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Tuesday, 6 October 2020

 Chloe Bright New Star of GenerationRent

There’s a bright new star writing about the crisis in the housing market, and specifically the lost ‘Generation Rent’. Because of sharply rising house prices far fewer youngsters can afford to buy a house, and are forced to carry on living with their parents or try their luck on the for-rent market. Chloe isn’t just reporting the generally horrid facts about the reality of renting in England today, she has got out there and interviewed many of the ‘players’.

But Chloe doesn’t stop at the ‘point-and-sigh’ stage, she wants to know what is causing the problem, and why. The main cause of the crisis is that prices have been allowed (by politicians) to get completely out of hand, rising to absurd levels. She gives a very good explanation of how we have arrived at this sorry state through the liberalisation of credit and mortgages, pushing up prices. The alternative public rental sector has been starved and shrunken via sale of council houses. Governments respond by Help-to-buy schemes which only make things worse.    Read on 

Thursday, 11 June 2020

THE POLITICS OF HOUSING A report from the National Housing Federation NHF By Keohane & Broughton, published in  2013

Now this should be useful! And it starts well:

“The affordability problem dominates England’s housing market: an increasing proportion of disposable household income being consumed by housing costs; difficulties for younger generations seeking to access the housing ladder, despite aspirations and expectations to do so; and, very long waiting lists for social housing.

Brilliant! They get it. Houses are too expensive. Prices must fall. 

Friday, 29 May 2020

Why would they ever love losing their Wealth as a result of LVT ?
Here’s our proposition: We've decided that wrapping up all of the current taxes on property -- Council Tax, Stamp Duty, IHT, ga-ga Granny Tax, Housing Benefit etc. -- and  transform them into LVT. But how on earth are the politicians going to sell that idea to the 60% of the population who are owner-occupiers and their families? Think of the reactions:

"Watch the price of your house drop to one-third of its present value."

"Be forced to pay tax even if you don't earn a penny."

"Pay the State for something you thought you owned outright, or have the very land under your house nationalised, just like they did in Soviet Russia."

Sunday, 24 May 2020

BANKS ‘Too Big to Fail, Too Big to Jail’ 
The Politics of BANKING and LVT:
During the Great Financial Crash of 2008, caused by the reckless behaviour of the bankers, our government rushed in with our money to rescue them. In the aftermath very little was done to change the way banks operate, and not a single banker went to jail for their crimes. (Big Short ref). A more stunning example of power over the political system is impossible to imagine (unless you include a virus like CV19!).

LVT would threaten to wipe out 75% of the banks favourite retail business – mortgage lending. To break another side of the Iron Triangle that is clamping the Housing Market, namely Banks and Finance, we are up against a formidably well-connected political force. Money power sometimes seems greater than political power, so can the banks be persuaded or compelled to go along with LVT?

Monday, 18 May 2020

Can they change? Might they WELCOME LVT?
So the housebuilding industry, working to its current business model is a failure. It is certainly not producing enough houses. Those that are built are of poor quality. But the greatest criticism is the price of these new houses increases year-on-year. Who is to blame for this mess?
It would be wrong just to heap all the blame the builders, as Liam seems to do. They are compelled to follow this business model, which only politicians could fix.
But the builders are not completely blameless. Their lavish funding of the Tory Party reaps its rewards, and sways the actions of government ministers. (Liam seems to find it especially reprehensible that Tony Gallagher a successful property developer hosted the 50th birthday party for David Cameron).
Not a normal industry

How would the housebuilders (one arm of the Iron Traingle locking down the housing market crisis )react to the imposition of LVT? 
 Before answering that I have to explain the strange beast that is the house-building industry.
We rely on the house-building industry for our supply of new houses, but we blame them for vastly under-supplying our needs. Perhaps if we understood the production methods which they are forced to follow we could see what is preventing the housebuilders from doing more. Understanding the peculiar characteristics of the spec-builders is essential if we are to find ways to help the housebuilders do better, build more and most of all get prices down.

Thursday, 16 April 2020



and very little else

Steve Keen, one of the very few economists who DID see the 2008 Great Financial Crash coming has posted the clear-cut evidence that it is Mortgage Lending that drives up house prices. Here's the graph for theUK followed by the explanation.
The impact of that increased debt for the household sector has been simply higher house prices. 

Putting it simply, most houses are bought primarily with mortgage debt, rather than out of income. 

So the monetary flow of demand for housing is primarily the flow of new mortgage debt. Divide this by the number of houses for sale, and you have a rough measure of the average demand price per house. 

Given how inflexible the supply of housing is, the change in this flow of demand is the primary determinant of the change in the house price level. 

So all this additional debt has done is simply drive up house prices by higher leverage.”