To think that just building houses isn't going to solve any problems

[SEmyarse]

So there's a huge housing shortage in the country, and there are loads of plans for building that seem to be taking yonks to come through.

Eventually, a small development has been almost completed near me, of about 30 houses. I'm a delivery driver, so have witnessed people moving in, and have delivered a lot of their new house goods to them.

There's quite a mix of housing. I think there are only 2 social houses, but maybe some of the flats are too. I can never get an answer at the flats, so have to leave a card and liaise redelivery. I keep discovering that these people all seem to have children at the same school as my kids, despite it being 4 miles away, and so I meet them there with deliveries. They've not been able to get their children into their local school, because it is jammed full of kids from my village who's parents ship them there because it's smaller. I often have to give deliveries to childminders, by agreement because these people are working silly hours to get a mortgage.

I know quite well one of the ladies who's been given a social house. She can't drive due to epilepsy, so has been housed in this village so she can care for her elderly mother. She has 5 children, and again can't get them in the school so has to bus them to our village every day, which is costing a fortune.

The next area of housing that was finished was the large executive homes at the back, with 4/5 bedrooms. Apart from one family, I think they have all been moved into by elderly couples. Now of course, if they've worked for the money, they have every right to spend it on what they like. At least that's what I used to think. But is it really right that people can sit on resources when others desperately need them? Should children all be growing up in cramped accommodation even though their parents are working like dogs? They have no outside space at all, and while I'm sure the elderly people enjoy their gardens very much, is it really right at the expense of children playing? I've already seen a lone child on a bike shouted at for riding on their bit of road, and told to play near their house. He wasn't causing any bother.

The last bit that now seems to be ready, is a couple of terraces of decent sized houses with integral garages. I knocked at one yesterday, and met a bloke. I commented that someone was eventually moving in, and he told me he wasn't moving in he'd bought up all 6 to rent out. So yet more overpriced rentals for all the local people who can't afford to buy them.

I don't think this development has made even the slightest dent into our local housing problems.

[MorrisZapp]

Of course, train, I agree. I thought you meant older people living in family sized homes. Yes, btl landlords are hoarding assets. To be fair, I'd do the same if I could though.

[Suzannewithaplan]

Great posts (as always) Train :o

[SaucyJack]

Nobhead!

SaucyJack, how on earth would you calculate those payment?
Based on a 10% deposit and an average credit score?
When interest rates go up, do rents automatically go up as well?

I have no idea what a credit score or interest rate is (having never had a mortgage), but I guess it would be calculated based on an average for the area + council tax band + size of property. Someone has to do similar to calculate the LHA, so it can't be that difficult.

[MoreBeta]

traininthedistance - yes I do recall the admission by Eddie George before he died that they 'knew what they were doing' pumping up the housing market. The Central Banks are still at it. Trying to save the banking system by repeating the same mistake as caused teh Financial Crisis. Making property values go up to bubble levels so the banks can offload the defaulted property they have repossessed back to the market without taking a loss. Problem is it pumped up London prices to stratospheric levels and outside London and South East prices are not rising and wages are falling. It is not working. Its creating yet another unsustainable bubble just like all the repeated housing bubbles of the last 30 years.

BackOnly - "You think old people should be forced from their homes so that there's enough room for younger people, but you don't think there should be enough homes for both?"

Downsizing should be a natural economic decision made willingly made by people once their children leave home. In normal economic circumstances that is what would happen - but it doesn't because of the massive distortions in the housing market as traininthedistance explained very well above.

The normal economic decision to downsize simply does not happen because the incentive to stay in the house hiding your wealth from tax while drawing down the equity via equity release mortgages is very well documented.

It is a well established principle that a land (and by extension property) tax is the only fair and least distortive tax there is. A landowner adds nothing to the economy. Just sits on a piece of productive asset and collects a rent (or enjoys the benefit of avoiding paying rent by living in the property themselves).

In fact, land and property are the least taxed of all assets. The tax system taxes wages instead which is the most distortive tax. In essence we tax people who are productive and don't tax the people who own the houses those productive people need to live in.

[MoreBeta]

Morris - "Many of the older generation shun credit, ...."

No simply not true. ALL the older generation borrowed like crazy in the 1970s and house prices rocketed due to inflation and that paid off their mortgage loan. Then they moved house put the accumulated gain down as a deposit on a bigger house and borrowed even more and inflation paid it off again. They are still borrowing through equity release spending the unearned fruits of owning a house - not a lifetime of productive work. The boomer generation is currently spending the income of the next two generations.

The housing market has been a vehicle for massive intergenerational wealth transfer and politicians knowingly did it and personally enjoyed the benefit themselves as did most Central Bank Governors.

[specialsubject]

landlord-haters:

BTL is not stealing a home. Someone lives in it. Would you prefer it sat empty?

rental income IS taxed. Of course. As an aside, you'll be pleased to hear that it can't be used for pension contributions because it is classed as 'unearned income'. In that, the government shares your belief that people get given houses for free which they can then rent out at huge prices.

letting agents aren't regulated (which is very wrong) but landlords are. There are laws that they must follow and there are penalties if they don't.

you have to pay someone for your house. They make a profit. I'm afraid that the necessities of life are not free. As mentioned on other threads, if you want that then North Korea may be the place for you. I don't think you'll like it though.


sorry to spoil the story with boring old facts.

[specialsubject]

p.s. if rents are too high, people don't take the properties. Unless it is London of course, where everyone seems to think they have to live.

[MorrisZapp]

MoreBeta, I was referring to my grans generation, not the boomers. But my own parents are boomers and it sounds odd to accuse them of profligate borrowing andspending.

