London housing

Free markets and housing policies

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A free market of regulated consumers or a regulated market of free consumers. Entrepreneurs favour the first, politicians the second. What do we get? A pendulum that swings between both and limited consumer choice.

Consumers need the benefit of market forces on the lion share of their weekly spending and the cost of monopoly prices on the mouse share of their weekly spending.

If the UK government spends £24B a year on housing benefit, this is the result of government decisions made over the last thirty years. If the UK government cares about the future, it needs to make smart decisions on housing policy now, so the country avoids spending double that annual figure in future years.

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Thinking rich and talking cheap

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If we could turn all the words written about London’s housing crisis into bricks, the crisis would have been solved decades ago.

The richest in society can carelessly mislay a few zeros off their net personal wealth and still not break a sweat.

London Life

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A man who is tired of London’s rush hour, is tired of life.

Friends, Londoners, countrymen. Sadly, three separate categories…

London Underground; mind the gap getting off. Mind the mosh pit when you get on.

Inner London inline skating; glide the Hyde, slalom the Serpentine.

London’s Square Mile; history equally balanced between length and breadth.

London transport – we carry designer hopefuls & designer locals, West End dancers & street dancers, Estate agents and secret agents, barristers & baristas.

London housing – more buying, filling, mending and watching the gap than minding the gap.

The rest of Britain might be heartland, but London’s a state of mind.

Sound of the times – i-tuning out the London buskers.

The tourists might come to London, but its mansions and tax breaks go to offshore tycoons.

Mass cycling and secure cycling lock-ups in London. There is nothing so powerful as two ideas whose time has come.

London cyclists entering the intersection early and motorists leaving the intersection late –  a tragic collision of ambition, stupidity and selfishness.

London cycling; ride the Hyde.  Toe-clip the toe path. Do a pm run on your Boris bike.

London cycling; less speedy dies. More beady eyes.

A marriage made in heaven needs two angels. A marriage made in London needs two human beings.

Tate Britain/Tate Modern – culture in stereo. Art works to power stations.

London talent without effort and courage – just a sports car in the showroom.

London rappers talk about it with style. London university students do it with substance.

London charity planning; a walk in the woulds. Helping the great unwatched.

London quality is about substance. London design is about style supporting substance. Welcome to Quality Design HQ.

London fashion, the magical stitching binding values with expression.

People come to our London store on a fashion quest. And leave on a style mission.

If we spend all our time bashing London wealth creators, instead of up-skilling, we’ll get the economic wasteland we deserve.

Westminster politicians are in a hurry to tax everything except themselves.

London numbers are like diamonds – their substance can generally be verified .However, as for diamonds, if you want a true reflection, look at their substance from all angles.

Using Finance in new ways to solve social problems

If we make and operate more trading markets, how can that solve some existing social problems in our communities?

In one example, creating a new product in the swaps market, we could swap bundled consumer poverty debt for public-body, impaired asset-liability (toxic/polluted land). That then gives a pool of almost penniless people (or a poor country heavily in debt), an asset instead of an unpayable financial debt. The asset may rise in the future, but in the meantime, as well as collectively paying the ongoing running costs, they can collectively pay an annual insurance premium to limit their downside risk.

From the public body’s perspective, they :

  • alter their custodial obligations (the shape of the land borders they physically manage),
  • minimise any controversy with their auditors on property, plant & equipment (PPE) impairment values,
  • swap a physical liability for a financial liability of the same NPV,
  • significantly reduce PPE liability volatility,
  • avoid ongoing various running costs, relating to maintaining the physical asset, including; regular valuations, impairment reviews & access management.

The public body can then re-finance (against other unutilised collateral sitting on its balance sheet) the financial debt (interest rates) and match future income receipts against that debt in the normal way, to progressively pay down the debt.

In another example – derivative creation, can we split off the impairment discount from the unimpaired net value for a land or building asset? This idea may be of interest to the Housing Sector e.g. large Church & Council housing estate owners. The impairment value could be traded publicly, once derivatives representing it are created, perhaps to be known as ‘impairment value derivatives’ or IVD’s.

