Guest blog: Shelter's Chief Exec on the rise of unaffordable housing

[JessMumsnet]

This week, to highlight the fact that housing is increasingly unaffordable for many, Shelter published research which showed what our weekly shop would cost if food prices had risen to the degree that housing costs have done over the last decade.

In this guest blog, Shelter's Chief Exec Campbell Robb warns that unless something changes, the next generation will find it even tougher to get a stable and affordable home.

What do you think? Are you struggling to get on the property ladder, with rising rents making it increasingly difficult to save for a deposit - or are you worried for your children's prospects? How do you think the situation could be improved? Post your URLs here if you blog on the subject, or tell us what you think here on the thread.

'mid 2000s'

IMHO the first thing we need to accept is that there is absolutely no political will whatsoever to make housing really affordable!

Also remember food prices have come down and down and bear no relationship to where they ought to be so it is not the best of comparisons but no doubt the one that most suits Shelter's agenda.

The state has interfered like the worst forms of socialists in keeping interest rates low - base rate at 0.5%! We need the free market rather than interference of that kind.

By the way comparing the first house we bought in 84 and our then salaries both about £7500, small 3 bed terraced £40k with the equivalent salary in those jobs now £40k each and the houses on that street now - zone 5 house £275k, (outer London zone 5) the comparison shows the financial positions of an equivalent couple today would not be too different, considering I was paying 33% tax then and interest rates rose to 12 - 18%, not the 3 - 5% people pay today. As for saving for deposits it was always hard. I think in 1900 only 15% of people ever owned a home. I am not sure things are too bad at all compared to how they were.

Finally the house my other moved to in 1938 today costs £50k. There are some parts of the country which are still cheap.

Sorry visiting family will post in bits

Can only talk about London and south east with any experience

What is more affordable? Truly affordable?
buying a house/flat for 350k or for 700k?

Clearly 350k

Once you accept that you realize house prices have to fall
But I'm sure home owners are more likely to vote

So if you want to drop house prices and not 'hurt' home owners how do you do it?

Simple tax btl like earned paye income

Prices drop no one really suffers .......

Sorry about typos on phone

I keep meaning to post an AIBU about this but have shitty Internet access so can't

Some of the things I have been told recently about money have truly amazed me

southwest - btl income is already taxed in the same was as other earned income.

Very interesting post, Swallowed. Agree!

And (don't get me started) they build horrible little boxes that they wouldn't dream of living in themselves, employ labour from elsewhere, pay taxes, if at all, in other countries ...

Why oh why oh why ...

prices in rent and housing don't drop by taxing btl income - not in a market where landlords always have the upper hand and can just command more rent because there'll be a high enough earning couple unable to get a mortgage but having the money to pay higher rent.

honestly i think we just have to improve the rights and stability of tenants including not allowing big rent hikes. the owners then have to either be decent affordable landlords or sell up to someone wanting to buy a home.

whilst landlords can buy cheap, rent high and boot out tenants at the drop of a hat when the market changes and they decide they can charge even more rent to a different class of tenant then no their won't be houses to buy, no their won't be affordable rent and no we won't shift the culture of property as investment.

The state has interfered like the worst forms of socialists in keeping interest rates low - base rate at 0.5%! We need the free market rather than interference of that kind.

Agree!

comparison shows the financial positions of an equivalent couple today would not be too different, considering I was paying 33% tax then and interest rates rose to 12 - 18%, not the 3 - 5% people pay today.

Buying when rates are high is good. The fact you could do so shows it was affordable for you, the price would have been higher had rates been lower.

So whats wrong with buying today at low rates? You can't afford to! Low rates will go up, your high rate environment was a privilege, you knew your repayments could only go down as rates would go down if they went anywhere.

Today when rates are low they only have one direction to go, buying today is an extreme gamble, when they are this low a small quarter point rise can wipe you out. Very very foolish to buy in a low rate environment, you were very fortunate indeed to have the luxury of buying in a high rate environment.

As for saving for deposits it was always hard. I think in 1900 only 15% of people ever owned a home. I am not sure things are too bad at all compared to how they were.

Another one! It was hard before so therefore, even though it is ten times harder today, it must be the same. Ok!

You're blinkered by your ego. You weren't harder working, smarter, or more prudent. You were lucky.

swallow - please can you tell me where landlords can buy cheap, rent high and boot tenants out at the drop of a hat? This certainly isn't the case where we live in the south west.

i guess you haven't read another thread on here recently where the tenant was several months behind with their rent; had trashed the flat causing loads of damage and disappeared and the landlord was unlikely to get them evicted for several months (whilst they still had to pay the mortgage etc).

Tenants eh? Total bastards, all of them.

i bought for the first time with a boyfriend in the early/mid 90's. interest rates were high but property was cheap and it was a buyer's market as equity/mortgages had finally broken even and people were desperate to move. we were only allowed to borrow 3.5x our joint salaries max and whilst we chose interest only we had to show evidence that we were investing in a financial product (a pep at that time) at a realistic level to cover the sum of the mortgage within 25yrs or less. that property rocketed in value over the next ten years or so (i left and signed it over to boyfriend).

i bought again in 2002 - prices were not yet peaking but were high and banks were lending huge mortgages without deposits. i got a 100% mortgage (re: no deposit) of 4.5x my salary as a single person based on the fact i was a professional and professional mortgages as they were called took into account that the salaries would be going up year on year with experience and jobs were secure. they even allowed me an interest only mortgage without requiring any evidence of me paying into any financial products for repayment.

