The new government seems as wedded to tackling the housing crisis as the outgoing one. They will readily take up the ambitions and schemes proposed in the 2015 Conservative Manifesto to bring home ownership to more people.
Part of what they have to do is to continue with the plans of before. The schemes designed to help people with deposits, to make new homes for first time buyers more affordable, and to expand the general supply are all good news.
The second part of what needs to be done lies on the demand side. The last government got nowhere near delivering its target of a two thirds reduction in net immigration. This government is pledged to take us out of the EU, which will enable it to put in place a points based system for work permits which can cut the numbers of unskilled and low skilled jobs being filled by EU migrants.
Out of the EU we will also be able to introduce new limitations on newly arrived people claiming benefits.
That will be good news. The large number of people coming into our country are adding greatly to the upward pressures on rents and flat and house prices, as landlords take advantage of the extra demand.
July 28, 2016
Fewer people or more properties is the solution. Relax planning, relay the OTT green crap building regulations, reduce stamp duty, sort out the lack of competition in banking. That is the way to ensure people can be housed.
Looking at Owen Smith’s 20 point plan it is clear his economics is just as daft as Corbyn’s. It makes even Osborne’s bonkers agenda look relatively sensible. The idea that even higher taxes in the UK would raise more money for governments to waste is just bonkers. The economy needs even higher taxes like it needs a hole in the head.
http://www.theguardian.com/politics/blog/live/2016/jul/27/labour-leadership-corbyn-owen-smith-speech-millions-of-labour-supporters-prefer-may-to-corbyn-poll-suggests-politics-live?page=with:block-579893c4e4b0e0542bbb256e#block-579893c4e4b0e0542bbb256e
July 28, 2016
Do people like Owen Smith really think they will raise money with a wealth tax or do they know full well it will do far more harm than good for the economy and just find it appeals to their “politics of envy”, “chip on the shoulder” pathetic lefty agenda.
July 28, 2016
Yes LL, Owen Smith totally bonkers.
It has always been said that 50% tax brings in less total revenue than 45% or 40% so it’s just socialist dogma…
Mind you Sturgeon also wants 50%…
July 28, 2016
Know Dice
If Mrs Sturgeon wants a 50% tax rate then why does she not introduce it in Scotland, I understand she has the power to do so.
All talk and just another thing to moan blame England for.
Why doesn’t an interviewer ask her the very simple question ?
July 29, 2016
AJ – Good question. The Scottish First Minister wants the power but of course once she gets it, will not use it because she knows how unpopular she and her party will become if they increase taxes in Scotland.
July 28, 2016
“Inequality” is not the problem as Allister Heath puts it today. Why are nearly all our politicians too daft to see this even half the Tories?
Smith even wants to see “equality of outcome”. I assume likes the thought of dim doctors, teachers, company directors, airline pilots and the likes. It should do wonders for UK efficiency and health and safely.
http://www.telegraph.co.uk/news/2016/07/27/yes-some-people-really-struggle-but-inequality-isnt-the-problem/
July 28, 2016
Owen Smiths politics seem to be no different from Ed Milibands. It is astonishing that a politician with access to all the information and economic history of the last century could propose punitive taxes, nationalisation and implementation of soviets of workers to control their bosses’ pay.
A happy result of Brexit is it will be clear to most people that the UK cannot afford such Marxist drivel and still be prosperous or even solvent. We need to compete – for capital, for skills & for markets. Who would want to come and risk their capital or careers with the threat of this return to the 1970s?
If Corbyn wins it could be worth having a general election to kill off the threat of Labour for good.
July 28, 2016
Ah! But do Mrs May and her government have the will to do all the things you mention? Or will we remain as EUlite.
July 28, 2016
Good morning.
It is good to hear someone willing to address the demand factors for housing. But that can start right NOW by reducing non-EU immigration which the UK government can do. EU immigration will have to be done at a later date.
Building more homes in the South East and London, especially very expensive ones, will not solve this problem. We need to address the imbalance within our own country between parts of the UK that have high levels of wealth (eg London) and parts that do not (eg basically elsewhere). What is the governments plan to tackle this ?
As proved by the industrial revolution, people will migrate to wherever there are jobs. If there are jobs in the NE of England, Wales and Ulster, that is where people will go. Housing, especially affordable housing, cheap land and availability is in good supply.
