Politics, politics, politics (so long and thanks for all the fish)

[glasgowspur]

Yes. Property value would almost certainly decrease and investors would leave the market. The flood of properties on the market would mean huge amounts of previous tenants would then become owners. Also that would result in lower competition for rental properties resulting in lower rent. Brilliant isn't it?

And would you compensate all the owners who have just seen the value of their assets decrease dramatically?
What about those that owned a three bed house to raise their family in and had planned to downsize to fund their retirement?

 

[Rorschach]

And would you compensate all the owners who have just seen the value of their assets decrease dramatically?
What about those that owned a three bed house to raise their family in and had planned to downsize to fund their retirement?

I wouldn't. They live in their house so unless they are selling iit then it doesn't matter.

 

[Grays_1890]

And the thing is, what they're saying they want landlords to be public and corporate. But the cost of running a house is the cost of running a house. Rents have got to cover not only the inherent cost of running a house, but the wages of those that administrate it (which a homeowner or many casual private landlords do for free). And if cheaper rents are to be subsidised, someone's got to pay for that somewhere. So like most arguments about "state owned is better" it still comes back to the fact that the state is funded by you and me and ordinary citizens. I.e. on the one hand it's a cost of living crisis and everyone is struggling after 15 years of tory rule and on the other hand the solution is that the government needs to take more money off everyone to pay for everything they think should happen in the country to make things better.

State owned? No I'm saying that with 2.5m homes taken off the market by multiple home owners those I would prefer than inventory to be available for people to buy and or not be exploited by higher manipulated rents.

What's the cost of running a home for a landlord in the UK after the majority of costs are passed on to the renters including service fees for communal apartments? I have a mate with a £650 PM mortgage on a one bed appt charging £1400 because market dictated conditions in Sutton ATM, I know for a fact that extra £750 isn't the cost of owning the property, not when he is considering using thay yo invest again.

Good luck to him, but I maintain, its a market that doesn't sit right with me, people need homes and I don't think it should be a market exploited by those who have had the fortitude to get in at the right time whilst those now who are in a similarly equal fianncial position can't afford to start a family home because inventory is taken up by people as investments.

 

[thfcsteff]

And the thing is, what they're saying they want landlords to be public and corporate. But the cost of running a house is the cost of running a house. Rents have got to cover not only the inherent cost of running a house, but the wages of those that administrate it (which a homeowner or many casual private landlords do for free). And if cheaper rents are to be subsidised, someone's got to pay for that somewhere. So like most arguments about "state owned is better" it still comes back to the fact that the state is funded by you and me and ordinary citizens. I.e. on the one hand it's a cost of living crisis and everyone is struggling after 15 years of tory rule and on the other hand the solution is that the government needs to take more money off everyone to pay for everything they think should happen in the country to make things better.

I think there's a middle path. I'd like to see better and more conscientious use of the private sector when hiring their services to execute public services. If we could somehow ensure that these contracts delivered a higher grade of the services they currently do, then immediately money is being saved long-term. In general, we should be demanding better of how government uses public money; I'd venture that 15 years of Tory rule saw some of those specific scruples go flying out of the window and society in general has suffered. The conversation is, admittedly, expansive and multi-layred. If there was an easy fix it'd be in by now. Plus there's always the reality of, errr, reality. We can all harbour utopian views of the society we want (I certainly do) but there's also the reality of where society currently is and how it currently operates...sigh...

 

[thfcsteff]

The plan needs to be a huge civil engineering project funded and co-ordinated by central government to modernise and rebuild the entire water infrastructure in this country.

I may well be ignorant when I ask this question (and am not upset to potentially admit as much) but it sounds to me like you're essentially stating what amounts to a bailout of Thames/other company Water's responsibilities to their, err, investment? I mean look, I think it's the only thing left, because generally speaking you're absolutely right, the water/sewage system is Victorian and about to fall apart. It's sad that we're here, sad that these private ownerships were allowed to let things run down like this...but we are where we are...(it's terrible)...

