"We need to have a major affordable house building programme"

Thanks for your reply Menelaus and it contains alot your insightful views as usual!!!

Mad

I am not sure tha the existence of 400K plots of land available to some developpers disproves the fact that there is a restriction on the 90% of land yet to be developed in the UK!!!

We need millions of homes to be built so let them allow more people to build on more of the unsed land so that house prices gets back to less than 3times average wages it was in 1971 when Heath allowed the banksters into property speculation.

@mene....Perhaps the right way lies somewhere in between keynes and mises.

That what its been like since the 80's, called mixed economy - doesn't work either.

The problem is the politicians and those with connections that demanded things to be done. Politicians wanted growth in order to win elections, they wanted glory, the need to satisfy their ego.

Mises is correct that in the 'free market', the state must do nothing except to make sure voluntary contracts between 2 or more parties are enforced. Take the state out, politicians could no longer engineer the economy for their own benefit.

The problem is education in UK and around the world. Children are taught to follow the 'system'....no one as far as i know learnt anything about Mises or 'Austrian school economy' at school, college or even university.

@ boris...However there is no way on earth someone could honestly claim that markets are efficient and are capable of governing themselves without unduly harming society.

Of course not........'market' is an abstraction.....it has no concept of efficiency or governing.

The markets you spoke of are the consumers and producers and under Mises it is efficient as the consumers are The Boss. The consumers make the decisions in what to buy and the producers react and provide. Inefficiency, malinvestments, inflation, etc, are caused by politicians, the state, by interfering in free market. Of course, consumers do make bad decisions but they soon learn from it, whereas the politicians does it all the time and learn nothing but repeat the cycle.

Of course, consumers do make bad decisions but they soon learn from it, whereas the politicians does it all the time and learn nothing but repeat the cycle.

Sums it up succinctly ski-wiz, thank you.

I've never heard an enthusiast for a housing crash explain how lower house prices would lead to more houses being built.

The same applies to that ''why can't we return to the three times the average wage for an average three bedroom house'' that's often quoted.

How many new houses would get built if that's all that builders could sell them for?
Builders don't build houses to lose money selling them for below cost.

@mene We wouldn't be where we are today if we had "100% money in place".

Under what economic model would you surmised the above. I disagree under Austrian school of thoughts. We can have increases in standard of living but at a natural pace and not under politicians' manipulations of the economy.

Without creating money out of thin air, inflation would be curtailed. The problems is dealing with the present human beings who live their lives based on illusions on wealth. If i am earning £100 per week and inflation is zero then i would have no issue with earning £100 per week, 10 years later if i am doing the same job. 99% (approx) of the human race wouldn't, they demand wage increases.

An example. At £100 per week i spent £20 on food for myself. 5 years later, due to increases in technology and production, where output increases, the price of food falls. I paid £15 per week on food. 10 years later, again output increases, i'm now paying £10 per week on food. Therefore my standard of living has improved over the period of 10 years. I now have extra money to spend on other things. The above example is the same for almost all products. The above would benefit everyone.

Under the present system there is inflation, consumer price index (Mickey Mouse calculation of inflation) and wages goes up according to CPI and not inflation. Increases in output and falling prices merely kept CPI low and may benefit most but not the poorest members of society.

Increasing standard of living by expanding debts and creating assets bubble based on fiat money, is an illusion that would would come crashing down when reality kicks in. That reality is when oil continues to run out and the price continues to go higher.

madasahatter • July 1, 2013 9:47 AM BST
Whatever you may say the fact is there is an restriction of supply of land in this country.

I don't think that is born out by the facts.

Of course there is a restriction of supply of land. One can not create more land to deal with expanding population hence land will always get scarcer.

Jul 1, 2013 -- 12:14PM, Dr Crippen wrote:

I've never heard an enthusiast for a housing crash explain how lower house prices would lead to more houses being built.The same applies to that ''why can't we return to the three times the average wage for an average three bedroom house'' that's often quoted. How many new houses would get built if that's all that builders could sell them for?Builders don't build houses to lose money selling them for below cost.

The primary problem is the cost of land. Take that away, how much does it cost to build a reasonable size 3 bedroom house. Lets say £50,000 for materials and labour. The land cost £50,000. The builder would sell it for £200,000, a little bit lower than the local market price. The current prices of housing is a bubble that has not yet been fully deflated but kept 'bubbling' and holes 'patching' by politicians, scared of mass repossession and 'recession'. In the early 1990's there was little interference by politicians as consumers had to learn the errors of their ways. Quickly the economy got itself sorted and growth was restored, with the budget being in surplus by 1997. Compare that to now.....no wonder the economy is still going nowhere with all these massive debts hanging around like a noose on everyone neck, except for mine.

Free market will correct themselves quicker than state interferences by politicians.

@ Ski-Wiz

I don't want to get into a discussion about what a "mixed economy" really is, or what Mises ACTUALLY said regarding free markets and where Austrians have gotten it wrong, or the frailties of our education system as that would take too long, and I've already spent waaaaay more than my "allotted" time putting up posts on here.

Briefly though, I want to say one thing. The FOUNDATION" of a free market is interest rates. And unfortunately Mises' greatest flaw was the rejection of the essential connection/link between gold and interest rates because he wrongly dismissed the idea of gold having a constant marginal utility. According to him, constant marginal utility would imply infinite demand for gold which is contradictory.

So it's nice to know the words and the "feel-good" motherhood statements like "free market", "growth", "Austrian economics", etc, but truly understanding what they mean where different economic theories fall short is an entirely different matter.

I do not agree that the wonderful free market is the solution to anything.

It was the disastrous decision by Brown to free up the financial sector and deregulate the banks wot did it, in Sunspeak.

Of course the Tories still wanted less regulation of the bankers at the time but it was Brown's responsibility.

Deregulated business freed up from the so called red tape have a great record. Union Carbide slaughtered and maimed many employees when they had a deregulated Indian operation and still have not bothered paying reasonable compensation to its victims.

Letting the free market decide housing policy and letting it become devoid of any planning regs would see unsafe houses built by companies that would quickly go into administration and leave buyers totally in the lurch.

