Affordable Housing - Can it be done?

thesaint

We don't vote for policies do we?

Romani_Ite_Domum

Curious_Moose wrote: »

How do you make housing more affordable without bringing down the price of existing houses (which would p!ss off existing homeowners)?

Say you built some new houses on green belt land for £75,000 each while others half a mile away were selling for £200,000. Either the £75,000 shoots up in value, which is nice for whoever bought it but does nothing to help those who missed out, or the £200,000 plummets in value, and no homeowner would ever vote for any policies where that might happen.

Why are you so sure no homeowner would ever vote for any policies where that might happen. I am against building all over this green and pleasant land but I would vote for a policy that brought the price of houses down. The value of a house is a house if its price is £100K less it's still a house.

Generali

Other countries manage to provide housing at an affordable price for their population without resorting to crackpot socialist schemes.

Housing in North America and Europe is substantially cheaper than in the UK and of at least comparable quality. The reasons? 2 fold.

- You can get planning permission far more easily than in the UK. As a result, the value of a house is much closer to the cost of building it than in the UK. Also, you get more competition in new house provision as you don't need loads of expensive lawyers to be able to build where people actually want to live. You don't get stuck with those nasty boxes with their tiny rooms that Barrett etc churn out as you can go to a small builder that competes on quality.

- People view a house as something to live in rather than a tool for social engineering (govt - pace tower blocks, right-to-buy, shared ownership, affordable housing) or a means of getting rich (many homeowners - it's your home not your pension).

Generali

Duplicate. Sorry all.

Romani_Ite_Domum

I smell a rat with this whole build more houses agenda. "Smart" money has been pilling to green field sites surrounding towns. Again the rich will benefit from another engineered problem.

I personally don't think there is a shortage of houses. Anybody would think that there has been a build moratorium for the last decade.

If GB wanted to help out with the problem that he created in the first place then he could just stop people treating homes as investments. He could do that quite easily with taxation.

Abolish BTL offset of mortgage payments against rental income.
Supertax on second homes.
Tightening of lending criteria and clamp down on mortgage fraud.

Of course he wouldn't be too popular with a lot of people as they have been brainwashed into thinking that high HPI is a good thing.

amcluesent

>Or, even more radically, the government employ builders themselves<

Ah yes, I recall when the government employed telephone engineers. Didn't you have to join a six month queue before they graciously allowed you to have a phone (probably shared on a party-line)

And then again, the government employed people who built cars and we had the Austin Allegro and Morris Marina (and a good chance of being stranded on the roadside when they fell to bits).

Hardly ringing endorsements for the state nationalising the building trade!

Curious_Moose

Romani_Ite_Domum wrote: »

Why are you so sure no homeowner would ever vote for any policies where that might happen. I am against building all over this green and pleasant land but I would vote for a policy that brought the price of houses down. The value of a house is a house if its price is £100K less it's still a house.

1) You have a £150,000 loan on a property currently valued at £200,000
You sell and have £50,000 in the bank.

2) You have a £150,000 loan on a property currently valued at £200,000. It plummets to £100,000. You have to sell (lose your job, new job elsewhere..whatever) and still owe £50,000. Oh, and you can't afford another cheaper house cos you have to pay off the £50,000 first.

Personally, I'd prefer option 1.

Romani_Ite_Domum

Curious_Moose wrote: »

1) You have a £150,000 loan on a property currently valued at £200,000
You sell and have £50,000 in the bank.

2) You have a £150,000 loan on a property currently valued at £200,000. It plummets to £100,000. You have to sell (lose your job, new job elsewhere..whatever) and still owe £50,000. Oh, and you can't afford another cheaper house cos you have to pay off the £50,000 first.

Personally, I'd prefer option 1.

Personally I would prefer option 3
During the last 10 years YOY Nominal HPI has been an average of 3%. In real terms it has been 0% .Of course that didn't happen. If it did you would have a £80K loan on a £100K property. How much nicer would that be?

RHemmings

Gorgeous_George wrote: »

Cheaper houses? Have you seen the houses most builders build these days? What can they do to make the houses even cheaper? Make them from straw perhaps.

Cheaper land? Agricultural land is cheaper but if houses were going to be built on it, the value would increase. It would be worth the same as similar building land in similar areas. Clearly, if a lot of agricultural (or green belt) land was released the cost would fall - but it would still be worth much more than agricultural land.



GG

You didn't read my post properly. I said that cheaper houses to buy wouldn't come from cheaper construction. As has been pointed out, the construction price is currently typically only a fraction of a typical sale price. And I said that by effectively limiting the sale prices of houses, there wouldn't be the scope for land prices to inflate considerably, as if they did no profit could be made, and nobody would buy them.

RHemmings

Curious_Moose wrote: »

How do you make housing more affordable without bringing down the price of existing houses (which would p!ss off existing homeowners)?

You can make affordable housing without significantly affecting the price of existing housing (all else being equal) if you build affordable housing that no-one would want to live in unless they had absolutely no choice. I believe that the government and private industry would be entirely capable of this.