The Conservatives caused the housing market crisis | Economics | New Statesman
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- Опубліковано 10 лис 2022
- The UK housing market is “frankly terrifying”, says Duncan Weldon - and it's the Tories' fault.
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Read Duncan Weldon's article, "Britain's big squeeze" here: www.newstatesman.com/economy/...
Economist Duncan Weldon and New Statesman business editor Will Dunn explore why the UK housing market is in crisis, with consequences for both homeowners and renters.
Will Dunn says the Conservatives have “taken almost every opportunity they've had to inflate the housing market" which “has created a crisis of affordability” that is squeezing homeowners and would-be-buyers across the UK.
An end to the era of low interest rates in the UK was always going to be “very painful for the British economy,” says Weldon. He argues that this pain was brought forward due to the economic decisions of the Conservative Party under Liz Truss - and will continue under Rishi Sunak.
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It is a government inspired crisis this time. The Treasury have to sell Bonds to cover the trade imbalance and the government spending imbalance. In order to sell them they have to raise interest rates and the old long-term, low risk, low interest, AAA investments (including Treasury Bonds), held by the banks (often due to government regulatory policy), become next to worthless. The next milestone is the 15th when the government issue a new batch of Bonds. I have approximately 350k stagnant in my portfolio that needs growth. What is the best way to take advantage of this downturn?
Indeed, you are correct! Economic downturns offer numerous prospects for ordinary individuals to create wealth from the ground up. Nevertheless, seeking guidance from an investment planner might be necessary if you desire a more assertive return.
Buy gold gold to money is at the same place as it was in 1971. in the subsequent 10 years gold rose by a factor of 30X
@@richardhudson1243 Thats true, I've been getting assisted by a FA for almost a year now, I started out with less than $200K and I'm just $19,000 short of half a million in profit.
@@tatianastarcic How can I reach this adviser of yours? because I'm seeking for a more effective investment approach on my savings
The UK has 60 million acres of land in total
70% of the land is owned by 1% of the population.
Just 6,000 or so landowners - mostly aristocrats, but also large institutions and the Crown - own about 40 million acres, two thirds of the UK.
Britain's top 20 landowning families have bought or inherited an area big enough to swallow up the entire counties of Kent, Essex and Bedfordshire, with more to spare.
Big landowners measure their holdings by the square mile; the average Briton living in a privately owned property has to exist on 340 square yards.
A building plot, the land, now constitutes between half to two- thirds of the cost of a new house.
60 million people live in 24 million "dwellings".
These 24 million dwellings sit on approx 4.4 million acres (7.7% of the land).
Of the 24 million dwellings, 11% owned by private landlords and 65% privately owned.
19 million privately owned homes, inc gardens, sit on 5.8% of the land.
Average dwelling has 2.4 people in it.
77% of the population of 60 million (projected to be more in new census) live on only 5.8% of the land, about 3.5 million acres (total 60 million).
Agriculture only accounts for 3% of the economy.
Average density of people on one residential acre is 12 to 13.
10.9 million homes carries a mortgage of some kind.
Thank you for the information. Time to turn back the clock on the Enclosure Act and the Clearances. That 1% need to have their assets seized and redistributed. Painful yes, but necessary. Similar to what happened during the Clearances and the Enclosure Act. Redistribution is necessary now.
@@annjuurinen6553 Watch the documentary on here Who Owns Britain, it shows just how unfair the UK is. Many aristocratic families own land that isn't even registered, ie before land registry was a thing.
@@gee3883 Should have fought harder at Hastings
Land owned from theft of colonial loot…….
@@annjuurinen6553
- just shows how 'far' or more realistically how ' little' we have travelled.
Shelter is one of the most basic human needs. The idea of building economic growth of housing price inflation is insane.
The Tories are insane and greedy with it.
Rapid house price inflation was alive and well in the 1980s under Thatcher and then Labour too... People thought house price inflation was good... Their grown up children may now beg to differ... (but then, how many of them voted to stay in the EU, with free movement of people causing uncontrolled demand for housing? )... Greed and stupidity was not limited to governments...
@@hilaryporter7841 they truly are
@@andrewwalsh2755 thatcher was prime minister in the eighties
@@annenunney9907... the sell off of social housing, the importing of cheap foreign labour, the "borrowing to invest" (and not paying off the debt), the tsunami wave of house price rises etc happened under Thatcher (in 1980s) and continued to this day. We didn't build up a national debt of £2.5 Trillion and (foolishly) became dependent on low paid imported labour in just the last 12 years...
For God's sake... don't believe the notorious "pledge" breaker Kier Starmers (Zionist) Labour claims!... Fully Costed, Fully Pledged... Fully Bogus!
(PS... thanks for the correction!)
Michael Gove is concerned that younger generations don't see the Tories as the party of opportunity. Too right they don't - previous generations were able to buy property much more easily than nowadays. And the Tories have just made it that much harder to purchase one's own home. My niece was about to buy a home for the first time but that has now gone up in smoke thanks to Truss and Kwarteng. The Tories deserve to be OUT of power -for good.
’Twas brillig, and the slithy toves
Did gyre and gimble in the wabe:
All mimsy were the boro goves,
And the mome raths outgrabe.
I couldn't give a damn if some oldies lose their shirts over a BTL property; they've been riding the gravy train for far too long.
Adam
Thatcher initiated right to buy.
Tenants took on barely affordable mortgages,
Tories caused financial crisis.
