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The housing crisis and ways to fix it?

E27007

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Is there a housing crisis or is there an inability of people to buy thier first house?
Both of those plus More!
1) try and find a Landlord of buy-to- let properties who will take on a tenant with an adverse credit history such as a County Court Judgement.

2) HMRC apply upward pressure on rents, . it works like this, HMRC have knowledge of the the typical average rent of similar rental property in the locality,Processing Annual Accounts submitted by the Landlord to HMRC, if HMRC decide the Landlord is charging a rent below the market rate as defined by HMRC, , HMRC will scale down tax allowances for repairs and improvements ( roof repairs , new central heating boiler etc) . Both the Landlord and Tenant are penalised, any low rent property will be either not maintained fully or the Landlord will skimp maintenance, or push the rent upwards towards what HMRI consider acceptable for full tax relief.

3) Accountants are advising landlords to scaledown on renting, if the landlord has a portfolio of 5 properties , reduce to 4., then 3.

4) In London rental properties are reducing in number, the shortage is now greater , renters are so desperate they are offering the Landlord a years rent in advance to win the tenancy

5) Home Energy Efficiency requirements, rented properties have to be A B or C rated, typically renters are often constrained to flats / maisonettes, small houses, irrespective of the needs of their family ,
 
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E27007

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Wasn't aware this was a railway issue. Sounds more like an job for HMRC. ;)
You are very observant! Thank you. I have amended my original post from HMRI to HMRC! I had an uneasy feeling, an error in the post, you found it
 

johncrossley

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The general rate of inflation from 2007 to today is 51%.

According to the Nationwide House Price Index


the increase in house prices from Q3 2007 to Q3 2022 is:

West Midlands 50%
Wales 39%
Yorkshire & Humber 34%
North West 34%
Scotland 21%
North 18%
Northern Ireland -19%

So in much of the country, house prices have gone down in real terms since 2007, and in Northern Ireland are still well below 2007 prices even in cash terms!
 

duncanp

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Both of those plus More!
1) try and find a Landlord of buy-to- let properties who will take on a tenant with an adverse credit history such as a County Court Judgement.

2) HMRC apply upward pressure on rents, . it works like this, HMRC have knowledge of the the typical average rent of similar rental property in the locality,Processing Annual Accounts submitted by the Landlord to HMRC, if HMRC decide the Landlord is charging a rent below the market rate as defined by HMRC, , HMRC will scale down tax allowances for repairs and improvements ( roof repairs , new central heating boiler etc) . Both the Landlord and Tenant are penalised, any low rent property will be either not maintained fully or the Landlord will skimp maintenance, or push the rent upwards towards what HMRI consider acceptable for full tax relief.

3) Accountants are advising landlords to scaledown on renting, if the landlord has a portfolio of 5 properties , reduce to 4., then 3.

4) In London rental properties are reducing in number, the shortage is now greater , renters are so desperate they are offering the Landlord a years rent in advance to win the tenancy

5) Home Energy Efficiency requirements, rented properties have to be A B or C rated, typically renters are often constrained to flats / maisonettes, small houses, irrespective of the needs of their family ,

The current rent freeze and eviction ban in Scotland, plus changes envisaged in the Renters Reform Bill in England, will only make the situation worse.

In other words, changes designed to protect tenants will, in the long term at least, have the opposite effect to that which was intended.
 

Yew

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Most of the new housing is planned for England, where the built-up percentage is far greater than 6%. Any new major developments should therefore go to the other 3 nations of the UK, particularly Scotland, which are far less densely populated.
Why should we build houses where people don't want to live?

The general rate of inflation from 2007 to today is 51%.

According to the Nationwide House Price Index


the increase in house prices from Q3 2007 to Q3 2022 is:

West Midlands 50%
Wales 39%
Yorkshire & Humber 34%
North West 34%
Scotland 21%
North 18%
Northern Ireland -19%

So in much of the country, house prices have gone down in real terms since 2007, and in Northern Ireland are still well below 2007 prices even in cash terms!
That seems a remarkably odd point to choose, just before the 2007 financial crisis?

How does that compare if you look at say, the last 50 years, and compare against wages?
 
