[Finance] Housing Market

[Eric the meek]

I would argue that low interest rates do create demand for housing as it is an asset in competition with other assets. This is the intended outcome of Government stimulus programmes post the 2008 crash. I know someone who has an enormous property portfolio in and around Sheffield. He is always on the lookout for residential and commercial property and he once told me his motto was ‘never sell a house.’ If interest rates were higher he would park his wealth in other assets rather than property.
The reality is that all of the factors mentioned on this thread are true to varying degrees. It’s not really about blaming certain sections of society. Inward migration and the rapid growth in landlord purchases for Air BnB investment in an extremely low interest rate environment designed to support buyers are sending house prices in one direction.

I see what you mean about the landlord in Sheffield - low interest rates could well mean the difference between buying an investment property (=the yield makes it worthwhile) and deciding not to buy it (=the sums don't add up). For this reason, I think it is less likely to apply for your average homebuyer. Fair point though.

I wouldn't agree that the low interest rate environment is designed to support buyers though. Interest rate policy is designed to control inflation, surely. We've just had an interest rate rise, so even if it were true this morning, it is slightly less true this afternoon!

 

[Nobby Cybergoat]

There's been net EU immigration into the UK throughout, even in 2018, 2019 and 2020.
2018 - 150,000 (plus 100,000 other)
2019 - 161,000 (+ 132,000 other)
2020 - 52,000 (+ 147,000 other)

3.4 million EU citizens still live here, 5.5 million applied in time for permanent settlement status here.

Inexorably our population increases and the demand on housing. We must build millions more homes.


I sometimes ponder Devon and Cornwall's situation. Locals sold to wealthy folk from SE England. What can be done to stop that? Anyone with workable ideas?

Savage taxation on airbnb's and second homes would be my preference

 

[zefarelly]

There's been net EU immigration into the UK throughout, even in 2018, 2019 and 2020.
2018 - 150,000 (plus 100,000 other)
2019 - 161,000 (+ 132,000 other)
2020 - 52,000 (+ 147,000 other)

3.4 million EU citizens still live here, 5.5 million applied in time for permanent settlement status here.

Inexorably our population increases and the demand on housing. We must build millions more homes.


I sometimes ponder Devon and Cornwall's situation. Locals sold to wealthy folk from SE England. What can be done to stop that? Anyone with workable ideas?

IMO building millions more homes is not viable. Population density is too high, at least in the south east.

The governement have tried and only partly succeeded in wiping out half the population.

They continue to make the country a less attractive and viable proposition, so maybe in another few years the population will drop to 40-45 million and alll will be sustainable again. . . .

 

[zefarelly]

Savage taxation on airbnb's and second homes would be my preference

don't forget the corporations and ultra wealthy, they can help fund the restocking of social housing.

preferably by reposession renovation and conversion of empty property.

 

[Weststander]

IMO building millions more homes is not viable. Population density is too high, at least in the south east.

The governement have tried and only partly succeeded in wiping out half the population.

They continue to make the country a less attractive and viable proposition, so maybe in another few years the population will drop to 40-45 million and alll will be sustainable again. . . .

Per capita, Italy, the Czech Republic and Spain made a far better fist at population control over the last 2 years.

This or the next government needs to swallow their pride and bring in overseas advisors on depopulation.

 

[Nobby Cybergoat]

IMO building millions more homes is not viable. Population density is too high, at least in the south east.

The governement have tried and only partly succeeded in wiping out half the population.

They continue to make the country a less attractive and viable proposition, so maybe in another few years the population will drop to 40-45 million and alll will be sustainable again. . . .

The way I see it there's plenty of housing stock around the country, it's just where nobody wants to live or there are no decent jobs.

If there was a genuine commitment to improving the poorer sections of the nation, instead of just short term bribes to marginal seats, the housing crisis could be largely remedied without concreting the countryside

 

[Berty23]

Also worth bearing in mind that we need to keep getting more people into work. With people living longer it means we need more workers to fund their retirement. I am sure I heard that we have just shifted to those kids born now to have lower life expectancy than their parents (or something like that) so we won’t necessarily keep living longer. But there is a significant issue bubbling up of what has been called “age-quake” in China. Ie not enough babies being born. There is also a potential issue with who is having babies. Professionals having fewer which will put more pressure on schools etc as the proportion of kids from deprived backgrounds will grow (and this has educational impacts due to early years)

We could end up in a situation with old people living in big houses which we can’t afford to help them live in because professionals can afford more kids due to cost of living limiting how many children they have. E.g. can’t afford bigger house, can’t afford time off work, can’t afford childcare etc.

