Politics Thread!

[VNVObit]

If it leads to more houses being built as the money raised has to be used for that then it will be a good thing. But if it just ends up shuffling money around then it will achieve very little. .

The simple answer to the first one is no and those that are built won't provide the returns that the government currently enjoy on social housing through reduced HB payments

It's not shuffling money around it's just giving handouts to individuals, requiring LAs (who have a responsibility to house people) to sell off properties to fund (and then increase their reliance on private landlords for temporary accommodation).

IIRC over £600m of state resources have been lost through RTB to date (that's just the cost of the discount for tenants) and the number of council houses has dwindled as LAs were not allowed to build until recently.

[VNVObit]

We have a perfectly healthy private housing market. It’s so healthy that it’s sending out valuable price signals, telling us that supply is not keeping up with demand. The fix to that is simple: improve housing supply, especially where people want to buy around London and the South East.

If it's healthy then why does it need to be fixed?

[pogo]

£600m over 30 or so years is not very much in the scheme of things, and I think this will be true of this too. Marginal amounts, only taken up by some, with only some parts of the country being especially expensive.

It also won’t do much to move house prices. Once concern with the previous Help To Buy scheme was it would just by putting more money into the housing market push up prices for everyone, and long term would have no net benefit. But I think so few people qualified and applied that it was too small to make a difference, and the same will be true here.

Unless it leads to more houses being built. But it’s more useful to consider that separately. We need to be building more houses, and it doesn’t really matter how it happens. There are many ways to do it that don’t involve handouts to housebuyers. Pass laws to shrink the green belts, or establish ten New Towns, or mandate faster planning processes that carry a much greater presumption to build, introduce new taxes on unbuilt land and un-redeveloped sites to incentivise development of them.

If it's healthy then why does it need to be fixed?

Perhaps “perfectly healthy” was an exaggeration. My point was the market works well if you let it. Try to micromanage it too much and it can backfire, as governments are often not very good at designing and building homes people want to live in. See e.g. much of the housing built by government since the 1950s. The main thing the government can do is get out of the way.

[pogo]

Of course there are things a government could do that would distort the market and likely remove properties from it. E.g.

Election 2015: Labour plan to stop 'massive' rent increases

Which is a ridiculous idea on all sorts of levels. First how do you know what is the right price level? There’s no reason for it to be “same as last year” or “same as last year plus inflation”. One year might not make much difference but over many years the price could diverge more and more from the market price. The upshot of that would be less supply, as more and more landlords were persuaded to do something else with their property or properties.

Again (sigh) the solution to too high prices is the same: improve supply. Hard in London where the main problem is, but if more properties are built outside but near London, reducing prices there and making commuting more affordable, then more can do that and not live in London itself.

[gravy]

Of course there are things a government could do that would distort the market and likely remove properties from it. E.g.

Election 2015: Labour plan to stop 'massive' rent increases

Which is a ridiculous idea on all sorts of levels. First how do you know what is the right price level? There’s no reason for it to be “same as last year” or “same as last year plus inflation”. One year might not make much difference but over many years the price could diverge more and more from the market price. The upshot of that would be less supply, as more and more landlords were persuaded to do something else with their property or properties.

And what would that be for buy to let owners? How would they service their mortgages?

In general it's not exactly clear to me what the realistic and likely other uses are for property you've been renting apart from selling.

[tufty]

In general it's not exactly clear to me what the realistic and likely other uses are for property you've been renting apart from selling.

Growing skunk.

[VNVObit]

Of course there are things a government could do that would distort the market and likely remove properties from it. E.g.

Election 2015: Labour plan to stop 'massive' rent increases

Which is a ridiculous idea on all sorts of levels. First how do you know what is the right price level? There’s no reason for it to be “same as last year” or “same as last year plus inflation”. One year might not make much difference but over many years the price could diverge more and more from the market price. The upshot of that would be less supply, as more and more landlords were persuaded to do something else with their property or properties.

Again (sigh) the solution to too high prices is the same: improve supply. Hard in London where the main problem is, but if more properties are built outside but near London, reducing prices there and making commuting more affordable, then more can do that and not live in London itself.

Given a not inconsiderable amount of the rental market is funded through housing benefit then a rent freeze or restricted ( keeping this years affordability levels) increase would be a benefit to the state's coffers. It would also mean that as salaries increase there is a higher probability of people no longer qualifying for Housing Benefit as the rents become affordable.

There is a significant disconnect between the market and affordability consequently people are spending considerably more than 30% of the gross income on housing (rent, mortgage, insurance, etc.) which has knock on effects in terms of health (mainly stress related illnesses) which also impact on state expenditure (demand for NHS services)

As for the landlords some cash is better than none so the vast majority will continue to rent and those who no longer want to can sell their investments as residential property has limited uses outside of housing people.

As for the simple solution of build more, you seem to forget about infrastructure and amenities all of which are paid for by the state (developers contribute damn all to education, health, environment) through local authorities. Where's the money for that?

Coupled with that is the last government's plans to reduce hospital services in and around London (asset sales and redirecting to poor performing, CQC judged, hospital services) which are still ongoing.

