The housing crisis

[MotherOfRatios]

Incoming rant, interested to hear what others think the solution is.

I'm mid 20s and I work in public affairs so not earning lots mid £30sk
My job is really focused in London and I do check the civil service website as I'm aware that there is jobs opening up in the north but I haven't found any that I like. Also many jobs continue to be in London for my type of work and no I don't wish to change sector. I love my job and the sector that I work in.

As one thing I see in regards to the housing crisis is change jobs/change where you live. So the above is the caveat that.

Renting is becoming more unaffordable. The average price of a room in London is about £1000. That is also a room, not a flat. (See article below) yes you could move further out, but I am in a job that requires me to be in the office four days a week for my organisation, and I have calculated the cost from commuting towns and it isn't any cheaper, plus I still enjoy a night out with my friends and as a woman I wouldn't feel safe getting an Uber back too my town because trains often don't run at 3am in the morning.

https://www.standard.co.uk/homesandproperty/renting/revealed-the-explosion-of-the-ps1-000-room-as-swathes-of-london-become-unaffordable-to-renters-b1072776.html

Some might say well buy a house or buy a flat, but I come from a black working-class family and I don't have the money for a deposit and rent takes up most of my earnings therefore I can't save for a deposit. Plus I've read various negative things about the shared ownership scheme, so even that is an option.

My tenancy on my current flat with my flatmates is coming up soon, and my landlord Landlord wants to raise it by a large amount, we have been looking at new flats, and the current prices are just so unaffordable.

Obviously they should build more social housing, but we have a problem in this country of wage stagnation combined with high house prices.

Does anyone else just wish the government would actually focus on the housing crisis? I have been thinking about low-paid workers in London and how if they can't afford to rent in London does that mean we'll see a mass exodus of waitresses and baristas? Then what happens to the economy? It really irritates me how the government don't take this seriously.

I think it’s just too easy to blame foreigners. People with empty houses do pay a penalty and extra council tax. These houses tend to be in areas that’s so expensive even if it were to become rental it will be out of most peoples price range. Let’s not forget these said foreigners have paid extórnate stamp duties and if selling also income tax. Don’t drive away the ultra wealthy please as we need their tax to help this already crippling economy.

Like I said above all the millions of news builds that were built for help to buy should have been for social housing. Now these are economically viable and efficient way of increasing rental units. Not trying to get the 10mio pound South Kensington guy to put their house on rental that’s be ludicrous.

I used to work in an LA and disagree with you

some foreign investors buy 20-50 flats in a block and sometimes attempt to rent but people can't afford so they sit empty

This is becoming less attractive to be part if portfolio now because of two folds 1. Interest rate is so high now so your post tax rental returns need to make sense. And the structure of tax around rental income and what can be offset against income is changed so much a lot of these investors have also left and sold their portfolio —> less rental units available 2. If you plot the price of flats vs houses you will realise the price of houses is a better real asset investment. If foreign investor that need to just ‘park cash’ somewhere they just buy one unit in Knightsbridge freehold and sit on that. Instead of dealing with ever increasing service charge , and ever increased supply of new builds on leasehold.
This used to be true when flat rental yield made sense. But look they are still in the equation I.e. available rental units.

We need a massive social housing building programme. Actual rental properties rather than ways of owning which actually are quite resstrictive and expensive

The rental rates need to be tapered as a percentage of NMW rates, so if you're on 18k a year for example you shouldnt really be paying more than 6k a year on the rent.

We need millions of properties to be created.

30x monthly salary where I am so approx £36k. What happens to minimum wage people, where are they living?

This is a start and what we need more of

https://www.plymouthherald.co.uk/news/plymouth-news/plympton-military-estate-new-lease-8290186.amp

there are plenty of derelict sites. There are also many carparks. If there was more housing in London, fewer people would need to drive in - improve public transport, and use carparking space for housing.

some people in London have a carparking space on the road, outside where they live, and another at their place of work. How is it OK for a car to have two places to be, and a human to have nowhere?

Good podcast series on the awful housing crisis. So hard in London and SE.

https://podcasts.apple.com/gb/podcast/crash-course-with-michael-walker/id1653753850

This podcast episode is v good.

“In her excellent book "Big Capital", Anna Minton explains how the influence of international finance has intensified the housing crisis in London, including by setting the scene for the displacement of thousands of families via estate demolitions. I was lucky enough to sit down with her for a discussion of the ideas in that book, and I think this became a really clear and expansive treatment of hyper-gentrification.”

https://podcasts.apple.com/gb/podcast/crash-course-with-michael-walker/id1653753850?i=1000590584292

London is the money laundering capital of the world. Russian oligarchs own great swathes of the capital. They were the ones, who seriously pushed up property prices.

