One way to lower the house prices is slashing the demand. They can do that by limiting immigration.
Why Britain doesn’t build
401–410 of 520 posts
Re: Why Britain doesn’t build
#402I am in Indian immigrant living in the UK for past 5 years. The housing system here feels extremely stupid to me. They basically resell houses 100+ years old at 5% higher value every year. It's kinda like gold or bitcoin, except those assets are actually very limited in number. But housing is simply artificially limited due to policies. Total UK housing stock is worth 10T GBP vs 2.2T GBP GDP output. Don't think any o…
Great comment.
You've described the issue at the upper-end of the income spectrum well. I think you're correct that excess income in this country tends to largely be funnelled into real estate rather than building businesses, but equally on the lower income spectrum (where individuals don't have the income to afford their own homes) their income gets redistributed to the wealthy via high rents (and I'd argue taxation too, but that's another topic).
That said, I'm not sure housing is the root cause of our economic problems – although it's certainly part of it. I think the primary issue is government underinvestment and that we just generally don't have very good incentives to build or work here. This has probably been the case for the last 20 or so years and now with these latest economic challenges the consequences are really starting to show.
On the wealthier end of the economy I'd argue culturally entrepreneurs and investors are far more risk adverse here. Technology and startups are viewed with more scepticism and less optimism and for this reason people tend do less innovative things. This is compounded by the fact our government has done very little to encourage innovation. So for this reason startups here tend to just apply tech to existing business models. Eg, "we're a bank but with a tech focus", "we're an insurance startup but with a tech focus", "we're an energy company but with a tech focus". This is literally the height of innovation in the UK. We rarely build anything truly new or interesting in the same way I'd argue Scandinavian countries do. Then on top of this you have the government crippling innovation via excessive taxation and regulation – although this is more of a general European issue.
On the lower-income side of the equation I have no idea why people work anymore. If you know what you're doing you can earn around £20,000 (tax free) on benefits in the UK. Additionally the government will give you a house (and often a car) so in total you'll generally have a far higher living standard on benefits than getting a working class job paying you £22,000. Whenever I say this I always have middle class people say I'm exaggerating or somehow slandering working class people as being lazy – and to be clear I'm not. I'm from a working class background and the majority of my family are on benefits because it just makes sense.
Re: Why Britain doesn’t build
#403Earlier quoted context omitted.
Why would you think that? A well built house can last hundreds of years. Why should it not be an investment? It makes absolutely no sense to put any kind of money into something that one day will be worthless - like I read that it happens in Japan that on average a house is worthless after about 40 years.
> It makes absolutely no sense to put any kind of money into something that one day will be worthless Cars, TVs, bicycles, the vast majority of furniture. > like I read that it happens in Japan that on average a house is worthless after about 40 years. And if you rent a place you "lose" all your money the moment you move out of it. If my mortgage payment was cut in half but in return my house didn't appreciate in val…
> Cars, TVs, bicycles, the vast majority of furniture.
These are consumables. Except maybe for the car if its something that one day can be worth a lot of money because it is nice. Like a '67 Mustang :)
> If houses in nice cities didn't cost over a million, people could move away from bad lawmakers!
I don't understand what you are trying to say. I see a benefit having a nice city and somehow a high house price is what you pay to live in a nice city.
Re: Why Britain doesn’t build
#404I find the economic reductionism in housing planning really irritating. It's not like other public utility functions, but it is damn close to a fundamental and is included in human rights declarations. What kind of state throws up it's hands and claims "it can't" fix housing when states can do precisely that? Thatcher's revolution in council housing is a cesspit of counterfactual outcomes. It made individual househol…
1. Politicians and the bureaucratic class have deep investments in real estate 2. Foreign money keeps flooding into western economies to find a safe haven and lack of capital controls. A bulk of it goes into real estate. 3. Elections are largely monopolized by older people who mostly tend to be homeowners. The entire system is rigged against anything that would impact home prices - such as an increase in supply or ch…
> 3. Elections are largely monopolized by older people who mostly tend to be homeowners.
This, in my opinion, is the biggest factor compared to the other two. Politicians that want to win power have to win votes. Older people (and homeowners) vote more than younger (renting) people. A party that prioritises younger people over older people will be referred to as His Majesty's Most Loyal Opposition.
The reason Liz Truss was kicked out of the PM's office by her party wasn't because her spending plans were economically illiterate. It's because her plans started rapidly increasing interest rates, so higher mortgages, which is starting the process of fucking over Tory voters.
Re: Why Britain doesn’t build
#405Earlier quoted context omitted.
> This is plainly false in every way. Firstly, buildijg is an expense - why would you build now if you can put off the expense? It might be worth considering how, if that were true, anything that has a capital investment required of it ever gets done. Building is not an expense to a building company. What do you think the company does to generate revenue, if it's not building?
If youre both managing a property portfolio as well as building on it, free capital gains for no work are a pretty good deal. Sure, if you're a small builder you want to build ASAP for cash flow reasons. However over the past decade both the UK and Irish building markets have become dominated by REITs who do in fact benefit from increased land prices in the absence of building.
Yes, because of the regulatory and zoning environment. Of course they should do this - in an environment where it's more profitable to do nothing than to build, building companies should do nothing. The problem is the environment they exist in. Fix the environment, and they will build more.
Re: Why Britain doesn’t build
#406Earlier quoted context omitted.
> The current population of U.K. in 2023 is 67,736,802, a 0.34% increase from 2022. > The population of U.K. in 2022 was 67,508,936, a 0.34% increase from 2021. > The population of U.K. in 2021 was 67,281,039, a 0.33% increase from 2020. > The population of U.K. in 2020 was 67,059,474, a 0.42% increase from 2019. 1 year old babies dont 4 bedroom houses of their own.
