The housing crisis and ways to fix it?

[najaB]

It's often said that the price of a house is split roughly equally between land, building costs and profit.

That has never been the case, as far as I know. It's closer to 20% land, 40% building costs and 40% profit. And for a major housebuilder copy-pasting houses on a typical development it's probably more like 10% land, 30% building, 70% profit thanks to economy of scale.

 

[ABB125]

That has never been the case, as far as I know. It's closer to 20% land, 40% building costs and 40% profit. And for a major housebuilder copy-pasting houses on a typical development it's probably more like 10% land, 30% building, 70% profit thanks to economy of scale.

Even so, the point still stands (and just illustrates the enormous profits made by the housebuilders!)

 

[najaB]

Even so, the point still stands (and just illustrates the enormous profits made by the housebuilders!)

That was actually the point I was making. I was agreeing with rather than contradicting you.

 

[ABB125]

That was actually the point I was making. I was agreeing with rather than contradicting you.

In which case please accept my apologies!

 

[johnnychips]

I work in Doncaster, which is hardly Stow-on-the Wold or the London Docklands, but the rate of new housing development is incredible. Old pit tops, knocking down old detached houses with big gardens and building four new ones instead, development on what I was surprised to be considered ‘brownfield’ land, areas that seem a flood risk…if this is Doncaster, what must it be like in other areas? And if an airport and its land is considered ‘brownfield’ then whoever owns the soon-to-close Doncaster airport must be licking their lips.

 

[LSWR Cavalier]

There seem to be a lot of golf courses around London. Could be very suitable for building homes on.

What about moving when one retires? Homes in 'unfashionable' places (Whitehaven, Hull, Stoke etc) are available for cheap prices.

 

[Magdalia]

There seem to be a lot of golf courses around London. Could be very suitable for building homes on.

In Surrey golf courses take up more land than houses.

What about moving when one retires? Homes in 'unfashionable' places (Whitehaven, Hull, Stoke etc) are available for cheap prices.

Too many of the older generation occupy too much housing space. My father lived on his own in 3 bedroom house right up until shortly before he died. But many older people have deep roots in their community so, even if they can be persuaded to move home, they are unlikely to move long distances, unless it is to be close to their children and grandchildren.

Unfashionable places don't always remain unfashionable, and it is the young who change that, not the old, by moving to where property is cheap. In the past that's mainly been seen in cities for example Brixton has changed massively since I lived near there 40 years ago. There's an interesting article on the BBC website here about Worthing, on the Sussex coast. The slant of the article is about the political impact, but the demographic and economic impacts are also important.

How seaside town newcomers sapped Tory strength

Worthing has voted Conservative for decades but an influx of urbanities has ruptured the status quo.

www.bbc.co.uk

"A coastal town popular with retirees has voted Conservative for decades but an influx of urbanites has unsettled the status quo. The BBC visited the town to meet some of the newcomers responsible."

 

[ChrisC]

I work in Doncaster, which is hardly Stow-on-the Wold or the London Docklands, but the rate of new housing development is incredible. Old pit tops, knocking down old detached houses with big gardens and building four new ones instead, development on what I was surprised to be considered ‘brownfield’ land, areas that seem a flood risk…if this is Doncaster, what must it be like in other areas? And if an airport and its land is considered ‘brownfield’ then whoever owns the soon-to-close Doncaster airport must be licking their lips.

It’s exactly the same to the south of Doncaster. The rate of housing development around Nottingham, Derby, Mansfield and Chesterfield has been amazing during these last few years and is still continuing. There are now large green field areas being built on on the outskirts of Nottingham with more planned for the next few years around Hucknall, Bingham, Clifton, Gedling, Stoke Bardolph to name a few. The huge development to the East of Nottingham near Stoke Bardolph is on flat land very close to the River Trent and could have a flooding problem in the future. Non of these are in AONB but are all very pleasant areas on the edge of a large city where people have enjoyed the countryside and the local walks for generations. I know we need housing but it always makes me feel sad when I see open countryside being built on.

