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Housing is anything from a third to 50% of the average UK earners take home income. Median house price to median income ratios are at historically high levels[0

by nly 5y ago

Housing is anything from a third to 50% of the average UK earners take home income. Median house price to median income ratios are at historically high levels[0], and rents are now also rising[1] Either wages need to rise or house prices need to fall. [0] If you look at somewhere mundane like Essex the median 'affordability ratio', as measured by the Office of National Statistics ( https://tinyurl.com/x5jatcx8 https://tinyurl.com/x5jatcx8 ), was 4.5 in 2000 but is now north of 10. And yes, low interest rates help with monthly affordability but house prices have gone up ~4 fold in the last 20 years while the multiple of your income banks will lend has not, and peoples capacity to save a deposit that is 4x bigger has not. [1] https://www.thisismoney.co.uk/money/buytolet/article-9969349/Rents-rise-13-years-tenants-flock-UK-cities.html https://www.thisismoney.co.uk/money/buytolet/article-9969349...

pibechorro 5y ago
Inflation will make any increase in wages meaningless. It will also further drive investment into housing to escape the free falling cash. The answer is no lockdowns, no bailouts, and no quantitative money printing to oblivion. Let the everything bubble pop and start over with sound first principles. We will get there, but not before politicians make it worse and delay the inevitable defaults.
- nly 5y ago
  - Boris Johnson (the British Prime Minister) sold his London family home in 2019 for £3.75M after having rented it out for £2000/week (just under 4x the national average income) while living in his Government provided accommodation in his role as Foreign Secretary (2016-2018).[0] - Property prices have shot up 10% during the pandemic, bolstered in part by the Government cutting stamp duty on sales. - A few days ago the Government raised National Insurance (which is an income tax) on all workers to pay for social care while protecting property wealth with a contribution cap. Nobody in power is popping the property asset bubble in the UK any time soon. It's a sacred cow. I'm in the top 2% of earners by income in the UK and I'm still completely priced out of wrt to buying a modest family home (or flat) a humane, commutable distance of central London. Price/Income ratios are too high even for me because I'm competing with my peers. It's a supply problem, and a problem of foreign investment and bad incentive schemes. [0] https://www.mirror.co.uk/news/politics/boris-johnson-clinging-rent-free-12949436 https://www.mirror.co.uk/news/politics/boris-johnson-clingin...
  - notanzaiiswear 5y ago
    Or many people want to live in London.
  - bb123 5y ago
    There is housing available within commuting distance - I bought a 2 bedroom flat walking distance from a station with a 35 minute link to Kings Cross for under 200k. People seem to think they have some sort of God-given right to live in central London. If you want to buy a property you may need to make some sacrifices in that department. Yes the town I live in is pretty shite, and I have to train to work or to see friends on the weekend but I own my home.
    - yesOfCourse9 5y ago
      Yes only the elite, who speculate prices beyond the reach of normies, should be allowed to live where they want. Nice embedded class based bias by the stiff upper lip crowd. Make the minority that hands itself free money subject to the same open market and you have a point.
      - II2II 5y ago
        > Yes only the elite, who speculate prices beyond the reach of normies, should be allowed to live where they want. It is not even a case of living where you want to, nor is it a case of supporting a particular lifestyle. It is a question of quality of life. If your commute is 30 minutes door-to-door, you are losing an hour a day. That hour could be better put to use to improving your skills, working paid hours, taking care of your personal well-being, or leisure. It is also worth noting that most people measure commute time as time in transit with a private vehicle, this incurs additional costs (meaning working additional hours) and the only way to get around it involves a significant tradeoff for time. There are many people who do not want to live an elitist lifestyle and would be happy to live somewhere other than where the elites live. What they don't want to endure is a quantitative and qualitative diminishing in their quality of life.
    - heavenlyblue 5y ago
- zpeti 5y ago
  Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. Either these prices are inflated away or there is a collapse. There's not much else you can, UK housing market is so far from market reality that it's a joke. And ironically the more you create policies like lower deposit amounts for younger people, or subsidised mortgage payments, the more you drive up house prices making these policies hurt the next generation of young people more. Perfect example of government intervention making things worse creating more government intervention etc etc
