House prices have risen a lot in recent years for a variety of reasons. Demand has been strong, with the country needing to provide for aroundĀ 300,000 extra people every year thanks to the past free movement of the EU and UK immigration policy. Supply has been limited by a lack of capacity amongst the major housebuilders, a shortage of skilled trades and a country which has lost too much production capacity for building materials. The money policy going for ultra low official rates of interest and relatively low rates for mortgagesĀ has enabled a substantial number of people to afford and pay ever higher prices for property. The multiple of incomes of the typical mortgage for a first time buyer has soared, but mortgage interest payments in relation to income have not changed much as the lower rates have so far offset much of the house price increase.
Some say a shortage of planning permissions has kept building land in short supply, yet many Councils report large numbers of unbuilt out plots and leading housebuilders pride themselves in holding substantial land banks. It is of course true that having a restrictive set of laws over how someone can use the land they own will over time mean higher plot prices for building, but there is no appetite to go over to a system where anyone with land can build what they like. Their decisions do have substantialĀ implications for the need for free infrastructure like roads, schools and surgeries where the public sector has to provide and offer some guidance on plans.
It would be a good idea to use the new controls over migration to limit numbers of economic migrants more.Ā We do need to review the provision of building capacity, making it more attractive to people to undertake relevant training. Whilst the provision of cement and bricks, tiles and roof trusses is a matter for the private sector, the government could do more on its energy, mining, quarrying and forestry policies to assist in providing more domestic capacity for the main supplies needed for building.
May 13, 2022
Good morning.
Our kind host is quite right to point out some of the causes of high house prices, but I think we also need to remind ourselves that MASS IMMIGRATION is a direct cause of government policy. We also need to remind ourselves of other government policies which are contributing to higher prices.
https://www.gov.uk/affordable-home-ownership-schemes
Property developers see that with more and more people wanting to buy or rent and a government keen to underpin the property market, they are clearly releasing just enough stock to keep the Ponzi Scheme running. Much like the oil and gas companies not wanting to drill for more oil. Just make it scarce enough to keep the price constantly high ie Throttling down supply just below demand, but not too low as to kill off the market.
People are being turned into both debt and cash cows and just simply work and earn money for others to take leaving little for them to enjoy or leave to loved ones when they are gone.
Of course, the rich use farmland as a means to avoid inheritance tax whilst the ‘little people’ have to.
https://www.gov.uk/guidance/agricultural-relief-on-inheritance-tax#:~:text=You%20can%20pass%20on%20some,growing%20crops
All government websites, Sir John š
May 13, 2022
Many thanks for putting this up so quickly, Sir John. And it being Friday the 13th and all that š
May 13, 2022
The Nationwide house price chart for regions matches the charts showing increased population and immigration. Add near zero interest rates since the banking crash and we have an unprecedented house price inflation. Now that younger people can no longer afford to buy and small private landlords are being squeezed out, banks and pension companies are building to rent, with government approval. This is in accordance with the WEF agenda. Tenants will own nothing and be happy. The Conservative Party is no longer for the individual or private ownership.
May 13, 2022
This has caused the greatest inter-generational wealth divide there has ever been. No wonder kids can be made to hate their parent’s generation.
I’d say build more houses but the oldies will die off soon enough.
I’d also say (in contradiction) resist any housing developments in your area. Not because of nimbyism but because there will be no increase in infrastructure nor services regardless of the extra council tax collected.
A new housing estate in your area will mark a significant drop in your quality of life and standard of living as the same resources are being spread a lot more thinly and congestion gets worse.
There is usually an increase in crime too, as in our region. Police officers being assaulted. Unheard of even five years ago.
May 14, 2022
I don’t see the resemblance.
https://datawrapper.dwcdn.net/qKCHV/2/
May 13, 2022
+many
Oh but the heart-wrenching destruction of the once countryside.
Yet the richās multi million enclaves remain exactly as everā¦green and unspoiled.
Too expensive for people to move home to but carefully cleansed, preserved and nurtured over the past few decades for exclusive use.
And when the elite get hold of our villages they recreate the very life they happily destroyed.
Mayfairs, craft fairs, Summer FĆŖtes, artisan shopsā¦.how nice for them!
May 13, 2022
In order to reduce immigration, you need to tackle one cause of it – skills shortage.
If only the country produced more engineers from its universities, rather than social studies.
Shortage of lorry drivers when the EU ones went home, shortage of farmworkers for the same reason. We posted a vacancy for an electronic engineer recently, and all but one of the applicants was foreign. So how do we fill the post?
You’re a mug if you do any training, because all you do is supply staff to other businesses that don’t bother.
May 13, 2022
But the torrent of social studies graduates feeds the government’s insatiable need for apparatchiks!
May 13, 2022
+10, Dave.
May 13, 2022
No-one’s ever been against *selective* immigration.
Clearly (with the hundreds of thousands in immigration a year) we’re not being selective.
May 13, 2022
The best cure for high prices is high prices. Bid the rate up, it will encourage supply.
“Real” shortage skills as evidenced by market salaries should trigger government to offer cross-training grants to UK citizens then residents. Before considering granting working visa’s. Taxapyer funded family immigration and of low wages just contributes to lower GDP and higher demand for public services.
Decreasing standard of living, declining public service and global governance moving in a distinctly totalitarian fashion.
It won’t matter soon as the comparative benefits of the UK will soon be lost, as we are being levelled down by a global policy of economic transfer via climate change, immigration and or wars.
May 13, 2022
What I fail to understand is we’re Importing 300,000 plus annually but we have staff shortage in every sector.
We were told there were 3 million EU citizens but 6 million applied for the right to reside. Where are they.
We are currently on holiday on the south coast and all the hotel staff are British, 5 years ago they were mainly EU nationals.
Are they all back home on benefits.
Something doesn’t add up.
May 13, 2022
I agree, an unsolved mystery. Hotels cutting out breakfasts and keeping the pandemic thing of not touching rooms running, yet unskilled immigration running wild. Record numbers of students with record debt desperate to work in the weekends and vacations? Where are they?
May 13, 2022
There definitely needs to be a benefits audit on anyone claiming but not paying tax, to ensure they are still living here.
May 13, 2022
How many were given loans which may now be re-payable? Or student loans which are now repayable? Schoolboy errors in administration were mentioned.
May 13, 2022
Some of the EU citioeho took up UK citizenship may have lived awhile.
