FAO Big Hitters: How are you solving the housing crisis?

MY tenant pays £500 a month LESS than it would cost her if she bought it from me – 

If she is paying 500 quid less a month than she would her mortgage on a similar property then I imagine shes getting a good deal. I suspect that is far from the norm however. Only folks I know who let a property have their mortgage pretty much covered by the tenant

Who are these ‘big hitters’?

#Its a pejorative way of saying folk like you and me that debate far too much on here 🙂

She is Mr Badger – and so am I.  A good deal is one where both sides are happy.  I am in a very privileged and lucky position.

(well as good a deal as you could expect living in Edinburgh)

Round near us there have been three recent housing developments. Every one of them is 3 and 4 bedroom detatched ‘Executive’ houses

Lots of land that can be built on in the area. Church fields, land near Summerseat, old paper mill, the green bit that between Holcombe brook and Brandleshome, Elton, walshaw etc. I’m almost certain James F MP will be the first to agree with the building of thousands of homes? :scratch:

Stop the banks lending so much. Restrict it to a much more sensible multiple of income

Rebuild the government housing stock.

Limit mortgages

Capital gains tax on profit from house sales.

MY tenant pays £500 a month LESS than it would cost her if she bought it from me – because I am lucky and in a very privileged position to be able to do this. Force me to sell she loses her home. Tax me highly on it I would need to put the rent up. ( as much as I am allowed here) Both options make life worse for her.

But presumably you would be the one banking a good chunk of the difference in her outgoings as a profit on this imaginary sale?  If not why did you ever choose to own a spare home?

and surely the upside is she would finally get to own her home rather than being in the precarious position of renting from the kind of renegade Landlord that grows a ponytail later in life 😉

I’m always amazed by the number of Robin Hoods types that go into Land Lording…

In my part of the midlands at least, reasonable starter homes are available for as little as £160k, which is affordable to a couple on minimum wage. Can’t see how that could be described as a crisis really. Is the crisis not just a south east thing? In which case localised rather than national solutions feels more suitable.

If not why did you ever choose to own a spare home?

It was Mrs TJs flat.  Its a long complex story.  I get plenty of money for the flat – really more than its worth IMO but way less than whats its market value is.

I get that people are concerned about developments on greenfield sites, but there are variations in these, and I think we need to be careful taht restrictions like the above will just stop all developments.
Near me there was a proposal to redevelop a listed building into flats, and add a second block of new build flats, matching the style of the listed building on the spare land behind it. The listed building has been empty for 20+ years, and been set alight at least twice and is in danger of collapse. Planners agreed, but put a clause in that said developers had to redevelop the old site first, before building the new block. Developers said this was not economic, so despite planning being agreed for 70 ish dwellings, the place has been allowed to deteriorate even further over the past 4 years, and planning is about to lapse…

But the reason for doing that is that far too many developers agree to deveop an exisitng building or site in exchange for permission to build on greenbelt land. They then say thay they have to build and sell the new greenbelt houses in order to finance the building / brownfield development.
Weirdly, after they have completed the greenbelt development they then dont go anywhere near the expensive brownfield one and just bigger off.  Obviously the councils cant afford to go after them in the coutrs, and if they do then the company just gets wound up and the directors walk away and start another company.

Not sure what the solution is other than insist on the hard part of the deal being completed first – however, this then looks like councils getting in the way of developers (which isn’t always as black and white as it looks)

ETA – this quote function is shite.

There’s been a few projects where people have collectively built or renovated a home, which they then can keep.

OK, while not suitable for everyone, and not everyone can do the work required, it does help with some things, namely builds more houses, instills more practical skills- plumbing, carpentry, brickwork, electrical, which is something we keep hearing that the country needs more of.

is the crisis not just a south east thing?

Not really – large areas of unaffordable housing in Scotland and I am sure in other areas – and a starter home of £160000 would have been beyond my reach as a nurse.  Its just shows how skewed this has all become that a house that is not affordable to most public servants is seen as affordable.

Reclassify parts of the green belt.  For example, there are plenty of towns/villages where a relief road has been built through green belt so allow some infill development  between the relief road and the town/village.

In my part of the midlands at least, reasonable starter homes are available for as little as £160k, which is affordable to a couple on minimum wage

That is just over 3.5 times two peoples minimum wage which used to be the maximum mortgage allowed.

Then there is the trouble of saving up for a deposit and lower wage jobs tend to be less secure, so in the lifetime of the mortgage it is quite unlikely they would always be employed.

IMO the idea that 160k is affordable is **** insane.

There is also the point that the housing market is a bubble that is reaching its limit, either is needs deflating, or it will burst and that will cause far bigger problems than deflating the market.

Essentially the entire developed world needs to change its economic system so that ownership of assets is taxed, rather than gains from the sale of assets. And inflation should be linked to asset prices, rather than just to goods and services

This is the whole structural problem which is causing capitalism to slowly implode.

