Housing - the silent crisis?

[CrisisTime]

The shocking state of housing in this country for anyone who didn't get on the gravy train in earlier decades, that is.

The homelessness. The sheer costs of housing. The tiny rooms and tiny houses. Storage rooms converted to miniscule 'bedrooms'. The dirt and dilapidation of so many rentals. Increasingly greedy landlords and letting agents. A cool house-share like The Young Ones would never exist now. The gentle landlord I once had (a vicar's wife) and her relaxed tenants - is no more. Just the sheer lack of decent affordable housing for so many.

300,000 more people coming to UK every year as well, which makes bad matters even worse, if they could be worse that is.

Is any politician from any party ever going to do anything on this issue? All I ever heard is daft initiatives that are a drop in the ocean.

Interest rates won't go back to 6% in just 18 months, that's for sure.

Eventually, they'll return to "normal", but it'll be gradual.

Watch what happens with brexit.

Want Even Brexit won't see the (independent of the government) bank raise interest rates by that much that quickly.

Want there was such oversupply if housing in Ireland during the boom that there were ghost estates with finished houses and no one living in them. It is the reason why the crash was massively worse in Ireland than the UK.

In terms of interest rates we are seeing cost push inflation rather than demand pull. Therefore raising interest rates would make it worse not better, at least in the short term. Higher inflation actually erodes debt so in terms of the housing market is complex. We may well see downward adjustment as we did with the financial crisis but crash I don't see happening.

There have been thousands of new luxury flats built where I live in SE London. Half of them have been sold to overseas investors and are now sitting empty. Many of the others are BTL at huge rental costs.

The government absolutely needs to stop London property being used for foreign investors to grow their wealth.

The government absolutely needs to stop London property being used for foreign investors to grow their wealth

As it looks like we will have a tory government for the next 5 years, this will not happen as it goes against their god of Market Forces.

Ah yes, market forces. If we did actually have a housing market based on those, it would be an improvement on now. Constant meddling from the state to keep prices high. I don't necessarily even advocate for a free market in housing, but this is infinitely worse.

In terms of Ireland, it usefully demonstrates that there isn't necessarily a connection between supply level and prices. You can have an oversupply and shitloads of ramping, at least for a time. Even in the UK, we don't have an actual shortage of dwellings do we? The spread of them doesn't match where people want to live, which is a different thing. I can see why people assume immigration has been a driving factor, but if you look into it at all, it hasn't particularly. We could still have the levels of immigration we've had and a much more sensible housing market, they're not mutually exclusive.

What we are going to have to do though, sooner or later, is disabuse ourselves of the notion that we can all have a home to live in and another to rent out. Well, we can, but by definition, that second home will end up empty for many of us. One good thing that's happened wrt housing policy recently is that BTL is going to become less attractive and more difficult. I have no wish to get into a landlords good v landlords bad debate on MN, I don't think they're any better or worse than anyone else and they're simply doing what humans will do, which is respond to incentives. But it's a phenomenon our society hasn't benefitted from.

Also, wtf is it with 'luxury' flats. I know some of the ones in London are all singing all dancing, but when i lived in one in a northern city a few years back it was just a nicely appointed new build, reasonably spacious for a two bed but not massively so, with a balcony. And yet it was described and promoted as luxury, and the price would have got me a 3 bed in any number of nice-ish areas of the city at the time. The location was convenient, but not enough to inspire a purchase at that money. Had it been 100k instead of 200k, I'd have considered it.

You can have an oversupply and shitloads of ramping, at least for a time. Even in the UK, we don't have an actual shortage of dwellings do we?

Yes we do have a shortage, that is what the thread is about. And yes there was false ramping in Ireland and it didn't last hence the crash. Supply has everything to do with it.

Where is the evidence that we have an actual shortage, as opposed to a shortage of housing where people want to live? Bear in mind we have areas of the UK where there are basically forgotten villages and areas. You might recall the Pathfinder scheme. It's just that eg if you want/need to live and work in the south east, none of them will be any use to you.

I discussed upthread that in my city, we have a population increase but also towns within a short geographical distance where there is more housing than needed. But that's obviously not the case everywhere.

Also, I'd be interested to hear what you mean by 'false' ramping- were you distinguishing between the stuff in Ireland and what we had here? Or was it just an expression? I would have said it was all false! Additionally, part of the reason why there's been a crash in ROI and prices have continued to climb here is because of government policies here to keep the bubble inflated.

It's not just the "luxury" flats, it's flats with 24-hour concierges and on-site gyms they're building. Do people really want these, and want to pay for these "services", added on top of the sky-high prices?

It was all false but it was even more false and overpriced in Ireland. The 'crash' in the UK was a lot less than anyone would have imagined in the wake of the final crisis.

