6 ms·

I really don't understand. A drop in prices of housing alone will fix all the problems (as long as banks are backed by the central bank like they are in the US)

I really don't understand. A drop in prices of housing alone will fix all the problems (as long as banks are backed by the central bank like they are in the US). Write laws that: - Prevent non-humans entities (trusts, shell-companies, foundations etc. from buying houses for the next 10 years) - Ban airbnb - Increase property taxes on vacant properties.

FredPret 3y ago
Or... you could try the supply and demand method. Increase supply (build more), keep demand steady (sane interest rates, sane immigration rates, speaking as an immigrant), and housing costs simply must fall. Yes, even if a single corporation buys every last house in the UK. Fight supply and demand at your peril.
- jjcon 3y ago
  Given UK age demographics that is going to happen over the next few decades anyway, putting all efforts into increasing supply could lead to the opposite problem in the not too far future.
  - betaby 3y ago
    Unlikely, all UN demographics predictions were/are wrong. Population is mostly grows everywhere unless that region a war zone. Being that growth driven by births, immigration, refugies or illegal move is irrelevant in context of supply/demand.
    - jfim 3y ago
      > Population is mostly grows everywhere unless that region a war zone. Define everywhere. Japan and Greece have seen population declines in the last few years, for example.
      - betaby 3y ago
        It's more 'define the interval'. For Japan and Greece that's more a stagnation - population didn't grow or fell much in last 30 years. On a interval of 2-3 generation (20-60 years) most of countries show growth, not decline in population. Many times predicted population decline in Germany turns to be slow growth during last 30 years.
- seydor 3y ago
  the war has made construction hugely more expensive in many countries The globalization of the real estate market has always been a setup for a scam and everybody knows it, yet keeps doing it, and the whole west is now stuck in this catch-22.
- scotty79 3y ago
  > Increase supply Supply can be vastly increased by punishing large owners severely for letting their properties stay empty.
  - FredPret 3y ago
    But they are being punished for having unproductive capital. Every year they’re losing a big chunk of money to inflation and opportunity cost.
    - brailsafe 3y ago
      Not if the empty homes are just perpetually rising assets with minimal servicing cost.
    - scotty79 3y ago
      > But they are being punished for having unproductive capital. Yes, and in some circumstances that might have been enough. But the fact that we got to where we are now proves that we are not in thise circumstances, because it isn't enough.
archsurface 3y ago
The UK housing "market" is the sacred elephant in the room.
- betaby 3y ago
  Hello from Canada!
JonChesterfield 3y ago
It seems likely the houses are overvalued, on the basis that ratio of house price to income has increased dramatically, and also that a significant fraction of the pension provision in the country is investment in property. I'm not sure what the housing market collapsing would mean for the UK but am doubtful it would fix more problems than it spawns. For what it's worth, the tax system is aggressively punitive towards companies that want to buy real estate. Landlords with mortgages can't offset the interest against profit any more so a bunch of those are no longer viable concerns and sold up. Some conquence to vacant property might be good, beyond the already punitive stamp duty when you go beyond the first one. I think you get hit for capital gains when selling non-primary residence as well.
api 3y ago
None of those things would be nearly as effective as what seems to be the unthinkable: building more housing.
- Jochim 3y ago
  Developers only built half the homes that they were approved to build over a 10 year period[0]. The destruction of the provision of social housing has been a disaster. [0] https://www.theguardian.com/society/2021/may/08/over-1m-homes-in-england-with-planning-permission-not-built https://www.theguardian.com/society/2021/may/08/over-1m-home...
  - candiodari 3y ago
    The issue (elsewhere than the UK) is that regulations have also made building so expensive that it's actually not worth it. People cannot pay for new houses, even on very cheap land. I don't even understand how it's supposed to work, by the current building standards in .be I'd say about 80% of all houses (mostly older ones) would be torn down if we follow the letter of the law. And a lot of those building standards (e.g. electrical safety, piping safety) apply to existing housing, not just to newly built ones. Social housing used to be famous for the government simply not following building codes (whether that meant maximum land occupancy or isolation/material standards), and disclaimed responsibility when it lead to accidents. But it made a lot of people home owners.
  - Silhouette 3y ago
