Several points to take from this chart. But firstly, in about 2008 when I was taking these numbers myself private renting and social renting represented about 20% of the total housing market. The other 80% was split evenly between mortgages and owned out right?
So what's changed?
Since 2010 there's about 15% most rentals. But nothing much has changed there since 2014 in the chart.
More importantly, I think we can see that houses owned outright are increasing the most.
And those with the mortgage have been decreasing slightly in a continuous path which is very interesting because those households have probably gone into rentals.
There's a rounding error with this graph of that 1%. It all adds up to 101%. But let's ignore that for now.
The buying with a mortgage line is a fallacy because part of that mortgage is rent and part of it is owned outright by the homeowner. The part which is rent is what we call interest on a mortgage, but is really rent going to your landlord the bank, rather than a private landlord or a public sector one. It's a fallacy.
So let's split that 28% in half because we don't have better numbers about it and give 14% to the owned outright and 14% the rented sector. And totting it all up we're left with 50% for owned outright and 50% for rented.
The point being that real estate owned outright compared to being rented is split fairly evenly down the middle so we can't blame big landowners for owning all the so-called wealth when it comes to housing. There might be a different split for commercial property and farmland, but that summed together is not worth anything like as much as the total stock of housing in the country.
The rental line is completely flat. It looks like some that used to have a mortgage may now own outright as their mortgage is redeemed but that is guesswork.
There are no indicators here of whhat what impact government policy is having on housing. This is one of the things I'm most interested in, so if you can see anything I cannot please comment.
A couple of points:
ReplyDeleteThe rental value of land in productive use is already captured by taxes on wages, goods, services and profits. The incidence of all these taxes is on production (it cannot come from anywhere else).
The effect is to tip marginal land into negative rental value ie it just goes out of use.
There is an unquantifiable hidden demand for housing Owner occupiers may have adult children living with them who would want to set up their own households and start families.