  - ZeroGravitas 5y ago
    Depends on what you mean by "government intervention". The phrase is usually used to stop people fixing problems like this, which are the kind of collective action problem that only government action can solve. The government intervention you mention is actually just the voters with property using their vote to protect their wealth. And that worked exactly as intended.
  - imtringued 5y ago
    >Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. The falling of interest is purely market driven. There is no government intervention there. Interest rates have been falling for a long time, far longer than 20 years and the reason is pretty simple. There are people out there who do not spend their money. The interest rate simply moderates between saving and investment. If saving is going up relative to investment then the interest rate must drop. https://news.ycombinator.com/item?id=28373304 https://news.ycombinator.com/item?id=28373304 You say higher and higher mortgage amounts have driven up prices but if you spend $360k what is wrong with getting a $360k house out of it in the end? What's so good about paying interest?
    - nly 5y ago
      > The interest rate simply moderates between saving and investment. For businesses perhaps, but this doesn't happen much at the personal level. Most people will save in cash, rather than invest, even if interest rates are zero or negative. Most people are risk adverse. Source: https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0fb63 https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0f... > While the annual ISA tally showed high levels of saving, most of the money went into cash ISAs, which offer low rates of interest and could leave savers vulnerable to rising inflation. > Some 300,000 new subscriptions went to stocks and shares ISAs, compared with 1.2M new subscriptions for cash accounts. So that's only ~20% of savers investing in to stocks in the most tax efficient way possible in the UK, even when the Bank of England base rate is at 0.1%
- nivenkos 5y ago
  The answer is to control the housing market and stop it being used an investment against inflation. Force people to invest in industry against inflation - not rent-seeking in housing, or cryptocurrency pyramid schemes. Only allow resident citizens to own the one property they live in, and have the government handle rentals like the old council housing / Folkhemmet homes.
  - boldslogan 5y ago
    I think the political will here is kind of weak...the voters who own housing dont want their asset to decrease in value and wont vote for politicians who want to force investment into industry, versus the renters who do. I am not sure what to suggest...
    - nicoburns 5y ago
      Medium term I think this political will will change as fewer an fewer people Can afford housing
      - disgruntledphd2 5y ago
        Probably not in the UK, as the house-owning population are much older and tend to vote Conservative (the current governing party). Young people are already screwed, and unless they all show up to vote in marginal constituences (unlikely) then they'll continue to get screwed, unfortunately.
        nicoburns 5y ago
        Right, but the age cohorts that are screwed are only going to get older over time (unless policy changes).
        disgruntledphd2 5y ago
        That time is well beyond the average politicians event horizon, I suspect.
- tclancy 5y ago
  That sounds a lot like if we just do what we have been doing for the last couple hundred years it will all work out. But we have a couple hundred years of evidence of who it works out for and who it does not.
  - FredPret 5y ago
    What are you talking about? Standards of living have increased the most at the bottom of society. - Labourers used to work seven days a week (12 hour days), then six, now five times eight is standard, with some exceptions. - Workplace safety have gone from a laughable concept to the first priority. - 100% of Western populations can read and write. This used to be a rich-person thing - How many poor kids have you seen lately with their faces covered in coal dust from the mines? - There are thousands of other examples. Poor people today live longer and better in many important ways than rich people even a hundred years ago, never mind a "couple hundred years."
    - pyrale 5y ago
      > Standards of living have increased the most at the bottom of society. Ah yes, conflating 150 years of history like the 60's and the 2010's were comparable in a stable stream of progress. Remember even further, when we were forced to dress in animal furs and sleep in grottos? How amazing progress we made since then... I wonder why the serfs are complaining.
