Inflation crisis: Due to various factors including war in Ukraine and Covid-19.

[DynamicSpirit]

Again...companies can choose NOT to pay the minimum wage to important employees. It may actually have the effect of motivating staff.

Yes, they can choose to. But that means they have higher costs and may therefore need to raise the prices they charge to customers. Depending on each company's circumstances, that in turn may mean they lose business to their competitors or end up having to make people redundant.

 

[ABB125]

Yes, they can choose to. But that means they have higher costs and may therefore need to raise the prices they charge to customers. Depending on each company's circumstances, that in turn may mean they lose business to their competitors or end up having to make people redundant.

This point is perfectly demonstrated in the scenario I gave a few posts ago - if staff costs rise, things won't happen, and then everyone loses out.

 

[asw22]

We hear often about how people are living off the basics and fail to manage.
I'm just about managing, living off one tin of 31p spaghetti per day and wearing 5 layers of clothes in winter.

What we don't hear about is the winners from the system.

For example, I have seen nearby households go from 1 to 2 car, 2 to 3 car, 3 to 4 car or even higher - one nearby has two people living there but 4 newish cars (car age 5 years or younger) yet they work from home 4 days so two of the cars are used once per week, the other two hardly ever.
In my local area I have seen a significant increase in cars parked at home throughout the day since the start of the pandemic also and note that used car prices have increased so I often wonder whether some sort of windfall tax could be applied when a person has two domestic cars in their name in order to help the poorer in society.

There are probably other examples n society who have managed to gain significantly from the covid period financially.

 

[DelayRepay]

There are probably other examples n society who have managed to gain significantly from the covid period financially.

I have gained in that I spent the best part of two years working from home, so saved a fortune in travel costs. And now I only have to go to the office a couple of times a week so am still saving. But I would happily give up all those savings to have the 18 months from March 2020 back. It was an absolutely miserable period.

I am very sorry to hear about your circumstances. I sometimes forget how lucky I am to have a reasonably secure job and an employer that was able to keep paying me throughout the pandemic.

 

[The Ham]

We hear often about how people are living off the basics and fail to manage.
I'm just about managing, living off one tin of 31p spaghetti per day and wearing 5 layers of clothes in winter.

What we don't hear about is the winners from the system.

For example, I have seen nearby households go from 1 to 2 car, 2 to 3 car, 3 to 4 car or even higher - one nearby has two people living there but 4 newish cars (car age 5 years or younger) yet they work from home 4 days so two of the cars are used once per week, the other two hardly ever.
In my local area I have seen a significant increase in cars parked at home throughout the day since the start of the pandemic also and note that used car prices have increased so I often wonder whether some sort of windfall tax could be applied when a person has two domestic cars in their name in order to help the poorer in society.

There are probably other examples n society who have managed to gain significantly from the covid period financially.

I was only saying earlier that my guess is that there's going to be a dividing between not only those at the top and those at the bottom but between those for whom the cost of living increases are having limited impact (due to rising wages) and those who are on more fixed incomes (such as those on or just above minimum wage).

For instance a civil engineer (where there's shortages of staff) can demand a pay rise (either through just asking or seeking alternative employment) whilst those without significant training or education may struggle to facilitate a similar increase as they can't obtain an increase by moving jobs.

 

[Peter Sarf]

I was only saying earlier that my guess is that there's going to be a dividing between not only those at the top and those at the bottom but between those for whom the cost of living increases are having limited impact (due to rising wages) and those who are on more fixed incomes (such as those on or just above minimum wage).

For instance a civil engineer (where there's shortages of staff) can demand a pay rise (either through just asking or seeking alternative employment) whilst those without significant training or education may struggle to facilitate a similar increase as they can't obtain an increase by moving jobs.

It was ever thus. Encourage your children to get an education or take the easy route to poverty.

 

[GS250]

It was ever thus. Encourage your children to get an education or take the easy route to poverty.

