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EU Referendum: The result and aftermath...

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northwichcat

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it may have reduced the supply of social housing (a good thing - ridding the taxpayer of a liability) but it didn't reduce the overall housing stock.

If council houses were being rented out on a 'not for profit' basis and housing associations and private landlords are renting on a 'for profit' basis then that will have increased the burden on the tax payer as more people would need housing benefit and existing claimants would need more so that the private houses are making a profit.

In my town a housing association seems to like doing unnecessary work to make their properties more attractive, yet some of them are occupied by people looking for work so where does the money come from for that work?
 
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HSTEd

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As far as I can see you are suggesting that it is better to clain benefits than have a job that you don't like and yet at the same time you are suggesting that being in the dole is worse than having a job.

No, it is better to not have to spend huge amounts of time at a job you hate to prevent the collapse into miserable penury.

The bounty of automation brings the day closer when people aren't forced into poorly renumerated jobs they hate just to avoid starvation/destitution.

Which part of the country are you referring to? Just curious that's all.
Rural East MIdlands where all the jobs are essentially very low paid manufacturing or very low paid agricultural - unless you are lucky enough to get a public sector job in the NHS or council.
Sorry, but I don't agree that increasing the birth rate is a viable or responsible solution. The planet is already at or above its carrying capacity, the problem is unequal population distribution. There are more than enough people, they are just in the wrong places.

A sensible migration policy has the dual effects of helping to tackle our labour shortage and reduction in poverty elsewhere in the world through remissions.
The birthrate in the UK could increase sufficiently to offset the demographic cliff and it would make absolutely no difference to the fate of the planet.
Huge climate change is going to happen.

All we can do is make sure the UK can weather it the best it can - and it is far too late to be deliberately restricting birth rates in a desperate attempt to avert it.
Remissions that make other parts of the world richer inevitably make Britain poorer.

Doesn't help Britain's housing problem though. "Build more houses" is simply not a solution.

Why not?
If we had more houses then the house prices would tend to fall

A friend has just had a letter from his water company, asking him to use less water, citing that his area is under severe water supply stress. Perhaps the EU should have been paying for the supply network to be strengthened then. Last year I was forced to go on a compulsory water meter supposedly for the same reason. So things have been getting more expensive thanks to rising population, which the EU has heavily contributed to.

The water supply network's capability is almost irrelevant - the price climbs because Ofwat allows the private sector to bleed the public dry for something they cannot do without, making collosal returns on vital infrastructure investment that could be paid for far more cheaply by the state.
We pay more and get less

Considering that water desalination is now practiced in Israel for 55 US cents a cubic metre the idea that there is any potable water shortage at domestic water prices is nonsensical and caused by a lack of good government policy and subserviance to blind ideology.

I don't see the relevance of right to buy. As you say, it may have reduced the supply of social housing (a good thing - ridding
the taxpayer of a liability) but it didn't reduce the overall housing stock. It's also worth adding that it was an extremely popular policy at the time - and I know quite a few nominally working-class people who benefited greatly over time from having a valuable asset to their name which they would otherwise have never had a chance of owning.
Who then became the next generation of slum lords, they were simply lucky enough to be holding onto the ladder when it was hauled up.
This gain can only happen once and can never be repeated because the housing stock is gone.

And it was a terrible deal for the taxpayer because now they have to expend £25 billion pounds a year on housing benefit - simply because the housing stock was sold for a tiny fraction of its value to the lucky few.
As for all these unused plots, I'd like to know where they are. All I read about in my local paper is loads of towns and villages campaigning against large numbers of new houses being built in their location. And looking at how local infrastructure is already at saturation point, it's easy to see why people feel this way. London has already had a wave of overspill last century which the south-east was able to take. This time it can't.
Why can't it take it?
There is still low value agricultural land in the south east - hell there is still low value agricultural land inside the M25.

There are huge numbers of plots available for the taking but there is a vested interest amongst the home owning classes to ensure house prices stay high forever, allowing them to bleed more public money through BTL and Housing Benefit.
Its the rise of a new aristocracy, aided and abetted by NIMBYism and the Town and Country PLanning Act.

And local infrastructure is only at saturation point because most of it was sold to venture capitalists who get the best returns they can when the infrastructure is so overused that it is only a little short of complete collapse.
That is simply how the market works.
 
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radamfi

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The birthrate in the UK could increase sufficiently to offset the demographic cliff.