D.H Lawrence Country was mentioned earlier in this thread. Some of the ex mining towns in this area along the border of Nottinghamshire and Derbyshire are a bit depressed and run down and have brown field sites that could be built on. However, some of the countryside between these towns is quite unspoilt with beautiful views which have probably not changed much since the days of D.H. Lawrence. I go walking regularly around these areas and would hate to see any more large scale housing developments like those planned to the north of Hucknall.

 

[Magdalia]

And if an airport and its land is considered ‘brownfield’ then whoever owns the soon-to-close Doncaster airport must be licking their lips.

If the landowner can make more money building houses than flying planes, then it isn't a surprise that the airport is closing. Much the same is happening near Cambridge, where Marshall's are moving out to Cranfield after more than 100 years in Cambridge, with their airfield going for housing.

 

[Broucek]

One of the deterrents to downsizing on retirement is that stamp duty wipes out a material slug of the money released... (I write as someone living in the London suburbs who will want to remain local when I retire.)

 

[Magdalia]

One of the deterrents to downsizing on retirement is that stamp duty wipes out a material slug of the money released... (I write as someone living in the London suburbs who will want to remain local when I retire.)

One of the bizarre features of UK property tax (I was going to write system but decided it an inappropriate description) is that property is undertaxed if people stay in the same property (council tax) but overtaxed when they move (stamp duty). This is a significant discouragement to mobility and efficient use of the housing stock.

But because of the way the market clears, changes in stamp duty rates mainly affect prices for the seller, with little impact on the overall cost to the buyer. When stamp duty is reduced what the buyer gains in lower stamp duty they lose in higher prices that are the result of increased demand in a situation of inelastic supply.

 

[Broucek]

One of the bizarre features of UK property tax (I was going to write system but decided it an inappropriate description) is that property is undertaxed if people stay in the same property (council tax) but overtaxed when they move (stamp duty). This is a significant discouragement to mobility and efficient use of the housing stock.

Exactly!

 

[py_megapixel]

Well, if "that village" is made up of attractive old Cotswold stone properties, a developer sticking a load of identikit red brick abominations on the edge isn't exactly an improvement...

Of course not. Building identikit developments of this type really needs to stop, as they are to almost nobody's benefit.

However, population growth isn't stopping any time soon, and the new houses have to go somewhere. On the edge of small villages probably isn't the best place in most cases. But, for example, where you have small settlements served by railway stations with very low passenger numbers, doesn't it make sense to build something "walkable" next to it (I'm not talking about high-rise buildings, but something denser than what is usually built now) and not only provide good-quality housing but also increase passenger numbers at the station?

Although I don't necessarily agree with the political motivations, the right to buy is one of the best things to come out of the Thatcher government.

Could you explain why? As I see it, it was essentially a guarantee that - even if they were allowed to - councils would never be able to maintain the size of their housing stock without cutting funding for other services, because they were effectively legally obliged to sell houses for, in many cases, less than it would cost to build a good-quality new equivalent.

not letting councils build more houses was literally the most stupid decision (but aligned with the political values of the government).
Anyway, we won't be able to fix the housing crisis until the system is no longer rigged in favour of the large housebuilders who can build poor-quality, unattractive identikit rubbish with impunity, as local councils are effectively powerless to stop them due to mandatory government targets.

I agree with both of these points.

And don't get me started on the destruction of the strategic road network by development and "growth at all costs"...

Again, this is something that should not be blamed on the fundemental idea of development, but on poor quality development, and of course systemic under-investment in public transport and active travel infrastructure.

If you build sprawling housing estates with few local amenities, you guarantee that almost everyone there will own and use a car, often causing severe traffic congestion. If you build a development which is easy and comfortable to walk and cycle in, has local businesses which satisfy peoples' everyday needs, and is served by high-quality public transport, far fewer people will use cars.

 

[Snow1964]

Encouraging housing associations to build for private rent at commercial prices would also bring rents down.

As I said further up the thread, whilst we have right to buy there is opposite. No one is going to build something that they are likely to have to sell off at a discount few years later, and before they have made any return.

