Politics: Amber Rudd

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- CommentAuthorborpin
- CommentTimeMay 25th 2015
Posted By: SteamyTeaI think that Amber Rudd is going to be under immense pressure to close our energy gap
What about SMR as a solution (Small Modular Reactors - for the benefit of others ). They seem an ideal solution in preference to the huge reactors that are currently being built.
- CommentAuthorbella
- CommentTimeMay 25th 2015
borpin, yes, yes, - no knowledge of the last.

Steamy Tea, Let us say a young couple wanted to buy your house. Reliable figures for national average income are always 2/3 years behind events. Assume the current average (mean) is Â£46,000 with 2 people working. In the current low interest rate climate they can relatively easily borrow x4 their income as a mortagage if they have a 10% deposit and are in reasonably secure employment, though this already puts them ahead of your average couple. If your house is on the market for, say, Â£180,000, no problem, they can afford to buy it. Are there new 4 bedroom houses with garages in your neck of the woods for Â£180,000?

The bottom 1/3rd of the income scale cannot aspire to such costs unless they get a gift for a larger deposit - and as you go down the income scale the likelihood of that gets less. Cheaper houses exist - but in areas of high unemployment. In London you will not find a house within the M25 for that price unless it is delapidated (and borders the N Circular!) - no hope of a mortgage there and your Particulate Emissions are off the scale. You would have to be looking for a one bedroom conversion flat and it won't be easy.

If you can live in 50msq/person I feel sure most in the lower half of the income range could do the same without feeling hard done by. Only boosting the rate of building to make more dwellings available (for purchase or rent) at the lower half of the income range is going to do the job. This is the bit of the housebuilding that has been missing for the last 30 years. That means building dwellings that cost around Â£100,000. This governement knows that and also knows that it would be a winner for getting re-elected. If they got it well on the road I might even vote for them.

My view is lobby, one way or another, to help ensure the strategy is to:- 1) build sound, convenient, well insulated dwellings for Â£100,000 that consume as little energy as possible and generate energy as well. 2) get wind turbines onto service stations, retail parks, office/industrial parks along motorways and major trunk roads away from housing - both of these paid for by raising VAT to 20% on energy consumption. There would be the most terrible fuss if energy prices were raised and there is no pay-off for the sacrifice that many will have to make.
- CommentAuthorSteamyTea
- CommentTimeMay 25th 2015
I am not convinced that one bed places are cheaper to build, not as if a two or three bed place needs 2 or 3 kitchens, bathroom, parking spaces, 3 front doors, fire-breaks, chimneys.

The argument about putting a homeless couple in, what seems on the face of it, seems a bigger than necessary place is pretty weak. Should we tax every single pensioners with a large house out of them? Rather taking an exception. But maybe we should just leave them sleeping rough until we have one small place for them.
In the 1990's, many cities built small, one bed, homes that went unsold. Manchester and Liverpool spring to mind.

It is better to use the hedonic method to price homes rather than just the number of bedrooms.

SMR! We can't build an approved reactor in 40 years (since the last one was started, Sizewell), no hope of an unlicensed one.
- CommentAuthorborpin
- CommentTimeMay 25th 2015
Posted By: SteamyTeaSMR! We can't build an approved reactor in 40 years (since the last one was started, Sizewell), no hope of an unlicensed one.
The point of SMR is taht it is simpler and quicker. Seems to work for others.
- CommentAuthorborpin
- CommentTimeMay 25th 2015 edited
Posted By: SteamyTeaThe argument about putting a homeless couple in, what seems on the face of it, seems a bigger than necessary place is pretty weak. Should we tax every single pensioners with a large house out of them? Rather taking an exception. But maybe we should just leave them sleeping rough until we have one small place for them.
In the 1990's, many cities built small, one bed, homes that went unsold. Manchester and Liverpool spring to mind.
I was not suggesting not giving them a home, just saying what they got was not the best solution due to cost. Did I say antything about taxing pensioners out of their homes? I think not. Maybe so in the 1990's but why was that? Just because it was wrong then, does not mean it is wrong now. A 1 bed flat built in the early 1990's in Swindon that I used to rent out was ideal as a starter/single person house.
- CommentAuthorbella
- CommentTimeMay 25th 2015
I forgot, 3) use land being released for PV "farms" for dwellings with PV on the roofs

