Housing Strategy - Solving The Housing Problem

I don’t think that there is anyone on the UK who isn’t aware of the seriousness of the housing crisis we are currently experiencing.

There seems to me to be four main areas needing attention being:

1. Social housing
2. Shortage of new affordable homes to buy
3. Getting young people onto the housing ladder

4. Homelessness

I don’t think that there is any reason why we cant tackle all of these issues in one go and with zero cost to the tax payer.
This idea started life as quite a complex solution some 6 months ago but over time, through development has simplified substantially.  

It is now entirely possible to give young people the instant access they need to the housing market with the ability to purchase property in virtually any location they desire. This will inspire the existing house builders to design and build excellent quality, genuinely affordable homes, freeing up valuable land and which returns a substantial profit for the tax payer. A profit so great that it alone could start to address the repayment of the national debt.

The way to achieve this is by truly radical thought and completely change the very basic principals of our housing market functions.

I am a strong believer that tax payers money should be invested to create the finances needed to fund the tax payers needs. And this is where it begins. The tax payer becomes a provider of interest only mortgages, with capital repayment becomming a matter of choice. I had toyed with the idea of long term standard mortgages, but these are not protected from market fluctuation so are inherently unstable. The mortgages provided buy the tax payer are free from market interferrence and as such the interest rate can be secured for the lifetime of the mortgage.

By providing interest only mortgages it enables all people to get onto the housing ladder, this includes the unemployed as the interest they pay on the mortgage will be substantially lower than the rent they pay a private landlord for the same property. This will give the unemployed and employed substantially more disposable income or they could choose to have less disposable income and opt for a better quality home. 

As the tax payer is providing mortgages as opposed to social housing, people will have the freedom to purchase the home they can afford in the area they can afford which will end the existence of council and social housing estates. Virtually every home will be privately owned. People will not be forced to make repayments to their capital which means that a mortgage can last a lifetime. But if they find themselves with a change of circumstance they can make the minimum interest payment meaning that they will never face the prospect of losing gheir home. Christmas and holidays will never be a thing to fear for lack of affordability. And time off to educate oneself is a choice and no longer an obstacle.

Lets say for example a home with a purchase price of £250,000 over a 25 year period at 3% interest. The initial repayments would be in the region of £1458 pcm. However on interest only at 3% this cost reduces to £625 pcm. The property becomes eminently more affordable and as the owners career develops and their salary grows, so the capital repayment increase. In 40 years, £250000 may become a trivial amount, much like the mortgage payments appear of people who purchased their homes 25 years ago.

If no capital is paid off then after say 50 years it will have made the tax payer a return of £375,000 and the tax payer still owns the 100% of the property.

If we invested £500b in mortgage provision, then every 50 years at 3% the tax payer would still own the £500bn investment and will have made £750bn in interest payments and the tax payer still owns the initial investment of £500bn, which quite possibly will have appreciated in value.

Double this investment to 1tn and in 50 years the national debt is paid. Double it again and the debt is paid in 25 years. Taxpayers money is no longer needed to pay the debt.

With a mortgage based on £100,000 the interest at 3% is £250 pcm. At 2% it is £166 pcm. 

With the extra disposable income being spent, new opportunities will naturally present themselves encouraging a growing and prosperous economy. 

The Death of Neo Liberalism

Have you ever wondered why there is so much negativity and hatred towards the left these days? The thing that has struck me so powerfully is the unprecedented level that the vitriol has reached. Why?

