5 ms·

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 ty

by 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
    Reality isn't like that, according to a pressure group that says empty homes is a major problem (and are thus unlikely to be underestimating) https://www.actiononemptyhomes.org/ https://www.actiononemptyhomes.org/ London, where the main problem is (two people on minimum wage can buy a 3 bed house pretty much everywhere in the country outside the south east) has under 2.5% either empty, in use for short term lets like airbnb, or used for people who have a flat in London and a family home elsewhere. https://static1.squarespace.com/static/6553693f7d629a133b6a4ece/t/6556395f5ebbf5732fcbc36e/1700149600422/London+stats.pdf https://static1.squarespace.com/static/6553693f7d629a133b6a4...
    - matt-p 3y ago
      "two people on minimum wage can buy a 3 bed house pretty much everywhere in the country outside the south east" source? Because it doesn't feel like that at all. https://www.theguardian.com/society/ng-interactive/2023/jun/12/interactive-tool-that-shows-where-you-can-afford-to-buy-or-rent-home-great-britain https://www.theguardian.com/society/ng-interactive/2023/jun/... take a look at this map - all the bits of Britain that are actually nice to live in are in "can't buy, can rent" or worse. Prove me wrong, give me an example area?
      - dukeyukey 3y ago
        Also worth seeing that London has about 9 million people, and the south-east has another 9 million. That's 27% of the UK's population in the now-unaffordable area. Throw in some expensive areas outside the south-east (Cambridge, Bristol, seaside resort towns) and that goes up to 30% easily.
        matt-p 3y ago
        Indeed. That's before you've even gotten to places like Manchester, Edinburgh and the like. Instinctively it feels like about 2/3rds of people live in "unaffordable to buy" areas. Worse it's probably the best paid 2/3rds of the country.
        Ekaros 3y ago
        Anywhere in the world demand is where there is supply for wages. Most places just have not succeed matching that demand with supply on the housing. While supply of wages has still gone on... Very often where there is no well paid jobs or even paid jobs the demand is low, so housing is cheap. Urbanization has been failed. Supply of housing has not kept up with labour around in most urban areas.
    - graemep 3y ago
      Many people are likely to lie about second homes, because their London property will be more expensive so they will want to claim the exemption from capital gains tax for their main residence.
  - graemep 3y ago
    Yes, hard to measure but my feeling is you are right. Definitely so in London where you also get a lot of very large houses (big enough to be converted into multiple flats) being bought by the rich and super rich. Talk to someone in a business linked to luxury London housing and see how long phrases like "family office" take to come up.
  - voisin 3y ago
    > Foreign money is far more of a problem than foreign people. Maybe in the UK, but in Canada we have the same problems (larger by the looks of it) and our government blocked foreign money with zero noticeable impact. I think foreigners are a scapegoat for the cumulative impact of decades of bad government policy at all levels of government, including bad monetary policy.
    - graemep 3y ago
      I think the UK is very different, London in particular. The most expensive parts of London the most: https://www.standard.co.uk/business/london-housing-market-forecast-overseas-ownership-b1094179.html https://www.standard.co.uk/business/london-housing-market-fo... Those numbers do not count the people who moved to the UK (mostly London) to avoid paying tax under "non-domiciled" exceptions which the government has promised to abolish next year. The main opposition party has endorsed this policy AFAIK so things should start changing from next year as far as those go.
- brutus1213 3y ago
  Housing seems to be a disaster almost everywhere in the world these days. This makes me think the issue is not a local one (or perhaps there are some traits in all of us as humans that are causing this mess). What is odd to me is that previous real-estate bubbles have been localized. Now, every single place I would consider living has had significant housing price increases/bidding wars, etc. From an economics perspective, lets assume there was no govt regulation at all. I am not sure if the problem would be fixed. There is a trite old sayings .. "they aren't making any more land" or "location-location-location". But this inelastic supply of land is nothing new. So why is this happening now?
  - voisin 3y ago
    > Housing seems to be a disaster almost everywhere in the world these days Interest rates have been ultra low (versus historic norms) in the developed world for two decades. And prior to that they were on the decline. Similarly, the developed world has largely not been building housing in line with population growth. For decades. We are at the natural conclusion of decades of bad policy and we aren’t going to squeeze out of it in a few years. It will take decades of good policy to fix this and our leaders don’t seem programmed for maintaining good policy for more than a few years until there’s a hint of prosperity and then they fritter it away.