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johncrossley

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That seems a remarkably odd point to choose, just before the 2007 financial crisis?

How does that compare if you look at say, the last 50 years, and compare against wages?

Obviously I picked the start point deliberately, but the point I was making is that housing is not a guaranteed one-way bet, as most people seem to think. For house prices in Northern Ireland to have dropped 46% in real terms over such a long period of time is quite incredible.
 

Bletchleyite

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Why should we build houses where people don't want to live?

To be fair some should probably be built in or near Edinburgh, possibly in the form of the regeneration of the more "Trainspotting" like Council estates - there are some really horrific ones there. The prices there are London levels yet no London wages - must be one of the least affordable places in the UK.
 

E27007

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Most of the new housing is planned for England, where the built-up percentage is far greater than 6%. Any new major developments should therefore go to the other 3 nations of the UK, particularly Scotland, which are far less densely populated.
The bulk of the population of GB is in England, the combined population of Scotland and Wales, is about 8 million, on par to London alone. when population densities are reported, the UK is high, but reasonable, but then consider the population density of England alone, it is an eye-opener, no other major European country comes close, Germany is half that of England, France one quarter.
 
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Bald Rick

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but then consider the population density of England alone, it is an eye-opener, no other major European country comes close, Germany is half that of England, France one quarter.

And then consider the population of England in the area south and east of Blackpool tower, and it is much denser still.
 

najaB

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when population densities are reported, the UK is high, but reasonable, but then consider the population density of England alone, it is an eye-opener, no other major European country comes close, Germany is half that of England, France one quarter.
True. But then, the population densities of European countries are, for the most part, quite low on the global scale. Germany is 66th the world, France is in position 100.
 

johncrossley

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West Germany used to be similar density to the UK. Obviously the Netherlands and the Flemish region of Belgium are particularly thickly populated as well. This is all in the Blue Banana


The Blue Banana (also known as the European Megalopolis or the Liverpool–Milan Axis) is a discontinuous corridor of urbanization spreading over Western and Central Europe, with a population of around 111 million.
 

The Ham

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So let me understand this. We encourage immigration into the UK because the country is either unwilling or unable to educate its young people and provide them with useful skills (and perhaps a decent work ethic). Presumably the carrot is they will have a "better life" than in their own countries.

Mods note - Some post have been moved here from the Conservative Party thread.


No, more to do with having a falling birthrate, meaning that without immigration the working aged population would be falling.

At the same time, because we are unwilling or unable to care for our older folk, we then encourage them (who have probably received a decent education and had a decent work ethic) to up sticks in their dotage to occupy the spaces which the youngsters arriving in the UK have left vacant. They should be encouraged to "go [or insert any other word of your choice] off and live somewhere else" rather than spend their retirement years in the country most of them have lived all their lives and to which they have contributed both financially and by their labours.

No one is suggesting that they have to, however (as an example) my grandparents used to go to the Med during the winter as they said that it was cheaper than running their home here (I doubt that, but food and heating costs would have been cut significantly, so there was at least some noticeable reduction in costs - so if you're going away anyway staying for add long at possible probably did make sense).

A few questions arise from that strategy:

1. What happens to the young UK citizens who have not been blessed with a decent enough education to make them employable?

They get jobs, maybe not the best jobs, maybe they have to get an entry level job and do college or training to get where they want to get to, etc. A few may end up on benefits (however chances are they would do so anyway), it's just with a larger working population there's more paying taxes to cover those costs.

2. What is in it for the older UK citizens who are encouraged to leave the UK to settle in a country which young people are leaving to seek a better life?

I'm not aware of older UK citizens being encouraged to leave, as I said above some think that living elsewhere is as good idea (look at the number who retired to Spain).

3. What happens in the donor countries which have seen their population denuded of young people, whose education they have funded, to see them replaced with older people who will be unable to contribute greatly to their economy?

Let's take Poland as an example (unless you wish to pick another, feel free to suggest one), a lot of young Polish people came here to work, they would save hard and some (when they returned) would be able to afford to buy a house and so had a boost.

If they stay here longer term, then they would end up going home to visit and spend some of their money there.

Overall Poland had been doing very well since joining the EU and doesn't have an issue with not having the staff they need.

