Newtons Bit
Penultimate Amazing
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I think you're confusing "plenty" with "some, but not nearly enough to keep up with demand", Information Analyst...
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Gentrification issues
- Thread starter Travis
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- housing property values
ponderingturtle
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You can't build your way out of a real estate bubble. It sounds like a lot of the issues in London are about investment markets messing it up not their being a real lack of space. Of course the exact issues of any community are different.
Depends what you mean by "demand". If the demand for new London properties is not being satisfied then wouldn't upping the building rate be soaked up, initially, by those who aren't quite wealthy enough to buy the £500k one-room flats?
Or, perhaps, London should build crappy developments that might only appeal to strapped-for-cash nurses and bus drivers?
London is "complicated".
Underpinning the whole problem is a chronic shortage of accommodation which has been an issue for decades. London is disproportionately large, acts as a magnet for inward investment and jobs and as a result will always tend to have accommodation supply issues.
Layered on top of this are a number of other factors:
- Foreign and/or non-domiciled investors in the London property market who are adding froth to the top of the market
- The British attitude towards property onwership vs renting
- Decades of government meddling in the property market which has stoked demand and subsidised buying houses
- Planning considerations and the lack of available building space which mitigates against the creation of affordable housing
Information Analyst
Penultimate Amazing
I was referring to the fact that while there is a a lot of building going on, it is not the type of property those most desperate to buy can affford. In that context they might as well be not be being built at all. When a foreign buyer buys a £500k flat, and leaves it empty, sure in the knowledge that they can sell it a few years later for a massive profit, there is no trickle-down effect that benefits the local population. On paper there isn't enough build to match demand as a whole, but the reality is that a large chunk of what is being build does not meet demand, either.
Information Analyst
Penultimate Amazing
As it's a factual programme, this might be viewable to non-UK residents. It covers developers are circumventing (some would say fiddling) their obligations as regards including a certain percentage of "affordable" (a very relative term) units in new developments.
Inside Out London 5 October 2015
It's the first item, although those who like cats may wish to keep viewing for the second, as well.
Inside Out London 5 October 2015
It's the first item, although those who like cats may wish to keep viewing for the second, as well.
ponderingturtle
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Real estate bubbles suck.
Unfortunately in the case of London it's a bubble that's been there at least since the 1980's (when I had experience of it) and probably much earlier. It's a bubble which seems resolutely impervious to market conditions in the rest of the UK and one which successive governments are complicit in making through decades of meddling in the housing market.
Here's the latest example:
http://www.bbc.co.uk/news/uk-politics-34460822
IMO there's no one single overriding cause of London's housing problems but it seems that the current government (and to be fair previous governments as long as I can remember) seems determined to exacerbate them.
Information Analyst
Penultimate Amazing
Lovely qualifier that it's for "buyers under 40," as if there's nobody above that age who doesn't stand a snowball's getting on the housing ladder in London! I've got a lot of freinds who are either approaching or past that threshold, and who are still renting.
Yes, although the idea of abolishing council-set percentages for "affordables" in new developments in favour of the same developers supposedly happily building cheap "starter homes" is just taking the piss.
ponderingturtle
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There is a difference between a hot housing market and a bubble though. There was a time when there was not enough money in the world to buy an acre of land in Tokyo for example.
Which are you claiming London is, hot or a bubble ?
If it's the latter, when did it become a bubble rather than a hot market and what characteristics mark it out ?
Do you mean cash money or a broader definition of money ?
I'm willing to be gainsaid but the price of land in Tokyo at the height of the boom was around $220k per square metre which makes that around $886m per acre.
There were several billion $1 bills in circulation in 1990 so I'm not sure whether that fact is accurate.
Newtons Bit
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I think after 3 decades of shortages and rising prices it can be considered something other than just a bubble...
I find the graphic below interesting. It's taken from this BBC Story:
http://www.bbc.co.uk/news/business-34465513
IMO the gap that's developed is due to the social housing programmes of the 50's, 60's and 70's being abandoned. Private builders are putting out 150-200k homes a year (though since the crash it's dropped off a cliff) but back in the day social housing was contributing a similar number.
http://www.bbc.co.uk/news/business-34465513
IMO the gap that's developed is due to the social housing programmes of the 50's, 60's and 70's being abandoned. Private builders are putting out 150-200k homes a year (though since the crash it's dropped off a cliff) but back in the day social housing was contributing a similar number.
Attachments
Information Analyst
Penultimate Amazing
That's horrifyingly stark. Housing associations have clearly increased their home-building, but it not anwhere near enough to make up the loss of building by councils. It's also pretty clear that the private sector hasn't upped its game, either. It's a shame there isn't a total line, as that would make it more clear that building overall has fallen.
I see from the BBC report that - less publicised earlier - relieving councils of the ability to force developers to provide affordable units is that neither will they have to ontribute to the cost of the infrastructure to support their developments, which actually strikes me as having far more serious implications at a time of a ever greater squeeze on public spending.
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ponderingturtle
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Wouldn't that need to be measured against population growth though?
