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.

Very soon, if not already, a life tied to large mortgage debt for a basic house will be seen as failure, in fact a lot of young people seem to be waking up to that fact and just staying at home so they can be actually well off in cash terms, they have also twigged to the education scam of borrow 50k at interest for a useless bit of paper, very interesting times.

The market doesn’t work when housing benefits distort it to this extent. I wonder what rents would be without benefits.

Housing costs rose sharply with Gordon browns over generous tax credit system, as the extra money in circulation just sucked up housing costs due to basic economics supply and demand. Over generous benefits have helped to fuel the house cost inflation and prevented any crash or slowdown.

I agree with this - social housing in one specific home should not be for life. I know of people in 3 bed properties that expect to remain there for life but who are now single occupants as children have left home, while others are starting families in a one bed and waiting years for a larger home. Private renters have no expectation of decades of pernance in their tenancy and, realistically, even homeowners know they need to upsize or downsize, often in the same area or sell up when they lose jobs/divirce because they can no longer meet mortgage and maintenance costs. Social housing shouldn’t come with an extended right of occupancy. Why are they more privileged than everyone else?

I fully agree- all forms of subsidised housing whether council or housing association should have tenancies renewed every 5 years at the most and terminated if certain qualifying criteria are no longer met. There are too many people who need the homes more than existing tenants, many of whom could make their own housing provision out in the open market.

I mean, home owners decorate (and maybe even upgrade their homes) and most go on to move house. Noting many move for the same reasons we’re discussing here: downsizing when they no longer need such a big house.

what makes you think those in social housing would do any different just because they have to move? It doesn’t make sense

The reason is obvious: to live in a house that better suits your tastes and is of a higher quality.

I decorated my last rental home that I stayed in for 2 years. I had to get permission first and had to choose a relatively neutral scheme but the landlord was supportive: why wouldn’t they be? They’re getting their property decorated for free.

Why don’t you run for local government, get elected to the House of Commons and lobby for change then. I’m sure what you propose will be the most brilliant idea they’ve heard for years.

I’m sure you spot the obvious flaw in your suggestion: local government representatives (councils) don’t get elected to the House of Commons….

No but if they try really hard and put themselves about they can become an MP

I suppose the Ginger Growler did manage that - but its pretty unusual.

basic economics: the supply of property to rent is not being outpriced by those looking to buy property

for most people home ownership is about climbing the ladder to a "better" property. Politics of envy?

It’s also about not paying rent into your retirement when income usually drops significantly.

Which is why so many people make no provision at all so the state pays their rent.

Hence why the country is bankrupt,

Back in the 'glory days' when people could afford to buy an house, the timeline was roughly this
Start work at 18/19
Continue to live at home and save everything - no holidays or treats
Get married
Buy a small house in a rundown area
Buy a better house in a better area
Have children
Buy your 'forever home' in a family area
Children grow up, start of enjoy life with holidays, treats, eating out etc.

Now the timeline is
Start work about 23/24
Move into rented accommodation
Meet a partner, move into better rented accommodation, enjoy life with holidays, cars, eating out and treats
Have children
Decide to buy a house and look for the forever home in a family area.
Complain you can't afford what your parents had and bemoan the pressure on young families that their parents know nothing about as they were lucky enough to buy a house when they were affordable.

It's like comparing apples and pears.

A lot of that is not the fault of the young person. It's the fault of successive governments/employers who have forced University as being necessary for so many jobs/careers/professions that you previously could start the day after leaving school, subject to the requisite number of O or A levels depending on the job. Also the centralisation of jobs into a small number of major cities whereas previously every town and city had loads of employers/jobs in virtually any profession you chose. Kids go to Uni because they're told it's the way to a decent job, then they stay in the Uni city or move to a new city upon qualification because there aren't any graduate jobs back in their home town.