It is all very complicated but I can’t see how the most basic need we have (other than food and drink) ie shelter, is so so so expensive and something people use to rinse us for. Making banks loads of cash. It is nuts.

 

[Weststander]

Also worth bearing in mind that we need to keep getting more people into work. With people living longer it means we need more workers to fund their retirement. I am sure I heard that we have just shifted to those kids born now to have lower life expectancy than their parents (or something like that) so we won’t necessarily keep living longer. But there is a significant issue bubbling up of what has been called “age-quake” in China. Ie not enough babies being born. There is also a potential issue with who is having babies. Professionals having fewer which will put more pressure on schools etc as the proportion of kids from deprived backgrounds will grow (and this has educational impacts due to early years)

We could end up in a situation with old people living in big houses which we can’t afford to help them live in because professionals can afford more kids due to cost of living limiting how many children they have. E.g. can’t afford bigger house, can’t afford time off work, can’t afford childcare etc.

It is all very complicated but I can’t see how the most basic need we have (other than food and drink) ie shelter, is so so so expensive and something people use to rinse us for. Making banks loads of cash. It is nuts.

I'd be genuinely interested to know the wider green movement's views on this at a continental or international level (not strictly UK).

Of a never ending need for more births to ultimately give more workers/taxpayers to support a burgeoning elderly population across half the planet.

In the past, I thought they had interesting ideas on slowing down or more, this ever speeding up carousel of; consumption, international trade, economic growth, increasing population .... to oil all the parts.

 

[WATFORD zero]

Interest rates have gone up to 0.50%, the second rise in 3 months

As I understand it this was by a 5 to 4 vote, the 4 wanting 0.75% and with BOE predicting Inflation of 7.5% by April, I can only see the rates going one way. However, how much effect this will have on the Housing market, I wouldn't like to guess

 

[Super Steve Earle]

Significant 'age quake' issue in China and not enough being born? There's bloody millions of them. How many more do they need? Perhaps if they stopped moving in to other countries etc where they aren't welcome and just stayed in China, working out how to make laboratories secure, there might not be such an issue.

 

[Berty23]

Significant 'age quake' issue in China and not enough being born? There's bloody millions of them. How many more do they need? Perhaps if they stopped moving in to other countries etc where they aren't welcome and just stayed in China, working out how to make laboratories secure, there might not be such an issue.

It is the issue of them being the wrong age. Not a problem until people get older and not enough people to pay for them.

 

[Berty23]

I'd be genuinely interested to know the wider green movement's views on this at a continental or international level (not strictly UK).

Of a never ending need for more births to ultimately give more workers/taxpayers to support a burgeoning elderly population across half the planet.

In the past, I thought they had interesting ideas on slowing down or more, this ever speeding up carousel of; consumption, international trade, economic growth, increasing population .... to oil all the parts.

No idea. It is a problem that no one will address in democracy because it is a massive long term plan and will people voted out. Will they make it harder to live longer? Make care for people over 90 years old more expensive? No idea. But it feels like something in that realm that would be needed. It is very very grim isn’t it?

 

[Machiavelli]

I'd be genuinely interested to know the wider green movement's views on this at a continental or international level (not strictly UK).

Of a never ending need for more births to ultimately give more workers/taxpayers to support a burgeoning elderly population across half the planet.

In the past, I thought they had interesting ideas on slowing down or more, this ever speeding up carousel of; consumption, international trade, economic growth, increasing population .... to oil all the parts.

I think you're mixing too many variables together in this post so find it difficult to respond, but if you can be more precise, I'll have a go

 

[Weststander]

I think you're mixing too many variables together in this post so find it difficult to respond, but if you can be more precise, I'll have a go

Breaking it down, to one major component first:
How to address the issue (financial - personal and state, enough people to do the care, to earn and pay the taxes) of people retiring mid 60/late 60’s, whilst living to 90, of population growth.