    That's partly because developers of large estates often have conditions on their planning permission such as including a certain proportion of "affordable" homes within their mix and funding various community facilities. So on paper they have approval to build all of that. The reality is that they can often make far more profit by building the expensive houses first, drip feeding them onto the market, and possibly never finishing the whole estate as originally approved. It's no accident that many homes are approved but never built. It's just a small group of wily giant building firms playing the system and getting away with it. In theory local authorities who administer the planning system should call them on it. In reality it's a David and Goliath situation. Attempting enforcement actions can result in years of expensive legal battles ultimately funded by local taxpayers with no guarantee of success even in what appear to be cut-and-dried cases.
ok_dad 3y ago
I’m in the USA but if I don’t put my house into trust for my kid then he has to go through probate and spend tens of thousands to get it when I die. I agree corporations and investors shouldn’t own houses just for investment purposes, but you also need some amount of rentals allowed because not everyone wants to buy a home. I’m not sure where it is, but there’s a fine line separating the moral investment into houses from immoral rent seeking.
- nine_zeros 3y ago
  > I’m in the USA but if I don’t put my house into trust for my kid then he has to go through probate and spend tens of thousands to get it when I die. And that's by design. Every human coming into the planet should start from a reasonably same starting point. By not taxing inheritance, the super wealthy's children start much further than the children born to non-wealthy families. The tax on inheritance is the best way to ensure that there is "some" inheritance but not enough that the children start at a starting point that is insanely ahead of others.
  - roody15 3y ago
    Hmm maybe but that puts a lot of trust in the system. Do you think taxing inheritance will result in the democratizing of said assets to society at large? Looking at the last three decades I see wealth just accumulate in mega corporations who now seem to operate at levels above that of many nation states. Large banks that can demand bailouts and demand “quantitive easing” which simply aggregates wealth in these banks and corporations. Literally transferring wealth from the bottom to the top by government decree.
    - nine_zeros 3y ago
      At a minimum, the taxation will allow payment of debt incurred by the parent's generation. That's a reasonable outcome for inheritance taxes.
  - WentFullRetard 3y ago
    [dead]
lottin 3y ago
- Close the borders Good living conditions are like a magnet for economic migrants, and the wholesale arrival of migrants will start a race to the bottom which will destroy any quality of life.
- pfisch 3y ago
  Pretty sure letting population enter freefall will start a race to the bottom that will destroy any country. Countries with fertility rates of 1.5 shouldn't be throwing stones at immigration.
  - rs999gti 3y ago
    > Countries with fertility rates of 1.5 shouldn't be throwing stones at immigration. Yes, they should be working to encourage more native women to have children. You can't immigrate your way out of a population decline.
    - pfisch 3y ago
      Of course you can. Why couldn't you?
      - lottin 3y ago
        Because you end up replacing one population with another. In other words, the remedy is worse than the disease.
        pfisch 3y ago
        Seems like you just end up with a mixed population that eventually just becomes the new "native" population.
  - lottin 3y ago
    A population decline doesn't lead to a race to the bottom. Less people means the economic output is likely to shrink in absolute terms, but it doesn't have to shrink in per capita terms. On the other hand, less pressure on natural resources, less pollution and less people overall makes arguably a nicer environment to live in.
rcarr 3y ago
What you're missing, is that all the property owners take out massive amounts of credit, believing that the rise in property values will cover it and they can just remortgage in 5 years. So they buy pointless shit like Range Rovers even though they live in the city and take luxury holidays they wouldn't be able to afford otherwise. The smarter ones use the extra credit to buy more houses. If the property prices tank all these people go bankrupt. No government will let it happen because they'll become unelectable for decades. It's truly absolute dogshit.
- LegitShady 3y ago
  property owners who over leveraged themselves forced to sell properties should help drop the price, so its actually a positive in terms of the solution, its just radioactive on the political end. Canada is the same way except massive immigration, temporary foreign worker program, and foreign students allowed to work 40 hours a week (in case you were wondering if the student visas are legit) have driven up the price of housing beyond any reason. Probably multiple generations of canadians whose financial future was sacrificed so the current government can run their seemingly ideological immigration program.
  - brailsafe 3y ago
    If there was much more modest immigration, which there probably should be at least for some time, we'd eventually have severely inflated house prices anyway, because that's the system they built. Various types of immigration are just some of the parts of it, and it's much more complex than just "dial the knob down and we're golden".
- eli_gottlieb 3y ago
  >If the property prices tank all these people go bankrupt. Good. Let them.