We need to broaden our approach to this subject beyond that what our kind host has suggested. And that is not a criticism of him but a suggestion for wider debate.
July 28, 2016
If only I could really believe that we will stop freedom of movement from the EU.
Unfortunately the more I see of Mrs May travelling around Europe, the more she reminds me of mr Cameron and his embarrassing failed attempts to get any change.
Aware Mrs May has to get to know her European counterparts, but she has appointed a Brexit team, she should stand above it all and not undermine their negotiating position with personal interference, has she not learned anything from Camerons demise and why it happened.
Clearly a lesson has not yet been learnt.
July 28, 2016
I wonder is it really the taxpayer who should be underwriting high house prices with some sort of subsidy, cash reward to some buyers which then helps maintain higher prices.
Why should house purchasers get a big reward for saving to buy a house, surely the best way would be to reduce some of the associated costs of purchase like stamp duty which if reduced would aid mobility, instead of increasing it which does exactly the opposite.
Reduce VAT on building work to Zero which would encourage modification and improvement of the housing stock and increase construction jobs at the same time, after all new housing is zero rated.
July 29, 2016
Alan Jutson ,
The taxpayer almost always underwrites high house/land prices and has done for over a century .
Example : when a new train station is built with public money , the surrounding buildings and land increase in value but that “unearned increment” accrues solely to the owners of the surrounding land and buildings .
Society which has improved the infrastructure to create this value does not benefit financially , the cost is socialised and the benefit privatised .
This is crony capitalism .
Same with a catchment area for good state schools , proximity to the M25 and other public infrastructure spending .
What is needed is for the unearned increment to accrue to society as a whole as an annuity .
The way to do it is with a land/location value tax (LVT) . The tax starts at zero in the margins (least desirable areas) and is highest in prime areas .
LVT introduces a negative feedback loop into land prices so the best time to introduce it would be after a crash when prices are more realistic .
LVT would be paid as an annual charge for “exclusive use of the commons” and would replace damaging transaction taxes like stamp duty .
Simultaneously , taxes on labour would be reduced .
At a stroke workers are no longer disadvantaged against speculative buyers , especially from overseas .
An empty lot of building land would be subject to LVT thus attaching a cost to holding on to building land without developing it – a practice which inconveniences society because someone else could be using the land more efficiently .
Oligarch’s who buy a London home and live in it 2 weeks a year are depriving someone else of the opportunity to live there – because land is a natural monopoly . Society is missing a trick by not attaching a cost to this , much like a cap and trade arrangement .
Churchill and Thomas Jefferson were in favour of LVT .
Here is his speech to the Commons in 1909
http://web.archive.org/web/20011217193137/home.vicnet.net.au/~earthshr/winston.html
Look up Mark Wadsworth LVT for more info .
July 28, 2016
Funny how we didn’t have such problems in the post war era up until the 1980s, even though during the late 1960s and the 19790s our adult (baby boomer) generation starting to need housing, numbers far greater than the current migration issue.
At one time, both in the inter-war years and post WW2, Labour and the Tory parties would boast about how many or criticise how few council houses each had or were planning to build, and under such pressure indeed many were built, and thus our housing problems diminished but back then -for most- houses were considered as a place to live, not an object to make money out of one way or another, if there was something to cash-in upon later life or pass on to ones children after death it was a bonus.
Sorry but more of the same current or past policies [1] will not solve the problems such policies have and are causing, more of the same is akin to putting an alcoholic in charge of a brewery! We need to take a fresh look at how housing works in the UK, not only is it causing social problems but it is a driver of the debt based boom and bust cycle.
[1] assuming there was actually a problem with our (1945-1979) post-war housing policies, beyond political that is
July 28, 2016
Out of the EU we can control migration but also we can have a sensible energy policy and ditch the absurd greencrap building regulations (that encourage tiny houses with tiny windows and the likes). Scrapping Hinkley Point and the damaging climate change act would be a huge advantage.
July 28, 2016
There has been no move to reduce immigration and the new Home Secretary will probably follow her predecessor and talk the talk but no action.
With the treasury insisting we stay in the customs union which means no change then immigration will continue to rise.
This is a very dangerous position for your party as Farage and UKIP haven’t gone away.
