To think this is a ticking time bomb (people priced out of housing)

[Batmanisreal]

It’s becoming clear that there is a problem with people not being able to afford housing like they used to be able to. This has been made worse by the introduction of right to buy by Thatcher in the 80s which reduced the numbers of council houses. The price of housing is going up and up, so more people are having to rent on the private market.

So what happens to these people who are privately renting homes, when they get to retirement age? If they can’t afford their rent?

I was lucky enough to be able to buy my house. I have young children who, by the time they get to the age I was when I bought my house, will probably not be able to afford to buy like I was. There’s a very big chance they will have to rent, possibly for the rest of their lives.

People who rent on the private market are at the mercy of whatever rents the landlords want to charge for those properties. And with more properties being rent out as short-term lets this is only going to make the situation worse.

I worry that we are heading for a situation where elderly people will end up on the streets, because there won’t be enough affordable or social housing to supply them with housing if they become homeless in the event of them not being able to afford their private rent anymore.

As a parent, I just find the whole situation so depressing.

Wrong thread

Rental and real estate purchase prices are high because demand exceeds supply. To lower them, demand has to decrease, or supply has to increase:

https://www.investopedia.com/ask/answers/040215/how-does-law-supply-and-demand-affect-housing-market.asp

Landlords also can't charge whatever they want. No one will rent a flat for 5k per month if comparable flats rent for 2k.

Tax, tax, tax. It’s what governments do. As a PP says, the housing benefit bill will increase and then there’s the state pension, which may be means-tested so money can be funnelled from there to fund the poor pensioners.

…when was the last time you saw an application to build Social & Affordable Homes, that wasn’t met with a protest / petition / outrage etc. How many “hyper-local” parties have been voted into Councils with the ticket of stopping any more housing being built?

HMOs are being vandalised, despite 85% of the people who live in a HMO being born & bred in this county.

Private Rents are high because we stopped seeing properties as homes, and instead saw them as a money-making machine. Massive investment corporations snapping up housing and using it to fund pension schemes abroad.

The government are looking to restart Council House building, so hopefully that’s a start.. but cue the protests.

I think there are things the government could do that they aren’t doing at the moment. For example, I think that there are ways they could make it less appealing for people to let homes out on a short-term holiday let basis. And I think the government should be making it less easy through taxation methods for private equity firms to be able to buy up residential housing to let out.

The government seems to think the answer is to build more council housing, but I don’t think they will be able to do that on a scale that will be sufficient to address this problem.

Yes, we need more council housing for those who cannot afford to privately rent or buy a home, but the government should really be thinking more about how to make it more of affordable for people to buy homes, and how to control the extent to which private landlords are able to increase rents, and what mechanisms they can use to restrict the activities of private equity companies in relation to residential housing.

The demand is too high.

Legal migration has been far too high since Covid, which has made it all so much worse.

People all over Australia are living in their cars because of this very situation.
Our government if finally going to reduce immigration. Other parties are promising to cut immigration until Australia can house it's population.
We are lagging behind in infrustructure of all types to meet the needs of our communities.
The cost of COVID (increased social security etc) is keeping the economy in debt. The ability to pay off debt is hampered by increased oil price and World conflicts.
It is depressing, yes, I agree.

It’s the massive investment corporations based overseas that worry me the most to be honest.

I think they should be banned from being able to buy residential housing in the UK. Is morally wrong in my opinion.

I wish the government would do something about this.

But AI is going to be reducing jobs more and more, which will in turn, reduce the tax intake.

More and more people will end up having to rely on state benefits. At some point that will become unaffordable if there isn’t enough tax revenue coming in and not enough wealth generation.

What then?

yep, it’s the root of many issues

House prices were at a low in the mid 1990s. This was the time when a lot of my generation (I’m mid-50s) were buying their first home so even if they’ve had to buy into stupid prices after that, their initial property wasn’t stupidly expensive so that helped. My mortgage is paid off now and the money that I inherited from my DPs will be passed to my children to help them buy somewhere. I think this is where the major divide will be - people in the position of my family, of which there will be many, and people who are not, of which are will also be huge numbers. DH’s friend is also mid-50s. He and his partner have rented all their lives but recently all parents have passed away and they are looking to buy their first house as a 100% cash purchase. There is currently a big divide and it’ll get worse. Maybe things will even out over time as the smaller number of children being born feeds into the population and the bulge of us older people falls away.

Most of GenX-ers are fine though, prices were not too high yet when they started their adult life, it’s Millenials I’m worried about (I’m saying this as someone who is between the two)

YANBU, it’s a ticking time bomb. My DAunt and DUncle live in a flat above a shop that came with my uncle’s low paid job; they pay rent still in retirement and only have state pensions. They don’t get pension credit or housing benefit and have very little else to live on. This situation looms for millions.

I think you're right - it's already getting ridiculous. Housing benefit (ie. the taxpayer) is already paying so much of people's rents it is crazy, and artificially propping up the market...
Where I live in the South East, it's already unaffordable for a person on what used to be considered a decent wage, eg. £50k, to buy even a 1-bed flat. That's the top of the teacher or nurse's pay scale...

I'm hoping Burnham will "do something" about housing.

Doing something will necessitate most of middle England losing a fair amount of cash though.

There isn't really any good way to fix the housing market and not lose existing owners of houses money.

So I'm not pinning my hopes on it.

OTOH he might decide that the market is so completely screwed that he may as well take the opportunity and the popularity hit.

But the government can still raise taxes - for example by increasing CGT or/and IHT. Also think they can raise money from making the state pension means-tested.

The problem is really that the government doesn't legislate against second homes because it's mainly wealthy people who have them and they are the ones keeping governments in power. So it goes on.

That’s one of the issues about “fixing” the marker. What “fixing” means is “making more affordable on an average wage”.

If we build enough houses so supply matches demand (ignoring the planning protests), the chances are that the price of current houses will come down … now, this is not an issue unless you wish to sell.. so if you can sit tight (or had no intention to sell) not a problem.

There is no doubt that a growing population has put pressure on the market - but so has the ageing population, increasing divorce rates, concentration of jobs in Big Cities .. all sorts of things.

The Government has plans, but nothing comes for free

I think they’ll be more multigenerational living. Plus the government will keep raising the retirement age so that people who don’t own a home won’t be able to retire.

While it may be higher in holiday towns, the share of second homes is too low to significantly affect prices overall.

www.ons.gov.uk/peoplepopulationandcommunity/housing/bulletins/numberofvacantandsecondhomesenglandandwales/census2021

• Of all dwellings, it was estimated that there was a slightly higher vacancy rate in Wales (7.0%) compared with England (5.4%); Wales also had a higher percentage of second homes with no usual residents (1.2%) compared with England (0.6%).

Agreed but imagine the uproar if government tried to decrease / remove it.

This will help with social care (of the elderly) and general societal cohesion.

You mean people can’t afford to save enough for their pensions as cost of living NOW is so fucking ridiculous that planning for the future is impossible.

Successive governments have done nothing about reducing the price of houses.

In fact they have even supported them through madcap schemes like help to buy.

From what I can tell Burnham has his own idiotic scheme that will help to keep house prices high. But maybe some of the other things he will do will lower the market at the middle and top end, which is probably where the issues are at the moment.

My belief is no government will do anything significant about this until they are forced/have outside factors they can blame instead. Maybe the countries current
financial issues are somewhere approaching this.

Every PM from Tony Blair to Keir Starmer has done nothing about solving this problem, which is now so significant it is probably putting a fair drag on the economy.

@Nincompoono I meant what I posted. I didn’t make a comment on why people aren’t saving enough.