Copy of Lib Dem coalition agreement with Tories

[Brendan]

The ?let's have a review' thing is particularly annoying mostly because we all know that it means, ?We don?t want to deal with it right now and hopefully by the time the review has happened you?ll have forgotten about it.?

I?m guilty of having done the exact same thing a number of times myself. Tosser that I am.

[DJKillaQueen]

lol....at least you're honest Brendan.

I think the real issue is that most politicians have no idea what it's like to live in a high density urban area. They grew up in leafy privilege with more space than a family of ten could need. They just have no idea of what it's like for a family of five (or four even) to be living in a two bedroomed tiny flat. And the ones that do, seem to have short memories once they too get their leafy suburban or better still, rural pad. They just do not care.

But we are now in this situation where even those with two decent enough incomes are being stretched by the cost. Yes they will have a suburban terrace big enough but it'll be costing them more than half their salaries. It's demoralising.

Governments should take overcrowding very seriously. It is one cause of family breakdown. Teenagers have nowhere to do homework. It's a very stressful way to live and especially when you are having to live like that for years.

I challenge any politician with a family to go and live in a two bedroomed flat for six months and see what it does to their mental health by the end. They'll soon change their tune on where housing ranks amongst other pressing areas of the economy.

[Moos]

...which takes us back to the thread on representative representation.

[HAL9000]

Brendan Wrote:

-------------------------------------------------------

> ... under the previous government an entire generation

> of young people have been priced out of the

> poverty market ...

There's many a slip twixt brain and keyboard! This is one of the best I've seen in a long while :)

[Brendan]

Blimey did I type that?

Well it is fitting enough.

[Brendan]

Either way I?m very interested to hear from James Barber what the party line on the housing crisis is.

I know the Labour standpoint which was, ?It doesn?t exist.? And the Conservative standpoint (if their propaganda sheets are an accurate reflection) is that people who earn less shouldn?t be able to have homes instead they should be forced to pay for the mortgages of more wealthy people?s second/third/fourth homes. As is their place in society and their duty to their landlords.

[DaveR]

The 'problem' of the housing market is not so easy to diagnose or fix, and a bit of class warfare is not going to do anybody any good. Buy to let took off because property prices had risen over a long period and were still rising, so lots of people had a bit of capital and the prospects of both an income stream and capital appreciation. Credit was cheap and easy to get, and in the main it made good commercial sense for lenders to lend against property (and lots of people benefited from that). Prices were rising primarily because the economy was growing, incomes were rising fast, and restrictive planning rules limit supply, not because of buy to let. In any event, if individuals hadn't got into the property rental market their places would have been taken by commercial landlords, because the returns were so good. As for the tax position, property rental is/was treated the same as other businesses - no specific tax breaks, but no different treatment (interest on business loans is always a deductible expense, for example).

Calling people 'scumbags' and talking about human rights is a diversion that makes people feel better about themselves but is f&ck all practical use to anyone. I'm all in favour of tweaking the tax regime to make sure that landlords pay their share, relaxing planning restrictions to get some high density housing built in areas of high demand, encouraging key worker schemes etc. but you have to face up to the fact that not everybody has the right to live where they want to. London is expensive, but if you want a 3 bed house for ?150k within 40 mins of the City, here's one:

Dartford

Now, you might not want to live in Dartford, but that's another issue entirely, and probably not high on the government agenda

[Huguenot]

I don't agree DaveR.

Residential Property should not be a business like any other.

It is perfectly reasonable to legislate that interest on loans should not be tax deductible on residential property, and housing associations can be accommodated effectively through a charitable status.

Local planning committees would not be interested in reclassifying residential property as commercial to accommodate aggressive landlords as it would create pressure on their own housing budgets.

It would be a self-sustaining proposition.

The fact that ic currently runs as a business is not a reason for it continuing to do so. This approach has wreaked tremendous damage and must be addressed.

[DaveR]

"Residential Property should not be a business like any other"

It's not. There are already all sorts of legal restrictions on the way that landlords deal with properties and tenants. What people are arguing for is a fundamental change to the residential property market, which is different. There is no contradiction between, on the one hand, boosting social housing, changing planning laws etc., while at the same time recognising that it is pointless and (in my view, wrong) to try and legislate the property market out of existence.

[DJKillaQueen]

I follow that by saying Dave that you assume the problems are limited to London. They are not. It's the same all over the country. Also the points I and others have been making have nothing to do with class warfare but a straight forward case of profit and value leaving salaries so far behind that half the working population are struggling to keep up. It's the growing size of the 'gap' that is the issue, not that there are low waged and high waged.