Plus short sentance on rational for each.
- CommentAuthorborpin
- CommentTimeMay 25th 2015
Posted By: SteamyTeaI am not convinced that one bed places are cheaper to build, not as if a two or three bed place needs 2 or 3 kitchens, bathroom, parking spaces, 3 front doors, fire-breaks, chimneys.
Depends how you build them. Old fashioned blocks of 4 maisonettes definitely will be. In fact that is what our council have been building as social housing and got an award for it! The cost is not in the kitchens and bathrooms. It is in the underbuild, outer structure and insulation. Every Sq M costs Â£150 at least.
- CommentAuthorSteamyTea
- CommentTimeMay 25th 2015 edited
Posted By: borpinMaybe so in the 1990's but why was that?
For the same reason that you are saying that we need more 1 bed places. The builders got their maths wrong and did not understand demographics very well. Same with pension schemes, the government have got that wrong, and the public are going to be paying the price of this for decades. They assumed the baby boom was the new normal and life expectancy would carry on at the same rate for the next 40 years as it did for the last 40.

Your not going to convince me that, excluding very special cases, that a single room home is cheaper to build than a multi- room place, though you have to be careful what you base the price on. It is true that if you built two identical 100m^2 homes, one with one bedroom and one with 2 bedrooms, then the two bed place would cost more, but that is a special case. If you base it on area, then multi room places cost more.
But as I said earlier, there is a better way to value these places.

Posted By: bellaI forgot, 3) use land being released for PV "farms" for dwellings with PV on the roofs

Plus short sentance on rational for each.

I like this idea as it is using land for two purposes. It adds value to an area (I don't want to get into the economics of adding value), satisfies a local needs, helps a national need. The trick is to make sure that is a net contribute to the energy grid, and contributes in a meaningful way (so some East and West PV as well).
The land should be low grade agricultural land (there is a lot of this that is currently unused).

The down sides are convincing people that building locally to them need not devalue the area.
- CommentAuthorSteamyTea
- CommentTimeMay 25th 2015 edited
Worth having a look at this, shows that there is not really a housing crisis, just appalling management of resources:
https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/385110/LT_Chart_612.xlsx

A quick example, in Cornwall, in 2014, there were 2990 long term vacant properties (out of total of 8099), the long term housing need was 38, with a total need of 115.

You can see where the real problem is.
- CommentAuthorskyewright
- CommentTimeMay 25th 2015
Posted By: bellaI forgot, 3) use land being released for PV "farms" for dwellings with PV on the roofs

Sorry to be negative about a very appealing idea but with any realistic housing density such an approach would have such a massively reduced PV area that I can't see it as being considered if generation is the main aim of a project. Plus it seems likely that potential solar farm sites are often going to be outside "local plan" housing area?
- CommentAuthorSteamyTea
- CommentTimeMay 25th 2015 edited
Posted By: skyewrightoutside "local plan" housing area?
That is the real problem. We really have to get to grips with this planning issue.
- CommentAuthorEd Davies
- CommentTimeMay 25th 2015
Posted By: SteamyTeaYour not going to convince me that, excluding very special cases, that a single room home is cheaper to build than a multi- room place, though you have to be careful what you base the price on.
As has been said, it's just down the mÂ² of floor area.

If I wanted to live in a city I'd much rather have one bedroom and a sofa-bed for guests in the decent-sized living room with space for a home-work table rather than a two bedroom flat of the same area but with the second bedroom too small to use as both a home-office and a guest bedroom and the living room too small to work in but be able to move away from work without tidying everything up.

(I don't want to live in a city primarily because of noise. Having no land within about 70 metres of my house site on which anybody could plausibly build (because I own it or I own its only access to the road or it's a quarry full of water) suites my just fine.)
- CommentAuthorSteamyTea
- CommentTimeMay 25th 2015 edited
Posted By: Ed DaviesAs has been said, it's just down the mÂ² of floor area.
That is why hedonic valuation is better.
We have the smallest homes in the EU, and we are one of the wealthiest countries in it. Something is wrong somewhere.
There is no shortage of homes, no shortage of land that could be developed, so why are we justifying cramming a couple of people, or more, into a tiny flat.
I think the problem is that we use London as the example for house planning. Most of the population does not live there, but it seems to me there is an assumption that people always want to live near their work, want to be in a large town or city, are unwilling to travel and if they are not part of 'the smoke' then they are loosing out.
- CommentAuthorborpin
- CommentTimeMay 25th 2015
Posted By: SteamyTeaIt is true that if you built two identical 100m^2 homes, one with one bedroom and one with 2 bedrooms, then the two bed place would cost more.
Hardly. A partition wall and a door is going to cost peanuts. As I said the cost of a new house is not the interiorit is the overall area.
Posted By: SteamyTeaIf you base it on area, then multi room places cost more.
No it is the area that broardly determines the cost (which is why a rough guide for building is per M2 regardless of interior layout).