The "benefit" of that would not be felt for about 20 years and in the meantime they would have to be fed, educated etc. at the cost of the parents and the taxpayer. Transferring more of that cost to the taxpayer to encourage increased childbirth is a tax on the childfree (and therefore unfair) and is bad for the environment. Most importantly, it is also ineffective. Some countries with stubbornly low birth rates have already tried offering ridiculously generous incentives to encourage people to have kids without success. Educated people (i.e. most people living in developed western economies) generally don't want many, if any, kids, regardless of how much you bribe them.

On the other hand, educated immigrant adults can contribute to the economy and plug skill shortages immediately.
 

HSTEd

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On the other hand, educated immigrant adults can contribute to the economy and plug skill shortages immediately.

But is unacceptable to the electorate at large, as we have recently seen.
 

radamfi

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But is unacceptable to the electorate at large, as we have recently seen.

Immigration may be a vote loser, but there is no practical alternative. Governments around the world continue to allow immigration even though it is mostly unpopular.
 

ainsworth74

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As you say, it may have reduced the supply of social housing (a good thing - ridding the taxpayer of a liability) but it didn't reduce the overall housing stock.

Of course one thing that has happened is that Housing Benefit payments have ballooned for private rented tenants so that Private Landlords now get increasing amounts of taxpayer money via Housing Benefit as more and more people end up in private rented property and rents continue to increase. So it seems to me there's been very little transfer of liability for the taxpayer.
 

HSTEd

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Immigration may be a vote loser, but there is no practical alternative. Governments around the world continue to allow immigration even though it is mostly unpopular.

The ONS Indicates that total fertility rate in England and Wales is approximately 1.88.
The ONS estimates that 'replacement fertility' to be roughly 2.075
However, Japan is shown as having a fertility rate of only 1.4-1.5
It is in a far worse condition, and yet immigration rates in Japan are almost negligible.

The Japanese economy might not growing particularily fast - but it is hardly in total collapse.

There are practical alternatives - if the government is willing to accept that business cannot simply import endless supplies of very cheap labour in a desperate attempt to avoid innovating.

It is also worth noting that fertility amongst women over 40 is still growing rapidly - so it is not clear that there is actually a demographic crisis approaching - we might simply be witnessing a one off increase in the average age of a new mother.

Even if natalist policies are relatively ineffective - they would only have to increase fertility rates by 10% to completely obviate the current crisis.
 
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radamfi

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Japan is shown as having a fertility rate of only 1.4-1.5
It is in a far worse condition, and yet immigration rates in Japan are almost negligible.

The Japanese economy might not growing particularily fast - but it is hardly in total collapse.

Japan is famous for being the exception. Japan has experienced a spectacularly long economic decline since the 80s so there has been little need for immigration. However if you do a quick search you can see that even they are now considering allowing more immigration and loopholes are being exploited.
 

HSTEd

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Japan is famous for being the exception. Japan has experienced a spectacularly long economic decline since the 80s so there has been little need for immigration. However if you do a quick search you can see that even they are now considering allowing more immigration and loopholes are being exploited.

Considering is not the same as doing so.

Additionally, as I stated - their birth rate is in a drastically worse condition than the British one and is nowhere near the replacement fertility rate.

A very crude calculation indicates that the UK is short roughly 80,000 births a year to reach natural replacement.
So if your primary objective is merely to avoid demographic collapse that is a reasonable target figure for net migration.

THe primary objective of immigration policy, as endorsed by the CBI, is to import many more workers than that - exerting significant downward pressure on wages and distorting the market in the favour of capital.
 
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radamfi

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It is also worth noting that fertility amongst women over 40 is still growing rapidly - so it is not clear that there is actually a demographic crisis approaching - we might simply be witnessing a one off increase in the average age of a new mother.

Increasing the gap between generations is not helpful in tacking the ageing population. What if the girls born to today's 40 year old first time mothers also wait until they are 40 to have her first baby? After decades of stigma against teenage pregnancy, I wouldn't be surprised to see governments, especially here in Europe, try to reverse that before long.
 

AlterEgo

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Immigration may be a vote loser, but there is no practical alternative. Governments around the world continue to allow immigration even though it is mostly unpopular.

I don't think anyone is suggesting a "closed country", but we should think hard about what sort of society we want to be - one reliant on immigrants with lower expectations in life to support an aging population, or something more sustainable.
 

HSTEd

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Increasing the gap between generations is not helpful in tacking the ageing population. What if the girls born to today's 40 year old first time mothers also wait until they are 40 to have her first baby? After decades of stigma against teenage pregnancy, I wouldn't be surprised to see governments, especially here in Europe, try to reverse that before long.

But if it is a one off transition then there will be no second dip, at least not for forty years!

