Interesting Links for 04-11-2015

[andrewducker]

• Entire editorial staff of Elsevier journal Lingua resigns over high price, lack of open access
  • (tags: OpenAccess publishing academia viaJaneCarnall )
• How reducing inequality boosts economic growth
  • (tags: inequality growth economics )
• BBC Greenlights Series Based on Philip Pullman’s ‘His Dark Materials’
  • (tags: PhilipPullman tv bbc )
• Universal Basic

Comments

[steer]

The mean proportion of income spent on rental has actually been "more or less" static for the UK since around about 1995.

This link here:
http://www.ifs.org.uk/uploads/publications/bns/BN161.pdf
is just awesome.

Take a look at figure 2.4b which shows the long term trend from 1969 -- though the figures stop in 2012. It's interesting to note that this is against a background of smaller average occupancy -- that is more people living on their own or in smaller groups. So the actual picture is that in recent years rent has not really increased as a proportion of income and there are more houses available per head of population. This is entirely counter to what I expected to read.

The real big changes were from 1979 (coinciding with the sell off of council housing stock and from 1989 - 1995 corresponding to a boom in buy-to-let mortgages). Piketty describes the situation as being the rise of the rentier society -- that a non-trivial proportion of the population derives income from owning property and renting it out to another section (by contrast to the 17th/18th century where that class derived income from owning land and having the lower classes work that land).

This seems counter intuitive and, of course, there are individuals for whom it is completely untrue like yourself where rent has gone up faster than income. For me the opposite is happening.

[naath]

This does seem rather unintuitive. Doesn't explain why the housing benefit bill is quite as large as it is for one thing.

[steer]

The housing benefits bill is a complex function of the number of people claiming it, the proportion of housing costs paid, the housing which those people being paid housing benefit will tolerate (typically you would have to share accommodation) and so on. The housing benefits bill is currently large because more people are claiming housing benefit. The number of claimants has literally doubled post the crash of 2008. (Actually, I didn't know it was so severe until I looked up to answer this question -- that is quite a startling statistic.)

http://www.independent.co.uk/news/uk/politics/number-of-people-in-work-claiming-housing-benefit-soars-9647752.html

Because we have wage stagnation and a slowly growing economy more and more people are finding themselves eligible to claim either because their income has shrunk, their savings have been spent or they have defaulted on their mortgage.

[naath]

If

So the actual picture is that in recent years rent has not really increased as a proportion of income and there are more houses available per head of population.

then how does wage stagnation mean that more people are unable to afford to pay their rent? Surely if "rent has not really increased as a proportion of income" then wage stagnation would imply rent stagnation too because if wages are flat and rent increasing then rent would be increasing as a proportion of income.

[steer]

Surely if "rent has not really increased as a proportion of income" then wage stagnation would imply rent stagnation too because if wages are flat and rent increasing then rent would be increasing as a proportion of income.

The mechanism to qualify for housing benefit isn't that you can't afford to pay your rent. You qualify for housing benefit if your income is below a certain level, you're renting (not paying a mortgage, though I think you can get some help if you are unemployed and paying a mortgage, I'm not sure of the details) and you don't have savings. Wage stagnation means that many people have effectively had a pay cut as inflation is low but still exists. An increasing number of people either default on their mortgage, eat into their savings until they qualify or have their income fall below a certain level. (Stagnant wages is a combination of people some of whom have wages rising, some of whom have wages falling and some of whom have wages staying the same.)

[steer]

The housing benefits bill is a complex function of the number of people claiming it, the proportion of housing costs paid, the housing which those people being paid housing benefit will tolerate (typically you would have to share accommodation) and so on. The housing benefits bill is currently large because more people are claiming housing benefit. The number of claimants has literally doubled post the crash of 2008. (Actually, I didn't know it was so severe until I looked up to answer this question -- that is quite a startling statistic.)

http://www.independent.co.uk/news/uk/politics/number-of-people-in-work-claiming-housing-benefit-soars-9647752.html

Because we have wage stagnation and a slowly growing economy more and more people are finding themselves eligible to claim either because their income has shrunk, their savings have been spent or they have defaulted on their mortgage.