    - dukeyukey 3y ago
      Low interest rates _should have_ allowed builders to build more homes too, but they haven't.
      - jackcosgrove 3y ago
        In the US housing supply did keep pace with demand until about 2006. Witness the reversion of prices to historical norms (briefly) after the housing crash. So the response of home builders to interest rates is mixed. The problem here at least is that many homebuilders went bankrupt after the housing crash and the supply of skills and willingness to build homes decreased for a generation.
      - 3y ago
- matt-p 3y ago
  I think we can add "high interest rates" to the above list. That is a symptom, not a cause. If we built more houses it wouldn't matter anywhere near as much. We can't have a situation where demand is outstripping supply to this extent and expect our economy to grow. We need workers able to live somewhere near where they work, we need them to not have a mortgage so high that they feel unsafe in moving jobs, starting a business or going freelance. We need folk with disposable income to spend on other sectors besides overheating the property market. All this promotes growth in our economy, housebuilding also of course generates work for builders, electricians, trades, road designers, rail companies etc etc
hackerlight 3y ago
(1), (3), (4) and (5) are all covert admissions that there's not enough available housing. For example, (1) says that net migration is outstripping housing, (3) usually comes down to the "land-banking" theory or this idea that heterogeneous developers are colluding to restrict housing, while (4) and (5) are about investors restricting housing for tenants. In my experience, the people adopting these explanations are usually neutral or hostile to actual new housing, aside from their pet solution of punishing their chosen scapegoat. The challenge is there's a grain of truth to all of these explanations. House prices and rents would go down if vacancies were outlawed. But these solutions that target scapegoats are probably insufficient to move the dial much. The vacancy rate in Ireland has gone down over the last decade while prices and rents have skyrocketed. AirBNBs are a small fraction of housing. The two biggest things you can do to reduce prices and rents is to build a lot by removing obstacles (whether private or public housing), and reduce incentives (tax and otherwise) for investors to buy and hold land.
- DrBazza 3y ago
  > (1), (3), (4) and (5) are all covert admissions that there's not enough available housing. Well, (1) isn't. It says demand outstrips supply, as the birth rate on its own would be a shrinking population in the UK. The obvious, low cost answer is to reduce demand. An 'x' in a box, saying no to immigration. Instead we have yes, and then thousands of pounds buying land, building houses, co2 emissions, loss of countryside, environmental destruction, loss of arable land and so on. We could reduce immigration to pre 1997 levels, when the economy grew at similar rates to now. The arguments for mass immigration in the UK are unproven simply because stopping immigration and seeing the result hasn't been tried. You could argue that with 10x 1997 levels we should have a measurable increase in annual GDP better than pre-1997. We don't. With a shrinking population, Japan's economy has stagnated and contracted a little. But nothing catastrophic. Perhaps the pursuit of 'GDP' is simply the wrong thing to be concerned about. House builders are happy with the current situation. They're pretty much a cartel, as they're solely responsible for the supply of new houses. They don't want to lose money on sites they've paid over the odds for. They don't want to be told to deliver more houses, if they could, as more supply would be competitive and prices would potentially drop, as would profit. Which is why they donate huge amounts to the national political parties, as well as locally as well to keep the status quo. Near me there's several fields of Grade 1 land owned by Bellway and Redrow for the last 2 decades. 20 years. The land has permission. They've not yet built on it. Can't think why.
sys_64738 3y ago
Britain's problem is cramming everything into the London areas and surrounding counties. There's plenty of space in the midlands and up north. What should happen is that Parliament be relocated from London to Manchester and other city-state services moved to the rest of the country. A huge rebalancing of investment will quickly equalise and normalise the lopsided weighting that this country has.
- matt-p 3y ago
  Manchester has the same house price issues as London these days. Leeds or something could be appropriate though. The problem is the Tories were re-elected on the basis of 'leveling up' the regions but f-all has actually happened so the metaphorical well has been poisoned.

