God help you if you're unemployed.

[Little John]

embark on a massive national social housing-building program.

But....we currently have the largest area of house space (and of higher quality) per person than at any time since just after the Black Death in 1347 (and the quality was questionable then).

A massive house building programme is addressing a non-existent problem.

(There may be a housing distribution issues such as a mismatch between houses in Chelsea and number of people wanting to live in Chelsea, but that's a different problem.)

So, would your solution be to nationalise the housing stock of the UK and then have the state centrally distribute such a resource? Because, in the absence of that, I don't see what your point is. Taking all of the points raised so far with regards to the housing issue, there seems to be four proposals either explicitly or implicitly made;

1) Drive down the bill on the state/taxpayer by driving the poor into destitution/multiple occupancy-overcrowded housing reminiscent of the early industrial revolution by largely removing the social security net

2) Drive down the bill on the state/taxpayer by placing significant restriction/regulations on the private landlord class.

3) Drive down the bill on the state/taxpayer by embarking on a massive state owned house building program

4) Have the state nationalise ownership/control of the existing UK housing stock and reallocate resources according to need.

All of the above would have significant political, economic and social consequences. However, I would argue that (1) and (4) would be most likely to lead to major civil unrest and/or civil war and so, consequently, solutions (2) or (3) present themselves as least likely to cause such civil unrest. Of these, my own preference would be for (3) since all of the money spent by the state comes back to the state (in the form of rents) and so can then be further recycled into the state provision of services.

[kenneal - lagger]

To add another point of argument, we wouldn't have such a housing shortage and such high levels of price and rent if we didn't have such high immigration. Immigration has also been used to reduce the problem of having to get the long term unemployed back to work: if you can bring in a hard working Pole you don't have to worry about training and motivating the unemployable. Immigration is keeping house prices/rents high, wage levels low and unemployment rates up.

[featherstick]

I'd argue the exact opposite. We have high immigration because we have high housing (discounting political decisions). Immigrants are often prepared to share a house with 5 of their mates, sleeping 2 to a bedroom, working long hours at dull jobs, because it's only temporary and in a couple of years they can save enough to open the hairdressing salon or finish their Master's degree back home. They can tolerate conditions and take jobs that a couple with normal aspirations to their own place and a bit of space for their family wouldn't take. £600 a month is beyond the reach of someone earning £12-15,000 pa, but if there's five or six of you it's a lot more affordable. In London the maths make even more sense.

[biffvernon]

Immigrants are always a handy scapegoat when faced with awkward facts.

Today's awkward fact is, as I said earlier, we have more square feet of warm, dry living space per person than ever in history. Go figure.

Ok, so there are changes in the way we now organise ourselves. More smaller households, fewer children per parent, longer old age with one occupier, more grannies living on their own, more divorces and adults living alone, adults getting together for later partnership but keeping on two house, holiday homes, empty houses for no apparently sensible reason, spaces over shops in high streets, people wanting to live in the more prosperous areas and abandoning other parts of the country. I'm not sure which of these is most important and there are doubtless others, but a purely physical shortage overall of houses is not the problem.

[Little John]

Immigrants are always a handy scapegoat when faced with awkward facts.

Today's awkward fact is, as I said earlier, we have more square feet of warm, dry living space per person than ever in history. Go figure.

Ok, so there are changes in the way we now organise ourselves. More smaller households, fewer children per parent, longer old age with one occupier, more grannies living on their own, more divorces and adults living alone, adults getting together for later partnership but keeping on two house, holiday homes, empty houses for no apparently sensible reason, spaces over shops in high streets, people wanting to live in the more prosperous areas and abandoning other parts of the country. I'm not sure which of these is most important and there are doubtless others, but a purely physical shortage overall of houses is not the problem.

So what is your solution to the reallocation of this resource?

[clv101]

Ok, so there are changes in the way we now organise ourselves. More smaller households, fewer children per parent, longer old age with one occupier, more grannies living on their own, more divorces and adults living alone, adults getting together for later partnership but keeping on two house, holiday homes, empty houses for no apparently sensible reason, spaces over shops in high streets, people wanting to live in the more prosperous areas and abandoning other parts of the country. I'm not sure which of these is most important and there are doubtless others, but a purely physical shortage overall of houses is not the problem.

Indeed! Immigrants are not a significant cause of this country's housing woes.

[JavaScriptDonkey]

Immigrants are always a handy scapegoat when faced with awkward facts.

Today's awkward fact is, as I said earlier, we have more square feet of warm, dry living space per person than ever in history. Go figure.

So will you be partitioning your house and giving half of it away to a young couple that is priced out?

The rot set in with the repeal of the Rent Act.
Current house prices have a lot to answer for when it comes to our economic woes. Too much money locked up in house purchases and wasted on interest or rent every year.

[RenewableCandy]

Current high house prices are driven by people who can afford to pay them (else, they wouldn't be so high). In most areas of the country today, these people do not include those working for anything like the median wage. That is the problem.

One solution would be to reduce the disparity in earnings. In a way this is what Housing Benefit attempts to do, but all HB in its present form does is create a big "tax gradient" for those moving from low to just-below-average incomes.

For a start, they might have to get rid of the single-dwellers' discount for Council Tax, in fact I think some councils are already doing this. And it's unbelievable that council tax is waived for empty houses: what's that all about??