New house owners couldn't meet repayments.
Ex council houses repossessed.
Ex council houses now on open market.
Tory goal achieved!
thatchers diabolical privatisation legacy continues to linger on.
And on top Thatcher stopped the councils to replace the sold council houses.
@@freko106 Johnson? The pathological liar? When did this man ever told the truth? Hell freezes over!
Thatcher initiated right to buy. When house prices were cheap and plentiful
Tenants took on barely affordable mortgages, The original mortgages were cheap the problems came when people remortgaged or traded up
Tories caused financial crisis. actually caused by the bank of England not matching fed rate rises
New house owners couldn't meet repayments. These are the people that bought at the end of the cycle at 9.92 times average earnings
Ex council houses repossessed.Most of the ex council houses have been traded multiple times
Ex council houses now on open market. see above
Tory goal achieved! The goal that people should feel responsible for their own actions stupid actions results in stupid outcomes
In Scotland we have a rent freeze. As an owner of more than one house, and a landlord, the freeze has my full support. I am not renting out as a, “businessman,” with any plans to expand, nor do I really know the tenant, who got the place through an agency. But, I can see that an equal rule which effects all landlords and their tenants equally, reduces panic and competition, meaning that renters are free to stimulate the economy in other ways, while landlords are not put off from buying new properties to rent out (at least, the ones I know have not been) because they know they can still get a fair return on their investment.
Two of our three adult children have already bought their own homes here in Scotland, in the last couple of years. And we have no real worries about the third, who is sharing accommodation with her partner for now, while she finishes her doctorate, so we expect she will be able to get a well paid, secure job, in the future.
Why won’t Westminster follow Scotland’s example here? It certainly seems as though the public wants this? And there have been several large demonstrations about rent prices around the country.
My suspicion is that property owners have too powerful a lobby in England? Indeed, that lobby would include many ministers, probably? Plus, a great deal of England’s prime real estate (much more than people know, as the public outcry would be huge if they did!) is in the hands of foreign oligarchs; or so it seems?
You mean “ an equal rule that AFFECTS “, not effects. Please learn the difference.
@@judeirwin2222 : Um . . . 🤔 . . . nope . . . You’re wrong there, son. 🤷♂️ See, there are good dictionaries and there are the crap ones, owned by grammar Nazis, too obtuse to deal with the point under consideration and more concerned with policing other people’s language. Please learn the difference? Especially when you’re policing the rules wrongly, like you were a member of the London Met or something. 🤭
Bought my first property in 1988. Mortgage interest rates reached 15% not long after. I couldn’t even afford to buy a newspaper, but survived negative equity; and learned the hard way about being persuaded by Abbey National to take out an ‘interest-only’ mortgage 😡.
Almost identical experience as me.
@@mikeroyce8926 Abbey Wankers more like...what do you expect from the management of a building society that opted to become a bank?
@@freko106 Today's financial crisis has been brought to you by our sponsors 'Unrestrained Casino Crapitalism' and 'Legal Theft Inc.'
Why did you take the interest only mortgage though?
Same here. We were told the interest only mortgages would pay out the cost of the capital at the end of the term. That was all we could afford anyway. Thank God we got on the ladder then though!
I bought my first house in August 2021, a small two up two down that needed work. My mortgage runs until August 2023 and is set to go up £225 per month. I was actually told I don’t meet affordability tests for most lenders now…£136k against a £39k salary
Over what remaining term, may I ask?
I was looking at finally moving out of the semi I'm in into a small but detached property - or at least one that doesn't have a living room and master bedroom attached to a party wall.
I'm on 30k and was banking on being able to remortgage to £135k of loan (including remaining debt on current mortgage).
This would be over 25-30 years though. It sounds from what you're saying like it might not be that simple?
@@tomgl6684 over 32 years! Its ridiculous. I was saving £300 p/m to spend on the house and the rate rise has basically wiped it out. Try using Strike mortgage advisors they are free
@@bigpaul4450 Thanks bud. I did check my current lender's AIP calculator and it looked fairly positive, but this was before Truss decided to near-singlehandedly wreck the economy in the space of a week... 🙄
@@tomgl6684 Yeah i wanted to remortgage to get some equity to finish renovating. Taking £10k was an extra £80 p/m then £157 now its £300 + I'm £225 p/m more with NO extra borrowing
There needs to be a market crash, my grandfather bought his house for 25k and it was a 3 bedroom semi detached house! Just think about that for a second this was in the 1970s
People don't understand the difference between price and value. It's actually worse than this video, new houses in UK are about the smallest in Europe, this is never mentioned. All that is ever talked about in the media is interest rates and monthly outgoing but never how the capital will be paid off
The prices need to come down at least 60%! Govt need to crack down massively on BTL and land banking. I thought there was a swath of empty office space post Covid
Not to the mention how ugly most UK properties are
“You will own nothing and be happy” they told everyone what they were doing and where the puppets were
I realise now why thatcher wanted everyone to be a homeowner so that when they are in need of care when elderly they could sell their homes to pay for the care disgusting then disgusting now
Although it's nice to see quaint cottages , most of the UK housing stock is not fit for purpose,they are completely inefficient . This has been highlighted in this energy crisis .
Does higher house prices contribute to GDP?... That would explain how, over the past 40 years, combined with free movement of people in the EU, increasing demand inflated house prices, plus cheap labour increasing consumption and production... enabled continuing govt borrowing, whilst at the same time reducing (national debt/GDP) but still increasing actual debt to £2.5 Trillion... What a cunning plan.
