Beneath the question is a serious issue. Putting a roof over your head - buying or renting - is too expensive. That is why the housing benefit bill has mushroomed. Housing is too expensive because there are too few houses for the number of people in the UK - and it will get worse because the population is booming. We need to build houses at the same time as stopping immigration and stopping financial incentives for people to have babies.
Why would the Government interfere in the free market?
Perhaps because the IMF highlighted the cost of housing as a major drag on the future performance of the British economy, that and housing benefit has sky rocketed in recent years and its primarily working people who are in receipt of it.
Why would the Government interfere in the free market?
Because we are paying £22 BILLION a year in housing benefit, the cost of which is a direct consequence of the price of housing.
Because we are paying out another £20+ BILLION in working tax credits to top up the wages of the low paid because the cost of living is so out of proportion with income in this country, the biggest piece of that pie being property cost.
Or does the benefit bill suddenly not bother you now?
Average wages at £25k (although 70% of UK workers earn under £20k) with an average house price of £165k is unsustainable without overleveraged borrowing, the very thing that led to economic collapse in the first place.
Outside of sanctioning the building of a lot more homes what could any government do about house prices? Many millions already have a mortgage on their home so the government can't step in to do anything about that including the buy to let's. I guess they could make owning 2nd homes so expensive in terms of stamp duty, council tax to make it prohibitive.
Beneath the question is a serious issue. Putting a roof over your head - buying or renting - is too expensive. That is why the housing benefit bill has mushroomed. Housing is too expensive because there are too few houses for the number of people in the UK - and it will get worse because the population is booming. We need to build houses at the same time as stopping immigration and stopping financial incentives for people to have babies.
Considering there are estimated to be @ 1 million empty properties in this country the need to build isn't as urgent as the builders would like everyone to believe it is.
What urgently needs to be done is to get those houses renovated and back in to use.
Considering there are estimated to be @ 1 million empty properties in this country the need to build isn't as urgent as the builders would like everyone to believe it is.
What urgently needs to be done is to get those houses renovated and back in to use.
not just that, we need to stop the drain of people from the North to the south by making industry and business more viable outside of London.
Outside of sanctioning the building of a lot more homes what could any government do about house prices? Many millions already have a mortgage on their home so the government can't step in to do anything about that including the buy to let's. I guess they could make owning 2nd homes so expensive in terms of stamp duty, council tax to make it prohibitive.
They could stop using tax payer funds in schemes designed to allow people to by homes the banks wont lend them enough money to buy for a start.
The OP asks what they are doing to reduce house prices, when this and the last government both actually used tax funds to inflate house prices.
If they cap housing benefit then properties bought by private landlords for said purpose wont look as financially attractive so demand might fall and demand, or lack of, impacts the market.
Looking at things regionally rather than nationally would also help.
Apart from that I don't expect/want them to do anything
Weren't those schemes set up to assist key workers such as members of the emergency services?
They were, if you remove them then the supply of buyers would dry up and without buyers the housing market would collapse. A problem for those who entered the housing market for short term financial gain, less so for those who entered for the purpose of owning a home to raise their family in.
Why would the Government interfere in the free market?
You are joking aren't you?!
They are doing everything possible to prop prices up precisely by interfering in the market e.g. quantitative easing, cheap money for banks, bank bailouts. Cos if prices fell it might help the young (who don't vote) but it would damage bank balance sheets and annoy (wrongly possibly as most have kids) the middle aged and elderly who do vote. Let alone all the taxbreaks buy to letters have over first time buyers.
Anyone who thinks housing is a 'free market' in the UK is very naïve.
As part of the 65% of the population who are homeowners, why would I want the government to reduce the value of something I've spent the last 25 years paying for?
They were, if you remove them then the supply of buyers would dry up and without buyers the housing market would collapse. A problem for those who entered the housing market for short term financial gain, less so for those who entered for the purpose of owning a home to raise their family in.
Propping up the housing market is like propping up a pyramid scheme. All you do is delay the inevitable crash and make its impact more devastating when it does come.
Propping up the housing market is like propping up a pyramid scheme. All you do is delay the inevitable crash and make its impact more devastating when it does come.
I would think the current situation, where house prices are stable, yet losing via inflation, is the best for everyone.
No government wants masses of negative equity on their hands, while none really want a massive spike (labour party excluded).
The question should really be "Why did Labour preside over grotesque and unsustainable house price booms whilst building less social housing than Thatcher?"