Because once the drought has passed there will be a steady supply of people reaching ~40 each year.
 

northwichcat

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It is also worth noting that fertility amongst women over 40 is still growing rapidly - so it is not clear that there is actually a demographic crisis approaching - we might simply be witnessing a one off increase in the average age of a new mother.

There does seem to be a growing trend of women trying to get high up the career ladder before they consider having children, meaning there's women in their mid to late 30s who are single and childless but want to have children.
 

fowler9

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More and more people having children later in life is just going to result in loads of 20 odd year olds forking out for their university education at the same time they are paying for the health care of rapidly aging parents. We may see a return to more than 2 generations of a family living in the same house for financial reasons. Nothing wrong with that but it will mean a massive change in expectations for a lot of younger people.

I have been talking about this for over a decade now having worked in the Endowment Mortgage business between 98 and about 2007. It couldn't carry on. Everyone got sold this myth that they could carry on making money by doing nothing other than owning property (By having a massive loan). It is impossible, someone has to loose. That is what the Tories and New Labour were all about, "You Can't Loose". Rubbish.

I was right there at the heart of it when the complaints started coming in that People were sold these policies on the basis that they couldn't loose. It would pay for their house and there would be enough spare cash for a cruise. As someone who studied Engineering at Uni it seemed instantly obvious to me that you cannot create something by doing nothing,
 
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HSTEd

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More and more people having children later in life is just going to result in loads of 20 odd year olds forking out for their university education at the same time they are paying for the health care of rapidly aging parents. We may see a return to more than 2 generations of a family living in the same house for financial reasons. Nothing wrong with that but it will mean a massive change in expectations for a lot of younger people.

I'm afraid we are already in this situation.
House prices have reached truly absurd levels and something has to give.

Really we need to build a Milton-Keynes esque city with a population of five or six million people.
 

fowler9

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I'm afraid we are already in this situation.
House prices have reached truly absurd levels and something has to give.

Really we need to build a Milton-Keynes esque city with a population of five or six million people.

Apologies mate, I have expanded on my original post. I agree with you though.
 

3141

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There are huge numbers of plots available for the taking but there is a vested interest amongst the home owning classes to ensure house prices stay high forever, allowing them to bleed more public money through BTL and Housing Benefit.

Why are you claiming that because my wife and I own our home we're "bleeding" public money through BTL and housing benefit?
 

HSTEd

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Why are you claiming that because my wife and I own our home we're "bleeding" public money through BTL and housing benefit?

If a person own a home (excluding people in negative equity - where the owns the home) they have almost certainly benefited by huge increases in house prices since right to buy was implemented.

This occured because housing benefit allowed BTL landlords to obtain near guaranteed incomes, this forced house prices to inflate to reduce the yields to the approximate breakeven level. Rents then started to increase to compensate this, forcing house prices up even further - causing a vicious circle that led to prices to inflate out of control.

These prices are pumped up with public money.

So homeowners have almost all benefited significantly from public money (as the homes have increased in price due to the guaranteed market provided by housing benefit).
 
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fowler9

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Why are you claiming that because my wife and I own our home we're "bleeding" public money through BTL and housing benefit

He isn't blaming you personally but you are part of the system. You personally I am sure never aimed to price people out of the housing market or put people on the streets, you are still part of that system though. Should you feel guilty? No. Should I? No. I live in my parents home which has increased ridiculously in value. It should make us all think though.
 
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3141

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If a person own a home (excluding people in negative equity - where the owns the home) they have almost certainly benefited by huge increases in house prices since right to buy was implemented.

This occured because housing benefit allowed BTL landlords to obtain near guaranteed incomes, this forced house prices to inflate to reduce the yields to the approximate breakeven level. Rents then started to increase to compensate this, forcing house prices up even further - causing a vicious circle that led to prices to inflate out of control.

These prices are pumped up with public money.

So homeowners have almost all benefited significantly from public money (as the homes have increased in price due to the guaranteed market provided by housing benefit).

Right to buy was introduced in 1980. Before that there were major increases in house prices during 1971-73 and 1976-80. The first house I bought in 1973 for £9400 cost only £2800 when it was new less than two years earlier. The house we bought for £14750 in 1976 sold for £31000 in 1980.

I’m not able to comment on what you’ve said in the passage I’ve quoted, other than pointing out that right to buy is clearly not the sole factor in substantial house price increases. But what you said in your earlier post (#6752) was

“There is a vested interest amongst the home owning classes to ensure house prices stay high forever, allowing them to bleed more public money through BTL and Housing Benefit.
It’s the rise of a new aristocracy, aided and abetted by NIMBYism and the Town and Country Planning Act.”