For too long the labour party has been edging ever closer to the right, which has kept capitalism as an economic plan, thriving. But the problem with capitalism is that it is an insatiable beast which will ultimately run out of the 'assets' on which it needs to feed. The last great store of wealth in the UK are the assets owned by the tax payer. Under the Conservatives neo-liberal economy, many of the assets we owned, the utility companies, railways and royal mail have already succumbed and we now bear witness to the 'fire sale' of the most profitable sections of oir last publicly funded assets. The police service, the NHS suffering increased costs to run and a degraded service to the public because sections of them are disappearing fast into private sector ownership. All of which provides woefull value for the tax payer. Social housing is an excellent example of dreadful value for the tax payer, we are now in the ridiculous position where it would be cheaper to buy the unemployed a home, than to rent one for them. Instead of the tax payer building an asset portfolio of hundreds of thousands of good quality homes, our taxes are wasted on private landlords, with no prospect of a return on the taxes we pay. This is what neo-liberalism is, it believes that all assets should be owned privately, not by governments. They achieve this by getting business friendly politicians into power. Once there, they can then start stripping the people of their assets until the tax payer has has nothing left. Most people know this as privatisation.

The new threat from the left for once, isn't just rhetoric, there lies behind it a very real plan. Jeremy Corbyn will create the structure for it, but it is ordinary people like you and me, who will benefit from it by building the infrastructure. Capitalism has effectively strangled creativity and entrepeneurialism, it has made it very hard for new innovations to be realised. Jeremy Corbyns policies will set this creativity free to impact on our lives in a million different ways. Technologies will be created to challenge and surpass existing industry, where decent pay and working conditions will become a standard. What will be created is truly 'trickle up' economics. It could even prove to be a 'tsunami up' economy. An economy that provides wealth for everyone, not driven and reliant on markets or shareholders. An economy of inherent strength, that has no need to slash thousands of jobs because of a dip in profit. And the thing that is petrifying the neo liberal conservatives the most is, that we now know how to do it.

It was John McDonald who inspired these thoughts, who in response to the Queens speech said:

"Labour rejects the failed and cruel austerity programme adopted by this government. Instead, working in partnership with businesses, entrepreneurs and workers, Labour would create an entrepreneurial state to support innovation, create wealth and drive growth. And we would share the proceeds of that growth fairly.

By investing in our economy Labour would lay the foundations of a new society that is radically fairer, more equal and more democratic. An alternative based upon a prosperous economy which is economically sound, environmentally sustainable and where that prosperity is shared by all"

I do not know if I'm using the right terminology, but I've called this 'Social Capitalism', maybe its just socialism. Where business is a tool used for the betterment of everyone, not for the enrichment of individuals. Within this society there would be no room for tax avoiders,  their existance wouldn't be tolerated. Reclaiming taxes would be much less of a problem than it is today, because a corporations survival would depend on it. It's not opposed to people building personal wealth, so there is a place for true, honest capitalism, which takes people with it, instead of leaving them behind. Corbyns policies are inclusive enough to appeal to many on the right, however, the days of the tax payer funded money tree will be consigned to history.

If this is Corbyns plan, then it is not surprising that there is so much opposition to him, so much desperate need to rid government of him because Corbyns vision is the only solution to reversing inequality and provide a fair economy for the benefit of everyone. There is so much creativity, innovation and entrepeneurialism just waiting to burst through that would be prevented from doing so, under our traditional parties. This is a vision that can does not depend on EU membership of, but all the more important to realise now that we are 'out'.

To allow the right to win now would be to deny the British people the opportunity to enjoy a country of social and economic justice.

I think therefore, going back to my opening paragraph, the manifestation of hatred and vitriol against the left can only be explained as the manifestation of fear, and judging by its levels, it must be rife within the neo-liberal community. A fear not only that neo-liberalism is in its death throws, but that there is something very real emerging, to seal its fate. The dream, that generations of people have been fighting for in social and economic justice is within touching distance and for the first time, we will no longer have to settle for scraps from the masters table. This time it's different, it feels real, this time its not rhetoric, this time we really do know how to achieve it. This is why, the bile that has been spewed by the main stream media about Jeremy Corbyn and his supporters has achieved nothing except for the opposite it was intended to. This time we have the vision, we have the talent, we have the support and most importantly, we have the leadership to guide us there.