Five years on
Posted: March 5, 2014 Filed under: Buy to let, Housing benefit, Housing market, Private renting | Tags: Interest rates, QE Leave a commentOn today’s fifth anniversary of record low interest rates all the talk is about how savers have lost out to borrowers. It should also be about renters and owners.
On 5 March, 2009 the Bank of England cut its main interest rate to 0.5 per cent, the lowest in history, and began its associated policy of quantitative easing in a successful attempt to prevent economic collapse.
But the effects continue to be controversial. The campaign group Save Our Savers estimates that savers have lost £117 billion in lost interest over the last five years plus another £209 billion from the way inflation has reduced the spending power of their money.
In contrast, borrowers have gained billions from lower interest rates. SOS’s message resonates because of the perceived unfairness that prudent savers and are paying to extricate us from a crisis caused by excess borrowing.
But what about the housing impact? In a CIH policy essay a few months ago, I did a rough calculation that mortgage borrowers have saved around £30 billion a year as a result of lower mortgage rates, QE and politcies such as Funding for Lending. Those with larger mortgages and with enough equity to remortgage to lower rates will have gained proportionately the most. The impact has also varied considerably between different regions.
Unequal shares: All that is Solid
Posted: February 25, 2014 Filed under: Equality, Housing market, Tax | Tags: All that is Solid, Danny Dorling Leave a commentWhat if our real housing problem is not a lack of a new homes but the distribution of the ones we already have?
That’s the key premise of All that is Solid: the Great Housing Disaster, an intriguing new book published this week by Danny Dorling, professor of human geography at Oxford University. In it he attacks not just the ‘yes to homes’ consensus about the solution to the housing crisis but the actions of just about all the key people involved. Politicians, housebuilders, landlords and property journalists are all seen as part of the problem but housing associations, the CIH and the voluntary sector also come under fire for accepting the status quo.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Crisis talk
Posted: February 5, 2014 Filed under: Housebuilding, Housing market Leave a commentIt was the housing shortage rather than the housing crisis that he said would last for 10 years but it was still a surprisingly frank admission from George Osborne.
This was the key quote from the chancellor yesterday that was the basis of the stories in this morning’s papers:
‘I imagine if we were all assembled again in 10 years’ time we’d still be talking about the challenge of making sure that our housing supply kept up with housing demand and we’re all legislators here and we all have a responsibility to the next generation.’
Read the rest of this post on Inside Edge, my blog for Inside Housing
Appearance and reality in the 2014 housing market
Posted: January 5, 2014 Filed under: Buy to let, Help to Buy, Housing benefit, Housing market, Labour market, Private renting | Tags: David Cameron, Fergus Wilson, housing benefit, Sharon Ray 3 CommentsCombine one ex-PR man prime minister with one lucky homebuyer who’s also an estate agent, then add one ex-teacher turned buy-to-let mogul. Welcome to the New Year recipe for housing, where perceptions are everything.
David Cameron used Help to Buy as a metaphor for the Conservative message about economic recovery and opportunity for all when he took part in a photo op in Southampton with a young mum and her toddler and had tea in the new home she’s just bought through a government scheme.
It seemed standard, if rather awkward-looking fare, until this post appeared on the internet claiming that the young mum, Sharon Ray, was actually Sharon O’Donnell, a sales director with the estate agent that allegedly sold the home. That was followed by a typically sexist story about the ‘attractive blonde’ in the Mail and this corrective about some exaggerations and errors in the original post. Cue a Twitterstorm and debate between those seeing the whole thing as an example of Tory fakery and those outraged by the hounding of a young woman who’d done nothing wrong.
10 things about 2013: part 2
Posted: December 30, 2013 Filed under: Buy to let, Help to Buy, Housebuilding, Housing market, Labour market, Planning, Private renting, Wales | Tags: Budget George Osborne, David Cameron Leave a commentHere’s the second part of my look back at the key themes I’ve been blogging about this year.
6) Help to Buy
If the bedroom tax was the subject I blogged about most in 2013 (see Part 1 of this blog), Help to Buy was certainly the best (or worst) of the rest.
The first hints of the scheme came in January as the coalition published its Mid-Term Review. Perhaps conscious of the gap between rhetoric and reality when it came to the government’s record on housing, David Cameron promised more help for people who cannot raise a deposit for a mortgage, with details to come in the Budget. By March Cameron and Clegg were promising what sounded to me like the coalition’s fourth housing strategy in three years. And in the Budget George Osborne duly announced what I called a huge gamble, loosening the targeting of previous schemes at first-time buyers and new homes and extending the help available much further up the income scale.
Gloomy forecast
Posted: December 10, 2013 Filed under: Help to Buy, Housing market, Private renting Leave a commentIt’s the time of year for predictions and the prospects do not look good for anyone struggling to get on to the housing ladder or afford their rent.
The latest Home Truths report from the National Housing Federation predicts that house prices in England will rise by 35 per cent by 2020. However, the bad news does not stop there for the ‘huge swathe of the population locked out of home ownership for life’ because rents will rise by 39 per cent over the same period.
The latest RICS housing market survey, also out this morning, shows that prices again rose sharply while expectations for future growth have risen to their highest level since 1999.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Blaming the planners
Posted: November 11, 2013 Filed under: Housebuilding, Housing market, Mortgages, Planning 1 CommentFix planning and you fix supply, fix supply and you fix the housing crisis. That’s the seductive argument that seems to be gaining ground.
My problem with it is not that it’s wrong. There is a dire shortage of new homes: completions are running at around half what’s needed to meet demand. Problems with the planning system can make supply too slow to respond to demand, constrain growth and make the crisis worse. It would be ridiculous to say otherwise.
It’s more that it’s too simple. It takes a kernel of truth and claims that it is the only truth. In its crudest form the argument is that all we have to do is sweep away ‘socialist’ planning and leave it to the market: in the 1930s there was no planning, private housebuilders were building over 250,000 homes a year and homes were affordable; the post-war Labour government required planning permission for new homes and prices have risen steadily higher ever since because the private sector has been unable to build enough homes.
Help to Buy: Dave’s dream
Posted: November 11, 2013 Filed under: Help to Buy, Housing market, Mortgages Leave a commentDavid Cameron’s cheerleading for the successful launch of the Help to Buy mortgage guarantee scheme unwittingly reveals more than he might have intended.
In a statement issued last night, the prime minister said that 2,384 households have put in offers under the controversial scheme and ten have already completed.
The figures come from applications backed by a decision in principle for 95 per cent mortgages by RBS and Lloyds, the semi-state owned banks. The average advance is £155,000 on homes worth £163,000, which Cameron said demonstrated that Help to Buy is supporting responsible lending.
Read the rest of this post on Inside Edge, my blog for Inside Housing
Jules Birch 