We are desperately short of houses. The debate about affordable or otherwise is almost irrelevant. While we have housing shortages, the market trend will always be up. Osborne's crazy plunge into the world of relaxed mortgages is madness indeed, but there is nothing at all wrong with the state building a lot of new houses for sale and for rent. If we relieve the housing shortages we will prevent a housing boom for a while as demand would be satisfied.

@ mene Mises' greatest flaw

Calm down......Mises had done a lot of theories in many books. No one economist would be 100% flawless and the occasionally theory difference in opinion hardly classes as 'greatest flaw'.

Regarding 'constant marginal utility', if memory serves me correctly there is a difference in applying diminishing marginal utility to subjective valued goods and future goods. To be brief, the idea of using gold as 'money' doesn't sit very well with me. I think gold should be left in the past. I haven't decided on what 'money system' i would prefer as their are pro and cons to each of them. Perhaps it would be better to do without money at all and implement a 'resource-based economy'.

Off shopping.....will discuss more on 'greatest flaw' later. Don't forget Mises had a lot things right when you look at society/economy in the last 50 years.

I think I just saw the goalposts move again.

We have now gone from "what do you mean Austrians have their own flaws?" to "no economist would be 100% flawless".

As for the rest.....

the idea of using gold as 'money' doesn't sit very well with me.

It's your prerogative but history is not on your side and about seven billion people around the planet would disagree with you.

I think gold should be left in the past.

Well, every central banker is telling us it's a barbarous relic and should be left in the past, but somehow they keep hoarding it in their vaults. And Germany, barbarous relic and all, wants their gold back. It will apparently ONLY take seven years to round it up and send it back to them. Imagine that...

I haven't decided on what 'money system' i would prefer as their are pro and cons to each of them.

Make sure you let us know when you do but I find your non committal however to greatly compete with your "free market economy" open support. You can't have a free market without removing interest rates from the control of central banks and anchoring money printing against collateral AND THAT'S PRECISELY where Mises got it wrong in dismissing gold as that collateral by refusing to accept it had a constant marginal utility. Fischer preferred a basket of commodities instead but that's neither here or there.

Perhaps it would be better to do without money at all and implement a 'resource-based economy'.

A resource based economy? What exactly do you mean by that? Resource producing countries have a resource based economy. Others have "chosen" manufacturing as the pillar of their economic growth and have a merchandilist model economy (Germany/China). The US/UK have masked the de-industrialization of their economies through supporting a consumer spending based and housing market economic model and moved towards a financialization based economy.

So I have no idea what you mean by doing "without money and implementing a resource based economy" unless you are suggesting we return to a barter system, which can set us back to the middle ages. It would all be fine with a barter system I suppose provided no one had a need for "payment terms", in other words they didn't quite have all that was needed to exchange goods or services through barter at the time. Which immediately means that the "time value" of money and "risk" must be accounted for through......drum roll please....interest rates set by those market participants. And as result, we would be back to where we started.

The population has become TOO high,and these clowns that say we should build on green belt land,need some serious lessons .Water shortages have become the norm,not being able to support the food chain is not far away.
   It is madness when people claim that there is loads of land in country areas,as the fabric of life will just go down the armitage shanks.That is why many major cities around the world have blocks of flats,which is the most affordable housing.
  Land is expensive,therefore houses are expensive,because availibility is in short supply.However there are plenty of areas in towns that can be developed,like old factory sites etc.

It's your prerogative but history is not on your side and about seven billion people around the planet would disagree with you.

As if 6.9 billion ish understand economic.

Well, every central banker is telling us it's a barbarous relic and should be left in the past,

That doesn't mean that i want CB to exist in private hands, nor FR lending.

Make sure you let us know when you do but I find your non committal however to greatly compete with your "free market economy"

Haven't made my mind up in 20 years......had plenty of debates with professors and other like minded people (the advance educated types). Free market economy with what 'money system'? It would not be creating money out of thin air by banks. Backed by gold? Backed by the state (collateral?) with limited powers fixed in the constitution, to prevent politicians from creating money for nothing.

A resource based economy? What exactly do you mean by that?

''It is a holistic socio-economic system in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few.''

http://www.thevenusproject.com/en/

''It is a holistic socio-economic system in which all goods and services are available without the use of money, credits, barter or any other system of debt or servitude. All resources become the common heritage of all of the inhabitants, not just a select few.''



.....and then you pinched yourself and woke up.

Get a clue FFS. The name of this planet is Earth, not Utopia.

A wee correction to earlier comments:

The discount under the Right to Buy scheme is capped at 75k ( not 70k ) except for London Boroughs where it is 100k.
So at the extreme end of this give away, someone could buy a 167k house in Dagenham for just over 67k if they'd lived there 25 years.
Discounts go fractionally higher if it's a flat. ( https://www.gov.uk/right-to-buy-buying-your-council-home/discounts )

Not eligible for this - why not take a look at the Social HomeBuy scheme or 'Right to Acquire'.

It's not enough for the promoters of 'affordable' housing - no, our government has this for you ( http://www.insidehousing.co.uk/ihstory.aspx?storycode=6527537 ), which is essentially a commitment to continue the subsidies mentioned in the opener.

The people in QT audiences who go happy clappy for all this are cretinous. There is no housing crisis. Homelessness and repossessions are low. We have a subsidy and free-trade crisis. People who want to develop something themselves, whether it's a mansion or just an extension, are less likely to go ahead as they're having the money they've saved for it devalued by money printing , and the price of the architects and builders inflated by the subsidies that they don't get.

I agree with unbiased that old factory sites should be developed - but not those in cities - when plastics factories explode, industrial estates are the best place for them. The old factory sites that should lose their protected status are the Forest of Dartmoor, the Yorkshire Dales and the North York Moors etc. Make no mistake, these are industrial waste-lands. Take the North Yorks Moors, that former iron ore extraction and smelting site. When the ore ran out, instead of letting nature back, they let in the sheep. And it's now barren shiite with the ratio of visitor numbers to land area lower than the Widnes museum. Probably.

Hey, Mr and Mrs Green , don't buy another yacht in Monaco this year, why not come and build a nice spread here in the Brecon Beacons say, overlooking the future site of the Welsh Formula 1 Grand Prix. In 120 years the National Trust will have it off you anyway as taxes wipe your children out, and we'll pay 2 groats to wander round your gardens, or have our weddings on your old lawns. Let's have some proper unaffordable housing.

