8 ms·

The Great British Housing Famine

40 points by dukeyukey 3y ago

nabla9 3y ago
>A focus on affordability over supply puts the cart before the horse. You have to have this discussion again and again. People simply refuse to accept this simple fact. Increasing supply is the best way to make housing affordable. Instead of making limits to housing prices, create mandatory new zoning and housing construction when there is not enough affordable housing. People who can afford expensive apartments are in lower numbers than those who can afford low cost housing. Just build more and prices drop and quality of housing increases.
- looseyesterday 3y ago
  I think you're right but supply alone isn't enough. Density is another issue. We need to learn to build up. Commutes are getting crazy and sprawl is intense. Most people who I know to own their own property end up so far from london they barely ever go in, only ever coming in for work because they have to. They let their connection wither and lead less interesting lives.
  - denotational 3y ago
    High-rise new-builds are tainted until we have leasehold reform; £8k p/a service charges and several hundred pounds ground rent, with failure to pay leading to the confiscation of your £1MM apartment by the freeholder, is insane, and is literal rent-seeking by the developers on properties that are ostensibly owned by their occupiers. They don’t want to build more, because they would also have to lower their service charges significantly or see them fail to sell once they’ve saturated the section of the market that can afford them.
    - ta1243 3y ago
      I used to own a flat back in 2008 (completed literally the day after northern rock went bust). I owned 1 of 42 shares in the management company responsible for the management of the block. Sure we had to spend money maintaining the gardens, internal areas, lift, door system, etc. Each year we had an AGM where we elected directors (I was one for a few years) and make the appropriate decisions. Ground rent (especially those expoential ones) is a problem, but all leaseholders have a right to manage their flats even if it's not set up that way. The far bigger problem is the fleecehold houses, where there is no right to manage, or even see the invoice -- https://inews.co.uk/news/housing/new-build-homeowners-nda-soaring-estate-charges-2970515 https://inews.co.uk/news/housing/new-build-homeowners-nda-so...
      - denotational 3y ago
        That’s fine if you have a share of freehold. Lots of people don’t, and are beholden to the whims of large commercial landlords. Replacing the management (or attempting to purchase the freehold) is tricky in buildings where the majority of units are sublet under ASTs; leaseholders who are landlords themselves generally don’t care how effective the management is, as long as it isn’t so bad as to disrupt their own income. Even when a critical mass can be found, the up front costs associated mean that it is often impossible unless all the residents have access to large amount of capital.
        ta1243 3y ago
        If you have a leasehold flat you have a right to manage https://www.gov.uk/right-to-manage-a-guide-for-landlords https://www.gov.uk/right-to-manage-a-guide-for-landlords Nothing to do with the freehold If I own a lease and then rent it out on an AST I want to reduce my costs to increase my profits. If I can manage the block myself for £4k and an annual vote for a director, or let the freeholder manage it for £8k, then clearly I'll do the former. Same incentive as if you are an owner-occupier leaseholder.
        denotational 3y ago
        I misread your original comment, but I don’t think replacing the management company is any easier than purchasing the freehold, aside from capital considerations. The right exists in principle, but 50% of flats (as I understand it, all of them, including flats that are not demised under lease, but under AST from the freeholder, and who do not form part of the quota) must agree to form a management company before it can take effect. > If I own a lease and then rent it out on an AST I want to reduce my costs to increase my profits. In a demand-skewed market you will just pass the higher cost on in rent; it’s not going to make it any less likely that you manage to let it out. Furthermore, even contacting the owners of sublet flats, let alone convincing them they should spend money and endure potential disruption, can be difficult, making it hard to reach the threshold. In a small block it might be easy, in a high-rise with 200 apartments, it’s trickier.
  - jajko 3y ago
    That's a bit condescending on your part to judge other's lives, just because world doesn't revolve around your values doesn't mean others are wrong and their life is shit. I for example hate places like London with moderate passion, living there I consider very low quality life and certainly prefer touch with real nature, no crowds, little to no air/noise pollution, and society being more... social, to certain point of course. 40 minute commute 2x a week is fine with me, most Londoners have way more (not from there nor GB, what I write applies to all big cities to some extent). For raising kids there is no discussion, cities mostly suck despite all benefits and many kids from there show it very clearly.
    - abenga 3y ago
      There 's not enough earth for everyone to live the way that you want to.
    - dukeyukey 3y ago
      I think you're underestimating how much of London is quite pleasant green suburbs. It's not a very dense city, especially when you get out of Zone 1 and a few adjacent places like Tower Hamlets. I grew up in a rural farming town, and there's no way I'd move back.
      - jajko 3y ago