I remember the prices of housing just prior to the start of deregulation in the 80's. I can remember a time when anyone on an average salary, perhaps with some overtime worked could just about afford to buy something, nothing fancy, but something. No other area, apart from finance has seen the level of profit in such a short time that housing has. And those that have benefited most, are the few that had money to spend in the early 80's. The baby boomers have had the best of everything to be honest, from free education to profit and early retirement but that's another discussion altogether.

Credit was cheap and easy to get, and in the main it made good commercial sense for lenders to lend against property (and lots of people benefited from that).

Banks have always lent against property. This was not something that came about because of cheaper credit! As we've seen, uncontrolled cheaper credit has been a disaster in the end anyway, with reckless borrowing and spending and ultimately the sub-prime disaster. Regulation came in after the crash of the 30's. It was designed to prevent such a thing ever happening again and it worked. But within 30 years of doing away with it we've seen two minor crashes and another major global crash. And duh - suddenly governments are saying we need regulation again! Of course we do...money and greed go hand in hand and bankers have shown just how irresponsible they are if left unchecked. In spite of those crashes, the housing market has never dipped significantly...continually propped up by further deregulation.

In any event, if individuals hadn't got into the property rental market their places would have been taken by commercial landlords, because the returns were so good.

Wrong again...market forces would have served to limit the rate of rise (because of the lack of commercial landlords compared to product and the same regulations that had kept things sane for decades) and we'd be in a much healthier position today as a result. The economy was never dependent on the health of the housing market, but has become so because of the deregulatory tinkering that was intended to keep fuelling the rise.

I'm all in favour of tweaking the tax regime to make sure that landlords pay their share, relaxing planning restrictions to get some high density housing built in areas of high demand,

What is needed are affordable family homes, not more high-rise high density flats. Again that is the attitude that says cram all the poor into a square mile and leave the wealthy to the luxurious space of the rest. We had that up until 100 years ago. It was a disaster that only served to create slums and ghettos.

but if you want a 3 bed house for ?150k within 40 mins of the City, here's one

And how can anyone on an average wage afford a mortgage to pay for it? I have a cousin in Liverpool. She earns 13K a year as a care worker for autistic children. She loves her job and it's an important job, but more than half her salary goes on rent for her and her three children. And she is average for Liverpool.

I'm sorry to say it Dave but you have very little understanding of what this conversation is really about. Decent, ordinary, hardworking people being told by people like you that they have no right to have decent housing unless they have some high flying job or enjoy some privilege handed to them by luck of birth! The free market does NOT take care of everything and in recent years has been a complete disaster. A sane and healthy economy is one that balances growth and regulation....not one that leaves those in most control of the economy to do as they wish, which has ultimately been about maximising self interest rather than being part of the creation of a cohesive and balanced economy and society. And we are all going to pay for that.

[DJKillaQueen]

There is no contradiction between, on the one hand, boosting social housing, changing planning laws etc., while at the same time recognising that it is pointless and (in my view, wrong) to try and legislate the property market out of existence.

No-one has even suggested that a property market should not exist - merely suggested it should be returned to a long term investment opportunity rather than the short term profit making machine it has been moulded into by those moving the goalpoasts of legislation. For example, why on earth did we ever end up with self certified mortgages and even worse, end up selling houses to those who couldn't really afford them? If anything, the housing market was deregulated into boom and then propped up with the ludicrous examples of selling I've just given. There has been a concerted effort to NOT let the free market do the job it would have normally done when customers began to run out. Instead new products emerge to keep the customer base rolling along, the latest being the ludicrous part buy part rent.

[Brendan]

Dave that is completely short-sighted and out of touch. 1 in 3 properties in London are bought by investors. Nationally the amount of buy-to-let mortgages being approved overtook the amount of first time buyer ones in 2006 and the gap is still widening.

Granted there are some people living in rented homes in London who do so electively (I don?t know any but I?m sure there are) the rest (not just house shares etc but increasingly young families) are doing so because they are forced to.

We can?t solve this by all moving to Dartford.

Buy-to-let isn?t on its own to blame for the fact that that a normal house costs 10-11 times the normal wage but it has exacerbated it considerably and it has caused a situation where some people are profiting off other peoples? suffering. (and trust me as someone whose family has been victim to this it is suffering. I?m not being overly emotive just accurate.)