Mene......

I said, 'Perhaps it would be better to do without money at all and implement a 'resource-based economy'.'.....Key word - perhaps.

.....and then you pinched yourself and woke up.

Get a clue FFS. The name of this planet is Earth, not Utopia.

You've demonstrated my point about people in boxes.....stuck in their ways. Be like water Mr Mene, open your mind to other informations, research.....pros and cons.....imagine.

You've demonstrated my point about people in boxes.....stuck in their ways. Be like water Mr Mene, open your mind to other informations, research.....pros and cons.....imagine.


You are confused again. There's a BIG DIFFERENCE between thinking out of the box and.....FANTASY.

Get a clue.

Oh mene....debating with you IS now officially pointless.

One can't 'cut the mustard', so resort to pointless comments.

And another on from BASRA ( the Bongo Anti-Subsidy Research Academy ).

In the early 80s housing associations took off, there's now around 1200 of them all opearting on a non-profit basis ( often charitable status ), although I'm sure a lot of Directors and contractors have done well from their activities. Remember there are around 300 Local authority areas in England who pretty well stopped doing new builds ( aka council builds ) by the end of the 1980s. Since then you would have expected at least a few of these HAs to have fecked up, perhaps borrowed excessively at the banks ( something the councils couldn't do ) or to be badly run, or bad luck with tenants, and for the HAs to have gone bust.

But this didn't happen.

Until this in early 2008 ( which was the first one ):
.http://www.standard.co.uk/news/black-housing-associations-bankruptcy-to-be-probed-6628410.html

I suspect some of it is exaggerated - could a HA really get 300m of subsidy to build stock worth 1000m, and have a tenant selection process which asks: Are you single, male and of a certain skin colour, before considering the crucial questions of references and if you're a suitable tenant. But it appears Ujima did.

Subsidies bugger everything. There must be 100s of HAs who have operated at lower levels of bad practice than Ujima, all being propped up by subsidies, prevented from failing. We've already had affordable housing programmes by the bucket load. Time for them to stop imv.

A black housing association for black people?

That's about as racist as you can get.

If a white landlord advertised a property stating that only white people need apply, they put him in jail.

Yet these black racists have been getting away with it for thirty years. And using public money into the bargain!

Agree with you there Crippen. It's a scandal that ethnic minorities have the law written in their favour against white people. I for one, do not understand why people are obsessed with colour of the skin after all it means nothing, a mere refraction of lights.

I should have tried to avoid the race angle to the article. The point I was trying to make is that due to subsidies a Housing Association has to be not just bad, but spectacularly cretinous, to go bust, akin to say a petrol station that only sells petrol and no diesel or Mars Bars. Subsidies have led to extraordinary behaviours because when you offer to subsidise something people you don't really like pop up wanting a piece of the pie. Free markets are about pleasing the customer, not pleasing the subsidy allocator.

We've already had the major affordable housing programmes. We don't need any more.

We've already had the major affordable housing programmes. We don't need any more.

So where are the immigrants going to live?

They are not sharing my property.....

Menelaus

I read and found most of what you are saying very interesting. I just hope your reading of the situation is very wrong for the sake of everyone and that they would adopt a form of full reserve banking so that we can finally have stability in our financial systems and economies.

Ever since the US abrogated it's gold obligations in 1971, deflation economic theories (who form the basis of every central bank's response to the financial crisis today) have been made irrelevant. Why? Because deflation in a fiat monetary system, where money can be conjured out of thin air without collateral to back it up is a MYTH. I'm sure at this juncture, some readers will wave their hands up in the air and shout "Japan, Japan, Japan", but unfortunately that is also a myth. I wrote quite a few posts on the Financials forum about the Japanese deflation situation and experience, you should look them up.

But how can you possibly disagree with existence of deflation in Japan?
You agreed it has occurred with their property market.
You agree it happened in their stock market even if that is not real.
They have seen the price of items like food, transport etc fall from what it was 20years ago.
Workers are seeing decreases in their wages.
The only debate there is for me about the Japanese deflation is that it might not have been harmful to the average Japanese citizen since their living standards are much higher now than prior to the start of deflation.

http://www.businessweek.com/magazine/content/11_06/b4214014587950.htm

By the way I have not yet heard your opinion on the deficits. Do you think they matter so much for sovereign currency issuing nations?

They have seen the price of items like food, transport etc fall from what it was 20years ago.

Assuming its true....who cares? Prices of food or transport going down IS good news for consumers as it may improve their purchasing power, having more money to spend on other things. If it causes deflation, who cares? Only the 'experts', protecting their own self-interest, are going on about deflation. Vast amount of consumers are not interested as in the real world, not la la land, the consumers will make a subjective valuation of a product at that point in time. 'Experts' says that deflation would make consumer delay their purchase of a product if they think the price would go lower. Thus somewhat harming the economy. So when a savvy consumer waits until there is a sale on, typically in the summer and after Christmas day, the consumer is delaying one's spending. I don't recall anyone popping up and saying 'sales must be banned'.

As you said 'food, transport...prices falling'....jolly good. No one can live without food so delaying spending on food is utter nonsense.

Ski-wiz

I was just saying that there was deflation indeed in Japan so we should not deny it as Menelaus was saying it was impossible to happen under a fiat system.

Now I already said I have no problem with either high inflation or deflation provided the living standards average citizens are protected like the Japanese government has done.

Most people who go to Japan will marvel at the number of infrastructure building their government undertook thanks to their numerous stimulus programs hence they are living better and have very low unemployment.

Deflation could be very good for the consumers provided their wages do not fall at a higher rate than consumer prices.

I was just saying that there was deflation indeed in Japan so we should not deny it as Menelaus was saying it was impossible to happen under a fiat system.

That would very much depend on your definition of 'inflation' and 'deflation' and Mene's definition. My definition of inflation is the amount of money supply expanded over time (a year if you like), that is the amount of 'funny money created out of thin air'. I presume your definition would be the same as the government tells you under CPI or RPI or any other nonsense. Under my definition, Mene would be right in saying it was impossible to happen under a fiat system as fiat expands money. I'm presuming Mene's definition is similar to mine.

