Just to Make Things Completely Clear

cells

I dont know why I cant resist, if only I babbled less and got my thoughts though more concisely.

IF people want homes to be cheap in London there are so many factors that are at play that makes it so difficult and only possible on very long term time frames. One of the factors is that high prices act as a limiting factor to London (stopping people coming, and convincing Londers to leave with bags of equity money to buy in stoke), if London prices were as cheap as say Birmingham then we would find London instead of growing by 100,000 people a year would grow by maybe 300,000 people a year. I am making no point on if that would be good or bad I dont know my guess without thinking about it much is that it would be good but the point is who has thought about what that would mean to London in the short medium or long term?

The only realistic way (and its still extremely unlikely) I can see London becoming cheaper is if the government sold off the council estates and moved a million council estate households out of London and did that in a fairly rapid timeframe (eg within a decade). But just look at the resistance the current tory housing policy has had in the lords and generally so who thinks it at all likely that the government will want to shrink inner London from 40% (hackney islington tower hamlets etc) social housing to a more reasonable 10-15%

CLAPTON

cells wrote: »

I dont know why I cant resist, if only I babbled less and got my thoughts though more concisely.

IF people want homes to be cheap in London there are so many factors that are at play that makes it so difficult and only possible on very long term time frames. One of the factors is that high prices act as a limiting factor to London (stopping people coming, and convincing Londers to leave with bags of equity money to buy in stoke), if London prices were as cheap as say Birmingham then we would find London instead of growing by 100,000 people a year would grow by maybe 300,000 people a year. I am making no point on if that would be good or bad I dont know my guess without thinking about it much is that it would be good but the point is who has thought about what that would mean to London in the short medium or long term?

The only realistic way (and its still extremely unlikely) I can see London becoming cheaper is if the government sold off the council estates and moved a million council estate households out of London and did that in a fairly rapid timeframe (eg within a decade). But just look at the resistance the current tory housing policy has had in the lords and generally so who thinks it at all likely that the government will want to shrink inner London from 40% (hackney islington tower hamlets etc) social housing to a more reasonable 10-15%

so we agree : just stopping people coming : stopping immigration is straight forward and is a system applied in every single country in the world.
something that you say you agree with too : we only disagree about the actual numbers.

HornetSaver

CLAPTON wrote: »

a good post, illustrating why we should abolish the minimum wage and let the market decide wages.

I'd agree with that, if there were the political will to plug the shortcomings of such an approach.

In practise I support the steady rise of the minimum wage because it is, in effect, an acknowledgement from the government that there is a problem to be addressed, but that they are unwilling and/or unable to take alternative measures to tackle this problem in a way that does not burden all businesses equally.

To give an example that would go down like a lead balloon among this audience, you could cut a third off the minimum wage in real terms, introduce rent controls and housebuilding subsidies, and put the economy in a more competitive position (the government subsidies paying for themselves when that growth came to fruition). Now, of course no political party could do this, because it would understandably infuriate millions upon millions of homeowners (particularly landlords and the high proportion of owners who have mistaken their house for their pension), and simultaneously alienate those previously covered by a higher minimum wage (despite them actually being in a better overall position).

That scenario is far from the only way to sort out the housing market. But whatever mechanism you use, any change to a system will by definition have winners and losers. Changing a system that is punitive to those at the bottom will by definition make losers of those somewhere further up. Something that is not politically tenable.

The end result is that catch-all rules like the minimum wage, fudges like housing benefit, short-term gimmes and smokescreens like help to buy and shared ownership respectively all end up becoming a permanent and necessary part of an increasingly convoluted mix.

kabayiri

Isn't a lot of the discussion above an argument for regional policy?

As pointed out the housing market isn't really broken in many parts of the UK.

In the NW, for example, you can pay a lot for a terrace or move a few miles away and pay much less. I'd argue such diversity in the market is a good thing, not bad.

HornetSaver

kabayiri wrote: »

Isn't a lot of the discussion above an argument for regional policy?

