 Good morning everybody. Welcome to the Resolution Foundation. My name's Torsten Bell. It's nice that you're all nice and crammed in. It's just like a private rented home in London. I hope everyone's looking forward to sweating later as we go. Now, a new decade is dawning, so we thought we should talk about a really old issue, which is housing. That is what we're here to talk about today. And we're particularly going to focus this conversation on what are some of the big trends in the world of housing that we should expect for the 2020s. When we look back at the 2010s, which is hard not to do right now, in some ways actually it feels housing was a bigger issue in politics and policy in the 2010s than it had been in any decade, at least since the 80s. But actually if we dig into what actually happened, in some ways actually most of the big action on housing happened earlier. The big rise in housing costs is a late 80s, early 1990s phenomenon that we were living with, but the big rise happened then. The big falls in youth home ownership are all back in the, again, in the 90s, starting in 1989, running into the early 2000s we saw, but broadly, low levels of youth home ownership, but not getting much worse than in the last few years, getting better. So the big things that we were living with and the newsworthy in the 2010s were far from new. Some things were new, I think, and particularly on who was paying what for their houses. Rather than, on the average, it didn't change much, but we definitely saw cuts to housing benefit, meaning poorer people's housing costs up, and we saw big cuts into interest rates, meaning better off people's housing costs came down, and in some cases came down a long way. So there are some big things changing within those aggregates staying broadly the same. So what is the 2020s got in store on demand, supply, social housing, interest rates, and what does that mean for house prices, tax, and probably given that more people are, this is slightly sensitive early in the morning, but there's going to be more dying going on with people with lots of houses in the 2020s. Inheritances are going to be going up. What is that going to do to our country? Now, to keep track of all of this, you should all have on your seats a thing called a housing outlook. Very exciting. It's our first one. We don't have champagne this early in the morning, but we're celebrating it today. Thank you to the team that worked on that. That's going to come out every quarter and is a way of asking the Resolution Foundation, forcing ourselves to keep track of those trends I've just talked about, as I say, looking at some of the things that everybody in the housing world looks at, supply and demand, all those kind of things, house prices, but also the thing we more focus on, which is the effect on people's living standards of housing costs, not just how much it cost to buy one in the first place. So that's what we're going to be discussing today. We've got a great panel to do it. So first of all, you're going to hear from Dan Tomlinson, an analyst at the Resolution Foundation who has written elements of this report, and he's going to give us a presentation on one element of the outlook today, giving our take on one trend or potential trend. Then we're going to hear from Rob Perrin's Chief Executive for the Barclay Group who, unlike everyone else on the panel, gets to build houses while the rest of us get to talk about it. Then Carol Lewis, Deputy Property Editor of the Times, who's going to tell us lots of things about housing and has been for years. People love reading about housing and the newspapers, and adverts keep newspapers in business, so this is good. And then we're going to hear from Ilan Mahoyan, Executive Director of the Tony Blair Institute, who's done some really good work over the last few years reminding people that house prices go up because money is cheap. And that's been a good, I'd say it's not new, but it's a really important insight in it. In retrospect, looking back over the last 20 years, it had drifted far too far out of the debate, given that falling interest costs since the 1980s have been a big, big feature of Britain's political economy. So that is the plan. Then we're going to have a discussion with you guys. So Dan, over to you to tell us something a bit about the outlook. Great. Good morning, everyone. Thanks for coming. Thanks for sharing in the launch of the Housing Outlook with me and the others that have worked on it, which is Cara Petiti, Satheya Lindsay-Jerj, who's our Senior Analyst on Housing. And thanks to Liberty as well, Liberty York, for helping with the interactive data that you can access on the website. Just briefly, just to introduce the Housing Outlook to you, even though I'm sure almost all of you got handed it when you walked in. So we've got 12 indicators that we'll be keeping track of over, well, potentially forever, but we'll see. 12 indicators. Three on the housing market. So four on the housing market, four on housing and living standards, and four looking at housing policy. We've done that because a lot of the focus of housing discussion is just about supply and demand. But as Torsten said, our bread and butter here is focusing on the impact of policy changes, and particularly here on housing, on families on low to middle incomes in the UK. So that's why we've got this focus on living standards and policy as well. We've got interactive charts, which you can find on our website for those of you who are trendy and like to have a look at the way the data is changing and download the data as well into spreadsheets and do your own analysis. If you're feeling a bit less trendy and want to do bad things to the planet, you can download a PDF and print out the Outlook every quarter. And within it we're going to have a local focus looking at some regional or local trends and then a spotlight where we're going to try and answer one big question on housing policy every quarter. So if you have any ideas for big questions you'd like us to answer, you can drop me an email, come up to me afterwards, always interested to hear what you think. And as I say, as Torsten said, we're publishing this every quarter. I don't know until when, but let's say until housing is fixed. So the spotlight, which is a short piece of analysis, this isn't one of Resolution Foundation's 60 page reports, as I'm sure you've noticed. We just want to have a quick look at a big question every quarter. And this time we're looking at levelling up. So if anyone's got the Prime Minister's number, drop him a text, let him know that even before he and the government started uttering this phrase in every single press release and every single quote, levelling up was actually happening in the UK and in part because of