Single Aspect Blog

I do love my readers.  So often somebody will type something into Google which sums up the situation better than I have so far and either leads me on to new knowledge or summarises a situation very well.  Such is the above (from Norwich I think).  If it was you, thank you and I hope you enjoyed reading through the long exchange between myself and Mizzentop the other day at https://www.singleaspect.org.uk/?p=9450

It’s been housing week in the Guardian this week.  Unsurprisingly perhaps.  Most of their usual columnists have had a go at some aspect of it generating scores of comments.  These two comments are from last year but no less relevant for that.

Sudders

10 August 2010 10:59PM

Council houses were never meant to be for those with a short term emergency need. They were to provide long-term secure, stable housing who provided the work force of this country. Maybe some of these could afford housing on the private market, maybe not.

As for subsidy, last year the treasury received more in rent from council house tenants than they payed out to maintain the stock. Hardly a subsidy. Once upon a time people called council houses their home with pride. Living in a council house was a symbol of membership of a larger society, working together for everyone. In the 70s the majority of people in cities like my native sheffield lived in council housing. Only a very small percentage of them received any subsidy or benefit in order to pay the rent.

 

HarryTheHorse

11 August 2010 4:39PM

burgerau205

Why is is `appalling’ to permit council house tenants to buy their homes?

It is legalised theft from the taxpayer. If someone wants to own their own house then they can buy it on the open market. Why should they expect to purchase a public asset for a knock-down discounted price? Cameron’s attitude to council hosuing is a classic example of doublethink, the holding of two contradicting ideas at the same time. Cameron says that it is unfair that tenants should be allowed to stay in their council houses indefinitely because that stops more deserving cases from occupying those houses yet his government is quite happy to sell the house and lose it from the stock of public housing forever. Any normal person could see that these are two contradictory attitudes.

https://www.guardian.co.uk/commentisfree/2010/aug/10/cameron-radical-labour-planet-1945

arryboy

26 November 2011 12:14AM

The problem’s exacerbated by the “right To Buy” scheme. Check out the number of ex council homes sold off at a discount, that appear on the private rental market at rents vastly in excess of that previously charged. Yet the coalition are floating plans to increase the RTB discount. Unbelievable!

https://www.guardian.co.uk/politics/davehillblog/2011/nov/25/welfare-caps-london-conservatives

nineofdiamonds

25 November 2011 11:35PM

The coalition wishes to keep the housing market artificially stimulated, to reanimate a problem that has reached its peak, and is flatlining. Why?

Because this Government is doing what any other would do in its place – supporting the core vote.

This is the big cohort of owner-occupiers, aged between about 55 and 70, largely consisting of people who profitted from buying up cheap council houses in the 1980s. Since then, the population has continued to grow but there has been very little investment in replenishing the stock of social housing. This has had the following effects:

1. First of all, the new owner-occupiers began to ride the housing price bubble, which has pretty much been inflating for 25 of the past 30 years. The key to all of this is the first-time buyer market. They’re the foundation of everything. Owner-occupation came to be viewed as a right, and as a mark of success for which people were willing to pay over the odds, and over time it became a necessity as the supply of affordable housing shrank and shrank. If you’re a young person just starting out in life and your choice is between staying at home with Mum and Dad until you’re 35, sitting on the social housing waiting list until you’re 45, paying the Earth to rent a flat off a buy-to-let landlord, or begging, borrowing and stealing every penny you can to fund the deposit for a crappy shoebox house then you’re most likely to do the latter.
2. As starter homes became more expensive to buy, so under-regulated banks were encouraged to profiteer by offering such monstrosities as 120% and self-certified mortgages, fuelling the debt boom. This enabled desperate, or foolhardy, first-time buyers to borrow more and more money to buy their overpriced little homes.
3. With property prices at the bottom of the ladder spiralling ever-upwards, all the homeowners sitting in larger properties knew that they were inhabiting a sellers’ market, with the people below them competing and willing to offer silly prices for their property, and so rampant house price inflation was stoked all the way up the chain.
4. Consequently, you now have a large constituency of voters – basically, the Tory core vote – who are a few years either side of retirement and sitting on an almighty pile of unearned wealth. They had the good jobs, the work ethic and the straightforward good luck to be able to invest in their council houses when this all kicked off, and then just rode the great asset bubble to prosperity.

Now, of course, we have a mighty credit crunch which threatens to wipe out a large chunk of the untaxed capital gains of all these well-to-do Tory electors, and Cameron fears that he can expect to be jettisoned from office, to a chorus of indignanty wailing emanating from the pages of the Daily Mail, if he doesn’t do something to stop it from happening. Hence the hideous concept of trying to reflate the bubble by backing sub-prime borrowers.

A truly progressive Government would do what neither the Tories nor Labour have dared to propose – chuck large quantities of cash at social housing providers and tell them to get buying and building accommodation, and then cut off the right to buy and tell aspirant purchasers to look to the open market instead, as they should. Increasing the housing stock in this way would…

(i) give more of our less well-off citizens a decent and affordable home
(ii) discourage sub-prime borrowing, by giving people who have felt forced to buy homes, but couldn’t really afford them, an appealing alternative
(iii) cut the legs out from under the more unscrupulous buy-to-let landlords, forcing them to either charge reasonable rents or withdraw from the business and dump their properties on the market
(iv) points (i) to (iii) would result in a large decrease in the number of first-time buyers in the market and an increase in the number of available properties. As we all understand, if you reduce demand for a commodity and increase supply then the price starts to fall
(v) once the value of starter property falls then the occupiers of such properties can no longer afford to pay as much to the next tier up, so those occupiers are forced in turn to lower asking prices for their properties
(vi) a cascade effect of collapsing house prices is felt all the way up the chain, and prices continue to fall until they restabilise at a more sensible level. Banks that find themselves in trouble because they have overlent to people who find themselves in unaffordable negative equity should then be allowed to go into controlled failure and be nationalised as punishment.
(vii) people learn to treat a house as somewhere to live again, rather than a stack of casino chips, and the value of rents and mortgage repayments falls in line with property prices, so that people have a much greater level of disposable income to spend or save

Sadly, the chance of this actually happening is approximately nil.

https://www.guardian.co.uk/commentisfree/2011/nov/25/deborah-orr-conservatives-housing-market