The example of 'civil engineers' is a good one. There's a reason they can increase their salary (during a recession) and that's because they chose to do a particularly difficult degree and then a demanding job of which is crucial to the progress and comfort of society.

Not so sure just 'getting an education' is necessarily going to cut it these days. There's only so many artificially highly paid 'HR' or various other middle management roles that can be filled with graduates in gender studies or media.

 

[The Ham]

It was ever thus. Encourage your children to get an education or take the easy route to poverty.

I'm aware of that, my point is that I suspect that the division is going to worse going forwards.

Talking to a friend they were saying that their aware of nearly fresh from Uni Architectural staff who are getting promoted to positions they wouldn't have previously got without 3 more years of experience.

Although I certainly buck the trend, my highest formal qualification is equivalent to an A level, however I'm doing a job which the vast majority of people who do have at least a degree. It's probably taken me a bit longer to get there and I certainly started off on fairly low pay (although didn't have the student debt that others would have had, so it probably nearly balances out) however it's not uncommon for me to be involved in training staff who have degrees.

OK, I can never work for a Council at a comparable level (as they are stuck in their ways and require an engineer to have a degree and have no way of allowing technically competent staff to get promoted above a certain grade) however I've never had an issue with getting a new job or even getting interviews in the private sector.

Likewise chartership would be hard work to obtain (effectively requiring me to write a dissertation just to get membership of a industry body) however not having membership of a professional body hasn't held me back and the one time I "needed" chartership for a project where I was there last engineer there was the option of "otherwise approved", which was granted just by me asking what was required to be otherwise approved (although I suspect given the technical questions I'd answered on the project in question proved that I was technically competent).

I know that I'm very much an exception (in part because whilst I don't do well in academia I do learn tasks fast; but probably more likely due to a shed load of luck).

Of course getting a degree would, for the vast majority of people for the vast majority of roles, would be an easier route to having a decent job.

Could I be at a higher grade than I am now, if I had a degree? We'll never know, quite possibly, however I'm content with where I am and my package of reward (obviously it'll be nice if I was paid more, but it's enough for what we need and even if I had more there's always more that I could be paid; however given our household income is in the upper 50th percentile by a comfortable margin, we're aware that many are worse off than we are, even showing for living somewhere with above average housing costs).

 

[yorksrob]

The issue is that we need people doing those jobs which are seen as not requiring much of an education, otherwise the economy grinds to a halt.

We need to find a way to ensure that waiters and waitresses etc can afford to live within the economy with adequate affordable housing, leisure etc.

 

[GS250]

The issue is that we need people doing those jobs which are seen as not requiring much of an education, otherwise the economy grinds to a halt.

We need to find a way to ensure that waiters and waitresses etc can afford to live within the economy with adequate affordable housing, leisure etc.

Absolutely.

To be fair.... that list of occupations extends further upwards than the traditional standard wage positions. The fact they are struggling to recruit for a £35k p/a IT support based roll (that an ex colleague took) means the situation is starting to get pretty serious regarding cost of living v Wages.

 

[Nicholas Lewis]

The issue is that we need people doing those jobs which are seen as not requiring much of an education, otherwise the economy grinds to a halt.

We need to find a way to ensure that waiters and waitresses etc can afford to live within the economy with adequate affordable housing, leisure etc.

I would suggest affordable housing is the biggest issue that needs sorting. Most European countries have rent controls even wunderbar Germany so that even people on low incomes can at least get by. The UK has had an obsession on house values that the economy would blow up utterly if the house bubble is pricked now so on it goes but it will be pricked with devastating consequences on all us minions that run society.

 

[DynamicSpirit]

I would suggest affordable housing is the biggest issue that needs sorting. Most European countries have rent controls even wunderbar Germany so that even people on low incomes can at least get by. The UK has had an obsession on house values that the economy would blow up utterly if the house bubble is pricked now so on it goes but it will be pricked with devastating consequences on all us minions that run society.

