Is it a fallacy that simply building more homes will in itself resolve the house pricing crisis?

[scrumpyjack]

The price of houses in a market economy is determined (like the price of everything else) by supply and demand. So, all things being equal, building more houses will increase supply and have some influence on house prices. However, overwhelmingly the reason for the rise in house prices over the last decases is the rise in demand casued by the astonishing decline in the cost of money (interest rates). This actually means that the real fallacy is to assume that there is a house pricing crisis at all, when in fact arguably houses are no more unaffordable than in the recent past - affordability being measured as the cost of servicing the debt taken on to buy a house and/or the opportunity cost of lost interest from funding a purchase out of savings.

As an example, I bought my first house in 1991 for £53,000 - and the same/similar property would now sell for £300, 000. My mortgage was for 8% - so the house was costing me £4240 per year. If I bought the house now I guess I might get a mortgae at 2% (or less?) and so the house would be costing me £6000 a year. However in 1991 I was earning £11, 500 a year; someone doing the same job now would, i reckon, be on £25, 000 - £30, 000 - so in real terms the house is considerably cheaper! (Or rather 'more affordable'.)

(OK - I know this is simplistic, ignores the cost of paying back the principal, the impossibility of getting a mortgage for 10x salary and is a very 'OK Boomer' answer. However, I think the basic point is valid - that house prices are so high because interrest rates are so low, because it's low interest rates that have made houses affordable at such high prices. it follows that prices should cease to rise at a faster rate than the rise in earnings once interest rates stop falling (which - surely? - must be now) and will fall relative to earnings if and when interest rates rise. But building a few thousand extra houses a year won't make much difference when faced with the huge weight of 'free' money.)

Yes but the fundamental difference is that in my youth the cost of paying for the house declined in real terms hugely over the years because of inflation. So the 'pain' of affordability in year 1 was at least halved by year 10. With low inflation that does not happen. The market, and the buyers, only consider affordability in year 1, not the real burden over the life of the mortgage. That is the main reason it is so much more of an issue now.

[anon155742]

Just because the TFR has been below replacement level since 1973 doesn't mean that immigration is the sole cause of population growth, as decreasing mortality is also a factor

Would you please explain how living longer causes a population to grow?

Just because you are living longer doesnt mean that the population will increase unless longevity results in spontaneous duplication

[anon155742]

I can see what you mean, but is the conclusion as simple as that? I only ask because when one sees a set of statistics quoted to further the end of a particular individual, someone else with a different agenda will come back with a different interpretation. Unfortunately, I am in no position to come to any conclusion myself, and would only believe a conclusion about this from some trusted expert source, such as More or Less, who are willing and competent to take all aspects into account.

So forgive me, if I am unable to argue the point, but my natural caution procludes my immediate agreement with you. So, the pinch of salt remains for the moment

I might also ask: if population growth has come from immigration, does it matter? Or perhaps, how much, does it matter?

Arb.

I suppose the Office of National Statistics isnt expert enough. I mean, they are only the primary source that compile the statistics and have government granted access to all the necessary data

Immigration growth has been increasing the population by bringing in 300,000 people every year. This means we would have to build housing the equivalent of Manchester every 10 years or so just to match supply to demand if we assume the migrants will live in a similar mix of housing types.

This has been the primary pressure for increasing house prices (never mind rising CO2 emmissions, decreased GDP per capita and countless other externalities which are ignored)

[Arborbridge]

I suppose the Office of National Statistics isnt expert enough. I mean, they are only the primary source that compile the statistics and have government granted access to all the necessary data

A cheap jibe, if I may say so. It is the interpretation of the data that's in question, not the quality of it.

As I said, I am not in a position to argue this out - but we've all seen how it is possible to quote perfectly true data, yet come to the wrong conclusion. It happens all the time in political debate and we've seen it happening in spades in recent years - Trump, Brexit, anti-vax rhetoric - name your favourite! - all could quote or misuse genuine data.

Lies, damn lies, and statistics may be a jaundiced phrase, but the essential point is people quote what they want to quote and ignore any counter-agenda evidence.

You didn't wash away the salt, but added to it

Arb.

[Arborbridge]

Just because the TFR has been below replacement level since 1973 doesn't mean that immigration is the sole cause of population growth, as decreasing mortality is also a factor

Would you please explain how living longer causes a population to grow?