Within the constraints of no one wants housing built near them, everyone’s field or bit of countryside on the urban fringe is more special than anyone else’s and most certainly should not be used to build homes.

Taking this as a pan European discussion.

I don’t want to forget about those ideas from the green movement. From my brief look at that a while back, it involved stopping the carousel of using finite resources, population growth, population growth to give the new taxpayers and do’ers, mass consumerism of products made from oil shipped 10,000 miles, then soon to landfill, an obsession with growth measured and sought in monetary terms.

 

[Sorrel]

There's been net EU immigration into the UK throughout, even in 2018, 2019 and 2020.
2018 - 150,000 (plus 100,000 other)
2019 - 161,000 (+ 132,000 other)
2020 - 52,000 (+ 147,000 other)

3.4 million EU citizens still live here, 5.5 million applied in time for permanent settlement status here.

Inexorably our population increases and the demand on housing. We must build millions more homes.


I sometimes ponder Devon and Cornwall's situation. Locals sold to wealthy folk from SE England. What can be done to stop that? Anyone with workable ideas?

What happens in one small town (especially) in the south west gradually filters through further into the region. The only way to stop it is to restrict house sales to locals (see: https://www.cornwalllive.com/news/cornwall-news/padstow-ban-second-home-owners-4939299, but also see https://www.falmouthpacket.co.uk/ne...-ives-cornwall-backfires-according-new-study/)

Logically the nicer places will always get priced above what the average person can afford. But the articles above notwithstanding, heavily taxing often empty second homes might be an idea. But in reality, it would probably just lead to more creative tax evasion.

Everywhere I go in Sussex there are towns complaining about new building work and yet we all know that houses are so expensive. Much of the problem is that everyone in Britain tends to want a "house" - not just somewhere to live. So we never build up to four or five floors, like most other northern European countries do.

But even if we did, I think we would continue to have a problem: if we look at the population increase each year it is obvious that we need lots of extra houses every year as well to replace/renew old rubbish housing. Limiting immigration won't do it because a) it won't happen whatever anyone claims and b) it would be an economic disaster.

 

[Weststander]

What happens in one small town (especially) in the south west gradually filters through further into the region. The only way to stop it is to restrict house sales to locals (see: https://www.cornwalllive.com/news/cornwall-news/padstow-ban-second-home-owners-4939299, but also see https://www.falmouthpacket.co.uk/ne...-ives-cornwall-backfires-according-new-study/)

Logically the nicer places will always get priced above what the average person can afford. But the articles above notwithstanding, heavily taxing often empty second homes might be an idea. But in reality, it would probably just lead to more creative tax evasion.

Everywhere I go in Sussex there are towns complaining about new building work and yet we all know that houses are so expensive. Much of the problem is that everyone in Britain tends to want a "house" - not just somewhere to live. So we never build up to four or five floors, like most other northern European countries do.

But even if we did, I think we would continue to have a problem: if we look at the population increase each year it is obvious that we need lots of extra houses every year as well to replace/renew old rubbish housing. Limiting immigration won't do it because a) it won't happen whatever anyone claims and b) it would be an economic disaster.

Agree with all your points.

Knowledgable mentioning the creative tax evasion bit. Similarly, just lying. One person purports to live in home A, their partner in B. I’ve seen this for tax evasion reasons beyond this discussion.

Also spot on about “houses”. We lived in flats, now you hear young folk starting out requiring a house and garden. In our travels round Europe eg France, Scandinavia, Germany, Netherlands, Austria, a huge proportion of new or recent housing stock is large apartment blocks. Some municipal, some let, some owned. Just accepted, no big deal.

 

[Machiavelli]

Breaking it down, to one major component first:
1, How to address the issue (financial - personal and state, enough people to do the care, to earn and pay the taxes) of people retiring mid 60/late 60’s, whilst living to 90, of population growth.

2, Within the constraints of no one wants housing built near them, everyone’s field or bit of countryside on the urban fringe is more special than anyone else’s and most certainly should not be used to build homes.

3, Taking this as a pan European discussion.

