NSEFAN
Established Member
I doubt he will end up as prime minister, but perhaps the party will gain a few more seats.
I'm afraid I would say that you're using economics when it suits you and ignoring economics when it doesn't.
Example 1: An immigrant coming in to work doesn't merely consume a job, he also needs food and services etc. which therefore creates employment. In your posts, you rightly draw attention to the job consumed but then ignore the employment created.
Example 2. House prices were massively rising and causing problems some years before immigration increased in the 2000's. Sure, I accept that immigration has added to that pressure, but it's not the only cause of the house price problem by a long way. There are lots of other factors - smaller family sizes, companies hoarding land, and most importantly failure by Govt to build houses. You could solve the problem completely (over a number of years) by fixing those issues. On the other hand, cutting immigration will by itself only make a small (although I accept, non-zero) contribution to reducing the problem. If you are so concerned about house prices, why do you keep going on about something that's only one contributor, yet I can't recall you ever once arguing for the measures that would really solve the problem (Govt action to build more houses etc.)
Example 3. As TheKnightWho has pointed out, if you make it harder for people to come to the UK to fill low wage jobs, but take no other action, basic economics dictates that some companies will respond by just moving the entire jobs overseas (obviously, some jobs, not all. Different job vary in their ability to be done in different locations). That doesn't help anyone in the UK. Yet in your reply, you failed to even acknowledge this. Why?
Yes, it's true that in general, if you increase supply of something (eg. labour) while demand stays constant, the price will tend to go down. But in the real world, things are more complicated. For example, in the labour market, demand doesn't stay constant, which is why your point doesn't really hold.
Look - I completely accept that things like house prices and low wage jobs are a big problem that are causing a lot of people hardship. And I want those problems solved. But you're not going to solve them unless you design policies that look at the whole picture - take into account all the consequences that any given change has. And your continual focus on immigration to the exclusion of everything else won't do that.
The factor that is often forgotten in these debates is about ownership of capital and the subsequent revenue streams this generates. Why is it, in an economy that is supposedly growing, the growth isn't turning up in wages.
It is not in the interest of big business for wages to stagnate as consumers will not be able to spend so much, which would mean less money for big business.
It is in the interests of big business for wages to stagnate, because they will be able to increase profit margins. More money for the fat cats.
The access to cheap credit is what keeps the economy going, both commercially and domestically. Companies will buy other companies using leverage, and the general population are encouraged and incentivised to stick new goods on the never-never. Most people will repay their debts, usually with new loans; loans and the contractual interest payments turn noughts on a computer screen into real money and real assets, and the rich corporate bankers and industrialists get ever richer.
The US/UK economic model is built entirely on low wages and leverage. That is why the previous economic crash did not touch the consumer credit industry.
Normally growth does translate into higher wages but that wasn't the case during the recent recovery. Hopefully that was an anomaly. It is not in the interest of big business for wages to stagnate as consumers will not be able to spend so much, which would mean less money for big business.
It is in the interests of big business for wages to stagnate, because they will be able to increase profit margins. More money for the fat cats.
The access to cheap credit is what keeps the economy going, both commercially and domestically. Companies will buy other companies using leverage, and the general population are encouraged and incentivised to stick new goods on the never-never. Most people will repay their debts, usually with new loans; loans and the contractual interest payments turn noughts on a computer screen into real money and real assets, and the rich corporate bankers and industrialists get ever richer.
The US/UK economic model is built entirely on low wages and leverage. That is why the previous economic crash did not touch the consumer credit industry.
The individual also cannot be fully blameless for getting involved in credit culture. There is no law saying they have to apply for credit cards or take out loans. It is also not necessarily the case that low earners are always the ones getting into debt. Some of the people that I know who are on low incomes don't borrow on principle, whereas there are people on high incomes who have spent extravagantly using credit and have a negative net worth.
It isn't about blame, there's no moral attachment to the use of debt.
My point is that our economy is built entirely on leverage. Kraft buy Cadbury's on tick, Malcolm Glazer buys Manchester United on tick, the middle manager buys his BMW 320 on tick, the benefits claimant buys their kids' XBox on tick.
