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0 pointsbArray2y ago0 comments

> Ask yourself, do Canada, Australia, New Zealand, the US, Britain, Ireland, etc, all have the same inability to build or is there maybe some other common cause?

In the UK, we have an issue with immigration that nobody wants to speak about. The birth rate in the UK is 1.49 in 2022 [1], meaning that housing demand should be going down. We build houses to last, and yet there is a massive shortage - why? In 2023 the ONS reported we had a net migration of 685k people [2], where 9% of the population do not have a British nationality at all.

The demand for housing in the UK (and related infrastructure) can be entirely explained by net migration. The reason the housing market is bubbling is because the demand is so insanely high. We need to build 340k houses a year to keep up with demand [3].

The fundamental issue in the UK is that we borrowed too much from the future, in terms of loans, but also pensions. They think that increasing the population dramatically will solve the problem, but it's actually destroying the UK. We are building on farmland, the infrastructure (water, gas, electric, roads, schools, etc, etc) is failing under the weight of the new housing. The interest on the debt owed [5] I believe is projected to exceed spending on the NHS (national healthcare system) by 2035.

The question we need to ask is whether large net migration is worth it, or whether we should largely reduce it. It seems clear to me that the UK is currently trying to grow too fast. It'll be a bitter pill to swallow, but at some point you need to deal with the spiralling situation.

> This is a problem of underutilisation in my view. Too many properties are being used as investments and not as a primary residence.

In NZ and many other Countries they put bans on foreign buyers exactly to stop this investment [4]. I know many, many professionals living in NZ that cannot afford to buy a home. They are all stuck renting, despite all earning in the top 25%.

[1] https://www.theguardian.com/uk-news/2024/feb/23/birthrate-in...

[2] https://commonslibrary.parliament.uk/research-briefings/sn06...

[3] https://commonslibrary.parliament.uk/research-briefings/cbp-...

[4] https://www.pittandmoore.co.nz/publications/foreign-buyer-ba...

[5] https://www.bbc.co.uk/news/business-50504151

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Earw0rm2y ago· 4 in thread

UK has massively high house prices - at least in "desirable" areas, and some not so desirable ones where it's possible to commute to work in a desirable area.

That doesn't necessarily reflect a shortage, it also reflects availability of money - and therefore the market bearing higher prices. It also reflects the unevenness of the UK economy: the expensive and unaffordable housing is mostly in and around London (where ~all the economic activity is), and in the most scenic of rural areas which is retirees, second-home owners and AirBnB investors. There's plenty of the UK which has affordable housing, but it's too far from anywhere with decent jobs.

The boom in house prices began when it became the norm for educated women to have lifelong progessional careers. All of a sudden there was a huge amount more discretionary income in the educated class. If you consider that, circa 1970, perhaps 20-30% of one male earner's income went on housing and the rest on life's essentials, all of a sudden the potential amount of cash to spend on housing goes from 30% of one income to 130%, a more than 4x increase. It took a while to filter through, sure, but in the end, it has - to the point where most families are now obligated to have two full-time earners.

Housing is a positional good (think about an auction where demand of the most desirable items will always exceed supply), the prices bear almost no relation to rational economic utility and every relation to how much cost people are able to bear. Which is one reason they're so responsive to interest rates i.e. debt affordability.

A 1.49 birth rate and 685k net migration isn't a desirable situation for any country, but the other issue here is the health and productivity of our own population, we're using migrants to prop it up and provide much of the labour needed by the NHS, childcare and elderly care. Our government is massively anti-immigration, and yet immigration remains high, the country can't and won't go cold-turkey on that: it's not practical to do so without further increasing the retirement age, cutting pensions and increasing "sin taxes" to keep a greater proportion of the population healthy enough to work til 70. And that'd be even less popular, politically, than mass immigration.

The reforms the UK needs are to get the economy functioning better in the regions, and to make it much easier to build higher density housing close to where the jobs are. The current system where they can't build apartment blocks on train-station car parks because a bunch of pensioners complain that it spoils their view is massively counterproductive.

vixen992y ago

If actions speak louder than words then the UK government is not massively anti-immigration. I would say that devolution of power in Britain has ensured that governments are not actually that powerful and unelected authorities with views of their own, hold sway with opinions which do not reflect the electorate. Polls suggest that a majority of people would like reduced migration. Problems abound.

https://migrationobservatory.ox.ac.uk/resources/briefings/mi...

I agree with you about the reforms but basically Brits live beyond their means and need to lower expectations or face a very uncertain future. The NHS is a good example. Demand is literally infinite. We're all going to die and likely suffer an ailment demanding treatment so how can a health service which fails to match that hard reality, survive. As you say, we can use stick and carrot to attenuate demand but it's finally going to crack IMO as was prophetically illustrated so tragically in the pandemic.

Earw0rm2y ago

Asking people - or indeed governments - in isolation if they'd like less migration is a bit like asking if they'd like less rain. Leaders and media who were up-front about the reality of the choices we face would make for a less toxic situation, but they're too lazy and cowardly, it's easier to lie for political points than to tell hard truths.