Information Analyst
Penultimate Amazing
Sure. Between 2013 and 2014 the population of England increased by 450,800but as noted in the BBC report, only 131,060 new homes were built in the year to June 2015. Obviously that's not an exact match, but it suggests a disparity. The article states:
"At the start of the financial crisis, in 2007, some 177,650 homes were completed in England. This plunged to 106,720 three years later. Since then the industry has recovered significantly, building 131,060 in the year to June."
Averaging out those figues gives around 1,175,500 new homes built since 2006, yet in the same time the population increased by around 3.8 million. Back in 2007 the ratio of new people to new homes was 2.3:1, in 2010 it had risen to 4.2:1, and has only now fallen to around 3.4:1. It's pretty clear that new supply isn't remotely keeping up with new demand. It the population had been flatlining or falling, we'd be laughing, but it hasn't.
I suppose that the key number is the growth in the number of households rather than the growth in population. I was under the impression that the rate of growth in the number of households was higher than the rate of growth of the population because because of bereavement and divorce.
Turns out I was wrong and the growth rates are similar
http://www.ons.gov.uk/ons/rel/famil.../families-and-households-in-the-uk--2014.html
Information Analyst
Penultimate Amazing
Regarding the increase in the number of household, there does seem to be a correlation with the number of newbuilds, given that between 2007 and 2013 the number of household increased by 788,000 while the number of newbuilds was approximately 740,500. Obviously some housing stock does actually get demolished, while other properties get split up - particuarly in London - and I doubt the newbuild numbers are adjusted for either.
What's surprising is that for the household data, between 2002 and 2013 there has really been no major change in the split of types of household as a percentage of the total:
One person household|12.3%|12.3%|12.3%
-Under 65|6.7%|6.8%|6.5%
-65 or over|5.6%|5.5%|5.7%
Two or more unrelated adults|3.3%|3.7%|3.6%
One family households|82.6%|82.2%|81.6%
-Couple|71.4%|70.8%|69.8%
-Lone parent|11.2%|11.4%|11.8%
Multi-family households|1.8%|1.9%|2.5%
This seems to run contrary to the received wisdom that couples splitting up are resulting in a significant increase in the number households.
Information Analyst
Penultimate Amazing
Whoops! I was using the wrong table in the "Impact of reweighing" spreadsheet - the one for individuals rather than households, with the latter giving us:
One person household|29%|29%|29%
-Under 65|16%|16%|15%
-65 or over|13%|13%|14%
Two or more unrelated adults|3%|3%|3%
One family households|67%|67%|67%
-Couple|57%|57%|56%
-Lone parent|10%|10%|11%
Multi-family households|1%|1%|1%
Even with the individual years, there doesn't appear to be any obvious massive shifts:
One person household|29.1%|29.1%|28.9%|28.7%|28.8%|29.1%|29.1%|28.9%|28.9%|29.0%|29.0%|29.1%|28.4%
-Under 65|15.9%|15.9%|15.5%|15.8%|15.8%|16.0%|16.1%|15.9%|16.0%|16.1%|16.0%|15.5%|15.5%
-65 or over|13.2%|13.2%|13.4%|12.9%|12.9%|13.1%|13.1%|13.0%|12.9%|12.9%|13.0%|13.6%|12.9%
Two or more unrelated adults|3.1%|3.1%|3.0%|3.1%|3.2%|3.2%|3.3%|3.1%|3.2%|3.5%|3.2%|3.2%|3.2%
One family households|67.0%|67.0%|67.4%|67.5%|67.3%|66.9%|66.6%|67.0%|67.0%|66.6%|66.8%|66.7%|67.2%
-Couple|57.2%|57.0%|57.1%|57.3%|57.1%|56.9%|56.5%|56.4%|56.2%|56.0%|55.9%|56.0%|56.6%
--No children|28.7%|28.9%|28.6%|29.0%|29.0%|28.7%|28.8%|28.4%|28.4%|28.3%|28.1%|27.7%|28.5%
--1-2 dependent children|18.4%|18.2%|18.3%|18.3%|18.4%|18.3%|18.0%|18.3%|18.2%|18.0%|18.1%|18.3%|18.2%
--3 or more dependent children|3.8%|3.8%|3.7%|3.6%|3.6%|3.5%|3.6%|3.4%|3.4%|3.4%|3.3%|3.4%|3.4%
--Non-dependent children only|6.3%|6.1%|6.5%|6.3%|6.2%|6.3%|6.1%|6.4%|6.2%|6.2%|6.4%|6.6%|6.5%
-Lone parent|9.8%|10.0%|10.2%|10.2%|10.1%|10.1%|10.2%|10.5%|10.8%|10.6%|10.9%|10.7%|10.6%
--Dependent children|6.9%|6.9%|7.1%|7.0%|7.0%|7.0%|7.0%|7.2%|7.3%|7.2%|7.3%|7.0%|6.9%
-Non-dependent children only|2.9%|3.1%|3.2%|3.1%|3.1%|3.1%|3.2%|3.3%|3.5%|3.4%|3.6%|3.7%|3.7%
Multi-family households|0.8%|0.8%|0.8%|0.8%|0.8%|0.8%|0.9%|0.9%|0.9%|1.0%|1.1%|1.1%|1.2%