UK house prices and rents are out of control but most of Europe and North America is in a similar mess for the same reasons.

Stamp duty should be completely abolished to encourage movement.

Capital gains on primary residences.

I think these two would cancel each other out

Council tax should double on second homes, treble on third homes etc.

Councils in Wales already at least double council tax on second/third homes

We need more homes for people,  simple as supply and demand.   Fix supply by building more (incentives to help developers,  tax or otherwise punish land banking/ developers not meeting targets, targets need to be the right type of home,  amend processes to speed up planning), and by addressing empty property (why are they empty? Find out and make sale,  change of use,  renting or whatever else is needed,  easier!)

Who are these ‘big hitters’?

First rule of Big Hitters club…

Process to be revised so that Approvals can come with fixed conditions for developers to meet before proceeding i.e:

“Developer to fund upgrade to local roads used for access, in order to prevent congestion”

This already happens – its a section 106 agreement

. The council can also charge a Community Infrastructure Levy.

https://www.gov.uk/guidance/community-infrastructure-levy

When new housing is built, can communities get the infrastructure to go with it?

Bumping up council tax won’t work. The cost will just be pushed on to the Tennant. As tj readily admits, taxing them won’t work either as the cost will likewise just drive up renting costs

Capital gains on primary residences.

At what point in the process though ?
For example, the house I paid £100k for is now selling at £150K.
The house I want to purchase is £200k.
You want to tax me on the £50k rise in the property value on current house ??

Mmm, I don’t want to pay that , so i’ll stay put, thus keeping a £150K property out of the market B-)

In my part of the midlands at least, reasonable starter homes are available for as little as £160k, which is affordable to a couple on minimum wage. Can’t see how that could be described as a crisis really. Is the crisis not just a south east thing? In which case localised rather than national solutions feels more suitable.

Definitely more of a south east thing. You can get a house not far from me for £30k-40k https://www.rightmove.co.uk/property-for-sale/find.html?locationIdentifier=REGION%5E611&sortType=1&propertyTypes=&mustHave=&dontShow=&furnishTypes=&keywords=

£6/7k deposit, cheap mortgage.

How about we nothing to the housing market but instead regenerate the areas which need it? If there were more jobs there then people would actually want to live there and housing demand would be more spread out? The example I’ve given is cheap because it’s too far to commute to Edinburgh, extending the railway from Galashiels to Hawick would probably be cheaper and more effective than building a load more homes in the commuter belt. Maybe more WF will help over time

Mmm, I don’t want to pay that , so i’ll stay put, thus keeping a £150K property out of the market

And this reducing the demand for, and price of, the £200k one…

Sorry double post

Only folks I know who let a property have their mortgage pretty much covered by the tenant

I’m in the same situation as an earlier poster: tennant pays only 2/3rds what they would have to pay on a mortgage to buy the flat, in London.  Perhaps some of the people you know had a substantial deposit on their properties, or the market is different elsewhere.

Bumping up council tax won’t work. The cost will just be pushed on to the Tennant.

If the property is let out, the Tennant will pay the council tax directly at the standard rate.

Its only if the property is vacant or used as a holiday let/2nd home that the landlord will be charged extra

I don’t want to pay that , so I’ll stay put, thus keeping a £150K property out of the market

Great. It means there is one more property available.

Plus if you are a first time buyer you have nothing to sell so its ‘cheaper’ for 1st time buyers.

Seize TJ Van Hoogstratens property empire and redistribute it to the proletariat

We need to make new homes a lot cheaper to build, e.g. modular construction, admit defeat in dying town centres (t’internet shopping is here for good) and free them up for residential and allow (or even compel) councils to direct revenue from sales in to new homes, oh and incentivise brown field development somehow

I think these two would cancel each other out

Not at all, because one is a tax on profit and one is a transaction fee. You’re assuming house prices continue to rise stratospherically but that doesn’t have to be the case if supply is corrected. If you bought a house 2 years ago, but you now want to move to the midlands for a job, you ain’t gonna be paying any capital gains tax on that purchase! The idea is to target boomers etc. who have massive gains just from being born in the right decade and owning a property for the last 30 years…

Process to be revised so that Approvals can come with fixed conditions for developers to meet before proceeding i.e

In Edinburgh we have the granton waterfront development – huge brownfield site that been developed over decades.  IIRC housing for 160 000 folk some new some replacing old stuff.  again IIRC one secondary school and some primary schools, a GP surgery and parkland and playgrounds – all built by the developers as “planning gain” ie the price of getting the planning permission.  this can be done.  Viable for private developers because high Edinburgh prices means plenty of profits even after building infrastructure

