And at the moment, there is very little sign that vision is going to appear from our politicians. They are dedicated to that neoliberal view that if only we let markets do whatever they wish, then profit motivation will result and, as a consequence, resources will be allocated optimally in society.
Neoliberalism has no explanation for poverty as a consequence.
Poverty is caused by an insufficiency of neoliberalism. QED.
Ritchie has a new Youtube video on the rise of the far right. He is wearing a black shirt!
Poverty is down to bad luck or working the system (laziness). The former will be druggies and people with severe mental health issues which are intractable. The latter are too comfortable on benefits which could easily be fixed by only providing a safety net for a limited period.
Tim, you may like to see this:
https://www.youtube.com/watch?v=os6Ex7-ZOi8
Lord above! Wot an unsufferable B3llend!
“After some debate between Thomas and myself over whether to make YouTube videos covering the Christmas period he persuaded me that we should.
His logic was quite compelling. A great many people will be very bored over the days to come and will be looking at their phones. He thought it was an ideal time to put out some videos. As a result, that is exactly what we will be doing.”
insufferable B3llend
Complaining about the profit motive (people doing things to get rich) is about as effective as complaining that people do things to get laid.
Labour are committed to increasing regulation and taxes, both direct and indirect – such as green levies and penalties.
All of which drag on activity and skew optimisation decisions.
Not much free market about that.
Complaining about the profit motive (people doing things to get rich) is about as effective as complaining that people do things to get laid.
People usually do the former to facilitate the latter.
Having watched Spud, I really needed cheering up. Thank God an old mate I haven’t seen in years sent me this :
Snow White, Superman and Pinocchio are out for a walk in town. They come across a fair and see a sign “Most beautiful woman in the world contest” Snow White says “I’m in!”. She comes out half an hour later. They say to her “How did you do?” “First place!” she says. Further on they see “Strongest man in the world contest”. “Watch this” says Superman. He comes back half an hour later. “How did you do?” they say, “First place!” he smiles. Next door is a booth “Greatest Liar in the World contest”. “This is mine!” says Pinocchio. Half an our later he come out bawling his head off. “What happened?” they ask. He screams “Who the hell is Rachel Reeves?!”
One thing that causes poverty in the UK is house price inflation.
A neighbour bought his home in 1997 for £66 K sold in 2023 for £430k – wages have not risen anywhere near like that.
Of course the UK house market is not a free market nor even close to one.
“David
One thing that causes poverty in the UK is house price inflation.
A neighbour bought his home in 1997 for £66 K sold in 2023 for £430k”
How has that made your neighbour poor?
David
If you can’t afford to buy accommodation (debatable with negligible interest rates since 2008) you rent it. According to the ONS, since 2013 median rent as a proportion of median income appears to have declined.
https://www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/privaterentalaffordabilityengland/2022
So how has house price inflation since 2013 caused poverty?
Admittedly, when I moved to London in 1980 rent vs. income seemed much less. Were there no poor people then as a result?
David is right. House price inflation makes everyone poorer, except banks and shit businesses like Bharat Homes.
It makes them poorer because paying £430K plus decades of interest payments is more expensive than paying £66K plus interest for the same house. This usually affects both the buyers and the sellers, since even if the seller makes a healthy profit he still needs to live somewhere.
Renting is dead money and helps keep people poor by ensuring – like King Charles promised us at Davos – that they will own nothing.
“David
One thing that causes poverty in the UK is house price inflation.
A neighbour bought his home in 1997 for £66 K sold in 2023 for £430k”
How has that made your neighbour poor?
Assuming all house prices have gone up by the same proportion he will find it harder to trade up. On the other hand if he’s looking to trade down then he’s quids in.
@BiND
…and when he dies, he wins the jackpot!
House price inflation makes people poor because an increased proportion of the after-tax earnings vanishes in paying for somewher to live, leaving less for everything else.
It now takes 2 salaries to get on the housing ladder, hence the drop in birth rates, as the couple cannot afford to stop earning, nor pay childminder+tax from earnings-tax.
TtC
There’s an argument that women entering the workforce, and therefore increasing the number of salaries available for house price purchase (plus driving down the average wage), has driven up prices. I’d expect the inflexion point to be when mortgage companies started accepting joint salaries as evidence of affordability.
