Can someone explain G. Brown's housing policy?

[jetjets]

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Laws of economics, supply and demand. Lots more homes would mean more choice for potential buyers. So bidders wouldn't offer as much for what little they can find, they would shop around for a good deal because they had lots more to choose from. Turn situation into a buyer's market (sellers having to compete for buyers) rather than a seller's market (sellers getting stupid prices for shacks).

Of course, Brown's plans are meaningless unless the homes are built quickly enough and in the right areas, where demand is highest. AND they have to be the right types of homes; many people cling to the idea of a 3 bed semi with garden, and won't look at flats or can't afford 4 bed luxury detached, either.

More property available to buy means buyers have more choice and sellers have to compete to sell their property keeping prices down overall.

Simple as that.

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jetjets fwiw my take on it is that you are right. There are many reasons why prices are so high lack of supply if it does contribute is way down the list. Gordon has announced this beacuse he wants to look good and fool those oh so cuddly public sector workers into thinking he cares and plans to do something about it. I gather it includes the usual double (maybe even triple accounting) only 250000 are additional houses the rest were planned allready. I wont give you my whole rnat on social housing it's too boring. The main thing is that as a poitician he must be seen to be totally divorced from any action that will cause the price of houses to drop that is ALL he cares about since he is concerned it would be a vote looser.

rant even!

In my little corner of the south-east, developers are buying up every single piece of land they can - even demolishing beautiful old houses because they come with a decent garden and they can build 20 flats and a few town houses on that area. Problem is that many of the new builds aren't selling. One block of flats has been on the market now for about a year and only about 2/3rds have been sold. Yet two more blocks are in the process of being built about 100 yds away.

Add to that the number of properties in town which are empty because they need a lot of work doing to them and it seems utterly nuts to keep building new homes.

It is a cynical avoidance of responsibility - on the part of G. Brown and also the media.

Insane house prices make people who already have property feel rich, at the expense of young families. As anyone who matters is already established, any policy that reduces the cost of housing is a vote loser.

Instead of mentioning the reasons for increased demand and desperation to buy houses - pensions scandal causing middle aged people to invest in property; high immigration levels; poor tenants rights making parents desperate to buy for some security of tenure...

Or even the banks lending at ever higher income multiples, meaning that more money is chasing the same amount of accomodation. That is the government's fault. They could easily have restricted the banks as other countries do but their friends would not have been pleased.

Or the planning laws that ensure that only rich, well-connected developers can build. Allowing them to charge insane prices for jerry-built houses and poky flats without storage space.

No - instead the government will offer to do a little bit of tinkering so that they can pretend to be addressing the social problems caused by their own policies. Younger families will have a reduced quality of life and some of the best and brightest will leave the UK.

And the media will twitter a little but never really address this issue. Because even if it destroys this country, they feel rich because their home is now "worth" five times what they paid for it.

unfortunately its not simple supply and demand and more houses being built wouldn't necessarily bring prices down.
there are so many people now who own multiple properties. even very ordinary people not just the super rich. If you can get a second property then you can get a third and a fourth etc because the rent from this one pays for the next one ,onwards like dominoes.They buy up all the property and then people who cant afford to buy have to rent from them. As soon as prices start to fall they can buy even more houses and so prices probabaly wont drop to the point that the low paid can afford them.
We need exceedingly heavy taxes for multiple house ownership ,but that aint gonna happen because all these 'socialist' politicians are multiple house owners themselves.

If the governement reformed tenants rights I would not be so angry about this - we cannot afford to buy a home, so we rent and have had to move every couple of years because the landlord decides to sell up or because they refuse to carry out repairs... we have no security of tenure and when our dcs are of school age that will be a real problem With two good private sector incomes we are not entitled to any of the affordable housing schemes or to social housing. There must be a lot of people our age in our position. I suppose a lot of them just put off starting a family.

I live in California and houses are expensive here, too. I made the mistake of buying one and not selling it before I bought the next. Now the markets over saturated with houses and I am stuck with two payments. Ouch! In California even in the cheaper areas houses run an easy $300,000 US dollars. In my area the best you will get is $500,000. And heaven help you if you want to live near the beach because condo go for over a million.