I agree that housing is the crucial issue. The problem is that we don't have enough housing in the places people want to live, and not enough houses will always cause prices/rents to rise to absorb any extra money that the people who need houses have. I don't think rent controls are the answer - if there's not enough houses then, no matter what rent levels you set, someone is going to be left without a house: That's basic maths - taking the difference between the number of people who need houses and the number of houses available. The answer is to build many more houses/flats/etc. as soon as we can.

 

[yorkie]

It was ever thus. Encourage your children to get an education or take the easy route to poverty.

If you are referring to University degrees, I strongly disagree, but it's probably a whole new subject in its own right; feel free to create a new thread clarifying what you mean.

 

[philthetube]

The main reason for inflation in this case is simple, there is not enough housing, food or oil about, we have basically stretched the earths resources to the limit, and so now we, both as a race and as a nation, are going to have to learn to use less because everyone needs the same resources which is increasing prices and so we can afford less.

This country cannot afford to continue to import loads of oil at ever increasing prices in order to make loads of drinks bottles and allow people to make 100 mile commutes.

We cannot afford to build loads more houses on land suitable for farming, and we cannot afford to import more and more food, depriving poorer countries of it.

If we do not learn to live within our means who knows what will happen.

 

[The Ham]

The main reason for inflation in this case is simple, there is not enough housing, food or oil about, we have basically stretched the earths resources to the limit, and so now we, both as a race and as a nation, are going to have to learn to use less because everyone needs the same resources which is increasing prices and so we can afford less.

This country cannot afford to continue to import loads of oil at ever increasing prices in order to make loads of drinks bottles and allow people to make 100 mile commutes.

We cannot afford to build loads more houses on land suitable for farming, and we cannot afford to import more and more food, depriving poorer countries of it.

If we do not learn to live within our means who knows what will happen.

House prices have gone crazy (best in mind what I said about being within the top 50% of household incomes) for us to move from a 3 bed to a 4 bed would require us to borrow again what we borrowed 12 years ago to buy our house. Which is just not affordable for us, and I doubt it is for anyone else.

The increase in house prices isn't entirely to do with population growth, a lot is down to people owning more than one (second home, but also rental properties and overseas investers).

To illustrate how this is the case, we can look at government policy. There's a target to build 300,000 homes a year, now based on the average house occupation rate that could allow population growth of 720,000 per year.

Now much has been made of the government not reaching this target for some time. The last year there's data has the figure at 240,000 (575,000 population increase).

However the last year there's data for had the population increase as 284,000, so if anything the pressure on housing should be reducing (even if it had been increasing prior to that).

Now some are accidental landlords, for example an elderly relative needs care, their home is rented to contribute towards their costs. They then die, leaving their offspring with a property which provides them with an income or that they can sell.

If there's lots of offspring, then it's easier to sell (and the monthly income may not look that attractive). If you assume £900/month of income then between 2 children it's £450/month, however between 5 it's £180/month. Now whilst the ratio to lump sum is the same, unless you've got a need for that lump sum the impact of a £5,400 pay rise over (say) a lump sum of £150,000 is going to be more tempting than one of £2,160 over a lump sum of £60,000. Especially if there's a risk of a sibling being difficult or wanting to be brought out of their share which then requires the remaining siblings to either put up the cash or take on a loan to do so.

 

[DelayRepay]

Absolutely.

To be fair.... that list of occupations extends further upwards than the traditional standard wage positions. The fact they are struggling to recruit for a £35k p/a IT support based roll (that an ex colleague took) means the situation is starting to get pretty serious regarding cost of living v Wages.

When I was little, my dad was a bus driver. My mum didn't work until my sister started school. My dad's income paid the mortgage, the bills and while we didn't live the life of riley we did always have clean clothes, enough food, a warm house and enough funds for leisure/days out. We had a holiday every year too, usually self catering at the English sea side. As far as I am aware the only state support was Child Benefit for me and my sister (which, in those days everyone got).

There is no way you could do that today.

Now some are accidental landlords, for example an elderly relative needs care, their home is rented to contribute towards their costs. They then die, leaving their offspring with a property which provides them with an income or that they can sell.