It?s a big fcking problem. Most landlords are just self serving idiots like most of humanity but the guy who recognises the problem and then decides to get in on the action himself is a scumbag. No two ways about it.

If you class war remark was aimed at my opinions on the conservative press please just go pick up a copy of the Telegraph one day and you?ll understand what I mean.

[James Barber]

House prices.

My understanding the long term relationship between average income and average house prices has been 1:3.

At the moment it is 1:6.

That seems like quite a structural issue for the economy, private wealth, young people, old people.

I don't know how to solve this structural problem. Part of the problem is rising population levels on an island where we want to keep green belt and we tax refurbishments of properties via VAT at 17.5%.

In Southwark alone we have over 5,000 empty properties which is more or less exactly the the amount required to house the 15,000 people on the council waiting list.

[Brendan]

What about the issue of the increasing number of people who don?t qualify for any kind of government assistance but are nevertheless excluded from having their own homes and are forced to pay off the mortgages of a select group who have an easy route into owning 2 or more?

Because that?s the reality for a significant amount of people in this country at the moment.

[DJKillaQueen]

Oh come now James...a true politicians answer. You really don't want to get into it do you?

Rising population is not the over riding reason we've got here as you well know. You also know that nationally (or maybe you don't) there is more than enough housing stock to house people, and prove the point in the comment you make about the 5000 homes in Southwark. Well you guys had control of the council for eight years so why didn't you do something about those 5000 homes? You found money to build new offices in Tooley Street after all.

Furthermore you know as well as I do that many coucil flats are housing families that need bigger homes. I have a woman above me with THREE children crammed into a 2 bedroom flat. She did have a husband. He left her recently because he couldn't take the stress anymore. So yet another mother becomes a single mother while trying in vain to get a bigger home via the bidding system.

Lack of social houising especially family homes exists for one reason only...most of them were bought in the 80's under the right to buy scheme. How many of them are now still lived in as family homes even? The three bedroom flat next door to me, bought by the family that were moved in by the council as priority need is now rented out, including the sitting room. The rent collected not only pays the mortgage on it, but a good part of the mortgage on the 2nd home they were then able to by in Oxford using the leasehold council flat as security. Right to buy was never intended to make council tenants into buy to let investors.

In fact do you have any views at all on the morality of all the points I and others have made above about the lack of regulation that culminated in self certified mortages?

Do you even agree it can't go on as it has done?

[DJKillaQueen]

Oh and another thing James, the majority of people are not earning the average wage...so the real ratio of salary to cheapest properties of many people is far higher than the 1:6 you quote. You know those figures are offset by high incomes and therefore give an impression that things aren;t as bad as suggested. Mr Average 30 years ago found an affordable house cost three times his salary compared to 6 times now? Well that is just not the reality. For most people the it's gone from 1:3 to 1:11.

[DaveR]

DjKilla, I understand the conversation perfectly thanks, and I've been patronised by incoherent left wing types before as well...

I've had a quick skip back through the thread to see if you or anyone else has come up with some concrete ideas about how you go about guaranteeing nice affordable homes for all (or any example of any place, any time, any where in the world where that has been achieved). I also remember the 70s and early 80s, when far fewer people actually owned their own homes, and far more people were council tenants, and anybody who thinks that was some kind of paradise is seriously deluded.

The mortgage market is demand led. There's no doubt that some lenders made stupid loans, but that was bad business practice rather than a result of any fundamental change in the legislative or regulatory environment, and most of the bad loans were to owner-occupiers rather than landlords. The key driver of demand in the housing market in the last 20 years has been growth in the economy, pure and simple (coupled with the British obsession with home ownership - ownership rates continued to rise throughout the 80s, 90s and dropped back slightly, for the first time in decades, in 2007). Just look at this thread - everybody wants to buy a house (or wants everybody to be able to buy a house) - that's where the demand comes from.

And finally, despite everybody saying 'the market doesn't work', prices are falling. Not in East Dulwich maybe, and less in London than elsewhere, but they are (13% in Liverpool in the first quarter of this year, for example). This was an interesting stat, I thought:

"The Council of Mortgage Lenders (CML) has said that the proportion of the average first-time borrower's income spent on mortgage interest payments dropped in November 2009 to its lowest level for six years, at 14.4%."

[Huguenot]

I think the CML figures are pointlessly and cynically misleading.

Mortgage interest payments don't buy you a house, they're just rental on a loan. You still have to pay off the capital.