If the UK was a limited company, it would look like rogue directors were artificially inflating asset values, to borrow against them, to squirrel away the cash in offshore bank accounts, to then leave the employees unpaid and pension fund raided... just like Robert Maxwell did...
I think Thatcher, Major, Blair, Brown etc should be held to account... its only now that Rishi is facing up to the scam (or incompetence) of decades past...
No its a net drain on GDP
Prices is a plural noun. DO higher prices is correct, rather than DOES. Does a price, do prices...etc. Get it?
@@judeirwin2222... Good Point!... But I was thinking of: Does (the concept of higher house prices) contribute to GDP?...
When are govts going to tax foreign owned properties in the UK?...
a) If foreign people & companies can afford to purchase properties in the UK... they can afford to pay the extra taxes...
b) Those who 'arranged' for their properties to be 'foreign owned' for nefarious tax dodging reasons and getting the tax payer to pay off their mortgages through bogus rent payments... should be targeted...
... and if the taxes aren't paid, the properties can be taken by HMRC in payment...
Because it’s a lucrative money-laundering scheme.
@@lindaj5492... Better vote Green Party at the next election then...
@@andrewwalsh2755 Yeah, great... spilt the vote. The Tories love the green party.
I love the thought that landlords are selling up because theyre not allowed to ban people who want to have a cat. Really shows that for a lot of landlords, its also to do with power and control over other people, you see it all the time.
Exactly what do you have against the use of apostrophes?
Shared Ownership Leases are also a way of allowing people to enter the housing market at a lower price point. It is also (wrongly in my opinion) defined as social housing in the 2008 Housing and Regeneration Act. Shared Ownership leaseholders have to pay 100% of the service charges for their flat even though they may only own say 25% of the flat. With rising interest rates shared ownership will cause another housing scandal.
I hope not, as for a friend of ours it was the only way to get security in housing. They have been there many years and are very happy with their choice.
Shared ownership is also (in my opinion ) wrongly advertised as affordable housing. It is not. Another consequence of successive governments failing in housing policy. This is clear false advertising by housing associations with government approval. Annual rent increases of RPI plus anything from 0.5 to 1.5 on top. RPI in October was 14.2. Annual increases based on RPI plus make the reselling impossible for tenants. Plus most on new housing estates so grass cutting etc for the estate added as a monthly charge. No council tax deduction despite a house a few streets away having their cut by the council. And you are more likely to to be on variable rate mortgages, so a triple whammy. I wish there would be an investigation into this and brought to more peoples attention.
No one should be allowed to own more than one house in this country for profit , when people don’t have a house at all. Greed coursed by successive Tory governments.
"coursed" ?
Tony Blair had 38 properties in his portfolio in around 2010. Now idea what that number is now.
@@user-hi9cv1sc2i absolutely disgusting a housing market created for the rich . All council houses sold off by thatcher and were not replaced . Hence the problem we have today.
@@user-hi9cv1sc2i Did you know a quarter of all Tory MPs are landlords .
@@user-hi9cv1sc2i He can only live in one at a time.... All this commie crap is history... I lived on a council estate for 10 years and I know what they are like....
The state needs to build, buy and, most importantly, KEEP at least 30% of houses to offer enough social housing. In my town in Germany there is this huge, huge social housing company and I think half the city lives in their flats. They have a great system of maintaining, hotlines for repairs, and keep up to the legal standard. My shared apartment is certainly no prize, they were all built in the 50s, but it's working fine, no mold or anything, and a handiman is at service when needed. Never waited more than a few days for a clogged drain to be fixed
Every single time, the tories are pouring petrol into the fire...
it's largely unproductive!
I enjoy your submissions and respect the quality of your narrative
You are missing the point
And the point is that in the past ten years population in UK has exploded and every new adult wants a house and builders take advantage by profiteering so you have too many people too little houses available and you have malicious greed
Please could you do an article explaining why home ownership is believed in UK to be better than a well-managed renting system (ie with legislative control that protects tenants from unscrupulous private landlords)? Comparison with other EU countries would be interesting.
the legislative framework is totally different. Govts of all stripes do not believe in secure tenancies in the way they exist in Germany and other places. They're 2 neo liberal parties with lots of landlords among groups of MPs.
@@borisj so when the repayments on a mortgage go to £600 when it’s getting £500 rent, what are they supposed to do? 😂 as I said the British attitude absolutely stinks, landlords are selling up because it’s not a viable business anymore, so they’ll be even less houses to rent. In a massive housing crisis. Landlords and investors are the people building the homes and offering rentals not the government. So if they keep being penalised it’s going to get worse and worse, again the British attitude absolutely stinks, moaning about things they’ve not got a clue about
People want to own their own homes because you aren't begging the landlord for permission to make changes to the home. I sold up earlier this year as I knew what was coming. I am renting while I wait for the drop and my next purchase. I forgot how much I hate renting. I want to paint this dreadful decor but I'm not allowed!
Key word "Well-managed". Quite frankly, the UK government can't manage anything well.
*this*
Cancer of Housing Private Landlords - Let your properties rot empty then try and turn to those you exploited ,extorted and turned out into the street.
I predict mass bankruptcies.
Glad a made an 11-year fix to the end of my mortgage in 2017. It was a bit more expensive than a 5 year, but I felt the unusual low interests rate could not last another decade.