Is this true?
Also, a good deal of the ‘everything else’ has got a lot cheaper. Food and clothing, for example, let alone the endless Chinese tat that ownership of which people equate with wealth.
The rest of the post is probably more terrifying:
And I do care. That’s what this channel, that’s what my politics is all about.
We’d rather you didn’t actually – most people would like to be left alone to get on with their lives rather than have some fat bastard say ‘you can’t eat a pizza’, ‘you can’t drive’ and ‘neoliberalism is bad’ endlessly. Is that an option?
I want a vision that puts care for people at the heart of our politics this Christmas.
Can’t you watch ‘It’s a Wonderful life’ and be happy that way?
I’m not interested any longer in discussing a political vision which is all about balancing the books and talking about finance and pretending that money is the be-all and end-all of everything when caring is.
Might explain Why the institution employing you decided you were surplus to requirements?
When we have children in poverty, when we have pensioners who will die of cold this winter, when we have people who are homeless or who are living in homes so substandard that there is water running down the walls, when we do not recognise our neighbour as ourselves, then there is something fundamentally wrong with our society.
Indeed there is – anything about a city the size of Birmingham coming in every year illegally? Though tcnot…:
?And that’s it. There is something fundamentally wrong with our politics that does not shout out about these things.
This is the worst government in human history – that much is certainly clear but Even I would acknowledge they pay lip service to caring about the items above – the problem you seem unable to grasp is that diagnosis is one part of the issue. If you choose the wrong cure the. The patient could be seriously injured and as you have consistently shown yourself to have no idea t Al about economics I think your vision has a much validity as someone who has been freebasing LSD powder.
And so, this Christmas, what I want is that new vision.
After 40 years of grifting don’t you get tired? Is this like something out of the Terminator?
!I’m not pretending we’ve got it just yet. We haven’t got all the answers right now. I will be exploring some of these themes over the next few days.
Something to block my calendar for
!This is after all, Christmas, and politics – at least the active form of politics that we find in Westminster – is kind of quiet right now. So, instead, I’ll be thinking about these bigger issues. But. That’s not long enough to create that vision. In 2025, this channel is going to be about how we create that vision
At least you’ll keep Tim’s blog content ticking over – maybe a job with ‘The Muslim Vote’ beckons??
TtC
I reckon you’re right about birth rates, though. When it takes two salaries to pay accommodation costs then both people are out at work, leaving little time and energy left over for child-rearing. That and the modern contempt for the word “housewife”.
“Renting is dead money” What the fuck is that meant to mean? I see it every now and then and think to myself “ooh, what a twat.”
Like any resource, accommodation of any kind has costs of provision. How are they to be paid, if you don’t own your accommodation outright? In many circumstances, like just wanting to be somewhere for a year or two, why would you want to own there? As with any transaction the advantages to you of living somewhere have to outweigh their cost, or you’re in the wrong place and should move somewhere more suited to you.
Dm – it means you’re paying the equivalent of a mortgage to someone else for something you’ll never own. Quite often a buy-to-let landlord, so you’re literally paying their mortgage.
I’m the kind of twat who would prefer that young couples can afford houses they can raise families in, rather than pay top whack to rent somewhere they’re not allowed to put pictures on the walls.
Hope that helps x
“They (politicians) are dedicated to that neoliberal view that if only we let markets do whatever they wish, then profit motivation will result…”
In some strange alternate reality presumably. If we actually had a free market economy then we would all be much better off and a lot more able to help people who were less fortunate.
Steve
Agree with you on Renting. The problems as you know don’t exist in isolation.
– Tony Blair, without a doubt up until the last six months the most evil person ever to hold Prime Ministerial office decided in his wisdom to send 50% of the population to University and keep everyone in education until 18 (Admittedly this was a policy originated by ‘Honest John’ Major. As a result Construction has fallen massively short of recruitment targets over the past two decades. The gap was filled by immigration to some degree but that causes issue when those coming in want to stay here permanently and they look at the indigenous (or indeed the ethnic minority’ population) getting easy sinecures that don’t require much work then they probably think that their children would be better off doing that. The myth perpetuated by halfwits like Murphy that construction is a ‘low skill’ occupation does not help.
