5 ms·

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 wh

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.
- OtherShrezzing 3y ago
  >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. That a couple on minimum wage can save for a £20k deposit within any meaningful time horizon is a pretty significant assumption.
  - ricardo81 3y ago
    To be fair, you can take 25% off that with a Lifetime ISA, so 15K needed.
    - matt-p 3y ago
      4k savings gets a 1k bonus per year so; -It's 16K -They need to wait 4 years. The point stands if they are aware of the scheme when they start saving and save exactly 4k a year every year (more realistically it will be 2k year 1, 4k year two, 7k year 3..)
      - ricardo81 3y ago
        Thanks yes, your maths is better, 20% on top. Having to save for 5 years doesn't seem unrealistic for people who don't have the bank of mum and dad. Totally doable - though below average house price in any area, preferably somewhere more affordable. There are a lot of tax instruments available today that never existed a generation ago.
        matt-p 3y ago
        I do agree but I think not enough people become aware of it when they start saving. In a sense it would probably be easier on all if the government just said we'll top up your deposit by 25% upto the value of 5k when you buy your first house.
        ta1243 3y ago
graemep 3y ago
I am not sure the comparison between England and Scotland is valid. Scotland is is much less densely populated has much smaller cities. The population of the whole of Scotland is much smaller than that of greater London. > 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 Yes, but what do you do about it? In the areas I know all sizes of house have gone up in price, so they would make a MUCH bigger profit on downsizing than when they bought houses a few decades ago. > There was a 'bedroom tax' imposed on people still living in Council housing that had empty bedrooms which didn't apply to private housing. I thought it applied to housing benefit? You no longer get housing benefit to pay for the extra room. Its also not empty rooms as such: its having more rooms than the govt thinks you need, so things such as young kids having their own rooms rather than sharing.
- ricardo81 3y ago
  >I am not sure the comparison between England and Scotland is valid Granted it's not exactly apples for apples, it's just my comparison as I live in Scotland and the affordability problem seems to be more of an English one, hence the GDP comparison on a pure monetary basis. >Yes, but what do you do about it? Removing right to buy, and laws on landlords tax benefits that have changed IMO have already changed the idea that being a landlord provides good ROI, in the main. I had a second property (my previous home) and having to pay 42% income tax on the rent, maintenance, any rent issues and then any potential capital gains certainly doesn't sound appetising vs selling and having cash. >Its also not empty rooms as such: its having more rooms than the govt thinks you need, so things such as young kids having their own rooms rather than sharing. You are perhaps right. General gist being that there's housing stock that'd better suit other people, which I guess was the spirit of the law.
  - graemep 3y ago
    > Removing right to buy, and laws on landlords tax benefits that have changed IMO have already changed the idea that being a landlord provides good ROI, in the main. I had a second property (my previous home) and having to pay 42% income tax on the rent, maintenance, any rent issues and then any potential capital gains certainly doesn't sound appetising vs selling and having cash. It should have an effect, but has not had that much yet. There is a lag so maybe we will see it some time soon. However, we have also had rent increases and falls in house prices in real terms so that might offset it.
TheOtherHobbes 3y ago
There are very severe restrictions on local councils that limit how many houses they can build. So on average they've been building 1400 a year, across the UK. There are also some quite generous tax breaks for landlords, including mortgage relief. The playing field is slanted very heavily towards private ownership and (literal) rent-seeking.
- dukeyukey 3y ago
  My understanding is that the restrictions aren't on the local councils - they can choose to approve more housing, like what Croydon did a few years ago. It's just most councils don't.
DrBazza 3y ago
As someone old enough to remember right-to-buy, and old enough to have grandparents in World War 2. Both sets of grandparents lost their own houses in the Blitz. They were subsequently housed in council houses, and received nothing for their destroyed houses other than a token payment from the state. There was no insurance back then. When they were then able to buy their council homes, both of my grandparents did that and finally owned their own homes again. Right-to-buy wasn't this 'awful' thing lots of people made it out to be.
- dukeyukey 3y ago
  Right-to-buy isn't fundamentally bad. What's bad about it is how much local councils lose on the deal.
- g5g5g5g5 3y ago
  It's entirely possible that certain groups benefitted from a policy that was awful for society at large. If it benefitted absolutely no one, it wouldn't have existed in the first place.
- ricardo81 3y ago
  I have no problem with it. I'm fortunate in that my own parents took advantage of it and I'll likely inherit it with my siblings. Part of what I was meaning is that a lot of people did take advantage of it from the boomer gen but they're staying in homes bigger than they necessarily need, maybe just a 'bump' of old activity that will even out over the next 10-20 years.
- seabass-labrax 3y ago
  I think wartime just has to be considered an edge case here. There was no way that Britain could have afforded to rebuild like-for-like after the war, and compensation for bomb damage couldn't have been done fairly. Who gets priority? Do Lord and Lady Middlecott have their stately home rebuilt first? Or does it start with the least valuable property and work upwards, meaning that Mr. Horace Hodge's garden shed is number one to be restored? It clearly can't be exactly proportional, otherwise his Lordship would get one wing of his mansion and Horace would get one wall of his shed, which helps nobody. I don't think it's callous of me to suggest that providing council housing for those like your grandparents was the only humane thing to do that the country could have afforded. Rather than directly restoring the pre-war social order, the post-war system was orientated towards comfortably housing the masses, and it did that with documented success.
dachworker 3y ago
Working From Home doesn't dissuade people from wanting to live near densely populated areas because of the social opportunities that people get out of such places. It's mostly young people driving these trends, anyway.
- ricardo81 3y ago
  But alleviates the market of people who are in densely populated areas that aren't particularly precious about living there.