Turn on the tv watch homes under the hammer and other property porn shows, you will see that anyone of all ages are speculating in property.
It?s not a boomer problem , it?s a banking and government policy problem.

Anyone with a pulse was lent ever increasing amounts of money to speculate

I doubt if anyone posting on here would have not been part of the problem given the chance.
Put up interest rates and the market will find a level nearer to affordability.
Without building a lot of social housing this will create massive homeless problems as the properties get repossessed by those that borrowed more than they could afford (greed)
Buy to let has been a big player in the prices of property. Forcing up prices at the lower end .

No! Not the free market! That's what got us into this mess. Survival of the fittest? Not on your nelly.

Would the free market have created the welfare state, free education? Would it have built decent-sized houses with big gardens for families to live in? Don't think so - not if you could maximise your profits by squeezing another boxlike dwelling into the back garden, calling it a bijoux apartment and letting it at inflated rents to young professionals ...

We need more of the enlightened kind of thinking we had in the 1940s after the war, when peope were so glad to be alive they loved one another and couldn't bear to think of anyone living in squalor.

United we stand! We are all interdependent in this circle of life. We can achieve a win-win situation with a little intelligent planning. We need to stand up to the bullies!

I think we can safely say that whatever the governments have been doing over the last 20 years hasn't worked - it's brought us to where we are now.

Why would we want more of the same?

Morebeta, nail on head,

i don't think borrowing more than you can afford was always about greed - for some literally the price of a basic house was the price and the bank were telling them they could borrow it and society was telling them you must buy a house, get on the ladder etc etc so they did.

now the ones who did that plus reeled up debt on credit cards, hire purchases etc etc that are being bailed out by low interest rates that mean the rest of us can't save do annoy me.

I thought buy to let was charged like any other income. It will be taxed as income surely.

i don't think borrowing more than you can afford was always about greed - for some literally the price of a basic house was the price and the bank were telling them they could borrow it and society was telling them you must buy a house, get on the ladder etc etc so they did.

Greed or stupidity/irresponsibility, not things we as a society should encourage or can afford.

now the ones who did that plus reeled up debt on credit cards, hire purchases etc etc that are being bailed out by low interest rates that mean the rest of us can't save do annoy me.

They are in the minority and the entire economy is being trashed just so they don't have to face the consequences of their actions. They should be out of properties they cannot afford.

i guess you haven't read another thread on here recently where the tenant was several months behind with their rent; had trashed the flat causing loads of damage and disappeared and the landlord was unlikely to get them evicted for several months

aww didums. If you make your money by taking advantage of the poor you should expect some consequences somewhere down the road. Do something useful with your life instead, create something, do some work for once. Picking the pockets of the poor and keeping them down is sick, Im glad there were some consequences. For many of these buy to let 'people' they get away with the damage they cause society scot free, that's the real tragedy.

does that entitle the 'poor' to disrespect other people's property though and trash places.

However, there has been some greedy people buying to let but then some decent people too.

unless you lived through several bad recessions plus a devaluation IMF taking control under Labour back in 1970 aprox, you cannot assume that people from previous generations had it on a platter.The only advantage we had was most of the time there were jobs, People were members of trade unions and collectively they helped create reasonable wage levels and conditions.
I would like to make a point here, in Labours 13 years of rule they created 2.3 million jobs , of those our population only took up about 250.000
This helped drive down wages along with a selfish new generation that came in about the time of Thatcher who didn?t want collective bargaining and let a lot of their rights be eroded.

Any surplus in Labour will drive down wages , where were you all while governments and corporations were doing this to you ?
We live in an age where people have got an entitled attitude
One thing for sure is we all get old and may some of the people on the internet reap what they are currently sowing when it?s their turn to be a victim

I forgot to mention 2 million of those jobs were taken by Immigrants , putting pressure on housing as well as driving down wage levels

Monday tuesday how true
"They are in the minority and the entire economy is being trashed just so they don't have to face the consequences of their actions. They should be out of properties they cannot afford"

i have to say (and as someone who eventually allowed my property to be repossessed) why we must avoid repossessions at all costs? repossession is the natural consequence of a market that lent out vast quantities of money to people who couldn't realistically afford it. the people make losses (i did, i know it's tough but hey) and the banks make losses - not real losses because they've made a fortune on the interest over the years upto repossession and that probably covers the shortfall when they sell at stupidly low prices and they then have the benefit of a situation where unlike any other debt it does not expire but can follow a person for life so the minute they get an inheritance they can pounce in.

why avoid it?

i think we do need to change the laws regarding mortgage shortfall though - i think if a mortgage company can be shown to have lended irresponsibly then they should at least share the financial consequences of the shortfall with the person they irresponsibly loaned to if not write off the debt. being made to write off shortfalls when they are the consequence of irresponsible lending may lead to more care in lending.