– The continued Asset price inflation caused by MMT/QE, combined with open door immigration and a ‘no questions asked’ policy for the provenance of foreign money looking to park the proceeds of illegal activity means that housing has been the equivalent of a lotter win since 1997 continually. i must admit the only solution I can see is to reduce council tax and other taxes for all yprivate renters to ‘Net Zero’ by cutting the number of public sector workers by around 50% across the board and switching them to money purchase schemes. Obviously the practical chances of that happening are remote.
Dearieme – I think most people want somewhere they can call their own. We aren’t all Jack Reacher. Additionally one of the greatest timebombs ever devised was the theft of private sector pensions by Blair/ Brown to create a Client state of Labour voters (Hence why Starmer is running the exact same playbook) and the switch to money purchase schemes from final salary. Once asset prices and the linked pensions collapse you’re left paying rent and with no pension. I do think any Labour or Tory politician from the last thirty years is going to be swinging from a tree, and many would say that’s what they deserve, every last one of them, as there’s two possibilities, as enunciated by ‘Ace’ Rothstein in the film ‘ Casino’:
‘ Listen, if you didn’t know you were being scammed you’re too fucking dumb to keep this job, if you did know, you were in on it.’
@Bloke in North Dorset
I meant new time buyers are worse off.
@Norman
Were interest rates for consumers in 2023 much lower than in 1997 (I don’t mean base rates I mean what people can find on the market – I have no idea I have never been able to find them)?
Having to rent forever rather than buying is not great and makes young people poorer (not me I own my home).
@Van_Patten
I agree
VP – I keep mentioning King Charles and his extraordinary plan to destroy the economic and social basis of our society – the Great Reset – because I think it’s meaningful and also extraordinary that we still allow this person to pose as our head of state.
“You will own nothing and be happy” is a new type of serfdom, one where the prole class is permanently excluded from the property owning class and incapable of building up or passing on generational wealth like wot rich people and their nepo babies take for granted.
The beneficiaries of this are the bankers, who plan on Owning Everything (and being much happier than you). Net Zero is also a debt trap designed to put the masses on an economic plantation where they’re farmed for rents their entire lives.
Hence the war being waged on white farmers across the UK and EU.
Steve:
The owner has come up with the down payment (yes in the US that can be minimal; the results of this were evident in 2008 and since).
The renter pays for the use of the dwelling. The owner is giving up its use, and wants to be compensated for that. They’re also arranging for payment of taxes, licensing and repairs.
Sure you’re paying for the mortgage while you’re renting. Why wouldn’t you?
The other side of it is that when you move out, the owner is still on the hook for all of that, including the mortgage payments.
It’s true that a renter ends up paying somewhat more than a theoretical part-owner would, as there’s a profit involved. But the tradeoff is not having to spend time on all that, plus the ability to walk away on more or less no notice, plus not having to come up with a large down payment.
The somewhat annoying bit where I live is that apartments for rent are assessed for property tax at a different, higher rate than for apartments that are bought. Presumably because renters don’t vote as often, and are often transient, so they don’t have as much of a lobby with the city as home owners do.
@Steve
It is surprising that the statement expensive housing is bad is controversial.
I haven’t even said why I think it is – although I did say it is not a free market.
Additional comment due to lack of ability to edit:
I currently own. I rented for years. I live in a very expensive city, and I basically had to inherit a large amount in order to be able to own.
So I’ve seen both sides.
Also nb the petty humiliations that come with renting.
Regular appointments for strangers to come into your home to check you’re not chav scum. They don’t even knock, because you are a mere renter. Just waltz in with their set of keys.
People taking electron scanning microscopes to the walls to find a reason to steal your deposit.
Rent increases based on “fuck you, that’s why”.
It’s ok if you’re only looking to live somewhere temporarily, but there’s lots of young couples who have simply been priced out of getting on the ladder. Rent seekers are just as useless as they’ve always been.
David – Yarp, seems to me uncontroversial that price inflation increases poverty.
Our money won’t buy what it used to, so we’re poorer.
