Rents in UK now most expensive in Europe

cells

The most realistic way to reduce the gap betweeb London and the rUK for house prices and rents is to sell the social stock as it becomes vacant and to put a housing benefit cap of £12k a year working or not

There are some 2 million people who live in council homes in London. They don't really need to be there. If they were relocated over a 20 year period that would offset others arriving to London so instead of the population going up by 100,000 a year it would be static.

at the end of 20 years London prices and rents differential would be lower than it Is today. Whereas continuing as it is london will grow by 2 milloon and house proces and rents are going to seem very cheap in 2015 vs 2035

Graham_Devon

cells wrote: »

There are some 2 million people who live in council homes in London. They don't really need to be there.

They do if London business want's to employ shop assistants, street sweepers, refuse collectors and the like.

No shop assistant is going to pay £5k a year to commute into London and earn 18k.

CLAPTON

Graham_Devon wrote: »

They do if London business want's to employ shop assistants, street sweepers, refuse collectors and the like.

No shop assistant is going to pay £5k a year to commute into London and earn 18k.

in which case businesses will
-move out of London
-innovate to reduce the need for these staff
-increase the wages to attract sufficient staff

what else would you expect?

silverwhistle

Landofwood wrote: »

It's basic economics Graham.

You've never heard of the velocity of money or the propensity to save? You could also add in the natural tendency of poorer people to buy goods and services (eg: food, power and transport) within the UK rather than expensive imports impacting the balance of trade.

I see GrahamD has already touched on this.

cells

Graham_Devon wrote: »

They do if London business want's to employ shop assistants, street sweepers, refuse collectors and the like.

No shop assistant is going to pay £5k a year to commute into London and earn 18k.

Plenty of people who baught 20 years ago when london homes were 2 ha penny

Plenty of kids and kidaults who still live with mum rent free

plenty of immigrants and some natives who live 8 to a 3 bed house

but yes I suspect wagss would have to rise a tad and that bad thing high house price area slightly more expensive bread and milk

JencParker

CLAPTON wrote: »

in which case businesses will
-move out of London
-innovate to reduce the need for these staff
-increase the wages to attract sufficient staff

what else would you expect?

Don't be so ridiculous. Why should businesses have to do any of that when there is a thriving labour black market of immigrants (illegal and legal) who will sleep ten to a room or share a bed and sleep in shifts.

Generali

Graham_Devon wrote: »

It is basic economics.

Give 100 people £500 each and they are likely to spend it.

Give one person £50,000 and they are likely to spend a portion of it and save the rest.

Give a multi millionaire landlord £340 a month extra and he/she probably won't even notice. But the family wanting to take their children on a short break in the summer holidays would certainly notice it and go out and use it.

In other words, that £340 goes a lot further and is recycled to far more people / business's when multiple people have it to spend in multiple localites.

If you are a fish and chip shop in a local town - what would you prefer? Everyone gets an extra £20 a week, or one person get's an extra £200,000 in the town? I know what I'd prefer if I was wanting to sell to local people.....multiple extra potential customers - not one.

If you distort price signals then you end up with an inefficient allocation of capital making everyone worse off.

remorseless

Graham_Devon wrote: »

They do if London business want's to employ shop assistants, street sweepers, refuse collectors and the like.

No shop assistant is going to pay £5k a year to commute into London and earn 18k.

surely it'd be better if the salary would adjust to allow people to support themselves! It's not like we're not paying for that anyway.
Whether it's through tax or through consumer prices, still comes out of our pockets! That's pretty much how the rest of the world does it.

IveSeenTheLight

Graham_Devon wrote: »

It is basic economics.

Give 100 people £500 each and they are likely to spend it.

Give one person £50,000 and they are likely to spend a portion of it and save the rest.

Graham,
In your simplified example, your being overly simplistic.

To assume that the 100 people would spend 100% of the money they have is unrealistic.

It's equally plausible to say that they spend £400 and save £100, meaning that only £40,00 is spent with £10,000 saved.

Meanwhile, the single person with the £50,000 reinvests this elsewhere and is more likely to use up a greater percentage if not all of the £50,000.

I certainly would not be keeping £50,000 in the bank when I could make the money work harder elsewhere.

Its probably best not to make any assumptions in either scenario

remorseless

IveSeenTheLight wrote: »

Graham,

To assume that the 100 people would spend 100% of the money they have is unrealistic.

I remember when in 2008/9 in Australia, we were given a 'stimulus package' of AU$900 (£450) from the government to inject in the economy. Most of us went to p!ss it overseas and did zippo for the local economy... ahhh Kevin!