If there's lots of offspring, then it's easier to sell (and the monthly income may not look that attractive). If you assume £900/month of income then between 2 children it's £450/month, however between 5 it's £180/month. Now whilst the ratio to lump sum is the same, unless you've got a need for that lump sum the impact of a £5,400 pay rise over (say) a lump sum of £150,000 is going to be more tempting than one of £2,160 over a lump sum of £60,000. Especially if there's a risk of a sibling being difficult or wanting to be brought out of their share which then requires the remaining siblings to either put up the cash or take on a loan to do so.

The accidental landlords aren't impacting housing supply though (if you assume the purpose of a house is to be lived in rather than as an investment). They are providing housing to people who cannot or do not want to buy a property. The last flat I rented before I bought a house was owned by an accidental landlord (actually landlady!) - it was her mother's flat, her mother had moved in with her and was renting the flat out to generate an income. When the mother died, the landlady decided to keep the flat as a source of income (which I was pleased with; if she'd sold it I might have been looking for a new home). She didn't really want to be a landlady though; when I told her I was moving out she put the flat on the market. The point is that even though that home wasn't being lived in by the owner, it was still providing a home to someone.

Obviously where homes are sat empty for some reason then that's impacting supply and pushing up prices (both to buy and to rent).

Turning to the issue of supply, we rely on private developers to build houses and whilst there are some 'affordable homes' requirements as part of planning rules, it's really not in the interests of developers to build small, inexpensive houses. It's in their interest to build large, expensive houses to achieve better prices. And it's in their interests to constrain supply to an extent and keep prices high.

We have another thread discussing whether it was right to sell off Council Housing so I won't go into that here, save to say that a national programme using public resources* to build affordable, decent homes, might be needed. We cannot do that though, because as supply increases, prices begin to fall. On the one hand, that's a desirable outcome as it will make housing affordable. On the other hand, people who are mortgaged up to the hilt will find themselves in negative equity. So unfortunately there isn't an easy solution now.

 

[yorksrob]

Absolutely.

To be fair.... that list of occupations extends further upwards than the traditional standard wage positions. The fact they are struggling to recruit for a £35k p/a IT support based roll (that an ex colleague took) means the situation is starting to get pretty serious regarding cost of living v Wages.

I think we're still a bit sheltered up here in Yorkshire from the full cost of housing crisis. I think I would be struggling if I hadn't settled here.

I would suggest affordable housing is the biggest issue that needs sorting. Most European countries have rent controls even wunderbar Germany so that even people on low incomes can at least get by. The UK has had an obsession on house values that the economy would blow up utterly if the house bubble is pricked now so on it goes but it will be pricked with devastating consequences on all us minions that run society.

I don't know how we can work ourselves backwards out of this situation without creating more problems.

 

[Yew]

We have another thread discussing whether it was right to sell off Council Housing so I won't go into that here, save to say that a national programme using public resources* to build affordable, decent homes, might be needed. We cannot do that though, because as supply increases, prices begin to fall. On the one hand, that's a desirable outcome as it will make housing affordable. On the other hand, people who are mortgaged up to the hilt will find themselves in negative equity. So unfortunately there isn't an easy solution now.

So I think the way to do this would be to try and build additional housing, in a manner that will keep prices stagnant, whilst inflation catches up.

 

[Peter Sarf]

The example of 'civil engineers' is a good one. There's a reason they can increase their salary (during a recession) and that's because they chose to do a particularly difficult degree and then a demanding job of which is crucial to the progress and comfort of society.

Not so sure just 'getting an education' is necessarily going to cut it these days. There's only so many artificially highly paid 'HR' or various other middle management roles that can be filled with graduates in gender studies or media.

Yes there are some oversubscribed and not relevant degree courses out there. And people who have them are saddled with debt from their student loan.

I'm aware of that, my point is that I suspect that the division is going to worse going forwards.

Talking to a friend they were saying that their aware of nearly fresh from Uni Architectural staff who are getting promoted to positions they wouldn't have previously got without 3 more years of experience.