As pointed out the housing market isn't really broken in many parts of the UK.

In the NW, for example, you can pay a lot for a terrace or move a few miles away and pay much less. I'd argue such diversity in the market is a good thing, not bad.

It's a fantastic thing, if the cheaper prices are at a tenable level and within tenable commuting distance of where the jobs are. That balance exists in the north west, Wales and most of the midlands, but not in the south east, London and most of the south west.

mwpt

michaels wrote: »

The argument is that we have a housing shortage and that generally rental properties have higher occupancy rates than OO (this is after all what the mortgage market supports) thus any move from rented to OO will merely exacerbate the shortage.

You are making an argument against something I never said. I said that on this forum there are two schools of though, sometimes held by the same people at the same time, which are orthogonal.

1) As we shifted away from higher OO rate since 2002, it meant more renters in the system and more demand, therefore higher rental prices.

2) If we shift back toward higher OO rates (though the anti BTL measures) this will reduce rental properties and therefore higher rental prices.

You don't need to factor in a housing shortage to see that these two arguments contradict each other, yet these are the arguments being made by the same people on this forum, including your original post.

cells

HornetSaver wrote: »

It's a fantastic thing, if the cheaper prices are at a tenable level and within tenable commuting distance of where the jobs are. That balance exists in the north west, Wales and most of the midlands, but not in the south east, London and most of the south west.

If homes in London were cheap like in Birmingham I think you would find that London instead of growing at +100,000 a year might be growing at +400,000 (much fewer people would leave, and more would come) by pulling in people from rUK and that might be an under-estimate

What do you propose to do about that? Some regions like the north east would see demographic decline while London would need to become a city of 20 million in 2050

So its nice and all to say London should be dead cheap but what about the secondary and further factors you did not consider?

cells

mwpt wrote: »

You are making an argument against something I never said. I said that on this forum there are two schools of though, sometimes held by the same people at the same time, which are orthogonal.

1) As we shifted away from higher OO rate since 2002, it meant more renters in the system and more demand, therefore higher rental prices.

2) If we shift back toward higher OO rates (though the anti BTL measures) this will reduce rental properties and therefore higher rental prices.

You don't need to factor in a housing shortage to see that these two arguments contradict each other, yet these are the arguments being made by the same people on this forum, including your original post.

no one says that or at least no one who thinks a few minutes. a shift from owners to renters both reduces rents and allows more people into the housing stock. of course other factors could be more dominant so that overall rents go up (but less than they would have)

cells

I purchased a 3 bed flat in Enfield from a lady who had lived there herself I guess for a very long time. No children no partner just her. She moved out of London I dont know where but for arguments sake lets say Birmingham and moving from a London flat to a semi. She looked to be in her mid 50s

Using land registry data for average prices.

10 years ago moving to Birmingham she would have got £40,000 minus stamp taxes, sale fees, moving fees, solicitors, valuations, lots of headache for not much more than £30k after costs. Today she would get £160,000. So a person like this is now much more willing and able to move away from London. She did and 3 tenants moved into the flat in this case all from rEngland. the market working its invisible hand and allow higher density in London where it is mostly needed

Anyway lets go back 20 years and look at my back yard of Hackney.
Back then a flat in Hackney cost £63.8k and a Flat in Birmingham £52.1k back then you would have little to no change left after your costs and headaches. Today doing the same would net you £440,000 difference so there is a big incentive to move


Going back to prices of 20 years ago (in real terms) is impossible not unless you can somehow build enough homes in London each year so it can grow at 3-4-5x its current very rapid rate

kabayiri

cells wrote: »

...
So its nice and all to say London should be dead cheap but what about the secondary and further factors you did not consider?

Controversial to say I know, but I have this feeling that every place needs it's equivalent of the slum area.

I'm remote from London, but the problem I see is the gentrification of absolutely every little bit of the city.

It's obviously complex, because I'm a fan of urban transit networks like the tram system in Greater Manchester, and these have the exact same effect of increasing the desirability of a wider area!