When individuals engage in property transactions, the property does not simply vanish; rather, it undergoes a change in ownership. It is crucial to recognize that the current narrative being propagated by the landlord lobby, which suggests that new housing legislation will adversely affect landlords and, by extension, tenants, is entirely unfounded. This erroneous perspective mirrors the flawed concept of trickle-down economics, which erroneously posits that if property owners amass greater wealth, their employees will consequently receive higher wages. However, historical evidence consistently demonstrates that increased profits for property owners do not directly translate into improved conditions for employees. This concept of a direct correlation between the financial success of property owners and the well-being of tenants is fallacious and deceptive. Tenants are not better off when landlords amass greater wealth; this notion is simply not true.
The madness of the UK housing system is short term money, in the U.S. you can buy 30 year fixed money, so what ever your starting mortgage rate may be it is fixed at that rate for 30 years,and you have the right to refinance your home at a lower rate anytime one becomes available. The short term fixed rate then float at market in the UK is just a time bomb waiting to go Boom.
Actual shared ownership between multiple tenants should be made easier. 4 friends should be able to get together to buy 1/4 of 4 bedroom house and be able to get finance and tokenise the ownership to easily exit or transfer the ownership. They shouldn't need to jump through the hoops of HMO licensing that are there to protect tenants from landlords if the landlords and tenants are the same people. Much more minimal HMO requirements for safety reason and not ongoing licenses should apply to 5, 6 or 7 co-ops but that should be the same as any house. The discrimination of single poor people needs to end. How many 5/6/7 bedroom homes built for rich families are sat empty because nobody has 5 children anymore and nobody else is allowed to live in them and why should a house lived in by adults need to meet tighter health and safety needs that one lived in by a family of children? And by that I mean actual large family houses, not bedsits with tiny rooms crammed into every corner with its own shower and kitchen by profit maximising landlords rented individually to strangers to meet the the current rigid HMO requirements that incentivise the chopping up of decent properties into cubicles.
That and the abuse of article 4 by NIMBYs needs to be stopped. Article 4 was meant to preserve special buildings or areas from development but now councils have voted to apply it to whole boroughs. The fact that just having 4 people wanting to live in a house together requires the bureaucracy of HMO licensing and even planning permission means this effectively gets used to keep out those who are trying to get a foothold in overpriced boroughs.
HMO residents are seven times as likely to die in a fire as single family occupants. HMO regulations are largely focused on reducing this risk
you can buy a house for £40k in the North East of England
why bust your balls with a mortgage (liability) when you can own 100% of the property (asset)
for the price of the mortgage deposit or 24 months rent in London, you can buy your home outright
Three things would go a long way to fixing the housing crisis/shortage ...and affordability.
End right to buy, stop depleting social housing stock
Enable councils to build the new social housing stock that is desperately needed
Establish a social bank or state bank for those who want to buy, 30 year fixed low interest fixed mortgage for first home buyers (this I understand is available in Germany)... And for builders to build the right homes, at the right (affordabe) price, in the right locations.
If you want builders to build you need to make them. they've been hoarding land, with planning permission in place, for years.
Get rid of unregulated landlords, unless you're a registered landlord owning more than 1 property should attract a rapidly ramping taxation.
Additional to the two posts above, a land value tax on undeveloped land would encourage building, and also banning buy to let mortgages and giving landlords two years to exit the market would help free up stock too. But the state Bank for FTB's with a 0% deposit would be amazing, albeit with a caveat on the sale that you have to live in the house you buy
@@James-mb3je Yep, yep yep... and yep!
Also stop buy to let.
@@missrockafella9432 Agree with you Miss R... Where I live when the area was built some 20 years ago, developers moved in and bought multiple houses which have subsequently been HMOs some of them by the time rooms have all been let as bedrooms, often including the lounge and converted garage, attract rents in excess of £3000pcm. Families who need to rent privately in this area cannot afford to do so.
I live in flat in Edinburgh, it has doubled in value in 10 !! years !! It's wrong, it's not sustainable, rampant free market liberalism let loose by the Tories is wrecking the UK. Even the US under Biden is looking at putting the breaks on 'supply side' / Trickle Down / Neo liberal economics ... but we keep voting in market speculators who use their position to help themselves and their palls suck yet more money upwards. I feel for renters who are trapped and living limited unfulfilled lives as 2/3rds of their income is stolen by property owners.
You better sell now because that's going into negative equity.
I'm going to not buy now because the arse is going to fall out of the market.
Interestingly, the much maligned developers are also not really responsible for the crisis. The cost of land once planning permission is granted is so high, that developers have to maximise the profit (or in many cases, avoiding considerable losses) on the site. The way they would like to do this is by increasing density (which makes a lot of sense, if demand in the area is high), but councils often push back and force them into building lots of single family dwellings.
Obviously this reduces the amount of properties they can provide on the land, increasing the cost of each property and often incentivising the cutting of corners on building costs. (This is why everyone thinks new builds are badly constructed.)
The people making the big money are the ones selling the land for redevelopment. Often developers focus on larger plots, as this reduces the cost of planning permission applications relative to each property. 'Land Banking' is used as a way of hedging risk, so they can make sure their construction teams/contractors have a steady supply of work, which is why land often lies empty for years after planning permission is finally granted.
The UK's planning permission is unusually unpredictable and restrictive, which favours existing homeowners, at the expense of future growth and opportunity for younger people. This video rightly says that housing is a very fundamental component of the British economy and growth is closely linked to housing costs/availability.
