UK housing: The £24bn Property puzzle

stator

The-Joker wrote: »

If they cut housing benefit, then either lots of people will be homeless or rents will fall. When they cut the rents will fall, bringing down artificial held up house prices with them.

Unlikely. Performing experiments with people's lives never works out.
Rents will stay high but people in the unfortunate position of having to claim housing benefit will have to move into worse accomodation, pushing them into the hands of slumlords who's accomodation is unsafe. Foreign investors will pick up any nicer places and leave them empty.

HAMISH_MCTAVISH

The-Joker wrote: »

If they cut housing benefit, then either lots of people will be homeless or rents will fall..
When they cut the rents will fall, bringing down artificial held up house prices with them.

That's exactly what a number of posters here said right before the last time they cut housing benefit.

Rents have since soared to new record highs.

And house prices are now at a new record high as well.

- You can't cure a housing shortage by slashing mortgage lending to 50% of the pre-crisis volumes.

- You can't cure a housing shortage by tightening credit standards, and by requiring higher deposits, and by reducing lending multiples.

- You can't cure a housing shortage by cutting housing benefits, or by moving claimants out from London to cheaper areas.

- You can't cure a housing shortage by messing about with any of those things.

We tried all that and it failed. Building fell to 100 year lows, rents soared to record highs, and prices are now at a new peak.

The ONLY way to cure a housing shortage is to build more houses.

And until we do that there's only one way rents and prices are going over the long term, and it ain't down...;)

dktreesea

HAMISH_MCTAVISH wrote: »

The ONLY way to cure a housing shortage is to build more houses.

Yes, that may be true, but in order for builders to build more houses the people have to be there who can afford to buy them. The problem with subsidising rents to the extent we do is that it incentivises people not to save, not to work really hard to protect their income streams, and basically to live like there is no tomorrow.

cells

dktreesea wrote: »

Yes, that may be true, but in order for builders to build more houses the people have to be there who can afford to buy them. The problem with subsidising rents to the extent we do is that it incentivises people not to save, not to work really hard to protect their income streams, and basically to live like there is no tomorrow.

it isn't really subsidising rents, its subsidising living

you could well pay a family a fixed living benefit of £500PW rather than five benefits of £100PW each and name one of them housing benefit.

gazter

stator wrote: »

The Conservatives answer is to make people homeless and some magical force will sort things out.

Homelessness is the same as what it was 35 years ago, yet there are eight million more people living here.

IveSeenTheLight

gazter wrote: »

Homelessness is the same as what it was 35 years ago, yet there are eight million more people living here.

An interesting statistic if true, but one that would need to also consider the context of people per household.

One would consider that if there are 8 million more people and the homeless figure remains constant, that with the lack of sufficient new properties brought to the market, the persons per household must be increasing.

Generali

IveSeenTheLight wrote: »

An interesting statistic if true, but one that would need to also consider the context of people per household.

One would consider that if there are 8 million more people and the homeless figure remains constant, that with the lack of sufficient new properties brought to the market, the persons per household must be increasing.

Homelessness is more generally a result of addiction or mental illness than a lack of a house.

I suspect a falling rate of homelessness shows better responses to mental ill-health, albeit from a shameslessly low level of response.

IveSeenTheLight

Generali wrote: »

Homelessness is more generally a result of addiction or mental illness than a lack of a house.

I suspect a falling rate of homelessness shows better responses to mental ill-health, albeit from a shameslessly low level of response.

Fully agree.
For the population to have increased without the sufficient properties being built, I would expect to see an increase in people per household, however between 2001 and 2011 the rate reduced from 2.4 to 2.3

The number of people living in households in the UK increased by 7.5 per cent since 2001, whilst the number of households has increased by 8 per cent resulting in a decrease in average household size for the UK.

Are we saying the shortage of properties is as a result of only the last 4 years?

HAMISH_MCTAVISH

IveSeenTheLight wrote: »

Fully agree.
For the population to have increased without the sufficient properties being built, I would expect to see an increase in people per household, however between 2001 and 2011 the rate reduced from 2.4 to 2.3

Are we saying the shortage of properties is as a result of only the last 4 years?

Not really.

At one end of the spectrum, you have a big increase in single person households, so the housing stock is being used less efficiently.

The number of "singletons" living alone has rocketed over the last decade, new figures from the Office for National Statistics have disclosed.

There were 7,067,000 one person households in the 2011 Census - 12.8 per cent of the household population - compared with 6,503,000 million in 2001, an increase of 564,000

http://www.telegraph.co.uk/news/politics/10863343/Huge-rise-in-the-singleton-lifestyle.html

And at the other end of the spectrum, you also have a big increase in over-crowding and HMO living.

The number of people living in households with six or more occupants has surged by a quarter in the last decade, providing further evidence of how Britain is becoming an overcrowded nation.

New statistics from the Office for National Statistics (ONS) revealed that more than three million people now live in a household with at least five other individuals.

An analysis of Census data from England and Wales showed there were 543,000 households with at least six residents, making it the fastest-growing category of housing with a 25 per cent jump in 10 years.

http://www.telegraph.co.uk/news/politics/10863346/Figures-show-surge-in-overcrowded-homes.html

There is no shortage of bedrooms in the UK. This has never been the issue...

But there is a serious and growing shortage of housing units, of the type people want to live in, in the places they want to live, and where the employment exists to support them.

Rising prices and rents are the market's way of rationing the housing stock, forcing people who would like to live alone to share, or forcing those who would like to live in small groups to live in larger groups, as there aren't enough houses to meet everyone's first preference for housing allocation.

That we don't have a huge homeless problem is down to people being willing to live in a bedroom, as opposed to a house of their own, and government accepting that is a viable solution and being willing to fund at least that much in benefits.

As I said, there is no shortage of bedrooms...

ukcarper

I wonder how HMOs are counted there has certainly been an increase in the number. Does an HMO with say 4 people living in it count as 1 or 4 households also how do bed and breakfasts fit in.