You combined two issues: (1) the vested interest among homeowners (but why “the home-owning classes” ?) to ensure house prices stay high, which is true for most people with a mortgage, but less so for those who own the home outright; and (2) an implication that homeowners consciously and deliberately seek to “bleed” public money.

“Aristocracy” is just a label* you’re trying to attach to the homeowners you want to attack, and NIMBYism isn’t a force which aids or abets resistance to new homebuilding but just an easily-understood attitude. (If it was a force it’s been ineffective where I live, where the number of houses is due to increase by 15% over the next twelve years.)

*The wrong label as well. You mean plutocracy.

And while where about it, what do you mean by

“And local infrastructure is only at saturation point because most of it was sold to venture capitalists who get the best returns they can when the infrastructure is so overused that it is only a little short of complete collapse” ?

In relation to housing development, “local infrastructure” normally refers to roads, schools, health facilities, shopping, and leisure facilities, which haven’t been sold to venture capitalists.
 

3141

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He isn't blaming you personally but you are part of the system.... It should make us all think though.

But he was lumping all homeowners together and suggesting that they are bleeding public resources, and I'm a homeowner.

Yes, it does make us think. The present situation is unsustainable and we need many more homes and/or fewer people, which is not an attack on immigration as I'm well aware that many services would collapse without the people from abroad who work in them. But this is one of the world's most densely-populated countries and providing the extra homes is not an easy matter. It needs some careful thought and not an airing of resentments.
 

HSTEd

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You combined two issues: (1) the vested interest among homeowners (but why “the home-owning classes” ?) to ensure house prices stay high, which is true for most people with a mortgage, but less so for those who own the home outright;

Why not people who own the home outright?
If the house prices fall drastically they will lose what is normally their largest asset. Significant numbers of people are counting on it to support them through a relatively long retirement.
“Aristocracy” is just a label* you’re trying to attach to the homeowners you want to attack, and NIMBYism isn’t a force which aids or abets resistance to new homebuilding but just an easily-understood attitude. (If it was a force it’s been ineffective where I live, where the number of houses is due to increase by 15% over the next twelve years.)
15% over the next 12 years is nowhere near enough.
That translates to something like 1.2% per annum. Which is only about ~340,000 nationally, which is not enough.
You need double or treble that to make any significant progress in solving the housing problem.

*The wrong label as well. You mean plutocracy.
The line between plutocracy and aristocracy is blurred at the best of times.
Considering that the only reasonable way for an ordinary young person to obtain a house is to inherit it - aristocracy seems reasonable.
And while where about it, what do you mean by

“And local infrastructure is only at saturation point because most of it was sold to venture capitalists who get the best returns they can when the infrastructure is so overused that it is only a little short of complete collapse” ?

In relation to housing development, “local infrastructure” normally refers to roads, schools, health facilities, shopping, and leisure facilities, which haven’t been sold to venture capitalists.

What world have you been living in?
My local council hasn't owned shopping facilities in my lifetime, and the leisure facilities, such as they are, have been private owned for nearly twenty years.

Health facilities are increasingly contracted out now that the only local direct NHS facility (the community hospital) has been deliberately run down to the benefit of Lincoln and Boston.
They are essentially all in the hands of private business - which increasingly means venture capital.

But this is one of the world's most densely-populated countries and providing the extra homes is not an easy matter. It needs some careful thought and not an airing of resentments.
It is well known that many people complaining that a matter 'needs careful thought' are merely attempting to stall for time.
The protection of the value of housing and the environment of a tiny corner of the country is more important than literally millions of functionally homeless people or those living in hopelessly overcrowded accomodation.

The government could provide the housing required with a tiny fraction of its resources.

And the UK is not particularily densely populatied - if it had the population density of the Netherlands it would be near a hundred million people.
You could drop a city of several million people in East Anglia or the East Midlands somewhere and not even effect a significant fraction of the country's population.
 
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Xenophon PCDGS

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Why not people who own the home outright?
If the house prices fall drastically they will lose what is normally their largest asset. Significant numbers of people are counting on it to support them through a relatively long retirement.

At the age of 72, I am seven years into my retirement and was fortunate to buy our home for a most reasonable price in 2004 when we returned from the ten year contract in Canada as the seller had the house on the market for quite some time and was prepared to accept our straight cash offer at a 15% price drop as he was moving into a private nursing home, where the monies from the sale of the property would keep him in a very reasonable standard of living for the rest of his life.