Now I already said I have no problem with either high inflation or deflation provided the living standards average citizens are protected

But it isn't protected. Living standards rose due to massive personal debts made possible by creating 'funny money'. I simply want stable prices and no inflation or deflation manipulated by politicians and their 'masters'.

Under my definition, Mene would be right in saying it was impossible to happen under a fiat system as fiat expands money. I'm presuming Mene's definition is similar to mine.

So are you also claiming that there was no deflation in Japan or that the Yen is not a fiat currency?

Most people who live there will definitely tell you that the general prices of property and other goods and services have fallen since the late 80s no matter how you want to measure inflation.

boris, I didn't spot all this until now, I have been very busy all day and engaged on the other thread.

I will assume by the substance of your post that you didn't take the time to visit the Financials forum and look for my posts on the subject. Which means I need to re-invent the wheel all over again. I'll try my best to answer your questions when time permits.

Stay tuned.

So are you also claiming that there was no deflation in Japan or that the Yen is not a fiat currency?

No. I was not making that claim/point. The point i was making is when people use the word 'inflation' many would have different definitions, so it hard to understand what people are trying to say unless you know what their definition IS?

Most people who live there will definitely tell you that the general prices of property and other goods and services have fallen since the late 80s no matter how you want to measure inflation.

I have no idea as i don't live in Japan, nor do i know anyone from Japan. I've read articles about deflation in Japan but i do not know what Japan's definition IS?

Yeees, get in there lass:

the SNP deputy leader realises that at least some of the subsidy ( the right-to-buy discounts will end in 2017 ) have to stop, it generally benefits people who are doing all right anyway
.
http://www.bbc.co.uk/news/uk-scotland-23155904
It could be done sooner, e.g. now, but this is better news than you'll get in England.

What is the definition of "affordable housing"?


To rent,  or to buy.


In London, to buy, presumably a family income of £70k p.a.is required.

What is the definition of "affordable housing"?

I don't think anyone knows that because there isn't one. Its very subjective for each person so very pointless.

Put it this year. If ''affordable housing'' is £40,000 then surely it would be clearer to say, 'The government will aim to build 30 homes at £40,000 each in La La Land town.'

Thanks ski wiz.

it is one of the political cliches that sounds good but means not much.

Mister E is asking the right question - what is meant by 'affordable housing'.

Affordable to the people getting the subsidy, or the people paying for it. The buyer or the renter, the seller or the landlord. No-one ever gets a chance to ask because when it's mentioned in a debate, the applause is so loud and long, that no-one gets the chance to ask the person proposing what it means and why we need even more of it given we've already got so many programmes already.

Blackburn memorably said on here that anything is affordable if someone else is paying.

Centrepoint have attempted their definition of 'affordable housing' in this article
.
http://www.bbc.co.uk/news/uk-23222287
They say it is property available at 'sub-market rents'.

The premise starts well by effectively saying, that there will be a Housing Crisis in 2021 ( that's 8 years off ). So that means that there is not a housing crisis right now, contrary to what Shelter and others say about it being here already. I'm happy with the realism. There could be a lot of other crises before 2021.

Then it goes on to talk about social rented sector, and tenants supported by Housing Benefit, but when you go the source report then it misses out when the free market means people are paying 'sub-market rents'. When 3 or 4 mates share a house that they couldn't afford to rent individually, through team-work and cooperation they have got a deal which works out as below market rent for each individual. Where are the numbers in the report for when this happens. Feck it when 4 adults share a Sky subscription in the shared lounge, they are paying below market price individually. Two couples sharing a house is common, if perhaps one couple owns the gaff but cuts a rental deal with the other couple. Mates rates. Moving back in with your parents or even staying with a grandparent, a lot of people have done it when times are tough, and you make a deal with them that is often massively below market rate. It's reasonable to pull your weight in the housework department and do a part-time caring role perhaps, but you are paying below what you'd pay normally to rent. 

You'd think with all the online and offline socialising that people do, the find a lodger schemes on the web, the myriad ways people keep in touch now, that free market affordable housing would be on the increase.

It's not clear, but the advocates of 'affordable housing' ignore the free market in their numbers, obsessed as they are with getting the State to do something. And housing minister Mark Prisk has adopted this line screaming 'We are doing something, the State is doing what you want ( with money it doesn't have )'. Conservatism is getting as close to New Labour in advocating state interventionism in so many aspects of peoples lives.

Unaffordable housing is what is really needed. Cut the subsidies.

Another little angle as to why predominantly free market economies are the best, and why when it is human nature to cooperate and share and work as a team it is best to unleash human nature rather than chain it up.

All over Britain prostitutes would like to share premises for the purpose of safety, security, companionship and cost. But apart from Edinburgh, Manchester, to some extent Milton Keynes, and a handful of other boroughs, the law forbids this. What are the consequences of the State behaving in this way which restricts agreed sales from shared premises of sexy services between consenting adults?

Well in Greater London, you have an unspecified number of prostitutes, at least a couple of thousand, possibly more, working legally and independently from apartments they rent for this purpose, as it ain't a brothel if you work there alone. These apartments would be perfectly adequate as accommodation if they were not being so used by moderately well-paid women on the game.

Unlike New Zealand, Australia and Germany, none of the mainstream political parties in the UK want to permit prostitutes to share premises - a move which despite anyone's morals, would have the effect of releasing several hundred small housing units in Greater London back onto the market. I except UKIP where the party has no policy, but their leader Mr Farage has stated in his view it's none of the State's business to prevent people selling their bodies as long as they pay taxes, and they do it willingly and are not coerced.

Free the market. Then you'll get more affordable housing indirectly. But direct subsidies bugger everything.

Prostitution - they say its the oldest profession....and yet politicians interfered and failed.

Truly they never understand reality.

I except UKIP where the party has no policy, but their leader Mr Farage has stated in his view it's none of the State's business to prevent people selling their bodies as long as they pay taxes, and they do it willingly and are not coerced.

You must be an idealist/fantasist!!!

Farrage is not UKIP and I do not see them ever allowing women to freely sell their sexual favours and opening brothels!!!