They're pretty cautious with money, as are most of my friends parents. And then there are the millions of boomers who never owned their own home anyway.

There are trends, but we can't possibly accuse an entire
generation of wrongdoing or greed.

[MoreBeta]

No Housing Benefit (or indeed any benefit) should be paid in the South East of England. Full Stop.

It is insane to pay people who are not working yet allow them to live in one of the highest economic growth areas of the UK in houses that working people in essential public service jobs like police, fire, teaching healthcare cannot afford.

London and South East should be designated special economic zones where no benefits are paid.

I say this as my sister lived rent free for years on Housing Benefit in a council flat in London and then got a job once her children went to secondary school, bought her council flat at a knock down price and flipped straight on to a BTL landlord making an instant £200k profit. She paid not a penny in tax on the transaction and she lived on benefits for 10 years.

[MoreBeta]

Morris - the boomers like your parents were not cautious.

The standard advice in the 1970s was borrow as much money as you possibly could on a mortgage and 'stretch yourself' for a few years to maximise the MIRAS and benefit from inflation. I am old enough to remember adults talking about it in the 1970s. I own my home but have never had a mortgage and am age 50 but my parents are very much 'believers' in the whole mantra of borrowing the maximum possible and buying property because 'it only goes up in value' to the extent we have had arguments about it.

If your gran is or would be age 80 - 100 now I grant you she didn't benefit.

[almondcake]

Sats, I agree that they need to move jobs away from the South East. It doesn't in the long term require people to keep moving away from the South East. It just means all the young people moving to the south East will no longer have to.

While I agree about the housing bubble and the drop to come, the national average price of a 3 bed terrace is about 200,000. A 3 bed terrace in the south for 700-800 thousand is indicative of greater problems in the Uk's spreading of wealth and jobs than just a housing bubble. 200 thousand is still not affordable to the average family, but it requires a smaller drop in prices, obviously.

[Catkinsthecatinthehat]

No Housing Benefit (or indeed any benefit) should be paid in the South East of England. Full Stop.

Really? So if someone is made redundant after years of work, and paying tax and national insurance, they get no benefits to tide them over because they're dawnnn Sarffff? I appreciate your pain at your scrounging relative, but I don't think that's the solution. Ending RTB might be though...

One problem that's becoming huge in my area of London is Buy to Leave. Lots of new developments, all selling at ridiculous prices, not even marketed in the UK, and empty as the owners are from China, Singapore or Russia and have never set foot in them. If foreign investors want to buy gold bars and store them in a UK bank I don't care. But it's unacceptable (morally and socially) for huge chunks of property in a city with a housing shortage problem to be off-limits in this way.

[sparechange]

SaucyJack

Council tax is worked out based on what a house was worth on a certain date.
Along the lines of all houses that were worth £100-150k pay one bill, houses that were £150-200k pay another bill etc etc

Those are slightly out of date now obviously.

For a mortgage payments, there is no such thing as 'an average'.

If I bought my house 10 years ago for £100k, and had £10k in savings, my mortgage would be £90k. Interest rates (you really have no idea what they are? were a bit higher then than they are now, so I would probably be paying a rate of about 5%. For arguments sake, lets say my mortgage payment is £500 a month.

The house next door comes on the market this year for £250k
I have savings for £30k. This means I had to take a mortgage of £220k, at an interest rate of 1.5%.
This makes my mortgage payment £1500 a month.

The lady who lives next door bought her house 30 years ago for £25k.
Her mortgage is £120 a month

Who's mortgage is the 'average one' for working out how much the rent should be?

[Suzannewithaplan]

Thats a pretty radical proposal MoreBeta
although understandable you'd be in favour considering the way your sister was able to play her hand to huge advantage.

Then again do you blame the player or blame the game?

[fayrae]

However many houses are built, they will just fill up. And then we're back to the same problem. We need to reduce the population. We are already an overcrowded country, how much more overcrowded are we prepared to get?

[Sicaq]

Personally I don't know how anyone can afford to buy and I think that housing benefit is the reason for inflated rents as it creates a false economy and pushes the rent up

Not sure I think HB makes a damn difference to most private landlords. I just ran a quick online search for London flats and houses to rent:

Total currently available: 13914
Of those, number where landlord will accept HB: 184

That's just 1.3%.

[Sicaq]

I've wondered that too, Iseenyou. Is HB paid to council tenants? Excuse my ignorance, I'm genuinely unsure how it works in social housing.

[wink1970]

Isn't the problem with HB that it used to be paid direct to the landlord, but now comes via the tenant? In some cases - presumably enough to put landlords off - the tenants paid to start with, then stopped handing it over when they felt strapped/wanted to spend it on something else. For most landlords to say 'no HB' it must be an issue of being paid rather than the level of rent.

[Nataleejah]

If it was my will, i'd allow one home per household. Then we wouldn't have empty homes owned by some estate agents, where nobody lives and nobody can afford to buy.

[Contrarian78]

An increase in supply should mean that housing becomes less of a speculative investment. I'd also introduce CGT on pricipal private residences.

I should point out that I'm a homeowner who rents out a property (by accident rather than design) I'd also introduce a ring-fenced tax on empty properties/second homes. In the event that the supply issue is fixed, these taxes could be scaled back/removed.

[AfricanExport]

More beta.

I like your thinking... I also don't think it's right that people live in zones 1-3 at the expense of taxpayers . The same taxpayers who cannot get homes near their work as they cost millions so have hour long commute to work each day. I think that they should refurb all council homes in London. Sell them at a high profit and build more social housing elsewhere.

And before anyone says anything. . many of us have left our families and support base to ensure we can get jobs. That's tough luck really.