Although I certainly buck the trend, my highest formal qualification is equivalent to an A level, however I'm doing a job which the vast majority of people who do have at least a degree. It's probably taken me a bit longer to get there and I certainly started off on fairly low pay (although didn't have the student debt that others would have had, so it probably nearly balances out) however it's not uncommon for me to be involved in training staff who have degrees.

OK, I can never work for a Council at a comparable level (as they are stuck in their ways and require an engineer to have a degree and have no way of allowing technically competent staff to get promoted above a certain grade) however I've never had an issue with getting a new job or even getting interviews in the private sector.

Likewise chartership would be hard work to obtain (effectively requiring me to write a dissertation just to get membership of a industry body) however not having membership of a professional body hasn't held me back and the one time I "needed" chartership for a project where I was there last engineer there was the option of "otherwise approved", which was granted just by me asking what was required to be otherwise approved (although I suspect given the technical questions I'd answered on the project in question proved that I was technically competent).

I know that I'm very much an exception (in part because whilst I don't do well in academia I do learn tasks fast; but probably more likely due to a shed load of luck).

Of course getting a degree would, for the vast majority of people for the vast majority of roles, would be an easier route to having a decent job.

Could I be at a higher grade than I am now, if I had a degree? We'll never know, quite possibly, however I'm content with where I am and my package of reward (obviously it'll be nice if I was paid more, but it's enough for what we need and even if I had more there's always more that I could be paid; however given our household income is in the upper 50th percentile by a comfortable margin, we're aware that many are worse off than we are, even showing for living somewhere with above average housing costs).

My IT career was similar. Those with formal qualification and those with ability. Some had both !.

And yes, the civil service is another world !.

The issue is that we need people doing those jobs which are seen as not requiring much of an education, otherwise the economy grinds to a halt.

We need to find a way to ensure that waiters and waitresses etc can afford to live within the economy with adequate affordable housing, leisure etc.

Vert much so. We need people to do those jobs and there has to be an expectation that they will need to live.

And in London there are police officers, medical staff and teachers who cannot afford to work in London as the cost of housing is too great.

Absolutely.

To be fair.... that list of occupations extends further upwards than the traditional standard wage positions. The fact they are struggling to recruit for a £35k p/a IT support based roll (that an ex colleague took) means the situation is starting to get pretty serious regarding cost of living v Wages.

Absolutely, we have had plenty of inflation in Greater London already !.

I would suggest affordable housing is the biggest issue that needs sorting. Most European countries have rent controls even wunderbar Germany so that even people on low incomes can at least get by. The UK has had an obsession on house values that the economy would blow up utterly if the house bubble is pricked now so on it goes but it will be pricked with devastating consequences on all us minions that run society.

I agree that housing is the crucial issue. The problem is that we don't have enough housing in the places people want to live, and not enough houses will always cause prices/rents to rise to absorb any extra money that the people who need houses have. I don't think rent controls are the answer - if there's not enough houses then, no matter what rent levels you set, someone is going to be left without a house: That's basic maths - taking the difference between the number of people who need houses and the number of houses available. The answer is to build many more houses/flats/etc. as soon as we can.

It is really why we have to have Housing Benefit. Lots of people in Greater London are working but getting housing benefit. Of course that stokes house price inflation but if the jobs need to be done then some have to be supported. One, arguably cruel, solution to the housing cost inflation is to not pay housing benefit to people who are not working but live in expensive areas (Greater London). Let them move to cheaper areas. BUT that leads to sink estates, deprived areas and distanced relatives/dependents so not an easy solution there to housing inflation.

If you are referring to University degrees, I strongly disagree, but it's probably a whole new subject in its own right; feel free to create a new thread clarifying what you mean.

As others have said. There are some arguably useless degrees. On the other hand qualifications does and should extend to apprenticeships etc.

The main reason for inflation in this case is simple, there is not enough housing, food or oil about, we have basically stretched the earths resources to the limit, and so now we, both as a race and as a nation, are going to have to learn to use less because everyone needs the same resources which is increasing prices and so we can afford less.

