Buying your own home

On Friday I met a number of young professionals in the constituency who wanted to talk to me about opportunities to buy a home of their own.

They all reported difficulty with current house prices in the Wokingham area, and wanted to know what more could be done to make homes more affordable. One had recently succeeded in buying a property but was still concerned about this issue.

I explained that the government has produced two schemes to help directly with raising the money to buy. The Help to Buy Isa provides a £3000 top up to savings of £12000 in an Isa to speed up saving for purchase. The Help to buy equity loan offers up to 20% of the price a first home to pay the deposit, where the buyer has the other 5% of the house price as savings to complete the 25% deposit requirement. The price of a home is limited to £600,000 in England for this scheme, which is well above the price of the typical first home.

The government has now removed Stamp duty on most first time buyer properties, and is working with Councils and the development industry to see that a suitable number of lower priced properties form part of the mix of new homes being built.

I am keen to find other ways that Councils and the government can assist in making more affordable housing available for first time buyers. As my meeting confirmed there is substantial pent up demand, as the wish to own remains strong in the younger generation as with their parents. Those with access to the well funded banks of Mum and Dad usually do get on with house purchase in their twenties. The government wants those without this advantage to be able to do the same.

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136 Comments

  1. Lifelogic
    Posted December 10, 2017 at 5:51 am | Permalink

    Both these schemes are largely pointless government gimmicks & tinkering round the edges. They do more harm than good. The cuts in stamp duty for first time buyers (up to £300K) saves just £5000 and this will largely go to vendors in higher prices. The help to buy loan is only for new homes and theses are largely over priced thanks in part to this scheme. So you are not really getting a genuine 20% discount at all in general.

    What is needed is more homes (or fewer people). To get this you relax planning, relax employment laws, relax green crap building controls, cut taxes and get government out of the damn way. Up to 15% stamp duty is absurd, it pushes up developer costs up hugely. Also kill the planning gain taxes and the social housing requirements than kill so many developments by rendering them uneconomic. Why should some buyer subsidise others?

    The governments attack on Landlords and thus tenants through the extra 3% stamp duty (and taxing them on profits not even made) is hugely unfair to tenants and totally misguided. Not everyone wants to buy. With stamp duty being so high it is often foolish to buy for less than several years and many are not settled.

    The other thing that damages the market is the real threat of confiscatory lets destroy the economy Corbyn + SNP. May seems most determined to hand him the keys to nos. 10.

    As Churchill put it:- “I contend that for a nation to try to tax itself into prosperity is like a man standing in a bucket and trying to lift himself up by the handle.”

    So why are May & Hammond doing this?

    • APL
      Posted December 11, 2017 at 7:46 am | Permalink

      Lifelogic: “To get this you relax planning, relax employment laws, relax green crap building controls, cut taxes and get government out of the damn way. Up to 15% stamp duty is absurd, it pushes up developer costs up hugely. Also kill the planning gain taxes and the social housing requirements than kill so many developments by rendering them uneconomic. Why should some buyer subsidise others?”

      Yea. you could do all those things. But you could also stop immigration and educate our own population such that ‘importing the best in the world’, isn’t necessary because we produce the best in the world here!

  2. Tom
    Posted December 10, 2017 at 6:24 am | Permalink

    Jo Johnson today says;- shorter degrees benefit students and the rest of us.

    Well probably true, but the main problem is that at least half of the current degrees are essentially pointless, hobby subjects or worse still damaging left wing (or climate alarmist) propaganda. Government’s should perhaps fund only the degrees that are not and are in demand. Stem subjects, medical subjects, programmers, business people, engineers, sales people and builders in the main.

    More builders is surely one good way to have more and cheaper homes?

    Why should taxpayers have fund others to study Media & Women’s studies degrees or Theology? Let them fund their own hobbies please.

    • Hope
      Posted December 10, 2017 at 10:04 am | Permalink

      Stop your govt’s mass immigration policy while lying to say it intends to reduce to tens of thousands. The last seven years demonstrates historic record high immigration and record number of immigrants, hundreds of thousands, lost to the system! Thus it could severely Reduce demand for social housing. As aside reduce demand on public services that your govt has made cuts but prepared to support foreign countries public services and infrastructure i.e. Pakistan 453 million last year for a country with space and nuclear programmed as well as expanding its defense!

      May’s current EU plan allows relatives of EU citizens to come here, at any age. How will this impact on adult social care housing and her dementia tax?

      The hundreds of thousands lost by May and Rudd fuel black Labour markets i.e. Sex trade, cockle pickers etc where gang masters become the norm. This impacts on law and order that your govt has made huge cuts, capped pay but May lying to say she made a good deal for the taxpayer by giving away tens of billions to the EU where the country is not legally obliged to pay a penny, thus supported by pro EU Lords paper.

    • Anonymous
      Posted December 10, 2017 at 11:40 am | Permalink

      Many students are paying their own dole money in effect.

      The courses are there to keep unemployment stats down.

      • longinus
        Posted December 10, 2017 at 4:59 pm | Permalink

        Young people should be advised to stand for Parliament as the taxpayer would then be happy to fund a nice property portfolio through expenses.

        • APL
          Posted December 11, 2017 at 7:49 am | Permalink

          longinus: “taxpayer would then be happy to fund a nice property portfolio through expenses.”

          Being an MP is such a drag these days. They’ve stopped the expenses which were such a risky method of extorting the tax payer, and bunged themselves another £10,000 instead.

          But it’s not these guys fault, the last Parliament made them do it.

          Reply An MP does not qualify for help with buying a property these days.

          • APL
            Posted December 11, 2017 at 7:26 pm | Permalink

            JR: “An MP does not qualify for help with buying a property these days.”

            Good.

            Why the change?

          • APL
            Posted December 12, 2017 at 8:07 am | Permalink

            APL: “Why the change?”

            I mean, if it is wrong to line one’s pockets at the tax payers expense now, it was wrong to do it then.

            So when are we going to see the illicitly obtained funds repaid?

    • Derek Henry
      Posted December 10, 2017 at 12:54 pm | Permalink

      I think you should have a chat with David Attenborough I know who I believe.

      But I guess your the expert ?

      • Lifelogic
        Posted December 10, 2017 at 7:24 pm | Permalink

        Attenborough has a pleasant voice and his programmes have amazing photography and huge emotional appeal. But it is very clear to most sensible, honest & rational scientists (at least the ones not seeking grant funding), that global warming has to say the least been somewhat “exaggerated”. A bit warmer is actually better on average anyway, more co2 increases crop yields and also greens the planet. Anyway the solutions they propose – “renewable” energy and electric cars do not really work, even in Co2 terms and the cost a fortune too.

        Richard Lindzen for example has it about right.

        • Lifelogic
          Posted December 10, 2017 at 7:33 pm | Permalink

          I see that – Sir David Attenborough has expressed dismay at the Brexit referendum vote, saying he would rather people “embrace one another than spat in one another’s face”.

          Clearly he is entitled to his opinion, but there is not that much sign of calm rational logic or reason in that statement. He seems to want an anti-democratic, socialist, big state, over regulated, green crap EU. I would have thought that observing animals, competition and evolution might have given him a rather better understanding of life.

          • Fedupsoutherner
            Posted December 10, 2017 at 11:21 pm | Permalink

            Spot on LL.

          • ale bro
            Posted December 11, 2017 at 1:24 pm | Permalink

            I’m pretty sure the David Attenborough is only a narrator, not a script writer, so he just regurgitates whatever nonsense flows out of the BBC climate change department,

  3. David Cockburn
    Posted December 10, 2017 at 6:36 am | Permalink

    The ‘sweat equity’ of hard working young couples could be invested in housing for themselves. But only if the government were to make access to make individual permissioned building lots available at a reasonable price. This could be done by requiring big developers to sell off 10% of permissioned lots in any new development as a condition of planning permission.

