Tuesday 21 January 2014

Cause and effects

From the FT, 17 January 2014:

Britain’s growing army of private landlords have been the biggest winners from recent rises in property prices, according to new research for the FT showing housing wealth concentrated in fewer hands.

The vast bulk of the equity gains from Britain’s rising housing market over the past decade has gone to landlords and wealthier individuals who own their homes outright, the research conducted by estate agent Savills shows...

Landlords’ total equity has more than doubled from £384bn a decade ago to £818bn today, thanks to rapid growth in the private rented sector and the fact that professional investors tend to buy property in housing hotspots.

But households who bought their home with a mortgage, often in poorer parts of the UK, have seen their share of Britain’s housing wealth drop over the same period.

From Oxfam.org.uk, 20 January 2014:

Wealthy elites have co-opted political power to rig the rules of the economic game, undermining democracy and creating a world where 85 richest people own the wealth of half of the world's population, worldwide development organisation Oxfam warns in a report published today.

Working For the Few, published ahead of this week's World Economic Forum in Davos, details the pernicious impact that widening inequality is having in both developed countries and in developing countries, helping the richest undermine democratic processes and insist on policies that promote their interests at the expense of everyone else.

The report says that there is a growing global public awareness of this power-grab. Polls carried out for Oxfam in the UK, Brazil, India, South Africa, Spain and US show that most people in all six countries believe that laws are skewed in favour of the rich. The UK polling carried out by Research Now, found that two-thirds of people thought 'the rich had too much influence over the direction the country is headed' and only one in ten disagreed. The UK is one of the most unequal countries in the OECD club of rich nations.

From the BBC, 21 January 2014

The Office for National Statistics (ONS) said more than 3.3 million adults between the ages of 20 and 34 were living with parents in 2013, 26% of that age group.

The number has increased by a quarter, or 669,000 people, since 1996. This is despite the fact that the number of 20 to 34-year-olds in the UK remains almost the same, the ONS said. The ONS suggested the trend of living at home might be due to the recent economic downturn.

Karen Gask, senior research officer at the ONS, said: "I think one of the main reasons is housing affordability, and that's been cited by several academics who've looked into it. It's hard for young people to get on the housing ladder."

The ratio of house prices paid by first time buyers to their annual incomes has risen from 2.7 to 4.47 in the period from 1996 to 2013, she added...

"There are wider implications for things like fertility rates, as people often look to move out of the parental home before having children."

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