I'm not sure that posting the population growth figures over four years and adding a snarky remark about babies owning houses proves anything whatsoever other than your own ignorance and disinterest on the matter in hand. You'd need to also think about not only the number of homes built, but the kind of homes built, the location they're built in, the cost at which they're built, the incomes of those who need to be ho…
I already posted the numbers from 1950 to date, both from the perspective of population growth and house building. The numbers are clear, perhaps you were not interested enough to look or were unable to understand.
> Or you can save us all the bother and say what you really mean.
Its pretty obvious that there is a change in the size of the household over the 73 years I cited, which everyone is comfortable ignoring.
The number of homes built is clearly not the dominant issue, but the kind of homes built, the location they're built in, the cost at which they're built, the incomes of those who need to be housed and where they and their jobs are located compared to the houses is the issue.
I could magic up 10million studio appartments in the geographic center of the country - it would make absolutely fuck all difference to the price of a family home in Manchester or Bristol (it would probably make them even more expensive as it would drain all the house building resources of the country). It would however, fully satisfy and surpass the targets of those that "care or are unhappy with the current situation" and their caring solutions.
Actually a large number of issues did start just after 2019. Something happened and the demands and tastes changed drastically nearly overnight, suddenly the kind of homes built, the location they're built in for the prior 10 years was not what everyone wanted.
Will it last? Will it flip back overnight? I dont know. Obviously I am not as knowledgeable or as interested as you are.
Re: Why Britain doesn’t build
#407Earlier quoted context omitted.
There's a limited amount of space and a non-negligible portion of society are unable to afford market rates. When the state doesn't build accommodation, citizens end up transferring ludicrous amounts to private landlords to house foster children, asylum seekers, the poor, or the disabled. The UK experimented with selling off it's social housing in the 70s. It was a colossal failure that has lead to the country having…
> Private landlords have been enriched at the expense of the wider society. We are literally subsidising the least productive "profession" in society, to the tune of billions. It's an absolute joke.
They aren't being subsidised. They're being paid to rent out their property.
Re: Why Britain doesn’t build
#408Earlier quoted context omitted.
> If I was a young person, this above all other things would radicalize me. Our elected leadership are captive to stupid market force arguments. I'd rather they tried and failed than sat on their hands. I truly think it has radicalized a lot of us. My generation (millennials and younger) are one of the first ones not to slide further right politically as time goes on but remain staunchly left wing. That's culturally…
There was a poll posted on HN within the last week or two showing the expected slide rightward for your demo. I can’t comment on how it compares to previous generations.
Everything I've read on the subject suggests that both economically and socially, we're far more left wing and liberal than what we "should be" by this age. I'm not sure what poll you're suggesting; if it's only polling HN members I imagine it wouldn't represent the broader population at all. Be aware I am discussing largely British politics which is a different beast in many ways (from years of Tory austerity and Brexit catastrophe). Just a quick web search provides a lot of material harking the same story.
This data is particularly telling: https://www.ft.com/__origami/service/image/v2/images/raw/htt...
Other reading material: https://www.ft.com/content/c361e372-769e-45cd-a063-f5c0a7767... https://blogs.lse.ac.uk/politicsandpolicy/generation-wars-ov... https://www.theguardian.com/politics/2019/dec/21/age-not-cla...
Re: Why Britain doesn’t build
#409Earlier quoted context omitted.
> Theresa May tried to sell this as part of her election campaign. It was a disaster. No one wants to be forced to give up some of their personal wealth to pay more for an NHS they've already paid into. It's not as simple as "give up some of their personal wealth to pay more for an NHS they've already paid into". If you have 20K in your bank account and no property, you have to pay for your care. If you own 2 flats w…
> Does this look fair? No, but because we should end means testing completely. I thought NHS meant you didn't have to do all the things we have to do here in the US. A few years ago, I had to do an annual wellness exam so I could keep my health insurance "discount" at work. There was some miscommunication within the three parties: 1. Doctor's office 2. Lab 3. Insurance and I had to act like a mediator between them. I…
The Conservative government that's been in power for 13 years has consistently underfunded the NHS. While the current vogue is to blame Covid, it's only been the final crack in a dam that's been bursting for years now.
Re: Why Britain doesn’t build
#410Earlier quoted context omitted.
> If I was a young person, this above all other things would radicalize me. Our elected leadership are captive to stupid market force arguments. I'd rather they tried and failed than sat on their hands. I truly think it has radicalized a lot of us. My generation (millennials and younger) are one of the first ones not to slide further right politically as time goes on but remain staunchly left wing. That's culturally…
Please remember not to ask for a pay rise too, otherwise you'll be making inflation worse! /s Yep it sucks. Many people I know cannot afford unless there are two people paying the bills. You need two to tango for kids of course, and some might argue why do you need a 3 bed house if you are single without kids (I am assuming here - you may not be). Of course that is no one's business apart from your own and shouldn't…
I want a 3 bed house because some time soon I'll probably need to have kids, else my partner be too old to conceive. I work from home most days, so a 3rd room would be nice for an office or if we want a 2nd child. We will likely make do with a 2 bed flat (still 200k if we're lucky in the arse end of nowhere - 250k in a place we'd actually enjoy living). I don't know any of my older colleagues or family that had to settle for that; again, following the same career path or worse. My parents managed a 3 bed house on the South coast on a nurse and chef salary. That would be functionally impossible today.