A block of 4 one bed maisonettes, say 50m2 ea, to house 4 single folk in need of low cost housing is hard to beat and cost per household (to build) is as low as you will get. They are inherently efficient both in use of building materials and the energy required. Add Solar PV split equally between the 4 and you should be able to achieve close to zero energy use (heat and light).

Equally you could build them a bit bigger and add in a second room for those that need one (but they will cost more). By need I do mean constant occupancy not occcasional stay over or office. These buildings are for specific needs; a very affordable home to prevent folk being homeless and give them the chance to get started in a world where you can do little without a permanent address. Would save a packet on housing benefit currently lining private landlords pockets.
- CommentAuthorborpin
- CommentTimeMay 25th 2015
Posted By: SteamyTea
Posted By: Ed DaviesAs has been said, it's just down the mÂ² of floor area.
That is why hedonic valuation is better.
Not quite sure what hedonism has to do with it :)
Posted By: SteamyTeaThere is no shortage of homes
Earlier you said "Maybe I am bias as I live in one of the poorest parts of the EU, I see terrible overcrowding all around me." how do those 2 statements stack up? If it is that there is insufficient housing of a suitable size, at an affordable price, that is a different problem and back to supply and demand (builders restricting supply). If so then the public building should focus on mid size, freeing up small for those who need them (115 people did you say?).
Posted By: SteamyTeawhy are we justifying cramming a couple of people, or more, into a tiny flat.
I do not think we are. Cramming is rather an emotive word and not one I would use. I would say build a suitable house at an affordable cost both to build and to rent/buy afterwards. If you are expecting the state to provide it for you then you should expect the minimum (and no not 'crammed in'). A one bed flat for a couple is hardly cramming or perhaps the expectations are too high?
- CommentAuthorSteamyTea
- CommentTimeMay 25th 2015 edited
Posted By: borpinA block of 4 one bed maisonettes, say 50m2 ea
So about the size of my 2 bed terraced house then. And I see how my neighbours live.
The ONS does not use a Â£/m^2 as the basis of what housing should cost thankfully. They take a much broader view.

Posted By: borpinAdd Solar PV split equally between the 4 and you should be able to achieve close to zero energy use (heat and light).
I have looked at PV for my place, it just does not stack up unfortunately. Wish it did.

The point I am making is that if we continue to build small and restrictive places, it drags the whole housing standards down.
Ed gives an example of living in a city with one bedroom rather than two. My argument is that if you outlawed one bed places and built adequate 2 bed place as a minimum (not just splitting a small places up, that is not what I am saying), then the lower end of the market would get populated with larger and more suitable homes, rather that using the excuse that smaller is cheaper. It is not the lack of land, or local infrastructure that particularly sets the price, that is based on borrowing power, savings and earnings. There is no reason why my house is worth about Â£100,000 down in Cornwall and probably over Â£2 million in Mayfair, it is the same house, would cost the same to build, would offer exactly the same usability. It is not the size that changes when it is moved, or the number of bedroom.
- CommentAuthorEd Davies
- CommentTimeMay 25th 2015
Posted By: SteamyTeaâ€¦then the lower end of the market would get populated with larger and more suitable homesâ€¦
More suitable for whom? The one bedroom flat in Reading I had for a lot of the 1980s was entirely suitable for me when I was out at work during the week and off doing other stuff a lot of weekend days. A bit more floor space would have been pretty much useless to me. Adding a bit more space but in the form of most of a second bedroom which also took a bite out of the existing bedroom and/or living room would have been worse than useless.

Maybe there's an argument for a minimum area for new-build homes but I really don't think it's a good idea to use the threat of violence to control the number of bedrooms people have.
- CommentAuthorEd Davies
- CommentTimeMay 25th 2015
Posted By: SteamyTeaThere is no reason why my house is worth about Â£100,000 down in Cornwall and probably over Â£2 million in Mayfair,
Yes, there is. It's in Cornwall! Mind you, it'd probably be Â£65,000 in Wick.

Where the UK suffers is from all the jobs, particularly the decently paid ones, being in the London area and a very few others. Next independence referendum should have the border on the anti-clockwise hard shoulder of the M25.
- CommentAuthorSteamyTea
- CommentTimeMay 25th 2015
Right
I have gone to the ONS site and looked at the 2011 Census data
I have looked at the distribution and total of houses by bedroom number, house prices by income and one person households.

There are 2,750,459 1 beds, 6,460,594 2 beds, 9,725,270 3 beds, 3,362,309 4 beds and 1,067,412 5 beds or more homes.
The relationship between income and house prices is 26 times median income (got to be careful with this as there may well be two or more incomes per house).
There are 7,067,261 single person households.
House types are very evenly distributed, income is not (positive skew).

