Pensions aren't the ticking timebomb - rents are

What do they need to do Nick?

This will mainly affect those in the south so if they cannot afford it they will have to move further north where rents are cheaper. As they say, pensions are ok so can't see why anyone else needs to get involved.

They need to facilitate the building of more houses and increase tax on buy to let.

But as the article says, people would need to buy before the landlords do and yet they cannot afford to do so. And, if they increase the tax, then wouldn't that just be passed on to the tenant?

If they increase tax on buy to let, it will become less attractive to landlords.  If landlords continue to buy, then there is an increase in tax revenue.

It is possible that extra costs will be passed on to tenants.  Maybe we need some form of rent control although I'm not sure about that.

In any case, we need to think about how we pay for the people who will be renting in retirement.

There are four easy measures any Govt could take next week to re-balance the housing market.
Obviously it won't be the Conservatives: as the Party of the landlords, any remedy they propose would be a concession to keep them in power.
Labour need to put clear water between their position and the Tories:
1) Commute mortgage tax-relief for landlords.
2) Make owners liable for Council Tax.
3) Tax rental income at source like other unearned income.
4) Liberalise the Housing Benefit baseline by which properties are valued.

Any measures will be passed onto the renter, that is certain.

The only way to solve the housing crisis is to have more houses than the population but rich people wont vote for that.

That is untrue, Ibrahima Sonko.
Nowhere else in Europe does the tax/regulation framework protect landlords as here.
The UK protects the interest of the landlord towards a two-state country:
Those with two houses, or more, and those with none.
It doesn't have to be this way.

Agree with the people owning more than one home, but at the end of the day it will be passed on to the renter or the person renting their 10th holiday home. But is like in every society the rich get richer.

if the owner has a mortgage of 1k and charges the renter 1.2k a month lets just say how is it possible to change the market price unless their more houses than renters ?

Look at how the market is ordered elsewhere.
Here, everyone has a roof over their head tonight, the housing crisis is not due to a lack of stock.
If there was a free market, prices would plummet overnight, and the Tories would be out of power.

if the owner has a mortgage of 1k and charges the renter 1.2k a month lets just say how is it possible to change the market price unless their more houses than renters ?

There are more houses than renters, or more spare rooms, at any rate. So long as keeping them empty is a good investment, the situation continues..

The tories are part the problem, but the uk is built on mortgages, be hard to change the last 40years of the uk economy.

Cant agree with spare rooms have to rented out play down the population issue when the owners maybe mortgage free etc.

The situation will always continue whilst the rich can get richer, i cant blame them

No of course no individual can be blamed.
Each will always do the best for his family.
So it needs a willing Govt to solve the crisis.

I used to think it was simply an issue of too few houses being built. Now I'm starting to believe that there are enough houses; it's just that too many are owned by buy to let landlords.

Yes.
And the tax-breaks mean that a landlord can always outbid a legitimate house buyer.
Crazy.

I would dread to see the numbers of the people who let houses, that will not ever be available.

We need more houses !!

A serious point i would like to make here, I work for an electricity company, a dno or an rno. Done that that for 30 years.

My standby duties revolve about people living in one house off a 60 amp fuse, when their 20 living that property, what do i do ?

Put the same fuse in or tell someone this is a mop ?

the real problem is wages have not gone up with inflation so everything has gone up in price but people are still earning the same they did 10~ years ago

most people's finances are like a sink with the plug open and the tap only half on so they can't fill it with water before the water drains away

Just for the record, house prices are falling across the country.

I selected about 15 random locations on zoopla and all had registered decreases.

A typical profile was:

Last 12mths: -3%
Last 6mths:  -5%
Last 3mths:  -2%

Just looked at another four. Three show falling prices over 12, 6 and 3 months.

In Truro, however, prices have risen 3.54% over the last 12 mths but have fallen by 1.02% in the previous 6 and 1.21% in the previous 3.

Rents aren't a problem at all.
They simply adjust to the demands of the market.

Too high and lack of demand brings them down.
Too low and high demand pushes them up.

Simples.

Making legislation on the back of spite towards landlords,will simply push prices up further and lead to fewer new properties getting built.

Nick whats the figures for Reading?
Putting in a cross rail to london soon.

The point is that people currently renting aren't going to be able to afford to pay their rent when they retire.  The state will have to assist them.

Even if that costs half of the £43bn estimate, that's going to hurt.

I did look at Reading:

12mths -2.45%
6mths -4.51%
3mths -1.32%

I often read about house prices falling, i see nothing of the south of england. And how do you value the price of the house, someone puts it up at a price but accepts lower meaning a fall ?

No doubt they rate it against inflation over period of time rather than wages.

