I have admitted to being angry this morning. I listed a long list of reasons for being so.
I omitted this, from the FT this morning:
Renting a one-bedroom flat is unaffordable across roughly half of England for new nurses, teachers and NHS healthcare assistants, according to the charity Shelter, highlighting the severity of the country's housing shortage.
Rent for an average one-bed property would take up more than 30 per cent of gross pay for a newly qualified nurse in 45 per cent of English local authorities, 43 per cent for teachers and 69 per cent for healthcare assistants, according to analysis of official data by the homelessness charity.
For these purposes, the Office for National Statistics has defined “unaffordable” as requiring that a person spend more than thirty per cent of gross pay on housing.
It makes no sense at all that people doing essential work cannot afford to live in a place of their own - even if it is very small.
The government wonders why young people are alienated. This is, amongst many things, the reason why.
And the answer is not to build ever more new houses.
There are two answers. One is to tax residential property, at least in final disposal, because it is the under-taxation of home ownership and the continuing generosity of tax reliefs for buy-to-let, which continues to deny young people the chance to have an affordable place to live.
The other is to cut interest rates. The Bank of England is denying young people hope. I presume they are pleased with themselves for doing so. I suspect their children are not among those impacted.
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Parallels here with inheritance tax relief on farm land. Prices are high (in part) due to a tax break; abolishing it would make it easier for new entrants….. but existing owners will howl. A good idea but the politics is impossible.
Lower interest rates? Yes, it will help but it still saddles young folk with massive debt and make them vulnerable to interest rate moves (although, these could be ameliorated by establishing a “US style” mortgage market).
Higher property taxes (Council Tax)? This would help. First, it would raise cash for local authorities; second, it would lead to a better distribution of properties as old folk were forced to downsize.
Oh, so it’s down to the elderly again. You must vote Labour. What is it with let’s all hate the elderly.? It’s not my fault that I was born in the post war “bulge”, nor that the governments since the 40s av refused to ring fence and invest the NI in order to pay pensions now. I ran away from home at 17 because my abusive father would not contribute a tiny amount for his daughter to go to Oxford. I’d drove buses to qualify with accountancy exams and worked as an accountants office manager. I saved and eventually got a house and paid for it through years of inflation, and high tax rates. Now I’m retired and feel unwanted in my own country, with a government that hates both young and old. So your solution is to “force” me to downsize does sound like more of the same bullying bs.
Inflation paud for most of your house
You probably paid not a lot
I am not at all sure you are being objective in your comment
Funnily enough it was the Right Wing Bow Group who called for The Government to set a target for average house prices if (from memory) 4 times average earnings.
They seemed to be early on the scene about the problems caused by high house prices and the impacts it had.
Clearly if that policy was adopted that would discourage anyone who wanted to buy property to make money from it
In the last 40 years “the income of the top 2% of working men has jumped 75%. But the average American man has not only missed out on 40 years of wage growth; wages have actually been in free fall [..] the median wage for the American man has dropped 28% since 1970 in real terms”. — Matt Kennard, The Racket.
Agreed
I don’t think taxing res property is the solution as the better off will be able to afford taxes. Far better to reduce the number of 2nd homes and hol lets through Uses classes orders and increase inc tax on higher earners. Could also have a change in IHT so that beneficiaries pay so if you already have a dwelling and inherit another you pay more tax.
At present there is a total disconnect between the official meaning of “affordable” rent (defined as 80% of “market” rent?) and the ONS definition of “UNaffordable” rent (>30% of gross income).
The forces controlling pay and those controlling rents and property values are also disconnected, or possibly even inversely related, driving (relative) pay levels DOWN and property values and rents, UP.
The government claim (wrongly) to be powerless in this matter.
That really is utterly disgraceful, isn’t it?
There is no housing shortage. Drive in any direction from my home and you will pass countless signs pointing towards new housing estates. There is a shortage of the houses ordinary working people need – a shortage caused by Thatcher’s ideologically inspired privatisation of social housing. Nobody dares call this what it really is as too many people (people who actually vote) bought their first homes because of it and therefore regard her as a saint. Political dynamite. But while the political aim, to turn society rightwards, was gained, the actual social consequence is disastrous.
Agreed
“One is to tax residential property, at least in final disposal”.. it is taxed via IHT
In 6% for estates
I would tax it in all estates
I remember Liz Kendall on that programme with Andrew Neil, Portillo and Liam Halligan. Portillo suggested that the only way out of the housing crisis was to build council houses. Everyone agreed except one … guess which one? A truly unpleasant woman.
“the answer is not to build ever more new houses”
We do need new houses, especially social housing and we should stop council houses being sold to the private sector.
