House Prices To Stay High Forever

House prices are likely to stay at high levels and potentially keep on rising over the coming decades, as big economic and demographic trends show no sign of letting up, according to a former Bank of England policymaker. Prices have rocketed far ahead of incomes since the 1970s and the gap is not expected to close, said David Miles, now a professor at Imperial College London. Population growth, combined with the scarcity of housing, is one factor driving in rises. Until the 1970s improved transport systems allowed more people to commute longer distances into cities for work, effectively opening up more land to use for housing - but that process ground to a halt, constraining available land and driving up prices. Read more on the Daily Telegraph website.

Housing Crisis Fuels Record Number Of Working Families Living In Poverty

Britain’s housing crisis has driven the number of people living in poverty despite being in a working family to a record 7.4 million, according to new research for the Joseph Rowntree Foundation. The annual Monitoring Poverty & Social Exclusion report shows that 3.8 million workers are living in poverty, more than one in 10 of all people in employment.  In total, 13.5 million people – more than one in five of the UK’s population – are living in poverty. Overall levels of poverty have remained flat compared to 2010, thanks to the economic recovery – but in-work poverty has risen by 1.1 million over the same period. The rise has been driven by the housing crisis and in particular high costs and insecurity in the private rented sector. Read the report online at the JRF website.

UK Housing Crisis Isn’t Supply Problem

Conventional wisdom maintains that the bubble in UK home prices is due to inadequate supply. Conventional wisdom is wrong. Despite tough British planning laws, the shortage of housing across the country is not acute. Overvaluation is largely the result of ultra-low interest rates. Low interest rates may be with us for a while. Relative to income, house prices have never been as unaffordable as they are today. Is a shortage in new homes to blame for the high prices? Last year, housing completions in the United Kingdom rose to just over 150,000. That’s 30 percent less than the average number of housing units completed annually in the 1980s. The solution is simple, say the pundits: Britain needs more houses. Planning regulations should be relaxed. Yet if high home prices were really the result of shortages, more people would be squeezed under the same roof. Read more on the Reuters website.

Extending Right To Buy To Cost £6bn By 2020

Extending the Right to Buy to housing association tenants will cost £6 billion over the next four years as almost 100,000 households take up the offer. It is forecast that around 24,000 housing association tenants a year will buy their home with an average discount of £63,271 under the Right to Buy extension - the discount would cost £1.5 billion a year. The Local Government Association (LGA) is warning that the offer must not be funded by forcing councils to sell-off their social housing, which would drive up rents and the housing benefit bill and lower the capacity of councils to build more homes and tackle waiting lists. It is crucial that councils are able to retain 100 per cent of receipts from the sale of any council homes to reinvest in the desperately needed homes across the country. Read more on the LGA website.

Seven Reasons Why Extending 'Right to Buy' to Housing Associations Is Plain Bad Policy

1.       We have a housing crisis.

2.       The proposal involves councils selling high value homes when they become empty with the proceeds being used as discounts to individuals. That means two rented homes lost to social renting forever to allow one lucky household to own a home.

3.       This is a very ineffective way to support the aspiration that many have to become home owners.

4.       We have over nine million households living in private rented accommodation who have no chance of benefitting from this bonanza.

5.       There are a further three million adults still living with their parents. Nothing for them in this either.

6.       There are huge numbers of people in poor quality, insecure homes who are working hard but in low paid jobs. Their aspiration is a decent home to rent.

7.       Housing Associations exist to provide benefit to the community and they hold their assets (housing stock) in trust for the community. They do this by providing affordable homes for rent. To dispose of these assets to individuals is contrary to their legal objectives.

Read more on the Huffington Post website.

Enfield Tears Up Rules in Radical Attempt to Ease Housing Problem

Pushed into a corner by soaring prices, greedy landlords and a cap on benefits, one London council has embarked on a daring set of untested policies to provide more public housing.  Read all about how Enfield Council has developed a range of options – including buying houses which would not be eligible for Right to Buy - in an attempt to counteract the ruinous costs of homelessness, on the Guardian website.

How to Fix the UK's Housing Mess

The high cost and low availability of housing is already causing political trouble. It is one of the arguments used by UKIP for pulling out of the EU and controlling immigration. The housing mess is also prompting Britain's mainstream political parties to come up with foolish policies. The Conservative-led government's flagship scheme - Help to Buy -helps people who wouldn't otherwise have a big enough deposit to buy a home. Its main effect will be to increase demand further, so pushing up prices, rather than increase the supply of homes. Meanwhile, the opposition Labour Party has promised to institute a type of rent control if it comes to power. That sounds nice for tenants. But it too would rig the market, deterring landlords from building new homes to rent. A better solution is not to distort the housing market but to remove existing distortions so that it operates more freely. Read more on the Yahoo! Finance website.