Totally agree that it needs a mass social housing build like the ones that followed the war. Good sized houses, bungalows, and flats with gardens. Cover all ages and family setups from singles to families.

No right to buy.
The definition of 'affordable' needs to be affordable to rent or buy on NMW without government assistance. Not the current farcical situation.
Every MP should be held accountable for the homelessness in their constituency.

Completely agree OP.
The private sector has completely and utterly failed to provide safe affordable homes and it's long past time government should have acted on this and built council housing. I also hate this idea that council housing should only be for those in desperate circumstances and they should be made to move out if their circumstances improve. Council housing should be for everyone, as originally planned, to make secure homes.

Another big issue is nimbyiam from people comfortable in their own homes, blocking developments. And I say all this as an older person in a big house, no mortgage and rental property. IMO social housing should be the landlord of first resort not last.

nothing wrong with "right to buy" but something very wrong with "right to buy to rent out". It should be illegal to rent out an ex council property as a private landlord

true tho less true during Russian sanctions. I was actually outbid on my house but that guy with substantially over asking price got turned down later because money came from Russia. Now the load of wealth are from Middle East / Asia. And our American friends has always been around. We would be naive to think any country / any government is not rife with corruption and unsanitary behaviour. Just look at our own cabinet on daily news.

@Greensleevevssnotnose it's so wrong

In London specifically prices are inflated because it is viewed as a relatively safe investment by global investors and, unlike many countries, there are no restrictions on international buyers purchasing property in the UK. Not just the super wealthy, but consortium investors who are gambling long term on prices increasing and are buying properties off plan and holding on to them (empty) as part of their portfolio.

Also I think you misunderstand tax on property and the benefit accruing to the treasury. On sale of property, tax is only paid on any increase in value (capital gains tax, not income tax). Often the properties are held in complex corporate vehicles specifically designed to ensure as little tax as possible is paid on disposal.

Far better for the economy to have people living in the available housing stock. Working, paying income tax and using the local shops and restaurants etc.

There’s blocks of flat and housing estates going up left right and centre. We don’t have shortage, but we do have an issue with falsely inflated value. But how do you step back? All the middle earners over the past 10 years or so who have put everything and more, mortgaged up to the hilt ? You can’t push them into negative equity just to reset!

OP, if I was earning 30k I wouldn’t base myself in London. Surely there’s roles outside of London you can take for the same salary but cheaper cost of living? Appreciate you might be starting out on a career pathway though

I agree with you OP it is awful. Also agree with a pp that this is a global problem. Economies across the world have been fucking with cash, all this quantitative easing, money doesn't mean the same as it used to. So people who have money have been hoovering up assets (and gold) like crazy. Unfortunately housing is an asset and our deregulated city banking system enables access to our assets for all sorts of shady operators both home grown and far flung. I didn't see Boris stand up to Putin & Co when he was mayor of London for eg. He turned London into one of the major money laundering centres of the world.

The only places that are ok in all this are countries that are relatively flat socially and that have effective brakes on asset acquisition and profiteering. The rest of us are fucked.

I did used to think that a labour government might help but actually the last one we had was perfectly happy when the initial upward price curve started under them and I don't think the next prospective lot will be much better.

At the very least in the short term we need rent controls and an actual system of asset and property taxation - council tax is a load of bollocks given that bloody tenants pay it. And then the billions that will shave off the benefit bill and the increased tax take, we use as leverage to borrow the initial costs of a cohesive and comprehensive building programme in the areas where people actually live and work. A few years later that would all be ticking along nicely paying for itself through rents collected and the people living in the properties would be out and about in towns and cities spending their money instead of handing over all their wage to a bloody landlord.

There, that's my solution. Vote for me.

@Loria how is council tax bollocks and why should the landlord pay? Is it not to provide services to the people?
where does your increased tax intake come from? Are properties not being built where people live and work?

Not affordable ones, no. My housebuilding programme would be for affordable homes. Increased tax take from asset tax and property ownership tax. Wouldn't get everything but it's better than nothing. It is incredible really that we don't have a property tax system in the UK. Even the USA has it!

Also we'd save billions by capping rents. We're spending billions of public money every year topping up people's rent money when they can't afford to pay their landlords. So that's extra cash in pocket straightaway for the Exchequer.

Crown land ie land belonging to the king. Surely he can spare a bit for his commoners. He's the largest land owner in the country.

@Loria ive not done enough reading to comment on the pros and cons of rent control to comment.
who would you target for increased tax on property and asset? The middle class or just the insanely rich? As a relatively high earner with a second property would I be a target?

This happens when LLs do not increase rent for years. The tenant has to face the shocking reality they've been subsidised so long and the area is now unaffordable.