I’m not convinced that “young couples … have simply been priced out of getting on the ladder”. The next generation of my own family – 8 of them aged between 30-42 – all own their own houses. Some of them live in places like Chorley, where you can get on the ladder for less than 6-figures, but some of them are in London (and reasonable areas, though obviously not Mayfair or Hampstead, or even Islington or Clapham). They all have ‘normal’ jobs – they aren’t drug dealers or quants in the City.
M – BTL mortgages are a form of intergenerational robbery. Younger renters get crowded out of the property market in favour of people who are adding absolutely no value whatsoever.
The owner is giving up its use, and wants to be compensated for that.
In BTL, the real owner is the bank. The landlord is engaged in a species of arbitrage where they use their better credit rating to ensure Mike and Sharon have to rent from someone like them, instead of getting their own mortgage.
This is not a productive economic activity that grows the economy, it’s rent seeking.
The other side of it is that when you move out, the owner is still on the hook for all of that, including the mortgage payments.
Yarp, but the other other side is that, in low wage, high immigration Britain, many people can’t afford to build up a significant deposit because they’re too busy working to pay rent. (And leccy, and taxes, and etc)
That temporary period where renting made more sense than committing to buy becomes a permanent fixture of their lives because they’re priced out of other options. Bright young 20somethings become anxious, trapped 30somethings before you know it.
Like Mrs Thatcher, I think we’re better off if people can afford homes.
Chris – consider the interplay of generation rent and the fertility crisis:
As of 2022-23, the average age for a first-time buyer in England was 34. In the same year, two in five (40%) first-time buyers were couples without dependents, with almost a third (32%) one-person households.
The average age of a first time buyer is now significantly higher than the average age at which human fertility begins to decline.
Despite this, 72% of first time buyers are now childless (!) This is not a repeatable game, it’s a road to ruin.
Children of Men wasn’t supposed to be an instruction manual.
Steve
You do have a way with words as always.
I keep mentioning King Charles and his extraordinary plan to destroy the economic and social basis of our society – the Great Reset – because I think it’s meaningful and also extraordinary that we still allow this person to pose as our head of state.
“You will own nothing and be happy” is a new type of serfdom, one where the prole class is permanently excluded from the property owning class and incapable of building up or passing on generational wealth like wot rich people and their nepo babies take for granted.
So true again, and that’s why I certainly think the Monarchy should have skipped a generation – to hear that clown pontificating on the environment and Net Zero does make my teeth grind rather. I think the only real solution is to start removing anyone who believes in the unholy Trinity from a position of public influence.
– DIE
– Net Zero
– Big Trans
I think anyone associated with the WEF and the Bilderberg group will need to be subject to Interpol arrest warrants and have their assets seized under the SOCA legislation. What’s good for the goose is good for the gander.
It is extraordinary and as you mention that’s why Environmentalism is normally a luxury belief embraced by people who have the material comfort to indulge it.
One does worry about the future but heigh ho – ‘we’re winning the war in Ukraine’ and ‘Putin is worse than Hitler and Stalin’ combined so as long as we tackle him everything will be ok.
“Hope that helps x”. Not in the least. You might as well say that rent you pay on a hired car is “dead money” or that interest you pay when you hire capital from a bank is “dead money”.
It’s a just a meaningless mooing sound unrelated to any kind of critical thought. Why not try defining what you mean by “dead money”?
We’ve seen what happens when politicians distribute resources.
Markets may not do close to perfect, but it’s orders of magnitude better at it.
@agammamon
“We’ve seen what happens when politicians distribute resources.
Markets may not do close to perfect, but it’s orders of magnitude better at it.”
I agree but in the UK the housing market is not a market in the classical sense – politicians distribute permissions and give special people cheap housing.
I would say that the UK housing market is an example of politicians distributing resources and shows why neoliberalism is better.
@Steve
“Chris – consider the interplay of generation rent and the fertility crisis:”
Yes. I calculated once that two nurses straight out of nursing school in 97 could have bought a house in my road (£11k p.a starting salary, and they got a bursary in the 90s which they could save on) average price £66k.
Now they would probably live in a flat share whilst saving to buy.
In which case would they be more likely to have children?
If houses cost too much, they wouldn’t find buyers at that price and they’d get cheaper. But they don’t. So they are priced correctly. The problem is that first-time buyers are not a particularly significant part of the market. Mostly people buying houses have one to sell. They have 25-year mortgages over forty years. They out-compete young people with lower salaries, of course they do. I suspect nearly all of us on this blog are in that former category.