My nephewās Spanish, mother-in-law had lived here for over thirty years, so when we left the EU she applied for the right to remain. Iām sure she wasnāt alone in that.
May 13, 2022
It would also help if UK assets were not available to the world’s dirty money as a safe haven.
It’s been pouring into particularly London residential property, which sets the trend for the whole country.
And in relation to that, the Tories wrecking of the effectiveness of Labour’s Empty Dwelling Management Order powers for local authorities need to be reversed as a matter of urgency.
May 13, 2022
Plenty of homes available in places like Nottingham and Cardiff for Ā£150,000 and less.
You are like most of Labour obsessed with London NHL.
PS
Banning all non UK citizens from buying property seems to be your latest idea.
What do you think other nations would do in retaliation?
May 13, 2022
More houses or fewer people the issue is very simple. For more houses you relax OTT green crap building regulations, relax planning and cut the many taxes on building and selling them.
Much talk of insulation and almost everyone cheers this on but often the cost simply does not make sense for the small energy saving made.
Also many can no longer afford to heat the whole house just one room at best. So it follows insulation for them (other than for that room) is totally pointless!
May 13, 2022
Looking around my area I’m not convinced planning needs to be relaxed, certainly not for the big builders. We are being built out of our countryside and my local market towns will be at least 50 percent bigger by 2030 than they were in 2020. On the other hand, try to get permission to do an extension and you will be bound up in delays, costs red tape etc. so maybe there you have a point there. If the population objects and the local councils object to major impositions, the government sends in an inspector from the other side of the country to clod hop all over the locals and grant just what the big boys want. Seen it several times in my area in the last 7 or so years. All under a Tory government of course who supposedly care for democracy. Ha!
May 13, 2022
One size fits all government determined insulation standards make little or no sense. People have very different needs and demands. Some are in all day other at work and away at weekends, for some it is a second home not used much at all, for others they can perhaps only afford to heat one room so full house insulation makes no sense at all.
In fact āone size fits all governmentā is always idiotic. You need to let the people at the coal face who know the local conditions & realities make the decisions.
May 13, 2022
David Frost today in the Telegraph but is Boris backing this? Will the dire lefty pro EU Lords obstruct it.
āWe had to agree to the Protocol. Now we have to scrap it
The EU may well retaliate against Britain, but the Government has a duty to Northern Irelandā
Also Hunt in the Times āTories risk losing the next electionā Hunt tells MPs they certainly do if he becomes leader or they follow his daft policies. The man who was nearly 5 years health minister yet did nothing to sort the appalling NHS service nor the social care service out. It is appalling value for money and fails millions.
May 13, 2022
Excellent news on NI. Yesterday our Churchillian Prime Minister stated very firmly: “We will not accept anywhere a changing of boundaries in Europe.” So that’s it, folks – no border down the Irish Sea, good.
Oh wait, he was talking about Ukraine, sorry.
May 13, 2022
Look, demand in housing is always in effect infinite, since almost everyone would live in a mansion in its grounds if they could.
Most people could afford a terrace in a northern post-industrial town on the other hand – for around Ā£40,000 – but for self-evident reasons they choose not to move there.
May 13, 2022
Not true.
I wouldn’t want to live in a mansion.
May 13, 2022
Please pay attention. I didn’t say everyone and neither would I.
May 13, 2022
Demand for housing isn’t infinate NHL
If everyone had a house then demand would obviously fall.
At present supply is nowhere near demand.
May 13, 2022
Demand is only real demand if people have the money and are willing to pay for it. Price is the mechanism to balance supply and such real demand. So real demand is not remotely infinite.
Many people want a nice or flat house in Chelsea with a view of the river but only a few are able & prepared to pay Ā£20 million for it.
May 13, 2022
Ironic isnāt it that Labour brought in Inheritance Tax to take away the estates of the landed gentry and now we see itās mainly the middle classes paying this disgusting tax with the mega-rich with their trust funds and large estates protected. No wonder the billionaires are buying up farmland and leaving it to re-wilding whilst the rest of us are left to starve.
May 13, 2022
Christine. Yes agree. We’ve just come back from a week in Wales and we have never seen so many farmers fields in a terrible state, covers in docks and thistles doing nothing in our lives. The pasture ( if you can call it that ) was so bad it couldn’t have been for silage and there were no livestock grazing. We assumed it was for rewilding.
May 13, 2022
+1
Not to forget all those wind farms they get paid for even when the wind is not blowing.
Subsidies for the rich.
š
May 13, 2022
Mark B
Don’t forget the constraint payments when the wind is blowing too hard and the grid can’t accept the power generated.
May 13, 2022
I thought it was N.Lawson who in 1986 transformed the Tax on Lifetime Gifts into the Inheritance Tax. And before that there had been some tax on donations, lifetime gifts, estate transfer since 1694. And as far as I could remember there was no such thing as Labour in the 17th century š.
May 13, 2022
The practice of taxing the transfer of estates at death in the UK began, in a
coherent way, in 1894. Though initially modest the top tax rate rose significantly
over time. In 1894 the very largest estates attracted a tax of 7.5 per cent. By 1930
that had risen to nearly 40 per cent. After the Second World War it rose to 65 per
cent. In 1949 Sir Stafford Cripps the Labour Chancellor raised the top rate to 75
per cent.
You are right the first British Labour Government came to power in January 1924 but the biggest increase in death duty has been since that time.
What I’m pointing out is that not only do the rich avoid paying it but the Government actively facilitates it yet this totally unfair tax designed to spread wealth now mainly hits the middle classes.
May 13, 2022
Christine,
True. Though Tony Benn managed to give inheritance tax a swerve.
Conservatives see it as another useful tax on those unaware or unable to avoid it.
May 13, 2022
Builders are not going to build a large surplus of unsold homes. They are only going to build when they think they can make a profit given the cost of building and the cost of the land that they have options over. When prices rise more rapidly, they can exercise more options over land and build more homes if there is sufficient labour to build them. The strike prices on options tend to be set above current market prices for land when the option is granted, which cheapens the cost of the option and allows a landowner to capture a better price while collecting the option premium up front. That means that house prices have to rise for builders to want to exercise the options. The building pipeline required by the planners is responsible for tying up land banks and therefore making it more difficult for a casual purchaser to buy building land today. If house prices fail to rise then options will be left to lapse, and the volume of building will decline because of lack of profitable plots. After the options lapse the land can enter the market once again, probably at lower prices than before, which allows building to resume.
