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An interesting piece from the Guardian here:
Simon Jenkins plays down the acuteness of the housing crisis (Look at society’s forgotten: there’s the real housing crisis, 9 February), saying there have been “the same price rises” in Australia and America. But in the US the median house price is “only” 5.7 times median household disposable income; in England that ratio is 8.2. A strictly comparable figure for Australia is not available, but the ratio of median house price to median gross household income is 5.6.
Jenkins also says National Audit Office figures show that “After the down payment … property has never been so affordable this century”. But while the NAO report says “Housing has become more affordable for existing homeowners”, it also says “housing has become less affordable for first-time buyers”, and “Social housing rents have been increasing faster than earnings since 2001-2”.
The steady rise in real house prices has led to the absurd situation in which, as the Resolution Foundation has shown, disposable income after housing costs is now higher for the median pensioner household than for the median working-age household. As Jim Edwards of Business Insider wrote recently, there are now two distinct classes in Britain: those who own property and those who are getting poorer.
But Jenkins is right that increasing supply will do little to change the situation, and he is right to point to the low density of London and many other cities. What is needed is to shift the burden of taxation away from work (national insurance and lower bands of income tax) and towards property. All governments talk about “hard-working families” while continuing to subject them to taxes from which the unearned windfall gains of property owners are largely exempted.
Interested to hear what landlords think about this??
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