That I do accept
But some of the are now owned by the private sector
Blackstone sells 3,000 homes worth £405mn to UK’s biggest pension fund (Aug 2024)
“The deal is the first sale by Blackstone from its UK residential portfolio, which includes roughly 20,000 homes.”
https://focusselection.co.uk/news/blackstone-sells-3000-homes-worth-405mn-to-uks-biggest-pension-fund/
Something is going on out here that means that getting a firm grip on the housing ‘morass’ is nigh impossible.
Housing in the UK is FUBAR.
Housing is a an asset and a good but gets treated as an asset because it can be used as collateral to access credit and achieve viability for modern human beings in an expensive market economy. Think about it. Really think about it.
Housing needs to be re-orientated back towards its use as a good, consumed for shelter and distributed on that basis. Its distribution at the moment as collateral merely contributes to inequality, as does its distribution as income as rent.
We need rent controls to reduce housing costs.
We need improved protection for tenants, with the emphasis on residential security over tenure flexibility that favours owners. Assured short-hold tenancies are an unforgivable oxymoron, as they can be terminated by the landlord – a contradiction in terms and by no means ‘assured’.
In an era of apparent shortage, we encourage and celebrate the ownership of second homes!! And more! I’m sorry but it should be stopped, especially if the areas concerned have long waiting lists.
Right To Buy just needs to be stopped. But no, it just gets tinkered with and can still fall victim to back seat drivers acquiring property on the cheap.
And finally, the biggest insult to us of all: no one can tell us in an age of AI, de-industrialisation, low wage/zero hour contracts how home ownership is still remotely viable!
Like the SUVs we see driving solo through empty streets in car adverts, dreams are still being sold in the real estate sector, making people feel like failures and making them ill or worse, willing to shaft their fellow human being to get on the property ladder.
Housing – FUBAR for sure.
Much to agree with
This is why the Hard Right think tanks are now chipping away at the State pension and why in the States Musk is feeding the media stories about fraud in social security. They’re going to turn the young against the old. They’re already doing it. And because many people don’t always think things through they don’t realise it’s their grandparents they’re being encouraged to resent. Just like many resentful people don’t realise the welfare state isn’t there for some other group of people, it’s there for them as well.
As the mafia say “before they kill you, they kill your name”.
So I expect we’ll see an end to the Triple Lock soon. And we can expect inflation to continue rising especially if there is a war. What will happen then to those on fixed incomes? It’s obvious.
This isn’t about bad ideas, it’s a financial coup d’etat. They plan to take as much as they can.
I posted the other day about Catherine Austin Fitts and her allegations about $21 trillion having gone missing from the US budget since 1998. Your colleague John Christensen has just done this interview with her:
https://live.solari.com/w/78uXAcPhYUjZkZ4VZgd1Ge
The Scottish Government ended the right to buy council houses several years ago. The sky did not fall in.
UK needs more social housing well located, to minimise transport costs / travel time and not subject to right to buy and held in perpetuity. The social housing should be in mixed social income developments, with a variety of tenure …. social rental, owner occupied (and enforced), cooperative , cohousing, rental in relative proportions, not a low income ghetto. The social housing should be well designed to generous space standards, preferably in traditional design being indistinguishable from those of other tenure in external quality and design .
Filtering …new build housing that overtime that becomes cheap to rent may help reduce prices but is dependent on the local housing market (always hot with old units constantly being refurbished and up-priced, the overseas wealthy looking for upmarket investment, private equity buying housing as an asset class,…) and in any event will take decades to occur.
Control of holiday lets, AirB&B, and proportion of second homes should be restricted. Rental or to buy for local low income residents need support. The proportion of housing types and costs need regulation. Second homes based on time of occupancy should be subject to higher rates.
Steve Keen had a few ideas on helping housing affordability :
– reducing house prices without homeowners loosing equity https://www.patreon.com/posts/new-liberals-61077693
– PILL Property Income Limited Leverage a maximum amount that can be borrowed to buy a property would be ten times its annual rental income.
Although I realize that many elderly and disabled people in the UK are being hard hit by Labour’s cuts, as an older person myself reliant on a wheelchair, despite having not had any children, the group I feel most seriously concerned for right now are our young people. When I left home shortly after turning 17, I also left the UK. However, if I had stayed in England I could have taken a basic minimum-wage job to earn a steady weekly wage sufficient enough to support myself living independently in a bedsit. This without relying on any type of benefit top-up like Universal Credit, or resorting to food banks.
I could even have obtained a grant to support myself while continuing my education at university to obtain a degree debt free. An enticing potential career path, if I had not struggled with dyslexia, which was not well understood or compensated for at the time. This was all possible without taking on massive student debt. I feel genuinely guilty that my selfish generation had access to a decent start in life that our government seems determined to deny this generation of young people. University tuition is a necessary government investment in the education and skills of our population. Instead we have presided over a morally bankrupt policy of scavenging ‘the best and the brightest’ from countries who could ill afford to train them!
