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Comment by rickdeckard | Hacker News Reader

"These problems are obvious to many British politicians. Leaders in the Conservative and Labour Parties often comment on expensive energy and scarce housing. But their goals haven’t been translated into priorities and policies that lead to growth."

I can't find this mentioned anywhere in the article, but the current imbalance of supply and demand and the resulting high prices is quite beneficial for parts of the real estate lobby which don't focus on building houses but on maximizing value from existing properties.

Approximately one in five Members of UK Parliament are landlords or have investments in the property market.

So while the article is advocating for the removal of "barriers that stop the private sector from doing what it already wants to do", it seems to be blissfully unaware of the powerful forces outside and likely WITHIN the political parties that rather prefer to maintain this imbalance...

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Here in Australia, there are 227 sitting Members of Parliament, of those: one in three federal politicians (71) own two properties; one in three (77) own three or more properties, and about one in three (67) own one property. Eleven federal politicians don't own a home, at least not in their name, and of those only one is known to be a renter.

I don't know why we call it Parliament House, it should be call the House of Lords.

https://www.abc.net.au/news/2024-10-16/how-many-properties-d...

Or Lords of Housing

And somehow this group, in the name of 'affordable housing', keeps coming up with ways to enable people to pay more and more for houses, rather than coming up with ways to make home ownership less expensive. I guess it's just one of those mysteries we may never solve.

Here's some more Recreational Statistics (a branch of Recreation Mathematics):

There are about 11.1 million residential properties in Australia, 30% of which, some 3.25 million residential properties, are held by investors.[1]

There are 25 million people in Australia, about 17.5 million of those are adults aged 25 years or older, of which about 12.8%, or 2.25 million, own one or more investment properties.[1,2]

Let's assume the majority of investment property owners also own their own home.

So, about 13% of Australian adults own about 60% of the housing.

Does that sound reasonable? I don't know if there's some alternate timeline where housing is more evenly distributed and life is better, or how to get there if we think that's a good idea.

1. https://realtyai.com.au/inside-australias-property-boom-how-...

2. https://realtyai.com.au/inside-australias-property-boom-how-...

This is absolutely key. The lobbies are very rich (because they own lots of land) and therefore very influential.

The Normans strike again!

About 70% of the land in the UK will never be built on for various reasons. This leaves 30%. That 30% contains all the towns, cities, suburbs, and various industrial estates, ports, airports and so on. The actual amount of land vaguely available for projects of any sort is rather small, and those projects face heavy headwinds in terms of planning permissions, NIMBYs, and other interests expressed often by people living nowhere near the land in question.

You don't even need lobbies. Anyone who owns a house isn't bothered by this, unless they are particularly fair-minded. It only affects people who don't own their own home, which is a much smaller voting group.

Not only are they not bothered. If they are even slightly aware of the situation they know it's in their financial interest. And if they are not aware of the economics most still have a bias against new construction especially high density in their area, because of the "nuisance" that construction will cause.

Sounds like it's time to make them bothered.

It's the same problem as here in the US: a bunch of people who have gotten fat off of not providing an equal or better future for the next generation.

Why is the answer always more real estate, and not private ownership of housing? If you don’t live in it you can’t have it.

UK House ownership rates are pretty high, but they went down right after the global financial crisis, presumably because the banks had tighter lending rules: https://www.economicshelp.org/blog/214874/economics/why-its-...

House prices are also way up. Lots of people who own them really like this, but it makes it harder to become a home owner in the first place.

For most people who own houses it's probably not relevant that the value has gone up?

If you upgrade you pay the margin, which is higher. Legal/admin/moving costs tend to be a percentage of house value, so costs are higher.

When you retire you might downsize and release a lot of equity, but that's not going to be true for most house owners (happy to be proved wrong) - downsizing is for the wealthy, if I ever downsize it will be to a cardboard box.

Most home owners will have children, prices being high negatively effects them, and finances tend to be somewhat shared (from 0% upwards...) so prices being high is a problem here too.

Maybe I'm missing something about the situation. I guess my kids will be happy for the money when I die, but it'll be easily eaten up by their housing debts.

So people without dependents; people who are very wealthy. Apart from those groups I don't really see how house value changing after purchase helps

> If you upgrade you pay the margin, which is higher. Legal/admin/moving costs tend to be a percentage of house value, so costs are higher.

Indeed.

But psychology: monkey likes seeing number go up.

>> Why is the answer always more real estate

Because as the population grows, we need an equivalent amount of new housing. Short of that, we compete for limited inventory and prices rise.

>Because as the population grows, we need an equivalent amount of new housing.