Thereafter, a fall in IVD value might occur, as the outcome of legal cases (relating to similar types of impaired physical assets held by other parties) establish payment liabilities on the owners of such properties. A gain in IVD value would occur, as investors speculate that impairment value attached to such IVD’s over time becomes excessive. And speculate that emerging new technologies make asset repairs & land remediation cheaper and more viable, causing a contraction in the impairment value. In the meantime, IVD shareholders could hedge their downside holding-risk (legal liability risk in particular), using insurance policies that cap the liability to themselves (effectively an insurance excess) and transfer most of it instead to the insurance industry.

Future housing in Britain

As the London housing supply problem continues and lower income households are forced to move out of the city (city rents and cost of living becomming unaffordable), they may well encounter groups of economic immigrants entering Britain who want to live as close as possible to their prospective employers of the future i.e. at the city margins.

The pressure to house both groups is firstly an issue of the land. And secondly an issue of housing on that land. Both groups will want cheap land. And housing that can be rapidly and cheaply constructed (perhaps 3D printed or prefabricated dwellings).

Where might the cheap land come from that is relatively near the centres of thriving commerce in the UK? Typically, from land being sold at a discount, because of its drawbacks. Example include; ex-landfill land, land next to railway sidings or motorways, land next to busy airports, ex-quarries, land at flood risk and ex-industrial land. Councils, NHS Trusts and other organisations under financial pressure may also be interested in selling off surplus land, simply to help balance their books.

Since existing towns and villages won’t have the space (or the interest from existing residents in building new schools, shops, social and medical facilities for the new settlers), it’s likely that new towns and villages will need be constructed. Perhaps as high density settlements, Soweto style.

Central government would be wise to prohibit the construction of new towns and villages alongside existing airports, rail and road links. Why? Because this would prevent their future width-expansion, to cope with an increased settler commuter-traffic, to and from the main centres of employment.

Central government and the UK Environmental Agency would also be wise to prohibit the construction of new towns and villages on known floodplains, or in low lying areas next to the sea, for obvious reasons.

Welcome to prefab Britain.

London Housing again…

I just finished watching the BBC Panorama programme ‘Life on the front line after the benefits cap’. http://www.bbc.co.uk/news/uk-26924411.

I firstly felt sympathy for the London Council housing officers facing a thankless task, encouraging local tenants to make delayed life decisions, following the cap on housing benefits.

I also feel real sympathy for those reliant on Council housing through no fault of their own. It’s a shame the BBC TV programme didn’t focus more on them, on why Council tenants are willing to gamble that no matter who else is impacted, ‘I’ll be ok Jack/my case is special’ and on why unemployed solo parents aren’t getting the financial help they desperately need, from the absent father or mother of their children.

Whether British born, or first generation immigrants, parents in Britain have to think long and hard about their children’s best interests, including when it comes to housing them.  That’s not left or right wing ideology, just simple ‘Maslow’s hierarchy of needs’ pragmatism. In the case of immigrants, they took a chance and embraced change once, coming to the UK for a better life for their families. So why loose that positive view on change and opportunity afterwards?

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Charles Handy, management guru,  once described how if a frog jumps and lands in a pot of boiling water, it will sense the sudden threat and take personal action (jump out fast). Likewise, if the frog lands in the same pot, but this time it is slowly heating up, the frog won’t sense the change and eventually cook. In my view, the same applies to parents in Council housing, especially in London.

Being a good parent, should take priority over being the Council tenant in a particular property, or in a particular location. Even if that means putting on a brave face, relocating to a cheaper town and seeking work outside of London, if necessary.

Ironically in life, the best choices (those with the strongest long term social or personal outcomes) sometimes involve confronting short term fear (of change), adopting the self-discipline to embrace new skills (it gets easier with practice) and adopting a change of mindset (glass half empty to glass half full).

London life is seldom easy, but the changes afoot bring opportunity for those willing to be realists. Finally, I doubt any child likes seeing his or her parents portray themselves as victims – behaving like a victim (even if you are one) rarely nurtures goodwill, parental respect or teamwork from the next generation.

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