        What I describe could be understood as extreme since I didn't give enough details, what you describe is opposite extreme and I understand your opinion, would probably have the same. The golden middle path, as usually, works the best for many after certain point in life. To be more concrete - smaller villages surrounded by vineyards and wild forests, 3 min by car from highway, 20 mins from a million-sized conglomeration with tons of work, 25 min from another bigger city, 5 minutes from beautiful crystal clear 100km wide lake. Village with well-equipped kindergarten, primary and secondary school, few shops and restaurants, in middle of wineyards, on foothills of beautiful mountains, looking at the alps few tens of kms away. Paradise to many. Expensive one of course. London can be great compared to many places (and its ranked very high on greenery lists), but sorry it doesn't even compare unless you are properly die hard city type.
  - ta1243 3y ago
    Westminster is not known for its desnity, especially given Hyde, Regents, Green, and St James Park However if the entire of Greater London suddenly became as dense as wesminster you could house another 9 million people.
  - happymellon 3y ago
    Transportation is massive for this situation, and the gutting of HS2 was entirely to prevent people being able to commute to London from further afield and wrecking the housing in London. If we were able to get a better network of transport it would unlock a lot more of the country where there is land, and there is already empty housing.
- petesergeant 3y ago
  > Increasing supply is the best way to make housing affordable It’s also the best way to redistribute wealth from the 50%[0] who own their own homes, and tend to vote, to those who don’t, while also giving those home owners with mortgages negative equity. By which I mean, it’s a total non-starter politically forever. I don’t own a house and I’d like to, and this affects me directly, but this is purely and 100% an issue of politics and has no solution[1] 0: ish, I can’t find any decent numbers that aren’t completely contradicted by others 1: That I’ve seen, that could get through parliament
  - matt-p 3y ago
    What do you think of these solutions; 1 - Create a independent body for housing growth "The house bank of England" and thier responsibility is to ensure 0% YOY house price growth by increasing supply to the point prices no longer rise, but no further. No negative equity created but also no above inflation price rises for a decade or two. This is not particularly different than when they do QE (for the middle class/wealthy who are often savers). 2 - growth areas: I'm thinking south London, Cambridge, Oxford, Leeds, maybe Manchester. Government builds houses and commits to buy any house for the value of it on $scheme_announcement_date for houses brought before that date. Scheme will last 25 years. Increasing the density of a city should actually draw house prices up in the long run as it will bring better transport links, more economic activity with greater productivity/efficiency.
    - petesergeant 3y ago
      The second is something I’ve thought about and probably the closest to something that could work, although I think the UK is naturally too free-market minded to accept it. I suspect the status quo is much more popular with the voters though.
      - matt-p 3y ago
        I honestly believe it does depend on the voter. For 2) Conservatives would never be able to even if they wanted this, however labour have the option of picking say Oxford or the home counties to do this in where they have very few voters to lose in the first place. They would still get in on a national election.
bradley13 3y ago
This is everywhere now. People who own houses want to see the value increase. This is even more true of all the investment companies, pension funds, etc. - they must show a substantial ROI. Build more houses, to make housing more affordable? They will fight it at every turn. Not openly, of course. You cannot openly oppose affordable housing. But through lobbying, they will prevent rezoning, put hurdles in the way of easing building regulations. Ensure that NIMBYs protest cheap housing near their upper-class neighborhoods. Whatever it takes.
- ta1243 3y ago
  In the UK a significant number of people think there's no need for more housing, not just in their back yard, but anywhere. They're BANANAs. The excuses are typically a mix of 1) Too many immigrants 2) Lack of rent controls 3) Greedy developers 4) AirBNB 5) Empty houses Depending on their political views.
  - graemep 3y ago
    All those are factors. They also leave out the biggest single problem: years of very low interest rates inflating prices, making it hard for people to afford deposits though. There is BoE research showing interest rates are the biggest factor in the earnings to house price ration. "Immigrants" also leaves something out. Foreign investors and rich foreigners buying holiday homes/second (or third or fourth etc.) homes are a factor in some places (especially London) - in much the same way that people from London and other big cities push up prices in places like Cornwall.
    - TheOtherHobbes 3y ago
      Foreign money is far more of a problem than foreign people. Notoriously, many newbuild flats end up empty because not many people can afford the rent, and they're really just investment tokens anyway. Property is like Bitcoin with bricks.
      - ta1243 3y ago
ricardo81 3y ago