New legislation aimed at making sure councils approve a certain quantity of new development, as well as introducing schemes such as 'street votes' was going to help improve the supply-side situation. A welcome break from the unsuccessful demand side policy we have seen in the past. However, this has been shot down by a vocal contingent of backbench Tory MPs. Despite the fact Labour would very likely support the motion, Rishi is too weak to want to be seen relying on opposition to get votes through, so the legislation has been cancelled.
It seemed to me that governments over the years have done whatever they could to keep the housing market going.
Now they are stuck because they can't control interest rates so the correction we should have had years ago is now here
Economics is doing what it should
Some blind people and disabled have not been paid their legally required incomes since the 2nd June 2022.
This happened as the DWP post office payment system was terminated and replaced by eurrr NOTHING ! Clearly the most vulnerable people legally entitled UK citizens have not received any money at all since the 2nd June 2022. The DWP is required to rectify and provide emergency payments within 7 days for these legally protected people. Six months later the DWP and its suppliers have failed to put in a new payment system accessible by blind people. Clearly nothing in the DWP system is legal or fit for purpose cost the tax payer billions.
The DWP explain that a new payment system for the blind disabled would not ready or tested for blind people. This leaves the most vulnerable in society UK citizens starving, no heating, no food, no access to medical care or government services in freezing weather.
The NHS warned the government that this is entirely preventable which may result in a national health emergency for many people with severe disabilities requiring hospital beds over christmas collapsing the NHS with resulting deaths.
The DWP respond with the statement they have outsourced the new arrangements so the system could not pay blind people. A urgent parliamentary enquiry is underway with the Joseph foundation warning the DWP failure is causing a domino effect over Christmas and breach of UK law.
The DWP have offered many apologies and have offered compensation to all individuals. However the charities say this is totally inadequate. Rishi Sunak will need to resign immediately in letting it soo bad soo quickly in breach of his contract of employment as prime minister and intentional legal breach Which comes closely after the fix penalty notices issued to Boris Johnson which forced his resignation.
The charities have asked for parliament to be recalled over Christmas and a state of emergency declared at this jaw dropping failure.
You could not believe that this would happen under UK law in 2022 ?
When you accuse the president of china and putin accuses the UK government of genocide of the most vulnerable blind children and adults in the UK you are tasked with the arrest and imprisionment of the surving UK priminister for genocide and abuse of these legally protected vulnerable people. The PM must go immediately...or resign as you dont truly beleive in burocracy.
This government is fully of corruption. This past week we hear that an MP `who has assets of 5 m or more has asked the taxpayer to give hime 220 k in leagal aid? When a UK citizens who is blind and disabled is refused legal aid because they dont want to be held accountable for genocide and abuse of the mst vlnerabe in society.
No arrest no reelection...test your beleif in Burocracy its crumbling in your hands...!!!!!
Analysis of Tory policy and where it's gone wrong is welcome, but could we have some alternative strategies outlined? Or are we stuck forever in in a neoliberal doom-loop built on the micro-economic fallacies of composition it is predicated on (what is good for the individual must, necessarily, be good for the economy as a whole)?
We live in a feudal kleptocracy.
It still has a lot to do with the pensions becoming screwed up!..
People just bought an extra house and rented them out and waited for a rainy day...
The tories don’t care about those who will never vote
Yes, there will be pain. It's starting now and will build over the next couple of years.
When the value of someone's house starts to rise, they feel comfortable borrowing to fund more consumer expenditure.
That's the problem, our economy is built on a foundation of sand, which is consumer credit.
People don't think about the total amount borrowed or the interest rate - all they think about is the monthly payment.
Nobody will sit and do without now for any length of time to save for something - it's been too easy to borrow.
Same with buy to let landlords. They can leverage their capital 10 to 1 with mortgages, and skim a bit of profit after payments are made - but as soon as the interest rates rise even marginally - they are upside down in the investment.
If the houses/flats are bought outright , interest rates and short-term price fluctuations don't impact you at all.
It isn't just the Tories. Labour didn't build social housing when in power. And they are clearly promising to do the same under Starmer. increasing the supply of actual affordable housing would reduce the value of property, something neither Starmer, or the New Statesman are interested in.
Labour was in power 12 years ago, that's enough time for Tories to have sorted out the mess.
Blair’s Labour continued a softer version of the right wing neoliberal consensus. Starmer is playing defence for the interests of private capital. A reset of a dead economic system is required, both for the environment and for the quality of peoples lives. But none of those solutions or replacement systems are from the right wing of the political spectrum, hence the resistance of the elite.
Labour have got rid of Right To Buy in Wales and the SNP have done so in Scotland, before those repeals were implemented, social housing had been in decline in both regions like it is in England, now it's on the steady increase and will no doubt spur on further economic stimuli in those regions vs England, as the cost of doing business there (lower wages due to lower rent/mortgages) will yield better returns than landlord dominated England when it comes to procuring cheap labour.
supply over demand won’t have a damaging issue if you ensure a steady demographic growth, however the unfair help to buy scheme is disastrous due to the fact it works for the bankers interest and not the buyers
Bankers’ interests, not the buyers’. Ffs, learn about how to use apostrophes for possessives.
Buy to rent owners have added to the problem. Houses used as an income rather than a home.
Silly ...if it is rented out, it is soonest home !