4. (The Eternal Question, never answered satisfactorily) What happens in the UK when the young people who have settled here for a better life, eventually get old (as, incredible as it may seem, they will)?

Native population is 20% over 65, EU population in the UK over 65 is 10%. Whilst the 50-64 populations follow a similar (20% UK, 14% EU) pattern, so this is unlikely to be a significant issue for at least 15 years, especially given that the EU natives make up 6% of the population.

The suggestion that such a population exchange should be encouraged is ludicrous and mildly offensive.


It depends very much who you ask.

If you visit most cities or large towns you will find that many people (I would suspect "most" - including many immigrants) very certainly do care. In many of these places "beds in sheds" are very much the norm. If you look at the local planning applications, you will find a multitude of entries to build "offices", "gymnasiums", "art studios" in back gardens. These are euphemisms for additional living accommodation as the applicants have no intention of using them for the stated purpose. You will also see some more genuine applicants wishing to build "granny annexe" type developments. Basically, back gardens are disappearing under concrete. Large family homes are being converted to "Houses of Multiple Occupation". Far more serious is the problem of people living in tents and other makeshift accommodation. These are not only apparent on the streets; areas of common land are now seeing "communities" develop with a number of people living a nomadic life.

All this is being done to provide accommodation for population numbers which are expanding unsustainably. But of course housing is just one aspect. Pressure on essential services - particularly health and education - is enormous. Speak to people in those areas and ask those trying to secure a doctor's appointment or a place for their child at school and see whether only a few of them care that the population is increasing by many hundreds of thousands every year.

The entire strategy is utter lunacy on so many levels.

Generally people want more space than they did in the past. However a lot of the issue with housing is not building enough for the shift in population.

This all rather points back to the real problem, we've not been building enough housing for the last 40 years, and therefore prices hae risen at unsustainble rates and priced many people out of the markets that they would historically choose.

Whist not building enough is part of the issue, this has been made worse by the fact that households sizes have been getting smaller. In part due to fewer children per couple, but also sure to much more of the population being over 65 and therefore less likely to have kids at home and with a fairly high number of single person households.

And even with immigration out of the picture, native-born population growth has outpaced housebuilding.

Native population growth isn't really the issue, it's not native population household sizes.

In 1996 the average size was 2.42 people, it's now 2.36. That didn't sound a lot, however to house 66.6 million people that's the difference between 28.2 million homes and 27.4 million homes, so just to keep pace with that shift we would have needed to build 50,000 extra houses a year.

If you go further back, even if that's to "just" 1971, household sizes were larger still. In 1971 it was 2.91, to house that same 66.6 million you'd have needed 22.9 million homes. That's an average of an extra 100,000 per year just to stand still in terms of numbers of homes due to the shrinking household size.

Obviously the population has also grown in that time, but the impact of that could have been a lot smaller if household sizes didn't fall as fast (although with a lower childhood death rate - even between 1979 and 2012 it's noticeable, as the infant mortality rate fell by a third - each couple were likely to reduce the number of children that they have).

In short, it's more complex than just not building enough homes. However that is something which would have helped.
 
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DynamicSpirit

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Native population growth isn't really the issue, it's not native population household sizes.

Why not accept that both things are issues that contribute to the housing shortage, instead of trying to maintain this absurd pretence that population growth somehow doesn't impact demand for houses?

In 1996 the average size was 2.42 people, it's now 2.36.

That's a 2.5% reduction in household size, which would therefore translate into a need for 2.5% more houses. In the same period the UK population has grown from 56.17M in 1996 to 67.33M in 1921 - an increase of 19.9%. That means that for every additional house you need to build because of household size reduction, you need to build another 8 houses because of population increase (And yes I realise not all that population increase is because of net migration).
 
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The Ham

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Why not accept that both things are issues that contribute to the housing shortage, instead of trying to maintain this absurd pretence that population growth somehow doesn't impact demand for houses?

If you read all the points I made I was clear that there was an issue with population growth, but another significant factor was the reduction in household size, for example read my last paragraph:

In short, it's more complex than just not building enough homes. However that is something which would have helped.


