I recently wrote a blog arguing that we could make more use of the burgeoning financial education/wellbeing brigade to get youngsters saving for proper housing of their own. My thoughts focussed on finance but of course the Government want the yoof to accelerate savings through help to buy savings products, most especially the lifetime ISA.
Rather more interesting than my blog are the comments it has inspired, especially from Con Keating – who can be relied upon to take a contrarian and informed position. In case you missed his comment – here it is!
Not finance but the price of housing
The problem here is not finance, it is the price of housing. This will not go away unti we start building enough houses to meet demand – the shortage is over one million homes and demand is growing at around 250,000 a year. The roots of the issue are clear, the post-war planning laws, with the issue being compounded by the policy of selling council kousing – littleof the proceeds from those sales went back into new housing, and councils had built a fairly steady 120,000 or so a year – this in fact is remarkably close to the annual shortfall.
It is odd, but we still demonise the inner city council estate, even though the majority of that stock is now owned privately by members of the middle class. Increasingly, that “sink” problem is moving away from the inner to the outer city – and we see the same thing in France with the banlieu.
Solving the finance problem will just exacerbate the price issue. Is there a solution – well the answer is yes – build more houses, lots of them – step up production from the current 130,000 or so to closer to 300,000 (which is probably the upper feasible limit given labour constraints).
Will this happen – of course, not. Do you want to be the politician that tells house owner voters that he or she want to build sufficient housing to make sure their house does not increase in price and may even go down. If you can find a way to get elected with that agenda, you will solve the problem, and be one hell of a magician. By the way, I will vote for you, if allowed
Not housing but proper housing
“Dave C” who is becoming a regular, argues not just for more housing, but proper housing that people want to live in. I am hoping to go up to Leeds/Wakefield and see what Legal and General are doing with these pre-pack houses. We tried that after the war- it’s surprising how durable it has proven .Here’s Dave C….
And they need to make nicer quality, lower density housing too.
These new builds are horrible and purely profit maximised.
While the big builders are all motivated by huge margins consumers get terrible vfm.
There are a lot of new builds going up in Harrogate right now and they’re all horrible.
Gardens west or north facing. Roads a few feet off the front door. No trees. Apparently large designs, but they’re ‘mini’ houses. 4 bedrooms you can’t use with double beds and furniture!
The while system from top to bottom is all about greed and money.
It won’t change while people see a home as an investment and a spineless government perpetuate it.
UK gov should print their (our) own money at zirp, pay off the 1tn debt, and spend the saved ‘interest’ to bank vampires by building housing stock at zero interest rates for all.
Houses/homes are infrastructure, if you want a happy populace buying stuff and breeding and feeding a strong economy, they need cheap homes and low taxes/debts.
Which is one of the best posts I have ever had. Dave goes on to harangue me for supporting spurious Government initiatives ending with a magnificent tirade
These pseudo socialist government incentives that appear helpful, while actually only existing to support a failing ponzi, is a travesty.
Those taking them must be stupid. Those who dreamt them up are as corrupted as the types who run Wonga loans or ‘kneecap finance’
Nudge or kneecap?
As with pensions so with housing, the incremental improvements of “nudge” or wholesale reform with massive Governments intervention.
Do we really care about inter-generational unfairness? Do we care to take a 10-20% haircut on the equity in our property?
Do we really want to be self-sufficient in old-age or are we hanging in there hoping that auto-enrolment will get us there?
Or are we prepared for the kneecap, not of Wonga but of a brutal state that decides it will build 300.000 new houses a year and will introduce a new tax called compulsory savings?
You decide what kind of society you want and you vote for the one suits you. Right now I’d give the knee-cap solution one chance in a hundred, but I didn’t give Leicester City one chance in five thousand!