UKIP is the very same party that intends to ban multiculturalism, burqas, foreign languages being spoken by foreigners etc so you must be having a dream to believe such tosh!!!

Farrage is not UKIP
Correct - I was trying to imply that Farege's views are not those of UKIP

I do not see them ever allowing women to freely sell their sexual favours
It is currently permitted for an uncoerced adult woman to work as a prostitute, just not to do so in shared premises, which would be eminently practical and cost-effective on some kind of cul-de sac at the end of an industrial estate rather than in regular housing. You're getting confusing here Boris -  are you saying that UKIP will forbid women to work as prostitutes if elected, or that you can't see UKIP ever being in power.

But let's try and stick to the point - predominantly free market economies rock. Restricting the free exchange of goods and services has unintended consequences. In the case of banning brothels, it means that one bedroom apartments are rented and used by women on the game.

Try a google new search for cannabis factory - almost one bust a day. What type of places are these? You've probably already guessed, they are small houses with bypassed electric meters, which house 100+ cannabis plants when they could equally well house a family. These cannabis growers should be doing it under polywrap on farmland ( oh, that's already more expensive than it should be in a free market because of subsidies ) and it can't be done anyway due to legal reasons.

What would the effect be of local authorities being allowed to licence cannabis growing and assumption - one effect would be more affordable housing coming to market - not a lot, but a little.

Stop the fecking subsidies and give the free market a little chance, please.

Ooops, for assumption, read consumption. That would be some catholic voo doo, not getting stoned in licenced premises close to public transport and a taxi rank.

You know that since I am a young left winger so I would most probably 100% agree with all of drugs legalisation, prostitution, polygamy etc.

But I know for a fact UKIP can never be regarded as a libertarian party as their supporters are the most socially conservative you can find.

i would only accept your free market on the property market if people were not allowed to monopolise land and impose an arbitrary restriction to hold the prices in favour of some vested interests.

Another appalling 'good news' story fed to you by journalistic sheep that can't see that susbsidy is as much a problem as it is a solution. With a nice picture of a well-paid Housing Association Executive on 200k + stunning pension to accompany it.

.
http://www.thejournal.co.uk/business/business-news/home-group-gets-85m-350-5683144

The arithmetic says each house will cost an average of £100k to build, with a subsidy of £24k.

Imagine you have saved to buy a plot on which you want to build your own house, and have around £100k-£150k of your own money to do so - your plan might include a downstairs bedroom and bathroom as it's odds-on that your parents or your wife's parents will be infirm one day and need to move in. Where's your subsidy? Feck you, this government won't let you have one, but you have to pay for other people's subsidy through taxes and inflation ( as some of the subsidy money is being printed ). And the cost of materials suppliers, builders and architects are being  inflated locally as they've already got contracts with the housing association so when you ask them if they want your contract, they will either say they're busy, or it'll cost you more.

You might not bother going ahead and decide to let the state deal with the elderly relatives when the time comes.

Subsidies bugger everything.

This news item about fraud in the social housing sector caught my eye this week. If anyone reads this, have a guess first at the total amount of fraud in this sector.
.
http://www.bbc.co.uk/news/uk-politics-23681052

The numbers were much higher than I would have guessed






£350m a year - overpayment of housing benefit due to fraudulent claims
£845m a year - unlawful subletting of council housing
£919m a year - unlawful subletting of housing association properties
TOTAL, approx £2.1bn

Expressed as a % of the Housing Benefit bill which is around £23bn a year, that is a lot of fraud. It's not quite fair to compute the % that way as many occupants of social housing are paying some of their rent themselves. It's not clear whether this is a lot of people doing smallish amounts of fraud ( eg 210,000 claimants mugging the taxpayer for say £10k a year each ) or smaller numbers of people doing larger scale scams distorting the picture. Either way, it's a lot of housing that is being used for purposes for which it was not intended. And a lot of housing that could benefit people who in theory do need it.

Government says it's giving councils more power and more incentives to clamp down, and that is fair enough, but a more effective way to cut this fraud bill would be to cut the subsidy. You can't mug the taxpayer for quite so much if less is being given away. Grants and other incentives can't be skimmed by dodgy types if there are no grants. Stop the affordable housing programmes, and let's start building some unaffordable housing!

For info: the source data of the article is this report
.
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/206552/nfa-annual-fraud-indicator-2013.pdf
which is packed full of statistics on fraud, and a lot of it is clearly guesswork, but an interesting broad brush picture of fraud in the UK.
Anyone wanting to shout 'what about tax fraud?' or 'what about insurance fraud?' will find figures in there that top the fraud in the social housing sector. It doesn't excuse it though.

Oops, slight mistake in the above.

Page 38 of the nfa report above suggests that around 98,000 social homes in England are subject to tenancy fraud, and a big portion of the fraud bill is having to put a family up in expensive temporary accommodation ( notional cost 18k a year ) when they would otherwise have a suitable house they could be placed in.

( so not the 210,000 homes that I speculated )

I did reply bongo, but it seems the powers that be, found my views too over the top for your very sensitive nature and deleted them before they saw the light of day!

You have given the wrong definition of affordable housing.

Affordable housing is for all apart from the English,they just have to pay for it.

When politicians say affordable housing, I understand them mean social housing or council houses.

Which is subsidised housing.

When politicians say affordable housing, I understand them mean social housing or council houses.

Which is subsidised housing.

I also presume that is what the politicians mean when they say affordable housing.

It is also safe to say that today, a lot of that housing is subsidised by housing benefit, not all but a lot.

However that has not always been the case and Councils up and down the country have housing stock portfolios now worth billions that have been bought and paid for by their tenants. And as long as house prices continue to rise, as they always have long term, Councils are able to use that paid for stock to use as collateral.

So you could say past council tenants have helped in subsidising their local council areas for the good of all.

no you just need to stop immigration, then you wont need more houses ha ha

why does bengo want to concrete over the british countryside

past council tenants have helped in subsidising their local council areas

I'd appreciate it if you could have another crack at explaining that, mickstick.
Who helped pay to build these places, who paid some of the rental costs and council tax, who has paid for all repairs and boiler maintenances etc, and who provided the Right to Buy subsidy which has now taken many of these out of council ownership?
Ah, you may be talking about houses which the council still owns - you say they are worth billions - care to name a council with a portfolio worth billions ( defined as say more than £2bn ), there are very few if any.