This country cannot afford to continue to import loads of oil at ever increasing prices in order to make loads of drinks bottles and allow people to make 100 mile commutes.

We cannot afford to build loads more houses on land suitable for farming, and we cannot afford to import more and more food, depriving poorer countries of it.

If we do not learn to live within our means who knows what will happen.

Afraid so. the only thing not in sort supply is US.

I think we're still a bit sheltered up here in Yorkshire from the full cost of housing crisis. I think I would be struggling if I hadn't settled here.



I don't know how we can work ourselves backwards out of this situation without creating more problems.

Yes house prices in SE England are hopelessly high.

As for a solution see below.

So I think the way to do this would be to try and build additional housing, in a manner that will keep prices stagnant, whilst inflation catches up.

The planet is only so big. The population of the human race is enormous and growing. WE are the problem.

 

[DynamicSpirit]

It is really why we have to have Housing Benefit. Lots of people in Greater London are working but getting housing benefit. Of course that stokes house price inflation but if the jobs need to be done then some have to be supported. One, arguably cruel, solution to the housing cost inflation is to not pay housing benefit to people who are not working but live in expensive areas (Greater London). Let them move to cheaper areas. BUT that leads to sink estates, deprived areas and distanced relatives/dependents so not an easy solution there to housing inflation.

Yes and no. In the short term, you are correct that people need to work and they have to live where they live, and if house prices/rents are too high then the only short term solution is to pay housing benefit so that people can survive.

But long term it's not a sustainable solution. As long as there are not enough homes, rents/prices will always rise to match what people can pay. If you raise housing benefits to match current house prices/rents, then the very fact that you've raised housing benefits will cause prices/rents will rise again to take account of that the higher benefits means people can afford higher rents. After a short time lag, people on housing benefits will turn out to be no better off than before. And the cycle will go on until enough houses are built. You can see evidence for this in another way: Look at how the minimum/living wage has grown extraordinarily over the last few years - it's not that many years ago that it was about £6/hour - and it keeps going up. Yet no matter how much it goes up by, it's never enough. And once again that's because, in the absence of us having enough houses for everyone to live in, rents and house prices will always go up to match what people can (just about) afford.

There's really no way to solve the problem without building a lot more houses - until we have enough for everybody.

 

[Peter Sarf]

Yes and no. In the short term, you are correct that people need to work and they have to live where they live, and if house prices/rents are too high then the only short term solution is to pay housing benefit so that people can survive.

But long term it's not a sustainable solution. As long as there are not enough homes, rents/prices will always rise to match what people can pay. If you raise housing benefits to match current house prices/rents, then the very fact that you've raised housing benefits will cause prices/rents will rise again to take account of that the higher benefits means people can afford higher rents. After a short time lag, people on housing benefits will turn out to be no better off than before. And the cycle will go on until enough houses are built. You can see evidence for this in another way: Look at how the minimum/living wage has grown extraordinarily over the last few years - it's not that many years ago that it was about £6/hour - and it keeps going up. Yet no matter how much it goes up by, it's never enough. And once again that's because, in the absence of us having enough houses for everyone to live in, rents and house prices will always go up to match what people can (just about) afford.

There's really no way to solve the problem without building a lot more houses - until we have enough for everybody.

I am sure that if housing benefits were discontinued you would quite quickly see rents come down. But I doubt rents would come down enough to stop an exodus of working people from jobs in Greater London. Greater London would implode with collapsed essential services like hospitals (and delivered meals !).

London is too big and there are too many people on the planet. We could also look at what constitutes adequate housing - but I don't fancy going there !.

 

[DynamicSpirit]

I am sure that if housing benefits were discontinued you would quite quickly see rents come down. But I doubt rents would come down enough to stop an exodus of working people from jobs in Greater London. Greater London would implode with collapsed essential services like hospitals (and delivered meals !).

