Ritchie is a card, isn’t he?

Fourth, this plan will inevitably end up as a boost to the private rental market: half of all former council properties sold by right-to-buy tenants are now in that sector. This will not then be a mechanism for providing an opportunity for home ownership for many. It will instead increase the concentration of asset ownership in the UK, which is the last thing we need.

Redistributing housing from the organs of the centralised state to individual owners is concentrating capital ownership now, is it?

33 thoughts on “Ritchie is a card, isn’t he?”

  1. Rather like the people who complain about media dominance, who always seem to mean Murdoch and not the BBC.

  2. So he believe sin redistribution but not RANDOM redistribution. What a little fascist.

    David Davis has this morning provided the perfect smackdown to these idiots: housing association tnenats occupying the best properties would remain as tenants forever, never leave and never free up housing stock to poor people trying to get a home. Sell these off, free up capital and allow housing associations to build more homes. The left should be drooling. But that would mean approving of a Tory policy. And opposing the Evil Tories is much more important than doing anything for the poor like building houses.

  3. But Ironman, you meanie, forcing poor people out into new-build suburbs is mean.

    We should dismiss global economic forces and local markets and insist janitors must be able to live next to millionaires throughout the country. #OccupyMayfair

  4. Ironman,

    “Sell these off, free up capital and allow housing associations to build more homes.”

    And that “build more homes” thing will happen? I won’t see any more photographs of my local Conservative MP standing in a field with some local residents whenever any sort of building is proposed on some land like I have for the last 4 years?

  5. The old duffer may have the cause and effect wrong, but this is already happening:

    “It will instead increase the concentration of asset ownership in the UK, which is the last thing we need.”

    So, instead of Households A, B and C each buying a house, increasingly it is just A who can afford the deposit, etc. B and C are still paying, via rent, but A gets the asset.

    If you take the current situation to its logical conclusion, then we’ll have a few big property owners, often or usually through an accident of birth, whilst the great majority rent (and have to work too).

    You don’t have to be a socialist to see this as a very bad turn of events (quite the reverse probably). Indeed, a socialist might welcome it: wait till the crunch then nationalise housing.

  6. Bloke in North Dorset

    Ironman,

    “And opposing the Evil Tories is much more important than doing anything for the poor like building houses.”

    I managed to get my son’s girlfriend, a (short) life long Labour supporter and activist from a Labour supporting family to admit that the only thing that unites Labour is a hatred of the Conservative party.

    I suspect that you are right here, they just won’t be able to bring themselves to say its a good policy, even if a large section of them believes it is because it will tear them apart.

  7. You have to love the Green Party (whom I think the man admires and to whom he would Definitely act as primary economic advisor)

    In addition to the mass nationalisation of almost every firm in the FTSE 350, they now propose to take over the nation’s housing stock. That means their manifesto comes out as costing trillions – which I am afraid even on the assumption that ‘Green QE’ is the magic bullet he claims blows all sorts of holes in his calculations that by ‘ending evasion’ we could have all the milk and honey his acolytes proclaim is ‘hiding out there’.

    Batshit crazy – but Murphy, I know you read this blog on the QT – to echo your pompous, tortuously constructed post:

    ‘I would love it if you or one of your acolytes mentioned the impact of immigration on the availability of housing’

    ‘I would love it if you openly admitted you want to reverse the right to buy legislation enacted in the 1980s and move to a situation where the majority of housing assets are owned by the state’

    ‘I would love to hear where the funding for the purchasing of the housing stock you advocate will come from given the current deficit and inflated house price level in the UK’

    and, of course:

    ‘I would love it if you would stop opining on subjects such as economics, taxation, finance, history, science, philosophy and government of which you are utterly and completely ignorant’

    Do you get the message, you ignorant, insufferable blowhard?

  8. The argument is not irrational, despite this being Ritchie. It’s saying that rather than producing a nation of home-owners, it will intensify the ownership in the hands of a small rentier class, which is basic Ricardian stuff (Tim W agrees with Ricardo’s law of rent, doesn’t he?). I’m not a Ricardian, but if you are, this is a reasonable argument.