Yes I can agree with that.
My point is that it's pointless comparing the situation today with the situation 20/30/40 years ago, as they are not remotely similar. However, I do think expectations are a lot higher now - see the poster upthread turning her nose up at a flat above a shop. These were classic first-time buyer homes in the 80s and 90s.
I suppose the difference is that before, people could afford the family home in a good area when they needed one (as it would be at least the second rung on their housing ladder), whereas now, buyers are not stepping up gradually but want/need the forever home from the off.

But the old "flat above a shop" used to be a pretty nice place to be, i.e. easy access to the shopping street, and the shop underneath probably opened "normal" daytime hours, closed on Sundays, etc. I lived above a shop myself for many years, it was a newsagents, and it was completely fine - bedroom at the back so not awaken by the vans delivering the papers at 5am!

Nowadays, heaven knows what you'll be above, probably either a greasy smelly fast food place, or a money laundering barber shop/nail bar/ethnic convenience store, open all hours, early to late, 7 days per week, lots of which are a magnet for anti social behaviour from the local yobs and drug dealers who hang out close to shops these days.

Completely different as the "High Street" has changed beyond recognition. Another aspect where things have changed.

As for the "stepping stone" aspect, I think a lot of that is the sheer cost of moving these days, i.e. stamp duty, legals, surveyors, mortgage fees, removal firms, which make moving very costly, so people do tend to hold back a while and buy later in the hope of having to move fewer times in the future. Another aspect is the shortage of "starter homes" which seem to be snapped up by BTL landlords these days to increase their portfolios, meaning first time buyers are often ignored by estate agents as they already have "known" landlords on their books who they know will find it quicker/easier to buy as they have funds in place rather than be delayed by banks doing all kinds of checks on first time buyers.

Politics of envy? Not sure where that come from.

I suspect that, for some people, like me who grew up without housing securing, owning a home is all about security. Are you really saying you don't understand why many people don't want to be dependent on a landlord, might want control over their own home and, more importantly, don't want to pay a lifetime of rent to someone else, including into retirement when their funds will be more limited?

Sure, people sometimes move to a bigger or "better" house as their circumstances and finances change. I'm not sure why that's supposed to be a bad thing, or evidence that home ownership is primarily about showing you have some thing better than others or displaying wealth or success. Plenty of people stay in homes even though they could afford something bigger or more expensive. "Better" is entirely relative and dependent on circumstances.

You chose Germany as your example, but Germany is an outlier in Europe when it comes to renting. Several European countries have home ownership rates above 90%. Are we seriously suggesting all those homeowners are motivated by having better wealth or status and climbing some imaginary ladder? If somebody is perfectly happy renting for life, that's their choice. Go for it. But why should everyone else's aspirations to own their home have to be downgraded to validate renting?

And whilst it wouldn't be my motivation, some people may buy a particular house because they think it signals status. So what? I couldn't care less. If they've earned their money, paid the taxes due and are spending it legally, it's their money. Why should anyone else get to decide whether their reason for spending it is sufficiently worthy? People aspiring to earn more, build businesses, take risks, save and provide for themselves help create the wealth and tax revenues this country needs to fund its spending. Keep treating those behaviours as inherently selfish or immoral and don't be surprised when some people decide the extra effort isn't worth it. Lets see how spending is funded then.

What time period are we talking for this nice flat where you won't be disturbed? And where in the country?

I don't recognise the rose tinted history that people keep talking about.

Not the point of this thread, but it's the same rose-tinted history when all families had one stay-at-home parent and a good standard of living was possible on one wage ... conveniently forgetting that 'a good standard of living' in the 1970s bore no resemblance whatsoever to today's 'basic' standard of living, which usually includes two cars, a bedroom each for the children, activity-packed weekends and school holidays, holidays and short breaks, hair and beauty appointments, takeaways, meals out and winter heating on 24/7.
But I digress.

I doubt it will ever be "fixed", due to the increase in population (10Million in the last 20 Years) without the commensurate increase in housing, compounded by completions now lower than historical averages.

Perhaps abolishing Stamp Duty, would increase fluidity, but it's hard to know if this would reduce the initial sale prices.

Personally I have just sold, and will watch the housing market for the next six-months, while I invest the cash... as I fear we're about to re-run the 70's