Will the housing crisis ever be solved?

[ByJustScroller]

Do you think there is any hope for young people wanting to buy in? I have friends and family where I live but now I am priced out. I am not just competing with locals but people who live in London and the ever increasing new arrivals. Housing supply has not kept up with demand for years and this government has no plans. I will be renting for ever.

How do you influence/control who captures the value? That's the million dollar question.

You were the one who introduced the "lords" and "new peasantry". If you agree successive governments and decades of policy failure created the problem, why turn it into a battle between two groups of ordinary people you have chosen to label in such a divisive way?

So now "homeowners" is supposed to mean NIMBYs, BTL landlords, second-home owners and basically anyone who doesn't agree with you on property tax. Technically they are all homeowners, but someone owning one home that they live in is not the same as a BTL landlord or a second homeowner. They may or may not be NIMBYs. They are very different groups with very different motivations. Most homeowners own one home - the one they live in, for security, not profit.

Sure NIMBYism does exist. But it is also a very convenient label to stick on anyone who quite rightly questions a poorly planned development. Take Adlington, which sits right up against Greater Manchester, our illustrious Leader's former Mayoral stomping ground. I mention that because you mentioned Manchester. Up to 20,000 houses proposed on Green Belt. The so-called "NIMBYs" asked questions about infrastructure, affordability and quality of life for new and existing residents. You know, the rather boring stuff. Roads, rail, schools, doctors, water, sewage and who was actually going to pay for all of that. How much were the cheapest market homes going to cost? Around £400k!!! I understand that there are some very affluent villages in the area, but average salary in Cheshire East is c£40k. Who exactly is that affordable for? Someone on £40k isn't getting anywhere near a £400k house on an ordinary mortgage, even on a 40 year term. Sure, locals with more money or moving into the area could have snapped those homes up. But what about ordinary local people? or those who need social housing? Tough luck? What about the already creaking services? Tough luck if you can't afford private healthcare or private schools, eh? What about taking agricultural land out of food production in an increasingly volatile global market? Yes those terrible NIMBYs stopping all of the affordable, well supported homes coming on the market....

Are you really going to argue that every challenged development is selfish NIMBYism? Or is it reasonable to ask whether building 20,000 houses is actually the same thing as tackling the housing crisis for ordinary people? Especially when a developer with a fiduciary responsibility to maximise profits is involved.

Now let's look over the border at Manchester, the PM's actual former stomping ground. It has done really well from a development perspective. Credit where credit is due. Huge numbers of flats have gone up... Many of them completely unaffordable to people on ordinary local salaries. And yet affordable and social housing that planning policy would otherwise have delivered from some developments has been greatly reduced or just not built at all. Often on the basis of... what's that pesky word again? Viability.

So again, where does the value go? If development is booming and developers are making money, but we still aren't getting enough genuinely affordable or social housing, how exactly does blaming the person living in the one home they own solve it? You know that it doesn't, yet you push the selfish lords and peasantry agenda. Why?

Questions should be asked, especially where developers have benefited from government-backed finance or other public support. If the public is helping underwrite some of the risk, I don't think it is unreasonable to ask where the public's share of the value created is.

You ask why government isn't building the right homes in the right places. Well that is exactly my point. Why aren't they? Why aren't suitable brownfield sites being targeted first? Why aren't we getting the affordable and social homes promised or needed? Why aren't we making sure the infrastructure is there? Why aren't developers made to honour their affordable and social housing commitments? Vilifying ordinary homeowners as some sort of feudal "lords" and demanding increasingly onerous taxation on the one home they own - one they have paid tax on and purchased with already-taxed money - starts to look rather like back door asset stripping of an asset the state doesn't actually own.

Wanting other people to have that same security doesn't require taking it away from those who already have it. Maybe we should concentrate on building a better system rather than taking stability from people who might already have, or be on the way to having it.

I think stop needs to be put on residential homes being bought as buy to let investment

No it won’t . There are multiple problems with the existing housing market and we’re building too few houses for too many people . No it won’t be solved for normal average wage earners .

We're also not dealing with all the empty properties that could be converted into residential, i.e. derelict/empty flats above shops, derelict/empty shops, derelict/empty boarding houses and hotels, brownfield sites, derelict/empty office blocks, and that's before we think about the empty houses, sometimes left empty for a couple of decades, when someone goes into a home but the house isn't sold until many months/years after they die, by the council who hold a legal charge by then.

You were the one who introduced the "lords" and "new peasantry". If you agree successive governments and decades of policy failure created the problem, why turn it into a battle between two groups of ordinary people you have chosen to label in such a divisive way?

Because "ordinary people" have bought into it. We can all wave our hands in the air and say "it's the government and no ones fault". The buck has to stop somewhere. Why is the UKs housing market such a mess ? Because enough people want to elect governments that keep it that way. It's kind of obvious that the way not to create an underclass/overclass divide is not to have an underclass in the first place.

Are you really going to argue that every challenged development is selfish NIMBYism?

No and I wasn't. But most of them are.

So now "homeowners" is supposed to mean NIMBYs, BTL landlords, second-home owners and basically anyone who doesn't agree with you on property tax.

No. These are just examples of ways in which homeowners erect barriers to entry to the market to preserve their own wealth and lifestyle while attempting to deny others the same opportunity, consciously or not.

You ask why government isn't building the right homes in the right places. Well that is exactly my point. Why aren't they?

It's kind of obvious. Because if they built enough good homes at affordable prices they would crash the market. No one is going to want to pay £stupid for a run down overpriced pit when there are numerous cheaper better places available.

Wanting other people to have that same security doesn't require taking it away from those who already have it. Maybe we should concentrate on building a better system rather than taking stability from people who might already have, or be on the way to having it.