At 6:1 ratio, the only people 'first time borrowing' are either on huge salaries or with large deposits paid for by wealthy parents. No suprise that in this market interest payments are only a low part of salary.

The average couple simply cannot buy.

Can I also, for the record, state my absolute revulsion with the pompous asses who talk about 'the British obsession with home ownership'? The only people who talk about this are greedy and grasping land owners who want to milk the masses like goats. They sound like victorian throwbacks.

This current ridiculous system undermines modern capitalist society.

This is not because I'm a prating left winger, but because I understand modern economics:

"The fundamental purpose of property rights, and their fundamental accomplishment, is that they eliminate destructive competition for control of economic resources. Well-defined and well-protected property rights replace competition by violence with competition by peaceful means."

The current BTL systems is just a way to replace feudal lords with modern property tyrants. Both systems rely on the existence of a massive community of disenfranchised serfs from whom self-determination is withheld.

Make NO mistake here. If you have a BTL house and the tenants are paying off your mortgage, you are simply stealing their property and the proceeds of their honest labour from them for personal gain.

Edited for shocking typing...

[Brendan]

Take it from one of the victims. The view that the huge proliferation of rental properties are somehow occupied by transients who need somewhere to stay for a while or people who electively rent is a lie. The view that a rental agreement is a satisfactorily secure legal arrangement for a family to live under is a complete lie. The view that there are plenty of options for people who need houses is an even bigger lie (where do you think the forced rental market comes from).

The facts of the matter are that landlords are exploiting young families by controlling their access to a place to live and obstructing their access to home ownership. I?m not sure how an administration that supposedly promotes people taking control of their own lives can preside over this situation.

But thanks for pointing me towards the gateau trolley DaveR. Most helpful.

[DJKillaQueen]

I've been patronised by incoherent left wing types before as well...

Maybe so but the points I and other are making are nothing to do with left or right, just common sense.

I've had a quick skip back through the thread to see if you or anyone else has come up with some concrete ideas about how you go about guaranteeing nice affordable homes for all

There have been suggestions on how to slow the rate of future growth. This is achievable but requires regulation to do so. Other European countries have it and still have bouyant markets whilst not having the housing crisis we do. The consensus from various European agencies is that the UK market has been over inflated for years (but we are not very good at taking economic advice from anyone in this country). It's not about reducing the number of buyers, but controlling the rate of rise of prices so that it grows more in line with salaries than the rampant money spinning market for the wealthy that it's become.

I also remember the 70s and early 80s, when far fewer people actually owned their own homes, and far more people were council tenants, and anybody who thinks that was some kind of paradise is seriously deluded.

And just who has said it was paradise? The point made was simply that hard work could get Mr. Average his own home. Or do you not think Mr. Average who works harder than a good deal of the affluent should be able to own or rent a home big enough for his family?

The mortgage market is demand led. There's no doubt that some lenders made stupid loans, but that was bad business practice rather than a result of any fundamental change in the legislative or regulatory environment,

In the 70's under the terms of a mortgage you couldn't even rent out a room for money in your home. The rules HAVE changed on mortgage lending radically over the past 30 years - turning what was for many people a 'home' into a lucrative investment opportunity. Everytime the market tailed off (as out-pricing of salaries normally would have that effect on the buyer pool) a new product was invented to keep people buying (well the same buyers buying again and again) without any reagrd for the impact that such rapid inflation would have on so many ordinary people.

Just look at this thread - everybody wants to buy a house (or wants everybody to be able to buy a house) - that's where the demand comes from.

That's an assumption you are making but based on no kind of fact. I rent and am perfectly happy with that but am lucky enough to have a low rent property. For many people, buying is the only way they can ever see themsleves having a place big enough for their family. For others buying would be the cheaper option to the rent they pay, if only they could save a deposit...but wait...there's nothing left after the rent and other bills are paid. That in part is why many people who would be perfectly happy renting are seeking to buy.

This is not about house prices only....it's not...it's about the knock on effect on rents too. NO-ONE can escape the clutches of it because we all need somewhere to live. Why do you think there are 1.8 million people on council waiting lists? Because they all desperately need affordable rents?

"The Council of Mortgage Lenders (CML) has said that the proportion of the average first-time borrower's income spent on mortgage interest payments dropped in November 2009 to its lowest level for six years, at 14.4%."

I second Huguenot on this point. Interest is only part of the mortgage value...