July 28, 2016
There appears to be considerable increased demand on not just housing but the NHS as well and other services. We foretold that unless immigration was brought down and properly controlled then this would happen. It has to make us suspicious that the numbers entering the UK is far higher than those the government own up to.
The high prices for homes of course is mostly government driven. Planning laws although recently relaxed a little keep land prices high. Subsidised rent and property inflation if too high (preferably none at all. Unfortunately impracticable. Once again because of government policies ) increases speculative demand. First time buyer schemes increases demand.
When supply is already not keeping up with demand then government should forget doing things to increase demand . To me that is very muddled thinking. Instead they should sort out the supply side first. Make planning permission cheap and easy like many other countries do for a start and now we are leaving the EU strip out rules and regulations that add so much to the cost of construction and so many other things we do in the UK.
The regulatory burden, restrictive practices (thanks to NUT, the BMA, the RMT and the like) and things like the living wage add considerable costs to products and services. We moan much about how much things costs. If we stopped and thought how much is down to public demand for things like the living wage and bureaucratic and progressives meddling we could put a stop to it. Thus reducing what we pay for things considerably.
July 28, 2016
“This government is pledged to take us out of the EU”
We’ve reviewed the composition of the current Conservative Parliamentary party in terms of Leave versus Remain. Perhaps it will be surprising to some of your readers that only 56% of all Tory MPs declared for Remain.
This includes MPs, Ministers, Junior Ministers, PPS’s, Whips, and all others on the Government payroll, several of whom had previously been strongly anti-EU and whose sympathies can therefore be assumed to lie with Leave. Some of the 56% clearly felt they should support Mr Cameron’s line during the Referendum campaign, against their previous statements on the issue.
Mrs May will no doubt be aware of this. (Or if she isn’t, we hope you will pass on the link to our piece here: http://facts4eu.org/news.shtml#toryparty )
As the media continue to report that you and ‘around 20-25’ MPs are ensuring the Government doesn’t waver on the country’s Brexit decision, we felt it was important to show that the Leave support within the Conservative Parliamentary party is higher than is being reported.
July 28, 2016
I have been singing the LLoyds Jingle a lot recently only to hear this am that many branches are going to be closed. If these people employed are going to be out of jobs it is social housing which is needed. What I would like to see is more social housing in areas where there is overall respect for the community they live in. Today some social housing estates are scruffy , broken down and people live in squalor. It is all very well saying people have a choice how they should live , but these houses will be required for other tenants and can be purchased. It is up to the tenant to keep their houses in good order , the outside and the inside and the councils help them in this way. A roof over someone’s head should be treated with the upmost respect and then the stigma would disappear.
In the meantime I cannot believe that the decision LLoyd’s has taken is being put down to the Brexit Vote ( and I need to remind those that it is an intention not a happening) when the split from TSB and the lack of new money spent indicated that this was on the books a few years ago.
July 28, 2016
Ever feel like moving to Northern Ireland and becoming an mp?
You would have my vote every single time!!
Sorry to your own constituents…
July 28, 2016
“The last government got nowhere near delivering its target of a two thirds reduction in net immigration.”
The can-kicker in charge of that one is now PM.
July 28, 2016
Off topic:
I see 3,000 Lloyds workers are thanking Carney for his single minded low interest rate policy this morning.
July 28, 2016
@Gary C; Good grief, any excuse to have a rant at the BoE policy and its governor! Otherwise please do tell us just what link there is between low interest rates and people using the internet to do their banking rather than visiting High Street branches?!…
July 28, 2016
I read in the Telegraph that Brexit could lead to better UK broadband service.
Why were we not told about this during the referendum campaign?
http://www.telegraph.co.uk/news/2016/07/26/britain-could-enjoy-better-broadband-after-leaving-the-eu-becaus/
July 28, 2016
I am not sure that Brexit is in any way linked to the quality of BT broadband, as the major problems seem to be a poor infrastructure outside big towns and awful customer service.
July 28, 2016
That is interesting. Certainly the woeful broadband service provided by BT outside cities is a major competitive disadvantage for the UK, hampering entrepreneurialism and small business. Absurdly, BT are incentivised to provide a bad service, refusing to optimise current networks while the government subsidises them to lay new lines. Competition is the answer as should be clear to all MPs, at least on the Conservative side. It is incredible that the baleful legacy of state monopoly is still felt 32 years after the first privatisation of BT!