Some semi-random observations, lack of housing supply semi-aside: One of the exceptional things about the UK is the 'right to buy' scheme introduced in 1980 which offered people in Council homes the opportunity to buy it, with up to a 60% discount on its guide price depending on how long they've rented. A lot of working class people in Council schemes took them up on that offer and so the amount of available housing stock to cheaply rent diminished sharply. IIRC in Scotland it was ended in the 2010s to curtail that trend. There is surely a generation of older people living in 2/3/4 bedroom houses that don't really need that space, but aren't willing to pay today's prices for a smaller place that hasn't been made their own home- this could affect the affordability of up and coming families. There was a 'bedroom tax' imposed on people still living in Council housing that had empty bedrooms which didn't apply to private housing. In Scotland the average house price is closer to £200K while in England it's closer to £300K, yet GDP/capita is broadly similar in both countries. UK house prices generally get more exorbitant the closer you get to London, though they're high in Edinburgh also. Would've hoped/thought that with WFH being more normalised with COVID that people could migrate to more affordable areas without sacrificing job opportunities and without much change in culture/climate etc. Where I live in the Scottish Borders, a couple on minimum wage can buy the average house price at well below 5x their salary. For WFH folks in unaffordable areas, get some research done on somewhere agreeable and take the leap.
- ta1243 3y ago
  > so the amount of available housing stock to cheaply rent diminished sharply And so did the number of people needing to rent. > There was a 'bedroom tax' imposed on people still living in Council housing that had empty bedrooms which didn't apply to private housing. A tax massively opposed by the left. A couple on minimum wage and 37.5 hours a week has a £3,200 a month net wage after tax. Even just 33% on a mortgage means you can get a c. 180k mortgage at 5%, enough to buy a 3 bed house in many parts of England, assuming you can find the required deposit. https://www.rightmove.co.uk/properties/146612411#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146612411#/?channel=R... https://www.rightmove.co.uk/properties/146822492#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146822492#/?channel=R... https://www.rightmove.co.uk/properties/146953640#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146953640#/?channel=R... https://www.rightmove.co.uk/properties/147046655#/?channel=RES_BUY https://www.rightmove.co.uk/properties/147046655#/?channel=R... https://www.rightmove.co.uk/properties/144397493#/?channel=RES_BUY https://www.rightmove.co.uk/properties/144397493#/?channel=R... https://www.rightmove.co.uk/properties/144533690#/?channel=RES_BUY https://www.rightmove.co.uk/properties/144533690#/?channel=R... https://www.rightmove.co.uk/properties/146820380#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146820380#/?channel=R... One problem the UK has with wages is while minimum wage has nearly doubled in real terms since 1999, median wage has increased just 27%. This means far more people earning about the same, and many jobs simply aren't worth the extra time to do it. Why spend 6 years in education and below-minimum-wage training when you can just stack shelves or roll pizzas for basically the same wage. The other problem we have with housing is the south east, but the solution to that is easy -- just move. You can live in 80% of the UK with a minimum wage job, so drop the sentimentalism and move 100 miles. Hell Americans think 100 miles is a trip to the local theatre.
MarkusWandel 3y ago
I'd love to see the AI prompts that made the pictures.
meindnoch 3y ago
It will only get worse. As long as there isn't a substantial amount of people angry enough to commit murder; it will only get worse.
voisin 3y ago
For the last fifty years municipal governments around the world have thought it really neat that they could control what could be built. They have relatively few levers to pull, so they continuously added more and more regulations to what could be built, each time adding complexity, uncertainty and cost. And this went well beyond the canonical example of “we can’t have nuclear power plants next to daycares!”. They just kept going with their new and quirky rules. In concert with this they started adding fees, and then more fees and more fees onto construction. Development fees, parkland dedication, public art, you name it, they found a creative way to shove the cost into the price of newly built buildings. The housing crisis today is 100% the result of government, and now government is acting like individuals caused the problem by buying units to rent on AirBNB, or bidding the prices up too high (also due to government’s ridiculously low interest rates for too damn long!) It’s wild to watch inept politicians fumble around looking to blame anyone but their predecessors for the problem at hand, and in the process hurt a lot of people. The only answer is more housing, and it will take likely as long to fix this issue as it has to create it - decades. There aren’t enough trades available, material has skyrocketed and will get worse due to demand, and now interest rates are high which makes the economics even more challenging. Essentially, costs have risen faster than rents/sales prices and it takes a long time for either to move in the right direction.
- seydor 3y ago
  The problem is that regulation is popular. And the same people who want to regulate everything also complain about the price of everything going up. It's fair to say that the majority of people cannot/do not assess the consequences of what they are voting for, and this manifests in many ways, for example with misguided green regulation like EV subsidies, or the looming pension/healthcare crises. Politicians use their tools to redirect the externalities/damage back to the population, so politicians are not to be expected to solve the problems that they helped create. We need some kind of institutional 'politician watch' to save our democracies from self-sabotage
flooow 3y ago