A reduction in house prices isn't taking peoples homes away from them. Yes we should be reducing the GINI coefficient. It's awful in this country and housing wealth is a significant contribution to that. We can transfer housing wealth without kicking people out of houses. Same as it is possible to increase property taxes without kicking people out of houses. This has been explained on several other threads.

People don't have to be removed from their homes for the country to have better housing opportunity for everyone. But ones who do own houses have to take a hit to their housing wealth in order for it to happen.

Not really, there are loads of unsold flats and new-builds, there isn"t a shortage, everyone viewing a property to rent or buy already lives somewhere, rents, prices and mortgage approvals are under pressure, the period of bailouts you mention was indeed all about saving the property Ponzi, but it was done in a very different global inflation/interest rate environment, if AB tried anything like that now the reaction from the bond market would be brutal, during Covid and 2008 all the global central banks were singing from the same hymn sheet, that definitely isn"t the case now.

Everybody viewing a house to rent or buy already lives somewhere, we need to stop trotting out the old banker"s memes, they are broken.

Or in short, we could print because everyone else was printing.

I guess the questionmark is, will the next credit bubble be a global credit bubble or a UK credit bubble ?

A global one the UK gets the get out. A local one, not so much.

The other big hindrance is the planning system . Think of how many people have outbuildings , garden rooms , stables , sheds , garages etc they’d like to convert into annexes for elderly relatives but can’t . Those elderly could then sell their house to someone else . I’ve never understood change of use in planning , the building is already there .

The housing crisis is an affordability crisis, not a shortage.

Successive governments have effectively subsidised demand, through Help to Buy, relaxing lending limits and years of artificially low interest rates. That has kept house price inflated. Now that time is coming to an end and we're already some way into a correction. I think prices will come down pretty significantly especially in London and the SE over the next couple of years.

Both credit bubbles have to pop first, we are not there yet, 10 year bond yields at 5 - 6% consistently over a period of time would probably bring the much needed hard landing for property prices IMO.

Exactly, the problem was too much cheap debt, not a property shortage, people were buying multiple properties because the debt was so cheap and they thought prices would always go up.

You say that if government built enough decent homes at genuinely affordable prices it would crash the market. Then you say existing homeowners "have to take a hit to their housing wealth" for the housing situation to improve.
Well if the government builds more houses, won't the price crash be a huge hit to the housing wealth of homeowners? Isn't that what you said needed to happen to have better housing opportunity for everyone?

So why would we also need to tax them more?

And as for the "transfer of housing wealth"... to whom exactly?

It's a lovely neat phrase, but appropriated "housing wealth" from an expensive five-bed detached house in Cobham isn't somehow magically going to be transferred to someone trying to buy a terraced house in Crawley. It will be collected by the state. And then what happens? I suspect it will be as successful and efficient as the "wealth transfer" from private education to state education with the VAT raised. Let's not forget that VAT on private school fees was sold alongside the promise of 6,500 additional teachers in state education.
They have recruited around 4,600 towards that 6,500 target. Sounds great... except the latest DfE figures show that overall we actually ended up with around 1,900 fewer teachers. So that has really worked well...

It's madness to keep pushing more taxation on such questionable grounds. The tax burden is already at historically very high levels, we have a substantial deficit, and food, energy and housing costs are hammering ordinary people.

It's not just homeowners who "have to take a hit" when money is poured into a leaky, inefficient system. The intended recipients take a hit too.

Make it make sense.

I think the crux comes down to working hard to save and buying where you can afford, which may not necessarily be where you’ve grown up

Why should A Landlord pay to move tenants in and out that makes zero sense.

Or where there are jobs…

Or where there are jobs…

They may be living "somewhere", but that takes no account of growing families, nor of people moving for work reasons, where they need to move. No point living in Keswick with family if your job is in London, and you can't keep squeezing more and more children into a one bedroom flat.

There are loads of empty properties in places like Merseyside and around Newcastle but that's not where people want to live as the job market is severely limited around those areas.

We're back to Norman Tebbitt's "on your bike" - people are having to move to where the jobs are, but there are no available/affordable housing in those areas.

Domestic property as an investment vehicle is absolutely something that needed addressing and still does.

Then you won't understand the planning process in places like close to the Lake District which is simply inexplainable. I have a client who did a barn/farm conversion into several small self contained homes and wanted planning permission for them to be residential. Council refused and insisted they HAD TO BE holiday homes with limits as to how long an occupant could live in them. This is a farm literally 5 minutes from the motorway network so would have been ideal for permanent residency, yet half an hour from the honeypot resorts in the Lake District so not exactly convenient, especially for those without a car as it wasn't on a bus route! They had to market them as holiday homes, so aiming at the investor market. That at a time when locals (especially young adults) were struggling to be able to afford a home (buy or rent) because of the insanely high prices of being at the edge of the Lake District. Make it make sense. They'd have been ideal starter homes for young locals, especially with good motorway access for jobs in the bigger towns and cities (Preston, Penrith, Carlisle etc), but instead lay empty half the year in the off season when there were few holiday makers (roughly half were sold for holiday lets) and others lay empty most of the year being "second homes" where the owners barely turned up at all. That was all caused by the planners refusing permanent residential planning permission.

Tends to be one and the same: generally can’t afford anywhere where there is no jobs!

So nobody wants to live in Merseyside or Newcastle because they can"t get a job there, and people are moving to London but they don"t have a house? You sound very confused on this, the problem with the banker memes is they don"t stand up to much scrutiny.

The Housing Association would get Government Grants for that very purpose. Much better value than tax payers funding a family of 4 in homelessness accommodation for years.

Government grants = other people’s money, the government has no magic money tree.

Why should tax payers pay the moving costs of individuals (who are already getting discounted housing)?

individuals need to start standing on their own two feet and stop being so reliant on the state for everything.