Help to buy, as well as obviously driving up prices, also was actually a REWARD after buying scheme. It diddnt help you buy a house. It just gave you money back after you did. If you diddnt have enough money to buy, then help to buy diddnt help
And what was the excuse back in 2000s when house prices really started shooting up out of control and when salaries were far lower than today? Truth be told it's stupid consumers who pay stupid amounts of money for places and greedy estate agents who push top dollar!
You came into my feed - I love discovering new UK social/political/eco channels that research and explain simply. Thank you
then watch the Wolf Street Report
Thanks, glad you like it!
The more people move to the UK, the higher house prices will go.
When I bought my first house in 2001, I could only borrow 3x my wages, or I could not get a mortgage, but now it's a lot more. By 2006/8, mortgage company were giving you more than what the house was worth pushing up prices, and by this time, my first home had gone up in value by 4 to 5x in just 8 years and this was during the time when labour was in power coursing the 2008 crash were people were borrowing more than they could afford. So, I'm not sure how its conservatives had done the damage to the housing market 🤔. And we can not go back now, as this would kill the uk/world economy.
Regarding the wealth disparity, if you were on a £50.000 income and got a 2% pay rise and someone on £20.000 and got the same increase, 🤔 is better off, and this has been happening for years. This has not helped with the divide. We need to start looking at the increase to wage value to resolve this, and it's going to take years to get there.
Some people think like Communist ideology, the suggestions they mentioned are anti conservatism. England tried other methods which happened to be unworkable.
Build, build and build? There are nearly 700,000 empty homes in England alone.
Why no mention of banking deregulation?
Over the last twenty years we have been subjected to the longest prolonged period of the lowest level of Interest Rates for the last 5,000 years! It took the BOE over 300 years to create the first one trillion pounds, and only eight years to create the second trillion. From 2000-2008. Under New Labours complete lack of regulation, (Neo-liberalism) the Banks poured hundreds of billions into the mortgage market in order to inflate histories biggest credit bubble, before demanding a bailout..
The bubble should have popped in 2008, but in 2009, Labour announced QE, which allowed our central bank, (along with the FED) to keep IR at historic lows and keep house prices high. New Labour made BTL attractive, and in doing so priced millions of middle income earners out of housing. In 1997 the average FTB was spending 17.5% of their net pay on their mortgage, and the average house cost 3.3x individual salary. By 2008, that FTB was spending 50% of net pay on their mortgage and the average house had risen to around 10x salary!
They inflated house prices and then bailed them out in 2008, 'propping up' house prices at around 10x salary!
Which was always completely unsustainable.
One reason BTL took off, was because Brown abolished dividend tax credits on pension funds. Companies saw the writing on the wall and immediately ended their final salary pension schemes to new employees shortly after the 'Brown raid', those funds were then channeled into fuelling a BTL property bubble, as all the houses, which used to be acquired by FTB's were then bought by BTL investors, to be used as their pension.
Tory/Labour - both unspeakable banker puppets.
The availability of easily accessible credit at historically low IR was what fuelled the bubble.
Now thats over, house prices will collapse over the next 6-7 years....
Its an evil system which causes more damage than actual wars. The 2008 banking crisis pushed over one hundred million people over the poverty line, and it was entirely avoidable, with half decent regulation.
...Boom and Bust is the banking model...
F*** Labour. F*** the Tories.
Vote4some1else.
I enjoy these videos a lot, but would suggest turning music down (and ideally not use any music)
Hi! Thanks for your feedback - duly noted!
We have an incredibly distorted housing market thanks largely to the Conservatives since Thatcher but New Labour did nothing to help to its eternal discredit. This distorted housing market distorts everything else in the UK economy, in particular it encourages more investment in houses and offices instead of in British industries. We desperately need a controlled and gradual decline in house prices back to the salary multiples we had in the 1970’s before Thatcher hatched her evil plans.
I am sorry to burst your bubble. On the week of the mini budget the Federal Reserve had a meeting on the Wednesday night and raised base rates 0.75% the Bank of England in its meeting on the Thursday raised rates by only 0.25%. This was the main issue that caused the treasury markets to tank and the outcome has been that the bank of England is now following Fed rate rises in tandem. As to the housing market crisis recently house prices rose to 9.92 average earnings. Now mortgage rates can be run of fixed or floating rates. Floating rates run of base +1.5-2.0%. Fixed rates are funded by the lender taking out a fixed term loan for a fixed period and lending the funds to fund mortgages. The cost of fixed funds are derived from teh rates on Treasury bonds. Due to rising inflation 5 year fixed Gilts have risen in the past year from 1.4% to 4.5%. So the UK government funds at 4.5% a bank might get 4.7% and so adds a 2% margin so thats 6.7% plus the loan amortisation means you pay 7.7%. Thus in effect the whole country will soon be paying 77% of its gross income on mortgage payments or house prices will reprice. The answer house prices will reprice they will not stay at nearly 10 times average earnings. The last time this happened between 1988 and 1995 house prices were 5.75 times earnings wages were rising at 7-8%pa and house prices fell 22% to a level of 3 times earnings where everyone could afford a house and the market stabilised. As house prices are now nearly double that in terms of income expect a far larger fall.
Its not exactly like New Labour helped much either 😑
So tired of the 2 party duopoly
They have increased interest rates to reduce inflation
Its almost as if Thatcher and her predecessors ideology is faulty when applied to the real world. Greed is not good.
Yes she sold houses off that were not hers to sell. Depriving councils of income from rent and assets.