In the UK (but also most elsewhere), population no longer grows. If censuses say differently, it's because immigrants are being imported from overseas, not from any organic growth. To believe that this is righteous is a strange thing, one has to accept that British people should suffer so that immigrants can gain.

You think the population is not growing in China or India? What a weird take.

Also, any resident is part of the population.

I don't at all see how private ownership would help anything.

As a former landlord, I would not compete with buyers on a potential rental property. I'd rather pick it up cheap because it is an investment. So the correlation between ownership and prices is not as clear to me, and landlords may provide some market making service. The connection between supply and prices is very clear, however.

Another issue is that historically low mortgage rates pushed up the maximum price of house that people could afford, and when rates went back up the market stalled out rather than price correct. I don't know how to fix that.

Because of the lack of building, 1 in 200 families are homeless?

https://www.bigissue.com/news/housing/britains-homelessness-...

Yes, getting rid of private landlords would be great but our housing crisis is far, far bigger than that.

Secondly, having a small amount of rental accommodation is useful. If I switch jobs and move cities then having somewhere to rent while I get on my feet is a good thing. I would agree that it's now gone too far though. Perhaps just having a small amount of government rental locations could solve this.

Mission accomplished, in other words.

> Approximately one in five Members of UK Parliament are landlords or have investments in the property market.

Ah, the class-based society.

Everybody wants affordable housing until it’s their housing becoming affordable.

If only those people outside of my window would just "vote with their wallets" and stop demanding a roof to live under, demand would die down and prices would stabilize again.

It's simple free market economics!

It is indeed simple free market economics: far more demand for housing than there is supply.

It does mention a previous instance of the Thatcher government failing because the insider had this exact mindset...

Have we tried just taxing land?

Set tax bands radiating from the centre of a city. The centre gets a higher rate than the edges?

We get a lot of dead towns because of speculation on land.

A big part of the problem is the UK used to let in about 100 thou immigrants yearly, that figure is now over a million per year. That means putting up a new house every few minutes. Unless you let Lagos or Caracas-style slums flourish, that’s not going to happen.

One of the reasons the Grenfell Tower disaster was so bad, is you had about 130 apartments with about 650 people in them. Illegally sub-let by the official council tenant.

The Grenfell Tower disaster happened because they chose to clad the building in plastic. If the building had in-wall insulation and no cladding or non-flammable cladding like say steel the whole thing would be a minor fire in one apartment.

Is it better to deliver low-quality housing or none at all?

The guy with no housing would be better served even with a large cardboard box, but the police would come and take it away from him if he tried.

Banning the symptoms of the problem doesn't solve the problem.

The problem is high pop growth. If they regulated the growth to a manageable level, the problem would be manageable. As it is they are importing other countries' housing problems. We saw that in the Us in the 1920s where we had slums and boarding houses. At least in the US we have land. Places like the UK and Japan have limited land. Canada, Brazil, Argentine, Libya have lots of land, the UK does not.

If you can't get local population to grow, you have to bring in your labor from somewhere else. And of course, like most wealthy nations, the British birth rate has been in the toilet since the 70s.

This is also a reason that Brexit happened. Arguably the reason, even. There are a lot of working-class people whose families have been in the British Isles for centuries who look at the lack of progress relative to what their ancestors saw during the Empire and postwar eras, and want someone to blame. In this case it was Brussels' migration policies, even though it was providing essential labor that the British economy needs and cannot get from "real British" people because they don't have kids at the necessary rate.

>If you can't get local population to grow, you have to bring in your labor from somewhere else.

Self-fulfilling prophecy... local populations can't grow when they're starved of housing, energy, and most importantly of all, jobs.

If I didn't know any better, I'd say that the current system of capital distribution wasn't providing those things adequately.

But that'd be silly.

That would be silly. Those things are supplied in the required quantities... but there's an oversupply of people to take them. People who don't even have a reason to be in the countries that we're discussing. Implementing marxism won't change anything anyone cares about.

Who said anything about Marxism?

> Those things are supplied in the required quantities

What makes you think that. The UK does not have soviet style socialism. The only supplied products and services come from the free market which right now is dysfunctional

Countries will have to adapt to lower or even declining birth rates and deal with it. The world cannot just keep on growing indefinitely, unless we populate Mars or whatever. The UK, Korea, El Salvador, Israel, Netherlands, Rwanda, etc., will have to learn to make their economies work with a steady state workforce even a shrinking workforce ala Japan.

Definitely, but the economies will likely won't be able to sustain your current style of living. Say goodbye to your electronics (including the one you are reading this comment on). Return to something closer to an agrarian economy until the birth rates go up. Will we agree to do this?