As I have often said, much to the obvious annoyance of many on this website, I had built up a strong financial portfolio over a period of some thirty years in addition to the monies that had been bequeathed to both my good lady wife and I and had been careful that my senior management consultancy annual bonus was always added to those funds. Hence, the purchase of the property was met by a part of these funds (remembering the monies from the 1995 sale of our previous property was part of the fund liquidity which went towards the said 2004 purchase).

I have no financial commitments whatsoever and my good lady wife now of the vintage age of 75 and myself have no worries whatsoever about living the rest of our lives at the standard to which we are accustomed in a most tranquil and pleasant rural part of Cheshire East.
 
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AM9

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At the age of 72, I am seven years into my retirement and was fortunate to buy our home for a most reasonable price in 2004 when we returned from the ten year contract in Canada as the seller had the house on the market for quite some time and was prepared to accept our straight cash offer at a 15% price drop as he was moving into a private nursing home, where the monies from the sale of the property would keep him in a very reasonable standard of living for the rest of his life.

As I have often said, much to the obvious annoyance of many on this website, I had built up a strong financial portfolio over a period of some thirty years in addition to the monies that had been bequeathed to both my good lady wide and I and had been careful that my senior management consultancy annual bonus was always added to those funds. Hence, the purchase of the property was met by a part of these funds (remembering the monies from the 1995 sale of our previous property was part of the fund liquidity which went towards the said 2004 purchase).

I have no financial commitments whatsoever and my good lady wife now of the vintage age of 75 and myself have no worries whatsoever about living the rest of our lives at the standard to which we are accustomed in a most tranquil and pleasant rural part of Cheshire East.

Yet another gloat. :roll:
 

Xenophon PCDGS

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Yet another gloat. :roll:

Not so, just a plain statement of fact. If you are prepared to accept that you are willing to make savings all your working life when the opportunity affords itself, you are likely to reap the benefits in future years.

I have learned to accept criticism on this website over the last six years from those who choose not to understand what the underlying meaning in my similar postings are and instead, come out with a deliberately puerile riposte such as that made in response above.
 

radamfi

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House prices in (southern) Britain are higher than in most other countries primarily as a result of speculation and a belief that you "can't go wrong with housing" (as an investment). People also buy the biggest house they can get a loan for, rather than one that suits their needs. Absurdly low interest rates have fuelled the house price bubble.
 

fowler9

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But he was lumping all homeowners together and suggesting that they are bleeding public resources, and I'm a homeowner.

Yes, it does make us think. The present situation is unsustainable and we need many more homes and/or fewer people, which is not an attack on immigration as I'm well aware that many services would collapse without the people from abroad who work in them. But this is one of the world's most densely-populated countries and providing the extra homes is not an easy matter. It needs some careful thought and not an airing of resentments.

In 2015 we were 50th out of 195 countries for most densely populated on a UN list. Unless things have changed massively in the last 2 years that isn't that high. Belgium and the Netherlands are higher.
 

yorksrob

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House prices in (southern) Britain are higher than in most other countries primarily as a result of speculation and a belief that you "can't go wrong with housing" (as an investment). People also buy the biggest house they can get a loan for, rather than one that suits their needs. Absurdly low interest rates have fuelled the house price bubble.

I'm not convinced that "absurdly" low interest rates are the cause of the issue. It strikes me that however low the baseline interest rate is, the majority of people paying a mortgage end up paying a lot more than the value of the house, usually at a somewhat higher rate than the baseline.

The problem is people buying multiple of the smaller properties which should be affordable for first time buyers as investments, and taking them out of reach of the majority.
 

fowler9

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Not so, just a plain statement of fact. If you are prepared to accept that you are willing to make savings all your working life when the opportunity affords itself, you are likely to reap the benefits in future years.

I have learned to accept criticism on this website over the last six years from those who choose not to understand what the underlying meaning in my similar postings are and instead, come out with a deliberately puerile riposte such as that made in response above.

Personally speaking I'm made up you seem to have worked hard and ended up with a nice place to live and I hope you enjoy it for a long time to come. I just can't condone turning houses in to investments rather than homes. I know you weren't replying to me and that isn't what you were saying. I just wanted to express my point of view and let you now I don't begrudge you what you have.
 

radamfi

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I'm not convinced that "absurdly" low interest rates are the cause of the issue. It strikes me that however low the baseline interest rate is, the majority of people paying a mortgage end up paying a lot more than the value of the house, usually at a somewhat higher rate than the baseline.

Interest rates are pretty important. For example, the monthly repayments on a repayment mortgage with a 10% rate (normal until the mid 90s) are nearly double that at 3%. A lot of people won't be able to afford their repayments if rates went up to 10%.
 
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