House price expectations are heavily influenced by monetary conditions, and the ease with which a mortgage can be obtained. Supply into housing chains comes not only from newbuilds, but also from executor sales and sales by those moving into care or emigrating, and couples relinquishing one home to form a new family unit where they had individual homes before (rarer these days). In fact, newbuilds are far less important in overall supply than these other channels.
May 13, 2022
The reference ‘the government could do more’ pretty much sums up everything that is wrong with Tory MPs and the now collectivist Tory Party who at one time would baulk at such statements.
May 13, 2022
+100
The very best thing it could do would be to do NOTHING.
Play tiddlywinksā¦.drinkā¦.cut its collective toenails.
Just get out of our faces!
May 13, 2022
Good news today – the government plans to reduce the size of the civil service. Complaints this will mean cutting services. I don’t think so, no doubt there are large numbers of middle management who contribute very little yet receive generous salaries.
May 13, 2022
There will be big redundancy payments, big pensions and round at the back door they will be hiring at higher cost the same people, or employing private firms at huge cost to cock things up quicker and better.
May 13, 2022
As Boris famously put it: āMy policy on cake is pro-having it and pro-eating it.ā But Borisās ācake-ismā cannot apply to economics.
This shows Boris is a socialist to the core.
You canāt have lockdown and not need economic growth. You canāt have economic growth and have the highest tax in 70 years, Net Zero, Mass Immigration. Destroying the economy with over demand for houses, taxes on energy, millions of low tax contributors and economic success cannot go together.
May 13, 2022
+exactly
A certain person has eaten all the cake.
None left.
The cake tin is rattling with emptiness.
And the cake-stuffed one now wants us to stump up for more!
May 13, 2022
Exactly Javelin, the treasury has created a perfect storm on purpose. Sunaks tax grab on people earning over Ā£35000 only overturned his NI grab on lower earners and those in lower band houses, the laugh is they don’t appreciate what he has done and it has rebound on this government.
In their bid to attack their own supporters the Conservatives shot themselves in the foot. When the middle classes stop spending and they have things seize up. Restaurants close, theatres empty, it is very socialist to stop people that strive, go to university, improve their skills and knowledge are the ones getting punished and asked to feed people who frankly don’t care enough to do the basics for themselves. Just ask them how much their equivalent benefits (every benefit added together) is worth in gross income.
May 13, 2022
A-Tracy. Quite right. We have a few layabouts in our street. We all know who they are. Those who have the privilige of getting up late and can still have their nails, hair and tattoos done while having the latest mobile phone, running a car and having nice holidays. My husand was still working at 72 and used to have to wait to get into their houses to do repairs until they’d seen fit to get their bums off the mattress. As you say, add it all up and alot of people working full time don’t earn that much
May 13, 2022
FuS you donāt have to look hard around here on the council estates, massive heated swimming pools, bars in the garden with lights strung up, and the most successful shops – booze shops, vape shops, the chippies, bookies, we see Mums walking around in the afternoon with pjs on pushing prams with big boxes of booze under the pram, just go to an estate shop someone will buy about 8 lottery tickets, 2 packets of ciggies and a bottle of vodka. Lots of these people are people that I grew up and away from, they frustrate me how they waste money and cry about not having enough given to them whilst not being willing to do anything for themselves.
Most of the people I know genuinely struggling now are those with Dad working full-time (with overtime down because of this talked up slump), Mum working part-time and not able to claim because they save for the future and look after themselves and pay for their kids own uniforms, childcare and school lunches, bus fares and clubs. This extra Ā£30 per month direct debit rise on gas/electric for the future and Ā£60 per month for diesel/petrol to get to work is making them hurt. Theyāre the strivers. I know single parents whose total array of benefits when grossed up take in more than the working family.
May 13, 2022
āHouse prices have risen a lot in recent years for a variety of reasonsā – yes supply & demand plus cheap mortgages. Plus higher building costs due to expensive energy, expensive utility connections, OTT building regs, very high taxes, daft employment laws, restrictive planning, affordable housing rules forcing some buyers to subsidise others, net zero, daft planning requirements added to consentsā¦ Government in other words.
May 14, 2022
I recently found a couple of data points for the 1930s that I found interesting. In 1930, the average mortgage was Ā£438, and by 1937 that had grown to just Ā£456, an increase of just over 4%. Nominal interest rates were low at the time, but particularly at the beginning of the period real interest rates were quite high because of falling prices during the Depression.
As Betjeman wrote in 1937
Come friendly bombs and fall on Slough
It isn’t fit for humans now
…
A house for ninety-seven down
And once a week a half a crown
For twenty years.
Total mortgage lending had expanded enormously over those years, but mortgage size remained controlled rather than inflating house prices. The money went into financing more homes, and 1930s semis sold like hot cakes.
May 13, 2022
What exactly is their ‘economic growth’? Is it wealth, or just GDP which tells us nothing about how we are doing, just how fast the wheels are spinning. Can’t say I’ve seen much ‘economic growth’ by the results of the national debt, the state of the NHS, the appalling state of the roads, highest ever taxes, poor public services and the ratting on pensions because ‘we can’t afford it’ whilst letting go of the corruption during the pandemic and the billions in fraud.
May 13, 2022
Dr Tim Morgan’s latest newsletter #227 “The reality is that 2022 is the year where old illusions go to die”
“The energy dynamic which determines material prosperity is deteriorating,as indeed it has been over an extended period.Relentless rises in EC0Es(the Energy Co-efficient of Energy)of fossil fuels have put western prosperity onto a declining trajectory since the early 2000s.
The average American,for instance,is now 11% poorer than he was back in 2000.Prosperity per capita has fallen by 13% in Britain since 2004 and by 7% in Japan since 1997.
That worsening economic trends have not been evident in conventional data reflects the way in which various forms of adventurism have been used to create a simulacrum of “growth”.Pouring cheap credit and cheaper money into the system has had the effect of creating “activity”(as measured by GDP)even though the “value” of economic output has been deteriorating.
Between 1999 and pre-Covid 2019 each $ of reported growth was accompanied by increases of $2.7 in new debt plus an estimated $3.75 in broader financial liabilities.Were unfunded pension promises included in this calculation it would emerge that close to $10 of forward commitments have been adopted for each “growth” dollar.
