Interesting analysis of the housing market

Earlier this year, the Department for Communities and Local Government estimated household formation in England at 220,000 per year up to 2020. The Conservative government (appear to) accept the need to build more houses and have preferenced first-time buyers with their policies since the election. However, when you dig beneath this consensus the issue starts to metamorphosise. In his 2014 book, All that is solid, Danny Dorling convincingly shows that we have never had as much sheltered space available in Britain; the issue is one of inequalities in terms of access to that space. And Dorling is not alone.

Dorling should be alone of course, even ridiculed. A generally richer society should not live in generally larger housing why?

For many owner-occupiers their home is a store of wealth based on its potential exchange value (i.e. what it could be sold for). This is the policy position we have all been encouraged to embrace whether it is through tax incentives, such as mortgage interest relief, or huge discounts through the generations of the Right to Buy policy.

Mortgage interest relief was abolished some time ago of course….

This idiocy published by the Alma Mater but fortunately not produced by them…..

24 thoughts on “Interesting analysis of the housing market”

  1. Appeals to authority which include phrases such as “Blogs shows that…” and “Bumface has demonstrated that…” should always make one suspicious.

  2. “More space” & “more people”. Therefore it is entirely possible that we have less space per person. Without conjuring the new shibboleth of “inequality”.

    And, of course, even without a significant increase in population numbers (but, however temporary, these EU migrants have to live somewhere and it won’t all be hotels and B&Bs), more single parents and more divorces would be enough to require additional housing.

  3. ” their home is a store of wealth…This is the policy position we have been encouraged to embrace” In other words, bribed . As Enoch Powell said “It is the irony of our parliamentary democracy that we have stringent laws to prevent individual candidates from bribing the electors in their constituencies with so much as a shilling or a glass of beer, but no control over whole parties or parliaments bribing millions of the electorate, to the electorate’s own loss, for decades at a time”

  4. “For many owner-occupiers their home is a store of wealth based on its potential exchange value (i.e. what it could be sold for)”

    As opposed to all those other bases for measuring stores of wealth, none of which funnily enough immediately come to mind.

  5. “But the house price/wages increase contradiction…”

    How about the house price/wages increase/rapid population growth complete non-contradiction?

  6. “In an earlier report the same authors show that nearly half of owner-occupiers under-occupy their homes”

    Half you say? So we’re not talking about the fabled 1% here then.

    Let’s look at, for example, Boston, Lincs. It’s had a massive increase in demand for those ‘sheltered spaces’ of which we have never had so much available. It’s funny you know; if a private landlord there takes an ordinary property, realises it’s being “under-occupied” and decides to break it up into 6 little boxes, well then he’s a Slum Landlord. If the forces of Social Good do it, we’ll then they get a special ‘Dorling Award for Dorks’, presumably for finding The Geographer’s Solution to Stuff he Knows Fuck all About.

  7. The mortgage to rent scheme looks suspicious to me. Why isn’t this a method to transfer ownership of the home from someone with little capital(the mortgage payer) to someone with a lot of capital(housing association)?

    The benefits of emphasising socially rented properties include: directly addressing those on waiting lists (including the hidden homeless such as sofa surfers); a reduction in the housing benefit bill as social rents are lower than either affordable rents or the private rented sector

    So in other words government money is used to artificially change rental prices. What could possibly go wrong?

    The only thing I might agree with is that use value is currently underrated. As this is the first time I’ve come across this particular label I am not sure yet how it fits into the issues I’ve identified in poor people housing.

  8. Exchange value is currently overrated because planning restrictions prevent market clearance. There is no further analysis needed.

    I look forward to watching g Sadie Khan, having said all the right things on the subject to get himself elected, now tries to do the right things to get himself re-elected. He’ll find the real solutions will upset sone vested interest.

    Or maybe there isn’t any housing shortage in London now they have a Labour mayor.

  9. I believe this is the first time I’ve seen the new mayor mentioned here. I am curious what the opinions are on his policy suggestions? I didn’t ask previously because I know the trolls will come out.

    Speaking of trolls, and hence bridges, has anyone considered building housing over the Thames? There is the historical precedent of Nonsuch House, completed in 1579.

  10. I doubt if our house is any more under-occupied than Mr Dorling’s brain. “This is the policy position we have all been encouraged to embrace”: what a tit. Who the hell needs encouraging to see a house as something you might sell rather than, say, exchange for a daisy chain and two buttercups?

    As for our house being a store of wealth, of course it’s a store of bleedin’ wealth. What else does he suppose is going to pay for my widow’s spell in a care home, and, come to that, very possibly pay for other peoples’ widows stays in care homes too?

  11. Liberal Yank

    Sadiq Khan is an outstanding politician, meaning he says the right things to get elected and doesn’t leave too much baggage. But his housing policy involves promising that he Green Belt will be in touched, that Transport for London has enough land to be released for all London’s housing needs, that brownfield sites will provide all the land, that priority to existing residents can be given (what an anti-immigrant racist). None of these hings is true and it will be interesting to see if London even acknowledges a problem once it dawns that the Labour mayor can’t fix it.

  12. Liberal Yank
    I have myself wondered what contemporary houses on bridges might be like. Perhaps a competition for ideas might come up with something interesting.

  13. ” their home is a store of wealth…This is the policy position we have been encouraged to embrace” In other words, bribed

    No. The simple answerer misses the point yet again. Anything you own is a store of wealth. Some are good, some are bad (i.e. new cars.) That housing is a store of wealth is entirely unexceptional.