July 28, 2016
I find it less than plausible when we have a successful economy, and an EU economy that is dead in the water, to expect immigration to be reduced significantly. Our economy needs a workforce with a work ethic. There are a large number of long term unemployed Brits who no one seems to be prepared to force into work. Work that is eagerly taken up by labour from the EU.
There also needs to be a more urgent drive to train our own skilled workforce. Apprentiships are a move in the right direction, but why does the NHS have to import so many nurses, and why do they all need to be trained to degree level.
I contend that a majority of house buyers only stay in a house for less than ten years, moving on geographically or to a larger or smaller property. Why not have 100 year mortgages so reducing capital and interest payback, while allowing the owners to benefit on sale from the increased value of the property. Why not build houses in factories for a much reduced cost. If we built cars like we build houses, few people would be able to afford them. On the rental side of the market the only way to keep costs down is to ensure that supply equals or exceeds demand. Were that so then quality would become much more significant to the tennant. Were local authorities incentivised back into the supply side it would be of considerable help.
July 28, 2016
Owen Smith, the ‘moderate’ Labour alternative to Jeremy Corbyn is reportedly in favour of: 65% income tax if income is “unearned” (that is the result of investment, of which Labour constantly tells us we need more); a wealth tax (a measure abolished as useless and a disincentive eg in Sweden even by a Social Democratic government); increases in CGT and inheritance tax (further disincentives to growth and investment); wage regulation and reverse of trade union reform + ‘worker’ control of company boards (eroding fiduciary responsibility from directors and shareholders, a communist measure surely calculated to ensure that anyone who has a choice invests anywhere other than the UK). So it’s the worst policies from the 60s and 70s from the ‘moderate’ alternative to the far left Mr Corbyn. In keeping with the new spirit of violence tacitly encouraged by the current Labour leadership, Mr Smith has apparently said he would like to “smash” Theresa May.
It is time for the actual moderate Labour MPs to recognise that it doesn’t matter who wins their absurd leadership contest, they have lost control of their party to a mob of far left activists, to whom Mr Smith is presumably pandering with this Neo-Marxist nonsense. If there is to be a centre-left alternative to the Conservatives committed to Parliamentary democracy and to policies which would have any hope of sustaining UK security and prosperity, moderate Labour MPs need to break off and form ‘New Labour’ or similar and re-establish a worthwhile opposition.
July 28, 2016
I don’t think this kind of headline enhances the UK’s reputation around the world.
https://euobserver.com/uk-referendum/134511
“UK will not guarantee EU citizens’ rights, May insists”
“British prime minister Theresa May has reiterated that the UK will guarantee the rights of EU citizens living in the UK only if British citizens are afforded the same rights in other EU countries.
“I intend to be able to guarantee their rights. The only circumstances in which that would not be possible would be if the rights of British citizens living in other EU member states were not guaranteed,” May said on Wednesday (27 July) at a press conference with her Italian counterpart Matteo Renzi in Rome.”
July 28, 2016
I go with you on this DC, take the moral high ground.
It will pay off in the long term
July 28, 2016
She said exactly the same thing to Hollande – she expected a reciprocal agreement. It caused little comment because Hollande had already made it clear that the British living and/or working in France were welcome to stay as long as they wished. Perhaps Renzi doesn’t want second home owning Guardian columnists in Italy, and who would blame him? I note that the EU is opening negotiations with Switzerland on the imposition of migration restrictions. Perhaps that is why this was given prominence in news outlets today .
July 28, 2016
She’s dead right.
July 29, 2016
No, she is wrong. It was one thing for the Remain side to spread fear that the other EU countries wouldn’t act with any basic decency and would boot out UK citizens, but that scaremongering should not have been continued by the government once the referendum had been held.
July 28, 2016
The law of supply and demand is an unquestioned fact of life everywhere other than when the effects of mass immigration are being considered, then all economic theories are set aside, and we are expected to believe demand pressure are completely separate to the millions of people coming into our country.
In all the years when we have been having mass immigration and the accompanying housing and serves shortages , I have never ever heard a BBC or any other media presenter, ask the question of a Minister…’Minister if you are so concerned about our housing shortage, shouldn’t you be doing more to limit the demand coming from migrants ?’