4, I don’t want to forget about those ideas from the green movement. From my brief look at that a while back, it involved stopping the carousel of using finite resources, population growth, population growth to give the new taxpayers and do’ers, mass consumerism of products made from oil shipped 10,000 miles, then soon to landfill, an obsession with growth measured and sought in monetary terms.

I'll have a go, although still too much for me, regarding:
1, might be addressed by technology but I'd doubt it (a 'care' robot!?), so most easily dealt with through immigration -- you might see a certain problem there. The rate of population growth is actually declining. The debate over how many the earth can 'carry' is difficult (due to other variables), and there are a range of views on this in the Green movement, although the misanthropes are there.
2, need legislative change for that (it's not an answer, but it is related: can't help but notice the rapid growth in high density housing in Brighton, eg Lewes Road, London Road. Victoria Gardens; ie this suggests that there is space for increasing housing stock in non-green belt areas -- 'Manhattan by the Sea')
3, if I'm following this, see 1
4, this illustrates what you're getting at better than anything else:

https://www.stockholmresilience.org...-dashboard-shows-increasing-human-impact.html

Yes, in the title of Tim Jackson's book, Prosperity Without Growth, it's largely about shifting away from the growth-energy-debt nexus, more towards better health/education, less reliance on the production of more 'stuff', planned obsolescence, more towards circular economies (reusing, sharing), and rapid shift away from fossil economies. In terms of the cost of living crisis (that's another thread!), the greens have been going on for decades about retro-fitting and insulating the existing housing stock, and all the other things you mention. One final point here, just listened to the most recent episode of Talking Politics and they were (in my view) rightly saying towards the end that all the technology has not resulted in a liberation from work, although it could -- less work (also more widely and equally distributed) is something that constitutes 'prosperity without growth', or it does for me.

 

[zefarelly]

The way I see it there's plenty of housing stock around the country, it's just where nobody wants to live or there are no decent jobs.

If there was a genuine commitment to improving the poorer sections of the nation, instead of just short term bribes to marginal seats, the housing crisis could be largely remedied without concreting the countryside

I agree, add to that draconian business/commercial laws/taxes . . . . .there are loads of empty spaces locally. Not that they should all be converted but holding hih means they never get used. Busineeses can't afford to.

I couldn't, WFH saved me a wage a week!

 

[beorhthelm]

Yes, in the title of Tim Jackson's book, Prosperity Without Growth, it's largely about shifting away from the growth-energy-debt nexus, more towards better health/education, less reliance on the production of more 'stuff', planned obsolescence, more towards circular economies (reusing, sharing), and rapid shift away from fossil economies.

or a service based economy.

also technology has been massivly transformative in work. often changing the physical labour effort involved in work rather than hours one is asked to work. we have at the same time also increased our expection of leisure time, requiring more services to do something in that time rather than say read or ponder the infinte universe. services need labour too, so we spend more money than ever on freetime, wondering where all the extra money went sipping our £3 frappacino.

 

[Machiavelli]

Breaking it down, to one major component first:
How to address the issue (financial - personal and state, enough people to do the care, to earn and pay the taxes) of people retiring mid 60/late 60’s, whilst living to 90, of population growth.

Within the constraints of no one wants housing built near them, everyone’s field or bit of countryside on the urban fringe is more special than anyone else’s and most certainly should not be used to build homes.

Taking this as a pan European discussion.

I don’t want to forget about those ideas from the green movement. From my brief look at that a while back, it involved stopping the carousel of using finite resources, population growth, population growth to give the new taxpayers and do’ers, mass consumerism of products made from oil shipped 10,000 miles, then soon to landfill, an obsession with growth measured and sought in monetary terms.

or a service based economy.

also technology has been massivly transformative in work. often changing the physical labour effort involved in work rather than hours one is asked to work. we have at the same time also increased our expection of leisure time, requiring more services to do something in that time rather than say read or ponder the infinte universe. services need labour too, so we spend more money than ever on freetime, wondering where all the extra money went sipping our £3 frappacino.

I would like more leisure time, but don't expect to get it. In order to do so, we'd need to develop a movement calling for it and, beyond a few isolated cases, that's just not happening at present.
Yes, technology has and continues to save many (though by no means all) forms of labour, and I agree with you about services -- and it's worth flagging up that many of the changes you and I refer to are happening already.