I rent an ex-coucil house in SE London. It takes around 45 minutes to get into the centre. The local drug-dealers hang out next to the house, there is graffiti on the walls, and it is next to one of the busiest roads in London. There have been multiple murders on the estate since I moved in. It is in the 96 percentile for air pollution. It is apparently worth six hundred and fifty thousand pounds. Assuming a £100K bung from mum and dad for the deposit, a 25 year repayment mortgage at 5%, and further assuming you spent 50% of your income on the mortgage, you would require an income of £122K to afford it. That would put you firmly in the top 1% of earners in the UK. Despite your high income, and paying £45K/year tax, you would live in one of the most deprived parts of the country and your local hospitals and schools would be in special measures.
- jacobp100 3y ago
  First time buyer mortgages are 35 years, you’d buy as a couple so it’s two incomes, and 1% is £180k Also either your description is wrong or the valuation is wrong. 1 mile from e.g. Orpington would be around £500k for a 3 bed house
  - matt-p 3y ago
    In the new cross area it's a minimum of 600k for a three bed and I'd say it meets pretty much all of the above criteria.
    - flooow 3y ago
      Bingo
      - matt-p 3y ago
        It was a tragically accurate description then. Also worth noting it is one of the cheapest places in zone 2, and only has trains or overground. It does feel (and is) genuinely unsafe, particularly if you don't get home from work until it's started getting dark. It may be slightly cheaper to buy in zone 4,5 or 6 but most of the saving in house prices is going to go straight out the door on more expensive travel cards. The poster above mentioned 500k in Orpington, well that's zone 6 so a travel card is an extra 140 per month per person so if there is two of you you're spending alot of what you've saved in the house price on that and you also both have to spend a extra 30mins in travel time each way, so an hour of extra lost time a day. Is it worth all of that to save 100K on the purchase price?
DrBazza 3y ago
There always seems to be implicit assumptions or unstated points of interest in articles about the UK housing market: 1. too much immigration is somehow unsavoury so we'll gloss over that; 2. a price correction should happen quickly; 3. and that the UK ever had 100% home ownership. The UK has at least 10 million more people since 1997 in a country that had 58 million people, we're now over 70 million. Everything is creaking. The NHS queues, the traffic, the roads, the trains, everything. But somehow all of that is always the fault of the current government, where people pick their own arbitrary point in time, not the cumulative result of the last 25 years of 100k+ people every single year. (edit- we don't have 20% more of everything that we had in 1997, but we do have almost 20% more people) A price correction in housing will take decades. Home owners won't sell below what they bought at, rarely. House builders won't lower prices either, their prices are locked in. I've only once lived through negative equity in the early 90s and it lasted a couple of years. People stopped moving until prices picked up. And lastly, the UK has never had 100% home ownership. In fact, IIRC, the peak was 60% or so, during right-to-buy.
ericd 3y ago
I’m not seeing anyone point at monetary/trade policy here. Every western government is running the same playbook of loose monetary policy and (at least in aggregate across the monetary unions) large structural trade deficits. We buy manufactured trinkets, and what do those countries do with the money, when we’re not offering enough goods and services to balance the trade? Some of it goes to eg US treasuries, but presumably, because we’re running inflationary monetary policy, a lot of it goes to buying assets, like property and companies. (I would dig up a foreign investment balance chart, but the gist is that the US went from investing in everyone else/buying up everyone else’s assets to the opposite happening). We’ve basically been living well above our means for quite a while, paying with the wealth we’d stored up, and now our assets are getting bid up past the point where much of our populations can afford it.
jackcosgrove 3y ago
I think this issue is in stasis until the older generations of homeowners pass away. They have made their opinions known, many times. They do not want more housing. The only question is if younger generations of homeowners remember their experiences as renters and follow a different path.
- dukeyukey 3y ago
  It looks like the traditional get-older-vote-Tory path is broken, so it wouldn't surprise me if this happened. Pity it'll be too late for me to benefit though.
hanyuliangchina 3y ago
Insufficient supply is due to insufficient production, and the essential cause is cumbersome building regulations that hinder the construction of new homes.
hanyuliangchina 3y ago
Insufficient supply is due to insufficient production, and the essential cause is cumbersome building regulations that hinder the construction of new homes.
- matt-p 3y ago
  Total rubbish, building regs are if anything not strict enough (see flammable cladding, new build house quality) The restriction is planning permission e.g where are developers allowed to build housing. To a lesser extent the large house builder oligopoly is not great either but fixing the former will probably sort that out.
- jacobp100 3y ago
  I don’t think the regs slow stuff down too much. We could build like the Americans and stick frame our houses - but people don’t seem to like that here
jacknews 3y ago
Britain has a perpetual housing famine, and the real truth is that they want it. They want the inequality and class hierarchy that derives from property ownership vs not.

