Second homes – a problem requiring more radical solutions!

How second-homes boom is hollowing out Yorkshire Dales villages

Increasing levels of second home ownership in the Yorkshire Dales have left the national park with a “flight of working-age people, school closures, loss of services and hollowed-out communities”, local politicians and campaigners have said.

The Yorkshire Dales national park authority chairman, Carl Lis, said people looking to the area for a picturesque bolthole were stimulating the housing market and helping to create “a gaping affordability gap between house prices and local wages”.

Around 1,500 properties in the Yorkshire Dales are second homes – more than 10% of the total housing stock.

For more: https://www.theguardian.com/money/2017/dec/03/yorkshire-dales-councils-plan-tax-crackdown-on-second-home-owners

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GDP – probably the wrong measure to assess our wellbeing!

An interesting article by Larry Elliot in the Guardian this last week.

Yet the idea that success can only be measured by gross domestic product has become a fetish. When growth accelerates, it is a time for national celebration. When growth remains unchanged it is a cause for concern. When growth falls it is a time for the newsreaders to put on a long face.

Hence the response to last week’s budget, in which the Office for Budget Responsibility shaved around half a percentage point off its growth forecasts in each of the next five years. This was seen, unambiguously, as a very bad thing indeed. Commentators (me included, I hasten to add) vied with each other to find new ways of describing just how terrible it was.

Now, make no mistake, when it comes to the UK economy there is plenty to be concerned about. It is a worry that for the past decade Britain has had to work so hard just to stand still. It matters that people are taking on more debt to finance their spending habits. It is not a great idea to be investing so little and importing so much.

But it is absurd to believe that GDP provides the best – or even an accurate – picture of how well the country is really doing. Since the financial crisis, GDP has been going up, largely due to the increase in the size of the population. GDP per head is a better measure, but even then takes no account of how the growth is being divvied up. In recent decades the fruits of growth have largely been snaffled by those at the top.

GDP acts as a yardstick for things that can be measured in monetary terms, so it goes up if the defence sector exports more arms, if the City embarks on an orgy of speculation, or if betting shops double the number of fixed odds terminals. Simon Kuznets, the economist who first came up with the idea of GDP, had a point when he said it should exclude harmful things, such as military spending and advertising.

https://www.theguardian.com/commentisfree/2017/nov/30/fixation-economic-growth-gdp-pollution-gambling

We can see the problem in Cornwall – more traffic – more congestion and pollution, but GDP up; more roadworks to accommodate more housing and more traffic – but GDP goes up!

We need to measure what is important and adds to wellbeing and the quality of life not just any activity that adds to GDP!

We have enough houses – its the tenure that has changed!

Much media attention has been devoted to the housing ‘shortage’ with tales of younger people now renting in the private sector rather than buying property. There are a number of reasons for this, some of which are housing related (outbid by other purchasers for example), some of which are not (earnings, benefit changes). But what the commentators have missed, which is either due to a lack of understanding of the issues or because parrot fashion they repeat the mantra ‘We must build more houses’ is hard to say, is that changes in housing tenure levels by age group have nothing to do with a lack of houses. People are still living in a house (or flat), there are sufficient properties available.

For example,there were 3.8 million household headed by someone in the 25-34 age-group. 1.5 million of these were in owner-occupied accommodation, with 1.6 million in privately rented accommodation. A further 0.7 million, lived in social housing. Thats 3.8 million households or houses/flats.

If 2 million lived in owner-occupied housing and 1 million in private rented with 0.8 million in social housing we would have 3.8 million households in 3.8 million houses/flats.

The same total as before. No more or fewer houses/flats. The distribution of tenure would have changed not the number of houses!

Easy really!

House of Commons Library, BRIEFING PAPER, Number CBP 7706, 9 June 2017 Home ownership & renting: demographics

How many houses do housebuilders build?

This simple question seems to cause confusion in some quarters but it’s fairly simple.

Housebuilders will only build enough that they know they can sell, there is no virtue in ending up with empty unsold properties.

So how many houses will they build?

All those they can sell whether these are:
sold to meet housing need (extra households buying)
sold to people who will rent out houses
sold to housing bodies who will rent out houses

sold to people who want a holiday home
sold to people who want a second home
sold to people who want an investment property

Households and housing stock – some figures

Returning to the (we know its boring, a bit tedious, too complicated!) question of housing need (measured by new households) and housing supply (measured by net additional dwellings) for England we get:

2001-13 an average of 165,000 households per year, and
169,000 extra dwellings a year.

2010 to 2013 sees fewer dwellings than households but and it’s a bit but, there were 274,000 more dwellings than new households in the previous period, so it could be argued that housebuilders understandably cut back on housing numbers as they did not want to end up with empty houses!

Information sources:
Table 406: Household projections by district, England, 1991- 2039
Table 122 Housing Supply; net additional dwellings,1 by local authority district, England: 2001-02 to 2015-16

DCLG.