General Election - 4th July 2024

[Mr Kobayashi]

That article simply isn't true. Saying Londons (Greater ) population hasn't grown since 1945 is completely disingenuous and the whole article based arround this lie. It fell from a post war peak up until about 25 years ago. But since then it has grown rapidly and is now higher than it has ever been. Check it out its a fact.

The UKs population has also grown I note the article doesnt dispute this it just conveniently ignores it.

Secondly people don't want to live in terrace houses they want modern houses with more space. Add these two points together and you have the need to build more houses. Supply isn't meeting demand.

This one article is not the entire source of my knowledge or argument.

This is something I've spoken about before. People also want more space because it makes sense to speculate and buy more if the price of the asset is bound to grow and you can afford the repayments. Single people in large houses previously occupied by families. see Danny Dorling.

I'm not even sure why this argument is still going.

Worsley admitted it wasn't something he could argue against. Are you more Catholic than the pope?

 

[Churchlawtonblue]

This one article is not the entire source of my knowledge or argument.

This is something I've spoken about before. People also want more space because it makes sense to speculate and buy more if the price of the asset is bound to grow and you can afford the repayments. Single people in large houses previously occupied by families. see Danny Dorling.

I'm not even sure why this argument is still going.

Worsley admitted it wasn't something he could argue against. Are you more Catholic than the pope?

Three points.

Firstly i'm not Worsley lol.

Secondly, you need to accept that the population is expanding. And the article you linked was incorrect.
Shock horror journalist gets simple facts wrong. Even in the Guardian!!

Thirdly largely because of point two but not soley, as housing type demand has also changed, demand is outstripping supply.

 

[BrianW]

A problem is that housing has become so good an investment. Pay 200k for a house, you know it will likely be worth 500k in ten years. In addition, because pensions have fallen apart, people see buying two or three houses and renting them out as a future pension income.

How you change this I don't know. It's a culture that has grown up over the years since Thatcher and the issue is that you have a big chunk of the population, maybe even a majority, for whom a rise in house prices is a Good Thing. Limiting supply is therefore quite popular! The fact that this shits on young people does not seem to be a major concern of any of the parties. Abolishing or reducing stamp duty is no answer. Far from it. Due to the laws of supply and demand, it will increase house prices still more, the only difference being it will move money from the government's pocket into those of fortunate private individuals. (Typical short-sighted Tory policy!)

It will be a bold government indeed that actively seeks to reduce house prices by creating a larger supply. Yet that is exactly what is needed. To make matters worse, the most active voters are those who have houses already, the least active are those in need of them. Politicians understand these facts.

 

[inbetween]

A problem is that housing has become so good an investment. Pay 200k for a house, you know it will likely be worth 500k in ten years. In addition, because pensions have fallen apart, people see buying two or three houses and renting them out as a future pension income.

How you change this I don't know. It's a culture that has grown up over the years since Thatcher and the issue is that you have a big chunk of the population, maybe even a majority, for whom a rise in house prices is a Good Thing. Limiting supply is therefore quite popular! The fact that this shits on young people does not seem to be a major concern of any of the parties. Abolishing or reducing stamp duty is no answer. Far from it. Due to the laws of supply and demand, it will increase house prices still more, the only difference being it will move money from the government's pocket into those of fortunate private individuals. (Typical short-sighted Tory policy!)

It will be a bold government indeed that actively seeks to reduce house prices by creating a larger supply. Yet that is exactly what is needed. To make matters worse, the most active voters are those who have houses already, the least active are those in need of them. Politicians understand these facts.

I still have the view that housing is not influenced by supply and more supply won't necessarily change things.

The real reason why housing has exploded over the last 20 years is because of low interest rates and subsequent access to finance. The rate of increase of housing prices recently has dropped, that isn't because of increased supply, it's because interest rates have jumped massively.

If interest rates stay high then no amount of new houses will change anything because nobody will be able to afford them and so they'll remain vacant. This is how housing markets crash and that's far worse as the economy will go with it.

There is no such thing as an affordable home either because it is physically impossible to build what we would call an affordable house. Land must be bought and land values will continue to go up. Inflation in recent years has made this even worse.

