PricedOut.org

[Giles]

I didn't say confiscate the houses then kick out the tenants Why would they need to be rehoused?



Giles surely is, he's suggesting that the 'law' of supply and demand in the guise of the market should be the final arbiter of this.

I am saying that if there were more houses (both to buy on the open market, and from RSLs to rent) then prices would come down all round, and it would be easier to for people to find homes.

Given that your proposals for wholesale nationalisation of people's property is a non-starter, I am just pointing out that more houses = lower prices = in everyone's interest (apart from rich country-dwelling NIMBYs who don't want houses for the rest of us spoiling their view, perhaps).

Giles..

 

[Giles]

Sorry Prince Rhyus, I don't buy into the slum landlord and second home owners as being the problem behind shortages & astronomical prices. Access to basic stats would disprove that suggestion.



Yes in some very picturesque villages, that is a problem but we're discussing the majority population here. And even in such villages where that has occurred expansion is restricted by planning policy.

As regards communities being high on the government agenda, I think you're internalizing and regurgitating political rhetoric. Community cohesiveness has been very effectively destroyed by government policy. Deliberately so.

How do you think that government policy has deliberately destroyed "community cohesiveness", whatever that is exactly?

Which policies?

Giles..

 

[muckypup]

whatever that is exactly?

precisely

 

[Prince Rhyus]

Well the riots in Moss Side, Brixton, Bradford and Oldham over the past few decades are examples of very bad community cohesiveness. In a nutshell, do you get on well with the people who live and word around you? That's what it's all about. In civil-service-speak it's community cohesion.

 

[durruti02]

sorry copied this from actvism fo...so no one know who they are? lefty? righty ??

 

[Blagsta]

The reason that house prices are high is simple supply and demand: there are too many people chasing too few houses.

Then why has rent stayed steady?

 

[nino_savatte]

People want to rent houses, if no-one was allowed to offer places for rent, how could they do this?

Unless of course you believe that perhaps the government should be the only owner of property or something? In which case you are clearly away with the fairies......

Giles..

I'm not sure i agree entirely with what you say here. I think most people, given the choice, would rather not rent from anyone and, if they had to rent, they would rent from a social landlord, rather than a private one. The reasons for this are quite obvious: accountability and security of tenancy.

 

[Louis MacNeice]

House price inflation is not simply a result of under supply, it has also been maintained by relaxing controls on the availability of credit. The impact of credit on house prices can be seen in the fall in house prices in the late 1980's brought about by the increased cost in credit as interest rates rose. Freeing up credit doesn't make more people need houses. It does make more people able to buy, which paradoxically squeezes those at the margins of affordability all the harder; historically it has been those last into the housing market who have been push out of it first.

Cheers - Louis MacNeice

 

[Giles]

Then why has rent stayed steady?

Because the number of properties to rent has increased. This means that landlords haven't been able to put up rents, and has also meant that tenants can be a lot more "picky" about the quality of places up for rent. It is less easy for owners to get away with renting out places in a poor state of decoration and/or furnishing.

Giles..

 

[Louis MacNeice]

Because the number of properties to rent has increased. This means that landlords haven't been able to put up rents, and has also meant that tenants can be a lot more "picky" about the quality of places up for rent. It is less easy for owners to get away with renting out places in a poor state of decoration and/or furnishing.

Giles..

And the number of properties to rent has increased because the availabiity of credit in the form of buy to let mortgages has increased. Any credit crunch - especially in the form of increased interest rates - will see some of this 'new' to rent stock go back into the buy to live in market. The number of homes available to live in will have changed hardly at all.

Louis MacNeice

 

[butchersapron]

And the number of properties to rent has increased because the availabiity of credit in the form of buy to let mortgages has increased. Any credit crunch - especially in the form of increased interest rates - will see some of this 'new' to rent stock go back into the buy to live in market. The number of homes available to live in will have changed hardly at all.

Louis MacNeice

Maybe some longer term knock-on in the commercial building program?

 

[Louis MacNeice]

Maybe some longer term knock-on in the commercial building program?