      - FredPret 5y ago
        Oh, I’m sorry that the eye-watering amount of progress isn’t good enough for you, because sometimes it’s faster than other times. Only if every single minute is better than the last by the exact same amount is capitalism working!
        pyrale 5y ago
        Are you the fifth Yorkshireman ? Too bad you left the band before it became famous.
- SquishyPanda23 5y ago
  > The answer is no lockdowns Ah yes, the anti-vaxxer chiming in with the "let everyone die" approach to the economy.
  - dang 5y ago
    This sort of comment will get you banned on HN, regardless of how wrong someone else is or you feel they are. If you'd please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here (all of them—you must have broken at least half a dozen here), we'd appreciate it.
    - SquishyPanda23 5y ago
      okay thanks
- onlyrealcuzzo 5y ago
  How can you be confident we will get there? Central Banks can easily knock interest rates down a few points and take away all gains in labor wages (plus more). Why would Central Bankers (who answers to no one) stop giving themselves (and other asset owners) more and more pie when it's so easy to take it? What's the incentive to stop? The West is on a 20-year trend to lower interest rates. Japan's on a 30-year trend. Have you stopped to consider how hard it is to maintain a life a leisure in a low-growth environment without slave labor? /s
prawn 5y ago
I'd be tackling housing prices. I think wages (in AU, at least) already render many small businesses unviable. Historically in Australia, it's seemed like houses have doubled in price every 10 years. More recently, it's seemed like every 5 years. A house I bought 10 years ago would now be 2.5* that as land value alone. A building I bought has apparently doubled in value in five years.
- M2Ys4U 5y ago
  >I'd be tackling housing prices. The government has absolutely no desire to do that. Their voter base is predominantly home owners who think of their house as an asset that should only go up in value.
  - prawn 5y ago
    Yes, I think the best opportunities are incremental changes like phasing out negative gearing, tweaking SMSF rules and so on.
  - benbojangles 5y ago
    I agree. Also, High streets don't have to 'die' due to excessive rent either, the government could hike taxes on vacant stores 1000% then make possession orders on unpaid premises after 18 months. Then the gov can nationalise shop rents according to reasonable incomes.
    - M2Ys4U 5y ago
      I'd advocate for scrapping council tax and business rates, replacing them with a land value tax payable by the freeholder rather than occupant. I just don't see the current Tory party touching it with a barge pole.
      - aurbano 5y ago
        Only issue is that UK politics are dominated by rich landowners...
      - 5y ago
notanzaiiswear 5y ago
Apparently there are people who are willing and able to pay the housing prices, so your claim seems obviously false.
Veen 5y ago
It's why I'm contemplating moving from the South West to the North East. I work remotely, so it doesn't matter much where I am. Rental costs in the North East are dramatically lower than where I am now (a location that attracts Londoners wanting a place in the country, significantly increasing house prices).
- moreira 5y ago
  I did exactly that this year - went from £1050/mo for a 2-bedroom flat in the south to £375/mo for a 2-bedroom house with a back yard, in the North East. You can get anything you need delivered these days, including groceries, and I’m within walking distance of a train station if I need to head to an airport or go anywhere bigger. It’s seriously worth considering.
  - Veen 5y ago
    I was looking at rental prices in County Durham and Northumberland, largely because that's where I lived when I was a young kid. My partner was initially convinced they were some sort of scam because houses are so much cheaper than we are paying down south. We could rent a three-bedroom detached with a decent chunk of land for less than we pay now for a two-bedroom end terrace with no garden.
    - moreira 5y ago
      Oh the house prices. I’ve gone from looking at £250+K houses and thinking I’ll never be able to afford one on my own to “I’m buying a house in the next 12 months”. £5K deposit (not even joking), a 3 year mortgage (which will end up costing about the same as my rent down south) and I’ll be set. I looked at Durham as well, and when it comes to buying, if I spot a good one there, that’s where I’ll go for sure. The town I live in is nice, quiet, the people are super friendly, there’s literally no downside if you’re a remote worker. These places aren’t a scam, they just don’t have high paying jobs available, but that isn’t a problem if you come with your own job.
      - 5y ago
ZeroGravitas 5y ago