If we want 'affordable' homes then the only thing that can be done is for the government to subsidise housebuilding where housebuilders build houses and the government pays their profit, and then sells the home to somebody at cost. This still would require people to get a deposit and mortgage though which is fully dependent on interest rates and other financial stuff.

 

[BrianW]

There are X people wanting a house/flat/prefab.

There are Y houses/flats/prefabs available.

A classic example of supply and demand. My house is worth multiple times what I paid for it, but only because there's a long list of people who would like to buy it, even at its current stupid price.

Interest rate increases merely suppress demand as fewer people can afford to buy. They also serve to increase rents as most landlords are buying on mortgages and those that aren't see it as a good excuse to raise rents anyway. Rents are at a stupid level because people are willing to pay the rents - they have little choice but to pay as the alternative is a park bench or to move back with Mum. Moreover, because of our silly system Housing Benefit subsidies rent at taxpayer expense, thus pushing up rent still further.

I absolutely guarantee that if we built 50,000 new Council houses in Manchester the average rent in Manchester would fall, as the supply would be greater.

Houses are relatively cheap to build and housing developers make huge profits. The state could do this job much more cheaply, as it used to do. The main problem is the supply of land. Unfortunately, private individuals and companies hoard land as a speculation. In addition, we have never had land reform. Certain individuals and institutions sit on vast acreages of land, while everyone else has to scramble for what's left. Not easy to solve, unfortunately. The much-derided Human Rights Act protects property rights. My answer would be to introduce Land Value Tax, but scaremongers would see that as a tax on everyone's garden, which it need not be at all.

 

[metalblue]

Inflation was actually low during most of the pandemic. It only started to rise significantly once the world opened back up and much of it was as a result of rising energy prices which were also reasonable during the pandemic. It was worse in the UK than many other countries partly due to supply shortages as a result of Brexit.

Net migration is unlikely to come down straight away under Labour but the notion that the Tories are the party of low immigration, low net migration, low taxes, and economic competence has been completely and utterly destroyed over the past 5 years.

And why you can’t accept that mortgage interest rates rocketed as a direct result of Truss and Kwarteng’s utterly reckless budget is fucking beyond me!

On inflation it’s a bit more nuanced than that for UK. Brexit wasn’t the cause, it was high shipping costs as the world unlocked, and we’re an island, the Rep of Ireland also suffered similarly to us (in the EU). Now that said if you overlay the additional red tape etc then if you’ve got a choice between Ireland be UK you’ll pick Ireland when demand is high so I won’t say Brexit didn’t have some impact but it was very very small probably unmeasurable in the overall scheme of things.

On migration, I don’t get the fascination with getting it “down”. All a country needs to do is work out how many people it can absorb each year and that’s the net migration you aim for. it maybe higher or lower than it is today, I’ve no idea as I’ve never seen anyone come up with that number - and if you forward plan that number can always go up.

On mortgage rates - Truss fucked us, however she was short lived and any impact of her policies are no longer reflected in the current rate we pay. Anyone who fixed in the immediate aftermath will of course be lumbered with her policies for a time yet. They do serve as a reminder that government policy has to be sensible - she was as un-Tory as they come in that regard.

 

[Kompany Car]

There are X people wanting a house/flat/prefab.

There are Y houses/flats/prefabs available.

A classic example of supply and demand. My house is worth multiple times what I paid for it, but only because there's a long list of people who would like to buy it, even at its current stupid price.

Interest rate increases merely suppress demand as fewer people can afford to buy. They also serve to increase rents as most landlords are buying on mortgages and those that aren't see it as a good excuse to raise rents anyway. Rents are at a stupid level because people are willing to pay the rents - they have little choice but to pay as the alternative is a park bench or to move back with Mum. Moreover, because of our silly system Housing Benefit subsidies rent at taxpayer expense, thus pushing up rent still further.

I absolutely guarantee that if we built 50,000 new Council houses in Manchester the average rent in Manchester would fall, as the supply would be greater.

