Reply to: Giving unemployed Britons “new hope and responsibility” by Cameron

[Zero Liability]

If availability falls because all the BTL'ers are now selling up, then property prices fall and a lot of those tenants can now afford to buy. High availability is a bit pointless if the people that need it can't afford it.

The point was to stop large amounts of tax payers' money pouring into the hands of private landlords in the form of housing benefit, which certainly doesn't help the people it purports to.



Fair point. But then we'd have no banking system and personally I think bartering for everything would get tedious.

I don't think that necessarily follows. This is what the bankers are inclined to claim, but what's the evidence for it? Who is to say more competent institutions would not take control of their assets? The problem is a lot of the debt they issued and hold is junk. The system does require a 'reset', which will entail a recognition that said junk is junk. Either way, the supply of property is the issue, as is trying to 'resuscitate' it through schemes like H2B etc.

If the central banks lose control of the current monetary situation, they may have to force the banks to take huge losses (by increasing their reserve ratios), or risk uncomfortable levels of inflation, amidst a number of possible scenarios.

That's the problem with tinkering with a somewhat free market, it doesn't always do what you'd like it to, especially when global forces come into play.

FTFY

[original PM]

FTFY.

In fact, we could make a film of it all entitled "A New Hope".

Who wants to be Darth Vader?

whichever poster has the worst asthma!??

[AtW]

I see this rather frequently with my esteemed customers.

It's never their problem, it's always mine.

Until I give them a swift reality check.

You work in a prison, right?

[VectraMan]

Why? Rent control makes it worse. Availability falls as does quality. If you happen to have a home when rent control is introduced it's not so bad, but it makes it worse for every other person who isn't already in a rent controlled house.

If availability falls because all the BTL'ers are now selling up, then property prices fall and a lot of those tenants can now afford to buy. High availability is a bit pointless if the people that need it can't afford it.

The point was to stop large amounts of tax payers' money pouring into the hands of private landlords in the form of housing benefit, which certainly doesn't help the people it purports to.

If you want to fix house prices then let banks fail. Simples.

Fair point. But then we'd have no banking system and personally I think bartering for everything would get tedious.

[SpontaneousOrder]

I wonder if what we need is a dose of rent control.

Why? Rent control makes it worse. Availability falls as does quality. If you happen to have a home when rent control is introduced it's not so bad, but it makes it worse for every other person who isn't already in a rent controlled house.


If you want to fix house prices then let banks fail. Simples.

[vetran]

It would probably be cheaper to start building council houses again

do you know how much a council house costs to run? The TCO is probably ruinous which is why all the council housing moved to housing associations.

We could free up Council houses by raising the rents and increasing the means tested housing benefit meaning that as renters get richer they are encouraged out of council houses (see Bob Crowe) currently a council house tenancy can be as profitable as a lottery win.

[doodab]

It would probably be cheaper to start building council houses again

You would be surprised how much housing benefit is paid out to people living in what used to be council houses.

Still, selling them off along with the state owned utilities paid for St Margaret to bribe us all with tax cuts so it can't be all bad.

[Jog On]

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ZG for President!

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WHS

[MicrosoftBob]

Housing benefit has certainly distorted the rental market. Perhaps they should be taking a harder look at that. The trouble is of course that reducing it considerably will have a knock on effect on house prices and no government wants to cause that.

It would probably be cheaper to start building council houses again

[original PM]

\ 0 /

ZG for President!

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[doodab]

It's a perfectly cromulant word.

It's insane that working people also get benefits and proves that there's something fundamentally wrong with our economy. But it's not that minimum wage needs to rise; it's that the cost of living needs to fall and the biggest problem with the cost of living isn't electricity or gas or food, it's housing costs. I wonder if what we need is a dose of rent control. A bit of a crazy socialist policy but it's got to be better than councils paying whatever landlords want to charge and ever spiraling housing benefit costs. Also it'd stop BTL'ers pricing everybody out of the property market.

I'd agree, as a proportion of income housing costs are far higher here than somewhere like Germany. I lived in one of the more expensive cities and paid €900 a month through a specialist agency for a short term lease on a one bed flat, it would have been more like €550 on the open market, less than 10% of my post tax income.In London I'd pay more like 20% of my post tax income to live in zone 3 or around 40% for a place in zone 1.

That's the problem with a free market, it doesn't always do what you'd like it to, especially when global forces come into play. I think particularly in London and the SE the influx of foreign investment and BTL more generally has distorted house prices, and the general shortage of housing means many lower earners are simply priced out of anywhere except the slums, even with housing benefit.

Councils don't pay whatever landlords want to charge however, it's assessed and limited, so a family of 4 with two young kids for example is considered to need a 2 bed flat, and each area has a scale of the maximum it will pay for such a property. Around my way that's about £3-400 less than the market rate for a 2 bed flat at the lower end of meeting the minimum standard you'd actually want to live in, and about half what I pay for my family home.

[original PM]

Anecdotes aside I went to see my Mother-in-law recently she lives where I grew up and from what I saw driving there nothing has changed one bit and things are even worse now in terms of the entitlement culture

It is not so much entitlement as it is the fact that for some reason there is a culture of people who think that if they have a problem of any sort then there is someone somewhere whose job it is to solve it and thus you just need to pick up the phone and someone somewhere will solve the problem.

You saw it a lot in the floods recently - -

"My house flooded last year- - it has flooded again this year no one has done anything about it'

So my question is what did you do about it? Why is it always the job of someone else to do something about it?

That is the culture that the UK cannot afford

[doodab]

Getting house prices and rents out of whack was most damaging, back in the late 90s you could trundle along in a low paid job and make ends meet. You have to think that in work benefits contributed to the rise.

Housing benefit has certainly distorted the rental market. Perhaps they should be taking a harder look at that. The trouble is of course that reducing it considerably will have a knock on effect on house prices and no government wants to cause that.

[VectraMan]

Also, "click on image to embiggen"

It's a perfectly cromulant word.

It's insane that working people also get benefits and proves that there's something fundamentally wrong with our economy. But it's not that minimum wage needs to rise; it's that the cost of living needs to fall and the biggest problem with the cost of living isn't electricity or gas or food, it's housing costs. I wonder if what we need is a dose of rent control. A bit of a crazy socialist policy but it's got to be better than councils paying whatever landlords want to charge and ever spiraling housing benefit costs. Also it'd stop BTL'ers pricing everybody out of the property market.

[The Spartan]

stop giving them money - they will starve

problem solved!

(probably not though)

Anecdotes aside I went to see my Mother-in-law recently she lives where I grew up and from what I saw driving there nothing has changed one bit and things are even worse now in terms of the entitlement culture