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.

OtherShrezzing 3y ago
>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. That a couple on minimum wage can save for a £20k deposit within any meaningful time horizon is a pretty significant assumption.
- ricardo81 3y ago
  To be fair, you can take 25% off that with a Lifetime ISA, so 15K needed.
  - matt-p 3y ago
    4k savings gets a 1k bonus per year so; -It's 16K -They need to wait 4 years. The point stands if they are aware of the scheme when they start saving and save exactly 4k a year every year (more realistically it will be 2k year 1, 4k year two, 7k year 3..)
    - ricardo81 3y ago
      Thanks yes, your maths is better, 20% on top. Having to save for 5 years doesn't seem unrealistic for people who don't have the bank of mum and dad. Totally doable - though below average house price in any area, preferably somewhere more affordable. There are a lot of tax instruments available today that never existed a generation ago.
      - matt-p 3y ago
        I do agree but I think not enough people become aware of it when they start saving. In a sense it would probably be easier on all if the government just said we'll top up your deposit by 25% upto the value of 5k when you buy your first house.
      - ta1243 3y ago

graemep 3y ago

I am not sure the comparison between England and Scotland is valid. Scotland is is much less densely populated has much smaller cities. The population of the whole of Scotland is much smaller than that of greater London. > 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 Yes, but what do you do about it? In the areas I know all sizes of house have gone up in price, so they would make a MUCH bigger profit on downsizing than when they bought houses a few decades ago. > There was a 'bedroom tax' imposed on people still living in Council housing that had empty bedrooms which didn't apply to private housing. I thought it applied to housing benefit? You no longer get housing benefit to pay for the extra room. Its also not empty rooms as such: its having more rooms than the govt thinks you need, so things such as young kids having their own rooms rather than sharing.

ricardo81 3y ago
>I am not sure the comparison between England and Scotland is valid Granted it's not exactly apples for apples, it's just my comparison as I live in Scotland and the affordability problem seems to be more of an English one, hence the GDP comparison on a pure monetary basis. >Yes, but what do you do about it? Removing right to buy, and laws on landlords tax benefits that have changed IMO have already changed the idea that being a landlord provides good ROI, in the main. I had a second property (my previous home) and having to pay 42% income tax on the rent, maintenance, any rent issues and then any potential capital gains certainly doesn't sound appetising vs selling and having cash. >Its also not empty rooms as such: its having more rooms than the govt thinks you need, so things such as young kids having their own rooms rather than sharing. You are perhaps right. General gist being that there's housing stock that'd better suit other people, which I guess was the spirit of the law.
- graemep 3y ago
  > Removing right to buy, and laws on landlords tax benefits that have changed IMO have already changed the idea that being a landlord provides good ROI, in the main. I had a second property (my previous home) and having to pay 42% income tax on the rent, maintenance, any rent issues and then any potential capital gains certainly doesn't sound appetising vs selling and having cash. It should have an effect, but has not had that much yet. There is a lag so maybe we will see it some time soon. However, we have also had rent increases and falls in house prices in real terms so that might offset it.

TheOtherHobbes 3y ago

There are very severe restrictions on local councils that limit how many houses they can build. So on average they've been building 1400 a year, across the UK. There are also some quite generous tax breaks for landlords, including mortgage relief. The playing field is slanted very heavily towards private ownership and (literal) rent-seeking.

dukeyukey 3y ago
My understanding is that the restrictions aren't on the local councils - they can choose to approve more housing, like what Croydon did a few years ago. It's just most councils don't.

DrBazza 3y ago

As someone old enough to remember right-to-buy, and old enough to have grandparents in World War 2. Both sets of grandparents lost their own houses in the Blitz. They were subsequently housed in council houses, and received nothing for their destroyed houses other than a token payment from the state. There was no insurance back then. When they were then able to buy their council homes, both of my grandparents did that and finally owned their own homes again. Right-to-buy wasn't this 'awful' thing lots of people made it out to be.

dukeyukey 3y ago
Right-to-buy isn't fundamentally bad. What's bad about it is how much local councils lose on the deal.
g5g5g5g5 3y ago
It's entirely possible that certain groups benefitted from a policy that was awful for society at large. If it benefitted absolutely no one, it wouldn't have existed in the first place.
ricardo81 3y ago
I have no problem with it. I'm fortunate in that my own parents took advantage of it and I'll likely inherit it with my siblings. Part of what I was meaning is that a lot of people did take advantage of it from the boomer gen but they're staying in homes bigger than they necessarily need, maybe just a 'bump' of old activity that will even out over the next 10-20 years.
seabass-labrax 3y ago
I think wartime just has to be considered an edge case here. There was no way that Britain could have afforded to rebuild like-for-like after the war, and compensation for bomb damage couldn't have been done fairly. Who gets priority? Do Lord and Lady Middlecott have their stately home rebuilt first? Or does it start with the least valuable property and work upwards, meaning that Mr. Horace Hodge's garden shed is number one to be restored? It clearly can't be exactly proportional, otherwise his Lordship would get one wing of his mansion and Horace would get one wall of his shed, which helps nobody. I don't think it's callous of me to suggest that providing council housing for those like your grandparents was the only humane thing to do that the country could have afforded. Rather than directly restoring the pre-war social order, the post-war system was orientated towards comfortably housing the masses, and it did that with documented success.

dachworker 3y ago

Working From Home doesn't dissuade people from wanting to live near densely populated areas because of the social opportunities that people get out of such places. It's mostly young people driving these trends, anyway.

ricardo81 3y ago
But alleviates the market of people who are in densely populated areas that aren't particularly precious about living there.