There is lots of evidence of shortage, stories on this thread, increase in people sleeping on the streets, a much larger increase in population than increase in property despite a larger number of single occupancy households. Where is your evidence that there isn't a shortage? Where are these forgotten towns with thousands of empty houses for anyone who wants one? And anyway the places you refer to (which are just not as expensive rather than the being a surplus) are the ones that in fact are in some cases still lower than pre-crisis which backs up the point that property is not entirely credit driven but has basis of simple demand and supply. Expectations are also powerful, which of course are embedded in nothing you can quantify.

In fact you have no evidence at all to back up anything that you are saying. 'Evidence' however is a shaky concept anyway in economics because it is not a science it is built in models. And before you tell me I know nothing about economics I have a degree in it. Time will tell, perhaps the property prices in the UK will halve, I don't see it personally.

It's not just the "luxury" flats, it's flats with 24-hour concierges and on-site gyms they're building. Do people really want these, and want to pay for these "services", added on top of the sky-high prices?

And all the sneaky deals that have made formerly public land private ... an awful lot of what looks like public spaces (e.g the entire Brindleyplace development in Brum) is actually private land - with all the ability to apply restrictions that suggests.

Some of these developments are like middle ages castles - all that's missing is a moat.

I don't think it's 'silent' at all any more, certainly not in London or the SE.

So many things have contributed to costs - buy to let investors enjoying preferential tax rates and outbidding first time buyers

Non U.K. residents allowed to buy up so much property, again able to pay more than locals and often not even living in the properties or even renting them out;
New blocks of flats targeted almost exclusively at overseas investors - though I am v glad to see that prices of many of these anywhere near here are now dropping, though not by enough.

Help to Buy, which IMO only pushed up prices of new builds - so often overpriced anyway - effectively subsidising builders at taxpayers' expense
And Right to Buy should have been put a stop to ages ago. Once prices started shooting up and there was a shortage of social housing anyway, why on earth didn't Labour do it? And there is a lot of fraud associated with it, so I gather.

The annual housing benefit bill is colossal - so much of the taxpayer money now going into private landlords' pockets could have gone into increasing or maintaining stock.

At least the pref, tax rates and allowances for landlords are now being scaled down, and about time too. But again, why didn't Labour do this, when it was clear that prices were becoming unaffordable for so many in London and the SE?

And while I'm at it, it's high time there was a real crackdown on landlords who don't declare rental income. Anecdotally I have heard of so many cases, and only recently I heard of one doctor telling another doctor that she was mad to be declaring her rental income: 'We never have!'

only recently I heard of one doctor telling another doctor that she was mad to be declaring her rental income: 'We never have!
Surely hmrc just need to look at the electoral roll, that will show them which houses are not owner occupied and then flag up those owners whose properties are occupied by tenants whose rent is not being declared.
I don't understand how anyone who is a landlord can stay under the radar🙁

If you can't be bothered to google increasinglymiddleaged, here is some discussion about areas in the UK where there is an oversupply of housing (not cheaper, oversupply):

• Areas of Burnley 9.8% vacancy rates

burnley.devplan.org.uk/document.aspx?document=20&display=chapter&id=175

• Oversupply of housing in the north west of England as against insufficient in the south east and West Midlands.

www.independent.co.uk/property/not-enough-properties-for-sale-in-the-south-east-oversupply-in-the-north-west-says-report-9791639.html

• 2500 empty homes in Hull

www.hulldailymail.co.uk/figures-reveal-nearly-2-500-empty-homes-in-hull/story-29881597-detail/story.html

• Welsh govt estimates 23,000 empty homes in Wales and has introduced Houses to Homes scheme to combat this.

gov.wales/topics/housing-and-regeneration/housing-supply/empty-homes/houses-into-homes/?lang=en As far as I can tell, it doesn't even include homes that were abandoned a longer time ago. But this is actually a fairly considerable issue in Wales. Google suggested 1k even in Cardiff, which if true is really worrying- you'd expect there to be a certain amount in former pit villages that grew to do jobs that no longer exist, but the major urban area in Wales is something quite different.

The problem is that they're not in areas where people want to live. We most definitely don't have sufficient housing in areas where people want and need to be, despite the fact that there are clearly places where there is more housing than there are people to live in it.

You'll note that I asked if we had an oversupply in the UK in total and you then gave what purported to be a definitive answer to the question, so I'm afraid the evidential onus is on you there, not me. I have proved what I claimed. The time to be telling us that the nature of economics means evidence is a shaky concept was before you started making definitive statements!