by ta1243 3y ago

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
  Reality isn't like that, according to a pressure group that says empty homes is a major problem (and are thus unlikely to be underestimating) https://www.actiononemptyhomes.org/ https://www.actiononemptyhomes.org/ London, where the main problem is (two people on minimum wage can buy a 3 bed house pretty much everywhere in the country outside the south east) has under 2.5% either empty, in use for short term lets like airbnb, or used for people who have a flat in London and a family home elsewhere. https://static1.squarespace.com/static/6553693f7d629a133b6a4ece/t/6556395f5ebbf5732fcbc36e/1700149600422/London+stats.pdf https://static1.squarespace.com/static/6553693f7d629a133b6a4...
  - matt-p 3y ago
    "two people on minimum wage can buy a 3 bed house pretty much everywhere in the country outside the south east" source? Because it doesn't feel like that at all. https://www.theguardian.com/society/ng-interactive/2023/jun/12/interactive-tool-that-shows-where-you-can-afford-to-buy-or-rent-home-great-britain https://www.theguardian.com/society/ng-interactive/2023/jun/... take a look at this map - all the bits of Britain that are actually nice to live in are in "can't buy, can rent" or worse. Prove me wrong, give me an example area?
    - dukeyukey 3y ago
      Also worth seeing that London has about 9 million people, and the south-east has another 9 million. That's 27% of the UK's population in the now-unaffordable area. Throw in some expensive areas outside the south-east (Cambridge, Bristol, seaside resort towns) and that goes up to 30% easily.
      - matt-p 3y ago
        Indeed. That's before you've even gotten to places like Manchester, Edinburgh and the like. Instinctively it feels like about 2/3rds of people live in "unaffordable to buy" areas. Worse it's probably the best paid 2/3rds of the country.
        Ekaros 3y ago
        Anywhere in the world demand is where there is supply for wages. Most places just have not succeed matching that demand with supply on the housing. While supply of wages has still gone on... Very often where there is no well paid jobs or even paid jobs the demand is low, so housing is cheap. Urbanization has been failed. Supply of housing has not kept up with labour around in most urban areas.
  - graemep 3y ago
    Many people are likely to lie about second homes, because their London property will be more expensive so they will want to claim the exemption from capital gains tax for their main residence.
- graemep 3y ago
  Yes, hard to measure but my feeling is you are right. Definitely so in London where you also get a lot of very large houses (big enough to be converted into multiple flats) being bought by the rich and super rich. Talk to someone in a business linked to luxury London housing and see how long phrases like "family office" take to come up.
- voisin 3y ago
  > Foreign money is far more of a problem than foreign people. Maybe in the UK, but in Canada we have the same problems (larger by the looks of it) and our government blocked foreign money with zero noticeable impact. I think foreigners are a scapegoat for the cumulative impact of decades of bad government policy at all levels of government, including bad monetary policy.
  - graemep 3y ago
    I think the UK is very different, London in particular. The most expensive parts of London the most: https://www.standard.co.uk/business/london-housing-market-forecast-overseas-ownership-b1094179.html https://www.standard.co.uk/business/london-housing-market-fo... Those numbers do not count the people who moved to the UK (mostly London) to avoid paying tax under "non-domiciled" exceptions which the government has promised to abolish next year. The main opposition party has endorsed this policy AFAIK so things should start changing from next year as far as those go.
brutus1213 3y ago
Housing seems to be a disaster almost everywhere in the world these days. This makes me think the issue is not a local one (or perhaps there are some traits in all of us as humans that are causing this mess). What is odd to me is that previous real-estate bubbles have been localized. Now, every single place I would consider living has had significant housing price increases/bidding wars, etc. From an economics perspective, lets assume there was no govt regulation at all. I am not sure if the problem would be fixed. There is a trite old sayings .. "they aren't making any more land" or "location-location-location". But this inelastic supply of land is nothing new. So why is this happening now?
- voisin 3y ago
  > Housing seems to be a disaster almost everywhere in the world these days Interest rates have been ultra low (versus historic norms) in the developed world for two decades. And prior to that they were on the decline. Similarly, the developed world has largely not been building housing in line with population growth. For decades. We are at the natural conclusion of decades of bad policy and we aren’t going to squeeze out of it in a few years. It will take decades of good policy to fix this and our leaders don’t seem programmed for maintaining good policy for more than a few years until there’s a hint of prosperity and then they fritter it away.
  - dukeyukey 3y ago
    Low interest rates _should have_ allowed builders to build more homes too, but they haven't.
    - jackcosgrove 3y ago
      In the US housing supply did keep pace with demand until about 2006. Witness the reversion of prices to historical norms (briefly) after the housing crash. So the response of home builders to interest rates is mixed. The problem here at least is that many homebuilders went bankrupt after the housing crash and the supply of skills and willingness to build homes decreased for a generation.
    - 3y ago
matt-p 3y ago
I think we can add "high interest rates" to the above list. That is a symptom, not a cause. If we built more houses it wouldn't matter anywhere near as much. We can't have a situation where demand is outstripping supply to this extent and expect our economy to grow. We need workers able to live somewhere near where they work, we need them to not have a mortgage so high that they feel unsafe in moving jobs, starting a business or going freelance. We need folk with disposable income to spend on other sectors besides overheating the property market. All this promotes growth in our economy, housebuilding also of course generates work for builders, electricians, trades, road designers, rail companies etc etc

