To: Department for communities and local government
Homes for a growing population
Spend taxpayers money on the infrastructure and house building required to remedy the exorbitant costs of owning a home rather than wasting the money to help first time buyers onto the housing ladder.
If houses are affordable in the first place then everyone benefits rather than a few.
The current policies are a sign of the short-termist thinking of those looking to buy election votes rather than create a country that benefits everyone.
If houses are affordable in the first place then everyone benefits rather than a few.
The current policies are a sign of the short-termist thinking of those looking to buy election votes rather than create a country that benefits everyone.
Why is this important?
It is a simple fact of economics that if demand increases without a corresponding increase in supply then market forces will drive up prices. Our countries inability to build enough homes for the growing population is well documented. What is not so well documented is that the governments various schemes to help first time buyers onto the housing ladder simply exacerbate the problem of high house prices. The schemes may be welcomed by those in or near a position to buy their first home, but in the long run all the schemes do is drive house prices higher.
Exorbitant house prices force a growing percentage of the population into private rental. As house prices increase private rental costs also increase, which in turn makes it far more difficult for those renting to build the deposit required to own a home. Those renting are forced to save a far larger percentage of their disposable income in order to build their deposit; and this of course relies on there being any disposable income left to save. Reports this week suggest that the average first-time buyer will have already spent £50000 on rent.
With all this money being saved by those looking to build a deposit, there is less and less money being put back into the economy. The growing percentage of the country who are building a deposit will be eating out less, limiting their purchase of luxury goods and generally saving money wherever possible. There is a concept known as the velocity of money that effectively states that the faster money moves around the faster the economy grows; money sat in savings accounts is stagnant and does very little for the economy. The upshot of this is that growth of the economy is limited, which in turn limits the number of jobs paying a decent wage, which in turn forces more of the population to rely on taxpayer funded benefits.
Less taxpayers money would be required to fund benefits if there were more jobs paying a living salary. The money made available by the reduced reliance on benefits could be used to increase funding for the NHS, reduce the tax burden on the population, make higher education free again, and many other causes.
In short, it is my opinion that a large number of the problems facing this country could be resolved if the government truly committed to investing in a long-term infrastructure and house building program rather than wasting taxpayer money driving up the cost of already exorbitant house prices. This is a policy that would fairly benefit the whole country rather than just a few.
Exorbitant house prices force a growing percentage of the population into private rental. As house prices increase private rental costs also increase, which in turn makes it far more difficult for those renting to build the deposit required to own a home. Those renting are forced to save a far larger percentage of their disposable income in order to build their deposit; and this of course relies on there being any disposable income left to save. Reports this week suggest that the average first-time buyer will have already spent £50000 on rent.
With all this money being saved by those looking to build a deposit, there is less and less money being put back into the economy. The growing percentage of the country who are building a deposit will be eating out less, limiting their purchase of luxury goods and generally saving money wherever possible. There is a concept known as the velocity of money that effectively states that the faster money moves around the faster the economy grows; money sat in savings accounts is stagnant and does very little for the economy. The upshot of this is that growth of the economy is limited, which in turn limits the number of jobs paying a decent wage, which in turn forces more of the population to rely on taxpayer funded benefits.
Less taxpayers money would be required to fund benefits if there were more jobs paying a living salary. The money made available by the reduced reliance on benefits could be used to increase funding for the NHS, reduce the tax burden on the population, make higher education free again, and many other causes.
In short, it is my opinion that a large number of the problems facing this country could be resolved if the government truly committed to investing in a long-term infrastructure and house building program rather than wasting taxpayer money driving up the cost of already exorbitant house prices. This is a policy that would fairly benefit the whole country rather than just a few.