 

[SpurMeUp]

You say £25 billion/£7.2 billion taken out and zero invested but this doesn't even make sense. To be paid a dividend you'll have to own shares. That means you'll have had to purchase said shares and therefore invested your money into the company. This is kind of the point of privatisation isn't it? You're getting the investment from private investors rather than British tax payers, so you can keep taxation lower and prioritise public spending on say, the NHS. If you nationalise Thames water, yes you end having to pay out £7 billion over 30 years to shareholders, but you also lose the capital injection those shareholders put in to be entitled to those dividends and all that capital has to be provided by the government (and the tax payer) instead.

If investment in infrastructure was being funding predominantly by investors - then yes - but it is being funded. The funding it does have is from revenue.

You espouse capitalism. So you must acknowledge that the exercise of investing in water company is about making money. The motivation is not invest and improve.

 

[Kompakted]

I may well be ignorant when I ask this question (and am not upset to potentially admit as much) but it sounds to me like you're essentially stating what amounts to a bailout of Thames/other company Water's responsibilities to their, err, investment? I mean look, I think it's the only thing left, because generally speaking you're absolutely right, the water/sewage system is Victorian and about to fall apart. It's sad that we're here, sad that these private ownerships were allowed to let things run down like this...but we are where we are...(it's terrible)...

The water system is like the railway system. You have infrastructure and you have operations. Private operators have been brought in to run services using public infrastructure. The government has been happy for public anger to be directed at private companies when it was always their responsibility to fund infrastructure upgrades. Let's say that water had never been privatised. Water bills would still only ever have funded the ticking by of day-to-day operations. It was always central government's duty and gift to co-ordinate and fund the national consolidated infrastructure changes necessary to avoid the "running down" to this point. When you have private operators running public services, they're still public services. It's the government and local authorities responsibilities to ensure they're fit for purpose - now and in the future.

Andy Burnham keeps ranting about Avanti West Coast and how the constant delays are a symptom of privatisation. I was on an Avanti West Coast service from Manchester Picadilly to London Euston 3 weeks ago. The train got stuck outside Stockport for 40 minutes. The reason? A points failure. The points are owned and operated by Network Rail, a public body. Andy thinks this is Avanti's fault when the train I was on was a highly advanced tilting train purchased in the last 10 years by a private operator. The train is capable of 150 mph but it has to crawl mist of the way as its sat on crumbling victorian train track that is owned by the public.

The government did in the case of the railways commit to a huge national infrastructure project to try and modernise our intercity high speed rail. But look at the utter utter utter utter utter utter *repeat until you're so angry you turn red* balls up they've made of it.

 

[glasgowspur]

I wouldn't. They live in their house so unless they are selling iit then it doesn't matter.

Well what about a young couple in their first flat who want to move to something larger to start a family and are suddenly in negative equity.
And if the older generations are not downsizing there's nowhere for them to move to.

 

[Kompakted]

If investment in infrastructure was being funding predominantly by investors - then yes - but it is being funded. The funding it does have is from revenue.

You espouse capitalism. So you must acknowledge that the exercise of investing in water company is about making money. The motivation is not invest and improve.

I'm not actually bothered whether they're privately or publically owned. You can make either system work. I'm pointing out that dividends are paid out as a result of money being paid in. The money becomes the company's money to do what it wants with. Investors expect investment. If there's no investment they'll eventually get less returns. New treatment works will be run more efficiently with less people and less repair works for example. Transformation and change is a big part of any private company's strategy to maintain profitability.

 

[ricky2tricky4city]

Yes. Property value would almost certainly decrease and investors would leave the market. The flood of properties on the market would mean huge amounts of previous tenants would then become owners. Also that would result in lower competition for rental properties resulting in lower rent. Brilliant isn't it?

I think, as with all these things, it takes careful footsteps to unwind a situation that we've spent years getting ourselves into.

Politically and from a humanity pov you have to be careful when dealing with people's homes. It's a safety pillar of life, roof over your head, somewhere to shelter.

Create carnage and pain in this area and you'll pay for it politically or visible public unrest.

We obviously need a bottom level of housing, and it's probably only coming in the way of social housing. Private housebuilders, at the moment, can't build units cheaply enough (regardless of an 'affordable' tag). Right to buy was a good policy but an incomplete loop. Keep ploughing the rent money and sales money into new social units. With councils having priority over their own land and private land opportunities.