40 points by dukeyukey 3y ago

>A focus on affordability over supply puts the cart before the horse. You have to have this discussion again and again. People simply refuse to accept this simple fact. Increasing supply is the best way to make housing affordable. Instead of making limits to housing prices, create mandatory new zoning and housing construction when there is not enough affordable housing. People who can afford expensive apartments are in lower numbers than those who can afford low cost housing. Just build more and prices drop and quality of housing increases.

looseyesterday 3y ago
I think you're right but supply alone isn't enough. Density is another issue. We need to learn to build up. Commutes are getting crazy and sprawl is intense. Most people who I know to own their own property end up so far from london they barely ever go in, only ever coming in for work because they have to. They let their connection wither and lead less interesting lives.
- denotational 3y ago
  High-rise new-builds are tainted until we have leasehold reform; £8k p/a service charges and several hundred pounds ground rent, with failure to pay leading to the confiscation of your £1MM apartment by the freeholder, is insane, and is literal rent-seeking by the developers on properties that are ostensibly owned by their occupiers. They don’t want to build more, because they would also have to lower their service charges significantly or see them fail to sell once they’ve saturated the section of the market that can afford them.
  - ta1243 3y ago
    I used to own a flat back in 2008 (completed literally the day after northern rock went bust). I owned 1 of 42 shares in the management company responsible for the management of the block. Sure we had to spend money maintaining the gardens, internal areas, lift, door system, etc. Each year we had an AGM where we elected directors (I was one for a few years) and make the appropriate decisions. Ground rent (especially those expoential ones) is a problem, but all leaseholders have a right to manage their flats even if it's not set up that way. The far bigger problem is the fleecehold houses, where there is no right to manage, or even see the invoice -- https://inews.co.uk/news/housing/new-build-homeowners-nda-soaring-estate-charges-2970515 https://inews.co.uk/news/housing/new-build-homeowners-nda-so...
    - denotational 3y ago
      That’s fine if you have a share of freehold. Lots of people don’t, and are beholden to the whims of large commercial landlords. Replacing the management (or attempting to purchase the freehold) is tricky in buildings where the majority of units are sublet under ASTs; leaseholders who are landlords themselves generally don’t care how effective the management is, as long as it isn’t so bad as to disrupt their own income. Even when a critical mass can be found, the up front costs associated mean that it is often impossible unless all the residents have access to large amount of capital.
      - ta1243 3y ago
        If you have a leasehold flat you have a right to manage https://www.gov.uk/right-to-manage-a-guide-for-landlords https://www.gov.uk/right-to-manage-a-guide-for-landlords Nothing to do with the freehold If I own a lease and then rent it out on an AST I want to reduce my costs to increase my profits. If I can manage the block myself for £4k and an annual vote for a director, or let the freeholder manage it for £8k, then clearly I'll do the former. Same incentive as if you are an owner-occupier leaseholder.
        denotational 3y ago
        I misread your original comment, but I don’t think replacing the management company is any easier than purchasing the freehold, aside from capital considerations. The right exists in principle, but 50% of flats (as I understand it, all of them, including flats that are not demised under lease, but under AST from the freeholder, and who do not form part of the quota) must agree to form a management company before it can take effect. > If I own a lease and then rent it out on an AST I want to reduce my costs to increase my profits. In a demand-skewed market you will just pass the higher cost on in rent; it’s not going to make it any less likely that you manage to let it out. Furthermore, even contacting the owners of sublet flats, let alone convincing them they should spend money and endure potential disruption, can be difficult, making it hard to reach the threshold. In a small block it might be easy, in a high-rise with 200 apartments, it’s trickier.
- jajko 3y ago
  That's a bit condescending on your part to judge other's lives, just because world doesn't revolve around your values doesn't mean others are wrong and their life is shit. I for example hate places like London with moderate passion, living there I consider very low quality life and certainly prefer touch with real nature, no crowds, little to no air/noise pollution, and society being more... social, to certain point of course. 40 minute commute 2x a week is fine with me, most Londoners have way more (not from there nor GB, what I write applies to all big cities to some extent). For raising kids there is no discussion, cities mostly suck despite all benefits and many kids from there show it very clearly.
  - abenga 3y ago
    There 's not enough earth for everyone to live the way that you want to.
  - dukeyukey 3y ago
    I think you're underestimating how much of London is quite pleasant green suburbs. It's not a very dense city, especially when you get out of Zone 1 and a few adjacent places like Tower Hamlets. I grew up in a rural farming town, and there's no way I'd move back.
    - jajko 3y ago
      What I describe could be understood as extreme since I didn't give enough details, what you describe is opposite extreme and I understand your opinion, would probably have the same. The golden middle path, as usually, works the best for many after certain point in life. To be more concrete - smaller villages surrounded by vineyards and wild forests, 3 min by car from highway, 20 mins from a million-sized conglomeration with tons of work, 25 min from another bigger city, 5 minutes from beautiful crystal clear 100km wide lake. Village with well-equipped kindergarten, primary and secondary school, few shops and restaurants, in middle of wineyards, on foothills of beautiful mountains, looking at the alps few tens of kms away. Paradise to many. Expensive one of course. London can be great compared to many places (and its ranked very high on greenery lists), but sorry it doesn't even compare unless you are properly die hard city type.
- ta1243 3y ago
  Westminster is not known for its desnity, especially given Hyde, Regents, Green, and St James Park However if the entire of Greater London suddenly became as dense as wesminster you could house another 9 million people.
- happymellon 3y ago
  Transportation is massive for this situation, and the gutting of HS2 was entirely to prevent people being able to commute to London from further afield and wrecking the housing in London. If we were able to get a better network of transport it would unlock a lot more of the country where there is land, and there is already empty housing.
petesergeant 3y ago
> Increasing supply is the best way to make housing affordable It’s also the best way to redistribute wealth from the 50%[0] who own their own homes, and tend to vote, to those who don’t, while also giving those home owners with mortgages negative equity. By which I mean, it’s a total non-starter politically forever. I don’t own a house and I’d like to, and this affects me directly, but this is purely and 100% an issue of politics and has no solution[1] 0: ish, I can’t find any decent numbers that aren’t completely contradicted by others 1: That I’ve seen, that could get through parliament
- matt-p 3y ago
  What do you think of these solutions; 1 - Create a independent body for housing growth "The house bank of England" and thier responsibility is to ensure 0% YOY house price growth by increasing supply to the point prices no longer rise, but no further. No negative equity created but also no above inflation price rises for a decade or two. This is not particularly different than when they do QE (for the middle class/wealthy who are often savers). 2 - growth areas: I'm thinking south London, Cambridge, Oxford, Leeds, maybe Manchester. Government builds houses and commits to buy any house for the value of it on $scheme_announcement_date for houses brought before that date. Scheme will last 25 years. Increasing the density of a city should actually draw house prices up in the long run as it will bring better transport links, more economic activity with greater productivity/efficiency.
  - petesergeant 3y ago
    The second is something I’ve thought about and probably the closest to something that could work, although I think the UK is naturally too free-market minded to accept it. I suspect the status quo is much more popular with the voters though.
    - matt-p 3y ago
      I honestly believe it does depend on the voter. For 2) Conservatives would never be able to even if they wanted this, however labour have the option of picking say Oxford or the home counties to do this in where they have very few voters to lose in the first place. They would still get in on a national election.