Agree re the NHS, my overall views are left, but the centre-right analysis that it's a National Sickness Service is correct, where is the investment in public health to reduce demand? Most Brits barely get out for a walk once a week, our environment doesn't prioritise health (driving everywhere, fast food outlets..) and the complaints when the state actually tries to do anything about it are endless.

bArrayOP2y ago

> UK has massively high house prices - at least in "desirable" areas, and some not so desirable ones where it's possible to commute to work in a desirable area.

Other than very undesirable areas, the house prices are pretty bad. I have friends living nowhere near London in remote Scotland noticing the house price increase. I've seen a local property double in price after ~11 years.

> That doesn't necessarily reflect a shortage, it also reflects availability of money [..]

It's not clear who has an availability of money. I'm aware of zero people within recent years buying a home without a mortgage. Availability of money has never been worse.

> It took a while to filter through, sure, but in the end, it has - to the point where most families are now obligated to have two full-time earners.

I don't think we're seeing 4x the living standard of 1970. It also doesn't explain that we see house prices increase by more than 4x relative to wages [1].

> Housing is a positional good (think about an auction where demand of the most desirable items will always exceed supply), the prices bear almost no relation to rational economic utility and every relation to how much cost people are able to bear. Which is one reason they're so responsive to interest rates i.e. debt affordability.

It's didn't used to be like that. A house would feasibly cost between 4-10 years of one man's wage. But this would defend what I said, that demand outstrips supply. There is a saying at auctions: "it's only worth what somebody else is willing to pay for it."

> we're using migrants to prop it up and provide much of the labour needed by the NHS, childcare and elderly care.

It's not working, the NHS is failing. Where I live I cannot get an appointment any more. If I am lucky the doctor calls me and essentially prescribes anything I ask for. I recently saw a similar situation with midwifery.

I generally don't find myself convinced that migration is a net good. They typically have dependants and create massive burdens on our infrastructure and systems. We are now at the state where children are deferred from starting school because there just are no palce

> Our government is massively anti-immigration, and yet immigration remains high, the country can't and won't go cold-turkey on that: [..]

I suspect not. If I am right in saying that immigration increases demand for housing and therefore the price, it would make sense that the Conservative party would keep this in place as their largest donors are property developers [2].

> The current system where they can't build apartment blocks on train-station car parks because a bunch of pensioners complain that it spoils their view is massively counterproductive.

I don't think that is fair, the answer isn't to build on every square metre of the UK until it's gone. Besides, if they get rid of the train station car park, where will all the commuters park? (I've seen this one play out, they park everywhere else.)

[1] http://news.bbc.co.uk/1/shared/spl/hi/guides/456900/456991/h...

[2] https://www.theguardian.com/business/2024/mar/14/who-are-the...

Earw0rm2y ago

> It's not clear who has an availability of money. I'm aware of zero people within recent years buying a home without a mortgage. Availability of money has never been worse.

"Availability of money" includes the ability to apply for, and service the debt on, a mortgage.

> I don't think we're seeing 4x the living standard of 1970. It also doesn't explain that we see house prices increase by more than 4x relative to wages [1].

I don't remember 1970, but there's no particular reason we should expect to have 4x living standard.. competition for housing can eat up a much bigger slice of the overall pie, as long as people are willing to compete.

> But this would defend what I said, that demand outstrips supply. There is a saying at auctions: "it's only worth what somebody else is willing to pay for it."

100% - but if nobody CAN pay (the asking price), nobody will be willing to pay it. And that's where positional goods matter, because effectively people are jostling for a place in a ranked queue. The prices are a function of "how much money are the people in the queue able and willing to raise and deploy". And so it's natural to have situations where incomes might only go up by 50%, but house prices can rise MUCH more if interest rates are low and the bulk of that extra income is discretionary.

> It's not working, the NHS is failing. Where I live I cannot get an appointment any more. If I am lucky the doctor calls me and essentially prescribes anything I ask for. I recently saw a similar situation with midwifery.

Bad here too, but most of the staff are immigrants or of immigrant background so I find it hard to blame that on migration, it'd be a lot worse if they turned the taps off. It's more to do with our population (native Brits and 1960s/70s immigrants) being elderly, unhealthy and generally decrepit, and a health service that tries to do too much. It excels at keeping people alive, but it sucks at keeping them healthy.

> We are now at the state where children are deferred from starting school because there just are no place

Not the case here, in a high-immigration area: they're actually closing primary schools because there aren't enough kids to fill them.

> I don't think that is fair, the answer isn't to build on every square metre of the UK until it's gone. Besides, if they get rid of the train station car park, where will all the commuters park? (I've seen this one play out, they park everywhere else.)

They should walk or take the bus. I'm talking about stations that are at most a mile or so spread out and usually served by half a dozen bus routes, suburban zone 3 & 4 London. Wouldn't work further out where distances are longer.

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