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politicalbetting.com » Blog Archive » The inter-generational gap: The Pinch and the Punch
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politicalbetting.com » Blog Archive » The inter-generational gap: The Pinch and the Punch
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F1: 15 mins to go, track is damp but probably dry tyres. Rain possible, nay probable in the next two hours. Rumours of turbo problems with Raikkonnen’s second place starting Ferrari, to add to Vettel’s Ferrari having turbo problems yesterday...
Edit: Kimi pushed off the grid, starts from the pit lane if they can fix it.
Congratulations to Mercedes on the Constructors’ championship!
At the moment we have a ludicrous situation where wages haven't kept up with inflation for most of the last decade combined with an explosion in housing costs and a steady rise in prices of goods. Which means a lack of disposable income which cheap bank loans have filled - but you can only tip so much debt onto already embattled consumers for so long before the whole thing starts to collapse.
We need rental controls as a starter for 10.
http://www.bbc.co.uk/sport/live/formula1/40624749?ns_mchannel=social&ns_source=twitter&ns_campaign=bbc_live&ns_linkname=59d09194e4b01d97d6e6d16b&Get Involved #bbcf1&&ns_fee=0#post_59d09194e4b01d97d6e6d16b
What we need is a supply of suitable rental housing. For that, council house building is the way to go as renting solid houses of the right size is unprofitable compared to putting up either shoeboxes or luxury housing. Equally, there's not, Corbyn's more insane promises on massive borrowing aside, the money to pay for it. So that would leave us, irritatingly, with either nothing or PFI which in many ways is worse.
If I had an easy solution I would share it. But beware that Corbyn's solutions are an extreme form of Politician's Logic.
(BTW, people confidently predicted capitalism had broken beyond repair in the 1930s too as the Soviet heavy economy took shape and the Western economies struggled in the Depression. But that turned out to be premature as well. I do however agree that companies should think more about their workers and providing for them, but please remember as well that the three you list were the exception not the rule. Mining houses in the South Wales Valleys were awful.)
We can't keep on building more and more and more houses. The developers charter the Tories brought in already means that residents and councils and planning officers can do little to stop developers building the wrong kinds of houses in the wrong locations. Scrap the NPPF is another good step.
I am also concerned about the wrong kind of houses but equally, if we have more and more people in the country we have to build more and more houses. If our population increases by a third in twenty years, they have to go somewhere. That does mean building new houses.
I know one poster (I think it was Alistair) put forward flats as the alternative but they tend not to be what most people actually want. So they can end up distorting matters further.
I would add that if large numbers of 60s towerblocks become unusable as well due to fire safety concerns that will make matters considerably more difficult.
Edit - and Alistair helpfully confirms he does think of building upwards.
1. Increase housing stock in much of the country substantially, both to buy and to let. Its time the NIMBYs (mainly BBs) got told to get stuffed.
2. Increase interest rates and essentially drive down house prices. It may seem perverse to reduce the affordability of housing when trying to increase the proportion of home ownership but it is very low interest rates that are driving the high prices to the profit of the BBs in possession.
3. Keep Osborne's much criticised help to buy policy. There is a risk that falling prices would make the deposit requirements even more severe. FTBs need help with this. Also if new build is going to be available there has to be demand for it.
4. Follow through on the more obvious parts of the 2017 suicide note/manifesto and start taking ridiculous freebies from the well to do retired to help the hard up young workers. Even if the numbers are not huge the message is.
5. Reduce both the fees and the interest rates on student loans.
6. Improve workers rights to give additional protections to those "self employed" in the Gig economy. Employment Tribunals are heading this way and there is an important case on the go right now but it is a trend that needs to be encouraged, not resisted.
7. Beef up tax reliefs on training and use the government's purchasing power to force more investment in training as a condition of public sector contracts.
8. Reinvigorate the college sector.
9. Start to address the huge intergenerational unfairness being caused by public sector pensions and retirement packages.
10. Listen carefully to what younger people want out of the Brexit deal and prioritise those objectives.
This is absolute madness and will put a schism through Spain that is not going to be healed for a very long time
So ironically rent controls could very easily lead to the kind of social cleansing they are designed to avoid.