If you want affordable rentals, have to give the landlords a long payback period, not have a policy where they are forced to give it away cheap. Right to buy killed cheap rental market (along with ending secured rent controlled tenancies few decades back).

Those who think right to buy is great idea don’t understand how it kills affordable rentals

 

[Grumbler]

Today there are more homes in the UK than there have ever been, but there is still a housing shortage, because the population is continuing to increase. This is not primarily due to a baby boom, as was the case after WW2, but because of immigration, currently over 700,000 a year. There is no appetite in either main parties in Parliament to reduce immigration, indeed, they want more of it (perhaps because donors to political parties profit from this, or poor immigrants are felt to be more likely to vote in a certain way).

IMO we need to implement a policy of "net zero population increase", otherwise the future of England (the other 3 countries of the UK not so much) is more urban sprawl at the expense of the countryside, more dependence on food imports, water shortages and generally a lower quality of life.

 

[najaB]

Today there are more homes in the UK than there have ever been, but there is still a housing shortage, because the population is continuing to increase. This is not primarily due to a baby boom, as was the case after WW2, but because of immigration, currently over 700,000 a year.

I don't know if you got that statistic from UKIP or the EDL, but the inbound immigrant contribution to UK population growth is projected to be 2.2 million over the next ten years, not 700,000 per annum:

UK population growth over the next 10 years is projected to be driven by a net 2.2 million people migrating into the country.

Source: https://www.ons.gov.uk/peoplepopula...ationalpopulationprojections/2020basedinterim

 

[duncanp]

If you want affordable rentals, have to give the landlords a long payback period, not have a policy where they are forced to give it away cheap. Right to buy killed cheap rental market (along with ending secured rent controlled tenancies few decades back).

Those who think right to buy is great idea don’t understand how it kills affordable rentals

As would having a fair private rental market that balances the needs of tenants and landlords.

For example, Nicola Sturgeon's current rent freeze and eviction ban in Scotland may be great for existing tenants, but it will reduce supply of rented accomodation for potential renters in the future, thus driving rents higher and disadvantaging new tenants.

Proposals to ban Assured Shorthold Tenancies and Section 21 evictions in England will have a similar effect.

 

[Grumbler]

I don't know if you got that statistic from UKIP or the EDL, but the inbound immigrant contribution to UK population growth is projected to be 2.2 million over the next ten years, not 700,000 per annum:

Source: https://www.ons.gov.uk/peoplepopula...ationalpopulationprojections/2020basedinterim

"Total long-term immigration by those of all citizenships (715,000)" according to https://www.migrationwatchuk.org/statistics-net-migration-statistics

 

[najaB]

"Total long-term immigration by those of all citizenships (715,000)" according to https://www.migrationwatchuk.org/statistics-net-migration-statistics

Using statistics compiled by an organisation with a strong anti-immigration bias...

This is why we campaign for significant reductions in immigration, in line with the wishes consistently expressed by three quarters of the public. In support of this campaign we monitor developments, conduct research, and provide the public with full and accurate facts placed in their proper context. We also make recommendations for policy

About-us | Migration Watch UK

Migration Watch UK is an independent and non-political body established in October 2001.

www.migrationwatchuk.org

 

[Yew]

What's the point of building homes going for a £500,000 asking price? Why not build more affordable homes in more "ordinary" locations, which will attract more affordable prices?

Ordinary places such as towns and villages near large cities?

From my understanding the problem is driven by wealthy landlords buying up the stock in London and renting it at inflated prices (or in some cases not even renting at all, but holding on to it, selling it, and making a silly profit), meaning it's difficult to find anything affordable within London, pushing people out of town. Really this should not be happening.

I can't disagree with that, but living in the city isn't for everyone.

Well, if "that village" is made up of attractive old Cotswold stone properties, a developer sticking a load of identikit red brick abominations on the edge isn't exactly an improvement...

But modern houses aren't exactly 60's pebbledash, I don't think they're so objectionable that it justifies doing nothing about the housing crisis.

Well, for a start the developers will have managed to escape from any planning obligations to provide things like improved infrastructure, community facilities etc in order to cope with the addition residents...

Would that not be the problem anywhere?