With modern materials and technology, there are many factory built home construction techniques that would provide cheaper units and better quality consistency. Traditional house builders have no interest in this they're stuck in their own methods. Government should 100% be looking at this. Singles/couples don't need much 30/35sqm can look as cool as fudge (just look a the IKEA room mock-ups).

The bigger question is ...how do we get affordability levels to a sensible 3-4 X earnings from where we are now, without too much carnage and pain?

How would the tenants become owners?

The obvious answer is they'd give their £1500 a month rent to a mortgage lender instead.
Of course, with the caveat, that paying so much rent might have negated their ability to save a deposit (100% mortgages anyone?...in a falling market)

 

[ricky2tricky4city]

And would you compensate all the owners who have just seen the value of their assets decrease dramatically?
What about those that owned a three bed house to raise their family in and had planned to downsize to fund their retirement?

This is where it becomes tricky....if forceful government policy creates a massive turn in the market...you have a point re.compensation. But normal market forces are just the game you're in. Buyer beware.

That said, there was plenty of government policies that kept house inflation bubbling along on the way up...so?.

Your second point...isn't, let's say, a 30% slump relative to both properties...so you sell AND pay less for both. Yeah, I get you lose a little as the lump sums for each are different.

 

[ricky2tricky4city]

I'm not actually bothered whether they're privately or publically owned. You can make either system work. I'm pointing out that dividends are paid out as a result of money being paid in. The money becomes the company's money to do what it wants with. Investors expect investment. If there's no investment they'll eventually get less returns. New treatment works will be run more efficiently with less people and less repair works for example. Transformation and change is a big part of any private company's strategy to maintain profitability.

That's not what's happened at Thames Water, for example?

 

[glasgowspur]

This is where it becomes tricky....if forceful government policy creates a massive turn in the market...you have a point re.compensation. But normal market forces are just the game you're in. Buyer beware.

That said, there was plenty of government policies that kept house inflation bubbling along on the way up...so?.

Your second point...isn't, let's say, a 30% slump relative to both properties...so you sell AND pay less for both. Yeah, I get you lose a little as the lump sums for each are different.

But if you paid £100k for a house now worth £70k you're in doodoo.
Obviously you will have paid some of that down, but at the beginning of a mortgage you are not making much of a dent in it.
Where does the £20k come from to balance the mortgage?

 

[glasgowspur]

I think, as with all these things, it takes careful footsteps to unwind a situation that we've spent years getting ourselves into.

Politically and from a humanity pov you have to be careful when dealing with people's homes. It's a safety pillar of life, roof over your head, somewhere to shelter.

Create carnage and pain in this area and you'll pay for it politically or visible public unrest.

We obviously need a bottom level of housing, and it's probably only coming in the way of social housing. Private housebuilders, at the moment, can't build units cheaply enough (regardless of an 'affordable' tag). Right to buy was a good policy but an incomplete loop. Keep ploughing the rent money and sales money into new social units. With councils having priority over their own land and private land opportunities.

With modern materials and technology, there are many factory built home construction techniques that would provide cheaper units and better quality consistency. Traditional house builders have no interest in this they're stuck in their own methods. Government should 100% be looking at this. Singles/couples don't need much 30/35sqm can look as cool as fudge (just look a the IKEA room mock-ups).

The bigger question is ...how do we get affordability levels to a sensible 3-4 X earnings from where we are now, without too much carnage and pain?


The obvious answer is they'd give their £1500 a month rent to a mortgage lender instead.
Of course, with the caveat, that paying so much rent might have negated their ability to save a deposit (100% mortgages anyone?...in a falling market)

Right to buy was a decent idea, but because it wasn't properly thought through it helped lead to the problems we have today.
I've yet to see a solution that isn't doing the same, moving the problem from one area to another and in some cases creating more and bigger problems.

 

[ricky2tricky4city]

But if you paid £100k for a house now worth £70k you're in doodoo.
Obviously you will have paid some of that down, but at the beginning of a mortgage you are not making much of a dent in it.
Where does the £20k come from to balance the mortgage?

As a side point as long as you can keep servicing your mortgage (and that's largely determined by interest rates and employment) it's not a problem.

There does have to be an acceptance that there will be 'winners and losers' in any market situation. That's the nature of it?.
Of course it's only natural they'll also be resentment for people on the right side of the market, especially given how long and elevated that 'right side' has been going.