The FT seems to be the only newspaper on the case

See here www.ft.com/cms/s/b97ad1c2-30d8-11dc-9a81-0000779fd2ac.html

"Pity the plight of the 80s babies"

"Few 80s children yet own a property and their financial prospects have been devastated by the rampant rise in property prices. The Nationwide Building Society calculates that for first-time buyers, house prices have risen from 2.3 times average earnings 10 years ago to 5.3 times today. With the average property now selling for roughly £180,000, it means today's first-time buyers need to borrow an extra £100,000 just to live in the same house as an equivalent person a decade ago. Servicing this additional debt alone costs an extra £100 a week in interest.

Let us put this unplanned redistribution from younger to older homeowners in context. It is the equivalent of reducing by a third the average full-time net pay for someone in their mid-20s. As a redistributor, Gordon Brown was a wimp in comparison. "

Just thinking about this - I guess that most posters on Mumsnet are homeowners. But lots of them must have had children in the 80s who are being affected by this now.

Why so little interest in this subject?

Perhaps one solution is to make longer term mortgages more accessible and less costly in charges.

I'm 42, lots of my friends took the plunge property wise in their mid to late 20's. Therefore, assuming we stayed put or made sure we did not remortgage for another 25 years each time we moved, we'd be mortgage free at 50-55.

As retirement age is now 65 and rising, is it reasonable to consider 35 year mortgages the norm and rebase the market accordingly ?

Another thing that GB should consider is the concentration of employment opportunities. If the government took the plunge and relocated some functions/departments or offered tax incentives to large employers to relocate to areas with lower housing costs and higher unemployment, house price inflation would perhaps not be so bad in London/commuter belt and the home counties.

Upwind and co you are all so right, the only thing wil be the proper tax treatment of multiple properties why is it right I can run my business tax free but can't put a roof over my childrens heads.
Gov. support for inflated house prices is so wrong there are many things I don't want to spend my taxes on but using them to keep a bloated property market going is certainly high up the list.
Devastating is right there was a thread on here where most people admitted they wouldn't be able to buy their own house any more.
However I have come to the conclusion that interest rates are in part being fueled by high house prices therefore the only thing to bring them down is getting the prices down. GB will see I'm right soon
I'm also rapidly coming to the conclusion that we're off out of it soon!

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You need to ask my sister....

she is the assistant economic advisor to this new housing advice depratment... there are only 12 of them in the whole depratment! you can blame her for the statistic too.

She has explained it all to me in detail and while i cnat explain it, how she explains it DOES make sense to me!

More houses = more supply = lower prices

tat's the theory

jetjets I know what you mean. We were looking at buying a 50% property new build by us, looking at £60,000 for half the house. When they are built you then find out that they are now worth £90,000 for half a house and you still have to pay rent on the other half!

supply and demand will work like roads build more roads more people traval on them, build more dwellings more households will spring up to occupy them. With roads it's a fact can't see why it wont be with dwellings.
What's needed is proper tax treatment of btl, it will come there are more and more calls for it.
Shared ownership/key worker also a con in many ways imho, you get half the house and all the upkeep and you get to buy at a premium. Again I don't like to see my tax spent on boosting the property market at so many others expense.
Have heard many people say all the money to be made in property has been made, many of my friends landlords are getting out, they have just cut value of 2 commercial property funds. One good friend who is such a bull sat next to me at lunch the other day and talked for half an hour about how sure she was the market was going down!
It's a bubble....
jetjets keep meaning to write to GB and now I need to ask him why he has fallen under the power of property developers and their 'lack of supply' cry, maybe I should write to nannyls sister instead, she might even reply

I haven't bothered to find out because I know it will be bullshit no matter what.

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I must be missing something here, why wouldn't you expect to pay rent for the other half of the house ?

fedup,I did expect to pay rent on top, I was stating that to explain how expensive it would be, that it wasn't just £90,000, there was still rent after that.

surely fuww, if you rent half then the HA/whatever should be liable for half the repairs ie have same relationship as normal landlord? It is also common for the shared ownership stuff to be the bit at the back overlooking the bins they can't sell any other way and for the price to be increased cf normal commercial for same type of property.