Now from these raw numbers it is very easy to assume that with 7 million single person households and only 2.75 million single bed houses, there is a shortage of single bed places (I think this is the mistake developers have made).
But if all the single places where 2 bed places, then there would be 9.25 million homes suitable for single people.
But even this is a nonsense in a way as it assumes that single people should live in a 1 bed place. The reality of this is very different, many are living in multi-bedroom places, either by choice or circumstance. No idea if they are happy with this, that is for the flaky sciences to look at.

What is a problem is the distribution, both in wealth terms and geographic terms of both the jobs market and the housing markets.

Maybe we should start a new thread on this subject.
- CommentAuthorGarethC
- CommentTimeMay 26th 2015
Halifax (now Lloyds) website has some of the best housing market affordability stats if you're interested (scales house price to income by average mortgage rates to give a more accurate picture, I think reguonally).

Remember London is unique in that residential property there is also viewed as an asset class for often international investors. The extra cash over and above that frim people needing somewhere to live divorces it from the rest of the UK market.

In principle also means prices there will be more volatile, as investment money will flow out fast if returns disappoint.
- CommentAuthorGarethC
- CommentTimeMay 26th 2015 edited
I do think almost all housebuilding issues are secondary to just finding a way to build a lot more housing subject to some sensible minumum requirements.

If there's lots of supply, so that households can actually shop around, then house builders will automatically tend to gravitate towards building what any particular area wants and needs in terms of the form of housing stock.

Interestingly, but depressingly, for analysing house prices in almost any fairly large area, in the UK you can assume that supply is fixed, or falling slightly relative to demand, given the risible rates of construction.

This contrasts greatly with the US, Spain and other countries which had building booms attending their price booms. They now have cheap, but perfectly good quality on average, housing. I've mentioned before that our price boom elicited bugger all extra building. Now that's a screwed up market.

Against that background, trends in incomes, local population growth and, importantly, cost and supply of mortgage finance (note volume and price are separate to some degree), essentially determine prices. The latter is the only one which is volatile (at least in recent years).

We need to facilitate a lot more (compliant) supply. All else is tinkering I think.
- CommentAuthorowlman
- CommentTimeMay 26th 2015
I don't know if it's already been said, I don't have time to read all 110 posts, but in the UK, post WW2 home ownership has generally been viewed as an investment, as well as a roof over your head. This maybe more so than in other countries more attuned to renting, so direct comparisons are difficult.
As a consequence many homes are viewed as a nest egg, and they generally have performed as good as or better than the stock market, without the risk, plus the added advantage of a home.
Trying not to kill demand too much and hence keep prices on a steady long term rise and at the same time keep a reasonable supply is a difficult one for any Government.
- CommentAuthorskyewright
- CommentTimeMay 26th 2015
Posted By: owlmanTrying not to kill demand too much and hence keep prices on a steady long term rise and at the same time keep a reasonable supply is a difficult one for any Government.

Aye, there's the rub!
People grumble about prices going up, but generally not if it's the price/value of "their" house...
- CommentAuthorGarethC
- CommentTimeMay 26th 2015
Invest Â£50k in the stock market. If the stock market falls by 25%, you've still got Â£37.5k.

Invest Â£50k as your deposit in a Â£200k home. If the housing market falls by 25%, you've lost all your money!

Technically, investing in housing is highly risky as it's a 'leveraged trade'. While it's worked out OK if you've been in the housing market for over about 10 years, for anyone that's entered the market since then, the housing market has ruined far more people than the stock market has over the same period. Only down to really low mortgage rates that even more misery hasn't been caused. Think you're right that the 'consumption returns' we seem to enjoy in the UK are very important though.

Agree entirely that it's a tough, tough nut to crack.
- CommentAuthorgravelld
- CommentTimeMay 26th 2015 edited
Posted By: owlmanAs a consequence many homes are viewed as a nest egg, and they generally have performed as good as or better than the stock market, without the risk, plus the added advantage of a home.
This is an infantile understanding of investment (not yours, people who expect houses to rise in value constantly). People have to learn how money and risk and finance works.
- CommentAuthorbella
- CommentTimeMay 26th 2015
London is a special case - but there are 12 million people in the SE including ordinary folk whose earnings are below the average wage. The rest are still predominantly city dwellers because that is where most of us earn a living. No matter where you look in cities where employment is at a respectable level, prices for 4 bed >3 bed > 2 bed > 1 bed >studio. You can buy a studio in centre of Leeds/Birmingham/Manchester for <Â£100,000, 1 bed about Â£100,000 more and 2 bed Â£100,000 more again. What did the lady say, "You can't buck the market"? Well the market says if you want lots more dwellings for the less well off you have to build lots more of modest character that people can spend their money on without risking all and with a return for the investor that gave them the loan!