    • Lifelogic
      Posted December 10, 2017 at 1:00 pm | Permalink

      Self build is certainly tax efficient saving much NI, income tax and stamp duty!

      • hefner
        Posted December 10, 2017 at 5:29 pm | Permalink

        Agreed, but the main problem in the Reading (and I guess Wokingham) area is that it is practically impossible to find a suitable piece of land, as most of those becoming available are “advertised”, it would seem, first to big name developers who tend to buy big areas/multiple plots.
        Only at the edges of the rather selective areas where “the happy few” live are there sometimes opportunities, but the land price in that case has a high premium, which makes it unaffordable to “the little ones”.

  4. Lifelogic
    Posted December 10, 2017 at 6:36 am | Permalink

    The more one considers May’s EU non deal the more appalling it looks. Non of the benefits, all of the disadvantages and a huge fee too. A complete and utter sick joke. I shall listen to what Farage has to say on LBC later today.

    Surely the public will not put up with this fraud? Gove says the public will be in control at the next election if they dislike the deal. Control? With an the appalling choice between socialist (remainer in all but name) T May types of “Conservatives” or the even more dire J Corbyn?

    Hardly control is it Gove? Gove anyway is the reason we have had to suffer this totally deluded and allegedly “very difficult” socialist woman.

    • Hope
      Posted December 10, 2017 at 10:07 am | Permalink

      Untrustworthy Gove who stopped the country from having a leave PM. A Trojan horse remainer. Who could believe a word he says.

    • Doug Powell
      Posted December 10, 2017 at 1:28 pm | Permalink

      It is apparent now that all our Brexit ‘Champions’ have a yellow streak down their backs a mile wide!

      • acorn
        Posted December 10, 2017 at 5:07 pm | Permalink

        As the Borg Queen said, the Collective must survive. The Collective in this case being the Conservative Party. The Party and its two centuries out of date, laissez faire, neo-liberal ideology, comes before everything and its God.

  5. stred
    Posted December 10, 2017 at 7:04 am | Permalink

    They will stand little chance of buying a home if net migration continues at 300k or more according to NI figures and we build far fewer accommodation units. Perhaps young people do not mind losing our countryside in which case, if we train bricklayers instead of useless graduates and rebuild brickworks, then we may just allow purchase of homes in the long run. Traitor May has ensured that by her signing away our rights to control net migration, this will not happen.

    Facts4eu has a summary and full text of Lawyers for Britain’s review of the capitulation today. It is beyond doubt that it is a disastrous foul up if not treachery.>

  6. Original Richard
    Posted December 10, 2017 at 8:10 am | Permalink

    Reducing house prices can only be achieved by either a collapse in the economy or by reducing the insatiable demand caused by massive net immigration.

    With our current Parliament the latter will never happen.

    • Ken Moore
      Posted December 11, 2017 at 12:19 am | Permalink

      Indeed and the government is also to blame by pursuing an ultra low interest rate strategy that has grossly distorted the housing market. Now they dream they can build 300,000 new homes a year in a country whose infra structure is already bursting at the seams.
      We need a return to ‘normal’ rates of interest and an acknowledgement that immigration needs to be brought down sharply…can’t see it happening under heir to blair may.

    • Lifelogic
      Posted December 11, 2017 at 4:35 pm | Permalink

      Corbyn will certainly destroy the economy if he gets chance.

  7. Sir Joe Soap
    Posted December 10, 2017 at 8:11 am | Permalink

    Yes, this will be a continuing problem given Mrs May’s agreement with the EU to allow free flowing families to enter the UK from the EU to seek work. Having no student loans from their EU education, paid for by the UK contribution to the EU, they’ll be in a better position than folk educated here from the get-go.
    Not to worry. Mr Corbyn will solve that one.

    • Ian Wragg
      Posted December 10, 2017 at 10:06 am | Permalink

      No doubt we the taxpayers will continue to pay student fees for EU citizens.
      I’m sure the ECJ will rule in their favour together with the continued payment of benefits so keeping the pull factor for immigration.
      What’s the betting EU migration soars now the obstacles have been lifted.
      Watch the care homes boom as we are forced to pay for the EU elder citizens again adjudicated by the ECJ.

  8. Iain Gill
    Posted December 10, 2017 at 8:32 am | Permalink

    Cut immigration

    Relax the planning rules

    Be careful to do it without destroying those who have had to buy at the top of the market, so allow inflation to kill their problem.

    Free up people to have their own houses built to their own spec.

    Clamp down on poor quality new housing. Incentivise builders on enduring resident satisfaction on their houses.

    Get the government out of manipulating the housing market in countless ways. From school catchment areas, to subsidising some and not others (often more needy). Charge market rents for social housing, give any subsidy to the resident to take where they want.

    Re “The government wants” complete and utter nonsense, the government maybe making noises but it really doesnt want anything of the sort, it has the cards in its hands and is dealing them.

  9. Sir Joe Soap
    Posted December 10, 2017 at 8:32 am | Permalink

    With these silly schemes you’re looking in the wrong place anyway. You don’t seriously think that putting in government schemes to pump up prices helps the next generation to buy, do you?
    Pumping prices is only on the margins so far as increasing supply is concerned, compared to freeing up planning restrictions and thereby reducing prices. Your professional buyers, however, will then be less inclined to want to buy a dwindling asset, and be quite happy renting either privately from rent-controlled properties or from local authorities, who will be targeted to build to meet demand under Labour. Problem solved.

  10. alan jutson
    Posted December 10, 2017 at 9:02 am | Permalink

    Best way to save a deposit for a new home is to continue to live at home with Mum and Dad (paying only a nominal rent) whilst you save.
    Trying to save whilst renting is almost impossible, unless you have a very well paid job.

    The Estate of Grandma and Grandpa would be of help to some, if it was not for inheritance tax.

    Afraid house prices are all about supply and demand as we have constantly debated before on this site.

    Too many people for too few houses.

    • Hope
      Posted December 10, 2017 at 10:10 am | Permalink

      Dad and mums home is targeted for May’s dementia tax same for grandparents in her cultural Marxist eutopia where there are no men and women but people!

      May is a national embarrassment. She needs to be ousted. She has rendered the ballot box null and void. It seems the Irish way fir independence only exists, at the end you also get to see the Queen!

      • Doug Powell
        Posted December 10, 2017 at 6:15 pm | Permalink

        She is also an embarrassment to our long held belief that we are a Democratic Nation. The referendum was won by Leave, yet it is the Remoaners who are driving Brexit! This is giving the Remoaners a second chance to stop Brexit. They should have nothing to do with Brexit! How can their involvement in any way be Right, Just, or Democratic?
        Also, whatever happened to ‘We owe the EU nothing’ and ‘The decision to leave the EU was a political decision, not an economic one? Well, we apparently owe EU rather a lot, and economic considerations are compromising the political decision of self determination we voted for!

    • A different Simon
      Posted December 10, 2017 at 11:25 am | Permalink

      A shortage of houses is necessary in order for vested interests including mortgage lenders , land owners and landlords to be able to jack up house (location) prices .

      In areas where demand has always been high and where supply cannot be increased such as cities , houses used to be cheaper several years ago than they are now so it is not all about changes to supply and demand of houses .

      The prices have gone up generally because lending rules have been relaxed by HM Govt allowing banks to move from lending 3X the mans salary (typically net of generous employers contribution to pension) , through to todays 5X dual income (essentially without any employers pension contribution) .

      I am sure sure you would not want a society where someones ability to own their own house depends on their inheritance .

      Take a look at LVT Land/Location Value Tax which is based on Adam Smiths proposed Annual Ground Rent and attempted to be implemented by Winston Churchill and LLoyd George as a partial replacement for treadmill taxes .