Just because you are living longer doesnt mean that the population will increase unless longevity results in spontaneous duplication

If you reduce the rate at which people die, the population will start to grow. If no one ever died the population would grow ad infinitum.

[nicodemusboffin]

Just because the TFR has been below replacement level since 1973 doesn't mean that immigration is the sole cause of population growth, as decreasing mortality is also a factor

Would you please explain how living longer causes a population to grow?

Well it wouldn't if nobody was being born or there was no net immigration, but changes in a population size depend on both the number of people being born and the number dying (as well as net migration). If in a given year nobody dies and just one person is born then population will increase.

Indeed, over the last 50 years, even though the TFR has been consistently below the replacement rate the number of births each year have been above the number of deaths almost every year. This increasing population size, despite a low TFR, is a result of both increased life expectancy and the baby boom experienced from 1945 to 1965. Eventually, if there is no net migration or an increase in TFR then the population will start to fall, but that won't happen for a decade or two because the vast majority of people live beyond 70 years of age.

[anon155742]

Just because the TFR has been below replacement level since 1973 doesn't mean that immigration is the sole cause of population growth, as decreasing mortality is also a factor

Would you please explain how living longer causes a population to grow?

Well it wouldn't if nobody was being born or there was no net immigration, but changes in a population size depend on both the number of people being born and the number dying (as well as net migration). If in a given year nobody dies and just one person is born then population will increase.

Indeed, over the last 50 years, even though the TFR has been consistently below the replacement rate the number of births each year have been above the number of deaths almost every year. This increasing population size, despite a low TFR, is a result of both increased life expectancy and the baby boom experienced from 1945 to 1965. Eventually, if there is no net migration or an increase in TFR then the population will start to fall, but that won't happen for a decade or two because the vast majority of people live beyond 70 years of age.

To give some actual numbers, in 1966 the population in the UK that was from a "minority ethnic group" was 886,000
https://warwick.ac.uk/fac/soc/crer/research/publications/nemda/nemda1991sp10.pdf

In 2011 in England alone there were 7,854,000 that would be considered non white which is probably the closest comparison
https://www.ethnicity-facts-figures.service.gov.uk/uk-population-by-ethnicity/national-and-regional-populations/population-of-england-and-wales/latest

An increase of 6,968,000. Even if those in the "minority ethnic group" had two generations in which each female had 5 children each then it would still be over a million people short.

So this increase alone would require a LOT of homebuilding, more than the housing stock currently used to house everyone in Scotland and Northern Ireland combined.

[plaguedbyfoibles]

Thanks for all the replies thus far, everyone.

It's great to see that this has stoked such passionate, thoughtful and detailed discussion.

If anyone is interested, Ian Mulheirn, chief economist for the Tony Blair Institute for Global Change, has also done some work in this field, including the following:

https://institute.global/policy/tacklin ... er-summary
https://institute.global/policy/our-hou ... s-we-build
https://www.insidehousing.co.uk/news/ne ... tute-62891

I think some of their ideas run parallel with ideas mentioned in either the Browne piece in the Spectator or in previous replies in this thread, including the idea of credit availability exerting either an upward or downward pressure on house prices (depending on whether or not credit availability is more widespread).

[servodude]

Well it wouldn't if nobody was being born or there was no net immigration, but changes in a population size depend on both the number of people being born and the number dying (as well as net migration). If in a given year nobody dies and just one person is born then population will increase.

Indeed, over the last 50 years, even though the TFR has been consistently below the replacement rate the number of births each year have been above the number of deaths almost every year. This increasing population size, despite a low TFR, is a result of both increased life expectancy and the baby boom experienced from 1945 to 1965. Eventually, if there is no net migration or an increase in TFR then the population will start to fall, but that won't happen for a decade or two because the vast majority of people live beyond 70 years of age.

It's really very simple stuff isn't it
I guess if one were looking to justify a racist position they would likely not be the smartest knife in the drawer anyway so it shouldn't be surprising they can't grasp basics

-sd

[anon155742]

It's really very simple stuff isn't it
I guess if one were looking to justify a racist position they would likely not be the smartest knife in the drawer anyway so it shouldn't be surprising they can't grasp basics

-sd

I do not need to resort to name calling to put across my point but you are more than welcome to. I dont mind and I take pleasure that if I called you a "name" then you would report me straight away to get the comment taken down.