Until we can get on top of the political bias in the mainstream media we will never get the many problems effecting our country sorted out, but on the bright side, the frustration this builds up in the general population means we will continue getting votes like the EU referendum.
July 28, 2016
How many of the incoming migrants are claiming benefits (net vs taxation paid by them or family), by how much would not letting them in reduce housing demand?
And if they were not in the country how much would businesses suffer from lack of people to do a good job or a seasonal (e.g. agricultural) work?
July 28, 2016
Why don’t we give the “fruit pickers” work-permits for a limited period of time?
July 28, 2016
After the second world war there was a similar crisis and one temporary solution was the prefab. I am sure there are more attractive up to date versions that could be purchased and put up quickly. We will never solve the shortage of homes by relying on bricks and mortar houses and bulding firms who either do not see it in their interest to build more and faster or are incapable of doing so.
We will see the appearance of shanty towns if we continue to build at the present rate and at the same time allowing very high levels of immigration.
July 28, 2016
Why not change the benefit system? If after 6 months on housing benefit people had to leave London then houses would be a lot cheaper.
Admittedly it could cause a house price crash but in the long term it would be good for the UK.
July 28, 2016
Of course there will be a financial crisis equivalent if not precisely worded the same as the 2008 sub-prime borrowing fiasco and resultant default on repayment. Unfortunately the companies involved will not be able to avail themselves of such things as “attachment to earnings” which the UK government as so kindly assisted by officially recognising these loan sharks. The reason: the debtors will not be in the country to attach those nasty little devices that cripple a person financially and force them in some cases into either unemployment or the black economy. They will have returned to any number of places in the EU and attempts at individual court action would be impractical.
Naturally enough, some of these firms have also doubled-up and intertwined their lending iffy loans with property mortgaging and subsequent remortgaging. A consequent slump in housing as a result of cuts to immigration and the fleeing of present debtor immigrants will force those companies as before to repackage their debts into increasingly toxic debts with attempts to sell them on.. It is to be hoped we do not have a dopey Chancellor this time, to buy up banks-proper and other so-called banks that have applied and been given licences to trade as banks. That these financial “institutions” will this time actually be allowed to fail as they should have been in 2008. And where necessary their captains be jailed.
I hear Lloyds Bank is considering sacking 3000 people after the “Brexit Shock” and close 200 branches. They fear lowering of “Growth” and lowering of interest rates. If they were a proper bank and we had adequate business people in this country with any idea at all of the market they would know that interest rates are so very low that any further lowering as a “tool” by the Chancellor/BoE would be a blunt instrument indeed.
Information from across the Atlantic shows interests rates will go up, though many think the opposite. This will wrong-foot, as usual, the best UK financial brains. You do not get a 2008 unless a great many people are lacking in the grey matter department. Our UK business people throughout and prior to 2008 and throughout Brexit have shown themselves to be developing dumplings.
Oh there will be cheaper homes. Whether people will be able to afford them is another thing. Many will be bought by local authorities and housing associations at knock-down prices but not before they have fallen in ruin and will need refurbishing with tax-payers’ government grants. Mr Corbyn is likely to be Prime Minister as he will live in a blind land where his one eye will push him into leadership.
July 28, 2016
The concerns over Brexit of people on the centre right, business people and many foreigners are: reduced or redundant investment as a consequence of potential restricted ‘access’ to the EU single market; lost skills due to restrictive immigration policies; weaker competition (also in the labour market) due to protectionism; and a general more insular, less cosmopolitan and backward looking attitude.
It is essential therefore that the Government moves swiftly and decisively to counter such fears. A cautious, focus group driven approach with a few sops to the left with gimmicks like employee representation on boards will not do the trick. We need bold and radical moves to show that the UK is an open and welcoming society and the most free market and business-friendly environment, at least in Europe.
July 28, 2016
“The large number of people coming into our country are adding greatly to the upward pressures on rents and flat and house prices, as landlords take advantage of the extra demand.”
So is availability of cheap credit. Too much money chasing too few goods.
You are absolutely right about the rising numbers of people coming into the country. But even after Brexit they will still be coming.
The issue is how we make housing more affordable (not just ‘social’ housing) without plunging younger people into negative equity or destroying older people’s supposed wealth. Any suggestions?
July 29, 2016
Colin Hart
Thats a great question, everyone looks at this purely from a house price viewpoint rather than cost of ownership etc.
