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Housing Policy

What is the housing policy regarding crazy high market; inaccessibility to credit and foreign investors buying to invest and not letting driving prices up ?

Comments

  • For a small but significant part of the answer to these problems, see my thread on Abolishing the City of London.
  • There are probably several threads to an answer.

    I find that local councils do not take their own affordable housing policies seriously. My council (Denbighshire) has a nice rule that says that a certain percentage of new-build must be "affordable", but in planning stages the large building companies cluster all affordable housing and stick it in one corner of the (long, thin) county while continuing to build "desirable" expensive houses elsewhere. Result, move away or live with your parents.

    As a nation we need to get over the idea that everyone should be on the mortgage ladder and own their own property. Other developed countries do very well with very low home ownership rates and there can be great benefits to rental over ownership.

    Of course, it is very hard for a government to take steps that will halt the rise in value of houses. The population is sadly a little short-sighted in believing that they are getting rich when they see the value of their houses going up. Similarly, an increase in mortgage rates could prove catastrophic to over-extended families and while it might cool the market, it would not gain votes (and would probably hurt the financial institutions that fund the major parties).

    We probably should also target the buy-to-let market. While someone has to own houses that are available for rent, the current assumptions by buy-to-let landlords are that they will make a killing on the value of the property, and that the rental is just something you do while you wait. As a result, it is almost impossible to rent a home if you are not a "respectable member of society." It needs to be illegal to refuse to rent to someone on the grounds that they are "on benefits", young, a single parent, etc.

    (Just ramblin')
    Adrian
  • Housing policy is something I take an interest in.

    Regarding letting, we want to implement rent controls.

    A lot of parties, including the Greens have been shouting about needing rent caps or some kind of cap.

    Having personally discussed the matter with experts, such as those in the People and Homes Charity in Shelter and looking at the evidence on Shelter's website, I put forward a policy for Rent Controls - NOT rent caps. This was discussed and voted on by the membership - now it's our policy, here:

    https://pirateparty.org.uk/policy/economy-and-jobs/adopt-rent-controls

    Evidence based policy at its finest.

    Note: Since we had this policy and I've been calling the Greens idiots, publicly, they have altered their policy some-what to be more "controls" as oppose to "caps" but again I don't think their policy making dude really understands the situation.
  • Seems to me like these policies should be linked together.
  • I single handedly finished a rather huge policy curation recently, whereby a lot of policies were merged or tidied up in some way. The same can probably be done for a few others but until someone volunteers it won't happen.
  • edited May 2016
    Might I suggest that since we are clearly going to need more houses built to deal with the housing crisis and we are facing sea level rise from climate change, we make it policy for the government to create some new 'mountain cities' (of 100% eco-homes, with the best insulation, renewables and Passive House stuff available) which are high up enough (FYI: recommended minimum altitude 80m above present sea level) to avoid having to play Flood Barrier Canute, and on land not suitable for growing food. They should also be built away from flood plains and the construction of buildings on slopes should be engineered such as it strengthens those slopes and allows drainage to function in the safest way possible. My first thought is somewhere near the M6 near the Lake District (to replace some of Carlisle and to add more housing besides), to be built with exceptional drainage (and rainwater capture/storage for use) due to the rainfall there. Similar projects could be done in Scotland (with lots of Scottish Gov involvement) and Wales (with lots of Welsh Gov involvement). Obviously we have to take into account SSSIs and National Parks and AONBs. But if this country managed to build Letchworth Garden City, Hemel Hempstead, Milton Keynes and Welwyn Garden City, maybe this isn't so farfetched. It took Milton Keynes a good 70 years or so to really become its own established city with its own identity, and when you consider the timescales of climate change induced sea level rise between now and us coming over all Dutch in terms of spending on dykes and pumps, we really need to get on top of developmental planning.
  • We've been doing the Dutch thing for a few hundred years now, in fairness. East Anglia used to be mainly islands and marshland, don't forget. The farmers might get a bit upset if we just let it all flood over again.
  • @DanFoxDavies @ThyPirateDave

    There is another angle that it's worth considering and is something I've personally had a lot of exposure to (from working in finance).

    In my opinion the principal driver of the housing crisis is cheap credit - cheap credit brought about by the deregulation of the mortgage markets. My beliefs are mostly draw from this study written by Geoffrey Meen at Oxford. To all our joy it's not available for free online!

    As mortgage markets have been deregulated since the 1980s, mortgage rationing has disappeared. Brokers, building societies and banks are able to sell an unlimited number of mortgages because they can sell on those risks they can't handle. This is different to other type of personal loans since those markets are less liquid and harder to move risk on. That means that the general public has access to a uniquely cheap source of credit exclusively for houses (unique globally as well (exc USA)).