Seize TJ Van Hoogstratens property empire and redistribute it to the proletariat

Love the reference 🙂

• We need to build more of the right type of houses.  Everyone talks about starter homes, but what about family homes occupied by a couple (or just one) for years after the family leaves because there is no where suitable to move to.  Needs to be done on a local basis
• More houses, should reduce price inflation, should make more affordable.  Very long term, but fixing is a very long term.
• We may need to more apartment type dwellings, a move away from houses.
• We will have to build on the Greenbelt.  Most areas (especially outside cities) do not have sufficient brown field sites (or even greybelt).  We won’t like it, but there will be no option.  Means huge changes to the planning system to power through the NIMBYs
• Get rid of right to buy, social housing should remain with the local communities. Build more social housing.
• Get rid of leasehold – and make it applicable existing properties
• Encourage long term (i.e. 5 + year) leases.  Make it easier for good landlords to get rid of poor tenants, make it easier for good tenants to force poor landlords to fix problems.
• Tax house wealth, imposing CGA on main residences, changing stamp duty sellers, etc are all short term “fixes”, they do not solve the problem of lack of housing.
• We do need to look at the problems caused by AirBnB.  How much of it money paid is declared to the tax man? Get AirBnB (and similar sites) have to report how much it paid to whom to HMRC.  All AirBnB (which are not part of the main residence) should be regarded as a business and taxed and regulated as such.

That’s more that I though I would scribble!

(Another none big hitter)

Get AirBnB (and similar sites) have to report how much it paid to whom to HMRC.  All AirBnB (which are not part of the main residence) should be regarded as a business and taxed and regulated as such.

This already happens, and rental income is all business income.

Also, there was an immense amount of moaning on here when HMRC got provided all eBay seller data…

https://www.thp.co.uk/airbnb-tax-crackdown/

Just to look at the affordability issue

Numbers are approximate from memory

When I bought my flat I was a band 6 nurse earning around £20 000 pa.   take home around £1200 a month.  I bought as flat costing £480000.  2.5 times earnings and affordable even when interest rates went up tho I didn’t see the worst of it.  Mortgage varied from 260 – 400 a month or 20 – 35% of my take home.  Affordable.

Now the same post the salary is £35000 ish.  the same flat is worth £350 000.  10 times salary  Take home would be around £2000 a month.  Mortgage payment £2000 a month.  Completely impossible.

there are flats to buy around £150 000.  Nothing like as nice.  Mortgage would be around £950 a month.  almost half the take home pay.  Not really affordable either and asn inter5est rate rise would make it totally unnaffordable

In much of the UK to buy a house without help from parents is almost impossible if you are on an average wage

This already happens, and rental income is all business income.

How much do you think is paid PCA?  I doubt much at all

just to give some context on the talk of building 1.5 million homes over next parliament ( e.g 4 years ) average new housing supply has been c. 170k a year for last 4 years so it’s a great ambition but there is simply no capacity in resources or supply chain for that amount of ramping up without some creative mobilisation of resources

We need more homes for people,  simple as supply and demand.

2 pages in and no-one is talking about the demand side? Net migration to the UK in 2023 was 685,000, disproportionately in SE England. If our new neighbours lived 3.5 to a property (which is high – the average household size in the UK is 2.4 people), the UK (and disproportionately SE England) would need 200,000 new homes just to stand still. In fact, 212,000 homes were built – so 90% of new construction just went to offset the increased demand caused by immigration.

https://migrationobservatory.ox.ac.uk/resources/briefings/long-term-international-migration-flows-to-and-from-the-uk/

https://www.housingtoday.co.uk/news/more-than-212000-new-homes-built-last-year-annual-housing-supply-figures-show/5126619.article

https://www.ons.gov.uk/peoplepopulationandcommunity/birthsdeathsandmarriages/families/bulletins/familiesandhouseholds/2022

Massive human depopulation. Resolves roads being too busy to cycle on, human caused climate change, and over tourism also. Win win win win then!

The idea is to target boomers etc. who have massive gains just from being born in the right decade and owning a property for the last 30 years…

This would have the opposite effect you want it to have. Increasing transaction costs reduces the volume of supply and encourages people to stay put. This is a big problem in the US at the moment with a different cause: a huge chunk of people have non-portable 25 year fixed rate mortgages on very low interest rates. If they move, even to a smaller place, their monthly payment will be far higher – so they stay where they are. This reduces liquidity on the market and labour mobility.

The problem with “getting rid” of holiday homes is that they are in tourist locations which is not where 95% of the working population want to live as the jobs they want are not there …. Unless they want to work in a restaurant.

There needs to be new homes built located with decent access to where the majority of jobs are – i.e. not in the lakes or by the coast.

I’ve seen affordable homes built in one particular tourist location and they couldn’t give them away because it was too far from the jobs.

Eventually to he council changed the rules on who could buy them and then they sold.