 

[Domh245]

perhaps because donors to political parties profit from this, or poor immigrants are felt to be more likely to vote in a certain way

Perhaps because various governments have developed a situation where there's a an aged population with with significant care costs, requiring significant expenditure (and thus tax income) with a dwindling working age population. They can't retroactively magic up working age taxpayers (and don't seem to be doing anything to fix the issue for 20 years time either..) which means either requiring/encouraging immigration to bolster the working age population, or some sort of drastic change to how we provide or pay for elderly care.

 

[Grumbler]

Using statistics compiled by an organisation with a strong anti-immigration bias...

About-us | Migration Watch UK

Migration Watch UK is an independent and non-political body established in October 2001.

www.migrationwatchuk.org

...chaired by an immigrant - Alp Mehmet.

 

[najaB]

...chaired by an immigrant - Alp Mehmet.

"I'm not racist, some of my friends are black."

Closing the drawbridge behind you is a thing...

 

[nw1]

Closing the drawbridge behind you is a thing...

The Rt Hon member for Shrewsbury springs to mind.

 

[GS250]

Too many of the older generation occupy too much housing space. My father lived on his own in 3 bedroom house right up until shortly before he died. But many older people have deep roots in their community so, even if they can be persuaded to move home, they are unlikely to move long distances, unless it is to be close to their children and grandchildren.

It may seem morally wrong that an older person takes up so much space but the chances are they have certainly earned the right to reside there. As you've alluded to, they are probably close to their family and friends and want the space to have the grandkids over from time to time. Cannot think of any bigger demotivator to applying for a mortgage, going through all that stress, barely making ends meet only to be expected to vacate the castle of which you have sacrificed for once you hit a certain age.

 

[najaB]

Cannot think of any bigger demotivator to applying for a mortgage, going through all that stress, barely making ends meet only to be expected to vacate the castle of which you have sacrificed for once you hit a certain age.

It's not about "being expected to vacate your castle" as much as it is turning that asset into something that's actually suited to your needs. Why rattle around a mostly empty three-bedroom house when you can have a manageable bungalow and a hundred thousand pounds (or more) of cash to spend on holidays or to fund the grandkid's future?

 

[Seejwalker]

They're usually the ones that live in them

There are literally AOONB everywhere. Most go unnoticed of having the title.

 

[Grumbler]

Perhaps because various governments have developed a situation where there's a an aged population with with significant care costs, requiring significant expenditure (and thus tax income) with a dwindling working age population. They can't retroactively magic up working age taxpayers (and don't seem to be doing anything to fix the issue for 20 years time either..) which means either requiring/encouraging immigration to bolster the working age population, or some sort of drastic change to how we provide or pay for elderly care.

Perfectly true, but immigrants get old and require care too, so we must find ways of dealing with these shortages without requiring an ever-increasing population (up by nearly 40% since WW2). For example, the UK currently recruits trained medical personnel from abroad, resulting in shortages in poor countries, because a decade or so ago the training budgets were cut - we need to reverse this to provide career paths for people already here. The same is true for other skills we need e.g. engineering.

 

[spyinthesky]

As I live on a ex MOD site there are approx 200 empty ex MOD properties which will shortly appear on the rental market. The houses are 3 bedroom and have been empty for at least nine months. The flats are mostly 3 bedrooms and approx 100 of these have been vacant for 7 years. The MOD/Annington homes have built 6 new estates in the area a little further afield from the barracks and moved the families to the new build.
Although the old estate is quiet and the biggest crime here is putting your bin out too early, it is not very popular as it is a way from amenities.
Previous emptying of MOD stocks have gone on sale and sold very well with a small portion reserved for rental remaining in the ownership of Annington Homes.
I can’t see this attempt of 100% rental doing very well and a complete waste of half decent housing stock.
The new build estates will have no doubt been funded by the taxpayer yet the taxpayer has been funding these empty properties for seven years.

 

[Grumbler]

"I'm not racist, some of my friends are black."

Closing the drawbridge behind you is a thing...

So your answer is to allow another 7 billion people to settle in the UK then is it?