Yeah, I think that's correct. And don't get me wrong - I'm not for a minute suggesting we suddenly scrap housing benefits - that would be a disaster when so many people have come to rely on them. You can't sensibly make sudden dramatic changes like that. But I think that for too long our focus has been on simply, trying to give people more money (via things like housing benefits or increasing the minimum wage) when the focus should've been on, addressing the structural problems (not enough housing) that were preventing the existing levels of benefits/wages from being enough. And if in the long term we want to get people out of poverty, the addressing the structural problems is actually the only way that will work, and that's what we need to do going forward. The aim should be, make sure that there is enough housing stock available that rents/house prices naturally fall to the point where someone on a normal salary doesn't need any housing benefit.

 

[Peter Sarf]

Yeah, I think that's correct. And don't get me wrong - I'm not for a minute suggesting we suddenly scrap housing benefits - that would be a disaster when so many people have come to rely on them. You can't sensibly make sudden dramatic changes like that. But I think that for too long our focus has been on simply, trying to give people more money (via things like housing benefits or increasing the minimum wage) when the focus should've been on, addressing the structural problems (not enough housing) that were preventing the existing levels of benefits/wages from being enough. And if in the long term we want to get people out of poverty, the addressing the structural problems is actually the only way that will work, and that's what we need to do going forward. The aim should be, make sure that there is enough housing stock available that rents/house prices naturally fall to the point where someone on a normal salary doesn't need any housing benefit.

It is true the costs need reducing not the subsidy increasing.

An example is rising fuel prices. Subsidising the cost of heating peoples homes is a mistake as this does not encourage the use of less fuel so the price will rise even further. Better to reduce demand by spending the money on insulation. Also education/expectation - we have got used to the idea that in winter our home needs heating but perhaps we need to go back to wearing warmer clothes indoors. This should yield earlier savings of energy than insulation which will take time to roll out. But telling people to dress up warmly in their own home will not be popular.

 

[Wynd]

Housing benefit is not the primary driver of house price growth.

The primary driver of house price growth is Mortgage lending.

Affordability of 4.5X Joint Salary under BOE rules gets you pretty quickly to the average UK house price.

I don't know if its intended, but the above could so easily be interpreted as "house prices are the fault of the poor", the very people who can barely afford shelter.

What could we blame the poor for next? Its practically a national sport, imposed on us in the middle by the higher ups to hide the fact that tax avoidance and corruption are the true drains on the wealth of the UK at large.

All intended to keep us fighting like ferrets in a sack!

It is true the costs need reducing not the subsidy increasing.

An example is rising fuel prices. Subsidising the cost of heating peoples homes is a mistake as this does not encourage the use of less fuel so the price will rise even further. Better to reduce demand by spending the money on insulation. Also education/expectation - we have got used to the idea that in winter our home needs heating but perhaps we need to go back to wearing warmer clothes indoors. This should yield earlier savings of energy than insulation which will take time to roll out. But telling people to dress up warmly in their own home will not be popular.

Another hilarious topic of how an Oil and Gas producing state is seeing the highest price escalation and inflation in the G7. But we cant store the Gas, why is that? https://inews.co.uk/news/uk-gas-storage-facilities-shortages-energy-price-rises-rough-1441830

Its not about popularity, its about your house being so cold there is frost on the inside of the glass and the Token meter crooking you out of what little money you have left.

Dont we aspire to have people living comfortably with sufficient disposable income? Or are we so callous now as to let them freeze?

 

[Peter Sarf]

Housing benefit is not the primary driver of house price growth.

The primary driver of house price growth is Mortgage lending.

Affordability of 4.5X Joint Salary under BOE rules gets you pretty quickly to the average UK house price.

I don't know if its intended, but the above could so easily be interpreted as "house prices are the fault of the poor", the very people who can barely afford shelter.

What could we blame the poor for next? Its practically a national sport, imposed on us in the middle by the higher ups to hide the fact that tax avoidance and corruption are the true drains on the wealth of the UK at large.

All intended to keep us fighting like ferrets in a sack!

