Homes in the UK still very cheap/affordable

Herzlos

That'd cause rampant house price inflation in stoke, overnight making it impossible to buy anything for under £100k and causing real problems for the people that work there to get a home.

How would you stop people taking that £100k and staying in London?

It'd be better to offer them other incentives, like a bigger social house for the same rent, a free extra room, or garden space. Or investing in facilities around stoke that make it more desirable.

cells

Herzlos wrote: »

That'd cause rampant house price inflation in stoke, overnight making it impossible to buy anything for under £100k and causing real problems for the people that work there to get a home.

How would you stop people taking that £100k and staying in London?

It'd be better to offer them other incentives, like a bigger social house for the same rent, a free extra room, or garden space. Or investing in facilities around stoke that make it more desirable.

The primary method would be to sell of all social homes within London as they become vacant and of course stop adding to the problem by mandating half of all new builds to be social. Each year the London social stock can contract by about 4% so by year 25 some 35% of the stock remains and the other 65% have been sold.

This would effectively transfer out half a million would be social homes to rUK taking some 1.2 million people out of London and a further 900k people out following that demand and need. That's about 2.1 million people and 0.9 million jobs moved from London to rUK

It would make London vhepaer and more productive. It would make the rest of the UK more productive and marginally more expensive. Marginally as you've moved 25% of London oud added 3.5% to the rest of the country over a 25 year period

And by stoke I mean anywhere outside of London

westernpromise

cells wrote: »

Something like 5% of the social stock becomes vacant each year as people move on or die. Within z1-z3 those homes should not be relet but sold off.

Another option is to possibly give the tenants £100k to move out of London. For that £100k they can buy outright a home in stoke. The council can then sell the vacated flat in inner London for £300-600k the government pockets the difference and we get a population decline and jobs moving out of London to Stoke

Yes indeed its unlikely to happen but so are all the other proposals of building more homes or convincing businesses to move to stoke without moving the demand.

Have you ever been to Stoke though? I used to live and work round there for 2.5 years in the late Eighties. Stoke was like Birmingham only smaller and not as nice. Looking at it again on Google Streetview it has not changed. There are still no worthwhile jobs there. There is no Porsche dealer in Stoke, which speaks volumes.

There is no high-value work there and nothing to do.

wotsthat

cells wrote: »

The primary method would be to sell of all social homes within London as they become vacant and of course stop adding to the problem by mandating half of all new builds to be social. Each year the London social stock can contract by about 4% so by year 25 some 35% of the stock remains and the other 65% have been sold.

This would effectively transfer out half a million would be social homes to rUK taking some 1.2 million people out of London and a further 900k people out following that demand and need. That's about 2.1 million people and 0.9 million jobs moved from London to rUK

It would make London vhepaer and more productive. It would make the rest of the UK more productive and marginally more expensive. Marginally as you've moved 25% of London oud added 3.5% to the rest of the country over a 25 year period

And by stoke I mean anywhere outside of London

One issue is that in year one of the plan someone buying an ex social property in London has another 25 years to wait before the rest of the social neighbours are cleared.

Don't know about London but around my way there's an inverse relation between social housing levels and desirability.

Of course no-one choose here as the ideal starting place to start solving the problem. It should never have been allowed to happen in the first place.

GDB2222

The main quibble I have wil Cells' figures is whether you can get a 30 year mortgage on a fixed rate? I mean fixed for 30 years, and what the rate is? Presumably not 2.5%, but possibly not that much more?


Edit - the longest fixed period I can find is 10 years.

cells

GDB2222 wrote: »

The main quibble I have wil Cells' figures is whether you can get a 30 year mortgage on a fixed rate? I mean fixed for 30 years, and what the rate is? Presumably not 2.5%, but possibly not that much more?


Edit - the longest fixed period I can find is 10 years.

In some countries long term fix rates are the norm eg the most common mortgages in the USA are 15 year fix mortgages (that is the mortgage runs for 15 years and is fixed for that time) and 30 year fixes.

I'm not sure you need you worry. You can fix for 5 years by which time you would have paid off 20% of your mortgage. There is a rsik rates might go up but they might fall or stay the same. However were you renting even in a social property the rents definitely will go up. So you are trading the possibility that rates may go up the guarantee that rents will.

GDB2222

cells wrote: »

In some countries long term fix rates are the norm eg the most common mortgages in the USA are 15 year fix mortgages (that is the mortgage runs for 15 years and is fixed for that time) and 30 year fixes.

I'm not sure you need you worry. You can fix for 5 years by which time you would have paid off 20% of your mortgage. There is a rsik rates might go up but they might fall or stay the same. However were you renting even in a social property the rents definitely will go up. So you are trading the possibility that rates may go up the guarantee that rents will.

If renting, I could manage a rise in rent in line with inflation, assuming my wages kept pace more or less. The worry about variable rate mortgages is a sudden hike in the rate. It's certainly conceivable that, at the end of the two year fixed period, the mortgage rate could be 5% for example. So a doubling in mortgage payments, more or less. That could be very hard to afford.

We've had a 20% current Devaluation, which is likely to feed through to higher inflation. That could, in turn, lead to higher interest rates. So, a 5% interest-rate in a couple of years time is, as I said, conceivable.

CLAPTON

cells wrote: »

In some countries long term fix rates are the norm eg the most common mortgages in the USA are 15 year fix mortgages (that is the mortgage runs for 15 years and is fixed for that time) and 30 year fixes.

and of course, US mortgages have never caused any issues or problems

cells

GDB2222 wrote: »

If renting, I could manage a rise in rent in line with inflation, assuming my wages kept pace more or less. The worry about variable rate mortgages is a sudden hike in the rate. It's certainly conceivable that, at the end of the two year fixed period, the mortgage rate could be 5% for example. So a doubling in mortgage payments, more or less. That could be very hard to afford.

We've had a 20% current Devaluation, which is likely to feed through to higher inflation. That could, in turn, lead to higher interest rates. So, a 5% interest-rate in a couple of years time is, as I said, conceivable.

But in most the country the current comparison is 2% mortgage rates vs 6-8% rental yields. Even if mortgage rates go to 5% its still less than the 6-8% you need to pay a landlord.

Either way if a renter is happy to take that gamble to rent for fear of a hpc its their decision. However they should be good enough that they don't come back in ten years and blame everyone else if prices go up and they lose their bet.

zagubov

gfplux wrote: »

Good point Filo, however my argument is with the cause of the demand. If you keep feeding the demand without thinking how to encourage demand elsewhere.
For all I know the demand for more capacity is from the airlines. If they ABSOLUTELY knew that no more capacity was being created at Heathrow and Gatwick they would try to build business in the other airports. That then might put pressure on the Government to improve the road and rail links. That means no extra run ways AND no night time flights OR shorter more dangerous gaps between landings.
Who knows.
What I do know. If we do nothing to discourage the flow of people to the South East we are doing a disservice to the rest of the country.

CLAPTON wrote: »

in would seem the government has been pursuing that very policy for the last 20 years and more.

Very much more.
I've posted links in the past about how London-headquartered parties have deliberately suppressed the growth of rival centres such as Birmingham. Policies like this need to stop, and the sooner the better.