The reality was that the housing portfolios housed a lot of the poorest tenants using council workers for maintenance resulted in an overhead for councils not income. The rents were low and the costs of maintenance high. They never sold the assets and when the government forced sale they never got teh proceeds.
What. Alive does the plonks elevator music add to a serious documentary? Answer: none. It detracts. Kill it.
That was meant to say " what value" not what. alive." Predictive text!
I hope house prices eventually halve. Then maybe our kids could afford to get on the ladder. Thatcher may have started it all off with right to buy but it was the Labour govt removing the cap on bank loans so with increased demand a 2-2.5× mortgage grew to a what 7x?? mortgage. Scandalous...as is 228 thousand uk houses standing empty. Multi occupancy poor grade flats with landlords making a tidy some also needs sorting. Blimey so much to do! Use for some of that former EU money perhaps?
Blair’s Labour government continued the right wing neoliberal system thatcher started, they just used a softer version of it.
Wow! Thanks for that report. You really are a little ray of sunshine aren't you 🤨
Lower volume on the backing music higher volume on what people are saying please
great please let house prices fall so that myself, a student might have.a chance to buy.
Guy Fawkes needs to come back
Lovely. Very interestingly different from the US. One can see a definite theme though. Big government does stupid things, both sides blame the other for the foolishness, yet no one thinks maybe the government should stay the hell out of market.
Big housing companies should be forced to build on land within a set timescales or sell the land on after being cut up into single building plots…..
Alternatively sell off all the land for social housing if not planing or built on within a 1 year period this force the hand of these big companies…..hopefully stop them land banking huge swathes of building plots…..
Don't mention brexit
Because of this the BOE can't raise the interest rate high enough ti lower inflation
Yes absolutely
Housing should come under health
4 jobs and we still cant afford to buy the standard way. Regulations and zoning laws makes buying the non standard way so opaque that its not worth it.
Why not just say house haven't been built at the rate which matches population increases? You say there's all this demand by cheap money, but not that there's a constrained supply. Its constrained supply which raises the prices, which makes it lucrative for speculators to invest in because of the high costs, which gives the illusion of power to certain very settled demographics who already own their own homes. You either have to build more densely which is unpopular, or build outwards with more suburbs which is also in certain areas either impossible because of restriction rules or also unpopular. Everyone just wants to have their cake and eat it too and pretend there's no knock on effects because so many peoples brains go absolutely haywire the moment you mention houses. There's just too much self interest and money in it all and its fucking over the country, even this video was a bit hands off and kids gloves about it all.
Nothing in the US, or in the world, will ever change for the better for the 99%, for us, the people, not as long as this ‘leftist’ - ‘right wing’ etc labelling doesn’t stop, or the thinking in ethnic or social minorities, like Blacks, Indian, Latino, migrant, LGBTQ… etc… People of these minorities have much more in common with each other than divides us. We are all humans, we all want to live in peace, raise families, see friends, help neighbours, sing, dance, play, love, live life and prosper.
There is only one minority that all others should face and oust from political power, the one minority that has convinced the rest of us, that it’s ok for them to control us.
Belonging to this minority is absolutely essential to ruling the world, one that allows leaders (contrary to democratic values) to spend billions on election campaigns, on manipulating the public dialogue, to throw billions of your tax money at the military industrial complex, at energy, water, real estate, pharma, food, agriculture or mining corporations and tell you the people, it’s for your benefit, for your freedom, for your democracy, one that allows them to buy off other politicians and lobbyists, one that allows them to live off interest free loans and pay no taxes, one that renders them untouchable gods to 99% of you, and it isn’t ethnicity.
Indian-British, African-American, Caucasian, Asian, Latino, Francophone, Farsi, Arabic, Tagalog, Suaheli, Slavic, Mandarin… etc… seriously?
Who cares, we all want the same!
Inequality, working poor, widespread lack of emotional intelligence, ignorance, arrogance, the exploitative treatment of the global south by corporate powers, excessive ravenous consumerism, poor idiot fools celebrating the super rich, social media influencing, the treatment and enslavement of refugees, slave trade, exploitation in general, devastating exploitative mining, fishing and logging, brutal, devastating animal husbandry and meat production, devastating industrial agriculture, the emergence of deep sea mining, land theft, water theft, corporate imperialism, devastating monocultures, oil and gas theft, mineral theft, wars, disinformation, division, spread of hatred, climate change, biodiversity loss… all to squeeze more profits out for the elites, who keep getting richer, and richer.
Language barriers? Ethnic differences? Nationalities? Who cares?
We’re all one, unless we move together, we’re but substrate.
This one minority, the capital elites, throw billions at the media, at presstitutes and at social media influencers, indoctrinating school children, students and workers, poisoning the consumer junkies… all to make the people believe that their minority (the capital elite) is ok, it’s fine that they rule, while dividing us, the people (all other minorities) along our little puny differences, like skin colour, gender identity, religion, language or place of origin etc… thus preventing us all from uniting and ousting this puny little, parasitical minority (the capital elite) from power once and for good.
So Trump got indicted, who gives a crap about Biden’s laptop, or Obama’s absurd Nobel Peace Price, we are being ruled by the capital elite minority, while we quarrel over irrelevant nonsense, they laugh at us, their boot in our neck, our faces in the dirt.
So, again, Indian-British, African-American, Caucasian, Asian, Latino etc… seriously?
Who cares, we all want the same!
