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.

There's a lot of poverty in the US and not a lot of benefits.

I don't know how many new jobs AI will create in the future, I hope it will mean people won't be doing boring repetitive jobs and will be filling more fulfilling roles. To an extent that happened with the rise of computers which some people also thought would put everyone out of a job. It did make redundant a lot of people working in things like telephone exchanges, switchboards, typing pools, etc. Working life now is vastly different from what it was before computers and mobile phones. And it will change again with AI we just don't know what it will be like in 5 or 10 years from now.

Maybe there will be more communal living in the future, which might be a good thing for older people, single parent families and young people. The bigger multi generational families used to work well and a well designed community could work like that. An awful lot of people are lonely currently and need support from other people as well as money.

I have seen this in my area of Scotland as well but all that’s happening is those who are coming here from more expensive areas are pushing up the prices of buying and renting here to the point where locals now can’t afford them, this then coupled with the fact that many retire here and we are struggling to care for them in their old age, the nhs and social care is on its knees here

This is a very simplistic view. Basic economics not only indicates supply and demand but also demand elasticity. I would say housing is inelastic because people have to live somewhere.

The inflated cost of housing is doubly impacted by reduced supply of new homes and an aging (home owning) population. Not only are young people facing a future of never owning a house, but also older, single/divorced people. Our low state pension only suffices because so many older people own their own homes so have minimal housing costs that are easily covered by SP and private pension. How people will manage in future when they are in life long rentals is a worry. In Germany, where renting is the norm, the state pension is 50% higher.

Living standards are declining and housing will be just one aspect of this. In some ways, things will return to how they were before the war. I remember my husband's grandmother describing how she "took lodgings" after the war with her husband. They rented a room in the house of an older couple and they stayed there until the first wave of council houses were built.
So yes, there will be lots of house shares, lodgers, and renting will become the norm. Buying will be much rarer, as it is on a lot of the continent already.
Housing will take up a bigger portion of household expenditure. Things like holidays, furniture, new clothes etc. will fall as a proportion of expenditure. In other words, a massive drop in living standards.

As someone else pointed out there are many many many empty/abandoned/second homes and empty shops and offices in this country that could be used for housing first instead of just building crappy boxes on green space, cramming in as many as possible. Also stopping overseas investors from hoovering up property to leave empty could also help

We have enough housing. We just have the wrong people in the wrong places.

I've just been for a walk around an area with huge houses - it's clear that most of the people living in this area are older. It is entirely likely that they have empty space in their house, that it is too large for their needs, difficult for them to maintain and expensive for the utilities.

At the same time in a nearbye city, there are huge numbers of young families in temporary accommodation, living in a single room.

Add to that the empty housing all over the place, owned by overseas investors who should be strongly disincentivised to keep it empty and AirB&B, which should not exist, also taking property off the market.

If I'm in a socialist mood, I would strongly incentivise through an annual property tax for people to be in the right size housing for their needs.

Key personnel should be near their work in subsidised housing (rooms). Older people should be encouraged to move from rural large houses into urban flats where it is cheaper and easier to supply them with health and care services. Individuals should live in flats or rooms because that is their need.

Won't happen because people have stopped seeing housing as shelter and now see it as 'investment'

DD and her DH have just bought their 1st home after 12 years of living together and paying rent. It's a lovely 2 bed bungalow with a large garden. They are child free by choice and it will be their home until 1) they die or 2), they decide to relocate when they retire. After so many years living in a flat they weren't prepared to live in another.

@user1471538275

We have enough housing. We just have the wrong people in the wrong places.

We also have a lot of empty premises that could be brought back into use or converted into homes. Such as all the "flats above shops" on High Streets that lay empty for decades, even before the shops below closed down - you can tell by the frayed net curtains etc. All the empty homes when the occupant has gone into a care home, sometimes for a decade or two. All the empty ground floor shop fronts that could be converted into small flats. We just need the political will (central and local) to actually stop sitting on their hands and make it happen. A lot of the problem with High Street shops/flats is that the councils won't grant planning permission to convert back into residential as they're in "commercial" zones, even though historically, many would have been residences (at least above the shop if not the ground floor too). Add into that building regulations that make it hard/expensive to convert, often due to steep staircases, rooms too small, lack of insulation, etc etc.

But yet, there's a lot of empty/unused residential space in the run down regions, mainly because there are no jobs there so people can't return to home towns for work once they've finished Uni and they stay in their Uni towns or move to big cities for the decent jobs. We could encourage/inventivise employers to move back or open branches in the regions to stop the centralisation and jobs sucking people into a handful of already congested large cities.

Yes, freedom of movement will mean more people coming to the UK. It's an electoral ploy to appeal to all the people who've never recovered from the leave vote. But it will put even more pressure on housing.

Isn’t the real reason the Uk population has significantly increased and the housing stock hasn’t? If there was ample housing (for rent or for sale) prices would come down a bit, not much though, because the costs have gone up uniformly. This is the issue with every government funded service, the increased population has resulted in pressure on all infrastructure.

Yes, and it's getting more common. When I was growing up it was unheard of. Now it's common to see unsightly tents and vans in the city centre and in some other, perhaps poorer, neighbourhoods.