bradley13 3y ago

This is everywhere now. People who own houses want to see the value increase. This is even more true of all the investment companies, pension funds, etc. - they must show a substantial ROI. Build more houses, to make housing more affordable? They will fight it at every turn. Not openly, of course. You cannot openly oppose affordable housing. But through lobbying, they will prevent rezoning, put hurdles in the way of easing building regulations. Ensure that NIMBYs protest cheap housing near their upper-class neighborhoods. Whatever it takes.

ta1243 3y ago
In the UK a significant number of people think there's no need for more housing, not just in their back yard, but anywhere. They're BANANAs. The excuses are typically a mix of 1) Too many immigrants 2) Lack of rent controls 3) Greedy developers 4) AirBNB 5) Empty houses Depending on their political views.
- graemep 3y ago
  All those are factors. They also leave out the biggest single problem: years of very low interest rates inflating prices, making it hard for people to afford deposits though. There is BoE research showing interest rates are the biggest factor in the earnings to house price ration. "Immigrants" also leaves something out. Foreign investors and rich foreigners buying holiday homes/second (or third or fourth etc.) homes are a factor in some places (especially London) - in much the same way that people from London and other big cities push up prices in places like Cornwall.
  - TheOtherHobbes 3y ago
    Foreign money is far more of a problem than foreign people. Notoriously, many newbuild flats end up empty because not many people can afford the rent, and they're really just investment tokens anyway. Property is like Bitcoin with bricks.
    - ta1243 3y ago