More seriously if the Spanish government were actually trying to provoke a UDI and a civil war they could scarcely be doing a better job.
I have a huge amount of sympathy with the argument that students should pay for their degrees - after all, on average, they are the ones who will benefit most from them.
Clearly many students don't have the cash upfront, so they need a source of finance and the government is the natural place to find that financing.
What I don't get is why, if higher education is a public good, the government is so focused on charging interest (even if it is only inflation).
Wouldn't the easiest solution be to simply say "If you have 3 years of university that is a cost of £27,000 and you have to pay it back". Make that over, say, 10-15 years and it should be affordable for most graduates.
Building up makes sense. As does building new towns. Not everyone wants to live in a city.
The other issue not talked about enough is the foreign ownership of residential property. This needs to be addressed; the commoditisation of homes is bad enough when it is 'nice middle class' BTL landlords, but when they're empty stores of wealth for wealthy foreigners not using or renting out, it is even worse.
Tax unoccupied property at 5x the normal rate. Or annual repeat of the purchase price stamp duty unless relatively continued occupation.
In a field of stiff competition, the decision to change that to a commercial rate - and I've got a feeling it was actually before the coalition - is the stupidest HE policy this country has ever had.
UDI would be a big step for Catalonia.
Wasn't the interest one of Osborne's wheezes?
Its not the supply thats the major issue its the price. A lot of people in cities have no interest in buying, they want to rent. And rents are set at the "market price" based on the cost to buy which is astronomical.
I'm open to other ideas. But the cost of housing has to be reduced and reduced significantly if we want the rest of the economy to thrive. Suck increasing amounts of people's wages into housing and thats money thats not available for them to spend on everything else.
Surely the other key question is why it costs £9000 a year for a history degree with 10 hours a week (over about 30 weeks) of contact time?
By and large, the people making the noise are the people who want to buy.
And we're not building enough.
So the problem is demand rather than supply.
There are certainly significant supply side problems. The housing development market seems like an oligopoly, and the new housing being developed is some of the smallest / worst quality in Europe. It's almost impossible to be a small scale developer. That needs fixing.
But to really reduce house prices you must dampen demand, by toughening mortgage lending requirements. As this would put the ordinary house buyer at a disadvantage to the cash rich 1% or the overseas buyer, there perhaps is a case for further taxes or controls.
Of course, London prices are already falling...
the man who whacked kids with ridiculous uni fees now wonders why the young havent got money
git
However, it can cost up to £30,000 to train a science graduate, and since they can't charge full fees for that, they need to recruit as many cheaper students in history, English, politics, business, art etc to make up the shortfall.
The other elephant in the room is Education - strangely, that's one of the more expensive degrees because of fees paid to schools. Which is of course why the DfE are frantically closing down education departments and moving to SCITT routes, even though they know this is a less effective way of training on the whole.
When base rates were at 3-4%, yields on rental properties were in the region of 6-7%. When base rates fell to 0.5%, yields (talking about London super prime) compressed to around 3-3.5%, effectively doubling the price of properties.
This pushed a large number of people into the rental market (as they couldn't afford the higher prices for houses, especially with the increased deposits/regulations on lending limits vs salaries).
More renters drove up rental prices...resulting in higher purchase prices...
Of course you could argue the mortgage boom was a form of QE, just with money created by banks over-leveraging rather than by the BoE buying up gilts.
The problem is that if you cap the rates then everyone wants to charge the cap - because they don't to be perceived as less good. There's not an effective market in fees - which is what the government hoped to achieve.
But someone needs to address the course structure. Buckingham manages very well with 2 year courses - but equally they don't do much research, and HEFC funding/academic career progression is very tied to research/publication vs teaching.
(Although, on your specific question 10x30 = 300 hours of contact time which equals £30 per hour: not a completely outrageous price to charge).