Bear in mind that the odds of you finding such a council are stacked against you - there are over 300 councils in England and according to page 38 of the National Fraud Authority report "There are nearly 4 million social housing properties in England, with an estimated asset value of more
than £180 billion. Over one-half of all social housing in England is managed by housing associations."
So as an estimate less than £90 billion of asset value is council owned, rather than by Housing Associations. That's an average of 1/3rd of a billion per council roughly. This is broad brush assessment but the average social housing unit in England today is worth about £45k according to the NFA's figures. They may be mistaken, I'll admit they're guesstimating in a lot of their figures, but we have a deuce of a lot of subsidy going on to shore up a relatively small amount of asset value. For sure, there are high number of people at least getting a cheap place to live, but you'd have to be a fool to justify these mammoth subsidies for assets now worth an average of perhaps £45k per unit.

Or maybe you're saying that council tenants are generally mugged off - that even after the free maintenances and partial housing benefits and council tax benefits, they have been as a collective net contributors and they would have been better off getting their own place in the private sector and getting a conventional mortgage. Do us a favour, there are some daft people about, but your net contributors are not that daft. What a depressing view of the human species you've just implied imv, people in council housing voluntarily letting themselves be net contributors when they could get a better deal elsewhere by exercising Right to Buy or going private. There will be a few cases, but in general people are more intelligent than that. Give them some credit, and stop with the contorted reasoning.

Justifying the subsidies, past or present, on the basis of the asset value of what is owned by councils is crazy finance

When fluff and generalities debate research on here, research always wins.

Well done, bongo, fantastic post.

Bongo

Housing Associations look after over half of social housing agreed. However the majority of that stock was in the ownership of local councils originally, but when tenants were given the chance to chose their landlord a majority went with housing associations. No money changed hands, council properties just had to hand over to housing associations the deeds.

A lot of housing associations became in existence just by switching the local councils housing department to a charitable housing association, so a council department became a charity in affect. This happened alongside council maintenance departments switching to become the maintenance departments of the newly formed associations. Only the names changed, and in most cases the staff stayed the same.

So I class all social housing as being the same in spite of who holds the deeds, and therefore together the portfolio is billions.

A council house was offered to my uncle in 1946 at the price of £1100, more than it cost to build. That same house today is worth over half a million, and is still in the ownership of the council. My uncle paid rent, some of his last years subsidised by housing benefit, until he died 5 years ago. I would think that he paid several times the cost of the house plus the maintenance of the property. Maintenance used to be cyclical (5 years for outside and 7 years for outside plus immediate) until the sixties/seventies when most councils got rid of direct labour. Anyhow the council have on paper at least an asset of half a million that hasn't had a net cost to the council.

The majority of council tenants did not take up the offer of discounted right to buy. They were'nt all mugs, a lot had no interest in becoming owners. They also would have no interest that they paid more in rent over the years than the property cost to build or maintain.

So these are the properties to which I was referring as allowing the councils and now housing associations to invest in perhaps more housing stock as they are now supposed to raise their own needs but it gave councils the leverage to raise money to benefit the local population.

Should say 7 years for inside.

I guess Dr Crippen as a landlord has tenants that cover the cost and more of the mortgages that he has on his properties. Long term council rent paying tenants (those that do not claim housing benefit) are no different and benefit the council in the same way.

Some people look upon council housing as safe, long term tenancies without the worries of being in long term debt.

Westminster council has 22,000 council properties looked after by CityWest with an approx valuation of 5 billion.

Justifying the subsidies, past or present, on the basis of the asset value of what is owned by councils is crazy finance.

Where you have managed to conjure up that sentence from

I also presume that is what the politicians mean when they say affordable housing.

It is also safe to say that today, a lot of that housing is subsidised by housing benefit, not all but a lot.

However that has not always been the case and Councils up and down the country have housing stock portfolios now worth billions that have been bought and paid for by their tenants. And as long as house prices continue to rise, as they always have long term, Councils are able to use that paid for stock to use as collateral.

So you could say past council tenants have helped in subsidising their local council areas for the good of all.

.......I have no idea.

I have to concede Mickstick has won the challenge with his example of westminster council's housing estate.

The battle will continue soon though ...

I couldn't find much on people who historically had more than paid their way over the lifetime of their tenure. Nor can I find evidence of how such people would have benefited the rest of council service users or of council stock being used as collateral to provide council services. Councils can't borrow money as far as I know. They can sell their properties at a discount which is currently 35% if you've been a social tenant for 5 years, wtf, more if a tenant for longer - I hope at least the vast majority on here would agree that Right to Buy subsidies have to stop. They serve to divert asset value, typically the best assets from the many ( council or HA ) to the few ( the individual owner ) on terms which are advantageouse to the buyer. Buyers who are probably in a situation where they would no longer qualify for a house in their current circumstances ( although they would have at the start of the tenure ). Right to Buy is surely one of the factors which have contributed to the situation where across the UK as a whole the average value of social housing is less than 50k per unit as the best ones have been taken.

In the example from the North-East I gave earlier, a subsidy of 24k is needed to build a 100k house, and after a tenant has been in 5+ years, there's a potential loss of 35k if Right to Buy is exercised. Horrifying. And George Osborne wanst to reduce the waiting period from 5 to 3 years
.http://www.standard.co.uk/news/uk/righttobuy-purchases-have-doubled-in-a-year-8570042.html
meaning you the taxpayer will lose your money even more quickly.

Where the value of houses an be used as collateral is on transfer to Housing Associations as I think mickstick is implying. These are relatively new organisations, some daughters of councils and staffed by ex-council employees with a C.E.O, others are new start-ups. There are typically about 3-4 for every council area now. But the HAs can borrow money, using their newly transferred stock as collateral afaik. This ability to borrow has benefited the Housing Association tenant and the Housing Association directors and staff though the 80s and 90s and 00s. I can't see how it's benefited the general public though who want their potholes repaired etc.