[Catweazle]

A 90yr old woman living alone in her once family home is not going to share it with three other people, so in reality there isn't a surplus of houses in the areas with work.

The real reason for the high prices could be a bit different. How would the banks survive without huge mortgages ? What a great game it is for them, they can lend more and more money for a finite amount of homes, ensuring inflation, thus guaranteeing their own loans, ensuring the next round of mortgages are even higher and more profitable. A bubble if ever there was one, and if it bursts the banks will fold.

The government takes a kick-back in the form of stamp duty, the councils use the value of their housing stock as collateral for loans or as their notional pension funds. It's a car-crash waiting to happen.

[JohnB]

So will you be partitioning your house and giving half of it away to a young couple that is priced out?

I bought my house with the intention of finding ways to partition it, but won't be giving it way as I want the money back to do other good stuff with.

[Little John]

Current high house prices are driven by people who can afford to pay them (else, they wouldn't be so high). In most areas of the country today, these people do not include those working for anything like the median wage. That is the problem.

One solution would be to reduce the disparity in earnings. In a way this is what Housing Benefit attempts to do, but all HB in its present form does is create a big "tax gradient" for those moving from low to just-below-average incomes.

For a start, they might have to get rid of the single-dwellers' discount for Council Tax, in fact I think some councils are already doing this. And it's unbelievable that council tax is waived for empty houses: what's that all about??

If wages were the reason for high house prices then we should have seen a commensurate rise in wages alongside the rise in house prices over the last 3 decades, but we haven't. Indeed, wages have remained more or less static for most people in that time.

What has happened is that credit has become easier to obtain and interest rates have been historically low.

[biffvernon]

So will you be partitioning your house and giving half of it away to a young couple that is priced out?

Why should I do that when there are lots of empty houses about? My local authority has just put out to consultation a policy change to charge council tax on empty buildings, a change I support.

I was talking to a friend just last night, a farmer who had a semi-derelict cottage on his land. He has recently refurbished it and is offering it for rent, a rent judged fair in the market by the local land agents. It has been waiting for tenants for a few months. He is unsure what to do.

[biffvernon]

So what is your solution to the reallocation of this resource?

I don't know of one silver bullet, but that does not justify blaming the wrong cause and proposing the wrong solution.

Each of the issues I listed above needs to be looked at in turn. RC suggested removing the council tax concessions on empty properties. A broader policy of dispersal of economic activity amongst the regions must feature large. Moving part of the BBC to Salford was a smart example but much more like that could be done. Don't build a new London airport runway but send the business to underused facilities elsewhere. Don't build HS2 but improve regional railways that do not lead to London. Invest massively in telecoms to allow business dispersal to remote places. ...

[clv101]

...a rent judged fair in the market by the local land agents. It has been waiting for tenants for a few months. He is unsure what to do.

If it's been empty for a few months (say four) he would have been better off setting the significantly lower (say -25%) and having a tenant. An occupied property at any rent is better than an empty one.

[Little John]

So what is your solution to the reallocation of this resource?

I don't know of one silver bullet, but that does not justify blaming the wrong cause and proposing the wrong solution.

Each of the issues I listed above needs to be looked at in turn. RC suggested removing the council tax concessions on empty properties. A broader policy of dispersal of economic activity amongst the regions must feature large. Moving part of the BBC to Salford was a smart example but much more like that could be done. Don't build a new London airport runway but send the business to underused facilities elsewhere. Don't build HS2 but improve regional railways that do not lead to London. Invest massively in telecoms to allow business dispersal to remote places. ...

Your post implies that house prices are too high in areas with a lot of work and too low in areas where there is no work and that all we need to do is re disperse the work more equitably in order to re-disperse the affordability of houses more equitably. Whilst a more equitable re-dispersal of work is necessary for other reasons, it will not affect the national affordability of house prices. House prices are too high wherever you go in this country. In the south east, where there is more work and wages are higher, house prices are too high for the wages that people earn. In the north east, where the is less work and wages are lower, house prices are too high for the wages people earn. In fact, the disparity between wages and prices in the north east is even worse than in the south east. That's why they have fallen proportionately further in price over the last two years compared to the south east

House prices are too high everywhere in relation to people's capacity to buy them and service the mortgages on them once they have bought them. Interest rates can't go any lower and so prices need to drop or wages need to rise. Though, rising wages woud merely serve to encourage the banks to pump yet more funny money into the economy and so bring us back to where we are right now. For the above reason and also because of inexorable resource contraints on economic growth, wages cannot rise and so house prices need to drop. The reason they are not being allowed to drop, though, is because our entire economy is built on the debt currently underpinning their "value".

Furthermore, the gross inflation of the housing market that has taken place over the last decade or two via the funny money pumped into our economy by the banks aided and abetted by historically low interest rates set by central banks is the central reason why we have so many empty properties. This is because they have come to be seen as a significant investment class for a whole host of financial institutions and, even, by the average citizen. Like any other investment class, it is sometimes profitable to simply sit on it and wait for the market to move in your direction before "cashing in". The fact that the market is not now moving in a perpetually upwards direction is an economic fact of life no one wishes to face. Least of all our government who know full well that if they let the whole, stinking, debt-ridden house of cards fall, there will be F--k all left of our economy.

Debt, as a function of a corrupt and broken monetary system, is the problem.

House price affordability, dysfunctional occupancy rates and the fact that Extractor Fan can't find a suitable employee for his business are all symptoms of that problem.