    And, what The Stigler said. Are Tory MPs going to stop the photo-ops with “local residents groups” opposing the building of anything, anywhere, for any reason?

  9. It’s actually quite a clever policy in some ways (other than the simple electoral bribi……vote-winning one).

    Whilst the government takes an upfront cash hit on the discounted house sale, it also shifts the cost of that asset off government balance sheets and onto private sector balance sheets (through banks/mortgages). So the govt gets cash and shifts all the risk onto the private sector.

    The govt can (could?) then recycle that cash into new house building programs, which one would hope we could agree are needed in many areas. So it’s fulfilling a need, tapping the private sector for most of the cash, not raising govt debt levels AND leaving most of the risks on the supply side of the curve in the hands of the private sector.

    IMHO its certainly more likely to get house building going without a crushing govt debt build up and hand wavy commitments to build a certain number of houses – because it is essentially a free market approach. Discounting to offset risk and receive capital now, rather than long term.

  10. Wot The Stigler and Ian B said, and where is the money for the replacement housing? Not from the large proportion of the proceeds of a discounted sale that go to HM Treasury.

    Here is a quote from UKIPdaily.com:

    The figures show that between April 2012 and July 2013 some 10,547 social houses were sold under the beefed-up Right to Buy scheme. These sales generated £173 million in receipts which would then be passed to councils and housing associations to build replacement social housing.

    And therein lies the problem. Each sale generated just £16,400 on average with which councils and housing associations could use to build a replacement.

  11. The Conservatives introduced right to buy in respect of *private* rented property in Scotland – Mr Forsyth/crofts. Top marks for bravery (if not economics) to the party that suggests it down here.

  12. @ Luis

    Part bribe, in reality, but as Tim W has pointed out many a time the real value of most property is the land + planning permission, not the building itself.

    So it is possible, given councils themselves essentially control said planning permission, that some of this discount is really just to open up the logjam in the planning departments at the councils. Essentially force them into building on land which is otherwise stored for want of someone paying the non-discounted price.

    I have no hard evidence for this, mind, but that is the logic I see behind it. Could work – have certainly heard stupider ideas.

  13. @ ukliberty
    The Housing Associations will get 100% of the market value: the discount is to be funded *by* the Treasury.

    So you are so way off beam as to be ludicrous.

    What is the market value of a flat sold for £16,400 with a maximum discount of 50%? Is it possibly that ukipdaily.com is not the Gospel?

  14. If housing associations are getting 100% of the market value, why not just let them build houses and sell them? Indeed, why not just let anyone build houses and sell them? Why force them to sell of their most valuable property if they don’t want to?

    This is State gentrification, isn’t it? I mean, shall we be clear here?

  15. john77,

    Is it possibly that ukipdaily.com is not the Gospel?

    Quite possible but it had the benefit of (1) agreeing with things I’ve read from thinktanks, House of Commons Library papers, broadsheets etc and (2) it entertained me.

    The Housing Associations will get 100% of the market value: the discount is to be funded *by* the Treasury.

    Where is the 100% mentioned in the Tory manifesto? Local authorities don’t receive the full amount under RTB today.

  16. John77

    Yes, Leasehold Reform Act.

    I believe , buy don’t know, that the Treasury takes back the discount out of any profit made on a subsequent sale. Am I right here? Does anybody actually know the detail?

  17. Ian B,

    This isn’t even the answer. The answer is having Land Value Tax which reduces speculation and gets rid of the worst of the buy-to-let market (it’s healthy to have some rental property for people who won’t be in a place for long).

    The long-term aim of this policy is to provide more houses for landlords. The last thing that Conservatives and their main supporters want is more housing diluting the supply.

    Before I’ll believe the Conservatives will build more houses, I’d want my Conservative MP to tell me where the first houses will be built.

    The only solution to this is Land Value Taxation. Tax the value of the land and let landlords make their money from keeping houses in good order for people rather than speculating on land values (which is ultimately a zero-sum game).