    • a-tracy
      Posted December 11, 2017 at 9:13 am | Permalink

      All well and good when you live near London Alan, but when all the best jobs are in London and the division of these jobs aren’t shared out properly around the regions then it will only get worse for the South East. I’d move an English parliament to Stoke on Trent, the Lords to Nottingham and just leave a UK senate in London, then move out other large institutions and put in decent transport links for all instead of just keep providing them in the South East.

      This is how social mobility works in the UK. You make a success of your education or a business. You can’t afford to buy in the nice area, so you have to buy in a secondary town, the secondary town is left to rot for 30 years, the schools fail, all the social housing is built there and lorry parks and traveller camps and things just spiral down instead of up, shops close, the evening ends at 6pm, there is no transport to the largest cities so as your children grow you may have a vehicle but they don’t, you then run an expensive taxi service giving them lifts to everything. If you manage to get them into a decent school out of the area you live in you end up with expensive bus fees but if they do well they move miles away but at least they’re mobile!! Then they can never save to buy because they can’t live with you whilst saving their deposit.

      • alan jutson
        Posted December 11, 2017 at 10:57 pm | Permalink

        a-tracy

        Likewise, I do not understand why some companies do not relocate out of London.

        I simply cannot believe they cannot get workers with the right skill set.

        Given the lower cost of commercial property, housing and lower living costs, disposable income goes a lot further and will give people a higher standard of living than ever you would get in London.

        The South East and London are becoming less attractive each year, both to live and work within.

        • a-tracy
          Posted December 12, 2017 at 10:07 am | Permalink

          London is a wonderful City especially if you’ve got money and business Directors don’t want to live in dross towns and Cities, many senior staff really moan if Northern relocation is mentioned because they know it’s network career ending unless you’re high ranking in the public sector and your salary matches that down South but you have the same problem… Where can they shop even if they live in wealthy enclaves it is so limiting, where do they go out at night with lots of people like them, experience the wonderful creative culture and the art that’s abundant in London, just having everything so easy to find.
          The transport that I know causes problems to South Easterns in the rush hours is so much superior to what the rest of the Country experiences that you all take it a bit for granted, especially if you’re over 60 and its all free, that is like earning an extra £8,000pa gross for those still working, being able to get around quickly to absolutely everything you might need is a treat when we visit. We have terribly overcrowded roads too and the M6 has taken three years to fix up just three junctions and all three have been virtually brought to a 50mph traffic jam in all that time, we’re told it will be another 18 months before it’s finished and it is lowering productivity, creating lots of accidents, even at night when there are no roadworkers we can’t progress all following one another in the inside lane to avoid speeding tickets. You simply can’t manage without a car up here yet our London politicians whack on the taxes on motoring to discourage it down South without a backward glance up North and in Rural Wales.

  11. Simon Brown
    Posted December 10, 2017 at 9:07 am | Permalink

    Please, please, please do not use the word affordable when you really mean low cost or starter homes. Affordable Homes are council houses under another name and should always be written with a capital “A” to avoid confusion and drive home the point that they are special, with special status and considerations under planning regulations. They cannot be owned by anyone other than a Housing Trust or regulated approved landlords, and an individual in a shared equity scheme with the Affordable Home owner can only ever acquire 80% of the equity.

  12. George Dunnett
    Posted December 10, 2017 at 9:09 am | Permalink

    The reason why your constituents can’t afford to buy a home is due to the Bank of England and the government thinking the problem of high house prices is a “supply-side” issue only.
    No it is mainly a demand-side issue. When we have previous chancellors of the exchequers saying “Britain is open for business” I cringe and start shouting at the TV/radio. Guess what, all the spivs and the get rich quick brigade in Chrisindom buy property in Britain.

    The demand for buying property in Britain is further being fuelled by the developers designing property by Chinese architects so that Chinese investors can buy them. 9 Elms is a case in point!!

    So the Help to buy and ISAs and all these other supply side incentive are just forcing prices up .

    SOLUTION 1. Ban the ownership of second homes.
    SOLUTION 2. Ban foreign ownership of residential property.
    SOLUTION 3. Extend the Right to Buy scheme to private tenants.

    Sarah Beeny is right, we haven’t got a housing shortage, we have an affordable housing shortage caused by the above.

    • Lifelogic
      Posted December 10, 2017 at 11:07 am | Permalink

      If you sell something for less than the market price there will always be more demand than supply and a shortage. Price is the mechanism to match supply and demand. The only solution for cheaper housing is more supply or less demand.

      We see this with the appallingly, dire NHS. If you do not charge you have to ration use, refuse treatment or delay for so long that people either die or go elsewhere.

      • Lifelogic
        Posted December 10, 2017 at 11:14 am | Permalink

        Then again at say 2% interest even a £300K mortgage is only £500 monthly, interest only.

        I remember John Major giving us 17% mortgage rates (with his idiotic experiment ERM experiment – still no apology from him)where a £300K mortgage cost £4,250 monthly. Perhaps these youngsters should stop complaining so much and work and save a bit harder!

        • hefner
          Posted December 10, 2017 at 5:38 pm | Permalink

          I went through Major’s 16.5% interest rate, fortunately (!) on a property originally bought for £70,000 (in Reading). I have recently seen the same property sold for £400k eighteen months ago.
          While I am ready to accept the role of emigration, I also think the ridiculous way both state and private pensions are organised in England (Britain?) is also responsible.

          • Lifelogic
            Posted December 11, 2017 at 7:33 am | Permalink

            Indeed the endless attacks on pensions, the constant changes and the way they are organised is hugely damaging. Brown Osborne and Hammond and have largely destroyed any confidence them by over taxation and over regulation.

  13. Roy Grainger
    Posted December 10, 2017 at 9:10 am | Permalink

    1) Realise That cutting stamp duty simply forces prices up so does not help
    2) Cut demand for housing by controlling immigration
    3) Penalise overseas buy-to-let investors with penal capital gains tax charges

    • Lifelogic
      Posted December 11, 2017 at 7:36 am | Permalink

      In relation to (1) it still help to bring more properties onto the market or to get built. On (3) they already have high CGT 28% and anyway the investment, and thus more properties being available to rent, is surely a good thing.

  14. Duncan
    Posted December 10, 2017 at 9:10 am | Permalink

    Governments are too blame. They spend far too much of our money to finance their idiotic political spending leaving them with no choice but to increase all taxes across the board to compensate

    I define political spending as state spending designed to

    One – reduce the possibility of negative, potentially damaging headlines in the press and on TV. Essentially, throwing money at screeching public sector union activists who know understand that the louder they scream the more cash they can extort. The Tories are particularly prone to this

    Two – increase the probability of their respective party being re-elected at the next election

    If we had a government that focused on cutting state spending (confronting the public sector vested interest) the gains from that could be used to slash income tax, increasing net wages and allowing young people in work to finance deposits and mortgage payments

    But we have cowards in charge who see the taxpayer as something to be abused for political gain which will mean, eventually, state bankruptcy

    I don’t own a property because I can’t afford too. I don’t book an interview with my MP moaning about that because I have a zero sense of entitlement. If you can’t afford a property, tough. That’s life. That’s the free market.

    TNSTAAFL

    And when those state debt bills land on the UK’s doormat interest rates will have to go up to attract ever greater capital.

    Interest rates are at all time lows and some people still can’t afford property. Can you imagine rates at 5%+ or even 10%. That’s what will happen when Labour get in

    You see, we have a party in power that ditched a true conservative as their leader. MT was the greatest PM this nation has ever known and KC and his buddies stabbed her in the back. It’s been down hill ever since

    This party is dead. We need an aggressive, pro-freedom, anti-socialist, pro-individual leader of our party. We don’t need a leader obsessed with liberal left nonsense

    • Lifelogic
      Posted December 11, 2017 at 7:37 am | Permalink

      “We don’t need a leader obsessed with liberal left nonsense”

      Exactly.