Possibly, but I suspect that would be concentrated in areas with a disproportionately high demand for rents with sufficient disposable income to support the demand; e.g. places with high levels of holiday lets and/or student populations. Neither of the above situations would do much for people on low incomes in those areas, in terms of providing suitable affordable accomodation, although they could create some service sector job opportunities.

Cheers - Louis MacNeice

 

[Giles]

And the number of properties to rent has increased because the availabiity of credit in the form of buy to let mortgages has increased. Any credit crunch - especially in the form of increased interest rates - will see some of this 'new' to rent stock go back into the buy to live in market. The number of homes available to live in will have changed hardly at all.

Louis MacNeice

You are right. We need to build more houses both "social" houses for letting and for people to buy, then there won't be so much of a shortage.

Giles..

 

[Jografer]

Let me take you back about, ooh...20 minutes or so - when i said remove them from the bloody market and take them into social ownership.

And can you honestly not differentiate bewteen the market currently dictating and an argument that the market shouldn't?

So, you are saying that there should be no private rental at all.......

 

[Louis MacNeice]

You are right. We need to build more houses both "social" houses for letting and for people to buy, then there won't be so much of a shortage.

Giles..

What about damping down the demand side of the equation by putting restrictions on the availability of credit (which might include the 'right to buy' discounted rented social housing)?

Louis MacNeice

 

[Giles]

What about damping down the demand side of the equation by putting restrictions on the availability of credit (which might include the 'right to buy' discounted rented social housing)?

Louis MacNeice

Well, you could, but: if one person or organisation wants to lend another person some money, why should the government pass laws to stop them?

If a bank thinks that I am good for a loan, why should Mr Brown butt in and tell me that I can't have one?

I wouldn't want to see a return to the days when people had to wait in line to get a mortgage, or to be told what is good for them and what isn't.

If the banks want to tighten up their credit policies (or relax them) then they are free to do so, but I wouldn't want a bunch of politicians telling me how to run my finances - they stick their noses into people's business too much as it is.

Giles..

 

[Louis MacNeice]

Well, you could, but: if one person or organisation wants to lend another person some money, why should the government pass laws to stop them?

Because it would be a way of working against house price inflation; an inflation which effectively excludes people from the housing market or places them in levels of debt which can be either unsustainable or at least dibilitating longterm. I suppose fundamentaly I can see a case for credit controls because I think providing access to affordable housing is more important than protecting people's 'right' to consume...I suspect you disagree.

Louis MacNeice

 

[Giles]

Because it would be a way of working against house price inflation; an inflation which effectively excludes people from the housing market or places them in levels of debt which can be either unsustainable or at least dibilitating longterm. I suppose fundamentaly I can see a case for credit controls because I think providing access to affordable housing is more important than protecting people's 'right' to consume...I suspect you disagree.

Louis MacNeice

The thing is, while credit controls would "protect" some people from taking on too much debt, they would do nothing to increase the number of houses, so would not really solve the housing shortage. You would just have even more people chasing the same number of houses.

And how would credit controls work in these days of financial freedom?

The government telling banks an overall limit to how much they could lend (resulting in queueing for mortgages) or some regulation that attempted to limit mortgages to a multiple of salary? In these days when many people work for themselves or whose "pay" is very variable, because of commissions, bonuses, performance-related pay and other sources of income, how would this be enforced?

Giles..

 

[Louis MacNeice]

The thing is, while credit controls would "protect" some people from taking on too much debt, they would do nothing to increase the number of houses, so would not really solve the housing shortage. You would just have even more people chasing the same number of houses.

And how would credit controls work in these days of financial freedom?

The government telling banks an overall limit to how much they could lend (resulting in queueing for mortgages) or some regulation that attempted to limit mortgages to a multiple of salary? In these days when many people work for themselves or whose "pay" is very variable, because of commissions, bonuses, performance-related pay and other sources of income, how would this be enforced?

Giles..

Limiting credit - e.g setting limit on multiples of income and length of mortgages, stopping interest only mortgages - would reduce demand. These would then become days of less financial freedom for some but better housing for others. The government could increase the supply side by building houses...it's been done before to great effect.