Wage rises without solving the housing issue is only going to raise house prices further. There's a bunch of potential solutions, but no-one directly benefits from them in the short term. Any attempt to fix it will be met with sob stories about old ladies in multi-million dollar homes being "forced out of their homes". So we'll all just sit and watch as things slowly spin out of control.
- Reason077 5y ago
  > "Wage rises without solving the housing issue is only going to raise house prices further." House prices aren't that tightly linked to incomes. House prices are more strongly influenced by interest rates and availability of credit. And, of course, supply/demand fundamentals (ie: population change vs. number of housing units in an area).
  - ZeroGravitas 5y ago
    I wasn't making a claim about what impacted house prices the most. If I was, then I'd say a system where the government basically gives you free money/tax breaks if you buy a home, is the root cause behind the things you mentioned which then drives house prices. The point is, without fixing that issue, you can't solve it by wage rises. People who don't even want homes are buying them, either as outright investments that they can sit on for years, or as something they also live in, but need to treat as an investment, rather than a home.
    - pjc50 5y ago
      > the government basically gives you free money/tax breaks if you buy a home Such as? MIRAS was abolished 20 years ago. Homes are arguably under-taxed (no US style property tax), but that's not really a "break".
      - rjsw 5y ago
        There is Help to Buy [1]. [1] https://en.wikipedia.org/wiki/Help_to_Buy https://en.wikipedia.org/wiki/Help_to_Buy
Factorium 5y ago
If you permanently reduce immigration, including deporting unauthorised migrants, you can achieve both of those things. Given the cost of land and building, we should consider Western nations 'full' and only allow immigration 'swaps' from other highly developed countries.
- Workaccount2 5y ago
  The issue with this though is two fold: 1.) You cannot have a nation of college degree high skilled workers. At least until robots and AI are widespread. Being rich is a lot less fun when you cannot spend it anywhere, because none of those places have a staff. 2.) Since people aren't having kids, and we love to saddle the future with liabilities, someone has to fill that void. All the hot shot AI inventory management software in the world is useless without grunts actually executing it's guidance on the ground.
  - Factorium 5y ago
    1) The ratio of people with a tertiary degree is probably too high. In past decades, only about the top 25% had university degrees: https://www.cedefop.europa.eu/files/images/graph_month-stat_march-april.jpg https://www.cedefop.europa.eu/files/images/graph_month-stat_... 2) Fertility is heavily influenced by the availability of housing. Without immigration, house prices will fall and wages will rise, providing a boost to fertility until the population equalises. https://www.nber.org/digest/feb12/impact-real-estate-market-fertility https://www.nber.org/digest/feb12/impact-real-estate-market-... With mass immigration you shortcut that, and simply end up replacing the original population, probably with negative overall effects if the incoming population is not genetically (average IQ, predisposition to violence) or culturally (respect for women etc.) aligned.
    - xxpor 5y ago
      You do realize intra-country migration has the same effect right? In the US, the majority of counties are losing population, because people are moving to cities. You're advocating for internal passports and residency permits: https://en.wikipedia.org/wiki/Hukou https://en.wikipedia.org/wiki/Hukou
jseliger 5y ago
The housing theory of everything: https://www.worksinprogress.co/issue/the-housing-theory-of-everything/ https://www.worksinprogress.co/issue/the-housing-theory-of-e...
eptcyka 5y ago
Access to cheap loans is partly what's driving the prices up. I think a better solution would be to enact legislation that penalizes the use of residential real estate for capital gains or profit in general, including serial landlords and AirBnBs.
- xxpor 5y ago
  The right way to do this is to tax the land in such a way that discourages rent seeking: https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism The second thing to do are reforms to make it much much easier to build new housing, as demand far outstrips supply.
chooseaname 5y ago
> Either wages need to rise or house prices need to fall. Raising wages in not in the best interest of share holders.
chooseaname 5y ago
> Housing is anything from a third to 50% This is way too much. We just finished paying off our current house and our payment was around 14% of our net. We are high earners in a low CoL area so the house is really nice, but wasn't very expensive. I can't imagine being "house poor" after this.