I was thinking about the effect on rents. I do agree it is not a simple problem to solve. But at least the poor are better off than they were in the past (workhouses, seasonal only work) - but lets see where this war takes us.

Another hilarious topic of how an Oil and Gas producing state is seeing the highest price escalation and inflation in the G7. But we cant store the Gas, why is that? https://inews.co.uk/news/uk-gas-storage-facilities-shortages-energy-price-rises-rough-1441830

Its not about popularity, its about your house being so cold there is frost on the inside of the glass and the Token meter crooking you out of what little money you have left.

Dont we aspire to have people living comfortably with sufficient disposable income? Or are we so callous now as to let them freeze?

INSULATION is better than chokeing the poor (and rich) to death with pollution and global warming. It is better to prevent this cause of inflation rather than try to cope with it.

 

[Yew]

The planet is only so big. The population of the human race is enormous and growing. WE are the problem.

And what do you propose? Or are you too caught up in your anthroposandry to suggest a solution?

 

[Dai Corner]

An example is rising fuel prices. Subsidising the cost of heating peoples homes is a mistake as this does not encourage the use of less fuel so the price will rise even further. Better to reduce demand by spending the money on insulation. Also education/expectation - we have got used to the idea that in winter our home needs heating but perhaps we need to go back to wearing warmer clothes indoors. This should yield earlier savings of energy than insulation which will take time to roll out. But telling people to dress up warmly in their own home will not be popular.

How about the Government giving us all a set of thermal underwear and a big jumper?

(Tongue not entirely in cheek).

 

[philthetube]

Yes and no. In the short term, you are correct that people need to work and they have to live where they live, and if house prices/rents are too high then the only short term solution is to pay housing benefit so that people can survive.

But long term it's not a sustainable solution. As long as there are not enough homes, rents/prices will always rise to match what people can pay. If you raise housing benefits to match current house prices/rents, then the very fact that you've raised housing benefits will cause prices/rents will rise again to take account of that the higher benefits means people can afford higher rents. After a short time lag, people on housing benefits will turn out to be no better off than before. And the cycle will go on until enough houses are built. You can see evidence for this in another way: Look at how the minimum/living wage has grown extraordinarily over the last few years - it's not that many years ago that it was about £6/hour - and it keeps going up. Yet no matter how much it goes up by, it's never enough. And once again that's because, in the absence of us having enough houses for everyone to live in, rents and house prices will always go up to match what people can (just about) afford.

There's really no way to solve the problem without building a lot more houses - until we have enough for everybody.

There is no way to solve it without a reducing population, if we continue as currently we will eventually end up building platforms out to see to put housing on,

One thing which could be done to release housing would be to build for the elderly in retirement homes, then allow councils to rent their properties and take responsibility for them, charging less for the new home than the rent charged for the original home, but allowing the elderly to retain ownership as selling the families inheritance is a big issue for many, this would actually provide a bit of disposable income for the elderly.

By releasing these properties this may allow rents in general to be reduced.

 

[Peter Sarf]

And what do you propose? Or are you too caught up in your anthroposandry to suggest a solution?

Well there are a variety of solutions, some easy some quick and drastic. I would not say it is easy but we really do need to consider our future more.

One basic one would be a limit on family sizes. The Chinese went for a one child policy which of course reduced the population. It was not 100% btw - I gather parents were charged if they had more than one child (a sort of reverse child benefit). Source Chinese daughter in law who has two sisters and a brother. Not a universally popular approach of course.

The challenge is that most economies thrive on population growth so there is little incentive to bite that bullet now. But that is far enough off topic.

A little bit of inflation is not a bad thing as it keeps us clear of deflation. However we are heading into a period of alarming inflation and it is on costs of essentials - energy and food. The war in Ukraine is hurting us and Putin might well have planned this bit of inflation and supply problems.

 

[Ediswan]

And what do you propose? Or are you too caught up in your anthroposandry to suggest a solution?

Do you have a definition for that word. Google said 'no match'.