AIBU to think that the UK housing crisis is not caused by supply and demand?

[Goodnightseamer]

It's often trotted out as a reason but there are 29 million houses in the UK. There are slightly fewer than 28 million households. That's over a million houses more than there are households. So there are plenty of houses. Houses are unaffordable due to speculative investment, not under supply. AIBU?

Tbh I think Uc is a good idea for all sorts of reasons- the equalisation of those on benefits being a big one- but it’s just hard to implement and has been introduced pretty badly

@CuriousaboutSamphire - aha - didn't know that. In that case more needs to be done to prevent mortgage lenders putting such onerous clauses in their contracts then.

@AwdBovril Abso-bleeding-lutely.

Between that and ensurng that the next set of proposed changes in the law are more carefully thought through than the last lot* both Tenant and Landlords need better protection

*The last set of laws were published the day before they came into force and then an amendment early on a Saturday morning (iirc) leaving all agents and landlords open to immediate legal action. I spent quite a while on lots of forums sharing the information and talking to my clients to make sure it was all understood and the corrected version was being used!

Property developers bagging their planning permissions then not building the homes is a big problem too. They don't count towards local council housing numbers until they're built. So on paper the council hasn't met its obligations to govt and has to start planning for more. Also round here (Gloucestershire) house builders are stopping building in the middle of 000's of houses because people aren't buying them!

@Ylvamoon home ownership is a very recent development. Historically, people rented their homes. Owning was a luxury out of reach for most. Home ownership only grew with the rise in available credit.

I’m not sure that lifetime renting is a good idea with the average lifespan increasing like it is. How do you propose people should pay for their rental costs once they’re into their 70s or 80s? The benefits system wouldn’t cope. Neither would the pensions system. Even if someone is fit enough to work till they’re 80 or till they drop, where are the extra jobs going to come from?

At least if someone can buy their home then once they retire they only have to find money for bills and food.

@Indecisivelurcher you must live close ish to me

@curious and very nice it is too, when we're not under water and got something to drink :)

Yep.

I always hate the arguments of ‘well home ownership is a fairly new concept/not all that common in ‘Europe’.’ And ‘what is the obsession with home ownership in the country’.

None of those comments are helpful to people who are stuck in a crumby rental flat and generally come from people who own their homes.

The “obsession” with home ownership is really a desire for security that private renting currently can’t provide. Once out of an AST you have 2 months security in a private rental. That’s it. I got lucky in my last move and got 4 months notice. Still stressful as hell trying to raise enough money for a deposit, first months rent, moving lorry, and new cooker, fridge and washing machine as well as the costs of redirecting mail, changing driving license and insurance over etc. I had to borrow it from family (again- I was lucky I could- others can’t) then trying to find somewhere thats close enough to school that will take a single parent in receipt of HB with pets (additional deposit required for that too) and yes I know I could have gotten rid of the pets but how fucking heartbreaking to have to just to be housed. I have 6 months left of this AST and then it’s back to living on my last nerve waiting to be told I have to move on. Again. This is our 5th home in 14 years. (Not all due to LL giving notice though- some was my choice due to shitty landlords not doing what they’re paid for)

Then there’s the security of old age. Knowing that come a certain point your home will be paid for and you can retire or at least take the pressure off.

I’m with you @IWorkAtTheCheescakeFactory.

The idea that renting is fine in other countries so it should be here only really works when everyone rents and there are good protections for both landlords and tenants.

There are several places in UK where housing IS affordable
Some people don't want to relocate
Sometimes poor job opportunities
Some people want a perfect property, not a doer upper
Some people don't want to make the sacrifices to save up for deposit

“Without wanting to engage in policical debate on this thread, VOTE Labour in December! Read their manifesto and policies for housing, old Corbs might not be everyone's favourite PM, but what counts is the policies. “

I don’t think so. Labour’s Marxist policies are going to crash the economy and their asset taxing manifesto will also hit property rich, income poor families hard. Marxism does not believe in private property and Corbyn’s attempted land grab will only result, like foreign failed states, in political favourites creaming off the best property whilst others are thrown onto the streets. Poor people will, of course, fare worse under Corbyn, McDonnell and the Marxists.

Vote to keep a free market and personal liberty where most people have a chance of benefiting, not for an authoritarian state ruled by self serving thugs. (For examples of how this works see every single Marxist state the world has produced - and Russia and China’s communist regimes killed a hundred million innocent people in the twentieth century alone.)

Personally I think renting should be a cheaper alternative to buying. I don't think you should be able to rent out a home unless you own it outright, to avoid rentals being pegged to cover mortgage payments and give the owner a bit of profit. I think renting should be half to 75% of the mortgage payment for a similar home. Social housing should have been replaced when it was sold off. Given that it was sold at a discount it is like the taxpayer transferring wealth to those who need it least at the expense of those who need it most. Why is a minimum wage worker paying for your discounted property when they can barely afford to rent a decent home for themselves?