No. Hence, conflict will ensue everywhere

Ironically, once "free" from Brussels, none of the conservatives have actually stop the migration rate or reduce it to nearly zero and they have not been honest about it either

In the year ending June 2024 the net migration into the UK was 728,000. That is the root cause.

The government (and this hasn't started with the current government) has a policy of high immigration then makes noise about the need of doing more to solve the "housing crisis"...

Coincidentally that's also roughly the birth-rate of the UK 20 years prior (2004: 715,996 [0]), a group of people I assume also arrived on the housing-market by now.

The population (and this hasn't started with the current population) has a tendency to shag around and then make noise about the need of housing (and food, and education, and...)

[0] https://www.ons.gov.uk/aboutus/transparencyandgovernance/fre...

Except that with immigration you add adults and families that need housing as soon as they get into the country. Additionally the birth rate has now been below replacement rate for long enough that population would start to decrease without immigration (and the need for housing would obviously decrease with it).

I can't understand this disparaging stance against anyone who brings the issue of immigration up.

It is at the highest level on record and the only cause of increasing population but, no the only issue is that we should build more apparently. And we should also do that while saving the climate and the environment.

There are many contradictions and cognitive dissonance here... And the way my comment is shut down is very telling of that.

UK real estate issues are the same as real estate issues globally.

All the major metros have somehow become a single real estate market. London, NY, Tokyo.

The real estate properties being made are the ones which generate profit, which happen to be for people with ‘large’ amounts of wealth.

Basically - you can worry about immigrants as much as you like, there still wont be affordable housing.

It’s not profitable.

(Terms and conditions apply)

UK's birth rate is 1.44. Someone is going to have to pay for your upkeep in old age.

Most political problems of today stem from the fact that politicians are unwilling to explain this basic fact to their none-too-bright constituents.

Reality is reality. This is why the fascist-lite Italian PM actually increased immigration from Africa after assuming office and taking one look at the numbers.

Lucky then, that immigrants don't age. Otherwise you'd be turning your country into one hell of a demographic Ponzi Scheme...

The are a few more things in the equation. Median age in the UK is ~40 while most immigration is from countries with medians in their 20s. Those families are more likely to have more children especially if they reach a stable and comfortable living situation. So it can be a Ponzi scheme but it can also be an investment.

It is a Ponzi scheme. The Ponzi scheme is that population has to grow forever, which is not sutainable and not possible, and coming to an end globally.

So high immigration now is just kicking the ball down the road while destroying your local culture and people in the process.

"local culture and people" are still very much still alive in the South West of England, where I live.

If this is the reference for the definition of a Ponzi scheme then the pension system in general is a Ponzi scheme by design and immigration is not "turning" it into one like OP said.

But I don't really agree this is the appropriate equivalent at least for the "spirit" of a Ponzi scheme. A pyramid scheme exists only when a pyramid is disguised as something else. When it's designed and presented as an actual pyramid it's not a scheme. In the design of the pension system there's no intention of fraud involved (only lack of education maybe), and the system is constantly and very transparently adjusted to widen the pyramid base and narrow the top (increase retirement age, contributor base, or individual contribution).

You are being unduly pedantic and argumentive. You should understand that the term was clearly used to mean that population must keep growing forever because the next generation must always be larger than the previous one.

And yes, the whole economy and benefit systems, including pensions, assume this. This is why it is difficult to face the fact that population cannot keep growing, and in fact it s forecast that will stop growing at global scale by the end of the century. It is even more unsustainable combined with the objective of solving the climate and environmental crisis.

There is a dishonest incoherency with our governments, and just incoherency with large sections of the public.

By the definition of Ponzi Scheme being used here, is there any capitalist country that is not running a Ponzi?

Someone is going to have to, but currently as much as immigration is raising the UK population, GDP per person is declining.

Declined relative to its peak in the 2010s. It's climbing again. Ironically the decline set in after Brexit.

It's also way higher than it ever was back when Britain was monoracial.

GDP per capita growth [1] has been more or less flat since 2008. The time of the GFC. I think people are starting to forget what productivity growth even feels like it has been so long. Subsequent governments set immigration to infinity to make GDP go up, but this has further exposed the fact that per-capita it is flat.

[1] https://www.macrotrends.net/global-metrics/countries/gbr/uni...

I remember when Tony Blair was elected and Gordon Brown proudly proclaimed "An end to boom and bust economics". I don't think many people realised this would be continuous bust with no boom ever.

So the graph there shows a huge jump in GDP per capita after Labour took power and opened up the UK to mass immigration in 1997.

Am I reading this info right?