No matter where we’re from, we are dreamers and makers, beginners, builders, scientists, movers, instigators, givers, leaders, helpers, runners, growers, lovers, healers, thinkers, lenders, workers, protectors, inventors, mediators, teachers, activists, friends, philosophers, dissidents, intellectuals, musicians, rebels, artists, poets, riddlers, wizards and witches, and problem solvers…
We are people, we all want the same!
People move, People change, People evolve, People make culture, People are culture.
Cultures emerge, mix and mingle, they live and celebrate…
Cultures fade, melt away and disappear.
We are all in motion, all of us… navigating a world out of control…
Who’s navigating?
The real reason is that there are not enough houses on the market, not that there are too many people buying...
keep in mind that investment funds can buy if they rent out, that won't reduce the availability of housing. Empty houses will.
So sell now if you planned to do it in the next few years otherwise ride the next recession out
£350 is a lot of money
Sunak probably wouldn’t think so.
You only have to look at America, to were we are going
If aliens visited the planet earth and realised that we've created an economic system where buying a house to live in has become a significant economic bet, they'd think we were fucking nuts - and they'd be right.
I hope they are right
Another reason many landlords are getting out of the market is that the UK gov put forward a moratorium on evictions during covid and many renters who were just getting by used that as an excuse not to pay rent for the better part of a year.
It cost some landlords many thousands of pounds in lost rent and waiting to go to court to get an eviction order, and even if they got the CCJ order for owed rent, there is no way to enforce that if the renters don't have any money. So the landlords were left holding the cost of the govs decision. There was no bailout or funds to cover this. The gov just hung them out to dry. So if a couple got a second property as a source of income to see them through retirement, that ended up costing them more than it was worth.
The housing market in the UK is all about making money, be that for the construction firms who limit supply to drive up prices. Some larger investment companies that own thousands of properties, or the lawyers and courts who make a good living on the eviction process. Because tenants can't voluntarily leave a property as they wouldn't be considered as in need of a house or homeless by the local social services, so they are forced to wait to be evicted.
RightToInflate & HelpToBubble
I've been seeing 6%
If you allow very big mortgages, you get very expensive housing. The music has now stopped as it always does. Well done Labour and well do the Conservatives. 🤔Economics stupid is an new religion. The only tool is to stimulate. Stimulate to hold power.
Sorry, but didn't labour do the same especially in the mid two thousands.
Can't afford to live or even Die anymore, what to do?
Buy to let is haif the problem
Thatcher was the beginning of the end of fair play and decency ,
Thatcher was a counter revolution by capital against the post war consensus system. These are always the results of right wing systems.
Conservatives deregulated the housing market in Norway in the 80'ies. That led to the first housing crisis in 87 when banks was bailed. Now we need new politics to get back to affordable homes and a society that get out of debt prison.
“ when Banks was bailed”. Banks is a plural noun. It requires a plural verb. “ when banks were bailed (out)”. Ffs, what happened to UK education to produce such a vast pool of semi-literate people?
'There's alot of people that are going to suffer'. Jesus what an angle.
Who in their right mind wants to live in Brexit Britain?
I suppose its ' there's alot of people that have to"
I can’t afford a house because my income is low. I couldn’t afford a house when I worked. That’s not anyone’s fault is it. Houses are generally not affordable regardless.
It's easy to blame the conservatives, but rises in housing prices with stagnating wages have been a global phenomenon. Just as rises in interest rates have. Countries with either left or right majority governments have fallen prey to the same naive notions of enternal low interest rates and infallible capital growth.
The fact is that if there was less interference in the market by governments themselves the housing sector could better self regulate and people wouldn't have to spend entire life earnings on a 50 year old brick and mortar 2 bedder in the sticks.
8% drop prediction is absolutely crackers. It'll be way, way higher. Nobody is being honest about how bad it's going to get.
I’ve been waiting for a crash for 20 years - i gave up. Doesn’t seem like it will ever happen, cause it would talk a significant number of forced sellers, which I doubt there will be any without some external event causing mass unemployment (which I would not wish on anyone)
Thought this was going to be an intelligent critique of our housing market and the problems that come from our attitude to housing, but in fact it was a bunch of platitudes.
They have done that on purpose
JFC, hire an audio pro, and fire that intern. music is awful, unnecessary, and overbearing.
Lose the music.... it is annoying
And between 1997 and 2010? Who invented QE in 2008 again? It's the banks and politicians, no matter the type.
It is a matter of type. We’ve had a right wing economic system for the last 40 years, and 170 of the past 200. Those 30 years we didn’t is when things improved. That was also the period the central banker didn’t matter, because they only matter in right wing systems.
All pretty true... but there's larger factors at work as well which compound the problem , see ua-cam.com/users/GarysEconomics for more. It also explains why house prices can ONLY GO UP. And who is to blame for that and how to fix it.
Mellenials Gen Z…bring.on the recession baby 🙌
The BOE had a right to raise rates when the house prices started escalating but no. Politicians can’t have that right ? 🤦♂️
Remove the annoying music.
It started before the Tories.
I doubt house prices will fall, at least in the south of England. I expect the super rich will keep on buying up houses as reliable assets and prices will continue to rise.
If that's your view pal you in for a big nasty shock.
@@Tony_Teacake Without a house of my own I do hope that high interest rates will cause the housing bubble to deflate but I am skeptical. I expect people with big bank accounts are going to snag a lot of bargains in the next 18 months