by nly 5y ago

pibechorro 5y ago

Inflation will make any increase in wages meaningless. It will also further drive investment into housing to escape the free falling cash. The answer is no lockdowns, no bailouts, and no quantitative money printing to oblivion. Let the everything bubble pop and start over with sound first principles. We will get there, but not before politicians make it worse and delay the inevitable defaults.

nly 5y ago
- Boris Johnson (the British Prime Minister) sold his London family home in 2019 for £3.75M after having rented it out for £2000/week (just under 4x the national average income) while living in his Government provided accommodation in his role as Foreign Secretary (2016-2018).[0] - Property prices have shot up 10% during the pandemic, bolstered in part by the Government cutting stamp duty on sales. - A few days ago the Government raised National Insurance (which is an income tax) on all workers to pay for social care while protecting property wealth with a contribution cap. Nobody in power is popping the property asset bubble in the UK any time soon. It's a sacred cow. I'm in the top 2% of earners by income in the UK and I'm still completely priced out of wrt to buying a modest family home (or flat) a humane, commutable distance of central London. Price/Income ratios are too high even for me because I'm competing with my peers. It's a supply problem, and a problem of foreign investment and bad incentive schemes. [0] https://www.mirror.co.uk/news/politics/boris-johnson-clinging-rent-free-12949436 https://www.mirror.co.uk/news/politics/boris-johnson-clingin...
- notanzaiiswear 5y ago
  Or many people want to live in London.
- bb123 5y ago
  There is housing available within commuting distance - I bought a 2 bedroom flat walking distance from a station with a 35 minute link to Kings Cross for under 200k. People seem to think they have some sort of God-given right to live in central London. If you want to buy a property you may need to make some sacrifices in that department. Yes the town I live in is pretty shite, and I have to train to work or to see friends on the weekend but I own my home.
  - yesOfCourse9 5y ago
    Yes only the elite, who speculate prices beyond the reach of normies, should be allowed to live where they want. Nice embedded class based bias by the stiff upper lip crowd. Make the minority that hands itself free money subject to the same open market and you have a point.
    - II2II 5y ago
      > Yes only the elite, who speculate prices beyond the reach of normies, should be allowed to live where they want. It is not even a case of living where you want to, nor is it a case of supporting a particular lifestyle. It is a question of quality of life. If your commute is 30 minutes door-to-door, you are losing an hour a day. That hour could be better put to use to improving your skills, working paid hours, taking care of your personal well-being, or leisure. It is also worth noting that most people measure commute time as time in transit with a private vehicle, this incurs additional costs (meaning working additional hours) and the only way to get around it involves a significant tradeoff for time. There are many people who do not want to live an elitist lifestyle and would be happy to live somewhere other than where the elites live. What they don't want to endure is a quantitative and qualitative diminishing in their quality of life.
  - heavenlyblue 5y ago
zpeti 5y ago
Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. Either these prices are inflated away or there is a collapse. There's not much else you can, UK housing market is so far from market reality that it's a joke. And ironically the more you create policies like lower deposit amounts for younger people, or subsidised mortgage payments, the more you drive up house prices making these policies hurt the next generation of young people more. Perfect example of government intervention making things worse creating more government intervention etc etc
- ZeroGravitas 5y ago
  Depends on what you mean by "government intervention". The phrase is usually used to stop people fixing problems like this, which are the kind of collective action problem that only government action can solve. The government intervention you mention is actually just the voters with property using their vote to protect their wealth. And that worked exactly as intended.
- imtringued 5y ago
  >Agreed. 20 years of lower and lower interest rates, meaning higher and higher mortgage amounts have driven up prices into oblivion. The falling of interest is purely market driven. There is no government intervention there. Interest rates have been falling for a long time, far longer than 20 years and the reason is pretty simple. There are people out there who do not spend their money. The interest rate simply moderates between saving and investment. If saving is going up relative to investment then the interest rate must drop. https://news.ycombinator.com/item?id=28373304 https://news.ycombinator.com/item?id=28373304 You say higher and higher mortgage amounts have driven up prices but if you spend $360k what is wrong with getting a $360k house out of it in the end? What's so good about paying interest?