My biggest suggestion is that the home tax ( stamp duty) should be scrapped completely on primary residence
One of the biggest boons to home buying when I first bought a home in the 70’s was MIRAS. Now that interest rates are so low that wouldn’t work as well but I do think that a special tax relief for first time buyers is in order . Community charges and business rates for that matter are both extortionate in terms of services delivered and add to the running costs.
More should be done by the financial industry to make shared ownership mortgages more available . In terms of the absolute cost of a home in the South East ( and it is predominantly a SE problem) maybe its time to think of some different styles of home ownership. Buying the freehold can’t be the only way . For instance once upon a time I used to buy a new car outright every 3 or 4 years. I wouldn’t dream of doing that now opting instead for a PCH deal. Maybe that is a hybrid way forward on homes a fixed term lease of say 10 years
The biggest issue though is TYPE of housing. Leaving aside the issue of incoming people to the UK. The demographics of the UK and current social trends has caused big problems in the housing supply side. There are vastly more post divorce 40 , 50 and 60 year old singles . There are also vastly more young single parent families . Therefore the nature of the housing stock needs to better reflect this. Smaller starter homes and smaller older peoples housing needs to be established thereby freeing up middle level family type homes.
Whatever its a question that needs to be brainstormed taking into account more parametres than just London homes are too expensive and there are too many foreigners and not enough council houses
July 28, 2016
Affordable homes for more? All I see on my 5 mile trip to the nearest town is housing estates going up. Most of those houses will presumably have newly arrived ( to the UK) families placed in them for us to pay for. People have enough problems working and keeping a roof over their own heads. How many other families roofs are we supposed to keep over their heads as well? The worker/mortgage payer can lose his house if he loses his job and cannot afford the mortgage – -the newly arrived who are having their housing costs paid for them will always be housed, with absolutely no need to work or contribute.
Cut all the “goodies for ever” off for arriving here, stop handing out free lives as a reward for coming here and destroying someone’s life – instant deportation – not years of costly appeals and claims for family life – even though they have never seen their offspring – and immigration will drop. And if immigration drops – we won’t need all these houses currently being built. . We are paying for our own destruction and annihilation.
July 28, 2016
Landlords are not really “taking advantage” of the extra demand. They are simply charging the market rate for their assets, as most people and businesses rightly do. Not many people when selling something would say, Oh! that is far too much, just give me half of that please? Why would they want to give money away? They are not charities, they have been mugged by Osborne’s extra 3% stamp duty and interest deduction rules. They probably need the extra rent to cover these outrages. This perhaps give the landlord more funds to build and extend more properties thus and increases supply.
Even if they did they take less than the market rate they would just get lots of people wanting the under priced property and they would still have to disappoint all but one lucky one!
July 28, 2016
Do Landlords really build houses? What a good idea. Surely it would be a way of avoiding the Stamp Duty to build and let them out? How many have you had built for your tenants?
As far as I can see they buy up properties in competition with buyers just wanting a home and charge more and more each year whether or not justified by their outlay in maintenance and improvement (mostly not) and eventually after the mortgage is paid off carry on hiking rents to ‘the market level’. What a gravy train for those with the money. How is Osborne’s 3 percent tax (which I disagree with by the way, as I think property taxes are wrong and make it difficult for buyers) affecting those properties you have held for donkeys years and yet you (landlords) keep increasing rents on, irrespective of tenants ability to pay. My sister works in the NHS and has not had a pay rise for years, yet her rent increases every single year, by above inflation, to ‘market levels’. How landlords can stand to look in the mirror, I don’t know.
July 29, 2016
Presumably you think Council owned property rented out to tenants is all fine
Just private sector landlords you don’t like.
July 28, 2016
Listening to your leader on the news last night she talked of reform but playing down complete control of EU immigration. The remainiacs will do everything in there power to keep us in their project by lies and stealth as they have for 50 years. They don’t do democracy as they want their completion of the federal state.
We will not get democratic control under the legacy parties and their stitch up in Westminster. Over 80% of Mays Ministers are remainers!
July 28, 2016
So benefits flow from leaving the EU: again, what are we waiting for?
As for supply, should the government not be encouraging (or even organizing) contruction firms to supply pre-fabricated properties? Such arrangements reportedly work well in Germany and Holland, improving quality (often an issue here with new builds) and speeding time to market.
