One male wage used to be enough to support a family. Since women joined the labour market, it now requires two wages. Why? Housing inflation. Why have rents and house prices increased so much - it's a simple market failure. Housing prices rise because the market inflates according to the ability of people to pay, however reluctantly, what sellers want. People MUST have somewhere to live - and there is a limited amount of desirable land and property. If people did not need to live near where they worked, or near hospitals and schools, they could live somewhere cheaper. But unfortunately most don't have that choice.
Banks have played the housing market by - until the recent crisis - increasing availability of mortgage borrowing, which of course encourages house price inflation. Most perversely of all, governments, the media and economists have all bought into the absurd idea that house price inflation is good. Why? How can making life unaffordable for most people while making a minority of landlords rich be good for us? For a while some people saw themselves as wealthy by virtue of rising house prices. But if you only have one house, the only way you can benefit from an expensive house is to move somewhere cheaper, or into something smaller, to cash in. Of course, when you die, you can pass on this cash pile to your children. So it works as a way of passing on unearned income to children. Why unearned? Because this money was not made through work or skill, but through buying when it was cheap and watching the value rise through asset inflation. By passing it on to kids, you help perpetuate a division in society between the housing rich and the housing poor.
Somehow we must get back to lower house prices and lower rents. The market will never do this - only state intervention through taxation, regulation of the market and provision of social housing can change this. The housing bubble helped cause the financial crisis. The housing market is totally disfunctional but no politician will propose meaningful solutions because they are all wedded to the idea that property owners and ownership are untouchable and that landlord greed is not to be tampered with. Private health used to be seen in the same way. Then came the NHS. We need a revolutionary change in the way we see housing. It could solve a huge number of social problems. People could start to work less hours, spend more time with family and doing things they enjoyed.
Part time work could become the norm, now that so many of the labour intensive industries of the past have declined. There simply isn't enough work for everybody anyway, and the current system, where some people are killing themselves working 50+ hours a week while there are three million people unemployed is just stupid. And the elderly are clearly going to have to be part of this too, there are now so many of them that it just isn't sustainable for the working population to carry them.
But, before this can become a reality, two major things need to happen, firstly we need a massive drop in housing costs, because at the moment it is pretty much impossible for a couple to manage of two part time salaries when so much money is sucked up in rents and mortgage payments, and secondly we need a change in attitude that does away with the idea that working excessive hours is somehow impressive, rather than an admission of incompetence, because you can't get your job done in the allocated hours.
Banks have played the housing market by - until the recent crisis - increasing availability of mortgage borrowing, which of course encourages house price inflation. Most perversely of all, governments, the media and economists have all bought into the absurd idea that house price inflation is good. Why? How can making life unaffordable for most people while making a minority of landlords rich be good for us? For a while some people saw themselves as wealthy by virtue of rising house prices. But if you only have one house, the only way you can benefit from an expensive house is to move somewhere cheaper, or into something smaller, to cash in. Of course, when you die, you can pass on this cash pile to your children. So it works as a way of passing on unearned income to children. Why unearned? Because this money was not made through work or skill, but through buying when it was cheap and watching the value rise through asset inflation. By passing it on to kids, you help perpetuate a division in society between the housing rich and the housing poor.
Somehow we must get back to lower house prices and lower rents. The market will never do this - only state intervention through taxation, regulation of the market and provision of social housing can change this. The housing bubble helped cause the financial crisis. The housing market is totally disfunctional but no politician will propose meaningful solutions because they are all wedded to the idea that property owners and ownership are untouchable and that landlord greed is not to be tampered with. Private health used to be seen in the same way. Then came the NHS. We need a revolutionary change in the way we see housing. It could solve a huge number of social problems. People could start to work less hours, spend more time with family and doing things they enjoyed.
Part time work could become the norm, now that so many of the labour intensive industries of the past have declined. There simply isn't enough work for everybody anyway, and the current system, where some people are killing themselves working 50+ hours a week while there are three million people unemployed is just stupid. And the elderly are clearly going to have to be part of this too, there are now so many of them that it just isn't sustainable for the working population to carry them.
But, before this can become a reality, two major things need to happen, firstly we need a massive drop in housing costs, because at the moment it is pretty much impossible for a couple to manage of two part time salaries when so much money is sucked up in rents and mortgage payments, and secondly we need a change in attitude that does away with the idea that working excessive hours is somehow impressive, rather than an admission of incompetence, because you can't get your job done in the allocated hours.
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