £50k.”
From Geoff Beacon’s “Plan for York”
“The type of homes that should now be built are ones that are carbon negative (i.e. the fabric of the dwelling stores more carbon than is created as part of its construction). They should use substantial amounts of wood or other biomass. I reject the approach of the BSI’s PAS2050 which, in my view, underestimates the carbon footprint of materials such as cement and over estimates the carbon footprint of wood. In the case of wood, PAS2050 dismisses the value of storing carbon in wood structures and gives wood a positive rather than a negative carbon footprint. This is a complicated argument but it is my suspicion that Government Departments and others support PAS2050 because it is less critical of current practices than should be the case. It seems the widely used BREEAM methodology, which gives an environmental score for building, does not measure the carbon created or stored in building construction.”
And we wonder why housebuilding’s more expensive than the 60/70s? What the hell has that lot got to do with putting roofs over peoples’ heads?
Aye, and I want a nice car I can be proud of, and a yacht, and a Ducati motorbike. And I want to influence government policy so I can have all these things, and I want to be able to boast loudly about them to other people, particularly those who have chosen not to buy them.
____
Thats nice, although annoying to listen to in the pub its much prefered to a bastard who wants none of those things and self righteously tells others why they should not have them and that they are a bad, shallow person, less than them, simply because they do.
Most people are happy with a house and a car, if they can afford the bike and the boat, so what? Glad to be part of a modern society, people like you, no matter what era you exist, will just sit around scorning others for their choices due to some complex you will never take responsibility for.
The true sign of personal sovereign choice, as opposed to choice driven by psychological dysfunction, is being comftable and indifferent to the choices of others.
You fail, hard, which opens up several career options for you the first of which being politics, in which you get the chance to force feed your shit on a daily basis to entire societys.
Glad to be part of a modern society, people like you, no matter what era you exist, will just sit around scorning others for their choices due to some complex you will never take responsibility for.
I don’t scorn anybody. As I’ve said (three times now) folk can want for a castle for all I care.
“I don’t scorn anybody.”
So calling people ‘fussy wankers’ for thinking they should be able to buy a three-bed terraced house like their parents isn’t scorning them?
UK housing prices relative to incomes increased massively during Labour’s term in power and the ConDems have done their best to keep prices up there. It’s nothing to do with ‘fussy wankers’ who think that paying ten years of their income to own what used to be a cheap council house is beneath them, and all to do with central planning and easy credit.
Nor would doctors of my parents’ generation have been happy in my parents’ house. They’d have had expected a fancy detached place in the new avenues on the outskirts of the city. Only local government bureaucrats are likely to be able to afford those these days.
I’m not sure what the big problem with everyone owning a 3 bed semi is?
There’s plenty of land about (less than 10% of england is urban, and only about 2.5% actually has buildings on it).
Granted they aren’t as cheap as apartments to build, but they still don’t cost anything like as much to build as they do to buy.
My 3 bed semi wasn’t that much dearer than the cheapest 1 bed flat in town (probably 30k more), and I’m a lot more confident I could sell it if I ever need to.
I’m also not convinced apartments are very viable in a car orientated society – they tend not to be strong on parking. One of the big draws for me of my semi is that I got off road parking for two cars – also a tatty single garage (in which lives my 1970s mirror dinghy, in the hope that at some point I’ll have time to sail it again).
I don’t think there was an apartment on sale in the whole place when I was looking with dedicated parking for two cars, never mind a rather fragile boat.
Dunno why TW is being so nasty to Richard Murphy over LVT. TW supports LVT and RM initially did n’t ,but is now coming round to the idea (thanks to persuasion by the likes of Carol Wilcox of Labour Land Campaign).
As for more chitties or planning permissions, what free land are you going to give permissions to in Central London? There is n’t any land available. Build on the Royal Parks? Give planning permissions for skyscrapers in the middle of Georgian terraces?TW probably means get rid of the Green Belts and have one Metropolis from Brighton to Luton.
It would be as easy to impose a LVT and use the proceeds to finance cheap (even free) high speed commuter trains into Town. The High Speed Rail 2 plans might help in this regard because they would free the commuter lines of express trains.
As for all the rest, Ian B has done a valiant job showing that all the political parties are intent on putting up house prices faster than inflation. You would think the penny had dropped when housing bubbles appeared round the world ,then crashed the banks which had been lending into a bubble, but a lot of people want to blame anything but the glaringly, but inconveniently, obvious.