Brexit. But only on housing. And this chart shows that for you. This shows since 2016 what's happened to house prices in the different regions of the UK. And you can see the places where house prices were highest to start with. Basically we've got London there and the southeast are the places where house prices have grown the least since 2016. And the places where they were lowest to start with, some of the places where they were pretty low to start with, East Midlands, Northwest Wales and the West Midlands have seen very significant increases in house prices since 2016. The northeast is a bit rogue on this chart and it is a bit rogue on lots of our charts. As we'll see it stands out as a region where the housing market is behaving quite differently than in the rest of the country. But broadly we can see some levelling up happening. I'm not quite sure what the government's definition of levelling up is but it's probably places like the north and the midlands doing better without London doing worse and that's what we can see here. So good news for government PR people. So levelling up is happening. Here's some specific examples for you and you can see a bit more about that in the document you've got printed or if you're watching from home you can nip onto the website and this just shows you the percent change in house prices over this sort of time period in each local authority. We can see some of these places in the midlands and the north on that list. A reminder which you don't need reminding of is that this period of levelling up, this period of convergence comes on the back of a decade of divergence in house prices. You all know that to be true but this chart just shows it very striking. This is the nominal change in both house prices and rents between 2006 and 2016. We've got London prices have almost doubled over that time period and in the northeast actually prices fell very, very slightly. So a big period of divergence came before this period of convergence. One way to think about these trends is just via this chart which is where we've plotted London prices and compared them to the UK average over the period looking back from 94 to the latest data. One thing to note is that over the long run the ONS's house price index data goes back to 1968. The link between London prices and UK average prices was maintained pretty constant around 30% so London prices being around 30% higher than the average price in the rest of the UK. There were ups and downs, there were these periods of convergence and divergence in the past as well but broadly staying around that level. Since the mid-1990s you can see that London and this is true to a lesser extent for other regions like the southeast and the east of England has pulled away from the UK average. You can see that big time period, this is why we've chosen 06 to 16 for our analysis where London really did pull away and then you can see things coming a bit more normal in the capital with London prices becoming 20% more normal since 2016. That's a really big change that's happened since and happened in the decade before. Obviously a lot of the reason why people talk about house prices is the impact that that has on home ownership rates and at least people's feeling of how much more difficult it is to access the housing market when house prices are really high and deposits are really big and trying to get together a deposit to become a homeowner. That's most salient that issue in our politics at least and probably in lots of people's lives for young people so this chart which you should be able to find as well if you look onto the website a version of this just shows you home ownership rates for 25 to 34 year olds across the different regions and you can see home ownership rates increasing pretty much across the country but again with this with similar to house prices yes there has been a reversal in the trend in recent years but there's still a long way to go to get back to that peak that parents and grandparents of today's young people might be used to. So here's the question that we start to build an answer to in this in this short spotlight which is what drives these regional differences in house prices and the first thing to note is that national trends and this is quite simple thing that I'm sure you all agree with but national trends can't do a very good job of explaining local differences they might explain some of the reason why house prices behave differently in different parts of the country but they definitely can't explain the whole thing and obviously pre 2016 this period of divergence is when we saw interest rates fall and that was and is a significant factor in why house prices increased so significantly but obviously interest rates fell across the whole country and in fact across the whole world and similarly in this period of convergence since 2016 everyone's talking about uncertainty I'm sure you've written lots of pieces in the times about uncertainty I've picked three out here I probably could have spent enough time probably could have found 300 people talking about how uncertainty is weighing on the housing market now I'm not saying that's not true it's definitely true that uncertainty will have affected the overall growth in house prices but it doesn't really do a good job of explaining the period of convergence that we've seen this leveling up unless you think that there's differential effects in different parts of the country that perfectly match up with the leveling up that we've seen but that's not that's not clear really given that places like the east of England have had a quite significant fall about they've been they've had a lower growth rate and they've had a big fall in their growth rate in this time period it's not clear that to me that the east of England and other parts of the country are going to be particularly affected in terms of housing demand more than others but we should discuss that that's an interesting point to discuss the national trends can't explain regional divergence in full and so we've we've had a look in this piece at one thing that that we think does look to have had an effect over this time period this isn't the only thing that matters I want to be really clear on that we're not saying that the only thing that drives house prices is population change at a local level there are lots of different things that are important but it's it's instructive and it's interesting to note that we can see that in in the parts of the country where rents increase the fastest between 2006 and 2016 and here we've got London as our stand out that's helping me make this point because it makes the chart look more like a line than a splotch but I still do think there is there is more of a line there even without London and we've got the