50% house price crash does not = more affordable homes

triathlon

lisyloo wrote: »

Let me explain then.

You were complaining about people slumming it in vans.
It was coffeehound (#51) who said these people are mostly economic immigrants which I took at face value.

You have said you don’t have any complaints about immigrants even though they appear to be the same people you are complaining about slumming it in vans on another thread.

I have never seen one immigrant slumming it in vans and I have not once said they do

lisyloo

Ok, then I take it back.
I took what coffeehound said at face value, my bad,

GreatApe

Chrysalis wrote: »

Compared to demand there is a lack of social homes.

Some councils are so overburdened with demand they even closed applications to get on the housing register, to claim there is no social housing crisis is an admittance that you are extremely out of touch.

If you want hard figures backing it up look at the 10s of billions paid out annually by the government to subsidise people private renting (this money going to private landlords) who would be prime candidates for social housing if it was available.

If the government brought 100k social homes today and rented them out what have they achieved?

Well given that private rental provides no security past 6-12 months in most cases, and typically costs 25-30% more than social rent (at the bottom end of the private market), I think the answer is obvious, you have supplied 100 thousand affordable secure accommodation to the population. Ironically tho I am not sure that would be enough as the crisis is so bad now with 4 decades of practically no social homes been built.

Also its more of a problem in certain sized properties than others e.g. for one bed properties its at its worst, and for 3+ bed properties its at it least severe.

Although I would prefer the government to build the houses rather than buy them, although buying them is still vastly better than doing nothing.

Of course if there was enough social properties to satisfy demand then I would expect the private rental market to contract 70-80%. It would crash. This may or may not have an impact on house prices (this thread's topic), but I dont think it would trigger a 50% crash. My reasoning behind that is it is my opinion that the private rental market for the most part is not fit for purpose, it is only thriving because people need a roof over their head and out of desperation take what they can get, most people who rent privately probably fall into one of the following categories.

~They are unemployed or in a part time job, long term renter - prime candidate for social homes.
~They are full time employed but fail affordability tests for a mortgage due to low wage, high rent ironically prevents them from saving to improve affordability - another prime candidate for social homes
~They are full time employed but struggling to find long term sustainable employment, working for agencies etc., likely failing mortgage requirements, another prime candidate for social homes.
The bulk of renters I think are the above.

The below I think makes up the remaining 30% or so.
~They recently split up from partner, lost home because of it.
~They are a student.
~They move around a lot, they want flexibility.
~They rent luxury high end apartments.
~Its out of choice to rent long term and could afford a mortgage, maybe just prefer to rent. (I dont think this is many people).
~Renting temporarily, plans to buy a home.

If everyone was given a choice and didnt have outside factors limiting their decision the majority would choose to either buy their home or rent socially, I doubt people volunteer to overpay rent and have little security. The reason the private rental market is as big as it is is due to an under supply of social housing.

Now you may argue there is specific pockets in the country where social housing is empty, but I will remind you that one cannot apply to live in social housing in a different area without a local link. There is also a reason hostels exist as well as councils putting people in hotel rooms, many areas, cannot even house all their homeless people, never mind the people who already have a roof over their head. So for you to think there is plentiful supply of social homes is just baffling.

Back in 1997 when I put my name on the waiting list (before was housing registers), I was told its a 7-8 year waiting list. Now do you think demand has gone up or down since 1997?

I expect the mistake you have made is to assume the following.

1 - Everyone who wants on the housing register can get on it.
2 - Everyone on the register is able to get housed.
3 - Everyone renting privately has done so out of choice rather than desperation.

The housing charity a family member of mine works for 9/10 people referred from the council are put in a hostel, the 10% or so who get housed, are usually very high priority people like single mums exiting a dangerous relationship.

I will also comment on brexit and immigration since I See it mentioned in this thread.

There is an assumption that if we brexit, then immigration will plummet, the reality is we need immigrants, so the probable outcome is we will replace EU immigrants with non EU immigrants, and net immigration will be a comparable number to what it is now. In addition if immigration falls, then expect the economy to contract, its fairly simple, less people = smaller economy. Its basic economics. The reasons for problems in our society such as lack of affordable housing is not because of the EU or immigration, its a governance problem stemming from pretending there is no housing crisis and/or not investing in infrastructure to fix these problems, when was the last time a new town was built e.g.? We in an era where everyone is out for themselves, there is extreme selfishness, low taxation, a hatred of tax increases, and a lack of investment in public services. Its no wonder threads like this exist, because its inevitable with how the country is currently governed.

While on the surface your arguments seem ok they are mostly wrong

For instance, what proportion of private renters rent long term (10+ years) ? Do you know?
It is about 25%. The other 75% of private renters either buy a home or get given a social home.

You are also probably unaware that a large number of privately rented homes are rented for FREE aka £0/month. That is mostly people buying a house for a relative and charging them no rent. The figure is close to 500,000 such properties

You also forget the number of people who are both private renters and owners of homes.
For instance one of my friends has been renting privately a flat in London for over 10 years, he is one of those poor long term private renters. But he also has a nice big house in the midlands where his family lives and where he goes back to on the weekends

You also assume incorrectly that all private renters are poor
I know a doctor who has been privately renting for over 15 years, boo hoo, but he has in excess of £2m net worth


Anyway, going back to the fact that private renting is a TRANSITIONAL TENURE that the vast majority of private renters either buy or are given a social home. Now update your model and tell me what you think of housing in the UK. Actually let me do it for you since you have too much baggage to come to the right conclusion.