Improving supply requires cash and flogging off 2 social assets in order to generate that cash, providing a generous discount/bribe to a small number of individuals, won't achieve that. Tory housing policy has reduced the returns the state used to make from social housing considerably and increased the reliance on housing benefit that previously did not exist, through older more cost effective funding models.

If you consider the PM and Chancellor as effectively the CEO and CFO of UK plc then both presided over cannibalising valuable assets for poor performing ones all in the name of dogma.

[VNVObit]

In general it's not exactly clear to me what the realistic and likely other uses are for property you've been renting apart from selling.

Growing skunk.

That market is already cornered by some of the residents

Council tenant loses home following cultivation of cannabis

[Dio]

The problem with the government building houses is it tends not to happen. Or it happens too slowly, or it happens in the wrong place, or they are the wrong type.

We have a perfectly healthy private housing market.

Odd way of looking at it, considering the private market isn't building for the low end at all and is particularly terrible at producing the kind of family houses which were very effectively produced by government effort post WW2.

[VNVObit]

The problem with the government building houses is it tends not to happen. Or it happens too slowly, or it happens in the wrong place, or they are the wrong type.

We have a perfectly healthy private housing market.

Odd way of looking at it, considering the private market isn't building for the low end at all and is particularly terrible at producing the kind of family houses which were very effectively produced by government effort post WW2.

The values they derive from 4 bed and above properties is relatively lower per square foot hence the focus on 1/2 bed properties where value per square foot is higher.

The other point to note is social housing (at least those funded through grant) have higher space standards than those produced for the private sector (i.e. a social 2 bed is typically larger than a private one)

[tufty]

The other point to note is social housing (at least those funded through grant) have higher space standards than those produced for the private sector (i.e. a social 2 bed is typically larger than a private one)

Of course it is. The private sector is based on making a maximum amount of money from a minimum of assets - if you can somehow pitch what would have been a bedsit as a 4 bedroom family home, you do it.

Last place I rented in the UK was one of the reasons we moved over here - after seb was born, we moved from the 110m^2 (admittedly borderline demolition order) warehouse space we were sharing in groovy, groovy, Hoxton (and for which we were still paying the same rent as when I first moved in 7 years before), and into a far more infant-friendly 60m^2 flat in the Docklands. After the first year the rent went up by 10%, after the second year they wanted to add another 25%. At which point we said "fuck off", loaded our stuff into a transit van, and fucked off to France.

Rent controls would be a very good thing.

[pogo]

Rent controls would be a very good thing.

No, it wouldn’t. It might help some people but the overall effect could be negative, in a number of ways.

Rent control can impact supply, which is not fixed or static. If you’ve lived in London you know a lot of the rental stock consists not of private houses and flats leased out as-is but conversions: office blocks converted to flats, warehouses converted to flats, houses and flats converted to flats through subdivision. These decisions are being made all the time, because the return on doing such conversions are high due to high London rents. If rents are artificially held down then such conversions may make less sense – properties may be subdivided less, or not at all and left as offices or larger units – and over time less properties come on the market.

The other effect is on non-controlled rents. If rent control is not complete then there will be some properties not covered by it. And with the same amount of money chasing properties to rent in the market (e.g. London) it can push prices of non-regulated properties even higher, so having no overall effect on average rents: some people pay less, some more. Those paying more are likely to be disadvantaged in other ways: recent immigrants for example, or those unable to hold down a steady job. Including many on benefits including housing benefits so the cost to government could be higher.

On the other hand Labour’s plans are likely to have minimal effect; rent control will only apply within tenancies which can be as short as a year. Labour want to increase that to three years so you get two years of savings, but they can be reset after those three years. This will limit the actual savings and limit the social impact of rent control dividing the market into insiders who have rent control, outsiders who don’t. It of course will do nothing to address the actual problems in the housing market, of lack of supply.

[tufty]

The issue is not with the concept of a government artificially holding down rents, but rather with property owners artificially inflating them. As you are no doubt aware, there is a situation in the South East, and in London in particular, where there is a shortage of housing supply, despite there being an enormous amount of property "lying fallow", so to speak. There is effectively no limit on rents in London - rental rates are "whatever the market will stand, plus a bit, professional couples only and fuck the poor". Try and find somewhere to live if you're working part time.

[pogo]

There’s not an enormous amount of vacant properties. Quite the opposite. The UK has by far the lowest number of vacant properties, per capita, in Europe.

http://www.theguardian.com/society/2014 ... nent-twice

And across the UK London is by far the most effective at utilising empty and underused property, as high prices both incentivise landlords/owners to not keep properties empty and help pay for any necessary investment needed to turn an empty property into an habitable one.

[merman]

Pogo, the new Right to Buy scheme has NO GUARANTEES of any new homes (let alone social housing) being built to replace the ones housing associations and councils are forced to sell off. The Tory manifesto has no plans to increase social housing either, just a vague promise to build "affordable" homes - having removed the planning obligation for developers to create new social houses in any new development.

And remember, 40% of former council homes are now owned by private landlords. The landlords are coining it in from increased private rents and direct payment of housing benefit.

And so the Labour idea to clean up the rental market is a GOOD THING.
More stability for families forced to rent because they cannot afford a mortgage.
More incentive for landlords to make sure their properties are fit to live in, else face a fine.
Less unscrupulous agencies taking payments from the people renting AND the landlords.