Louis MacNeice

 

[Giles]

Limiting credit - e.g setting limit on multiples of income and length of mortgages, stopping interest only mortgages - would reduce demand. These would then become days of less financial freedom for some but better housing for others. The government could increase the supply side by building houses...it's been done before to great effect.

Louis MacNeice

None of these measures would in any way "reduce demand" for houses, would they?

They would cause prices to fall, meaning (as you say yourself) that MORE people will be able to afford houses. But there still won't be enough houses for everyone to buy.

In fact, if anything, by reducing house prices, they would also reduce the money to be made by building new places, making building houses less of a money-making opportunity, which means that some developments that currently make financial sense, wouldn't.

What is needed is a lot more houses, not archaic limits on mortgages.

Such limits would hit the average person rather than the rich because (a) the rich have more money, and (b) richer people would inevitably find ways around any restrictions.

Suggestions include (especially for people running their own business) temporarily boosting your salary for sufficient time to produce three payslips showing your earnings in order to get a bigger loan, getting loans from offshore institutions beyond the scope of any rules, calling a mortgage (or part of it) a personal loan, car loan, or whatever, people setting up businesses specifically to get finance to buy property, etc etc etc.

Giles..

 

[butchersapron]

None of these measures would in any way "reduce demand" for houses, would they?

Why not? If you don't have the money you won't be buying - esp in the massively expanding buying to let market of which you are an eager and greedy participant.

 

[Giles]

Why not? If you don't have the money you won't be buying - esp in the massively expanding buying to let market of which you are an eager and greedy participant.

Any credit control measures would probably bring prices down (this I thought was Louise's purpose in suggesting these measures) in order that more ordinary people could afford houses.

So: more demand for the same basic number of houses, from all the people who can afford them now, plus all the other people who will be able to afford them when they are cheaper.

But it won't solve the problem that we need many more houses and flats.

And maybe tax breaks from government for companies to relocate to areas where there is almost a surplus of places to live and not enough jobs. Maybe government could relocate more of its own functions to such areas. It isn't practical for more and more of the population to move to the South-East.

Giles..

 

[Louis MacNeice]

Any credit control measures would probably bring prices down (this I thought was Louise's purpose in suggesting these measures) in order that more ordinary people could afford houses.

So: more demand for the same basic number of houses, from all the people who can afford them now, plus all the other people who will be able to afford them when they are cheaper.

But it won't solve the problem that we need many more houses and flats.

And maybe tax breaks from government for companies to relocate to areas where there is almost a surplus of places to live and not enough jobs. Maybe government could relocate more of its own functions to such areas. It isn't practical for more and more of the population to move to the South-East.

Giles..

Has it ever occured to you that home ownership - or more accurately long term debt - may not be the best meas of supply homes? What you are trying to do is justify a situation where housing debt is the default position (and the aspiration?).

Credit controls would certainly impact on housing debt; in a way which would reduce that debt and make money available for use eleswhere in the economy. Government house building for rent - either direct or with the governement enabling others to build - would address the supply side.

Louis MacNeice

 

[obanite]

Couldn't we just have an increasing tax bracket for income on the quantity of buy-to-let properties a landlord owns?

 

[Giles]

Couldn't we just have an increasing tax bracket for income on the quantity of buy-to-let properties a landlord owns?

Why would this make sense?

Income is income, and is all taxed the same fundamental way.

If I run a shop, I pay tax on the profit that I am left with after paying: the rent or loan interest on my shop, the cost of the stock that I sell, the cost of any staff, insurance premiums, advertising, etc.

Same with renting out property: you pay tax on the income left after paying loan interest, insurance premiums, repairs and maintenance on the properties, cost of advertising for tenants or agency fees, etc.

This is true of everyone, whether a big company (even a housing association) right down to someone who owns a cottage that they inherited from their grandmother and rent it out.

If you did introduce some weird rule about "number of units owned" you would just create bizarre outcomes, like a dearth of smaller flats for rent, and lots more big, shared houses. How far could you push the definition of "one property"? A small student hall of residence with 30 rooms?

Taxation of any business activity is basically treated the same, which is fair.

Gross income - cost of running business = profit. Then you pay tax on the profit at the same rates as you do working for someone else.

Giles..