percentage change in rents up here on the y-axis and along the bottom we've got the change in the number of family units which is basically the change in the population we think that family units has a better way to measure population changes with respect to the impact on housing demand you can look at the population you can look at households or you can look at family units which is a family unit is basically a single adult or a couple of adults and their children and that's just a better way we think of understanding pressures on housing for example an adult living with their parents would count as a separate family unit whereas they're in the same household they just be counted as one so it doesn't make a big difference to the analysis but it is an important distinction that we draw so anyway local population trends mattering for local differences in prices it seems pre 2016 with the number of family units in London increasing very significantly and rents going up significantly too and this holds to a certain extent post 2016 as well we can see those parts of the country like the East Midlands and the West Midlands where rents have increased at the fastest pace or some of the fastest pace also being places where the number of family units have increased the fastest too just to zoom in on London here because that's seen some of the biggest changes it moved from right at the top of the chart to much more in the middle of the pack the rate of increase in family units in London half from 1.2% a year on average in that decade before to 0.6% a year on average since part of this is about changing patterns of whether or not people who are born outside of the UK are choosing to live in London the share of London's population that was born overseas increased steadily from 2006 to 2016 from 31 to 38 percent and that's actually gone in to reverse in the three years since it's back down to 37 that won't be all of what's driving this but it's definitely significant and it's worth mentioning so that's just that's a bit of why we think this levelling up might have happened one of the contributing factors at least a question that's worth asking definitely in an event where we're looking forward is this levelling up over or does it still have some way to run and I'll get to our sort of answer to that question in a second but just to put a version of a chart that I've already shown you up here so this is changing house prices and rents again in normal terms not in real terms but was in real all these lines would be significantly lower only London really and maybe the southeast would have rents that increased faster than inflation or incomes but you can see here the nominal change in rents and house prices across the UK and you can see that pit that divergent sorry over this whole time pit so this is the 2019 now and the key thing to take away from this chart is that prices haven't increased uniformly across the country given the rental price change that has happened so this chart is basically a version of this one but just trying to help me explain this point to you can see what we've done is we've put the rental price chains at 100 for each region and then compared the house price change to it so you can see in east of England and London house prices increasing two and a half times faster than rents over this time period in other regions again the northeast stands out I think we're not going to have to do a housing spotlight on the northeast in a future edition where housing house prices have actually increased more than half as slowly as rents have over this whole time period overall the average change in house prices relative to rents is 70 percent faster so all we do is apply that 70 percent to the rental change in each region to help us think about whether this period of levelling up may or may not continue and that's this hypothetical house price bar that's now appeared on this chart the light blue one and we can see there that this suggests and of course this is affected by the fact we started our analysis in 2006 we start in a different period we might get slightly we would get slightly different answers but broadly this story holds that then there may be some overvaluation potentially of prices in in London and regions in the southeastern east and some undervaluation relative to this in place like the northeast and Yorkshire now we're not saying that we predict big house price falls in London in fact one of the things that we have published in our outlook today is our very very near-term forecast for house price growth across the country and that actually shows house price growth picking up in part because our model that we've put together is heavily determined by what happens in the ricks data and that show in a pickup as I'm sure some of you will have noticed in the news so we aren't predicting big house price falls in in these parts of the country where the implied increase in house prices is a bit lower than what's actually happened but there could be this levelling up happen where these regions continue these reasons on the left of the chart continue to grow faster than the regions on the right hand side so just to summarize to bring it all together for you levelling up is happening in house prices at least we'll wait to see whether it happens across the whole country in all the other metrics that we care about in terms of living standards in the economy but it's happening in terms of prices national trends can't explain regional differences there might go some way towards doing so and we wouldn't rule out the fact there's differential effects from these national trends in different parts of the country local trends clearly matter income growth supply whether different governments are having different policies if you think of Scotland and Wales they have more powers over these sort of things the mayor of London is thinking of introducing rent controls if you can get the powers to do so and population change is another thing that matters and that's one of the things that we've discussed here today and then just to say what I've just said levelling up may have some way to run so that's it from me thank you so divergence then convergence and possibly some more convergence to come before anyone takes this as financial advice obviously convergence can mean everyone going up but different rates or it can mean people coming down and we're not offering you any advice on that you can choose to make your own profit and losses so I saw making profit and losses Rob over to you okay um my focus is really going to just be on London the southeast I'm not going to sort of go too much on the national I think to me there are four real trends that we need to address which I think is the feature of the where we are in the 2020s and