I’ve owned four houses serially in England, a concurrent flat to rent for a couple
of years and a concurrent house in Texas which was far cheaper than renting and made 18% over 18 months. Bought the last house without mortgage by ‘down-sizing’. Does that make me a generational thief, or was I just doing what seemed a good idea at the time?
Steve: « In BTL, the real owner is the bank. »
That rather depends on the LTV. I have excellent tenants otherwise I’d suggest you and V_P could spend some quality time there together.
So apart from the flood of Diversity which has arrived here since 1997, what else has changed? Why do ordinary people Buy To Let? Ask them and they say the BTL will be their pension.
Why BTL property with all of its management hassle and bad tenants, rather than conventional pensions or even stocks? Might it have anything to do with the outright spivvery in the pensions market in the ’80s, or what Gordon Brown did in the 2000s?
If we’re to live beyond our productive span we must build resources to draw down to do that. If a fucking spiv or politician in a Next suit is going to nick the best part of it (or all of it if you’re a Swansea steelworker), if you can you’re going to put your money into bricks and mortar so that you can see and touch it, and no cunt can make it magically disappear.
Might this partly explain the rising house prices across the developed world?
Rhoda – If houses cost too much, they wouldn’t find buyers at that price and they’d get cheaper. But they don’t. So they are priced correctly.
“Sorry peasants, we know the cost of necessities is spiraling out of your price range, but just eat cake instead.”
I mean, technically Marie Antoinette was right (the best kind of right), but it would be far better to still own a head.
David – the amount of working adults who now live in shared houses/flats with strangers is sad. It’s definitely a fertility depressant.
Dm – You might as well say that rent you pay on a hired car is “dead money”
It is. Mugs take the hire purchase option.
or that interest you pay when you hire capital from a bank is “dead money”.
If you’re having to take out eye-watering loans to afford to live in our society, that can be dead money.
Why not try defining what you mean by “dead money”?
I mean spending money on renting things that you should, as a working adult member of our society, be able to own. Because we want our children to be richer, and not poorer than us. Y’know, property owning democracy and all that.
You might want to think this is meaningless, but it means a lot to young couples struggling to build a life.
Hope that helps x
VP – thank you, you are right. There’s a hard reckoning coming for the West. In the not too distant future, lots of people will pretend they never heard of or had anything to do with Diversity, Net Zero, or encouraging children to become eunuchs.
It’ll be like Covid, they’ll just change the subject and try to gaslight you into believing all the evil things they said and did didn’t happen. It won’t work, but they’ll give it a go.
They came for the BTL pensions as well. That inability to deduct tax at marginal rates affects a LOT of people.
The number who think if something isn’t taxed it is subsidised is ever greater.
Houston we have a problem.
Steve, the modern rentier problem isn’t BTL landlords exploiting their property by renting it out whilst trying to build capital from it for retirement.
It’s the modern public sector/benefit claimant cunt class and their corporatist mates exploiting other people’s property, assuming ownership of it by taxing it.
A BTL landlord provides an actual, useful service: accommodation for as long as is necessary, to those who are semi-transient or don’t have a mortgage down-payment. Meanwhile our taxes buy diversity officers, or the hernia op I’ve been waiting four years for.
>David
December 24, 2024 at 12:09 pm
One thing that causes poverty in the UK is house price inflation.
A neighbour bought his home in 1997 for £66 K sold in 2023 for £430k – wages have not risen anywhere near like that.
Nothing changed in the neighborhood over the intervening 3 decades? Its not more built up, more amenities, he made no improvements to the property? The whole price increase is due to inflation?
Norman – Yarpsolutely. I don’t think BTL is the main problem, tho every little doesn’t help in a tight market and it’s mad that people feel compelled to buy houses they don’t plan on living in, using debt, to help fund their retirement because they (rightly) suspect the government will eventually steal their pensions.
Al Beebra six years ago:
About 40% of young adults cannot afford to buy one of the cheapest homes in their area even with a 10% deposit, according to a new research.
The Institute for Fiscal Studies said house prices in England have risen by 173% over two decades.
But average pay for 25-34 year-olds has grown by just 19% over the same period.