There will be scandals to come in the next 10 years of overindebted HAs, and uncollected rents. Some are hugely in debt already and no longer creditworthy such has been their bingeing on credit during the boom years. But that will be for another day.

Anyway, using data from the NFA who say there are about 4 million social housing units in the UK ( council and Housing Association combined ) and the data from these two articles
.
http://www.insidehousing.co.uk/care/more-than-40500-new-housing-benefit-claims-in-a-year/6528149.article
http://www.insidehousing.co.uk/regulation/number-of-benefit-claimants-in-work-nears-1-million-landmark/6528257.article
in particular the comments from Joe Halewood, I think a meaningful picture can be painted of how many council and HA tenants might be paying their own way here and now.

There are 5.1mill HB claims, 4.0mill units of social housing, and 1.7 mill HB claims from those in the private sector.
So about 0.6mill of social housing tenants are NOT claiming Housing Benefit.
They almost certainly were when they qualified for the social house, but they are not now claiming it.
Average social housing rents are 364/month or 84/week.
If someone took a mortgage at 3.94% APR and paid 364/month, they could repay 75k over 28 years. And that's not allowing for them having to cover maintenance and buildings insurance which I assume are included in the social housing deal. I chose 75k as a rough half-way point between the average unit, and one that has just been built. The point is that it is possible for a long-term social tenant who doesn't exercise right to buy, to pay for their house at least once. Such a tenant would not though have an asset to fall back on in old age, so could well be back in the housing benefit system after retirement.

People who think there are meaningful numbers of tenants who pay for their social housing two or more times over are dreamers.

And there's more madness:

Take this development in Accrington for example
.
http://www.bbc.co.uk/news/uk-england-lancashire-20897748

A 14m plan to restore 200 empty terraced houses of the 2-up 2-down variety. ( 70k per empty unit )
Hey you cretins, there's a reason why they're empty, but what do the happy clappy affordable housing junkies want to do with them? They want to knock them through in pairs to make some four bedroomed properties. We can do the arithmetic. A four bed terraced house ( formerly 2 units ) will cost about £140,000, for which I expect you'll get on street parking only , no garden, and you have to wait a year.

But right here, right now, in what's left of the free market economy in the UK you can buy this within 3 miles
.
http://www.rightmove.co.uk/property-for-sale/property-19288107.html
for just under £135k, possibly less with a little negotiation. You get a similar sized house which is a semi, has a drive and a bit of green space. And you can have it NOW, not next year.
And there are many others like this, where you can get more for less. So why is the taxpayer paying to redevelop houses which are not wanted and at great expense in an area where there are already high numbers of vacant properties.

And the people who are selling this are not rich ( it's well below UK average prices ) but they and the buyer will get no subsidy and will likely be paying taxes towards those who benefit from the subsidies.

Oops, apologies
'drive' - that should have said 'off-street parking space' : estate agent bullshine creeping through my filter there

There is even more.
If you're so inclined check out "Contribution to Social Housing"
This is the condition in a lot of planning applications that the developer either builds some 'affordable housing' or if there isn't the land available for this then they make a cash payment to the LA's coffers so they can build some somewhere else presumably.

There's a way round this for developers in Westminster and similar rich boroughs where you can argue that there is no space for the housing, and you can't or won't make a payment in lieu, because then the development would lose money.
For example
.
http://www.insidehousing.co.uk/regulation/councillors-waive-affordable-housing-contribution-for-private-members-club/6516075.article

Outside big cities, this is a fair example of a council with a plot of land to sell, but they are insisting that 10% of anything that is built is affordable housing
.
http://content.durham.gov.uk/PDFRepository/PeterleeCollegeparticulars.pdf It is in an area where there are plenty of 2-bed properties for less than 40k for sale already. An area which badly needs free enterprise and some unaffordable and extravagant housing development to bring balance to the dark forces of match-box living and dependency.

Search the particulars of 'land for sale' on your local council web-site and you'll see similar restrictions on enterprise near you. Sometimes it is called CIL or Communities Infrastructure Levy which is a reworking of the previous scheme, which can even impact on people planning self-builds and making them give up on their dreams.

What effect does this insisting on 'Contributions to Affordable Housing' have? Well according to (.http://www.insidehousing.co.uk/development/the-levy-gets-heavy/6526156.article)
"Councils are also concerned that the cumulative effect of CIL, section 106 and the actual cost of development will put developers off building at all."

No shït Sherlock.

Actually, that's a bad phrase as to a great many people it is not obvious that state affordable housing programmes are not working, and that people who don't quite qualify are being squeezed. As are people who want to pay for housing themselves to requirements that they specify and can afford.

And some more:

This is the annual report of a big London housing association predominantly running properties in Hackney

.
http://www.nlmha.com/documents/NLMHA%20annual%20report%202013-2014LR.pdf

The fact we have 'Muslim' housing associations is not the point, it's the absurdly low values of their properties and the absurdly large surplus and balance sheet which is the problem.

Firstly, they have over 700 properties with a combined valuation of £91.5 bn, which is around 125k each on average. Why the feck is the taxpayer propping up organisations like this with subsidies? London couples would queue overnight outside the agents doors if a few of their houses were offered at around 200k. This is Hackney, close to the centre of Europe's most expensive city ( probably ) and people who don't want or don't qualify for a hand-out or getting mortgaged up to their eyeballs to live in Basildon.

Secondly, they made a surplus of 1.7m on turnover of 5.4m. They've got net cash of 3.4m and net fixed assets of 35.3m. They are supposed to be 'not for profit'.

Solution: 500GBP a month gets a decent rental place in most of the UK for a family of four. We have to cap Housing Benefit at typical UK levels like these ( not a % of typical private rentals within walking distance which is pretty much the current London formula which gets the London HA a 1100GBP monthly rental income from the tax-payer ).

There's enough flexibility in the London HA budgets for them to adapt to reduced subsidies, and enough empty houses in the rest of the country for tenants to move to if they have to.

Next time perhaps: a look at the typical salaries of HA executives, which is another disgrace.

Build houses where they are needed and rent them out to people at prices they can afford. Yep I am saying bring back council houses. No fancy fkin about with all this fancy monetarism bllsht. That's what got us into this impending meltdown in the first place..

