Housing shortage in UK

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David Cameron wants to prevent people under the age of 25 from being entitled to housing benefit. He says this will save £2billion a year on housing costs.

He also wants a wider debate on the issue of housing costs. Well it is easy:

1 - Since the 80s social housing has been reduced dramatically
2 - Council tenents were given the right to buy their council homes
3 - House prices in the UK shot up so ordinary people struggled to afford a home
4 - The population of the UK has increased
5 - Mortgages became very easy to obtain
6 - Rent charges have gone up along with the property prices

All of this has increased the housing benefits bill and the money goes to private landlords.

Perhaps it is a good thing to encourage young people to stay at home and save for their own property. But the above 6 points do need to be addressed. Number 5 has been addressed but that was only because of the banking crisis.

Now we are in a situation where house prices are still very high because there is a shortage, and people cannot get mortgages easily so are forced to rent, which keeps rents high.

What do people think? And is this an issue in the US?

As interest rates are rock-bottom caused by lack of demand in the economy, I suggest a massive government home-building programme as existed under Wilson, for example. Kill two birds with one stone.

Yes but I don't think they would do this because that would bring house prices down. I think our governments have deliberatly allowed the shortage to develop in order to keep property prices high.

Does the UK have the land available for extra housing? Is it available in the population centers?

The USA doesn't really have this problem yet except in very popular areas like the coasts. We still have a lot of undeveloped space. We also spread out of the population centers as well. I am not experiencing an inflated housing market since I live in a $60-80K neighborhood and the house cost is close to 1x my salary. Those prices aren't available on the east and west coasts, but many people don't want to live here. That's their problem and not mine.

Not really, unless we build up rather than across.

As for wanting to deny housing benefit to the under 25s, not everyone can live with their parents into adulthood. There just isn't enough space in some houses for extra adults. It will just lead to more overcrowding and homelessness.

These would be council housing and would not be on the market. I suppose though that landlords might not be able to charge so much if there are alternatives...

If we deported every single scrounging parasite assylum seeker we wouldn't need extra housing. These free loaders and their twenty-six children are costing the UK tax payer countless millions. And why are 90% of them muslim?

Why doesn't allah look after them?

From my experience, asylum seekers aren't really responsible for the overcrowding problem here.

If they were deported, the NAIRU doctrine would demand creating new unemployed to replace them in the reserve army of labour. Neoliberalism is the problem, not some fictitious immigrant bogeyman.

When in doubt let the government spend your own money before you even see it.

ruveyn

You seem to be under the impression that the American government takes care of, or represents, or gives a flying f**k about American citizens. There is very little government housing here. What little there is consists of apartments(flats), and there is usually a years-long waiting list to get in.
In general, America doesn't provide health care or housing for people. Our public schools are poorly funded, our infrastructure is decaying - heck, even our post offices are cutting hours and closing branches. America is dying.

I wondered if in the US you suffer the same ridicoulousy high property prices that we are experiencing in the UK. At the moment the average price here is £226,000. That is well beyong the reach of the vast majority of people in the UK.

For council homes in the UK there is more than a year waiting list; and most people do not even apply because they know they would not even be considered.

I think the UK has become a lot like the US in recent years.

They are an indirect cause. We cannot really blame them but we can blame our governments for allowing the huge increases in their numbers.

I think multiple issues have contributed to the housing problem in the UK.

It's isn't just number of houses it is also quality.

The UK builds the smallest and worst insulated houses in the civilised world, our construction market is geared towards extracting the maximum amount of money out of the punter at every step of the way.

We have renting laws massively stacked in favour of the landowner making it very easy for landlords to evict and increase charges unjustifiably every year.

Our benefit system effectively puts a floor under the rental market allowing landlords to continue ratcheting up the cost of housing. We spend 3-4 billion pounds per year on unemployment benefit for the poorest in our society but we spend about 20 billion pounds per year on housing benefit which goes straight into the pockets of the middle class landed gentry or the banks that hold issued the mortgage.

Our land market is rigged and development land is 'land banked' by large companies to keep the price of land ridiculously high. 40%-60% of the cost of a new build is the cost of the land with development permission which is often many hundreds of times more expensive than the cost of land per acre without planning permission.

We have a diabolical planning system that is ruled by small groups of people opposed to any development of anything ever. The problem isn't nimbyism, I respect the right of a person to dictate what happens in his back yard when he owns his back yard, but that principle has been extended to allow people to prevent anyone anywhere from building anything. We have roving pressure groups that are anti wind and spend their time travelling up and down the country opposing wind power plans in meetings even though the site of the wind turbine will be many hundreds of miles away from 'their back yard'. The level of anti-development and bureaucracy in the planning system means that if you intend to build a few red-brick houses, you will spend more money employing people to do paperwork to just to secure planning permission that you will spend buying bricks.

We have imported millions of immigrants over the last decade (currently in 2012, net migration stands at 1,400 people per day) and have not built anywhere for them to live. This has led to situations highlighted in these couple of articles:

http://www.guardian.co.uk/society/2012/ ... te-tenants
http://www.guardian.co.uk/housing-netwo ... -landlords

In 2001 Gordon Brown didn't want to go into an election with a recession (dot-com bust) so a very loose monetary policy was started. This flood of new money had nowhere productive to go so it just went into the existing housing market, driving the cost of housing sky high. From 2001-2008 the UK was averaging 12% pa monetary inflation.

The TV watching masses have been brainwashed into thinking that high house prices are good and make them rich. In reality the only people that benefit from high house prices are the rentiers, those people that have multiple properties and seek to derive income from other people's work. For everyone else it is just a massive tax on existence.


Did I miss anything?

Oh yes, a nation full of deluded economically illiterate baby-boomers who think 'my house is my pension' and also use equity withdrawal on the basis that 'my house is my credit card'.

Good post DC. I particularly like your phrase "My house is my credit card."

I think our nation's attitude to what a home is has become warped. Our governments have succeeded in turning the fact that people need a home into an industry and right now they are using the supply/demand discrepency to make as much money as possible.