The older generation who benefited from that free access to higher education and the boost it gave to start their career, went on to earn higher wages and pay higher taxes, thereby giving back to society. However, that same privileged cohort are now ready to continue denying the benefit of free university tuition to today’s young school leavers. The imposition of tuition fees, with the debt burden that places on young people, is in reality forcing them to pay for their education twice over: once through debt payments and a second time through higher taxes for life.
Back when I was growing up you did not see desperate people sleeping rough; the disheveled hobo was very rarely seen begging on UK streets where I lived. How far has our modern society deteriorated since my youth as we walk past dozens of pitiful beggars in our towns and cities? In the fifth largest economy on earth, we have some of the lowest benefit payments of any industrialized nation. The UK has also been severely criticized several times by the UN rapporteur for our treatment of the disabled, but this Labour government is now preparing to impose further cuts. This is a national disgrace!
Only young people privileged enough to rely on wealthy parents can afford to consider buying a home of their own. We have regressed to the point where most young people cannot even afford to leave home until they are well into their thirties! Those who lose, or are abandoned by, parents risk sinking into destitution. As someone whose parental support ended at 17, although I was often desperately short of funds, I was fortunate enough to enjoy the opportunity of independent adventure and travel. I just wish that current youth enjoyed those same options, but there are now even more restrictions on travel within the EU now than there were when I left the UK well before we joined the EU. Why cant Labour accept the invitation to lift EU travel restrictions on the under 30s?
This Labour government fails to understand why so many young people are on benefits due to mental health problems. Oh really? For me it’s a ‘no-brainer’! Insecure work in exploitative zero hours contracts to earn pitance wages. Both wages and benefits are paid at a lower rate to those under the age of 25; does it cost them less to live? Insecure housing, still with ‘no fault evictions’, with most rents totally unaffordable. Significant challenges that you have highlighted, regarding the difficulty navigating the hiring process. You were also right to stress that this is especially difficult for those who are neuro divergent and unable to fit into our very restrictive workplaces.
The reality is that we have very seriously contributed to and exacerbated their mental health problems and not provided much needed counseling. However, Labour are now planning to scrap any access to benefits for those young people in distress! How much more can we cripple the life chances of our youth? I was astonished to hear Bill Gates admit that he is Autistic, and that many of the sharpest minds in Silicon Valley are too. We need to adapt to take full advantage of this talent pool. While wage increases and other positive changes will help, this Labour government needs to go a lot further to rebalance the economy and lift the burden from those we will expect to run our country in future.
Much to agree with
When I worked in supported housing for young people, they were penalised financially as soon as they found work. Housing Benefit and Unemployment Benefit stopped and they had to pay rent, giving them debts from the first day of work. It often led to the Housing Association applying for eviction. As with all benefits a more gentle tapering off would have helped.
Agreed
I went to university in 1957, in a full State Scholarship (£255 a year, then) After 3 years I had no debt. But then there were somewhere between 4 and 6% of the age group going to university, and we were mostly serious about our subject, and committed. You can’t feasibly expect 50% or so of the age group to be supported by the taxpayer on the same terms, especially when “uni” is such an automatic choice. I’ve heard people defending the view of present day uni as 3 years of idling, booze, and drugs . . “the young deserve to have a good time before real life” Those who don’t go to university probably think differently. I was lucky and determined then. My brother left school at 16 to become an actuary, training on the job and day release, and again didn’t need to accrue debt. Where are similar opportunities for 16-18 years old now?
There is no link to reply to your message to me.
Unlike the Microsoft and Amazon who believe that “buying” means they can take software back Stephen they like, houses are bought. Inflation was none of my doing, I paid the rate for the house, it’s mine, I don’t want old people’s accommodation, nor a flt. I bought a house to live in, I’m single with no kids, so the house will go to a charity and a nephew. I’m sorry for the young, but I didn’t put the country where it is, generations for overpaid incompetent politicians did. So why should I bow to generation hated and give up my home, it’s not an investment, it’s my home. Objective or not, that’s the case, and will remain so unless the Draconian louts in parliament take my little to stuff the craw if the multi- billionaires that fund them. Why you expect me to be objective is behind me. Like you I am angry, but forcing me out on the basis of intergenerational hatred fostered by government spokesmen is not the answer.
I am nit sure where this inter generational hatred is
Boomers have done massively well
Pensioners have done well, under triple lock
No one on benefits alone has done well
I agree on winter fuel
But where is this hatred of older people? The young are having it very much harder.