  - nly 5y ago
    > The interest rate simply moderates between saving and investment. For businesses perhaps, but this doesn't happen much at the personal level. Most people will save in cash, rather than invest, even if interest rates are zero or negative. Most people are risk adverse. Source: https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0fb63 https://www.ft.com/content/2bcd4367-ef4c-4d1d-a69d-df2126b0f... > While the annual ISA tally showed high levels of saving, most of the money went into cash ISAs, which offer low rates of interest and could leave savers vulnerable to rising inflation. > Some 300,000 new subscriptions went to stocks and shares ISAs, compared with 1.2M new subscriptions for cash accounts. So that's only ~20% of savers investing in to stocks in the most tax efficient way possible in the UK, even when the Bank of England base rate is at 0.1%
nivenkos 5y ago
The answer is to control the housing market and stop it being used an investment against inflation. Force people to invest in industry against inflation - not rent-seeking in housing, or cryptocurrency pyramid schemes. Only allow resident citizens to own the one property they live in, and have the government handle rentals like the old council housing / Folkhemmet homes.
- boldslogan 5y ago
  I think the political will here is kind of weak...the voters who own housing dont want their asset to decrease in value and wont vote for politicians who want to force investment into industry, versus the renters who do. I am not sure what to suggest...
  - nicoburns 5y ago
    Medium term I think this political will will change as fewer an fewer people Can afford housing
    - disgruntledphd2 5y ago
      Probably not in the UK, as the house-owning population are much older and tend to vote Conservative (the current governing party). Young people are already screwed, and unless they all show up to vote in marginal constituences (unlikely) then they'll continue to get screwed, unfortunately.
      - nicoburns 5y ago
        Right, but the age cohorts that are screwed are only going to get older over time (unless policy changes).
        disgruntledphd2 5y ago
        That time is well beyond the average politicians event horizon, I suspect.
tclancy 5y ago
That sounds a lot like if we just do what we have been doing for the last couple hundred years it will all work out. But we have a couple hundred years of evidence of who it works out for and who it does not.
- FredPret 5y ago
  What are you talking about? Standards of living have increased the most at the bottom of society. - Labourers used to work seven days a week (12 hour days), then six, now five times eight is standard, with some exceptions. - Workplace safety have gone from a laughable concept to the first priority. - 100% of Western populations can read and write. This used to be a rich-person thing - How many poor kids have you seen lately with their faces covered in coal dust from the mines? - There are thousands of other examples. Poor people today live longer and better in many important ways than rich people even a hundred years ago, never mind a "couple hundred years."
  - pyrale 5y ago
    > Standards of living have increased the most at the bottom of society. Ah yes, conflating 150 years of history like the 60's and the 2010's were comparable in a stable stream of progress. Remember even further, when we were forced to dress in animal furs and sleep in grottos? How amazing progress we made since then... I wonder why the serfs are complaining.
    - FredPret 5y ago
      Oh, I’m sorry that the eye-watering amount of progress isn’t good enough for you, because sometimes it’s faster than other times. Only if every single minute is better than the last by the exact same amount is capitalism working!
      - pyrale 5y ago
        Are you the fifth Yorkshireman ? Too bad you left the band before it became famous.
SquishyPanda23 5y ago
> The answer is no lockdowns Ah yes, the anti-vaxxer chiming in with the "let everyone die" approach to the economy.
- dang 5y ago
  This sort of comment will get you banned on HN, regardless of how wrong someone else is or you feel they are. If you'd please review https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html and stick to the rules when posting here (all of them—you must have broken at least half a dozen here), we'd appreciate it.
  - SquishyPanda23 5y ago
    okay thanks
onlyrealcuzzo 5y ago
How can you be confident we will get there? Central Banks can easily knock interest rates down a few points and take away all gains in labor wages (plus more). Why would Central Bankers (who answers to no one) stop giving themselves (and other asset owners) more and more pie when it's so easy to take it? What's the incentive to stop? The West is on a 20-year trend to lower interest rates. Japan's on a 30-year trend. Have you stopped to consider how hard it is to maintain a life a leisure in a low-growth environment without slave labor? /s