Check out these numbers:

GDP per capita for the US, EU, and some others: https://data.worldbank.org/indicator/NY.GDP.PCAP.CD?end=2023...

The US was & is ahead per capita but you can see the EU and Canada taking a big hit in 2008 and going sideways after that.

Here's full GDP. It tells a different story due to the EU's larger population. There have been several occasions where it actually had a larger economy than the US; but every time it seems to hit a roadblock and go sideways for a decade (1980, 1995, 2008): https://data.worldbank.org/indicator/NY.GDP.MKTP.CD?end=2023...

Brexit was around the same time as COVID, so hard to split the two.

>> It's also way higher than it ever was back when Britain was monoracial.

Yes, but the immigration model has changed. It used to be "let the best and brightest from around the world work and live in the UK" now it is "let anybody move here that is willing to work for less money".

Well, no, actually. It's not hard to look at the expected effects of brexit and examine whether they are occurring. For example, decline in small forms exporting to Europe due to trades friction.

"But the working assumption of the Office for Budget Responsibility (OBR), the government's independent official forecaster, is still that Brexit in the long-term will reduce exports and imports of goods and services by 15% relative to otherwise. It has held this view since 2016, including under the previous Government."

"And the OBR's other working assumption is that the fall in trade relative to otherwise will reduce the long-term size of the UK economy by around 4% relative to otherwise, equivalent to roughly £100bn in today's money."

https://www.bbc.com/news/articles/cdrynjz1glpo

Play stupid games, win stupid prizes.

You mean the same civil service that was against Brexit from the start, still tries to justify it being a bad idea? Amazing.

You even didn't include the paragraph prior to your quote:

"It's also clear UK services exports - such as advertising and management consulting - have done unexpectedly well since 2021."

I realise Brexit was a horrible shock for the middle classes that they are still coming to terms with, but I think long term it will be neutral or positive. Now that we have a more pro-UK president there is even scope of trade deals with the USA replacing some of the "lost" EU trade.

Right - I included the bottom line on trade. There's plenty more context in the article, and only a small sliver is at all good for the Brexiteer. Everyone agrees it's been between 6-30% worse on the trade front, and the OBR estimate is middle-of-the-road in that regard.

Enjoy the kool-aid.

"Everyone". Everyone said there would be a run on the pound as well.

Stay delusional.

"Would be a run on the pound" is forecasting, just like expecting that Brexit will eventually be neutral or slightly positive. The article reports agreement on past/present facts.

"And the OBR's other working assumption" - Assumptions no more weight than forecasts.

The obr is not the only source here, but one among many.

You seem very invested in ignoring evidence that before wasn't a great idea. This suggests you're more interested in ideology than evidence-based reasoning. It's distressing that "free thinking" has become an excuse to ignore evidence and pursue vibes-based policy.

Are you counting the English, Scottish and Northern Irish under the same racial group?

The root cause of there not being enough homes is our failure to build enough homes, decade after decade.

France has over 4 million more homes available than the UK, as stated in the report linked in TFA.

> With almost identical population sizes, the UK has under 30 million homes, while France has around 37 million. 800,000 British families have second homes compared to 3.4 million French families.

You are correct. Immigration exploded under Blair, and exploded again (from its previous high) under Johnson. That is the root cause of the housing crisis.

Look at how many people in their 20s were able to buy homes in the 1990s, then look at immigration levels in that decade.

You and the other person who pointed this out got downvoted. As you say, it's forbidden to bring this up. But it's true. Immigration has benefited the very wealthy and upper-middle classes while screwing the middle- and working-classes.

I think it's the same issue as with deficits. The issue isn't that it's a forbidden subject but that people are put off by arguments that don't fully address the causality.

With deficits it's not just spending but also how much revenue you're raising which is instrumental to understanding the problem, and anyone who tries to tell you it's only one or the other is not a reliable narrator. It is similarly the case that access to housing has every bit as much to do with housing policy as it has to do with population dynamics.

>Immigration has benefited the very wealthy and upper-middle classes

A great reason to make more housing and to make housing more accessible to lower and middle classes. Your comment was so rich with pro housing policy subtext that I just want to bring that to the foreground.

The article itself points out that this isn’t the cause of the crisis, and that the misunderstanding of the crisis results in this exact argument.

However, the emotional aspect of this question is what needs to be addressed.

Britain is leaving its citizens out to dry. Well - you need to get with your legislators and more importantly neighbours and decide that you are ok with new housing being built, which ISNT for the rich, very rich, and super rich.

Actual middle class housing.

You need a boom in construction to start dealing with the fact that there isn’t enough affordable housing available. Hopefully that will give the UK enough to restart its growth, and then tackle the issue of railways.

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