To answer...that 20k comes from you, it's the commitment you signed up to. Mortgage indemnity might cover it, if you've been stumping up for that on behalf of your lender (although the indemnity provider might still chase you iirc! Lol) As I said before, it's harsh as 'your home' is a very emotive issue.

 

[glasgowspur]

As a side point as long as you can keep servicing your mortgage (and that's largely determined by interest rates and employment) it's not a problem.

There does have to be an acceptance that there will be 'winners and losers' in any market situation. That's the nature of it?.
Of course it's only natural they'll also be resentment for people on the right side of the market, especially given how long and elevated that 'right side' has been going.

To answer...that 20k comes from you, it's the commitment you signed up to. Mortgage indemnity might cover it, if you've been stumping up for that on behalf of your lender (although the indemnity provider might still chase you iirc! Lol) As I said before, it's harsh as 'your home' is a very emotive issue.

So we're not solving anything, we're just moving the problem from one section of society to another.
That really is the point I'm trying to make, all these solutions are not solutions, and that's not just for the housing market but in general.
These are huge complex issues that affect almost every member of our society, but there are some that through out glib theories and answers and go "there you are, problem solved".
Which is fine when it's a bunch of bored plebs on a football forum, but it has got into the corridors of power now as well.

 

[Kompakted]

I think, as with all these things, it takes careful footsteps to unwind a situation that we've spent years getting ourselves into.

Politically and from a humanity pov you have to be careful when dealing with people's homes. It's a safety pillar of life, roof over your head, somewhere to shelter.

Create carnage and pain in this area and you'll pay for it politically or visible public unrest.

We obviously need a bottom level of housing, and it's probably only coming in the way of social housing. Private housebuilders, at the moment, can't build units cheaply enough (regardless of an 'affordable' tag). Right to buy was a good policy but an incomplete loop. Keep ploughing the rent money and sales money into new social units. With councils having priority over their own land and private land opportunities.

With modern materials and technology, there are many factory built home construction techniques that would provide cheaper units and better quality consistency. Traditional house builders have no interest in this they're stuck in their own methods. Government should 100% be looking at this. Singles/couples don't need much 30/35sqm can look as cool as fudge (just look a the IKEA room mock-ups).

The bigger question is ...how do we get affordability levels to a sensible 3-4 X earnings from where we are now, without too much carnage and pain?


The obvious answer is they'd give their £1500 a month rent to a mortgage lender instead.
Of course, with the caveat, that paying so much rent might have negated their ability to save a deposit (100% mortgages anyone?...in a falling market)

So you're advocating doing what the last Labour government did? Try and increase home ownership amongst low income and insecure income groups by deregulation of prudential risk within banking and encouraging sub-prime lending? That ended well.....

 

[ricky2tricky4city]

So you're advocating doing what the last Labour government did? Try and increase home ownership amongst low income and insecure income groups by deregulation of prudential risk within banking and encouraging sub-prime lending? That ended well.....

Not sure how you've drawn that conclusion?

 

[Grays_1890]

Not sure how you've drawn that conclusion?

Not sure what is insecure about people in stable jobs on good money who are being priced out of the housing market being given the opportunity of a fairer market

 

[ricky2tricky4city]

So we're not solving anything, we're just moving the problem from one section of society to another.
That really is the point I'm trying to make, all these solutions are not solutions, and that's not just for the housing market but in general.
These are huge complex issues that affect almost every member of our society, but there are some that through out glib theories and answers and go "there you are, problem solved".
Which is fine when it's a bunch of bored plebs on a football forum, but it has got into the corridors of power now as well.

Only in the scenario you gave, or on the back of the idea Rorschach floated. (I've lost track)

There has to be an acceptance that sometimes things will be painful, you might have to suffer (poch or Ange will tell you this). Nothing is (or shouldn't be a straight line). Unfortunately, politically, they have been brick scared of letting such events happening...let's keep the masses happy. This will rotate around money, sadly the thing that makes most people happy. But the world is in massive debt now and they have no clue how to unwind that. With the added problem is massive wealth inequality has developed and the group of people on the wrong side of that has increased as it creeps up the middle classes. I digress though..