Roughly speaking the UK housing market is

63% owner
20% private renter
17% Social Renter

That is a snapshot of the housing stock right now

But that is no what is important, what is important is the fact that people move between tenures especially private renting. I rented privately from age 18-27 that is 9 years then I bought.

If you take the fact that only about 25% of private renters are long term, and re-allocate the 75% of private renters into owning and social in due course you find the real information that is important.

Which is that 75% will own at some point in their life, 20% will be put into social at some point in their life, and only 5% will be long term private renters and many of those long term private renters are neither poor or being exploited (by the fact 500,000 private rented homes are rented for £0)

Your mistake is to look at a snapshot and not factor into account the fact that private renting is a transitional tenure. So I ask you again, what is the problem with the uk housing market when only about 5% rent privately long term?



BTW this is true also for unemployment.
The headline might be 5% (or whatever) but the long term unemployment figure (12+ months unemployed) is closer to 1.5% what this means is people move in and out of the headline unemployed figure its not the same 5% of the population continuously unemployed. Hence why economists say we have full employment when the figure of unemployment is circa 5% they see and understand actual unemployment is much lower and that this is a pool of churn.
Just like private rental stock is mostly churn its what people do until they can afford to buy a house or get given a social property

And I repeat once more, your argument of not enough social homes is just empty because you can and people do say that very sentence for area with 10% social homes and areas with 50% social homes.

GreatApe

Chrysalis wrote: »

Compared to demand there is a lack of social homes.

Such an empty statement. Here is another empty statement for you

Compared to demand there is a lack of cheaper homes

Compared to demand there is a lack of cheaper new cars

Compared to demand there is a lack of cheaper food

Compared to demand there is a lack of cheaper...anything and everything

I guess what I am trying to say is...people want stuff to be cheaper :rotfl:

westernpromise

Chrysalis wrote: »

Now you may argue there is specific pockets in the country where social housing is empty, but I will remind you that one cannot apply to live in social housing in a different area without a local link.

One the great evils of social housing is that it prevents social mobility in just this way. If you're out of work, you can't move to where work is, because council house. This is why we need a PRS.

We in an era where everyone is out for themselves, there is extreme selfishness, low taxation, a hatred of tax increases, and a lack of investment in public services.

Likewise, there is the extreme selfishness of people who demand more stuff but don't intend to pay a bean for it and instead want it all funded by tax increases on everyone but themselves.

I'm in that demographic that pays all the tax, and the funny thing is that I have never sensed the least gratitude for my doing so from those on whom it is spent and who are in the demographic that pays basically nothing.

lisyloo

westernpromise wrote: »

I'm in that demographic that pays all the tax, and the funny thing is that I have never sensed the least gratitude for my doing so from those on whom it is spent and who are in the demographic that pays basically nothing.

This seems to be a chip on your shoulder which I suspect isn’t doing you too many favours.
I have expressed gratitude publicly several times but you are choosing to stick to your preconceived beliefs despite the fact that it’s making you miserable.

But let’s go along with it for a minute.
Let’s suppose they are all ungrateful.
What would you rather. That we have feral people running round knicking your stuff and begging so you need to live in a gated community, go shopping in a gated shopping center with a gated car park or risk not being able to walk anywhere without high levels of harassment, or do you think what we have now is better i.e. basic levels of benefits to keep the peace so you can safely walk the streets (mostly).

westernpromise

lisyloo wrote: »

I have expressed gratitude publicly several times but you are choosing to stick to your preconceived beliefs despite the fact that it’s making you miserable.

You're not in the demographic that pays nothing, though, are you?

Herzlos

I'm not sure that was her point. Paying a fair share of taxes (and you can argue it's not if you want) benefits you as well - those feral ungratefuls are going to leave you alone if they are being looked after, but if you were to cut all of their funding you'd need to be worried about burglary, car jackings and kidnappings on a daily basis.


They also put almost all of their money back into the economy because they can't afford to save or offshore any of it.

Filo25

Would agree with other comments that the only significant group really likely to benefit from a large property price crash would be those sitting on large pots of cash, ready to move into the market (more likely to be investors than FTBs).

In times of falling property prices when housing looks a much less secure investment (and it would generally be at times when the broader economy is performing badly as well), banks will obviously tighten lending restrictions significantly, they will assume prices are likely to fall further and that borrowers are more likely to lose their jobs and default, so you start losing high LTV mortgages and I would imagine much pickier lending policies as well.

Houses won't drop 50% in a vacuum, they will generally do it for some kind of economic reason which means people are suddenly less able to buy, no magic windfall for FTBs unfortunately.

Malthusian

Herzlos wrote: »

I'm not sure that was her point. Paying a fair share of taxes (and you can argue it's not if you want) benefits you as well - those feral ungratefuls are going to leave you alone if they are being looked after, but if you were to cut all of their funding you'd need to be worried about burglary, car jackings and kidnappings on a daily basis.

He wouldn't, though. If we cut all public services, everyone who is currently a net taxpayer (i.e. top 40% of income), including Westernpromise, would live in gated communities with private security guards and be just as safe as they are now. Probably safer.

The people who would need to be worried about car jackings and kidnappings would be people currently living on council estates who are doing slightly better than other council estate residents, who have an old banger to nick or a few valuables in their flat. They are the ones who would lose out.

The people who benefit from public services are neither the top (who pay for them) nor the bottom (who don't take advantage) but those in between. Your ordinary Joes and Joans, your decent hard working folk, your squeezed middle.

The victims of crime are overwhelmingly likely to be from the same social class as the criminal.