To me Dave it sounds as though you are saying, the market is fine, let it keep rolling along, and who cares if families are crammed into poor accomodaton? Who cares if so many people don't know why they bother working when they see so much of their hard earned cash spent paying someone else's mortgage?

Here's one suggestion that would be for the better overall:

Rent capping (instead of the comparative fair rent committees we have at the moment). If what Lanlords can charge is restricted to a year on year rise in line with inflation (just as local authority rents are currently regulated) then house prices will rise in an equally reasonable manner. The buy-to-let market will still roll along but investment with be a long term one. There really is no need for such a fast housing market. The economy won't die because the housing market grows at a slower rate - but we might just see a lot more people happier in their lives because they can finally afford to rent or buy somewhere big enough for themselves or their family. Do you really think there is anything wrong with that Dave?

[Brendan]

Essentially pal, your ?right? to own 2 houses should not supersede the right of another family to have the opportunity to have one of their own regardless of what the law says. And no, paying tithe to you as their landlord is not providing them with a home. You are just exploiting them for your own profit.

And trying to validate your view by attaching it to a conservative ideology is hypocritical, rubbish because my value system is the product of conservatism and it involves common decency, personal responsibility and fair play* not taking a stance which protects the rights of you and your contemporaries to exploit other people.

Perhaps next you can regale me with subjects such as, ?Rape. Why it?s sometimes ok.? or, ?Slavery. The misunderstood labour source.?

*funnily enough values neither evident or even encouraged by the Conservative Party if we want to get into politics.

[MitchK]

I recognise that I cannot fully appreciate what it is like to be on a waiting list for a home etc and do think that landlords are overly powerful in this country and some balance needs to be restored in favour of tenants. Renting is a rather uncertain business and children need stability.

I am lucky enough to own a house but I have friends who cannot get on the property ladder in London due to the expense, so they end up renting. But part of this is their determination to remain in an upmarket area of London (better than Dulwich) rather than accept that their incomes will never be enough to buy a sizeable property in that area. In my view, they should bite the bullet and move out of London and commute or move to a less desirable area.

That's not always possible of course and more affordable housing needs to be built, but in central London there really isn't much room to do this.

The house price to income ratio has gone up but this is partly due to interest costs being considerably lower nowadays. I am not sure a lot of people would cope very well if interest rates go up to 10%.

But do not expect that a person earning the average UK wage will be able to easily buy a nice 3 bed house in East Dulwich.

[Brendan]

Once again a watered down view of how big the problem actually is. We bring in far more than double the average household income (this in itself shouldn?t be a prerequisite for home ownership anyway). We have significant savings and no debt and we have been priced out of a home which will provide a family with decent accommodation. Not just in East Dulwich (We?ve been forced to move) but pretty much anywhere realistically commutable to our jobs.

So years of study, professional careers and a successful business are rewarded in this country by either raising a family in a 1 bedroom flat or by paying off someone else second home for them while they reserve the right to kick you out at 2 months notice if they decide they want to sell the place (which was a treat with a heavily pregnant wife). These situations are not isolated either I can think of 2 other families I know who have suffered similarly at the hands of landlords within the last year. And that?s the situation for people who are apparently ?successful? and work every hour god sends.

My opinion is to just leave and let the bastards eat each other. They probably deserve it and there are plenty of far better countries with much nicer people who are happy to have us. But unfortunately my wife is a bit attached to her homeland and her family but even she has been finding it hard to stay positive about the place considering the contempt in which people hold one another and the consequent exploitation they allow to occur.

[MitchK]

Well I agree that this country and this city in particular are becoming intolerable. But we might differ on our reasons for thinking that.

Well the average household income is 30k I believe. So if you bring in over double this and have savings, surely you could afford a decent flat in e.g. Beckenham or something. Or are you hoping for something more palatial?

[Brendan]

No we couldn?t. Believe me we tried. The deposits required at the moment mean that realistically only investors and the few first time buyers who have parents to bung them 30K + can get somewhere with more than one bedroom.

We?ve done one to Surrey and (only because we?re lucky enough to bring in what we do) will be able to buy something in the future if mortgages become more affordable to first time buyers than they are to buy-to-let parasites.

The vast majority of people aren?t as lucky as us. (The irony in this term considering what we?re been put through and how we are being exploited does not escape me). They are looking at renting for the rest of their lives if something doesn?t happen.

And I will assume that everyone reading has the ability to distinguish between right and wrong so I don?t have to draw a picture explaining why that is unjust.