4 ms·

(1) is as an admission of a lack of housing, because "demand is too high" is the same as "supply is too low". The interaction makes the price, and we can't say

(1) is as an admission of a lack of housing, because "demand is too high" is the same as "supply is too low". The interaction makes the price, and we can't say only one side causes the imbalance unless there's some hard structural reason why the other side can't adjust. People that promote (1) focus on the demand side of the equation because that gives them their desired policy outcome of restricting immigration, but that's a sneaky rhetorical device (begging the question) more than a useful analysis that honestly considers all the different factors that contribute to the housing crisis (investor demand for capital assets, zoning, materials and labor cost inflation, credit costs, rural to city urbanization migration, etc).

DrBazza 2y ago
The problem is that we can't just wave a magic wand and increase supply instantly, or even with a year, or perhaps 5 years (lack of trades, materials, and so on), but we could, at the stroke of a pen, flatten demand right now. The fact is that the UK is creaking at the seams and the elephant in the room is too many people. Yet, for the NHS it's 'Tory underinvestment' (despite never having more money, and the highest ever staffing levels), and for all the potholes it is again... Tory underinvestment, despite vastly more traffic and no new roads. Similarly with pretty much everything else. Demand is people using the NHS. Demand is people using the roads. And yet somehow we've not raised silly amounts of extra tax from the extra people to pay for any of the extra stuff. But it's always fashionable to blame the Tories (as they're mostly in power), rather than apply a bit more critical thought to the problem. Next 5 years at least, will be Labour, but it will still be the Tories' fault. And I'll place a small wager than net immigration to the UK will still be 200k per annum, so another 1mm people, but that will be ignored in favour of 'Tory underinvestment'. Every government casts a shadow on the next one, some shadows are longer than others. This one started in 1990, and got worse in 1997. > honestly considers all the different factors that contribute to the housing crisis It's not really a 'crisis', it's just, well, business as usual. I remember the same topic covered in the late 80s and early 90s. 'We're not building enough', 'there's a housing crisis'. Sadly the UK housing market is so entwined in the economy, it will be decades for a correction to happen. Homeowners won't sell below purchase price. House builders won't sell without making a profit. Lack of house sales paralyses the economy. No labour mobility, loss of stamp duty and so on. We cannot force prices down without causing problems in the economy - tradesmen, solicitors, estate agents, investors, and so on. There needs to be a multi-decade plan from 'the Government' to somehow reduce house prices. But that seems to be well above the level of ability of our politicians and political system.
- ta1243 2y ago
  For the last 5 years we've had a 300k houses a year target. We're over half a million short on that number. Stamp duty is terrible, it stops movement. Replacing with increased property tax (say at 1/10th of stamp duty per year) would be far more sensible. Or we could just tax the land -- good look offshoring that.

DrBazza 2y ago

The problem is that we can't just wave a magic wand and increase supply instantly, or even with a year, or perhaps 5 years (lack of trades, materials, and so on), but we could, at the stroke of a pen, flatten demand right now. The fact is that the UK is creaking at the seams and the elephant in the room is too many people. Yet, for the NHS it's 'Tory underinvestment' (despite never having more money, and the highest ever staffing levels), and for all the potholes it is again... Tory underinvestment, despite vastly more traffic and no new roads. Similarly with pretty much everything else. Demand is people using the NHS. Demand is people using the roads. And yet somehow we've not raised silly amounts of extra tax from the extra people to pay for any of the extra stuff. But it's always fashionable to blame the Tories (as they're mostly in power), rather than apply a bit more critical thought to the problem. Next 5 years at least, will be Labour, but it will still be the Tories' fault. And I'll place a small wager than net immigration to the UK will still be 200k per annum, so another 1mm people, but that will be ignored in favour of 'Tory underinvestment'. Every government casts a shadow on the next one, some shadows are longer than others. This one started in 1990, and got worse in 1997. > honestly considers all the different factors that contribute to the housing crisis It's not really a 'crisis', it's just, well, business as usual. I remember the same topic covered in the late 80s and early 90s. 'We're not building enough', 'there's a housing crisis'. Sadly the UK housing market is so entwined in the economy, it will be decades for a correction to happen. Homeowners won't sell below purchase price. House builders won't sell without making a profit. Lack of house sales paralyses the economy. No labour mobility, loss of stamp duty and so on. We cannot force prices down without causing problems in the economy - tradesmen, solicitors, estate agents, investors, and so on. There needs to be a multi-decade plan from 'the Government' to somehow reduce house prices. But that seems to be well above the level of ability of our politicians and political system.

ta1243 2y ago
For the last 5 years we've had a 300k houses a year target. We're over half a million short on that number. Stamp duty is terrible, it stops movement. Replacing with increased property tax (say at 1/10th of stamp duty per year) would be far more sensible. Or we could just tax the land -- good look offshoring that.