Also people living longer and holding onto their properties longer to maximise on the property value for inheritance purposes means larger homes are not being freed up for larger families to buy and pushing up the house prices of those that are available. Families who would have been better off in a 3 bed home stay longer in their 2 bed flat also pushing up the prices of entry level homes.

Your argument is based on a false premise OP. You are assuming that the level of demand for homes is equal to the number of households. That is not the case. The wealthiest quartile of the country contains a high proportion of households who feel the need to own more than one property - either to have a holiday home or to provide themselves with an additional income stream from rental. International companies want to own stocks of properties that they can house visiting workers on secondment to the UK, and wealthy people from overseas want to have a UK base too. And that is before you get to the speculative investment you mention which is obviously also part of demand in free market capitalism.

If you want to limit demand to one property per resident household you have to bring in legislation to either ban or tax into oblivion all the above reasons for property ownership that are not owner-occupier or social housing. Achieving this may be part of the Corbyn plan for building a new utopia for all I know.

The housing crisis was started by the selling off of council houses. Whilst I don’t agree that they should not be for life not everyone has been able to buy. So the shortage is really about lack of social housing.

There is a lack of affordable housing in London and the south east. The rate of house building in in recent years has been staggering but it’s almost all extremely high end (£1 million+) homes in central London.

The housing crisis was started by the selling off of council houses - I don't think this is exactly true. If a family has a secure and inheritable council tenancy then there is literally no difference between the overall home-availability situation if they remain in the house as tenants vs buying the house from the council. Either way the house is not available to anyone else, and with right to buy councils are effectively exchanging future rental income for immediate spending funds from releasing the capital.

The issue isn't so much the right to buy as the inadequate conditions placed on the sale which have led to vast numbers of these homes ending up in the hands of BTL landlords a few years later. A binding and unremovable clause on the deeds that any ex-council home can only ever be owner-occupied or sold back to a social housing group with the same massive discount from market value as was originally given when it was bought would have helped enormously. Such restrictions would have kept a lid on spiraling house prices too.

I think the main culprit was the massive increase in availability of mortgage funds from the 1980s onwards. BTL landlords being able to borrow 100% of a property's value, and couples being able to borrow based on both incomes, have simply meant there is more money sloshing around, and as supply is limited that therefore causes prices to rise. But the housing market is predicated on constantly flowing price increases so policies to stop and reverse this flow would make the whole house of cards topple down. Never forget that the value of property and money only holds true for as long as the illusion that it is true is convincing enough people. That can change.

Historically, people rented their homes. Owning was a luxury out of reach for most. Home ownership only grew with the rise in available credit.
Just some food for thought

The thing is that rental prices are so high in some areas now that mortgage payments are actually lower than rent pcm. It's a LL's market too; in my area houses that are damp, run down, need work still go like the drop of a hat. When I went for the last viewing 13 other people were there. Many are stuck in a rental cycle though because saving for a deposit can be very difficult if you live in an area with high rents.

The problem with RTB, and the reason it contributed to the housing crisis is that for each sale of council property, the council were supposed to build a new house to meet increased demand

For all sorts of reasons, this didn’t happen often. So it wasn’t the sale of council housing because, as you say, those units remained

Some people don't want to relocate - and some cant relocate because their entire support system is in one place
Sometimes poor job opportunities - or none
Some people want a perfect property, not a doer upper - and some could never manage to do up a doer upper.
Some people don't want to make the sacrifices to save up for deposit- and some have nothing else they can sacrifice for a deposit.

I do wish that they would ban the practice of building of high rise flats to sell to people from abroad as investments where noone ever lives in the flat

Skipped to the end of the thread to comment, so hope no-one else got there first.

This isn't true. The mayor of London commissioned some academics to look into it, and they found that this was an illusion caused by the fact that it takes up to two years after completion for a new tower be occupied.

It would make no economic sense for expensive new flats to be left empty long-term, research has confirmed it isn't happening.

All the new towers being built are being occupied, they are a useful addition to the housing supply. I'd like to see a lot more in the appropriate parts of London. (A development containing 10 towers is being built next door to me. My only complaint is that it wasn't started many years earlier, when the previous user of the land moved out.)

About 10 towers, I should have said. I can't remember the exact count. And a couple of the buildings aren't that tall. Tallest is 20-25 stories I think, but the average is only 15.

Supply may be greater than demand as you say but if a section of that supply is not available to meet the demand then it’s still the same issue, you’ve just got to take that chunk out.

Is there a crisis btw? There might be but in what sense

@Passthecherrycoke
The problem with RTB, and the reason it contributed to the housing crisis is that for each sale of council property, the council were supposed to build a new house to meet increased demand

For all sorts of reasons, this didn’t happen often. So it wasn’t the sale of council housing because, as you say, those units remained

This is completely untrue - when RTB was introduced, councils were FORBIDDEN to build new houses with the proceeds of RTB sales - the whole point was to reduce state-ownership of assets. I believe that much later on the rules were changed to allow councils to build again, but by that time the damage to housing stocks was already done.