One point, though: the Right to Buy made a lot of people very well off, so it's no surprise it was popular. However, in many parts of the country - and in London, in particular - a large proportion of former council properties are now buy-to-let properties. All that's changed is that rents are a whole lot higher and tenants are less secure. Not sure that's great policy.
Anyway I have a mighty three manual organ to play for harvest festival, and appropriately I am going to have to go out into the soft refreshing rain. Have a good morning.
The question i would raise, it what would we do, if Political parties did not exist and there was no attempt to manipulate policies to target voters ?
Student loans and other costs meaning a typical debt of over £50k for a University course make no sense at all. Yes there is long term repayment offered, but having discussed the issue with a couple of senior people dealing with Student Loans, management of these debts is proving a real pain in the *ss. No matter how much they try to enforce repayment of these debts, there are too many people not paying. It is estimated that over 50% of these student debts will be written off over a long period of time. The Government sold off loads of older student loan debts and the debt buyers are no longer interested, as they got their fingers burnt. They found that there was just too many problems with the administration by SLC, deferments, correspondence about no payment etc etc. Trying to gain payment by litigation if necessary was just proving more difficult than with Banking debts.
On housing costs, this is not just a UK issue, as they have the same problem in many countries. There is more demand for housing than supply. If you build more houses, then you have to invest in all of the infrastructure to support it. This means an increase in Government debt, as well as private/Bank debts in mortgages to buy new housing. I am not sure any political commitment to build millions of new homes is that honest. The cost overall would be enormous. So any new house building will continue at the slow rate it has over recent decades. Government could enable local authorities to borrow to supply properties on rent to buy schemes and that might make a difference.
Actually, at the expense of most.
It's not just those trying to get on the housing ladder. It's also those who'd hope to step up - the rungs on the ladder have got bigger.
The supply of new flats in central London generates demand for second homes that would not necessarily exist if the flats weren't there imo (that couple with the fact that if you have a spare £500k in savings you aren't going to earn anything by keeping it on deposit).
We need measures to reduce the attractiveness of housing as an asset class. Not only does it inflate prices for people who just need a first home, its an unproductive use of wealth.
The problem of housing is mostly in SE England. Elsewhere it is mostly a problem of opportunity.
Honestly, some people are impossible to satisfy. The cry goes out: build more flats in London. Then the cry goes out, no, not REALLY nice ones, that'll only encourage them.
I suppose the preferred solution is to build moderately attractive flats, certified by an architect as adequately mediocre.
The thing that strikes me is that, on both sides, Labour and the Conservatives are trying to rig the market. Labour, with rent controls and price controls. The Conservatives, with help to buy.
You can't rig the market. Neither work.
This is a classic case of supply and demand. Supply is too restricted (not enough homes built fast enough where they are needed) and demand increases all the time (population growth and immigration).
If you're an ordinary Briton temporarily trying to rent your old home out, so you can move and buy a new one, and it takes 2-4 months to find a tenant, that would be punitive.
The problems of low wage growth and low productivity are in my view far more pressing.
What we need is a good Liberal government.
Source: student in the mid 2000s
A clear majority of units bought by overseas investors are let out to Londoners;
Others are used by owners’ family members, children in education or returning expats, and are fully occupied;
A small but highly visible subset is lived in only occasionally. However, there was almost no evidence of homes being left permanently empty;
Pre-sales to overseas buyers enable developers to build faster and thus make more market and affordable housing available than would otherwise have been the case;
International investment and finance have helped bring stalled sites into use and speed up development on larger sites. They have also been key to creating our Build to Rent sector.
http://blogs.lse.ac.uk/politicsandpolicy/what-is-the-role-of-overseas-investors-in-the-london-new-build-residential-market/
https://twitter.com/mstothard/status/914385341917876224
I'm not an economist, but surely supple and demand dictates that if more homes are built the price inflation should at least stabilise, if not drop?
LOL, LOL, LOL.
It's always someone else's fault, isn't it, finger-boy.
Unfortunately, not as much money as the old parties, with their wealthy backers.
But by all accounts, with more members that the Conservatives.....
F1: thoroughly entertaining race. Alas, we're leaving Malaysia yet Azerbaijan remains.