Cheers Nick

IS - The data will be based on historic selling prices.  I suppose there will be an element of subjectivity in current valuations which will be based on the sales prices of similar properties +/- recent market conditions.

If you do a postcode search (any steet) you can see historic sales prices for any property.

The point is that people currently renting aren't going to be able to afford to pay their rent when they retire.  The state will have to assist them.

That's what happens now.
If the government thought it would be cheaper to put private rental tenants who claim assistance in council houses they'd be doing wouldn't they?
They prefer to give the council houses to immigrants and their families.

Yes, it does happen now.

The concern is that because of the market conditions over the last 15-20 years, there are vast numbers of people in their 40s and 50s who never bought a house and never will.

Reading:

Average price paid over the last 3 months: £400k

Current average value: £421k


What's the average wage in Reading? £30k?

It'll work out.

Social cleansing is the answer.

Move the ones claiming high rents to areas where the rents are lower.

It all links into the same issue. There will be fewer people of working age to support those that aren't. As technology advances, the ability to keep people living longer improves however the need for manual work diminishes (internet, robotics, ai etc). In my opinion there's absolutely no guarantee that a middle aged person now will be in receipt of a non means tested pension (at any age). A person wiser than me, many years ago advised me that when I retire I'd better be really rich or really poor. Anyone in between with a modest self determined pension will be no better off, as the state will have pick up the tab anyway for what you're paying yourself. Essentially working people are supporting pensioners now, however it's unlikely to be reciprocated in thirty years.

Yes Nick about that i think. Prices around here are crazy and hearing stories of people from and working in london coming
to Reading to live with what will be an easy commute.

Landlords have been subsisidised by the government for a couple of decades now. Gifted billions of pounds in tax relief and emergency interest rates since 2008. Other schemes like help to buy have also gone straight into their fat pockets.

The interest rate one is going to massively reduce pension payouts as well because the funds have to invest a proportion in cash.

It's not much fun shielding assets from inflation, nevermind achieving real growth. Equities seem bloated now as well, due to the cheap pound. It's a no win situation for mortals. The other thing you can't guarantee is gaining access to your pension pots without being taxed (down the line).

Start with £100; find three 1.01 shots per day. Go all in.

This time next year you WILL be a meelyonaire. (If they all win, of course.)

Equities seem bloated now as well, due to the cheap pound.

That's a matter of opinion.

the government needs to build more houses

supply and demand

increase the supply, and all the other costs will go down

Everyone has a roof over their heads tonight. So building more houses won't solve anything while the balance of the market weighs so heavily in favour of buy to let. It is a political crisis of inaction; solving it would mean prices falling, which would be unpopular.
It makes me chuckle that house owners are so focussed on the price of their houses, yet didn't even notice the loss as the Brexit vote decimated the value of everything they have. It's like this: a house on the Irish border is now worth thirty grand less than another down the same road, because it is valued in £.

Cider - I'm more optimistic. The stock market is rising, but only as fast as that of say Italy or the USA - the cheap £ isn't the driving factor. As the BoE Governor says: depreciations are essentially how a country makes itself poorer.

Get all your money out of the UK and under the aegis of a pension, then you can beat one of the certainties of life. But not the other.

Here's just one article on it, ub .http://www.cityam.com/260961/why-ftse-100-rises-sterling-falls-explained-tw...

Thank you for the link, Cider, obviously cheap £ is a factor - you can stand on a street corner all day and sell fivers for £4.50 - but not the main driver of the FTSE rising.

Im in tech (NASDAQ index) Cider  :  https://tradingeconomics.com/stocks

does anyone think there is any possibility that house prices in this country will fall significantly? seems for years now everyone thinks they are far over valued but they just continue to rise and rise.

Another hike in interest rates is forecast in July or August. Households have high levels of debt, so I think a 20% fall is possible but I wouldn't be trying to call the market.

I have to say that although I'm not a fan of the Guardian this article echoes concerns I've had for a few years about the situation.For many of us the capital released from selling our houses will hopefully provide sufficient to keep us in a comfortable care home when our health etc deteriorates . We also have lived during a period when it has been possible to build up reasonably substantial pensions.My kids in their late 20s/early 30s have neither direct benefit pensions nor the capital to buy in London unless I part with a substantial amount of capital thus leaving me potentially exposed in old age.A real dilemma.

The average wage in Reading won't be as much as £30k.

Just said on the London news that the average salary in the capital is £28,560.  Londoners haven't had a real pay rise for 15 years.

Of course, there is also the issue of landlords' tax evasion which is estimated to cost the Treasury up to £1bn pa. (Various studies have put the figure between £180m and £1bn).