The Covid interventions have made all of these ratios far worse.Historians of the future are likely to characterize these gargantuan interventions as the last hurrah of the money-for-nothing form of denial.”
Dr Tim Morgan-Surplus Energy Economics.
May 15, 2022
(sorry, a day late)
Weren’t we due to get the census data this month? I expect the total population will be underestimated but get us a step closer to knowing GDP per capita.
May 13, 2022
The policy you are describing is caused by TAX DILUTION.
If you have millions of extra low tax payers and want the same levels of public service you have to tax the workers to levels that destroy motivation to work.
That policy has proven to fail. Even the first settlers in the USA tried that at Plymouth Rock. The net result was they almost all starved to death.
May 13, 2022
What are the ānew controls over migrationā?
Did I miss something?
Something in the not-Queenās speech?
Not Rwanda surely?
May 13, 2022
Sir John’s analysis is reasonably balanced.
If you understood it then you’d realise that immigration is not the main factor in determining house prices. Furthermore irregular immigration is only a minor part of that.
In particular I welcome his highlighting of the number of unbuilt planning permissions and land banking going on.
There is an effective cartel strangulating supply.
However, what is to be done about the main cause, chronic lax credit, is unclear.
May 13, 2022
Indeed, with 313,000 added to our population last year , that we know about, there is little in the way of limiting mass immigration going on, in fact everytime Johnson opens his mouth on the subject he is issuing invitations for millions more to come here. The British establishment are destroying England with overpopulation, while at the same time lecturing us about sustainability.
May 13, 2022
+100 Iain
May 13, 2022
In name only. I believe Boris has relaxed the qualifications for entrants, so with the illegals still flooding in, probably umpteen more from Hong Kong as the situation there worsens, Ukrainian refugees, more from India as he bribes them to try and get a trade deal and I suspect others linked to trade deals, the situation is worse than pre Brexit.
Maybe Sir JR could link some numbers to this new policy so we can assess its effectiveness and the truth, or not of government spin.
May 13, 2022
+1
Many thanks for the answer.
May 13, 2022
Nig1. Don’t forget the vulnerable from Rwanda that we are gping to take. That should ease the mental health crisis. …not.
May 13, 2022
Check out Migration Watchā¦ Alp Mehmet keeps a watchful eye on it all.
May 13, 2022
Yep, give more visas by the hundreds of thousands so that it is legal immigration instead of illegal.
No sham new policy is of any use other than to con the public by the socialist high tax Tory party. ECHR must go if the UK is to regain control of its borders and who is and is not allowed to be here. We still have the Iranian siege bomber living here on benefits forty years on!! Our military risked their lives to save life and bring an end to the siege, yet one of the culprits lived here ever since. Threat to our nation, threat to lives at the embassy but not allowed to be sent back to where he came from!
Remember Abu Qatada under May as Home Secretary?
Mark is right JRs party and govt are creating the housing shortage by its mass immigration policy. Johnson even falsely claimed there would be a reduction even though he knew his policy on visas, ECHR, and a historic high record for immigration under his party and govt exists for twelve long years while lying and creating policies to fool/con the public.
Another partial fact based blog by JR today not to highlight another two huge policy failures, housing and immigration. They go hand and hand.
May 13, 2022
Demand massively outstripping supply meets a massive creation of money and cheap loans. It was only ever going to end one way.
There is now too much riding on the housing market it is too big to fail.
The way forward is to find a way of damping demand without killing it, to restrict money creation and to charge a realistic amount for money borrowed. In the short term higher interest rates may restrict the prices that buyers are able to pay. Unfortunately that will just force failed buyers into the rental market which puts rentals up.
Perhaps the short term solution is house sharing with tax incentives offered to landlords who have tenants sharing to encourage it.
May 13, 2022
I’m sure Johnson will tighten controls on economic migration …… after 5 million Chinese in Hong Kong have moved here; 2 million from India; several million from various African and middle eastern countries ….. oh and 500,000 Ukrainian refugees and a similar number of channel-crossing invaders.
Oh, and when pigs can fly.
The CONservative Party has no desire or intention to restrict immigration. It needs to grow the economy to try and repair some of the destruction the lock downs have caused. The quickest and, for the Government easiest way of doing that, is to increase the size of the workforce which results in a higher GDP ….. but NOT higher GDP per capita. The fact that it causes a great many more serious problems – insufficient housing being just one of them – are cans which will continue to be kicked down the road.
May 13, 2022
O?T 90,000 Civil Service jobs to go – the Unions immediately scaremonger that passports and driving licences will be affected. Why did we not have civil servant processing passports before 2016?
Will the Unions defend the increase in jobs related to diversity or is it possible that we can find some rather large savings in this area and other layers of management designed to obfuscate rather than deliver?
May 13, 2022
They didn’t tell you that all those extra months you got on your passport the last time you renewed it early, don’t count in the EU after Brexit. UK Passports more than ten years to the day older than the start date don’t work in the EU anymore. I have just renewed mine (took three weeks), seven months before its expiry date. Surprise, surprise!!! There has been a post pandemic last minute rush on passport renewals.
Getting rid of 91,000 civil servants can be done two ways. (1) You repeal the primary legislation that caused the requirement for those civil servants. (2) You keep the legislation and reduce the civil servants who operate it.
The snag is the government has no idea which legislation it needs to repeal; and, it has no idea which repeals could turn into political fizzers, that could explode all over the voters. Getting rid of a fifth of the civil service and back to 2016 levels, as Boris wants, will drop the wage bill down from Ā£222 billion a year back to Ā£175 billion. The bit he doesn’t know is where the queues for the reduced capacity public services will turn up. It won’t be just the Passport office or security and passport control at the Airports that will upset the voters.
May 13, 2022
Continuing increases in overpopulation leads to the whole country being covered in covered in concrete unfit for living within.
May 13, 2022
Why do we need 300,000 more people each year?
Anything to do with your obsession with āgrowthā, Mr. Redwood?
More people means more GDP which means more tax but, without the houses for them to live in, it also means higher rents and higher house prices. This higher demand does mean a lot of houses do get built. Wokingham is a perfect example of a town absolutely covered with new housing in the last 10 years. Under the Tories.
However, the main factor in house prices generally is the cost and availability of mortgages. High salary multiples and low interest rates put house prices up. Whenever interest rates go up or multiples are reduced housing activity diminishes and prices stabilise or even fall a little.