DBC-
The London issue is another problem. The London Bubble (and more general South East Bubble) are a consequence of the State pumping new money into the economy in the Square Mile (via banking) and the new ruling class generally, clustered around the central government.
London is probably the place where we can most clearly the see the consequence of the Neoliberal/corporatist economic paradigm as we see an ever sharper division of society into two classes- people who get money from the government, and those who don’t. The former can afford ludicrously expensive properties, the latter are their nannies and gardeners, and serve them their lattes.
So we can’t just use a “Ricardian” style analysis here. London prices have a natural premium (it’s the capital, with its opera houses and dancing bears) but this is grossly enhanced by the economic system sucking the life out of the rest of the economy and into the pockets of the few who are State funding connected.
This part can’t be solved by any land reform (either free building, or LVT, or such measures).
We used to have an economy in which while the government were in one place but economic production was geographically spread out- the old industrial areas and great trading cities like Liverpool. Increasingly, we have an economy where all that matters is being closest to the money printing presses. Which is why London’s property market is not merely “premium”, but ludicrous.
London is probably the place where we can most clearly the see the consequence of the Neoliberal/corporatist economic paradigm as we see an ever sharper division of society into two classes- people who get money from the government, and those who don’t.
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What in the fuck are you on about? So Londons house prices arent high because those propertys are in high demand from people all over the world, no, its just British people who own them, only bankers, who were given hands outs by the goverment to buy them, yea.
And why are they all coming to London, Ob? For the weather?
You’re basically arguing that prices are high because demand is high without bothering to wonder why demand is high. Bear in mind that the banking scam spread worldwide during the twentieth century.
Note the terror in the bond markets when moneybags Bernanke recently suggested he might reduce the flood of new money a little. Whatever this is we live under, it sure as shit isn’t free market capitalism.
This is OWS grade crap. An international center of finance attracts high bidders OMFGZ banking scam!
Yes, but you’re not quite grasping the point, which is that an “international centre of finance” is basically a group of people clustering around the printing press, and that this generates a bubble. All bubbles “attract high bidders”. That’s why they’re bubbles.
The strange element of it is that these beneficiaries of State indulgence then raise their snouts from the trough to proclaim themselves to be free market capitalists.
>What I mean is, money is not actually taken from one
>group of people and given to another, is it?
No more than money is being taken from one group of people and given to another when a government solves its debt crisis by printing money, and inflating its debts away. In theory, people have the same number of pesos in their bank accounts that they did before. In practice, these pesos buy less than they did before. What has actually happened in practice is that people have been taxed.
Fucking around with monetary policy is a great way to transfer assets from one group of people to another while pretending you are not. This is why government do it so much.
The truth is that over the last five years, people with mortgages in this country have had an outrageously easy ride for no good reason other than that they have an outrageous sense of entitlement and they like to whine a lot, and the government listens.
Yes, but you’re not quite grasping the point, which is that an “international centre of finance” is basically a group of people clustering around the printing press, and that this generates a bubble.
Yes all the financing and every useful thing that happens in the city can be described as “a press room” “basically”
I’m still not sure I follow the chain of causation you’re describing. Yes, government policy favours one group over another. Yes, it shouldn’t. But taxation is forcibly taking money from someone, and I don’t see that that’s what’s occurring.
Far too much on here implying that the State has printing presses by which it increases the money supply: It does n’t (worse luck).It can only spend what it can raise from taxation and borrowing.It is the commercial banks that summon up money out of nothing.
But Ian B’s point about London still holds : that London generates a lot of new money which totally distorts the housing market in the SE.
In the present perma-crisis however, things may be panning out a little less straightforwardly. The Government of whatever wing of the Homeownerist hegemony needs to provide something for nothing for its client voters in the majority homeowning class. But the bankers appear to be loth to lend into another housing bubble which nearly ruined them all last time.They are on some industrial scale go slow on loans hence explicit Gov guarantees for property. This might lead to a re-balancing round a much lower rate of activity ,approaching a state of near atrophied self preservation.
Set against that is the attraction of London property as the resort of flight capital now that neoconservative policies have reduced the world to chaos. Oh ,as Lord Carrington said recently for the calm and discipline of the Cold War!
The Guv may have to compensate the banks for nearly putting them out of business last time, but there may not be another bubble if the banks keep sullenly disobeying orders to turn on the something-for-nothing spigot for all those voters who are bribed to vote to preserve their untaxed capital gains in property.