prawn 5y ago

I'd be tackling housing prices. I think wages (in AU, at least) already render many small businesses unviable. Historically in Australia, it's seemed like houses have doubled in price every 10 years. More recently, it's seemed like every 5 years. A house I bought 10 years ago would now be 2.5* that as land value alone. A building I bought has apparently doubled in value in five years.

M2Ys4U 5y ago
>I'd be tackling housing prices. The government has absolutely no desire to do that. Their voter base is predominantly home owners who think of their house as an asset that should only go up in value.
- prawn 5y ago
  Yes, I think the best opportunities are incremental changes like phasing out negative gearing, tweaking SMSF rules and so on.
- benbojangles 5y ago
  I agree. Also, High streets don't have to 'die' due to excessive rent either, the government could hike taxes on vacant stores 1000% then make possession orders on unpaid premises after 18 months. Then the gov can nationalise shop rents according to reasonable incomes.
  - M2Ys4U 5y ago
    I'd advocate for scrapping council tax and business rates, replacing them with a land value tax payable by the freeholder rather than occupant. I just don't see the current Tory party touching it with a barge pole.
    - aurbano 5y ago
      Only issue is that UK politics are dominated by rich landowners...
    - 5y ago

notanzaiiswear 5y ago

Apparently there are people who are willing and able to pay the housing prices, so your claim seems obviously false.

Veen 5y ago

It's why I'm contemplating moving from the South West to the North East. I work remotely, so it doesn't matter much where I am. Rental costs in the North East are dramatically lower than where I am now (a location that attracts Londoners wanting a place in the country, significantly increasing house prices).

moreira 5y ago
I did exactly that this year - went from £1050/mo for a 2-bedroom flat in the south to £375/mo for a 2-bedroom house with a back yard, in the North East. You can get anything you need delivered these days, including groceries, and I’m within walking distance of a train station if I need to head to an airport or go anywhere bigger. It’s seriously worth considering.
- Veen 5y ago
  I was looking at rental prices in County Durham and Northumberland, largely because that's where I lived when I was a young kid. My partner was initially convinced they were some sort of scam because houses are so much cheaper than we are paying down south. We could rent a three-bedroom detached with a decent chunk of land for less than we pay now for a two-bedroom end terrace with no garden.
  - moreira 5y ago
    Oh the house prices. I’ve gone from looking at £250+K houses and thinking I’ll never be able to afford one on my own to “I’m buying a house in the next 12 months”. £5K deposit (not even joking), a 3 year mortgage (which will end up costing about the same as my rent down south) and I’ll be set. I looked at Durham as well, and when it comes to buying, if I spot a good one there, that’s where I’ll go for sure. The town I live in is nice, quiet, the people are super friendly, there’s literally no downside if you’re a remote worker. These places aren’t a scam, they just don’t have high paying jobs available, but that isn’t a problem if you come with your own job.
    - 5y ago

ZeroGravitas 5y ago

Wage rises without solving the housing issue is only going to raise house prices further. There's a bunch of potential solutions, but no-one directly benefits from them in the short term. Any attempt to fix it will be met with sob stories about old ladies in multi-million dollar homes being "forced out of their homes". So we'll all just sit and watch as things slowly spin out of control.