If you really want to control house prices you need to control lending. You (allegedly) do not control the base rate but you could control multiples. If we went back to 2.5 times one salary and 1.0 times a second salary, house prices could only go up with wages – and interest rates. You could force lenders to provide 25 year fixed rate mortgages and/or finance and force councils to provide mortgages (you know, like they used to).
We need stability. And you could easily legislate to stop lenders creating money out of thin air and lending it as mortgages.
I believe, Mr. Redwood, that since the 1970s governments have made a complete mess of the economy. We float now on a sea of personal and government debt. For most of the last 50 years we have had Tory governments. Why you apparently have a reputation for fiscal competence baffles me.
Reply I want per capita income growth not more migrants. I have always made the case for controlled migration at considerably lower levels than today for sustainability reasons.
May 13, 2022
Reply to reply.
If I may John. How do farmworkers achieve capita income growth? Does this mean more expensive food, so they can afford to buy houses currently beyond their means through second homes and holiday let sales? Then they will find themselves out of work because imports are much cheaper.
You could get more per capita income if you abandoned the aspiration for farms and turn the whole country over to suburban sprawl of hedge fund managers.
It’s clear which way the government is going, despite their lip service.
Reply Plenty of ways of raising yields of crops and Labour productivity
May 13, 2022
Plus1
May 13, 2022
Anyway.
Why talk of housing and its inequities when the govt. is long-distance p*ssing OUR bloody money over to Ukraine?
Why do we pay for their war?
Because Johnson is in lockstep with the US and we havenāt even remotely left the EU.
Not to mentionā¦
āNo government can address the threat of pandemics alone ā we must come togetherā
Johnson set to sign Pandemic Treaty
https://www.gov.uk/government/speeches/no-government-can-address-the-threat-of-pandemics-alone-we-must-come-together
May 13, 2022
For what it’s worth the petition to parliament number 614335 – “Do not sign any WHO pandemic treaty unless it is approved via a public referendum” is gathering steady support daily. I would at least like to see this proposal debated & for the public to know exactly what we are being signed up to. Government website link is: https://petition.parliament.uk/petitions/614335
May 13, 2022
+1
Yes I posted it here some days ago.
It was at about 18,000 then.
However ā¦.it looks like the Treaty is all but signed and sealed!
Life will not be worth livingā¦and already it is a bit iffy.
May 13, 2022
+1
But it will probably be like Mrs maybe and the Global Migration Compact. ‘Too late, I’ve already signed it, tee-hee’.
May 13, 2022
I signed that petition last week. I then wrote to my MP to tell him Iād signed it, enclosing the link to that and the WHO website., which shows that Johnson has already signed up his interest!
Iāve seen several people, from different countries speak about that treaty. They are all concerned that Dr Tedros very much admired the Chinese way of dealing with a pandemicā¦. And wants to use the idea for future pandemics! Scary stuff! Especially as the treaty would over-rule individual governments.
May 13, 2022
Everhopeful. Since seeing the official figures for serious after effects of the vaccines ( courtesy of GB News) and the fact that they only give 2 months protection, I’ve decided not to have another booster when it’s offered. If we sign up to the WHO’S pandemic programme I think there could be alot of trouble ahead if they insist on mandatory vaccination.
May 13, 2022
+1
Totally agree.
And I have read that it will extend to other ( all?) areas of health.
May 13, 2022
A good testing ground for the pandemic is North Korea which is currently badly infected. This is a closed country with no vaccines at all. It could be interesting to see just what the death rate is under these circumstances, assuming of course that the authorities there release actual figures, not cooked up low ones like the Chinese, or even the UK in the opposite direction. Could prove one way or another whether the vaccines were worthwhile but will we be able to believe it?
May 13, 2022
A big problem is NIMBYism where locals will object to any and all proposed new housing developments and the politicians whose main interest is re-election will cave in to their demands. For example here’s a recent news story:
“Grant Shapps has blocked TFL from building 351 new, transport oriented homes ON A CAR PARK: including 100+ affordable homes.”
Of course the people who would benefit from those new homes don’t get a say in this decision, only the NIMBYs opposed to it do. On a larger scale, for the same reason, Boris is frantically back-tracking on his proposed changes to planning laws to make house building easier – these were fatally flawed anyway as they envisaged local consultation and consent for developments. The fact is this: locals will oppose all new home development, there’s no point even asking them.
May 13, 2022
Around our area, there are insufficient GPs, too much congestion on the road, water companies running out of reservoir capacity and dumping raw sewage into the sea.
So no, I don’t welcome more housing estates. Tell me one part of the country that’s not like it.
May 13, 2022
Ditto here Dave.
May 13, 2022
I’ll tell you one particular part of the country that is now covered with houses and that is Mr. Redwood’s constituency of Wokingham. He should have led the protests, he should have laid down in front of the bulldozers and made a real issue of it. But, as always, people just shrug while 10,000 homes are built in Wokingham and Bracknell.
May 13, 2022
Insulting to call people Nimbys when all they are trying to do is protect their local environment from being buried under concrete . Look at the long list of new towns that have been created, all of them an architectural blight on our countryside , all supposed to have fixed our housing problem, but failed, and not surprisingly when the British establishment have been pursuing a mass immigration policy for decades. I suppose when you say…. ‘who would benefit from those new homes donāt get a say in this decision’ , you mean Poles, Afghans, Albanians, Syrians, Indians, Hong Kongers, Pakistanis, Nigerians , Ukrainians etc.
May 13, 2022
100%
Bravo! Agree entirely!!
May 13, 2022
+1
May 13, 2022
I agree with most you say but! The problem is in the detail and i am sure Boris and most of the Conservatives do not do detail.
North Devon is a Conservative seat and the builders are beavering away. Not building houses for the locals but high quality, very expensive second homes for the London rich. They never modify the infrastructure to suit the increase, doctors surgeries have waiting lists months long – a lot dont use the doctors but go straight to A&E and that I call misuse of facilities. Dentists have no vacancies for patients , a friend of mine travels to Plymouth for his dental work( how good is that for his carbon footprint). Farm land is disappearing under the tarmac while brown field sites are left to pollute.
Detail must be addressed, brown field sites cost the builder more to clear before use but they must be forced to use them. We also must open more uni places forr nurses doctors and dentists instead of useless degrees like ā media studiesā.
A bit of a rant , i know but it must be said.