ricardo81 3y ago

Some semi-random observations, lack of housing supply semi-aside: One of the exceptional things about the UK is the 'right to buy' scheme introduced in 1980 which offered people in Council homes the opportunity to buy it, with up to a 60% discount on its guide price depending on how long they've rented. A lot of working class people in Council schemes took them up on that offer and so the amount of available housing stock to cheaply rent diminished sharply. IIRC in Scotland it was ended in the 2010s to curtail that trend. There is surely a generation of older people living in 2/3/4 bedroom houses that don't really need that space, but aren't willing to pay today's prices for a smaller place that hasn't been made their own home- this could affect the affordability of up and coming families. There was a 'bedroom tax' imposed on people still living in Council housing that had empty bedrooms which didn't apply to private housing. In Scotland the average house price is closer to £200K while in England it's closer to £300K, yet GDP/capita is broadly similar in both countries. UK house prices generally get more exorbitant the closer you get to London, though they're high in Edinburgh also. Would've hoped/thought that with WFH being more normalised with COVID that people could migrate to more affordable areas without sacrificing job opportunities and without much change in culture/climate etc. Where I live in the Scottish Borders, a couple on minimum wage can buy the average house price at well below 5x their salary. For WFH folks in unaffordable areas, get some research done on somewhere agreeable and take the leap.

ta1243 3y ago
> so the amount of available housing stock to cheaply rent diminished sharply And so did the number of people needing to rent. > There was a 'bedroom tax' imposed on people still living in Council housing that had empty bedrooms which didn't apply to private housing. A tax massively opposed by the left. A couple on minimum wage and 37.5 hours a week has a £3,200 a month net wage after tax. Even just 33% on a mortgage means you can get a c. 180k mortgage at 5%, enough to buy a 3 bed house in many parts of England, assuming you can find the required deposit. https://www.rightmove.co.uk/properties/146612411#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146612411#/?channel=R... https://www.rightmove.co.uk/properties/146822492#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146822492#/?channel=R... https://www.rightmove.co.uk/properties/146953640#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146953640#/?channel=R... https://www.rightmove.co.uk/properties/147046655#/?channel=RES_BUY https://www.rightmove.co.uk/properties/147046655#/?channel=R... https://www.rightmove.co.uk/properties/144397493#/?channel=RES_BUY https://www.rightmove.co.uk/properties/144397493#/?channel=R... https://www.rightmove.co.uk/properties/144533690#/?channel=RES_BUY https://www.rightmove.co.uk/properties/144533690#/?channel=R... https://www.rightmove.co.uk/properties/146820380#/?channel=RES_BUY https://www.rightmove.co.uk/properties/146820380#/?channel=R... One problem the UK has with wages is while minimum wage has nearly doubled in real terms since 1999, median wage has increased just 27%. This means far more people earning about the same, and many jobs simply aren't worth the extra time to do it. Why spend 6 years in education and below-minimum-wage training when you can just stack shelves or roll pizzas for basically the same wage. The other problem we have with housing is the south east, but the solution to that is easy -- just move. You can live in 80% of the UK with a minimum wage job, so drop the sentimentalism and move 100 miles. Hell Americans think 100 miles is a trip to the local theatre.

MarkusWandel 3y ago

I'd love to see the AI prompts that made the pictures.

meindnoch 3y ago

It will only get worse. As long as there isn't a substantial amount of people angry enough to commit murder; it will only get worse.

voisin 3y ago

For the last fifty years municipal governments around the world have thought it really neat that they could control what could be built. They have relatively few levers to pull, so they continuously added more and more regulations to what could be built, each time adding complexity, uncertainty and cost. And this went well beyond the canonical example of “we can’t have nuclear power plants next to daycares!”. They just kept going with their new and quirky rules. In concert with this they started adding fees, and then more fees and more fees onto construction. Development fees, parkland dedication, public art, you name it, they found a creative way to shove the cost into the price of newly built buildings. The housing crisis today is 100% the result of government, and now government is acting like individuals caused the problem by buying units to rent on AirBNB, or bidding the prices up too high (also due to government’s ridiculously low interest rates for too damn long!) It’s wild to watch inept politicians fumble around looking to blame anyone but their predecessors for the problem at hand, and in the process hurt a lot of people. The only answer is more housing, and it will take likely as long to fix this issue as it has to create it - decades. There aren’t enough trades available, material has skyrocketed and will get worse due to demand, and now interest rates are high which makes the economics even more challenging. Essentially, costs have risen faster than rents/sales prices and it takes a long time for either to move in the right direction.