Reason077 5y ago
> "Wage rises without solving the housing issue is only going to raise house prices further." House prices aren't that tightly linked to incomes. House prices are more strongly influenced by interest rates and availability of credit. And, of course, supply/demand fundamentals (ie: population change vs. number of housing units in an area).
- ZeroGravitas 5y ago
  I wasn't making a claim about what impacted house prices the most. If I was, then I'd say a system where the government basically gives you free money/tax breaks if you buy a home, is the root cause behind the things you mentioned which then drives house prices. The point is, without fixing that issue, you can't solve it by wage rises. People who don't even want homes are buying them, either as outright investments that they can sit on for years, or as something they also live in, but need to treat as an investment, rather than a home.
  - pjc50 5y ago
    > the government basically gives you free money/tax breaks if you buy a home Such as? MIRAS was abolished 20 years ago. Homes are arguably under-taxed (no US style property tax), but that's not really a "break".
    - rjsw 5y ago
      There is Help to Buy [1]. [1] https://en.wikipedia.org/wiki/Help_to_Buy https://en.wikipedia.org/wiki/Help_to_Buy

Factorium 5y ago

If you permanently reduce immigration, including deporting unauthorised migrants, you can achieve both of those things. Given the cost of land and building, we should consider Western nations 'full' and only allow immigration 'swaps' from other highly developed countries.

Workaccount2 5y ago
The issue with this though is two fold: 1.) You cannot have a nation of college degree high skilled workers. At least until robots and AI are widespread. Being rich is a lot less fun when you cannot spend it anywhere, because none of those places have a staff. 2.) Since people aren't having kids, and we love to saddle the future with liabilities, someone has to fill that void. All the hot shot AI inventory management software in the world is useless without grunts actually executing it's guidance on the ground.
- Factorium 5y ago
  1) The ratio of people with a tertiary degree is probably too high. In past decades, only about the top 25% had university degrees: https://www.cedefop.europa.eu/files/images/graph_month-stat_march-april.jpg https://www.cedefop.europa.eu/files/images/graph_month-stat_... 2) Fertility is heavily influenced by the availability of housing. Without immigration, house prices will fall and wages will rise, providing a boost to fertility until the population equalises. https://www.nber.org/digest/feb12/impact-real-estate-market-fertility https://www.nber.org/digest/feb12/impact-real-estate-market-... With mass immigration you shortcut that, and simply end up replacing the original population, probably with negative overall effects if the incoming population is not genetically (average IQ, predisposition to violence) or culturally (respect for women etc.) aligned.
  - xxpor 5y ago
    You do realize intra-country migration has the same effect right? In the US, the majority of counties are losing population, because people are moving to cities. You're advocating for internal passports and residency permits: https://en.wikipedia.org/wiki/Hukou https://en.wikipedia.org/wiki/Hukou

jseliger 5y ago

The housing theory of everything: https://www.worksinprogress.co/issue/the-housing-theory-of-everything/ https://www.worksinprogress.co/issue/the-housing-theory-of-e...

eptcyka 5y ago

Access to cheap loans is partly what's driving the prices up. I think a better solution would be to enact legislation that penalizes the use of residential real estate for capital gains or profit in general, including serial landlords and AirBnBs.

xxpor 5y ago
The right way to do this is to tax the land in such a way that discourages rent seeking: https://en.wikipedia.org/wiki/Georgism https://en.wikipedia.org/wiki/Georgism The second thing to do are reforms to make it much much easier to build new housing, as demand far outstrips supply.

chooseaname 5y ago

> Either wages need to rise or house prices need to fall. Raising wages in not in the best interest of share holders.

chooseaname 5y ago

> Housing is anything from a third to 50% This is way too much. We just finished paying off our current house and our payment was around 14% of our net. We are high earners in a low CoL area so the house is really nice, but wasn't very expensive. I can't imagine being "house poor" after this.