    • Glenn Vaughan
      Posted December 11, 2017 at 9:40 am | Permalink

      Duncan – “MT was the greatest PM this nation has ever known”… Really? Greater than Winston Churchill? Your claim is idiotic so do your history homework!

    • APL
      Posted December 11, 2017 at 1:10 pm | Permalink

      Duncan: “I don’t own a property because I can’t afford too. ”

      Not only can’t you afford to own a property, you never actually own it even if you did.

      Refuse to pay your council tax and see how secure your property title is then.

  15. The Prangwizard
    Posted December 10, 2017 at 9:24 am | Permalink

    And the elephant in the room is continued mass immigration.

    Mr Redwood, losing cedibility with his wish to put party before country with Brexit is doing the same on this issue which is completely linked. EU immigrants will be able to bring relatives almost without restriction under the EU deal.

    Yet he pushes the party line on these virtual irrelevances.

    Mr Redwood – did you tell them that all these schemes are almost irrelevant when mass immigration continues to be encouraged?

    • Andy
      Posted December 10, 2017 at 11:33 am | Permalink

      Except every reputable study concludes otherwise. Migration is a negligible factor – though the ranting hard-right likes to pretend otherwise. Far bigger factors are the number of people now living alone – both old and young – and increasing life expectancy.

      The real elephant in the room is pensioners. Many refuse to downsize – and end up pottering around in the houses which are too big for them. Many own second, third and fourth homes – which are either rented out at ridiculous prices or left empty. The baby Boomers – the most selfish generation in history – are responsible for most of these problem.

      • alan jutson
        Posted December 10, 2017 at 5:20 pm | Permalink

        Andy

        Why do you think your “older people” are reluctant to move out and downsize.

        Perhaps stamp duty is a reas0n, as may be estate agents and solicitors fees, likewise, having to refurnish with new carpets curtains etc.

        Smaller homes usually also have smaller rooms ,so new furniture also often required.

        Not so simple a solution as you suggest, as it may cost very many tens of thousands of pounds to downsize, thus why bother.

        • Lifelogic
          Posted December 11, 2017 at 7:38 am | Permalink

          Indeed better perhaps to let out a part of your large house!

          • alan jutson
            Posted December 11, 2017 at 10:58 pm | Permalink

            Even better, eventually employ your own live in nurse, and avoid nursing home care costs.

      • Hope
        Posted December 10, 2017 at 5:26 pm | Permalink

        Migrant watch stats quite clear. Immigrants are the reason for the high demand. Fact. Not anything to do with labeling views hard right or hard left.

      • Cheshire Girl
        Posted December 10, 2017 at 5:44 pm | Permalink

        What a load of rubbish! Why should pensioners downsize, to get Governments out of the hole they have dug for themselves over the years . I don’t know anyone who has third or fourth homes either.
        The truth is that the Government is quite happy to see pensioners targeted, while they themselves sit on two or three homes, and collect their large taxpayer funded salaries and expenses.
        Personally, it is up to me to determine if my home is too big for my needs, and no Government will influence me to leave it. I will be carried out in a box, before I will let this happen!

      • Iain Gill
        Posted December 10, 2017 at 6:09 pm | Permalink

        My mother paid for her house

        Others spend money on booze, gambling and cigarettes

        If she wants to live in it I suggest the state leaves her alone

      • Edward2
        Posted December 10, 2017 at 6:09 pm | Permalink

        “Every ruputable study”…equals.. the studies I believe in.
        And being ageist is just another variation of discrimination.

      • rose
        Posted December 10, 2017 at 7:37 pm | Permalink

        Yes, the Baby Boomers are guilty – of promoting mass immigration and preventing discussion on it.

        • Fedupsoutherner
          Posted December 10, 2017 at 11:32 pm | Permalink

          Well I’m a baby boomer Rose and I don’t want or encourage mass immigration. What a strange idea.

          • rose
            Posted December 11, 2017 at 10:47 pm | Permalink

            Sorry, I meant the baby boomer generation, not all baby boomers. There are lots of them who don’t like what has happened. But before their generation took over, it was possible to talk and mass immigration didn’t exist anyway. all the legislation on equality, discrimination, etc is a baby boomer contribution. The previous generations didn’t think like that.

      • libertarian
        Posted December 10, 2017 at 8:00 pm | Permalink

        Andy

        You are a parody account aren’t you

        Pensioners refuse to downsize… do they ? Any evidence for this? And if they did downsize from their 5 bedroom luxury house, please explain how generation snowflake are going to buy a 5 bed luxury home as their first purchase. Baby boomers the generation that invented every piece of technology you take for granted and the generation that created the jobs that your generation should be doing. You might like to compare the lifestyle at 20-30 of a baby boomer with the lifestyle of a 20-30 snowflake and get back to us on selfish…

      • miami.mode
        Posted December 10, 2017 at 8:22 pm | Permalink

        Andy, you should try some lovely sweet red seedless grapes rather than the sour ones you currently consume.

        Obviously any “reputable” survey will not blame immigration because it is de rigueur, in fact almost verboten, amongst the sort of people who conduct these surveys not to mention the i word.

      • sm
        Posted December 10, 2017 at 8:39 pm | Permalink

        I agree that increased life expectancy is a major problem, but as an OAP who has downsized twice, may I point out that there is a dearth of appropriate property to move to.

        2 years ago, I visited several recent developments of retirement flats in an affluent area: the designs were dismal, the kitchens were miniscule, and in even the very expensive ones, there were no dishwashers or washing machines. And I realised I, like many others, did not want to be living so close to just one generation. I have friends who want to downsize, but realise it’s stupid to swap one house with a staircase for another with a staircase, albeit having fewer bedrooms and a smaller garden.

        • Andy
          Posted December 10, 2017 at 11:11 pm | Permalink

          You are correct. Which is why we need to build on the Green Belt.

      • a-tracy
        Posted December 11, 2017 at 9:20 am | Permalink

        Can you direct me to a couple of the studies you’ve read Andy please, I want to read the findings for myself.

    • Fedupsoutherner
      Posted December 10, 2017 at 11:26 pm | Permalink

      Prangwizard. No, of course not. Its not PC.

  16. Mark B
    Posted December 10, 2017 at 9:27 am | Permalink

    Good morning

    I wish them all luck.

    I bet one thing that was not discussed was the old saying of, “supply and demand.” And what is causing such demand. But we are not allowed to talk about that.

    Off

    I would like to ask a question of both our kind host and my fellow contributors.

    When HMG was winding down her Empire, did it ever demand from those former colonies such onerous concessions that we have granted to our true masters in Brussels?

    I’d doubt I will get an answer.

    • Hope
      Posted December 10, 2017 at 10:11 am | Permalink

      Or future trade partners.

    • David
      Posted December 10, 2017 at 12:22 pm | Permalink

      Good point about our former colonies.

    • APL
      Posted December 11, 2017 at 8:01 am | Permalink

      Mark B: “did it ever demand from those former colonies such onerous concessions that we have granted to our true masters in Brussels? ”

      We left most of them in pretty good financial position; Kenya, Canada ( 😉 ) Australia.

      Although not quite in the same basket, Rhodesia was a very prosperous exporter of food and minerals before Mugabe took over and destroyed the countries economy.

      So, No.

  17. brian
    Posted December 10, 2017 at 9:38 am | Permalink

    Some things never change. About 40 years ago while working overseas I visited England for a holiday. The BBC ran a piece about a young engaged couple in a village near Cambridge who said they could not afford to buy a house in that area. There have always been difficulties for young people in affluent areas.