FredPret 3y ago

Or... you could try the supply and demand method. Increase supply (build more), keep demand steady (sane interest rates, sane immigration rates, speaking as an immigrant), and housing costs simply must fall. Yes, even if a single corporation buys every last house in the UK. Fight supply and demand at your peril.

jjcon 3y ago
Given UK age demographics that is going to happen over the next few decades anyway, putting all efforts into increasing supply could lead to the opposite problem in the not too far future.
- betaby 3y ago
  Unlikely, all UN demographics predictions were/are wrong. Population is mostly grows everywhere unless that region a war zone. Being that growth driven by births, immigration, refugies or illegal move is irrelevant in context of supply/demand.
  - jfim 3y ago
    > Population is mostly grows everywhere unless that region a war zone. Define everywhere. Japan and Greece have seen population declines in the last few years, for example.
    - betaby 3y ago
      It's more 'define the interval'. For Japan and Greece that's more a stagnation - population didn't grow or fell much in last 30 years. On a interval of 2-3 generation (20-60 years) most of countries show growth, not decline in population. Many times predicted population decline in Germany turns to be slow growth during last 30 years.
seydor 3y ago
the war has made construction hugely more expensive in many countries The globalization of the real estate market has always been a setup for a scam and everybody knows it, yet keeps doing it, and the whole west is now stuck in this catch-22.
scotty79 3y ago
> Increase supply Supply can be vastly increased by punishing large owners severely for letting their properties stay empty.
- FredPret 3y ago
  But they are being punished for having unproductive capital. Every year they’re losing a big chunk of money to inflation and opportunity cost.
  - brailsafe 3y ago
    Not if the empty homes are just perpetually rising assets with minimal servicing cost.
  - scotty79 3y ago
    > But they are being punished for having unproductive capital. Yes, and in some circumstances that might have been enough. But the fact that we got to where we are now proves that we are not in thise circumstances, because it isn't enough.

archsurface 3y ago

The UK housing "market" is the sacred elephant in the room.

betaby 3y ago
Hello from Canada!

JonChesterfield 3y ago

It seems likely the houses are overvalued, on the basis that ratio of house price to income has increased dramatically, and also that a significant fraction of the pension provision in the country is investment in property. I'm not sure what the housing market collapsing would mean for the UK but am doubtful it would fix more problems than it spawns. For what it's worth, the tax system is aggressively punitive towards companies that want to buy real estate. Landlords with mortgages can't offset the interest against profit any more so a bunch of those are no longer viable concerns and sold up. Some conquence to vacant property might be good, beyond the already punitive stamp duty when you go beyond the first one. I think you get hit for capital gains when selling non-primary residence as well.

api 3y ago

None of those things would be nearly as effective as what seems to be the unthinkable: building more housing.

Jochim 3y ago
Developers only built half the homes that they were approved to build over a 10 year period[0]. The destruction of the provision of social housing has been a disaster. [0] https://www.theguardian.com/society/2021/may/08/over-1m-homes-in-england-with-planning-permission-not-built https://www.theguardian.com/society/2021/may/08/over-1m-home...
- candiodari 3y ago
  The issue (elsewhere than the UK) is that regulations have also made building so expensive that it's actually not worth it. People cannot pay for new houses, even on very cheap land. I don't even understand how it's supposed to work, by the current building standards in .be I'd say about 80% of all houses (mostly older ones) would be torn down if we follow the letter of the law. And a lot of those building standards (e.g. electrical safety, piping safety) apply to existing housing, not just to newly built ones. Social housing used to be famous for the government simply not following building codes (whether that meant maximum land occupancy or isolation/material standards), and disclaimed responsibility when it lead to accidents. But it made a lot of people home owners.
- Silhouette 3y ago
  That's partly because developers of large estates often have conditions on their planning permission such as including a certain proportion of "affordable" homes within their mix and funding various community facilities. So on paper they have approval to build all of that. The reality is that they can often make far more profit by building the expensive houses first, drip feeding them onto the market, and possibly never finishing the whole estate as originally approved. It's no accident that many homes are approved but never built. It's just a small group of wily giant building firms playing the system and getting away with it. In theory local authorities who administer the planning system should call them on it. In reality it's a David and Goliath situation. Attempting enforcement actions can result in years of expensive legal battles ultimately funded by local taxpayers with no guarantee of success even in what appear to be cut-and-dried cases.