At least Grant Shapps, when asked, said a desirable situation would be flat prices for the foreseeable future so wages would eventually catch up. That's a lot more than any Labour minister would ever say - they always refused to answer the question.
As part of the 65% of the population who are homeowners, why would I want the government to reduce the value of something I've spent the last 25 years paying for?
66% of the population are not home owners. 66% of the population live in owner occupied homes, but that's a different matter. The teenage children of a home owner benefit little from inflated house prices until their parents kick the bucket, but those kids are likely to be in their fifties or sixties before that happens.
In fact in 2008 there were 14.5 million home owners in Britain, which means only about one in four of the population.
a key indicator to me is the ratio of average house price to average wage. which is too high.
that having been said i don't think a government policy to reduce the price of people houses would be that popular.
if house prices are high then their should be more incentive for house builders to build them. the government can't build them themselves. all they can do is make it as easy as possible for people to build homes in respect of planning and so on, and make sure that they can obtain the financing necessary.
thomas pain
Posts: 2,318
Comments
Why would the Government interfere in the free market?
To protect people from getting ripped off.
Why do you think this government (or indeed the last one) has any interest in reducing house prices?
Quite so.Adjusted for inflation, average house prices have dropped by approximately 25% since the bubble burst in 2007.
http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php
How are people getting "ripped off"?
Perhaps because the IMF highlighted the cost of housing as a major drag on the future performance of the British economy, that and housing benefit has sky rocketed in recent years and its primarily working people who are in receipt of it.
The problem with that is that the current planning system makes it difficult to build a lot of houses.
Because we are paying £22 BILLION a year in housing benefit, the cost of which is a direct consequence of the price of housing.
Because we are paying out another £20+ BILLION in working tax credits to top up the wages of the low paid because the cost of living is so out of proportion with income in this country, the biggest piece of that pie being property cost.
Or does the benefit bill suddenly not bother you now?
Average wages at £25k (although 70% of UK workers earn under £20k) with an average house price of £165k is unsustainable without overleveraged borrowing, the very thing that led to economic collapse in the first place.
Considering there are estimated to be @ 1 million empty properties in this country the need to build isn't as urgent as the builders would like everyone to believe it is.
What urgently needs to be done is to get those houses renovated and back in to use.
not just that, we need to stop the drain of people from the North to the south by making industry and business more viable outside of London.
They could stop using tax payer funds in schemes designed to allow people to by homes the banks wont lend them enough money to buy for a start.
The OP asks what they are doing to reduce house prices, when this and the last government both actually used tax funds to inflate house prices.
apart from house prices are reducing...
Looking at things regionally rather than nationally would also help.
Apart from that I don't expect/want them to do anything
Weren't those schemes set up to assist key workers such as members of the emergency services?
They were, if you remove them then the supply of buyers would dry up and without buyers the housing market would collapse. A problem for those who entered the housing market for short term financial gain, less so for those who entered for the purpose of owning a home to raise their family in.
You are joking aren't you?!
They are doing everything possible to prop prices up precisely by interfering in the market e.g. quantitative easing, cheap money for banks, bank bailouts. Cos if prices fell it might help the young (who don't vote) but it would damage bank balance sheets and annoy (wrongly possibly as most have kids) the middle aged and elderly who do vote. Let alone all the taxbreaks buy to letters have over first time buyers.
Anyone who thinks housing is a 'free market' in the UK is very naïve.
Propping up the housing market is like propping up a pyramid scheme. All you do is delay the inevitable crash and make its impact more devastating when it does come.
I would think the current situation, where house prices are stable, yet losing via inflation, is the best for everyone.
No government wants masses of negative equity on their hands, while none really want a massive spike (labour party excluded).
At least Grant Shapps, when asked, said a desirable situation would be flat prices for the foreseeable future so wages would eventually catch up. That's a lot more than any Labour minister would ever say - they always refused to answer the question.
66% of the population are not home owners. 66% of the population live in owner occupied homes, but that's a different matter. The teenage children of a home owner benefit little from inflated house prices until their parents kick the bucket, but those kids are likely to be in their fifties or sixties before that happens.
In fact in 2008 there were 14.5 million home owners in Britain, which means only about one in four of the population.
that having been said i don't think a government policy to reduce the price of people houses would be that popular.
if house prices are high then their should be more incentive for house builders to build them. the government can't build them themselves. all they can do is make it as easy as possible for people to build homes in respect of planning and so on, and make sure that they can obtain the financing necessary.