  18. acorn
    Posted December 10, 2017 at 9:44 am | Permalink

    Four out of 10 council homes sold under Margaret Thatcher’s flagship right-to-buy policy are now in the hands of private landlords, with their tenants paying more than twice the rent levels charged by local authorities. (Guardian)

    While all these owner occupiers are spending large parts of their income on an asset that earns no income, they are limited in what-else they can buy. Hence, why invest tens of thousands in a Rollover Car Washing Machine; when you can easily supply the market with five lads on minimum wage, if they’re lucky, and a bucket of soapy water. National productivity did you say???

    “There are now 20,000 hand car washes in Britain, only a thousand of them regulated. By contrast, in the space of 10 years, the number of rollover car-wash machines has halved – from 9,000 to 4,200. The free-market economic model, combined with a globalised labour market, has produced a kind of reverse industrialisation.” (Paul Mason Guardian)

    • Mark B
      Posted December 10, 2017 at 8:40 pm | Permalink

      Did the Guardian explain why, so long after Mrs.T left office why this is so ?

      I would argue that part of the reason is because under New Labour the pensions were raided and the doors to MASS immigration from far and wide (“we sent out search parties”) were thrown open. Not that you would think that New Labour ever left office.

  19. VotedOut
    Posted December 10, 2017 at 9:48 am | Permalink

    Look at the UK population growth – there is the answer.

    No mainstream politician really addresses this issue yet it impacts everything every single day.

    This social engineering has gone on without the consent of the British people and despite all continues apace.

    The important question is; why do you continue to avoid this central issue of our time?

  20. Epikouros
    Posted December 10, 2017 at 9:52 am | Permalink

    The obvious place to start is with planning permission. It caters for vested and political interests not those of consumers. As in all things we should prioritise allowing consumers and the individual to design and build the systems and mechanisms that cater for our needs whether they be economic or social. History tells us that they are very good at it and that governments, bureaucrats and vested interests are not.

    That does not mean that our lives should be dictated by populism or dictatorship of the majority as that is more or less facilitated what we have now in the West and which has given the governance we currently have to suffer. As it gives us more cost and problems that are far above what it is worth. The people and consumer actions that work is not through direct action but through interaction, exchange and the steady accumulation of knowledge that translates into wise choices and ever improving systems and mechanisms.

  21. Dave Andrews
    Posted December 10, 2017 at 9:56 am | Permalink

    Drastic measures to collapse house values might be damaging to the economy. My proposal is action by degrees.
    Firstly, follow NZ lead in restricting foreign ownership. There should be no “buy to leave” property, where London property is bought up before it ever is released to the general public and left to appreciate.
    Secondly, restrict multiple ownership, perhaps on a regional basis.
    These measures will reduce demand and hence house price.
    Cutting immigration would also help, particularly on rental prices.
    No more houses please. English meadow looks much better.

  22. English Pensioner
    Posted December 10, 2017 at 10:18 am | Permalink

    I don’t think that the younger generation are prepared to save like their parents or grandparents. They won’t give up their social life, still insist on expensive holidays and if they actually get married, spend a fortune on stag nights, reception, honeymoon etc. Today’s generation simply don’t know how to save.
    Mortgages were short when we wanted to have our first one. You had to save with a Building Society each month for at least a year, a sum equivalent to your proposed mortgage, not easy if you have rent to pay out as well.
    And of course, no-one is prepared to address the real reasons for the housing shortage, immigration!

    • alan jutson
      Posted December 10, 2017 at 5:23 pm | Permalink

      EP

      Exactly.

    • Original Richard
      Posted December 10, 2017 at 7:01 pm | Permalink

      “Mortgages were short when we wanted to have our first one.”

      “Yes”.

      Back in the mid 1970’s when I was in my late twenties and had already worked several years after leaving University, I fixed an appointment with the manager of a well known building society with a view to taking out a loan to purchase a flat.

      The first question he asked was whether or not I was married. When I replied, “No”, he said that he could not offer me a mortgage and then showed me the door.

      I didn’t even get to being asked any questions about earnings or savings.

    • a-tracy
      Posted December 11, 2017 at 9:39 am | Permalink

      My children save English Pensioner. They’re not all the same. Park of the problem is rents are so high, perhaps we should have starter rent homes that people can have on low-cost rents funded and built by Housing Association (without the profit element private rental landlords expect) that people can only have for 2-4 years depending on their income projections, with an expectation and a check they are saving into a building society account (help to buy ISA) to get on the property ladder themselves.

  23. Richard1
    Posted December 10, 2017 at 10:19 am | Permalink

    Reform the planning laws and cut down on the army of bureaucrats who enforce them. 2birds with one stone.

  24. Bert Young
    Posted December 10, 2017 at 10:25 am | Permalink

    Property values are a chain linked situation . It is all very well introducing an inducement for the young to buy , but values will rise according to demand . I also question whether a young couple from the EU could arrive here and also qualify for the same rights ; after a short time they would be able to sell and return to their EU home with a handsome profit .

    There is no sign of any “opportunity for the young” in the area where I live ; values are very high and land is very scarce . Developers concentrate on buildings that will create the most profit – who could blame them ?. Stamp duty on all properties should be drastically reduced ; two recent widows I know who wish to down-size have had their houses on the market now for almost 18 months and , so far , have received no offers to buy .

  25. Kenneth
    Posted December 10, 2017 at 10:40 am | Permalink

    The obvious first step is to drastically reduce immigration

  26. formula57
    Posted December 10, 2017 at 10:58 am | Permalink

    Good for you in not insulting the young professionals by repeating the blether offered up in his budget day speech by the Chancellor (who will not be solving a problem the nature of which he clearly does not understand).

  27. Andy
    Posted December 10, 2017 at 11:27 am | Permalink

    Build on the Green Belt. It is the only long term solution but your party does not have the guts to say so. More importantly, it angers the pensioners who vote for you.

    • Edward2
      Posted December 10, 2017 at 6:11 pm | Permalink

      You are blinded by your predudices.

    • Gustin Playdeau
      Posted December 10, 2017 at 8:48 pm | Permalink

      I’m a pensioner but not in JR’s domain. I hate idea of green belts. Putting loads of concrete down and surrounding it with a token amount of grass is weird. Once escaping the housing, I wish to see open fields stretching not to the next set if houses but to genuine countryside. Too many people live here. The long term solution is to encourage people to emigrate on the basis as we have immigrants, ..you’re allowed to bring in dependents. So, away with everyone, their mother and father and grandparents to Canada where countryside goes on seemingly for ever.

  28. Thames Trader
    Posted December 10, 2017 at 11:29 am | Permalink

    I don’t agree with these schemes to help buyers save for a deposit. The price of a house depends (depending on which part of the country you live in and the size of the house) mainly on the laws of supply and demand. All these schemes do is increase the cost of the house due to the greater competition for a limited commodity. The only solutions are to level off prices by a) increasing the supply of houses; b) reducing mass immigration to slow the increase in demand. To increase the supply of houses the planning system should be simplified and measures taken to make it simpler to make land available for private individuals to buy plots and build their own.

  29. Anonymous
    Posted December 10, 2017 at 11:31 am | Permalink

    PS, We still have terrorism – via Schengen !

  30. Anonymous
    Posted December 10, 2017 at 11:35 am | Permalink

    Any kind of help to buy, bank of Mum and Dad, low interest, ISA, easy loan does nothing but drive up prices for those joining the market afterwards.

    Can kicking wearing out very expensive shoes whilst doing it.

    Too many people is the problem, not too little money.

  31. Barbara
    Posted December 10, 2017 at 11:46 am | Permalink

    This is just one more reason why a stable – or, indeed, slightly declining – population was a boon.