I stick to my point that even if people are living longer then a TFR below 2 alongside population growth can only be due to very large amounts of immigration and I have backed that up with evidence.

I know that my evidence is not even needed on this matter. Anyone who switches on a TV to see the propaganda being put out every day can see it. They see their towns and cities becoming poorer, more dangerous places. They visit somewhere like Bradford and know that the town in England in name only, colonised. In relation to the topic, their university educated kids being unable to afford a basic house to raise a family in. They are now used all of the problems that it has brought but they dare not question it because to do so will be instantly branded racist. It is not racist to wish to restrict migration and prevent 300,000 people arriving each year.

I find it very odd that people like yourself seem to take pleasure from it.

[Arborbridge]

It's really very simple stuff isn't it
I guess if one were looking to justify a racist position they would likely not be the smartest knife in the drawer anyway so it shouldn't be surprising they can't grasp basics

-sd

I do not need to resort to name calling to put across my point but you are more than welcome to. I dont mind and I take pleasure that if I called you a "name" then you would report me straight away to get the comment taken down.

I stick to my point that even if people are living longer then a TFR below 2 alongside population growth can only be due to very large amounts of immigration and I have backed that up with evidence.

I know that my evidence is not even needed on this matter. Anyone who switches on a TV to see the propaganda being put out every day can see it. They see their towns and cities becoming poorer, more dangerous places. They visit somewhere like Bradford and know that the town in England in name only, colonised. In relation to the topic, their university educated kids being unable to afford a basic house to raise a family in. They are now used all of the problems that it has brought but they dare not question it because to do so will be instantly branded racist. It is not racist to wish to restrict migration and prevent 300,000 people arriving each year.

I find it very odd that people like yourself seem to take pleasure from it.

I think your post comes dangerously close to revealing a racist outlook - but... I completely agree that we cannot allow unlimited immigration. Actually, I don't believe we do, but the question is how much is reasonable?
It suits economists to build up a thriving younger base of workers, particular vigorous people who have fought personal battles to get here. But I quite see the point that others do not want society to change too quickly.
I question whether our cities are seen as poorer due to immigration, and I don't see them as being more dangerous either. I was wandering around Birmingham recently, and was pleasantly surprised compared with what I remember from twenty or thirty years ago. It is a proud and modern place and the people seem confident and friendly. The same could be said of the East End of London which is far and way nicer and safer than in previous epoch's. No doubt you will come back and quote reams of statistics at me, but I am answering your opinion about what people see "when they switch on the TV" one of my own based on observation.

BTW, I am still suspicious of your interpretation of the numbers, especially as you have now revealed what might be seen as a racist angle to your thoughts. I would really like someone with a less enthusiastically anti-immigration stance to do some analysis here.

Perhaps More or Less has convered this subject? - it's quite likely.

I agree with those who say this has been a most interesting thread, revealing as it does a deep split amongst the contributors - which goes way back with echoes of the Brexit schism, I feel.

Arb.

[GoSeigen]

It's really very simple stuff isn't it
I guess if one were looking to justify a racist position they would likely not be the smartest knife in the drawer anyway so it shouldn't be surprising they can't grasp basics

-sd

I do not need to resort to name calling to put across my point but you are more than welcome to. I dont mind and I take pleasure that if I called you a "name" then you would report me straight away to get the comment taken down.

I stick to my point that even if people are living longer then a TFR below 2 alongside population growth can only be due to very large amounts of immigration and I have backed that up with evidence.

I know that my evidence is not even needed on this matter. Anyone who switches on a TV to see the propaganda being put out every day can see it. They see their towns and cities becoming poorer, more dangerous places. They visit somewhere like Bradford and know that the town in England in name only, colonised. In relation to the topic, their university educated kids being unable to afford a basic house to raise a family in. They are now used all of the problems that it has brought but they dare not question it because to do so will be instantly branded racist. It is not racist to wish to restrict migration and prevent 300,000 people arriving each year.

I find it very odd that people like yourself seem to take pleasure from it.

Problem is you wouldn't know what racist means if it smacked you in the face!

GS
@happy to admit I'm a born and bred racist but striving to change.