July 28, 2016
I have just returned from a 2 week spell in the sun ; during this time one thing has followed another politically and economically . Overall I am pleased with TMs’ efforts with one exception – she seems to want to bring back worker representation on Boards ( shades of Bullock and all that ) ; this always was a step in the wrong direction and I hope we will not have to go through all that rigmaroll again . I also sincerely hope she is not going to give way in the Brexit negotiations ; we are in a good position and ought to keep it “tough”.
There is no doubt that we will face a surge in migrants from the EU before the deal is done and we ought to immediately put in place an entry procedure system to stop this ; after all we are now “0ut “.
July 28, 2016
Do you think the implosion of the Labour Party means this government wont need to keep bribing voters with house price inflation to maintain their grip on power?
July 28, 2016
I just hope Theresa May’s version of BREXIT accords with your own. Hopefully the meeting of the 25 MPs will serve as a ‘shot across her bows’ if she’s thinking of watering down the post BREXIT negotiations.
July 28, 2016
We need to kick the floor from under house prices by depressing demand. Immigration should urgently be reduced to near zero and interest rates should be steadily raised. Supply should be augmented by selling off all council and housing association property, either to the occupant or to a landlord, and getting the State and local government entirely out of the housing market.
There is another consideration. If the law pitches minimum housing standards too high and maximum occupancy rates too low, the result is more people sleeping in cardboard boxes. Politicians seem to be totally intolerant of honest poverty, otherwise they wouldn’t interfere so much.
July 28, 2016
Interest rates have now been so low and for so long, that if there were an attempt to raise them, half the population would not be able to pay their mortgages. That would obviously lead to repossession, which is politically, totally unacceptable. So, where do we go from here?
July 29, 2016
The ideal would be to raise interest rates slowly, so that in nominal terms wages and salaries increased while house prices were static. This would mean tolerating a bit of inflation, which is surely coming anyway.
July 28, 2016
What about the pressures on services? And I don’t just mean education and health – I mean roads and drains and water supplies and transport services and sewerage.
I have seen very substantial growth in my medieval market town home: lots more dwellings, lots more traffic, lots more pollution = overcrowded medical and education services, clogged up roads etc.
July 28, 2016
I’m no longer convinced that they will leave the EU. It looks like a fudge is imminent.
July 28, 2016
The Conservatives have added to the failures of the Labour Party with regards to housing.
The only way to solve this is a mass house-building programme. Think of McMillan.
And the only way to reduce immigration is to reduce demand for workers – ie a recession. We are not the Labour Party.
July 28, 2016
The price of a house, historically, has been understandable on the basis of a certain multiple of an average income. Maybe 3 in some parts of the country. Maybe 5 in others. I’m sure readers of this blog will remember what their own income was, in relation to their own house or flat, when they first entered the property market.
However, these kinds of multiples seem like a distant memory now. The price of a typical dwelling doesn’t have any fixed relationship to incomes any longer. But there doesn’t seem to any reason why they shouldn’t again in the future. It depends on how our economy functions and whether we can shake off the pernicious effects of so-called New Keynesianism.
Indeed, house prices will have to fall back to these kinds of historic multiples if they are going to be more affordable again.
If they do, that will be difficulties for those who’ve bought at higher prices. They could end up being technically bankrupt. If prices don’t fall then houses will continue to be unaffordable in many parts of the country. Local businesses will have problems recruiting staff from elsewhere.
The other possibility is that we have several years of inflation in wages and prices, but not in houses, to get around both these problems.
So difficulties will lie ahead whatever happens!
July 28, 2016
Unless the UK economy is going to be continually based on foreigners coming into the country, and a big thing being made about someone ( a foreigner ) employing 250 people, ( again foreigners ) as happened in the last two years, no doubt facilitated with local and national tax-payers money , and, producing guess what…sandwiches… and the wages for making sandwiches for 8 hours per day being pretty steep then no-one is going to be able to afford homes that cost more than a second-hand car tent needing great repair and increased weather insulation. British workers, traditionally, are highly skilled at making their own sandwiches without need of foreign imported expertise.