    This is money that people wouldn't already have and can only spend on one thing; houses. That means more money chasing the same set of assets. Add to that that people with 'good credit' can borrow money even more cheaply so they can now have two or three houses for 'buy to let'.

    There are solutions. The easiest is to withdraw government assistance for borrowing to buy houses. Almost evert 'help to buy' scheme brought in by governments has focussed on increasing the amount of cheap credit in the marketplace. After that you can start to regulate the mortgage market and make it more expensive for retailers to pass risk up the chain; make them eat the shit they sell (so to speak).

    So why doesn't all this cheap credit, leading to great demand lead to more houses? Yes, it's a bit planning regulations and a bit government policy but mostly it's dynamics of a mortgage market. The mortgage markets most want to lend to 'credit-worthy' people (wasn't true in the US for different reasons) and 'credit-worthy' people have assets and are well off. That means they can borrow logarithmically more which pushes harder on houses that appeal to that group. Building is then focussed in one area and limited resources devoted to an almost infinite pool of money from the 'credit-worthy'. More houses are built and the money pool is able to buy them without a drop in price.
  • I must admit, I don't know an awful lot about housing and the mortgage markets, but I have heard that the government aid mechanism tend to make it easier only for those that already have houses. What you're saying about mortgage market and restricting risk selling makes sense to me though.
  • ThyPirateDaveThyPirateDave South Wales
    edited July 2016
    The credit market has crashed and boomed while the housing crisis remained so I don't think it is related (in terms of causation) to that.

    There are of course correlations between the house prices rising with credit but that isn't the cause, the cause is the lack of supply. To allow people to continue purchasing along with the high prices, banks offer more credit (else they wouldn't have any customers).

    Ultimately if you take the term "affordable homes" literally, as in, 20-40% of houses built are barely affordable by the average joe, the remaining 80-60% aren't affordable. If credit was so easily sourcable for everyone, people could afford it but they simply cannot. This means the houses are either going to investors abroad, at home or from people who have saved large deposits (which isn't as uncommon as one may think).

    Housing more EASILY affordable homes, along with affordable homes should be the priority but given just about every large building firm and housing association makes a healthy profit from the housing crisis... along with every landlord being able to keep high rents... AND the banks get to charge higher on mortgages, you're fighting against a lot of money to get things to change.

    Ken Livingston took them on in London and was never elected again.
  • I think one of the things that might help would be to force councils to take action against unoccupied dwellings. Councils already have the right to increase certain rates on unoccupied premises (at least in London they do), but the most affluent boroughs that tend to more heavily attract foreign investors have a tendency to not enforce these rates.

    Making it considerably more expensive to hold unoccupied properties where housing is scarce would both help to deflate the high-end of the market without too negatively impacting house owners that actually live in their property, and raise additional funds to put towards helping build new affordable housing.
  • ThyPirateDaveThyPirateDave South Wales
    edited July 2016
    Many councils are already taking action - whereby they now offer interest free loans that they like to call "temporary grants" or something stupid. However this was after a rather terrible implementation of other regs.

    Unoccupied dwellings drastically increased when they brought in the new energy efficiency regulation without providing support, grace periods or schemes to support the small, indie landlords. This meant any time a tenant made a complaint about their landlord to the council (even when the tenant had never complained to their landlord at all and not followed due process - which is a required due process in other industries) the council did a full inspection of the property to see if things like wiring, insulation, gas etc was up to scratch.

    This meant generally Landlords were given orders to bring their property up to current regs. Regs drastically and radically changed around the time EPCs were brought in and the vast majority most homes were not insulated well enough against these new measures. Additionally some councils require you use their electricians to check the cables and cannot use your own, costing several hundreds of pounds.

    This created a simple choice for the landlord. Upgrade your property to what would essentially be a new-build standard or shut down.

    Many chose to shut down as the rent return didn't even come close to justifying the cost of insulation and such.

    Councils created an environment where it was cheaper to have an empty house than it was to rent. This meant most landlords sold the property and down sized to something they could insulate or shutdown, while improvements were made in order to sell (can take a year or so).

    Additionally a lot of building materials are seasonal. Insulation costs more in winter, fencing materials cost more in summer. Landlords were not given the opportunity to wait until the prices of materials would allow them to continue renting, so inevitably they could not afford to let the property.

    If the councils handled the initial implementation of insulation and other regs properly, there would be far fewer empty homes.

    That being said, I do believe a rule that if a home is now empty, with no intention to sell and no on-going works of improvement, there should be some process in order to help get the house into a dwelling that can be occupied. I also believe that properties such as abandoned old pubs (we get a few of those around here) should be allowed to be converted into housing.
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