Companies want to keep costs down and profit margins high. Banks want to create assets out of nothing. Both parts of the economy are ideally suited to leverage, which is all about turning zeroes on a computer screen into real-life assets like property through loans.
But what you're forgetting is that value is created through trust and, even more importantly, use. Money is intrinsically valueless without it, and is just a way to store that trust and also has to be tradable. After all, I'll only accept £5 in payment for something I deem worth £5 if I expect I'll be able to get anything from it. Getting ₩1341.53 North Korean Won wouldn't be particularly useful to me unless I lived in North Korea, even if it's still worth £5.
You might think debt creates value out of nothing, but actually it facilitates the economy through allowing people to spend now, rather than having to save up. Obviously it does need to be paid back in the long term, but the long term is a nebulous thing and not easy to define. Indeed, the debt will never totally go away and it's a good thing that it won't.
This applies to the country and much as individuals.
For western governments, the argument for borrowing is even stronger as they can command very low interest rates given their (mostly) excellent credit rating. A country having no debt is essentially a wasted opportunity. For example, Norway which has far more tax revenue than it could ever spend still borrows.
We seem to be in agreement about wages and house prices, there are undoubtedly other factors but the more people come into the UK looking for jobs and accommodation the worse the situation becomes.
In the Medway Towns in Kent for example the number of people placed in temporary accommodation has more than doubled in the last three years and there are warnings that the situation will get worse before it gets better. It seems that wherever you go in the south east new houses are going up but it is just impossible to keep up with demand.
I would argue that a significant factor in the lack of house building is because high house prices and rents suit a certain sector of the population - namely those who are landlords or own property, and those people are politically powerful. If a huge number of houses were built which meant that the Daily Mail readers weren't seeing their houses increase so much, or because of the supply the buy-to-let landlords couldn't leech quite so money out of people, they'd be unhappy - and such people hold a lot of power.
If the government wanted to it could instigate a mass housebuilding programme to sort this out very quickly indeed.
A mass house building programme is already well underway in the south east but still the problem is getting worse.
There are undoubtedly unscrupulous landlords taking advantage of the situation by renting out sub standard properties but they know somebody will be desperate enough to take it.
Which is why landlords should be licensed, as they are here in Newham.There are undoubtedly unscrupulous landlords taking advantage of the situation by renting out sub standard properties but they know somebody will be desperate enough to take it.
mass housebuilding is far from underway. It is not in the interest of housebuilders to build large numbers of properties as that will lead to a reduction in the value of their land banks. We have a bizarre system that the government is using our money to subsidise some house buyers which just further increases demand and hence prices when for the same cost they could actually build 10,000s of homes that will go some way to addressing the problem. In addition some £10bn a year goes in housing benefit to private landlords - enougth to build at least 50,000 properties a year.
A mass house building programme is already well underway in the south east but still the problem is getting worse.
There are undoubtedly unscrupulous landlords taking advantage of the situation by renting out sub standard properties but they know somebody will be desperate enough to take it.
mass housebuilding is far from underway. It is not in the interest of housebuilders to build large numbers of properties as that will lead to a reduction in the value of their land banks. We have a bizarre system that the government is using our money to subsidise some house buyers which just further increases demand and hence prices when for the same cost they could actually build 10,000s of homes that will go some way to addressing the problem. In addition some £10bn a year goes in housing benefit to private landlords - enougth to build at least 50,000 properties a year.
Are you really arguing that immigrants are stealing all of our houses? This is utter madness.
Immigrants consume things, but they also contribute to economies. They're no different than if there was a very large teenage population who were all coming of age all of a sudden, apart from the fact they weren't born here. That is literally the only difference from an economic perspective. In fact they're better, because many of them have the skills to facilitate things like building new houses etc.
Well it depends how you define mass house building, certainly there are plenty of homes being built in the south east and there are usually plenty of objections to house building as well.
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Oh here we go again...............I haven't accused anybody of stealing anything:roll:
I think the greater barrier to people getting on the property ladder now is over-cautiousness from banks and the requirement for a very large deposit, making it very hard to obtain a mortgage. How many young people have thousands of pounds saved up for this?radamfi said:How much is a reasonable price for a first time buyer property? £100K? Rightmove shows plenty of properties in Coventry, Glasgow, Crewe, Bolton and Lowestoft under that price.