seydor 3y ago
The problem is that regulation is popular. And the same people who want to regulate everything also complain about the price of everything going up. It's fair to say that the majority of people cannot/do not assess the consequences of what they are voting for, and this manifests in many ways, for example with misguided green regulation like EV subsidies, or the looming pension/healthcare crises. Politicians use their tools to redirect the externalities/damage back to the population, so politicians are not to be expected to solve the problems that they helped create. We need some kind of institutional 'politician watch' to save our democracies from self-sabotage

flooow 3y ago

I rent an ex-coucil house in SE London. It takes around 45 minutes to get into the centre. The local drug-dealers hang out next to the house, there is graffiti on the walls, and it is next to one of the busiest roads in London. There have been multiple murders on the estate since I moved in. It is in the 96 percentile for air pollution. It is apparently worth six hundred and fifty thousand pounds. Assuming a £100K bung from mum and dad for the deposit, a 25 year repayment mortgage at 5%, and further assuming you spent 50% of your income on the mortgage, you would require an income of £122K to afford it. That would put you firmly in the top 1% of earners in the UK. Despite your high income, and paying £45K/year tax, you would live in one of the most deprived parts of the country and your local hospitals and schools would be in special measures.

jacobp100 3y ago
First time buyer mortgages are 35 years, you’d buy as a couple so it’s two incomes, and 1% is £180k Also either your description is wrong or the valuation is wrong. 1 mile from e.g. Orpington would be around £500k for a 3 bed house
- matt-p 3y ago
  In the new cross area it's a minimum of 600k for a three bed and I'd say it meets pretty much all of the above criteria.
  - flooow 3y ago
    Bingo
    - matt-p 3y ago
      It was a tragically accurate description then. Also worth noting it is one of the cheapest places in zone 2, and only has trains or overground. It does feel (and is) genuinely unsafe, particularly if you don't get home from work until it's started getting dark. It may be slightly cheaper to buy in zone 4,5 or 6 but most of the saving in house prices is going to go straight out the door on more expensive travel cards. The poster above mentioned 500k in Orpington, well that's zone 6 so a travel card is an extra 140 per month per person so if there is two of you you're spending alot of what you've saved in the house price on that and you also both have to spend a extra 30mins in travel time each way, so an hour of extra lost time a day. Is it worth all of that to save 100K on the purchase price?

DrBazza 3y ago

There always seems to be implicit assumptions or unstated points of interest in articles about the UK housing market: 1. too much immigration is somehow unsavoury so we'll gloss over that; 2. a price correction should happen quickly; 3. and that the UK ever had 100% home ownership. The UK has at least 10 million more people since 1997 in a country that had 58 million people, we're now over 70 million. Everything is creaking. The NHS queues, the traffic, the roads, the trains, everything. But somehow all of that is always the fault of the current government, where people pick their own arbitrary point in time, not the cumulative result of the last 25 years of 100k+ people every single year. (edit- we don't have 20% more of everything that we had in 1997, but we do have almost 20% more people) A price correction in housing will take decades. Home owners won't sell below what they bought at, rarely. House builders won't lower prices either, their prices are locked in. I've only once lived through negative equity in the early 90s and it lasted a couple of years. People stopped moving until prices picked up. And lastly, the UK has never had 100% home ownership. In fact, IIRC, the peak was 60% or so, during right-to-buy.

ericd 3y ago

I’m not seeing anyone point at monetary/trade policy here. Every western government is running the same playbook of loose monetary policy and (at least in aggregate across the monetary unions) large structural trade deficits. We buy manufactured trinkets, and what do those countries do with the money, when we’re not offering enough goods and services to balance the trade? Some of it goes to eg US treasuries, but presumably, because we’re running inflationary monetary policy, a lot of it goes to buying assets, like property and companies. (I would dig up a foreign investment balance chart, but the gist is that the US went from investing in everyone else/buying up everyone else’s assets to the opposite happening). We’ve basically been living well above our means for quite a while, paying with the wealth we’d stored up, and now our assets are getting bid up past the point where much of our populations can afford it.

jackcosgrove 3y ago

I think this issue is in stasis until the older generations of homeowners pass away. They have made their opinions known, many times. They do not want more housing. The only question is if younger generations of homeowners remember their experiences as renters and follow a different path.

dukeyukey 3y ago
It looks like the traditional get-older-vote-Tory path is broken, so it wouldn't surprise me if this happened. Pity it'll be too late for me to benefit though.

hanyuliangchina 3y ago

Insufficient supply is due to insufficient production, and the essential cause is cumbersome building regulations that hinder the construction of new homes.

hanyuliangchina 3y ago

Insufficient supply is due to insufficient production, and the essential cause is cumbersome building regulations that hinder the construction of new homes.

matt-p 3y ago
Total rubbish, building regs are if anything not strict enough (see flammable cladding, new build house quality) The restriction is planning permission e.g where are developers allowed to build housing. To a lesser extent the large house builder oligopoly is not great either but fixing the former will probably sort that out.
jacobp100 3y ago
I don’t think the regs slow stuff down too much. We could build like the Americans and stick frame our houses - but people don’t seem to like that here

jacknews 3y ago

Britain has a perpetual housing famine, and the real truth is that they want it. They want the inequality and class hierarchy that derives from property ownership vs not.