May 13, 2022
This is a problem that government has sat on for many years, no doubt swayed by the lobbying of large building companies set on controlling the market and maximising their profits.
House building in the UK is atrophied in old methods, materials and thinking. It has changed little since Stonehenge and the Pyramids.
My answer would be to research the Swedish house building industry. Mostly factory modular built, trucked to prepared groundworks and erected in days. Easy to control specifications and apply ISO 9000 quality control systems.
Government could encourage them to set up in Freeports and start manufacture in large numbers. By this I mean any one factory producing 100,000 units per annum minimum and of varied designs, a la car industry.
Then there is the question of land on which to erect them and the infrastructure that must go up at the same time. It was done in Milton Keynes and Harlow after WW2. Do it again in say half a dozen UK locations, not in every nimby blighted cosy village throughout our land.
Dare I say it, control immigration. As long as demand exceeds supply the problem persists, and prices grow beyond access for first time buyers.
Well there is a plan. Put it in the hands of a Lord Beaverbrook look alike as was done with Covid vaccines and action tomorrow.
May 13, 2022
If you solicit comment , and solutions, the least you can do is have the curtesy to moderate them. One can only conclude that moderation is politically driven. Troll comment is only included to give a veneer of balance.
May 13, 2022
Why does this article ignore the effects of natural change on housing demands and house prices?
Such articles should consider all factors, not just the ones designed to reinforce a particular political point of view.
May 13, 2022
How many homes were freed up by all the excess deaths through covid (170,000 not sure if this was pa or over the two years)? Or are most of them still held up, sitting empty, in probate processing?
May 13, 2022
Haha wait until the double council tax on houses left empty for more than 12 months hits in tandem with delays in probate processing. That’ll teach ’em not to die!
May 13, 2022
You mean 17,000 deaths ‘through Covid’, a-tracy. Over nearly two years. All the others were ‘with Covid’, revealed thanks to a FOIA request to have had other serious medical conditions on their death certificates, so Covid may or may not have been responsible. And since the average age of death was 82, many of the unfortunate deaths would have been in care homes, not their own properties.
May 13, 2022
One thing you hardly ever hear in the North about housebuilding is that they are ground-breaking, innovative, inspiring, the victorian terraces and semi’s were so much more attractive both in housing style and mews style streets, now we have pint-sized homes with insufficient parking road pavement parking with peoples work vehicles blocking roads in working class areas.
When I see people in the papers with six children wanting big four and five bedroomed homes I think what would a private home owner do with five or six children, they’d probably try to build a bedroom on the back of the house or put two bedrooms in the loft, so why don’t the council/ha housing do this. Many of them have massive gardens much bigger than most private plots. Empty run down shops with shuttered unused amenity buildings above them why aren’t they floored and new modern apartments with shops in the ground floor built?
More council/ha retirement apartments blocks need building with a dining room/spare bedroom for grandchildren to stay over, or build in lounge seats that make easy conversion into beds for overnight guests like posh caravans have. Put the allotments to rent out in their parkland space so that the retired can help out plot owners and the establishment gets rent and produce from the plots.
Look at the social housing for big gaps and spaces between properties and stop allowing tenants to do big land grabs doubling their space with no extra charges when they are virtually given the homes for buttons.
May 13, 2022
The housing shortage, and consequently the price of houses, is a direct result of the Governmentās policy of mass immigration which not only causes shortages of housing but also healthcare, schooling and infrastructure.
Importing large numbers of economic, but not cultural, migrants will not only damage the countryās economy and quality of life but also its social cohesion.
May 13, 2022
You have fallen for the ‘supply and demand’ misconception regarding the housing market. Go to your local high street and look in the Estate Agents’ windows. Are there houses for sale? Yes, there are. Therefore there is a supply of houses available.
The price of houses is primarily driven by the cost and availability of credit. Surely you must have noticed this over the last 50 years. When interest rates fall and mortgage lending is eased – there is a house price boom. Always, without fail. That is what causes house prices to rise.
May 13, 2022
The biggest restriction on building appears to be Natural England and its recent hard line on development of anything including extensions.
Allowing building sites to be bought up wholesale by the large developers does nothing to encourage SMEs, partnerships and sole traders to build new homes. Yet when they have an opportunity to build new homes, small builders built to a higher standard and produce beautiful individual homes that are far from the identikit estates we are constantly saddled with. Profits are also spread throughout the community rather than being hoovered up by the large developers and their corporate shareholders.
Encouraging approved development plots to be sold off individually also allows potential residents to acquire a plot for a self build or to commission themselves from a small builder.
May 13, 2022
It is not just the actual construction of the houses it is all the infrastructure that is needed to support them.
Energy, drains, sewers, roads, jobs education, medical, leisure facilities are they being taken into account?
Just like with the renewable energy programme put them wherever you a can get them by paying subsidies and then think about how to get it transmitted and delivered. How many billions paid out for constraint payments?
Come to West Sussex new build everywhere, roads grid locked, schools overflowing, 3 week lead times at some GPS, sewer and water infrastructure struggling and still you let them hit our beaches. When is ” time out” going to be called and a properly thought out costed approach to the way things need to be done, so that everybody gets value for money?
May 13, 2022
āWhilst the provision of cement and bricks, tiles and roof trusses is a matter for the private sector, the government could do more on its energy, mining, quarrying and forestry policies to assist in providing more domestic capacity for the main supplies needed for building.ā
No chance whilst the Governmentās top priority is the implementation of BEISā Net Zero Strategy.
In fact the current high price of energy is in a very large part caused by the Governmentās deliberate policies of cutting back on the North Sea supplies of hydrocarbons and closing down/not building new nuclear power plants which consequently has led to energy shortages and hence higher prices.
The invasion of Ukraine has simply amplified the already existing deliberate policies to make our energy even more expensive ā and eventually also intermittent.
There is no energy security whilst wind turbines and solar panels are supplied by China and we will have next to zero nuclear by 2035, the date for the decarbonisation of our electricity.
May 13, 2022
As you say, Richard, expensive energy was already happening beforet the invasion of Ukraine. Here’s what Ofgem said at the beginning of February this year: ‘The increase [in the energy price cap] is driven by a record rise in global gas prices over the last 6 months, with wholesale prices quadrupling in the last year.’ https://www.ofgem.gov.uk/publications/price-cap-increase-ps693-april
Not enough gas was being produced worldwide, not enough gas was being held in reserves, and the cancellation of the Nordstream2 gas pipeline last autumn following US pressure on Germany, was the last straw, sending gas prices even higher. We really didn’t need this war on top of that.