That's a 2.5% reduction in household size, which would therefore translate into a need for 2.5% more houses. In the same period the UK population has grown from 56.17M in 1996 to 67.33M in 1921 - an increase of 19.9%. That means that for every additional house you need to build because of household size reduction, you need to build another 8 houses because of population increase (And yes I realise not all that population increase is because of net migration).

The comment I was reply to was saying that native population growth was the issue, to which I was saying that for the native population reducing goals sizes was a bigger issue (i.e. not counting immigration).

If it wasn't for immigration we'd have had a fairly rapid shrinking of those under 18. Therefore a lot of the reason for the stabilisation if the household size over the last 16 years compared to the preceding 15 is down to the stabilisation of number of children (i.e. not due to the native population and so this would have likely resulted in a faster fall in the size of households).

If it were possible to remove migration from the numbers, the likely driver of the need for more housing for the native population isn't down to population growth within the native population but rather due to the shrinking of household sizes.
 

najaB

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The comment I was reply to was saying that native population growth was the issue, to which I was saying that for the native population reducing goals sizes was a bigger issue (i.e. not counting immigration).
For clarity, the point I was making in my post was that it wasn't simply "immigrants taking all the houses, innit?" either, and that even absent immigration we would still have a housing shortage. I wasn't suggesting that was entirely down to native-born population growth.
 

jon0844

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As I've said before, the housing industry doesn't want to build too many homes. Nobody wants to bring house prices down as in this country, it's a form of investment. Of course, many people still lose out if they have a family member that needs a high level of care in later life - the home often being sold to pay for it.

What we're seemingly happy to do is build supposedly premium apartments that rich investors can snap up, often not one or two flats but an entire block, and then rent out for exorbitant amounts (or perhaps as in the past let them sit empty and class them as business premises with maybe a few employees and guests using them from time to time).

Is there any sign of that changing? The only social housing comes when a council succeeds in forcing a developer to set aside a certain percentage in order to get what they want, and those properties are often very basic in comparison.
 

najaB

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As I've said before, the housing industry doesn't want to build too many homes. Nobody wants to bring house prices down as in this country, it's a form of investment.
And one of the few investments that people expect to increase in value with little to no effort being expended, while also simultaneously extracting significant value (in the form of accommodation).
 

DerekC

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This seems to have turned into an "immigration and its impact on housing/population" thread. Suggest the protagonists start a new one if that's what they want to discuss.
 

jon0844

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And one of the few investments that people expect to increase in value with little to no effort being expended, while also simultaneously extracting significant value (in the form of accommodation).

The problem is the next generations are going to be screwed because of it.

Even assuming we see some forced development to ease demand under a future Government (unlikely), they're going to be more tiny shoe boxes that don't give people a great quality of life and will see people stepping on each other's toes, with neighbours getting agitated by noise issues, parking issues and so on. And they're still going to be expensive.

The ghettos of tomorrow.
 

bleeder4

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Is there any sign of that changing? The only social housing comes when a council succeeds in forcing a developer to set aside a certain percentage in order to get what they want, and those properties are often very basic in comparison.
Is that a recent phenomenon? I bought a new-build property from Taylor Wimpey in 2015. A proportion of the development was built as affordable housing - council houses, shared ownership schemes, housing agencies and the like etc. Taylor Wimpey told me at the time that the law was that 25% of every new development had to be built as affordable housing. Has that changed in the last 8 years?
 

Typhoon

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Is that a recent phenomenon? I bought a new-build property from Taylor Wimpey in 2015. A proportion of the development was built as affordable housing - council houses, shared ownership schemes, housing agencies and the like etc. Taylor Wimpey told me at the time that the law was that 25% of every new development had to be built as affordable housing. Has that changed in the last 8 years?
According to the National Planning Policy Framework (NPPF):
The NPPF says where major development includes the provision of housing, at least 10% of the housing provided should be for affordable home ownership, subject to some exceptions. There is no minimum level of provision of affordable rented housing – this is for local planning authorities to determine.
(my emphasis). Basically, there are ways they can get round it, and they do. I could find no reference to the 25% but note that 'built as affordable housing' and 'affordable home ownership' may not be the same thing.
The affordability of housing has worsened significantly over the last 20 years, making it harder for people to get the housing they need.