    Politicial parties in all their wisdom decided to do wreck that and keep wrecking it to a greater and greater degree. Congratulations.

  32. behindthefrogs
    Posted December 10, 2017 at 12:01 pm | Permalink

    Provision of schools, surgeries etc should be an addition to the provision of affordable housing not an exchange deal with the council.

  33. David
    Posted December 10, 2017 at 12:22 pm | Permalink

    HTB puts prices up.
    The quickest, cheapest, best way is to say no housing benefit for anyone who does not work in zones 1-4.
    They can move somewhere cheaper (like many people who do work in London have to).
    This would cause prices to drop in London, some immigrants to go home and the ripple affect would make prices more affordable everywhere. It would also help get rid of deficit and make the balance for people who work don’t fairer..
    Ideally this would have been done years ago to stop prices getting so high, but better late than never.

  34. William Long
    Posted December 10, 2017 at 12:22 pm | Permalink

    These schemes are just tinkering at the edges. What is needed to bring prices down is more supply – ease planning restrictions and get the builders working, coupled with alignment of taxation with other investments: put Capital Gains Tax in place of Stamp Duty. Houses are no more than something to live in, but with the current CGT free regime they are seen by many as a super-desireable investment, thereby increasing the demand beyond what it would otherwise be. I suspect if they were taxed just like any other investment it would result in an immediate reduction in values. That might not suit existing owners but it would certainly help time buyers.

    • alan jutson
      Posted December 10, 2017 at 5:26 pm | Permalink

      William

      Capital gains tax on housing.

      I hope you are not including the residential home here, otherwise no one would want to move, and the whole process would simply stagnate.

    • Edward2
      Posted December 11, 2017 at 9:21 am | Permalink

      Or the prices of homes would rise as sellers factored in the cost of the extra tax you were making them pay.

  35. Oracle
    Posted December 10, 2017 at 12:44 pm | Permalink

    So is it a good idea to take out a mortgage in say Boston right now at present house prices or wait for 29th March 2019 to see if there will be reasonable rents and be spoilt for choice of just where to live exactly? 🙂

  36. Derek Henry
    Posted December 10, 2017 at 1:01 pm | Permalink

    Change the rent laws or put more tax on Landlords.

    It’s perverse that one person can own so many properties and extract rent from people who pay more in rent than they would do if they could qualify for a mortgage.

    Housing should be a human right not an extortion racket.

    Everybody told Maggie at the time what was going to happen. It has been the same old story with most privatisations because the competition authority and monopolies commision have been a complete and utter joke.

    The laughing stock of the UK.

    • libertarian
      Posted December 10, 2017 at 8:14 pm | Permalink

      Derek

      Its perverse that you think there shouldn’t be a house rental market just like there is in every European country… You are an odd person…

      What any of that has to do with Thatcher Ive no idea and nor have you. Currently there are 1400 empty council houses in Newham & Tower Hamlets ( Labour Boroughs )

  37. Debt Collector
    Posted December 10, 2017 at 1:01 pm | Permalink

    Mums and Dads will need to make a decision on whether to lend money to their kids who are temporarily in love and temporarily together on a house they cannot afford and have to sell at just the wrong time when they have a major fall-out and head for divorce.
    As someone who had been in the business of speaking most stridently to many Mum and Dad guarantors of loans of their children who found themselves “temporarily” not able to continue making mortgage payments, I may say it is hard to know who to feel sorry for? The parents who succeeded and were lucky in their jobs and market timing but still lost via their children’s lack of luck or the children who wiped out their parents wealth and wiped out their own wealth on their deaths.
    MPs should stop facilitating parent and children borrowing which has led to suicide and at least ill-health both mental and physical.
    Fruit Machines are better than taking out a mortgage. Usually one has to have real money to lose in the machine and once put through the slot then that’s that. A mortgage however can be a life sentence for a one-off stupidity when you were too young to understand possible consequences.

    • a-tracy
      Posted December 11, 2017 at 10:13 am | Permalink

      All very good points, I have seen this regularly, it also affects children who rent and fall back on parents to help them out all the time, putting a strain on relationships when one parent or the other thinks a stronger line should be taken with their offspring especially in second marriages.

    • Rien Huizer
      Posted December 11, 2017 at 12:20 pm | Permalink

      Love is blind

    • A different Simon
      Posted December 11, 2017 at 1:19 pm | Permalink

      There should be some more disincentive for banks which choose to continue to lend to couples who are a bad risk .
      What would you think about making mortgages non-recourse loans as they are in some other countries ?

      That way a desperate house owner in negative equity who could not pay the mortgage could give the keys back to the lender and the lender could not pursue them for the shortfall when the house is auctioned off at less that the amount of the outstanding principal .

      Banks willingness to lend ridiculous multiples of dual incomes has been a major cause of house price inflation .

  38. Mr Obviousborne
    Posted December 10, 2017 at 1:12 pm | Permalink

    The thing about young couple mortgage applicants is that they believe their business relationship will last forever. How silly. They must be in love.

  39. rose
    Posted December 10, 2017 at 5:37 pm | Permalink

    When did it become a fact that people in their twenties could automatically expect to have a house of their own? We didn’t get our house till I was in my mid 30s and my husband was in his late forties. We didn’t feel hard done by. We had had high inflation and mortgage famine, and it wasn’t easy, even though we lived very frugally in order to save.

    Where this generation has a major disadvantage is in the overpopulation the successive governments have inflicted on the country with profligate abandon. That must be addressed, and the PM must not go behind everyone’s backs arranging with the Commission for it to continue.

    • A different Simon
      Posted December 11, 2017 at 1:30 pm | Permalink

      Rose ,

      Inflation and the accompanying wage inflation counted in most home buyers favour , probably yours too .

      Many people who say they bought their own home only bought a tiny part of it . Inflation bought the rest for them .

      example : suppose you bought a home in 1970 which cost 3X the mans salary .

      If your mortgage had not have been a repayment mortgage but interest only , by 1980 when wage inflation had tripled most peoples wages the outstanding amount
      of your mortgage would be only 1X the mans salary .

      Inflation would have bought 2/3rds of the home for them .

      The current young generation are almost certainly in a worse financial situation than your generation due to no fault of their own . Can’t you find any sympathy for them ?

      • rose
        Posted December 11, 2017 at 11:19 pm | Permalink

        I understand the point that an NHS consultant on index-linked pay and pension made large capital gains: I can remember one even saying, “What I need now is a burst of inflation…”[to cancel his debt, as you describe]. But not everyone had that luxury of being securely index-linked all the way through life, and many people, not just Margaret Thatcher, regarded inflation as a very great evil, but one that would be difficult to slay because so many big people, not just big government, had an interest in it. And so it turned out.

        I don’t like the house appreciating all the time. It means ever more taxation not based on income and that is a great worry. What is supposed to be a home becomes regarded by grasping government and others as unearned capital and therefore to be raided. But it can’t be raided, because it is being lived in. Many people won’t downsize because of stamp duty.

        Of course I am sympathetic to the younger generation. Why wouldn’t I be? But the past is not always as easy as it is made out, and I don’t like the younger generation being whipped up against the older generation in this way. It has never happened before. It is the new class war.

        • A different Simon
          Posted December 12, 2017 at 9:19 am | Permalink

          Thanks for your reply .

          I agree with what you say .

          Where the rentable value of a particular location outstrips the others , the cause is usually communal spending – e.g. the cross-rail development raises the rent landlords can charge for homes and commercial properties near stations .

          The point is that the costs are socialised and paid by all of us but the benefits are privatised by landlords , old freeholders and mortgage lenders – both by capital gains and as an ever increasing Housing Benefit bill .