In 1996, 93% of those with a deposit who borrowed four and a half times their salary could purchase a home but that fell to 61% in 2016.
The IFS also said that higher rental costs – up from an average £140 a week to £200 a week in England – have “reduced the purchasing power of young adults’ incomes” and made it harder to save for a deposit.
This sounds to me like a bad thing.
Bradley Tucker, a 27-year-old recruitment worker from King’s Langley in Hertfordshire, is struggling to save for a deposit.
He and his partner have moved from a rented flat to a shared house, so they can start to save something.
But while his dad – a bricklayer – managed to buy a house after just one year, Bradley estimates it will take them at least a decade.
“On a current trajectory, the cheapest deposit is £15,000 to £20,000, so you’re looking at 10 years plus,” he told the BBC.
“For young people, it seems an almost impossible challenge. It’s a depressing outlook.”
When your children are demonstrably poorer than you were at that age, despite (because) they took the advice of adults who told them to go to Yooni and become white collar drones, that also seems like a bad thing to me.
But housing, and the feeling of being secure in your own home, well. Doesn’t get much more fundamental on the ol’ Maslow hierarchy than that. It’s not just a house.
Astonishing how all these Sirs, CMG’s and KCMG’s in our world class, joined-up, evidence-based government don’t understand anything more nuanced than “Line on graph go up. WHEEE!”.
We are mammals, of course the availability of nests and dens for the young uns (not The Young Ones, they had to house share because everybody hates students) is going to have implications.
@ Steve
The average age of first time buyers has gone up to 34, but by then they will probably have been loafing at Uni for a few years, gone travelling for a year or at least had lots of long haul holidays, spent several thousands on phones , drive better cars than old bangers and spend an absolute fortune attending stag or hen parties. Hard to buy a house till you settle down and start saving, but once they do it still seems possible.
TMB/ Rhoda
House prices certainly reflect supply and demand and I happen to agree with Norman on BTL, although the impact on demographics which Steve mentions is undeniable, and may explain why the UK is likely to become The equivalent of Pakistan in about four decades time,
Because of the complete shitshow that Almost every government at least since 1997 has made of running the economy, with every asset class being problematic, and inferior return to property I don’t blame anyone for pursuing BTL if they were able to afford it. However, the social impact is that birth rates among cultures that value a degree of intra generational privacy have collapsed, and as Mark Steyn points out ‘Demography is destiny’ – Of course the Labour Party are evil in a way that was previously only thought theoretical and have no equal in this regard. Of course they want to steal your house and your pension. That doesn’t make BTL a cost – free exercise.
I would of course wish all the excellent commentators on this site a Very Merry Christmas and look forward to the discussion continuing into 2025…
– It is [dead money]. Mugs take the hire purchase option.
dearieme talked about renting/hiring a car and you’ve dishonestly changed the subject to hire purchase. Should I try the same technique and point out that a buying a house via a mortgage is essentially hire purchase?
– It’s not just a house.
That notion is one of reasons they cost more than they should.
Some observations:
Interest rates…..
1979 = 17%
1987 = 11.58%
1997 = 8.8%
2007 =5%
2017 = 3%
Back in the day houses were cheap because money was expensive.
Boom and bust: My house was sold for £59,000 in 1989.
We bought it for £35,000 in 1994.
One episode of The Sweeney in the mid seventies has George Carter desperate for promotion so he can afford a mortgage on his Nan’s property (Right to buy). He doesn’t get the promotion and therefore can’t get the mortgage.
Detective Sergeant in the Met average pay now = £56,000. Mortgages available as shown on Martin Lewis’ site: between £182,000 and £252,000.
Buy to let properties have increased by 1% over the last decade (https://www.finder.com/uk/mortgages/buy-to-let-statistics).
@Agamemnon
Yes it is just inflation.
@Addolf
Yes, the true limiting factor in buying a house is the size of the monthly repayment on the mortgage you need. I bought my first home for £30k, but my mortgage was 16% (though I did get tax relief on it).
@Addolff
I can assure you that interest rates and mortgage rates are not always the same.
In 2008 I got a tracker of base plus 0.85 – that was not on offer 3 years later.
@Chris Miller
Doesn’t that assume that people always have the same type of house?