We can throw endless resources at bankers and wars. Build houses.


If you are against this and you are a landlord please admit your vested interest in high rent and house prices.

Of course it won't happen. We are addicted (that includes labour) to taking money from the poor and giving it to the rich . And that obviously includes landlords.

you are putting up so much stupidity as melv,
i am the one now about to shout "please remove"

you are clueless no matter what name you use

If you are against this and you are a landlord please admit your vested interest in high rent and house prices.

On the other hand if you're a scrounger or a low wage earner please admit your desire to exploit the efforts of people who are hardworking and with more talent than you, through taxing them to provide you with cheap subsidised housing.

Have a windfall tax on buy-to-let landlords, resulting in a glut of properties con the market at realistic, affordable prices. Everybody's happy.

Windfall tax on what?

I propose more tax breaks for btl landlords for doing the government's job for them, and finding homes for those who can't afford to buy a home.

Yes, most BTL are in it for charitable reasons. Time Van Hoogstraten and the rest were mentioned in the honours list. Or would you be content, Dr Crippen, with the Queen's Award For Industry?

UB,
I'll concede that most BTL landlords are in the game for slightly more reasons than to merely serve the public.

Nevertheless their contribution to society is no small matter, and might be considered by the powers that be for minor honours such as an OBE perhaps?
Of course the ones who look after the benefit claiming toe-rags should be considered first. After all they do have to operate at the sharp end.

Good idea UB.
Keep them coming.

Buy to let landlords have already been given a huge subsidy paid for by the public. A windfall tax would only get some of that money back.

paddletoe,

A windfall tax on what exactly?

The value of their properties equivalent to the subsidies they have benefited from at the expense of the public.

For example savers have been paying the mortgages of buy to let landlords for several years now.

What subsidies?

No disrespect Dr Crippen but I would love to put a stricture around the neck of a BTL Landlord and tighten it until the head turns black, and falls off, metaphorically speaking.
My vote at the Election goes to the party who promise to do this: I'll keep the forum posted but, at the moment, looks like the LibDems.

Crippen your clever enough to know that in that true capitalist system you like to promote lots of buy to let landlords would be screwed if you had not the subsidy of government intervention.

That's simple jealousy UB. It categorises you exactly.

You ought to be ashamed of yourself.

Where would people live if they're weren't landlords?

ODFOYSC

seriously, just how f/k'd up can anyone be to do this all day every day?

"you are disturbed"

"yes i am, yes i am, and proud of it"

Menelaus - thread over

There’s nothing wrong with being a btl landlord, the politics on envy crap makes me laugh. But I agree they shouldn’t be subsidised by an ever expanding housing benefit bill.
Chop that down to f all and let the market equalise out.

The politics of envy is a fact.
It drives many people into the jaws of the socialists.

"thread over"


the thread was over as soon as it went up because...
...THERE....IS.....NO....ONE.....ELSE.....HERE

just a deranged mug on a wheelchair banging posts
back and forth to himself all day, every day

it was would be very sad if it wasn't so hilariously funny
and pleasing

Another constructive day Menelus/Extreme? Well done for getting back into double figures for rude pointless posts. You can achieve your goal of 2,500+ runde posts in a year. Don't let anybody put you off by claiming that you a sorry excuse for a human who has nothing better to do all day than be abusive on the Betfair forum.

Believe in yourself Menelus - Why not spend tomorrow & all next week in front of a keyboard claiming every other poster is in fact 1 person?


Menelus - you have still not explained why Betfair banned you from the forum. Why did you come back to the forum with a new name. Menelus -  Are you still banned by betfair?

With respect Crippen when it came time to pay the piper the buy to let landlords were saved by that thing you don't like to talk about - socialist intervention! The lone ranger came riding over the hill to save the day for these buy to let landlords and they have been surviving from hand outs ever since. That's not the politics of envy. Its the truth you don't like to talk about.

Again with respect Crippen, if your going to use phrases such as the politics of envy then I think it  fair to ask the following question. Which is worse the politics of envy or the politics of hypocricy?

The BTL landlords were saved from what exactly, and what are these handouts that you claim they are surviving on?


Which is worse the politics of envy or the politics of hypocricy?

While you're asking - what about the politics of misinformation?

With respect.

On the other hand if you're a scrounger or a low wage earner please admit your desire to exploit the efforts of people who are hardworking and with more talent than you, through taxing them to provide you with cheap subsidised housing.

Thanks Doc. At least you’re honest. Nice to know where people stand. If more people where this clear we could isolate the right wing in this country much more easily

So people on low incomes are scroungers.

And the only  hardworking talented people are  either rich or are landlords.

The fact is that most young people a cannot afford to buy a house they are not scroungers and are full of talent. And they are hard  hardworking along with millions of other people on low pay ( and getting lower).

So people on low incomes are scroungers.

Well melv you need to brush up on your understanding of what is written. Unless you always choose to misrepresent what people say.

I clearly didn't say that.

Well Crippen I would say pretty much close to zero interest rates and the nationalising of the banks is as near to a hand out as you can get. The capital value of houses has been protected for buy to let landlords and savers are paying for their mortgages.

i don't remember you mentioning larry,
but did you finally decide to enter the
london marathon next year or not?






i could add all the low iq comments on this thread
by all your characters and the total wouldn't exceed
an understanding of finance and economics to that displayed by a goldfish
AND I AM BEING SERIOUS!

but that's just you

Melanus, winning the London marathon is about the only thing you haven't claimed to have done.

listen larry, cut back a bit today and put up only 200,000 words
under say 20 names, give or take a few, and make sure that you
at least drop in for a few minutes to your dance class

sorry larry, that was really cruel
-i'll get out of your way so you can enjoy yourself
on here banging posts back and forth to yourself
until the wee hours of the morning again

who am i to spoil your fun?

Everybody in business scores from low interest rates, but what about those who hold a lot of cash in reserve? They certainly don't.
So why single out landlords who are buying properties on mortgages and then blatantly include those that aren't?
You see everybody who lets out property isn't in debt to the lenders.

What about regular homebuyer? There are many more of them than landlords with mortgages, are they all getting hand outs?
I think they'd argue not.

ignorance and stupidity on steroids.....and on public display