          Like Winston Churchill , I am in favour of taxing land in prime locations much more heavily but this would be as a replacement for some of the treadmill taxes which people pay , e.g. income tax , not additional taxation .

          Take a look at LVT (Land/Location Value Tax) .

        • a-tracy
          Posted December 12, 2017 at 10:19 am | Permalink

          It’s very short-sighted of the Labour party to whip up the young generation against their parents and grandparents generation, they should remember the majority of their unionised workforce funders are dependent on the next generation for their generous public sector pension to be honoured. When they’re telling these same young people you’re going to be getting a pittance state pension after paying in 50 years at the age of 70 and the return on a private pension even with a £100,000 is only £4000 if you want a spousal transfer, this isn’t going to go down well at all when people wake up to it. 20 odd years ago I said waspi women weren’t being informed clearly enough about their pension age rising and what this meant for them, that is a minor problem compared with what Gordon Brown did with private sector workers pension pots and the majority of them aren’t paying attention! Nest will just about pay their Council tax and licence fee for them if they’re lucky.

  40. ian
    Posted December 10, 2017 at 5:52 pm | Permalink

    The government does the biggest rip off in loans in the housing market at this time. with loan deposits of 20% t0 40% on properties up to the value of 600,000 pounds for young people. A loan of 40,000 pounds, if your house goes up by 100% in five years which happened in the early 2000s, the borrower would owe the Gov 80,000 pounds when they sell, that’s 8,000- pound profit every year of the loan, if the loan for 10 years, interest is payable on last five years of the loan at RPI plus 1%. so this year was 4% plus 1% that’s 5% on 40,000 pounds for 5 five years, which is 2000 pounds interest in one of the five years which could as much 10,000 pounds over the loan period on top of the 100% price increase, they would have given the Gov over 10 years, 50,000 pounds plus their money back of 40,000 pounds. 90,000 pounds IF/ borrowed from nationwide on a 5% deposit 95 % loan, it would of cost over 10 years, 4. 1/2% on 190,000 10 years fix rate loan of 855 pounds a year for 10 years, which is 8,550 pounds over 10 years, a saving of 41,450 pounds and no need to pay the 40,000 pounds back to the GOV. leaving the applicant 90,000 pounds in the hole when selling their home, with nationwide 8,550 pounds in interest payments, so when selling your house with gov loan for 40,000 you would be left with 310,ooo pounds, with nationwide 391,450 after 10 years, just the interest lose. How are going to replace 81,450 pounds to buy another house, loan it? the gov get away with a 50,000 pound profit, 40,000 with no interest.

    They call it a leg up for young people, worse than student loans of 50,000 pounds each.

    • Rien Huizer
      Posted December 11, 2017 at 12:20 pm | Permalink

      It is a very good system and those criticisms are unfair. These people should try to repay the gvt loan asap. Furthermore, house prices cannot go much higher, they are already ridiculously high (in the cosmopolitan parts of the UK)

  41. Bob
    Posted December 10, 2017 at 6:26 pm | Permalink

    Mr Redwood,
    The gimmicky targeted schemes that successive chancellors have introduced are just diversions from the real problems. A return to MIRAS would make more sense. Stop trying to decide who is deserving and who isn’t, lets have a level playing field.

    Immigration led increases in demand, especially when people turn up with eight kids, no job and no money, no prospects and then ask the local authorities to house them. There is no housing shortage north of the M25, but the bulk of demand is for London properties. There are homes available for as little as £1 for those prepared to leave London.

    Stamp duty too high, means existing owners would rather spend the money on loft conversions and extensions. Lower flatter rates would increase liquidity in the market.

    Tuition Fees mean that kids are leaving uni with debts of £57k @ 6% compound annual interest before they even start their working lives. Jeremy Corbyn has promised to deal with this outrageous interest charge if he gets into number ten. That will cost the Tories votes.

    CGT Investment properties might be placed on the market if rates were more reasonable, like they were under the last Labour govt.

    • a-tracy
      Posted December 11, 2017 at 10:21 am | Permalink

      “Jeremy Corbyn has promised to deal with this outrageous interest charge if he gets into number ten”

      Yes BUT if he gives all following graduates FREE tuition then it is only 2012 grads that end up with neverending 30 year loans at 9% graduate tax and all the people graduating after them will be cheaper to recruit because they won’t have the 9% tax to pay out of their gross and thus will accept salaries 9% less and be the same net recipient, this is the benefits the Scots and Welsh have now. They can accept the lower graduate paid jobs in England that English graduates can’t afford and live off. If these extremely bright grads (that we’re told about all the time are much more intelligent than us) sit down and work this out Labour might not get quite the free run at the next election, especially if a new party gets it’s act together with younger, graduates realising a job in politics gives them the money for a home and a fabulous pension and a pretty decent starter wage with no criteria like a first class degree from a top ranking university to make you eligible for office, just work your socks off in the local area (in fact they’d best get started now).

    • APL
      Posted December 11, 2017 at 7:59 pm | Permalink

      Bob: “Stop trying to decide who is deserving and who isn’t, lets have a level playing field.”

      Exactly, who thinks the government knows anything about real estate?

      For the government, the housing bubble isn’t about buying houses, it’s about buying votes.

  42. lojolondon
    Posted December 10, 2017 at 7:14 pm | Permalink

    Easiest way to relieve pressure on house prices, on railway crowding, road crowding, water and electricity usage, NHS and school demands = stop importing 600,000 new people to Britain every year. This is the only honest way to solve all the above, never mentioned by any UK politician or media organisation.

  43. Peter
    Posted December 10, 2017 at 7:27 pm | Permalink

    Housing has now become a hugely important investment vehicle.

    In former times a building society would lend three times annual salary and that, with a small deposit, was usually sufficient to buy a first property – even in London.

    Nowadays those multiples are long gone. People in this country put huge sums into property and foreign buyers treat London property as an overseas safe deposit box.

    So tinkering with stamp duty and special ISAs will achieve little. In any case it is difficult for the government to actively seek lower house prices as so much now depends on them. So the government is in a real bind.

    The best advice for your Wokingham constituents would be to find an area with a more attractive house price to salary ratio and satisfactory prospects of earning a reasonable living.

    • A different Simon
      Posted December 11, 2017 at 9:14 am | Permalink

      Peter ,

      Successive governments have indeed created a monster by implementing policy after policy to puff economic rental values of locations which are the major component of house prices .

      Now they are finding the monster is out of control and they are scared of trying to tame it .

      The recent report from the ONS showing the proportion of UK wealth which is land and the proportion which is buildings is a damning indictment of this lack of long term thinking .

      We now have an economy which is built on credit secured on land and bricks and mortar .

      When the long overdue massive correction inevitably comes , this “wealth” will disappear and only the debts will remain .

      Banks will force real businesses providing real tax paying jobs to close because they have taken out loans to expand which are secured on directors houses – which will no longer provide the collateral to underpin the loan .

  44. Peter
    Posted December 10, 2017 at 7:36 pm | Permalink

    France and Germany do not have similar issues with house buyers.

    People are happier to rent with reasonable rentals readily available.

    The same capital gains as UK property are not available in European property either. It is a completely different market.

    Hence the unabashed delight of UK guests on the endless TV property shows at some house in a foreign land where they know little of the people or the customs or the work prospects. The house price always makes them happy.

    • Rien Huizer
      Posted December 11, 2017 at 12:09 pm | Permalink

      Houses in Munich or Paris can be as expensive as in London. Maybe the average price of houses sold (has a different weighting. Most reports do unosphisticated arithmetic Total value of dwelling sold divided by number. In an upswing there is always a disproportionate increase in the number of fairly expensive houses in the mix, on the way down, these houses stop sellin first. Your house may vary in value relative to the average depending on the point in the cycle. In addition, some areas in Western Europe, like Greater London, Paris, Brussels, Amsterdam, Copenhagen/Malmoe, Hamburg, Franfurt and Munich and Munich have special location factors working for them. The german cities on this list have moved as much as London over the past five years but the rest of Germany is much cheaper.

