Take the land banks off the builders & build smaller houses. Don't think Dave or Boris will do that & Jeremy will probably pay over the odds. Basically were doomed.
This is not a party political rant, both main parties have had a go at this issue and failed. Further I am not a racist or against people migrating per se.
I read yesterday that house prices went up by nearly 10% again over the past 12 months: much faster than the rate of general inflation and wages. House prices have been too expensive in my opinion for years and this is a completely unsustainable situation: young people just cannot afford to buy their first home.
However when I look at the economic factors in play, it's only going to get worse:
1) Net immigration 300k per year (and has been high through various governments)
2) New houses being built at a rate of 118k in 2015. Even the target of 250k won't meet demand if net immigration continues at this pace. (ditto - both parties failed to address)
3) The squeeze on landlords is IMO going to make it worse. They will either sell up or hike rents in response to the tax changes. If they sell up then houses in multiple occupation will now just hold one family and so there is an even greater demand. (Tory Policy but it was also in the Labour manifesto)
4) Student loans mean that young people leaving University already have large debts at 21 - they're not going to be able to afford a mortgage (Labour policy but tuition fees hiked by Tories)
4) The bedroom tax is an attempt to address the issue but it's not enough and people need help to find alternative accommodation if they want to move as a result. (Tory policy)
5) Brown's credit bubble didn't help either (unsurprisingly) - you just put people into debt they cannot afford. (Labour policy)
I'm led to the conclusion that we either have to build many hundreds of thousands of houses soon or curb net immigration. Isn't it time a party thought about the time bomb and did something to address it?
Daughter currently looking for 3bed in Stoke /Wyken
20k increase since Christmas, mental
Couldn't agree more with your points but I really think they don't want to handle it.
With each surge it becomes less likely to be solved as they don't want to decrease the asset.
Immigration isn't the only part of the story though, the continuing policy of allowing lenders to print money through issuing mortgages is a massive problem, but government policy and idiot people seem to believe that having a house with a high paper value is a good thing.
I don't understand this point. Issuing a mortgage isn't printing money. Banks have to fund mortgages: that's why they have savings accounts and the London inter-bank lending market exists (LIBOR). Further, reducing mortgage lending further would only put new buyers in greater difficulty.
It is printing money. Banks are permitted to lend money out that doesn't really exist.
I'm sorry - you are wrong.
Every new loan that a bank makes creates new money. While this is often hard to believe at first, it’s common knowledge to the people that manage the banking system. In March 2014, the Bank of England release a report called “Money Creation in the Modern Economy”, where they stated that:
“Commercial [i.e. high-street] banks create money, in the form of bank deposits, by making new loans. When a bank makes a loan, for example to someone taking out a mortgage to buy a house, it does not typically do so by giving them thousands of pounds worth of banknotes. Instead, it credits their bank account with a bank deposit of the size of the mortgage. At that moment, new money is created.”
I don't understand this point. Issuing a mortgage isn't printing money. Banks have to fund mortgages: that's why they have savings accounts and the London inter-bank lending market exists (LIBOR). Further, reducing mortgage lending further would only put new buyers in greater difficulty.
There is widespread misunderstanding of how new money is created. Where Does Money Come From? examines the workings of the UK monetary system and concludes that the most useful description is that new money is created by commercial banks when they extend or create credit, either through making loans or buying existing assets. In creating credit, banks simultaneously create deposits in our bank accounts, which, to all intents and purposes, is money.
Many people would be surprised to learn that even among bankers, economists, and policymakers, there is no common understanding of how new money is created. This is a problem for two main reasons. First, in the absence of this understanding, attempts at banking reform are more likely to fail. Second, the creation of new money and the allocation of purchasing power are a vital economic function and highly profitable. This is therefore a matter of significant public interest and not an obscure technocratic debate. Greater clarity and transparency about this could improve both the democratic legitimacy of the banking system and our economic prospects.
I agree with almost everything you say & I agree that houses can be bought for £100k. But my concern is that even that is not affordable: Age 24, now earning, say, £27k and has £20k of student debt outstanding. £27k is a good salary for a young person and that's only just affordable - right on the limit.
The time bomb that no politician ever talks about is what will happen at retirement for all those stuck in rented homes. Previous generations of working class folk have managed to pay off mortgages and their meagre state pensions are eaten up with normal living expenses but at least no rent. Imagine this new situation where huge numbers of people are still renting and trying to survive. The answer is increasing poverty or increasing state help.
As a nation, we need to decentralise away from London & the SE.
Absolutely this. For example we've had years of banging on about a new runway in London, why is nobody saying forget that and expand Birmingham airport? Same with HS2, every time it is talked about it is how it will be quicker to get to London, why not the reverse?
Slightly different topic but I was reading earlier this week that for the first time in history for the average worker to be able to afford to retire they now need to keep working and paying into a pension past the average life expectancy.
Not true, you just have to go back in history far enough. What's more the average pension for a post war factory worker retiring up to the mid 80's (even semi-skilled) wasn't impressive, white collar workers were generally OK though.
There isn't a housing shortage in the UK as a whole......its just that the houses are in the wrong place....or rather, the jobs are in the wrong place.
As a nation, we need to decentralise away from London & the SE.
We also need a national publicly funded house building project to replace the million + social/council houses sold off since Thatcher. These new social houses should then be used correctly, no sub-letting & no subsidised living for wealthy folks who happen to be in a council house.
Another step-change is the massive sense of entitlement the younger generation appear to have developed.....
When I bought my first house, a large 3 bed Victorian terrace, it was in a bit of shithole area (several tinned up houses in the street) & I had bars on all my back windows.
My first night in the house, my furniture consisted of a single mattress, a becks crate coffee table & a bean bag.....I got a couch the following week 2nd hand out of the local paper...
My wifes youngest cousins are just buying their first home & are whining cos they cannot afford the 3 bed semi in the leafy suburb of their choosing.......well boo hoo hoo.....I'd like to live in Buckingham palace, but I can't afford that.
People need to get real with regards expectations......and actually make some compromises.
Without checking, I'd guess that pretty much every major town & city outside London & the SE/M25 region has housing stock for sale at £100K or less......I certainly know all the major northern cities have housing available way cheaper than that!
If you cannot afford to save £5K & get a £95K mortgage....then you probably shouldn't be buying anyway.
Never thought of that, if you have somebody paying 600 - 700 a month rent when they get to retirement age and then have a state pension (I did a quick google so might be wrong) of 231.90 per week for a married couple. That's £927.60 a month, take the rent out there's £200 left, take out council tax, heating, home insurance and you have a problem. How do you eat?
Then do that for a single person which is 115.95 a week and 463.8 a month, you have people getting kicked out of their homes.
Yes indeed; it is incredibly concerning and is an issue that won't be addressed at all, or if it is, it'll be to late. Britain is becoming a country for the rich and elite more and more, with an ever growing focus on London and the south.
Take the land banks off the builders & build smaller houses.
Yeah, every development around where I come from seems to be 'exclusive four bed'. All very well... bu how the hell am I ever supposed to be able to live there?!?
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