Steamy Tea, Much as they matter, we are not talking about the small number of folk considered in dire need of a roof over their heads but people in employment who struggle to pay the rent, heat their homes in winter and feed their children whilst having little hold over the accomodation they occupy, the schools their children attend and the jobs they work in. No amount of talk of "cramming in", "drags the whole housing market down", "restrictive spaces", "it is for the flaky sciences to find out" is going to change the fact that Local Authorities filled this gap until the early 1980s (when average house prices were around Â£30,000).Without the 50,000 modest homes/year they built the market has been stoked up and prices have risen 6-7 fold. Most of upper half of the income range before the peak salary range can just about borrow and buy hedonistically (blimey!) but they too would benefit from being able to choose to start modest. The lower half is really stuck without a gift or an inheritance.
- CommentAuthorSteamyTea
- CommentTimeMay 26th 2015 edited
Posted By: bellaSteamy Tea, Much as they matter, we are not talking about the small number of folk considered in dire need of a roof over their heads but people in employment who struggle to pay the rent, heat their homes in winter and feed their children whilst having little hold over the accomodation they occupy, the schools their children attend and the jobs they work in. No amount of talk of "cramming in", "drags the whole housing market down", "restrictive spaces", "it is for the flaky sciences to find out" is going to change the fact that Local Authorities filled this gap until the early 1980s (when average house prices were around Â£30,000).Without the 50,000 modest homes/year they built the market has been stoked up and prices have risen 6-7 fold. Most of upper half of the income range before the peak salary range can just about borrow and buy hedonistically (blimey!) but they too would benefit from being able to choose to start modest. The lower half is really stuck without a gift or an inheritance.

Thought that was what I was saying, except we have forced them to live in hovels. I was suggesting that we build bigger places, the price will be the same (that is what not bucking the market does).
We have created a new entry level, bit like GCSEs did. They were of a lower standards, but are now considered 'acceptable'.

But this has all moved on from Amber Rudd's problems of how to supply us with affordable low emissions energy.
She only has one quick fix, and that is gas. Then she can look at re-doing the Contact For Difference (though I am not sure she can).
She can also look at how to get homes better insulated and more airtight, but that is fraught with problems, generally technical (cause we have such a rubbish housing stock to work with).
And she has to find a way to pay for it all. That is the real challenge.

She could start by getting local authorities to identify the worse 20% of the housing stock, and target them directly. I think this is what a government minister should be doing, kick a bit of arse and say 'you will do this'
- CommentAuthorbella
- CommentTimeMay 27th 2015
There you go again, "live in hovels". One man's hovel - well I'll say no more.
- CommentAuthorborpin
- CommentTimeMay 29th 2015
Posted By: SteamyTeaThere are 7,067,261 single person households.
Would that figure include households without a house?
Posted By: SteamyTeaBut if all the single places where 2 bed places, then there would be 9.25 million homes suitable for single people.
Big assumption that a) they want 2 bedrooms and b) they can afford 2 bedrooms.

I still cannot see how you support the assertion that is costs no more to build 2 bed homes than it does to build 1 bed homes (where the floor area of the 2 bed is greater by the size of the bedroom and all other features are the same).

We still come to the same problem of supply and demand and the only solution for that is local authority building programmes.
- CommentAuthorSteamyTea
- CommentTimeMay 29th 2015 edited
Posted By: borpinWould that figure include households without a house?
Not sure what you mean.
Posted By: borpina) they want 2 bedrooms
Yes an assumption, but the same one as they want 1 bed. Hard to prove one way of another on that from government statistics.
The main point is that there may well be an assumption that is is 1 person per bedroom, this is often not the case and not unusual to have 3 people per bedroom (i.e. family). Only allowing 2 bed places excludes this possibility.
Posted By: borpinb) they can afford 2 bedrooms.
That is to do with the supply of money rather than the supply of buildings.
If the minimum entry to the housing market is say, Â£60,000 and that gets you a 1 bed place. If the only places available were 2 bed places, and nothing else changed (an assumption there), then entry level homes would still be Â£60,000.

You only have to look at the car market to see this. Hard to buy a car without power steering these days, but they cost no more that equivalent 'bangers' did 15 years ago.

It is the money supply, and distribution that has distorted the housing market.

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Politics: Amber Rudd