May 13, 2022
* Still plenty of brownfield sites and landbanks for building!! More council houses too there.
* Ensure solar for all new homes where practical – via building regs
* Nudge Unit to look at encouraging downsizing for pensioners, free up their bigger houses for families….
As sage others have said on this site – sort out our domestic training/skills needed and stop importing people to do these essential jobs via immigration … if it’s accurate there is 300k net immigration per annum, where are they all going to live and work? No rocket science to do the maths.
I just don’t see the joined up government thinking….
May 13, 2022
This Government goes on and on about a level playing field but introduces more legislation to make it even more un-level. Why do some tenants have subsidised housing via council accommodation whilst others have to pay the full market price? Why should council house and now housing association tenants get to buy their homes for a discount whilst others donāt? I know many people who live in housing association accommodation who have lots of money squirreled away. Why do we see immigrants jumping the housing queue? And I bet they are also jumping the NHS queue as well.
All rent should be charged at market value then the benefits system used to top up those on low incomes. This would remove the subsidies being given to council house tenants, especially in London, where there are multi-generational working family members living in the same household.
May 13, 2022
Christine
Benefits System used to top up
Because there has never been a let the market decide ethos in many critical areas, all benefit top ups are a massive drain on resources aka taxpayers.
They are the people who take the hit everytime. Reports have shown Benefits to some foreign workers were paid on their children in their homeland and after a few years they return to a new property paid for by our taxpayers.
Some thing more substantial in the way of benefit payments has to be introduced. There should be no benefits paid until the recipient has paid a minimum of 18 months into the system if benefit cover is required it is paid for by their employer or by their own private insurance. This would have a big impact on all the freeloaders who take full advantage of our easy to claim system.
May 13, 2022
Housing Benefit is already paid to people on low incomes, nothing in my suggestion changes this but removing the council house rent subsidy makes those households with a higher income pay the market value. Why should they get cheaper accommodation when they may earn far more than others in private rented accommodation?
As regards foreigners receiving benefits whilst living abroad ask Boris why he signed the Withdrawal Agreement allowing this to continue? We are being taken for mugs as usual.
May 13, 2022
Good points Christine. Someone I know had her rent on her council house paid for by benefits for over 9 years. She met someone and he moved in and within a year they bought the house at a very large discount. Unfortunately he died a while after but she then sold the house at a premium price and bought a 2 bed flat having money left over. It doesn’t seem right that the public paid her rent and she got the profit.
May 13, 2022
Christine
You are so right, but I suppose we must be grateful in that we are in a very large club so we are not alone. It’s funny but like all the other members we never see the word mug on our forehead when we look in the mirror. But government’s do no matter what their colours are.
May 13, 2022
Everything is much harsher and coarser these days. There is little gentleness and this reflects in building designs which are all front without substance. If you look at the untidy and out of context way towns are laid out , I wonder if town planners have any artistic streak at all.Towns and cities are a whole unit and care should be taken not to be slovenly about putting in new buildings.
As we get older we look to ages past where everything wasn’t about competition , denigrating others and on the whole gentler . Perhaps I am a child of post war Britain and reflect the desire to cut out aggression , but there again as I watch Nana Mouskouri and Charles Aznavour; TV programmes which projected a gentler life.
I turn round to some and say do you remember this or those people and am looked at blankly.We have lost a lot with loss of Britishness. ( There are some who will mentally chip in with not so , or ridicule sentimentality) but this just underlines the crudeness of perspective today, where everything is a competition .
May 13, 2022
ONS state that 2025 will be the year when deaths outstrip births, why are we building houses that in 35 years no-one will need, or even be able to remove from the blighted landscape they adorn ,due to the permanence of their crappy Barrat design ….why not make them to be easily disposed of without scarring the fields they have been built in.
As the current Ukrainian crisis is showing food supply is fragile..so FOOD NOT HOUSES please.
May 13, 2022
This country has lax planning and building regs.
Paradoxically that makes land expensive because they mean that large profits can be made from building on it, and so off the spiral goes.
May 13, 2022
Quite the opposite NHL.
Planning permission is very difficult to gain and very slow to be dealt with.
Building regulations for new builds and inspections during the building process are also very complex and strictly enforced.
May 14, 2022
Because all those people, legal and illegal that are arriving here will need somewhere to live.
May 13, 2022
“How can a Council Tax of Ā£2,474 per annum on a Ā£30m house in Kensington, compared to Ā£2,398 per annum on, say, a Ā£500,000 house in Solihull, be considered as a proportionate property tax? Council Tax has become a (very flawed) system of charging home occupiers for Local Authority services.”
Introducing a land value tax alongside the current council tax and business rates: and letting it gradually replace the latter two, is the best way to go.
Foreign bandits are using London property as low cost liquid securities. UK land Barron’s, hold onto land, at no cost, untill the council lays a road up to it, then the planning app for residential development goes in. LVT will put a significant cost on hoarding land for years.
https://www.prospectmagazine.co.uk/economics-and-finance/this-practical-fix-shows-why-the-chancellor-should-introduce-a-land-value-tax
Reply Someone on a low pension may be living in a now very valuable London house they bought years ago when they were affordable. We should not tax them out of their homes. The rich man in the mansion will be taxed highly on his income in a progressive system where the rich pay much of the Income tax.
May 13, 2022
That rich man will be one of those, “Finance chiefs ‘pay less tax than cleaners”
May 14, 2022
acorn
Using a selective example to underpin a political point and position on a complex subject does you no favours and can be played both ways. For example.
An old age pensioner living alone and owner of their house can only claim a %25 reduction on their Council Tax. The property next door is of the same value yet, it is inhabited by a couple with three children who generate more waste, consume more in council and other services but only one of the parents works. To me that seems a little unfair as the pensioner is clearly subsidising the family next door.
So yes, the current system is unfair and the Conservative government of Mrs. T sought to change it. Alas it was badly implemented. Perhaps this might be a good topic for discussion some day ?
Reply There is no pressure to change this
May 14, 2022
Quite a few countries and US states with modern government systems, are using forms of LVT based on the Harrisburg Pennsylvania model. The WEF article explains at https://www.weforum.org/agenda/2022/03/land-value-tax-housing-crisis/
As JR implies, there is a lot of pressure from the land barons not to change this.