hackerlight 3y ago

(1), (3), (4) and (5) are all covert admissions that there's not enough available housing. For example, (1) says that net migration is outstripping housing, (3) usually comes down to the "land-banking" theory or this idea that heterogeneous developers are colluding to restrict housing, while (4) and (5) are about investors restricting housing for tenants. In my experience, the people adopting these explanations are usually neutral or hostile to actual new housing, aside from their pet solution of punishing their chosen scapegoat. The challenge is there's a grain of truth to all of these explanations. House prices and rents would go down if vacancies were outlawed. But these solutions that target scapegoats are probably insufficient to move the dial much. The vacancy rate in Ireland has gone down over the last decade while prices and rents have skyrocketed. AirBNBs are a small fraction of housing. The two biggest things you can do to reduce prices and rents is to build a lot by removing obstacles (whether private or public housing), and reduce incentives (tax and otherwise) for investors to buy and hold land.

DrBazza 3y ago
> (1), (3), (4) and (5) are all covert admissions that there's not enough available housing. Well, (1) isn't. It says demand outstrips supply, as the birth rate on its own would be a shrinking population in the UK. The obvious, low cost answer is to reduce demand. An 'x' in a box, saying no to immigration. Instead we have yes, and then thousands of pounds buying land, building houses, co2 emissions, loss of countryside, environmental destruction, loss of arable land and so on. We could reduce immigration to pre 1997 levels, when the economy grew at similar rates to now. The arguments for mass immigration in the UK are unproven simply because stopping immigration and seeing the result hasn't been tried. You could argue that with 10x 1997 levels we should have a measurable increase in annual GDP better than pre-1997. We don't. With a shrinking population, Japan's economy has stagnated and contracted a little. But nothing catastrophic. Perhaps the pursuit of 'GDP' is simply the wrong thing to be concerned about. House builders are happy with the current situation. They're pretty much a cartel, as they're solely responsible for the supply of new houses. They don't want to lose money on sites they've paid over the odds for. They don't want to be told to deliver more houses, if they could, as more supply would be competitive and prices would potentially drop, as would profit. Which is why they donate huge amounts to the national political parties, as well as locally as well to keep the status quo. Near me there's several fields of Grade 1 land owned by Bellway and Redrow for the last 2 decades. 20 years. The land has permission. They've not yet built on it. Can't think why.

sys_64738 3y ago

Britain's problem is cramming everything into the London areas and surrounding counties. There's plenty of space in the midlands and up north. What should happen is that Parliament be relocated from London to Manchester and other city-state services moved to the rest of the country. A huge rebalancing of investment will quickly equalise and normalise the lopsided weighting that this country has.

matt-p 3y ago
Manchester has the same house price issues as London these days. Leeds or something could be appropriate though. The problem is the Tories were re-elected on the basis of 'leveling up' the regions but f-all has actually happened so the metaphorical well has been poisoned.