But the market works only when demand brings forth supply, people have plenty of choice and providers are therefore under pressure to improve quality. That’s not the case in housing.
There’s little pressure on landlords because people don’t have much choice about where to live. Try renting a flat these days: you’ll be lucky to get a viewing. Try buying a house — or, to be honest, don’t even bother calling the mortgage company unless you have parents who can provide you with a deposit.
The chokehold is the State refusing to allow planning permissions. That’s why supply is not expanding and why prices are rising.
Solve that problem and you’ve solved it all. Aka, kill the Nimbys.
It’s a demand-side problem and we all know why.
Dunno. On my travels around I see quite a lot of house building. The north west side of Bishop’s Stortford inside the bypass is one giant building site.
Yes, I agree the NIMBY’s desire not to see a fall in their house price is a problem, but it’s not the only problem.
Building new housing means building new infrastructure to support it and the house builders haven’t been keen to cut their own profits to afford that, at least when it was a function of “New Town Development” opportunities there was a bit more co-ordination.
Not everybody loves Milton Keynes, but plenty of folks want to live there.
So by all means prevent the town hall bureaucrats from interfering in new house building, but someone and/or something needs to build the infrastructure around the houses (shops, schools, GP surgeries, etc.) and that can’t be a standalone function or responsibility of the house builder alone.
What rhoda klapp said. Where exactly do people think the half a million new arrivals last year are living? Tents? Tree houses?
Let the government turn a blind eye to mass migration – probably a fifth of the population were born overseas, plus a chunk of those who weren’t don’t want to assimilate – and allow companies to build houses wherever they like.
Add in the fact that we have a welfare state and a higher standard of living than third world shitholes, and we can see our future quite clearly. People will only stop coming here once the entire country is so overcrowded and ruined that it’s more attractive to remain in third world shitholes. Then let’s all live together harmoniously in our fuel-poverty future.
“Try renting a flat these days”: well there is there the additional problem of the present govt’s war on landlords – more income tax, harder to evict, capital spending required on energy upgrades …
You’d have to be a super-optimist or a Rachman to set up in the BTL game now.
So by all means prevent the town hall bureaucrats from interfering in new house building, but someone and/or something needs to build the infrastructure around the houses (shops, schools, GP surgeries, etc.) and that can’t be a standalone function or responsibility of the house builder alone.
In a true market economy, all that would be taken care of my the market. Demand attracts supply. Why doesn’t it?
Well, does not supply create its own demand? Plus shortage of housing/high price of housing is not driven by government supply restrictions (Gov failure). There a whole raft of other government failures starting with bad money, and moving onto bad tax policy that taxes production – labour and capital – and under-taxes or even worse subsidises land. The tax treatment of planning gain meaning that builders – quite rightly – maximise profit by leaking houses out at a rate that does that. And so on.
I think (THINK) the answer to that is that it does, but with a delay, perhaps a delay of years, which is the problem.
My new estate in Stevenage (back in 2002), had this problem and the house builder was required to build just a row of shops opposite the school that they also built as part of the multiphase development.
The mini supermarket was an immediate success, because you don’t need too many people to make it viable and the mini-supermarket was part of a larger chain that could afford a few lean years. All the rest of the shops remained empty for a couple of years until the development grew enough to sustain then, but these were independently owned businesses that thrived or died on their own service / merits (estate agents, hair dressers, pet business, etc.).
Zero interest rates mean you might as well borrow as much as you can. Spend it on anything, rather than something that will make enough to allow you to pay it back with interest.
Investment in companies means nothing (they make more buying their stock back), so you might as well put it in the thing that’s going up. Housing, because everyone else is doing it.
Because housing is the only thing going up, people will want to build more. Clamp down on that so that you never get a glut (since it’s about as illiquid as things get, it’s a real danger).
Also ensure there’s lots more people to be housed by whatever means necessary, again to keep it from going into a glut.
Of course, when money’s velocity actually does increase causing inflation, interest rates rise and bite you in the unmentionables.
@Sam Vara – “Let the government turn a blind eye to mass migration…”
This is xenophobic nonsense. People immigrating have less demand on us than people born here – an immigrant will already have survived childhood and any expensive illnesses, and had education provided by someone else. Unlike the native born whose costs until their first job are paid for by us.
And the only reason why people would come here to avail themselves of our welfare state is because of ignorant people like you frequently claiming that they can. In reality many people coming here have visas endorsed with “no recourse to public funds” and nobody would be let in who seemed likely to be in need of benefits unless they were a legitimate refugee, the conditions for whom are only likely to attract those in dire need.
So that explains why housing is cheapest in cities where there is so much of it.
Oh wait. It doesn’t.
So it must be immigration. Although prices shot up where I am during Covid when immigration was halted, and now immigration is back on and they are falling.. so possibly it’s not that either.
But, I suppose, when you just want to blame the guvmnt or immigration for every problem, and you’re not averse to spouting crap, these explanations are appealing.
I see quite a lot of house building. The north west side of Bishop’s Stortford inside the bypass is one giant building site.
I bet that none of that building site is four storeys and upwards, which is what you’d see in SUI as an example.
But aside from that, which government fuckwit in the mid 20th century decided that most schools had to be provided by the State, and healthcare by the State, and all that other schit we call infrastructure that new residents need?
I would like to point out that houses are so expensive because people CAN afford them.
Charles
So in effect if 300 million from India, Pakistan and Bangladesh want to come here we should let them
In?
@Van_Patten
Yes. None of that lefty, central planning nonsense, please.