It is patchy though, so anyone living in a better off neighbourhood may not come across this at all. But I think it will get more common as time goes on, unfortunately.

Absolutely agree with this 100%.
I am fed up with hearing that people are stuck in the rent trap and cannot afford to buy, unlike their 'lucky' parents, when the expectations compared to their parents' are off the scale.
This situation is not helped by starting a family before you buy a house, so you jump straight to wanting the 'family house in a good area' as a ftb. To someone my age, this was about three rungs up the ladder, from a 2-up 2-down is a less-than-perfect area as a starter home.
It has always been expensive to move, houses in London and the SE have always - in my lifetime at least - been out of the reach of many, saving a deposit requires denying yourself nice things for a while - none of this is new or unique to 30 somethings.

Yes, it's pretty bad, in some places more than others. Some places may not have this at all, other places it's common. People living in tents and vans is a symptom of a housing market that's completely dysfunctional.

Where do people live during the "don't rent" bit?

There are many reasons why someone is not working FT. Being a single parent, a carer, or disabled.

A friend of mine who was now 70 was planning to use his private pension to pay for his care when he got older. However he lives in a social housing flat and now hes retired hes expected to pay his rent and council tax with it until its down to £16,000 or below. You get help with social care at £23,000 He had £29.000 in his pension. The pension co charged him £6.000 to transfer his pension to his current account so he can use it to pay his rent. So its now down to 23.000 which is the lowest amount you can have before getting help with social care anyway. But as its going to be spent on the luxuries that are rent and council tax then its moot anyway. Saving does no good in this situation.

This is laughable

My immigrant parents bought their semi detached London home pre dc in their 20s as FTBs then moved again to a bigger home in their early 30s with one worker. That 2nd property was 60k ish in the 80s, 1.7m today. They had a tiny deposit & did interest only. Similar story for in-laws.

I bought my London flat as a FTB in the 00s with DH pre dc. This was possible due to decent salaries & more importantly living at home/help from parents in order to save up the big deposit. We made 200k on it in a few years. I did nothing apart from some paint. This enabled me to move to a house but I still can’t afford anything like my parents or in-laws despite us both working.

Timing is everything & younger people are disadvantaged. Look at birth rates for gods sake, people are putting off dc to afford secure housing.

It makes far more sense in this economic climate to skip the flat stage.

Not for pensioners. Although I guess that may change.

What will happen, and what is already happening to an extent (there are pensioners now who don't own property, although they're not as many in number as there will be in 15 years or so), is that the state will cover the shortfall through housing benefit/possibly housing element of universal credit in the future, for those pensioners who rent. A lot of them are able to get LA housing because there is more availability in the over 55s developments so at least the payments to cover their rent don't go to private landlords.

But, there's a broader issue in that in order to qualify for what is after all a state benefit, those pensioners must have less than £16,000 in savings including personal/works pensions. So for anyone facing this prospect in the years leading up to reaching state pension age there's a clear incentive to spend everything before they get there. Or not to save at all.

Because without housing benefit/housing element, they'd have to fund their own rent and they'd also lose eligibility for any associated benefits and freebies which all add up. Even LA pensioner housing is at least £450-500 a month and in many cases more because often these developments have service charges for ground maintenance etc. The typical pensioner who doesn't own property is unlikely to have sufficient personal pension/savings to cover this plus their living costs - you'd need a pot of at least £200k for that. So they're actually way worse off having savings/pension pot over £16k and if they have any sense they'll make sure that they don't. Which is a related time bomb the government doesn't seem to be giving any thought to.

No, that's not the case. There are roughly enough dwellings to cover the amount of households we have.

When economists talk about "supply and demand" wrt housing, "demand" doesn't mean "the number of people demanding a house". It means the amount of finance and credit available in the round for the purchase of land and property. In the UK and many other first-wave industrial countries that amount has snowballed since 2008, sustained by things like quantitative easing (all money is worth less now), liberalisation of banking regulations, specific schemes that benefit international investors. Because no one at the very top of the pile wants to just have money, that's pointless - they want assets. They want art, antiques, gold, jewels - and they want property and land.

How do you work that out? A house price doesnt go down just because the person died, their relatives sell it for an even more inflated price to try to recoup inheritance tax. It doesnt just get cheaper because the old person died...

In tents and vans.

How is that acceptable?

I was just listening to a podcast and this came up. The guest was remarking that in the US the median age for being able to buy your first property is 40. They went on to say that the reason people are priced out of house ownership is because in the last 25 years western governments have been printing money and devaluing currency. Once you adopt that strategy it’s very hard to keep inflation stable and as it stands the debt keeps growing meaning government spending is servicing the huge debt mountain which continues to grow.

We tried austerity which didn’t work. We tried to spend our way out of it which didn’t work. We are now trying to tax our way out of it which also won’t work. What’s comes after that is a failure of capitalism and that’s why socialism/communisn tends to be the flip of the coin as that involves a redistribution of wealth which funnily enough, also doesn’t work.

Its not acceptable. In fact living in a van parked on a street is illegal.

But it happens and is becoming increasingly common.

Nothing to do with the 7 millions or so net migration into the country since 1997, then? Almost like adding a city the size of London by bringing people in and then wondering why we don’t have enough houses. Utter madness.