    That a deliberately created shortage of housing is a ‘significant source of income’ (note the changes) is an outcome that can be entirely rationally opposed. As it is by most here. Not, except for you and a couple of others, by insisting on “MOAR TAX” but by simply increasing the supply of the most desirable housing types (in the relevant geographical areas – which can be adjusted by infrastructure investment – e.g. new rail lines or new stations on existing lines.)

    By amending or revoking the various Planning Acts.

    Note: I fully appreciate the need to protect Ancient Monuments, SSSIs and the lesser spotted anti-Semitic newt. A generic field, on the other hand, merely because it lies within, for example, the M25? Nah.

  14. The question that must be asked on all such occasions is; “Where does the accuser live?”.

    And if the answer is the same as for, say, Billy Bragg, then the accuser falls into a special category of person who should be hung by their thumbs for a period not less than 20 years.

  15. @R de la J
    There have been several competitions and proposals. Googling Thames Water Habitable Bridge Competition describes a lot of them.
    Would the attitude shown on here , that you should be paid in unearned untaxed capital gains, for living in your house have something to do with the total fuck-up that is the UK economy: that people cannot afford to live anywhere there’s good jobs? It might be possible to defend the static store of money concept but the idea that the house’s earnings should continually grow and outstrip the
    people’s earnings is national economic suicide. Thats why it is the core Conservative policy of course. Gets votes: that’s all that matters; fuck the country. (Powell was talking about housing policy in the above quote).

  16. but no control over whole parties or parliaments bribing millions of the electorate, to the electorate’s own loss, for decades at a time

    Then you need to decrease the size and scope of the state. Somehow, however, I have a feeling the people who whinge about the corruptness of the state want to decrease the state’s ability to engage in corruptitude in the first place.

  17. DBC Reed

    So creating millions of jobs for Labour supporters and bringing in immigrants specifically to vote for a party are both great uses of public money? Fuck the country – it’s all about power….

  18. So Much For Subtlety

    Ironman – “that priority to existing residents can be given (what an anti-immigrant racist).”

    And now we enter the looking glass into the world of meta-racism. Khan, a non-indigenous British person of recent immigration background, has promised to give “existing residents” priority. That is a non-White person is pushing an agenda that Rusty can accept is racist.

    I look forward to seeing how Rusty is going to reconcile this apparent contradiction. Is he going to claim that the gentleman of South Asian origin is a liar? That would be a tad racist. Is he going to support a racist policy? Is he going to condemn the non-White person for being racist?

    You know, I await with bated breath. My bet is that Rusty will disappear in a puff of logic after bending into an Escher shaped pretzel. But not without some abuse along the way.

  19. @ LIberal Yank
    The answer is yes.
    Try searching for a sixteenth or seventeenth century of London Bridge which had many houses on it.
    Or Google Bridge House Estates – a charity run by the City of London; wiki refers to the rents from houses on London Bridge.
    Not precisely houses over the Thames – there is a village of residential barges on the south bank of the Thames just downstream of London Bridge, complete with gardens (on the roofs), walkways, community activities etc.

  20. @ dearieme
    I think that you mean Mr Dorling’s head in which his brain is supposed to reside….
    He would say that our house is under-occupied because #1 son had to leave home to get a job and we haven’t demolished or sub-let his bedroom so that he can use it when he comes home (e.g. at Christmas). I shall leave to your imagination my reply to that.

  21. In the report referenced by Mr Smyth “In England people with the greatest incomes also have most housing wealth. Among homeowners just over a quarter of all housing wealth was owned by people in the top income quintile with half owned by the top two quintiles. Homeowners in the top 20 per cent of the population had twice as much housing equity as owners in the lowest 20 per cent.”
    So the bottom quintile by income distribution had more than one-eighth of housing wealth (value of home plus second home plus btl less mortgage)? There must be an awful lot of widows living alone in the family house and struggling to pay the Council Tax! The tendency of middle-class incomes to rise with experience and seniority would lead one to expect a much greater alignment between higher incomes and housing wealth than the 26:24:20;17:13 split by income quintile implied by this.

  22. john77,

    I have seen the paintings. I can also tell that those houses are all gone. I understand there were issues with the bridges not being built to carry the loads but we have the technology to avoid that today. What I don’t understand is why nobody is building any housing over the river.

  23. @VP
    I don’t imagine even Enoch Powell would have called creating millions of jobs by which people worked very hard for their money a system of bribery : in comparison with the capital gains in excess of wages that are dished out to Homeowners post 1963 and the abolition of Schedule A Income Tax on Owner occupation which is definitely bribery on his terms . Powell spoke out against the abolition of this tax schedule very eloquently in Parliament but the combination of corrupt Tory politicians and seedy Tory electors was too much for him. He could hardly be accused of favouring migrants.
    Does it ever occur to you that migrants are attracted here by the chance to make a guaranteed fortune by investing in property they can also live in?

  24. @ Liberal Yank
    “What I don’t understand is why nobody is building any housing over the river.”
    Ah, that is a different question. One reason is planning permission – the owner of the riverbed would have to apply for planning permission and the planning officer would demand proof that the proposed house had adequate foundations. There are other reasons, such as the cost would be far greater than building on an empty plot of land (Tim has data about the tiny %age of Britain covered by houses). I am sure there are others but the unwillingness of the private owner of a river (there are a few, mostly ones with good salmon or trout-fishing) to have a house built on it is one of them.

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