How much is a reasonable price for a first time buyer property? £100K? Rightmove shows plenty of properties in Coventry, Glasgow, Crewe, Bolton and Lowestoft under that price.
I actually somewhat agree with you here. Your argument appears to be that British people can't afford houses because of the number of immigrants who need houses. In the past some people have lazily (and provocatively) tended to describe that situation as 'immigrants stealing houses', but to your credit you haven't used that language, so I don't think TheKnightWho should have attributed that language to you. Obviously I still think your argument is largely wrong though, and I agree with the rest of his points. It would be correct to say that immigration has increased pressure on housing supply, but it's not the main reason for the massively high house prices (which are causing so much hardship).
But it's what amounts to effectively the same thing. Obviously Antman wasn't arguing that immigrnats were breaking into houses and claiming them as their own, but it's the same word that's used when you get people saying "immigrants steal our jobs!", and it's the same logic that somehow we can't create more houses (just as the other people forget that more immigrants means more jobs).
Well at least 'Dynamic Spirit' and I can disagree about certain things in a civilised way, all you seem to be intent on doing is provoking endless arguments with your inflammatory and inaccurate comments!
You're not even addressing what I say. You're just constantly outraged.
The conclusion of what you're saying is that immigrants are taking houses that should go to British people. I've been trying to say it's nothing like as simple as that, and yet you just get offended.
The level of house prices are influenced to a very high degree by sentiment and hype, just like shares on the stock market. Just like shares, houses can appreciate spectacularly when everyone wants to get in on the act and don't want to be left behind, like in the mid 80s or early 00s, and then crash when everyone realises it was a bubble, like the late 80s/early 90s and late 00s. There was still a crash in the late 00s even though immigration had increased substantially in the previous decade.
Certain 'market segments' become more trendy than others. In the late 90s, so called 'tech shares' were incredibly popular and rose far higher than the rest of the already booming stock market and if you invested in almost any of those companies you were almost guaranteed to make a fortune as long as you sold before the year 2000, when the tech crash happened.
Today it is very 'cool' to buy property in London. Foreigners are now buying there without even living there. If anything signals 'bubble', then that is it. It wasn't always like that. In the early 90s, property in London crashed much worse than in the rest of the country and buying was almost a dirty word.
Nobody talks about regulation of share prices, so why should house prices be different? Yes, everyone needs somewhere to live, so we need to have fair RENTS and strong regulation of the rental sector.
So when you are thinking of somewhere to live, you should compare the costs of renting and buying and make an informed decision based on pure affordability, not because 'renting is dead money', or 'if I don't buy now I'll never be able to afford to because of runaway house prices'. It might mean leaving the area if there is much better value elsewhere.
In London, house prices are obviously insane. If you still buy there because you feel you have to, regardless of whether it is value for money, then you are contributing to the hype and making prices even higher for everyone else. You know you will struggle to make the enormous repayments and will have no life as a result, but you still do it regardless, almost like following a religion, the belief being that buying is always right, no matter what the cost. If, at a later date, you find you cannot afford the repayments and have your property repossessed, then I'm afraid that is your own fault. You took an enormous risk which didn't pay off.
The lower risk option is to continue to rent, maybe share a flat instead of having your own flat to yourself. Or to find a job somewhere else in the country where buying is more viable. You may take a pay cut, but, contrary to popular opinion, most people outside London have jobs and many earn double the minimum wage. For example, Manchester is considered to have a particularly buoyant economy, yet you can buy a house in Bolton and many other surrounding areas for under £100,000. There are eastern Europeans in the Manchester area, just like in most of the country, yet house prices are still at those low levels. However, even there, there are some areas, in south Manchester particularly, that are hyped to silly levels. Just avoid them.
deltic:2122175 said:However unlike demand for shares demand for houses mainly reflects an actual desire to use the product. Rents and house prices in the UK have risen significantly in relation to earnings over a long period time which demonstrates that demand outstrips supply in most parts of the country. The main demand for housing over the last 50 years plus has little to do with population increase but has been driven by falling family sizes.