I also would be wary of citing people sleeping on the streets as evidence of housing shortages: that's not to say it's never relevant, but there are also other contributory factors. Again those of us in Manchester, dealing with a burgeoning homeless population and a spice epidemic, are well aware of this. There's been a lot written on it recently.

FRT personally I think the current crisis has multiple causes. Supply, credit, social housing, they all have had their role.

People with capital, buy up all the available properties forcing would be owner occupiers to use their wages to line someone else's pockets
and they don't even pay the fuckjng tax that is due😡😠
Surely they realise how much shit theyll be in if the tax man catches up with them?

Surely hmrc just need to look at the electoral roll, that will show them which houses are not owner occupied and then flag up those owners whose properties are occupied by tenants whose rent is not being declared.

HMRC are not the most efficient of organisations but they may have a nasty shock and large bill if they catch up with them in the future.

If you are a tenant then consider it your civic duty to inform hmrc of the fact, make sure they know who the landlord is, when the property was first let and what the rent is

The problem is that they're not in areas where people want to live. We most definitely don't have sufficient housing in areas where people want and need to be, despite the fact that there are clearly places where there is more housing than there are people to live in it.

Well exactly, and those areas are cheap which is exactly the point I made. Plus a lot of the empty properties are unlikely to actually be habitable anyway, cheap prices often make them uneconomical to renovate anyway. Where people need large deposits it is also very difficult for young people to buy a house that needs major work, because you have to use your money for the deposit then wouldn't be able to afford to sort it out.....

FRT personally I think the current crisis has multiple causes. Supply, credit, social housing, they all have had their role.

I agree with you. Credit of course being a factor in demand. Property wealth from previous generations also distorts the market and makes it very unequal. I would also add the cost of rent as it makes it hard to save and stagnation of wages in recent years (although of course if people had more money then they may be more expensive ). It's just so complex with no one cause.

But we were talking about whether there was ever going to be a real crash and if oversupply in Ireland caused a problem. I still standby that yes it did and that there won't be a massive UK crash. Of course the oversupply in Ireland and access the finance are not separate factors anyway because the banks were heavily invested in the half finished estates/ unwanted houses when it all went wrong.

No one knows what the future holds though.

increasingly Yes in the suburbs to Dublin there were a couple of ghost estates. The issue was the banks didn't have the capital on their balance sheet to extend credit to people to buy. No one could get a loan to buy a home period. Having to pay cash or borrow from a foreign bank under onerous terms resulted in a huge drop. Over supply of house was a very small factor compared to the issue of deregulation of their financial system.

My former tenant was from Dublin and she sold just before the crash as she relocated here. She said the drop was about 50% but in some areas the drop was more like 75-80% because you had to pay cash to buy a place and Irish expats were not interested in buying in those towns/areas.

I just don't agree it was a small factor. People need to have somewhere to live so if there isn't oversupply/ there is a shortage there will still be demand for the property that there is, which prevents true crash.

You can argue that the oversupply was in part because the banks were willing to lend lots to people for second homes etc and that people thought property could never go down and it would always have worth. So OK it was by banks in the first place. But ultimately oversupply when it all went tits up caused the crash to be worse than it would have been otherwise. As you quite correctly say the effect was less where the oversupply was less/ there was still demand which is exactly what you would expect.

I also don't think there is an actual shortage of housing even in the SE. The problem is all the houses at the bottom end are only available to rent and they are often untenable in terms if affordability.
So when people say there is no housing it means they can't find anything they can afford.
LL in the south east aren't rent sensitive because the property increases in value every year anyway.

all the nimbys... not against housing 'per se' but NOT IN OUR VILLAGE WE'VE ONLY GOT ONE BUS A DAY / SMALL DOCTORS/ VILLAGE SCHOOL IS TINY.

(that's because nimbys like you wont let any building happen) nobody's going to spend millions on a road/school/hospital and leave it empty just in case someone decides to develop. We've got a bunch of NIMBY's about 2 miles away, they're actually driving round the (inner city) area I live in highlighting where a few houses could be crammed in, their FB page is shockingly selfish. I suspect a few of them are on this thread

Re landlords and rent, not everybody is on the electoral roll anyway, and presumably cross referencing all that with the Land Registry - would there be another way? - would be a major operation.

The self assessment tax form does not even ask for addresses of rental properties - merely how many and what the rents are. If anybody is going to understate, or fail to declare altogether, I should imagine that there is a very good chance of never being found out. A fair percentage of LLs buy for cash, so there is not even a bank or mortgage lender needing (in theory) to be informed.

There needs IMO to be a country-wide mandatory register of LLs and rental properties at local council level - with really hefty fines for non compliance - though having said that I gather housing fraud/brown envelopes are not altogether unknown within local govt. housing departments.