>The largest cohort of households are those who are “owner occupied without a loan or mortgage” – almost 680,000 of them. […]
>
>The next biggest cohort are those households who are “owner occupied with a loan or mortgage” – there’s 531,000 of them. Again – a bunch of people not exactly cheering for a house price collapse.
>
>The rest of the households are made up by those rented from a private landlord (330,000), those rented from a local authority or voluntary body (about 183,000) and about 110,000 which are either occupied free of rent or “not stated”.
>
>So of the 1.84 million or so permanent private households in the country, more than 1.21 million have a very direct economic interest in house prices not nosediving.
I’m amazed at the number of people that seem to think “The Government” have any control over the matter.
Of course they don’t – and Leahy points out the reason why they obviously don’t:
>So of the 1.84 million or so permanent private households in the country, more than 1.21 million have a very direct economic interest in house prices not nosediving.
The standard rebuke to this is that homeowners don’t care about their house price, if they want to move the new house will also have increased in price.
Ignore for a second the obvious flaw that where prices of the asset rise faster than wages it gives those with an asset an advantage over those without. Even ignore that for mortgage holders a drop in house prices impacts their LTV ratio and in turn the interest rate they can achieve.
The fact is that people do care about the value of their home because the new construction that risks devaluing their home is not something that occurs across the board. And this is exactly how we see opposition to falling house prices occur in practice.
People want more housing, but they want it “somewhere else”. When it’s “somewhere else” it won’t reduce *their* house value, but they obviously don’t care if it reduces someone else’s.
Leahy is right that it’s built into the planning system. I wish he’d delve more into detail on that as some have done. The problem stems ultimately from political choices about development. The government publish a National Development Plan that envisages too little population growth, and that for political reasons decides that it should be “regionally balanced”. That then feeds into the local development plans, where again cllrs (and the LDPs are one of the few areas where they have real power) also restrict the amount and density of development that is permitted for the lifetime of the plan. None of the plans take into account the backlog of housing required due to the failure to build over the last decade.
Neither the government or the main opposition parties are actively trying to reduce house values.
They all talk about “affordable schemes” etc.
But it would not be popular to state that you will actively try to reduce house values, as a party.
Of course they don’t.
Possibly, just not *their* properties.
We live in a free market economy. As long as housing is unregulated the only thing the government can do is fund more social housing. The government don’t control interest rates, they don’t have a national agency to construct housing and they don’t have price controls or blocks on foreign capital acquiring houses as an investment vehicle.
In short they can do fuck all with the current tools being used.
No, of course not. But we should be able to find a way to build cheaper homes.
The government of landlords? 🤔🤔🤔🤔🤔
Nobody is selling their house because there’s nowhete else to go, if the government doesnt build a rake of new houses, house prices will never go down
The state can’t keep house prices high without a _deliberate_ decision to maintain failure in the property market.
They proselytize ‘free markets’, but what they really mean is state-sanctioned Cartels/rent-seeking.
If property worked anything like a free market, prices would collapse in short order as supply meets demand.
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Excerpt:
>The largest cohort of households are those who are “owner occupied without a loan or mortgage” – almost 680,000 of them. […]
>
>The next biggest cohort are those households who are “owner occupied with a loan or mortgage” – there’s 531,000 of them. Again – a bunch of people not exactly cheering for a house price collapse.
>
>The rest of the households are made up by those rented from a private landlord (330,000), those rented from a local authority or voluntary body (about 183,000) and about 110,000 which are either occupied free of rent or “not stated”.
>
>So of the 1.84 million or so permanent private households in the country, more than 1.21 million have a very direct economic interest in house prices not nosediving.
I’m amazed at the number of people that seem to think “The Government” have any control over the matter.
Of course they don’t – and Leahy points out the reason why they obviously don’t:
>So of the 1.84 million or so permanent private households in the country, more than 1.21 million have a very direct economic interest in house prices not nosediving.
The standard rebuke to this is that homeowners don’t care about their house price, if they want to move the new house will also have increased in price.
Ignore for a second the obvious flaw that where prices of the asset rise faster than wages it gives those with an asset an advantage over those without. Even ignore that for mortgage holders a drop in house prices impacts their LTV ratio and in turn the interest rate they can achieve.
The fact is that people do care about the value of their home because the new construction that risks devaluing their home is not something that occurs across the board. And this is exactly how we see opposition to falling house prices occur in practice.
People want more housing, but they want it “somewhere else”. When it’s “somewhere else” it won’t reduce *their* house value, but they obviously don’t care if it reduces someone else’s.
Leahy is right that it’s built into the planning system. I wish he’d delve more into detail on that as some have done. The problem stems ultimately from political choices about development. The government publish a National Development Plan that envisages too little population growth, and that for political reasons decides that it should be “regionally balanced”. That then feeds into the local development plans, where again cllrs (and the LDPs are one of the few areas where they have real power) also restrict the amount and density of development that is permitted for the lifetime of the plan. None of the plans take into account the backlog of housing required due to the failure to build over the last decade.
Neither the government or the main opposition parties are actively trying to reduce house values.
They all talk about “affordable schemes” etc.
But it would not be popular to state that you will actively try to reduce house values, as a party.
Of course they don’t.
Possibly, just not *their* properties.
We live in a free market economy. As long as housing is unregulated the only thing the government can do is fund more social housing. The government don’t control interest rates, they don’t have a national agency to construct housing and they don’t have price controls or blocks on foreign capital acquiring houses as an investment vehicle.
In short they can do fuck all with the current tools being used.
No, of course not. But we should be able to find a way to build cheaper homes.
The government of landlords? 🤔🤔🤔🤔🤔
Nobody is selling their house because there’s nowhete else to go, if the government doesnt build a rake of new houses, house prices will never go down
The state can’t keep house prices high without a _deliberate_ decision to maintain failure in the property market.
They proselytize ‘free markets’, but what they really mean is state-sanctioned Cartels/rent-seeking.
If property worked anything like a free market, prices would collapse in short order as supply meets demand.