  45. Iain Gill
    Posted December 10, 2017 at 8:18 pm | Permalink

    Half an inch of snow and every school in town has declared itself shut tomorrow.

    When I was a kid I walked to school in 4 foot of snow regularly.

    Typical nationalised industry where the customers have no buying power, and they can do what they want with no incentive to do otherwise.

    All those parents who will not be able to go to work tomorrow!

    How much has this cost the country?

    It’s embarrassing, having been in places like Copenhagen with much more snow and life carries on without a hiccup.

    British public sector are a complete shambles.

    As usual.

    • alan jutson
      Posted December 11, 2017 at 7:17 am | Permalink

      Agreed Ian

      Remember 1963 when we had months of snow, schools never closed for a single day, the school caretaker made sure the coal fired central heating (such as it was) worked to its maximum, and we wore warm clothes.

      Walked a mile to get to school every day like many others, simply because our family did not have a car.

      This certainly is not the snowflake generation for that reason alone !

    • Rien Huizer
      Posted December 11, 2017 at 12:02 pm | Permalink

      Snow is metric these days, so you have to multiply by 2.5

    • Iain Gill
      Posted December 11, 2017 at 4:32 pm | Permalink

      Fee paying schools open I notice

      So nothing a bit of consumer buying power would not fix

  46. ian
    Posted December 10, 2017 at 8:25 pm | Permalink

    If you borrow the max from the Gov of 240,000 pounds, after 5 years you owe them 480,000 if house price went up by 100% over the five years, so out of a sale of 1.2 million pounds you would owe them 480,000, and if the loan is more than five years you have interest at this price of 5% on 240,000, which is 12,000 pounds a year, so you could be down 540,000 over 10 years, so when trying to sell the house you need 480,000 in saving so you can afford to buy the same priced house, would have to borrow 480,000 pounds more to make the money back up to 1.2 million pounds and pay the 5% house buying tax of 60,000 on 1.2 million pounds. Best deal in town.

    • APL
      Posted December 11, 2017 at 7:42 am | Permalink

      ian: “and if the loan is more than five years you have interest at this price of 5% on ”

      Good God! my Building society mortgage is 1.5% at the moment. Have the usurers taken over the government too?

      If your figures are correct, Help to buy is a vicious scam.

      • APL
        Posted December 11, 2017 at 1:45 pm | Permalink

        This is how ridiculous this housing situation is,

        One bedroom flat ( 35 sq meters ) in Tottenham near to Seven Sisters tube station ( five minutes walking distance ) bought new in 1994 for £47,000

        Changed hands in July 2017 for £275,000

        What newly married couple perhaps with a child on the way, is earning the £79,000 pa that’d allow them to secure a mortgage on a tiny flat – which they couldn’t live in for long if they are planning to raise a family??

        That particular property had maintanence charges on top of Insane Haringey council tax.

        This can’t be fixed by pretending to help people buy and then extorting 3.5% premium over the commercially available mortgate rate.

        • APL
          Posted December 11, 2017 at 7:34 pm | Permalink

          “What newly married couple perhaps with a child on the way, is earning the £79,000 pa that’d allow them to secure a mortgage on a tiny flat ”

          Not only do this married couple have to pay their mortgage, these days they’ve probably as Mike Wilson pointed out below got £50k of student debt too.

          There is the threat to the housing bubble, no buyers because they are all swimming in debt and burdened by local authority council tax.

    • a-tracy
      Posted December 12, 2017 at 11:30 am | Permalink

      ian, do you have to have the mortgage from the government on these terms for help to buy or can you get a mortgage from any provider?

  47. ferdinand
    Posted December 10, 2017 at 8:25 pm | Permalink

    There is confusion between homes and houses. Apartments are just as much homes as houses. Nowhere in the World do only houses exist. We can build many more apartments and at much lower cost. This will relieve the pressure much more quickly than trying to build houses down to a price which in most cases means building on unsuitable land in unsuitable places.

    • Rien Huizer
      Posted December 11, 2017 at 12:00 pm | Permalink

      Any idea why this is not happening?

  48. Bead
    Posted December 10, 2017 at 8:25 pm | Permalink

    Grass blades can be seen sticking well above the snow aside UK airport runways. It just shows how good UK lawn fertiliser. Even in winter grass grows with a vengeance. Of course all the schools will be closed due to teachers not being able to get in. Even though they haven’t as yet chosen to commute from abroad. We should employ more teachers with a height exceeding 2cm not that we should discriminate against sub-atomic heighted (?) teachers.

  49. Jeremy
    Posted December 11, 2017 at 1:07 am | Permalink

    Supply and demand is not the major factor driving up prices. The real issue is cheap money supply. The very low interest rates over recent years have meant buyers can take out ever larger mortgages. It’s this cheap money that allows purchasers to bid against each other pushing up prices. As prices are set at the margins, it only takes one bidding war between buyers (enabled by cheap borrowing) to set the new price benchmark for a street.

    Related to this issue is the fact that a young couple, to afford the huge mortgages, typically now have to both work. This is detrimental to family life as the children are taken care of by grandparents or sent to nursery.

    Schemes like “help to buy” are nothing of the sort. “Help to sell” or “help to increase developer profits” are more accurate names. All they do is contribute to ever increasing house prices.

    Mr Redwood – if you are really serious about tackling this issue, then please educate yourself about the real causes of high house prices and what should be done about it. You could start by reading a Moneyweek article on the subject titled “We really need to sort out the housing market before it destroys our economy”. The author talks about restricting the flow of credit into the housing market.

  50. APL
    Posted December 11, 2017 at 7:33 am | Permalink

    JR: “and wanted to know what more could be done to make homes more affordable. ”

    The administration you support could stop destroying the currency, and stop artificially pumping demand for a limited commodity.

    And stop importing low cost labour to undercut the salaries of the British population.

    That would allow house prices to fall to the level where a married man on a sensible salary could pay a reasonable 3x mortgage and still allow his wife to stay at home and look after their children, if she wanted to.

    Lifelogic as a property speculator, probably wouldn’t like the prescription, but it would be effective.

    • Lifelogic
      Posted December 12, 2017 at 4:11 pm | Permalink

      I agree more house (or fewer people) are the only solution.

  51. Mike Wilson
    Posted December 11, 2017 at 9:28 am | Permalink

    Mr. Redwood – please take the time to take a look at new homes in the Wokingham area – have a look at what is being built. Where are the 2 bed terraces for, say, £200k? There aren’t any – the builders are selling tiny terraced houses with little or no parking for £400k. And Help to Buy is facilitating this. Developers have just jacked their prices up to allow for the fact that buyers are getting 20% of the price as an interest free loan for 5 years. And, even after that, the interest rate is nominal. The rest of us are propping up the market.

    You should be encouraging self-build for youngsters. No-one should start out in life with £50k of university debt followed by £300k (minimum) of mortgage debt.

  52. Tom Rogers
    Posted December 13, 2017 at 12:21 am | Permalink

    Just end mass immigration.

    How difficult is it for your Party to understand? Is it because you are not the Conservative Party but in fact the Business Party?

  • About John Redwood


    John Redwood won a free place at Kent College, Canterbury, and graduated from Magdalen College Oxford. He is a Distinguished fellow of All Souls, Oxford. A businessman by background, he has set up an investment management business, was both executive and non executive chairman of a quoted industrial PLC, and chaired a manufacturing company with factories in Birmingham, Chicago, India and China. He is the MP for Wokingham, first elected in 1987.

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