It is doubtful John Montagu, 4th Earl of Sandwich invented the sandwich as even the most ill-bred and uneducated peasant was capable and quite expert at stuffing something into something.But the Upper classes wish to take credit even for the most mundane if not done properly. Better they would not categorise, then use whatever commonsense they can possibly muster given their less than common circumstances and senselessness and in their economic appraisals as “Growth” stop thinking plain stuffing stuff is a vital need for import..
July 28, 2016
Maybe people don’t really want affordable homes. Maybe what they really want is the best homes they can get for their money.
July 28, 2016
What they want is a lovely nice home that is far cheaper than it should be, because some other tax payers are partly subsidising it for them.
We need more homes or fewer people, anything else is just re-arranging deck chairs on the Titanic.
July 28, 2016
Off Topic:
Sky News has interviewed today a DNA Ancestry expert who says his own Australian ancestors were deported Irish criminals. In a recent study, he says Yorkshire people are more Anglo-Saxon than everyone else in the UK. A massive 42% are more or less pure Anglo-Saxon..” They are more British than everyone else in the UK.”
This comes as no surprise to Yorkshire folk, except 58% of us.There must be a huge understatement about this Australian foreigner’s 42% statistic.
July 29, 2016
That is why when Labour set out to undermine the British nation with uncontrolled immigration they settled most of them in Yorkshire, Christopher.
July 28, 2016
People who wish to buy their own newly-built homes must be considered fairly well off in order to qualify in the first place. It seems bizarre that these people should be subsidised by the poor who are forced to pay their taxes through VAT plus any others that may be applicable.
Developers will only develop when and where they believe they can make a profit and our recent history is full of developers and builders who have gone bankrupt through misjudging the market or falling foul of rapidly changing economic conditions.
To correct the situation the government should assess what is needed and then get involved by building sufficient social housing for rent or by commissioning homes for sale through developers and contractors when necessary. The homes for sale obviously involve some risk but as you say the government will be able to accurately control the rate of any immigration and in addition they have it within their power to create conditions for employment in areas of their choice.
July 28, 2016
Another top policy from marxist parliament, wont be long before they making private landlord sell their property the same as housing association, i see that hinkley going ahead, 25 billion i think and 2030 finish date with two more to follow, HS2 ready to go next 36 billion, lots more windmills another 12 billion and a lot more spending to come on waste, i would say that i am well on target for 1.85 trillion debt by 2020 and not forgetting 350 billion off balance sheet debt
Looks like its going to be the biggest social wasting parliament that you have ever seen and with mrs m pet project thrown in, should be quit a laugh.
July 28, 2016
Ian, you couldn’t make it up. Just more of the same.
July 28, 2016
Here’s today’s example of why high levels of immigration haven’t led to high levels of housing demand:
http://www.dailymail.co.uk/news/article-3712339/Migrants-living-six-room-Slumdog-Millionaire-four-bedroom-home-rogue-landlords-raked-100-000-year-charging-65-week.html
On the other hand, Carney’s ZIRP policy continues to prop up house prices, making them unaffordable for most would-be first time buyers. It really isn’t about trying to make a few new homes cheaper. Most new homes are bought by landlords, while the Land Registry records nearly ten times as many house sales for second hand homes.
July 28, 2016
Affordable homes?
Reduce immigration and consequent demand .Particularly those likely to be funded by the taxpayer. e.g. by housing benefit or other subsidies or other obfuscating terms.
Reduce hidden tax costs imposed on newbuilds.
Reduce the parasitism by Landlord/Councils and Service charge companies when designing master leases which add other unfair long term costs to the lease agreements.
Penalise land banking. If it exceeds a certain build ratio, force a sale or release.
Key workers houses should be provided and or built by the employer.
Encourage, automation in house building, perhaps a standard build plan with pre-approved designs which uses standard parts enabling volume production cheaply.
Consider a land value tax to fund infrastructure.
July 29, 2016
Anon ,
I thought I was going to be the only person to extol the virtues of LVT but you made my day by mentioning it !
The UK is crying out for it .
Have the rest of you even heard of Land/Location Value Tax ?
July 31, 2016
All you need to do is to tell the commuter luvvies that it is a few well-apportioned skyscrapers in the counties or ripping up all their green belt land.
There is an luddite outcry about high rise buildings in rural areas.
Why?
What is so special about these pampered, spoiled, selfish, self-centred communities that think that their 19th century idyll must be preserved at the cost of the modern economy?