May 14, 2022
For your last line read The British Establishment in place of land barons.
They are, after all, essentially one and the same and have been for centuries.
May 14, 2022
Land barons
lol
You lefties are so funny.
May 13, 2022
Off topic
Iāve just had my electricity bill, itās gone from Ā£30 per month to Ā£77 per month, standing charge 51.5 pence per day .. Ā£3.71 VAT
How to guarantee losing the next election, I wish my pension had increased by a simple amount, I remember the triple lock pension pledge in the 2019 manifesto
May 13, 2022
I wonder why the standing charge has gone up. Does it suddenly cost a lot more to maintain the network. Seems like a racket to me and the first thing our useless PM and his chums should crack down on. If the price of the electricity goes up because the producers have to put it up – fair enough. But there is no excuse for increasing the standing charge.
May 13, 2022
It is said to be to cover the losses of the firms that went bust. Trouble is, when that money has been recovered the standing charge will not go down again, but up ad infinitum.
May 13, 2022
Mike. Apparently it’s something to do with having to take up the slack of the companies that went bust. Don’t ask me??? I don’t understand any more than anyone else.
May 14, 2022
Mike
One possibility is that people will use less gas and electric as a result and the companies will suffer a drop in income as a result. One way to offset this is to raise the Standing Charge so no matter how much you use they get paid.
My take on it.
May 14, 2022
Yeah, but you’ll vote Tory again.
So stop boring the world with your pathetic whimpering about the 100% predictable results of that.
May 14, 2022
Labour are obsessed with green planet saving plans
You really think they would be trying to reducing energy and fuel prices?
Hilarious as usual NHL
May 13, 2022
The population density of Paris is double that of London. This is not as a result of monstrous tower blocks plonked without any context, creating ready-made slums but to the building of well designed attractive to live in apartment blocks in a coherent urban environment. However, it appears that our architects, urban planners and builders are incapable of creating pleasing urban environments for occupation with the sensible population densities that exist in many towns and cities around the world.
We need more accommodation but we cannot afford to cover our countryside with acres of boxes with gardens for people who do not use them. Builders that do not have the skills to build anything but boxes need to go bust; their skills are now obsolete and so are their architects. Urban planners need to spend time abroad learning how to do their jobs properly because they are not learning here.
May 13, 2022
Who wants to raise a family in a bloody apartment?
May 13, 2022
Agree Mike. I couldn’t understand why the Spanish lived in apartments even with large families. Not many in houses or villas. They were occupied by other nationalities.
May 13, 2022
And of course, France is twice as big as the UK so they don’t need to do that. Parisians may like to live like that but on the whole, we do not. We tried that in the 60’s and they became slums.
May 13, 2022
I believe someone in the BoE is manipulating the figures, on the coal face Iād say with energy, fuel and food bills that inflation is running far higher than our government is telling usā¦.Iād say between 15% and 20%
May 13, 2022
+1
May 13, 2022
Some Developers (all?) just push their luck with cut price methods and see what the local authority will let them get away with. There’s one new estate near me where the many cul-de-sacs off the spine road can’t be adopted by the LA owing to poor construction. As long as they got their money why should they care?
May 13, 2022
The councils impose things in the plans, but if the builders decide not to do them the councils are stuffed because they cannot afford to take developers with deep pockets to law. That’s how they get away with it.
May 13, 2022
DavidL. No new housing estates around us are taken on by the council anymore. The residents have to either set up their own committee to organise grass cutting etc or appoint a company to take care of it and everyone pay. The council don’t mind taking money for council tax though.
May 13, 2022
Off topic, this has just come out:
https://ukandeu.ac.uk/theresa-may-speaks-the-truth-on-the-northern-ireland-protocol/
“Theresa May speaks the truth on the Northern Ireland protocol”
No she doesn’t, as I have told her directly as my constituency MP, and nor of course does Boris Johnson, and nor does anybody who claims that Brexit has created an insoluble “trilemma” on the island of Ireland.
Not unless you accept this absurd claim from the Irish government:
https://drb.ie/articles/the-professional/
“any checks or controls anywhere on the island would constitute a hard border.”
Otherwise you will accept that EU checks and controls could be just on goods intended to cross the land border into the Irish Republic and they could be performed at sites well away from the border. Which will have to be done anyway, for goods produced in the province rather than brought in from outside. It is a very strange and not very neighbourly thing that at present it is not even an offence under UK law to take across goods which do not comply with EU standards, the new laws envisaged last July not having been passed:
http://johnredwoodsdiary.com/2022/05/12/32749/?unapproved=1318232&moderation-hash=f842fbb47a653b847c9d442dd036929e#comment-1318232
May 13, 2022
I was going to move to a small new build manageable detached but modern designs have pretty fronts and nowhere to garden.This aspect of home life is important for all and the environment.I voted for 3 green councillors who say they will stand up for our open spaces.
May 13, 2022
I considered new build when I moved to Dorset. But the rooms are sooooooo small. A bedroom with just enough room for a bedside table each side of a 4’6″ bed and, if you are lucky, a small built-in wardrobe. And that’s a ‘master bedroom’ with an en-suite so small you can’t dry yourself after you step out of the shower without banging your elbows on the walls.
May 13, 2022
I told the estate agent to stop sending us properties under 20 years old. All had at least one inadequately sized joke of a room – just so that it fitted a loose definition of a ‘3 bed’.
May 13, 2022
Agree Mike. We looked at a 3 bed detached house. You couldn’t park on the driveway as there wasn’t room to open your doors if the neighbours were parked on their drive. The utility room was so small you’d struggle to open the washing machine door. The lounge only had room for 3 chairs. As you say the bedrooms were tiny. All thrown up and problems with flooding and sewerage. Very nice I’m sure.
May 14, 2022
I am not sure I entirely understand Sir John’s statement that “…. substantial implications for the need for free infrastructure like roads, schools and surgeries where the public sector has to provide and offer some guidance on plans.”
The need for this free infrastructure already exists in the country as a whole – since the people, including immigrants, children and patients are already here. A new building development merely attracts that demand from somewhere else to the area of the new building development thus relieving the replaced infrastructure elsewhere within the country.
It might therefore be more appropriate for the cost of the new, but replaced, infrastructure to be borne by central government?