Data published in March 2023 shows that in 2002, the median salary in England was £20,739 and the median house price was £102,000. This equated to an affordability ratio of 4.92.

In 2022, the median salary was £33,208 and the median house price was £275,000. This means that the affordability ratio in 2022 was 8.28.
Development near me
2, 3, 4 & 5 bedroom houses
From £355,000
And you just know the £355K has two bedrooms.

It is grim, I am just pleased that I am of an age where my concern will be care home fees. I feel very, very sorry for the younger members of this forum, I really don't know the answer but it isn't what we have now.

Sources:
https://commonslibrary.parliament.u... home ownership, subject to some exceptions.
https://www.gov.uk/government/publi...sing/fact-sheet-9-what-is-affordable-housing
 

telstarbox

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On some sites the affordable housing is as high as 40%, although this usually includes shared ownership as well as traditional social housing. On others the developer pay the council to provide it off site or negotiate it down to zero through the dark art of "viability" (there can be justifiable reasons for this such as land remediation costs on brownfield sites).
 

jon0844

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So many scams/tricks with S106 funding too, but that is off topic. Developers are usually very good at their job and gaming the system.
 

The Ham

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So many scams/tricks with S106 funding too, but that is off topic. Developers are usually very good at their job and gaming the system.

They are also good at getting the value of land for very little unless the (say) farmer gets professional guidance as to what to expect they are dangled "your land will be worth £x" but then are stung with a lot of the costs coming off of that value so the actual value they get is much reduced.

As to why there's not enough housing being built, a fair amount will be down to the inability to get planning permission for anything more than the targets set by government. Which is first is reasonable, only other than when sites with planning don't get built (often due to high costs).

Another factor will be sure with placing for (say) 1,250 homes with a condition don't that something that has to be delivered before (say) the 1,100 occupation. Well, if it's poorly worded and the scheme is expensive it can be cheaper for the developer to walk away after selling 1,099 homes and leave the rest unbuilt.

You don't need many of either for you time that as a country we're short several thousand from the targets.

There's things which could be done (unfortunately they aren't done as much as the should be). For example, the government should set their annual target higher so that the real target is hit. For example if the real target is 300,000 then set the goal as 400,000.

Likewise, ensuring delivery of conditions are time limited (for example "the delivery of x must be done before the 1,100 occupation or within 17 years of starting on site" given most developers can sell up to 100 homes a year such a clause isn't too unreasonable).

If you really wanted to hit the target tax insensitive the building companies. Any developer profits will be taxed at 45% if there are less than 150,000 addional homes built in a year, then cut it by 2% for every additional 10,000 homes built. Hit the target of 300,000 and the tax on the developers profits is 15%.

To actually sell that number of houses there's a good chance that prices would stabilise a little more than they currently are. It would also mean that you'd be less likely to have companies slow delivery unless things were really bad in the economy (and in doing so actually probably mean that things didn't get as bad anyway).
 

JamesT

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Too many 5 bedroom houses seem to be being built - I assume more profitabl. Need loads more 1, 2 and 3 bed homes.
https://www.statista.com/statistics/1056041/average-number-bedrooms-new-british-houses-1930-2020/ Says the average number of bedrooms in a new build house was just under 3.
Though I don’t understand this idea that too many large houses are being built. The housebuilders aren’t idiots, if nobody wants large houses, they wouldn’t be building them.
I’d also expect people buying houses with more bedrooms to be moving up from a smaller house. So building a large house makes a small one available.
 

gg1

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Too many 5 bedroom houses seem to be being built - I assume more profitabl. Need loads more 1, 2 and 3 bed homes.
It's only 'too many' if those 5 bedroom houses are under occupied.

There are certainly far more people continuing to live with their parents well in to their 20s or even 30s than there were 20+ years ago, sharing a room with a sibling is fine when you're 10, not so desirable when you're 25. On top of that there's the rise of home working leading to a desire to set aside a room as a home office, if not a dedicated room, at least one which doubles up as spare bedroom/office.

Additionally many new build 5 bedroom homes are 3 storey so don't require more land than a typical 3 bedroom house anyway.
 

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