Houses are relatively cheap to build and housing developers make huge profits. The state could do this job much more cheaply, as it used to do. The main problem is the supply of land. Unfortunately, private individuals and companies hoard land as a speculation. In addition, we have never had land reform. Certain individuals and institutions sit on vast acreages of land, while everyone else has to scramble for what's left. Not easy to solve, unfortunately. The much-derided Human Rights Act protects property rights. My answer would be to introduce Land Value Tax, but scaremongers would see that as a tax on everyone's garden, which it need not be at all.

Fully agree with a Land Value Tax and it’s fairly easy to exempt gardens of existing properties by placing a 30yr development covenant with respect to the construction of buildings if the land is classed as a garden.

The thing that does my head in regarding landlords and the rental market is this link they make between the interest rates going up, meaning it’s directly passed onto the renters, yet it’s apparently an alternative to a pension for them.

If it truly is an alternative to a pension, then like every other investment there’s risk. The interest rates going up is the risk element of having a rental property with a mortgage. The fact that regardless of the increase in costs of servicing the mortgage each month, the landlord gains more equity in the property seems to not count to them.

It all comes down to having working rent controls and standards which must be met in terms of the property and it’s maintenance. Put that in place and it takes out the slum landlords and reduces the exposure of renters. That should remove a number of landlords from the market who are highly leveraged, i.e not those who are truly investing as a pension alternative.

 

[metalblue]

General Election Prediction

The state of play. It has changed quite a bit over the weeks.

That’s quite a neat site. You can make your own predictions. If you look at the polls you can see a potential narrowing occurring - it won’t show through in the headline numbers as they are trailing averages however it is potentially significant if sticky



Assuming no further fuck ups from anyone (big assumption I know) and the narrowing firms up I’ve got Labour finishing with a 92 seat majority with results as follows:

Labour on 35% of the vote (371 seats), Tories on 30% (173 seats), LD 12% on (60 seats), SNP 3% (18 seats), Greens 6% (3 seats), reform 9% (2 seats), PC 1% (3 seats), NI is 18 seats then 2 seats to others.

 

[blueparrot]

That’s quite a neat site. You can make your own predictions. If you look at the polls you can see a potential narrowing occurring - it won’t show through in the headline numbers as they are trailing averages however it is potentially significant if sticky

View attachment 123612

Assuming no further fuck ups from anyone (big assumption I know) and the narrowing firms up I’ve got Labour finishing with a 92 seat majority with results as follows:

Labour on 35% of the vote (371 seats), Tories on 30% (173 seats), LD 12% on (60 seats), SNP 3% (18 seats), Greens 6% (3 seats), reform 9% (2 seats), PC 1% (3 seats), NI is 18 seats then 2 seats to others.

Don't think that image is the best. This is a clearer one of the campaign and it's pretty much flat lined for 2 weeks now.

 

[Churchlawtonblue]

There are X people wanting a house/flat/prefab.

There are Y houses/flats/prefabs available.

A classic example of supply and demand. My house is worth multiple times what I paid for it, but only because there's a long list of people who would like to buy it, even at its current stupid price.

Interest rate increases merely suppress demand as fewer people can afford to buy. They also serve to increase rents as most landlords are buying on mortgages and those that aren't see it as a good excuse to raise rents anyway. Rents are at a stupid level because people are willing to pay the rents - they have little choice but to pay as the alternative is a park bench or to move back with Mum. Moreover, because of our silly system Housing Benefit subsidies rent at taxpayer expense, thus pushing up rent still further.

I absolutely guarantee that if we built 50,000 new Council houses in Manchester the average rent in Manchester would fall, as the supply would be greater.

Houses are relatively cheap to build and housing developers make huge profits. The state could do this job much more cheaply, as it used to do. The main problem is the supply of land. Unfortunately, private individuals and companies hoard land as a speculation. In addition, we have never had land reform. Certain individuals and institutions sit on vast acreages of land, while everyone else has to scramble for what's left. Not easy to solve, unfortunately. The much-derided Human Rights Act protects property rights. My answer would be to introduce Land Value Tax, but scaremongers would see that as a tax on everyone's garden, which it need not be at all.

Bingo, your first sentence , simple supply and demand. Increasing population and not enough houses being built.