  18. I sneeze in threes

    Why give the housing associations full market value? Many of the houses would have been free as part of section 106 developers are forced pay.

    As the associations rent them out at a market discount should they not also apply the same discount to the value they are going to claim back from the poor bloody taxpayer less sale proceeds?

  19. ISIT-

    Bear in mind that the Housing Associations are (apparently) going to be forced to sell property they otherwise would not choose to sell. Who’s fleecing “the taxpayer”? The associations who don’t want to claim back their losses on sales they wouldn’t otherwise undertake, or the desperate fucking Tory Party trying to buy an election victory?

  20. If you don’t want more social housing built and you don’t want sold stock to be replaced on a one-to-one basis, then you’ll agree with Right to Buy until now and the proposal in the Conservative’s manifesto for 2015.

  21. @ ukliberty
    Housing Associations are not part of the government so if the government mandates a discount then it is its responsibility to pick up the tab for the discount. The Tories at least pretend that they ought to pay their own bills.

  22. Ian B has it.

    You all realise that housing associations build their houses using private loans?

    Who will pay those off?

    As the Thatcher nonsense shifted the debt to the public sector, that funny phrase “socialising everything shit”, this will be worse.

    And I know that, indisputably. It’s the worst possible outcome for providing social housing that any sane person can think of.

    I guess most of you are as stupid enough that you thought it was a good idea in the past, that you think it’s a winner now.

    It’s the most crass, short term, and illogical nonsense a housing policy can get.

    It is really more shit than you can think.

  23. So Much for Subtlety

    ukliberty – “If you don’t want more social housing built and you don’t want sold stock to be replaced on a one-to-one basis, then you’ll agree with Right to Buy until now and the proposal in the Conservative’s manifesto for 2015.”

    I don’t want more social housing built. I want more housing built. I don’t want sold stock to be replaced on a one-to-one basis. I want the government out of the housing market all together. I do not agree with the Right to Buy which is just a Right to Steal. And I doubt I would agree with any large section of the “Conservative’s” manifesto.

    But all of this is beside the point. The future of housing in the UK is in the informal sector. Already people in parts of London are turning their sheds and back gardens into slum accommodation. You can see it on aerial pictures. The government is making housing too expensive. They are not allowing people to build in the formal sector. We have a lot of immigrants who are used to much lower quality housing. The solution is the Brazilian Favella.

  24. And then there’s John77.

    Housing associations pay their own bills. It uses rent income to satisfy cashflow analysis to secure the heavy, unsubsidised loans they have to beg for in the market. Sometimes, on redevelopement sites, a grant is involved. That gives the association some comfort in bargaining for what are punitive loans, the banks knowing there is little choice.

    Selling any stock forces a whole series of debt consolidation, inevitably leading to a climate that favours fire-sales to private operators.

    I’m guessing you guys on here are quite happy with that, someone you know will make a killing. And that’s all there is in your dark world.

  25. Arnald

    Has whichever blog you were hiding on kicked you off – I not you’ve been rather prolific in the past few days?

    Alternatively, when did the judge grant parole?

  26. Uronman

    I don’t agree with much of his stuff, but you’re welcome.

    Looking.forwar.to.youiore.next.posy

  27. @ Arnald
    “And then there’s John77.”
    Where am I? Your comment has zero relevance to anything I wrote.
    That it is stupid bullshit is not what immediately concerns me – it is that you seem to want to drag me into your alternate universe.

    However I will just point out that the only proposal is that houses that more than doubled in price under the wonderful Labour government might be purchased by tenants with any discount being funded by the government so that the Housing Association got the full price. So the sale of one house pays off the debt on *at least* two, strengthening the HA’s balance sheet.
    Your claim “Selling any stock forces a whole series of debt consolidation, inevitably leading to a climate that favours fire-sales to private operators.” as usual you are 180degrees to the truth

Leave a Reply

Your email address will not be published. Required fields are marked *