ok_dad 3y ago

I’m in the USA but if I don’t put my house into trust for my kid then he has to go through probate and spend tens of thousands to get it when I die. I agree corporations and investors shouldn’t own houses just for investment purposes, but you also need some amount of rentals allowed because not everyone wants to buy a home. I’m not sure where it is, but there’s a fine line separating the moral investment into houses from immoral rent seeking.

nine_zeros 3y ago
> I’m in the USA but if I don’t put my house into trust for my kid then he has to go through probate and spend tens of thousands to get it when I die. And that's by design. Every human coming into the planet should start from a reasonably same starting point. By not taxing inheritance, the super wealthy's children start much further than the children born to non-wealthy families. The tax on inheritance is the best way to ensure that there is "some" inheritance but not enough that the children start at a starting point that is insanely ahead of others.
- roody15 3y ago
  Hmm maybe but that puts a lot of trust in the system. Do you think taxing inheritance will result in the democratizing of said assets to society at large? Looking at the last three decades I see wealth just accumulate in mega corporations who now seem to operate at levels above that of many nation states. Large banks that can demand bailouts and demand “quantitive easing” which simply aggregates wealth in these banks and corporations. Literally transferring wealth from the bottom to the top by government decree.
  - nine_zeros 3y ago
    At a minimum, the taxation will allow payment of debt incurred by the parent's generation. That's a reasonable outcome for inheritance taxes.
- WentFullRetard 3y ago
  [dead]

lottin 3y ago

- Close the borders Good living conditions are like a magnet for economic migrants, and the wholesale arrival of migrants will start a race to the bottom which will destroy any quality of life.

pfisch 3y ago
Pretty sure letting population enter freefall will start a race to the bottom that will destroy any country. Countries with fertility rates of 1.5 shouldn't be throwing stones at immigration.
- rs999gti 3y ago
  > Countries with fertility rates of 1.5 shouldn't be throwing stones at immigration. Yes, they should be working to encourage more native women to have children. You can't immigrate your way out of a population decline.
  - pfisch 3y ago
    Of course you can. Why couldn't you?
    - lottin 3y ago
      Because you end up replacing one population with another. In other words, the remedy is worse than the disease.
      - pfisch 3y ago
        Seems like you just end up with a mixed population that eventually just becomes the new "native" population.
- lottin 3y ago
  A population decline doesn't lead to a race to the bottom. Less people means the economic output is likely to shrink in absolute terms, but it doesn't have to shrink in per capita terms. On the other hand, less pressure on natural resources, less pollution and less people overall makes arguably a nicer environment to live in.

rcarr 3y ago

What you're missing, is that all the property owners take out massive amounts of credit, believing that the rise in property values will cover it and they can just remortgage in 5 years. So they buy pointless shit like Range Rovers even though they live in the city and take luxury holidays they wouldn't be able to afford otherwise. The smarter ones use the extra credit to buy more houses. If the property prices tank all these people go bankrupt. No government will let it happen because they'll become unelectable for decades. It's truly absolute dogshit.

LegitShady 3y ago
property owners who over leveraged themselves forced to sell properties should help drop the price, so its actually a positive in terms of the solution, its just radioactive on the political end. Canada is the same way except massive immigration, temporary foreign worker program, and foreign students allowed to work 40 hours a week (in case you were wondering if the student visas are legit) have driven up the price of housing beyond any reason. Probably multiple generations of canadians whose financial future was sacrificed so the current government can run their seemingly ideological immigration program.
- brailsafe 3y ago
  If there was much more modest immigration, which there probably should be at least for some time, we'd eventually have severely inflated house prices anyway, because that's the system they built. Various types of immigration are just some of the parts of it, and it's much more complex than just "dial the knob down and we're golden".
eli_gottlieb 3y ago
>If the property prices tank all these people go bankrupt. Good. Let them.