[GeoffF100]

Anyone who switches on a TV to see the propaganda being put out every day can see it. They see their towns and cities becoming poorer, more dangerous places. They visit somewhere like Bradford and know that the town in England in name only, colonised. In relation to the topic, their university educated kids being unable to afford a basic house to raise a family in.

I do not have a TV. Do all the TV channels really pump out racist propaganda every day? I have been seeing our towns and cities getting richer every day. Brexit and mismanagement of Covid put a brake on that recently, but perhaps the world will move on. I live in Bradford. It is still English as far as I know, and populated with Englishmen. Some of them are a bit brown, but there is nothing wrong with that. Bradford has a very rich history of migration:

https://historicengland.org.uk/content/ ... eline-doc/

There has always been migration, and there always will be. Many more people go to University nowadays. It dos not give the competitive advantage that it once did. "The world does not owe you a living", I was once told. Try going back 100 years and see what life was like then. Go forward 100 years and it may be far worse.

[servodude]

Isn't this where some posts get pulled and the usual suspects trot out the "I never saw anything racist" line?

[Lootman]

Isn't this where some posts get pulled and the usual suspects trot out the "I never saw anything racist" line?

Either that or the part where a post is not removed because someone saw racism where in fact there was none.

[servodude]

Isn't this where some posts get pulled and the usual suspects trot out the "I never saw anything racist" line?

Either that or the part where a post is not removed because someone saw racism where in fact there was none.

How do you understand the following quote.

They visit somewhere like Bradford and know that the town in England in name only, colonised.

I know you like this type of stuff

-sd

[Arborbridge]

Isn't this where some posts get pulled and the usual suspects trot out the "I never saw anything racist" line?

Either that or the part where a post is not removed because someone saw racism where in fact there was none.

That's why my post was carefully word to give the benefit of the doubt.

In truth, it's possible that GS's line "@happy to admit I'm a born and bred racist but striving to change" would fit many of us. Discrimination against "those who do not look like us" is a natural phenomenon with a million years behind it and had good reasons to exist as security would depend on it. However, in the modern world we understand more about these tribal urges and try to mitigate against them.

Incidentally, I would say I was pretty much colour blind myself, more or less non-racist as one can be. However, recent events - particularly some instances of over-wokery and all those discussions, seem to be making me more aware of race and if anything more racist. It's a creeping virus. Years ago I would never have even noticed the number of ethnics or disabled on TV - now I do. I honestly didn't notice that a particularly well known ballet dancer was mixed race until it was pointed out. I didn't matter - she was just a normal Brit in my eyes.

Ah well, the new world where non-racists are encouraged to start to "categorise" people, if not to discriminate.

Arb.

[Lootman]

Isn't this where some posts get pulled and the usual suspects trot out the "I never saw anything racist" line?

Either that or the part where a post is not removed because someone saw racism where in fact there was none.

How do you understand the following quote.

They visit somewhere like Bradford and know that the town in England in name only, colonised.

I know you like this type of stuff

You know nothing of the sort.

I see that as a whimsical observation by someone who was born in England and senses that the nation has changed significantly from how it was when they grew up there.

I might have phrased it differently but I don't think you can predict any disposition for prejudicial behaviour based on that one sentence taken out of context. What was that TMF guideline - that we should give others here the benefit of the doubt?

[servodude]

Either that or the part where a post is not removed because someone saw racism where in fact there was none.

How do you understand the following quote.

They visit somewhere like Bradford and know that the town in England in name only, colonised.

I know you like this type of stuff

You know nothing of the sort.

I see that as a whimsical observation by someone who was born in England and senses that the nation has changed significantly from how it was when they grew up there.

I might have phrased it differently but I don't think you can predict any disposition for prejudicial behaviour based on that one sentence taken out of context. What was that TMF guideline - that we should give others here the benefit of the doubt?

nudge nudge wink wink say no more

[Lootman]

I know you like this type of stuff

You know nothing of the sort.

I see that as a whimsical observation by someone who was born in England and senses that the nation has changed significantly from how it was when they grew up there.

I might have phrased it differently but I don't think you can predict any disposition for prejudicial behaviour based on that one sentence taken out of context. What was that TMF guideline - that we should give others here the benefit of the doubt?

nudge nudge wink wink say no more

If my flaw is that I recognise only 50% of genuinely racist incidents, then your flaw is that you recognise 150% of them