in London southeast it is at the under supply we need to really focus on the under supply we do need to focus on the affordability issue and the affordability issue that happened the third thing I think is the lack of funding for truly social homes you know and for whatever reason that lack of funding needs to be thought through the focus has been on shared ownership products and the fourth thing to focus on is really infrastructure and the green energy and the uncertainty of government policy around that um house price increases can be really in the affordability gap can be can be highlighted on many of your factors due to the you know actually real interest rates have fallen five percent over the period and fundamentally that has driven has has driven this sort of affordability gap and the increase in pricing coupled with the under supply you know when you couple those two areas together government policy is trying to be helpful in areas that help to buy been a real issue in terms of the new build and has helped it hasn't really kept up and actually the focus has actually been on increasing the under supply to a degree but you know the London plan is 555 pages long it's hugely bureaucratic hugely complex has a whole load of outcomes not due to just the supply of housing you know stamp duty has really affected social mobility it's really affected again that the ability for people to move especially in the second hand market so it's in the stamp duty policies haven't been helpful so you have a number of these of policy that have really not been helpful which has increased you know created that under supply from a market perspective we've had the investment and we've had the ability to to be on these of you know 25 very long term sites which take us five years to get into construction and we can go through that period of planning and why does it take five years but what is really frightening for London at the 2020 is that you know we have a requirement for 66,000 homes in the London plan and we're building and starting less than 20,000 homes so we have a real issue there's been an issue around people engaging with communities really building what people want really sort of understanding local community needs and I think you know we as developers have moved forward but we have to move forward a lot more in our community engagement really making sure that we deliver what communities require the looking forward and what I'm what if I was I've got loads of issues if I was housing minister and so really for that sort of but but four things I would focus on I think there's lots of others around the planning side around supply unsupply just really focus on you've got to cut down the bureaucracy on every part of it what's happened effectively in planning is we're trying to solve a whole load of other issues which take a lot of time and there's lots of so much broxy so how do you then broxy loads of areas around the time it takes to get planning in the section 106 is clearing condition infrastructure and utilities so cutting broxy we talk about it a lot but it is actually quite simple to do and there's some certain areas you can go to to really cut that down on that area in affordability I think we really have to focus around how we how we sort out deposits is really clear it's a deposit issue mortgage rates are fantastically low so actually the economic ownership of a home for those people who can get on it is absolutely critical we've got to make sure that the affordable housing we produce in London you know we are forecasting increase by 50% to build over 6,000 homes over the next five years over 30% of those are affordable homes now the tenure of this government is going to be on home ownership so it's going to be a discounted discounted market focused but we've got to make sure that that tariff is pretty well set at 30% but 10% of that must be truly social homes at least and fully funded social homes the government policy on energy is very unclear I'm not sure if they're going down one minute we're decarbonising the electricity and electricity focused but you know we're still putting in central boilers we're putting in technology that's going to be obsolete by 2025 we're not sure if we're going to go down gas and hydrogen in the areas so I think government have got to really be clear on their long-term policies as well as they have for infrastructure infrastructure housing go together and densification of our cities to make sure that we do really truly build sustainable homes that are carbon zero carbon looking forward coupled with allowing people to live in resilient places and live sustainable lives in cities which will be the focus so those are my four asks I've got 27 others which we can do in the questions and answers and so I'll probably like to end there I think just on your chart and if you went back over different periods what you're highlighting in the price differential happened before if you had different issues completely of which and I was just statistic when we were in Manchester Manchester was at higher prices than that so in six in 2004 so if you if you follow through the periods whichever period you have you'll show that it's completely normal what's happening in that in that slide the convergence or the divergence the convergence it's completely convergence divergence happens all the time nothing goes first the rest of the country will come later there's nothing unusual in levelling up and I so I don't think it's a brexit issue or a I think it's just normal market issue so far how it happens so let's just dig into that a bit so you're just saying London goes first everyone sees it going up and then the national housing market in the end returns to an equilibrium level London yeah it does it does level up and you get more investment in the home counties sorry outside London it levels up I think the 2004 and 2006 levelling up was caused partly by the deregulation of mortgage market you have these 125% mortgages you had real investment in there which caused the crash in 910 but but fundamentally London really peaked came back in 2011-12 through to the demand in those areas and it's radiated out the country the highlight of why it's closed down from 2016 is due to the stamp duty changes but it was going to happen anyway but the stamp duty has made it faster effectively the higher capital values in London than the second hand the one good thing about stamp duty I think it's an awful tax for many reasons but the one good thing about stamp duty is it's leveled off house pricing at the higher end if you want house pricing stability it's actually worked but it's created less homes being built and less demand and supply yeah although the convergence was driven by the stamp duty changes they obviously had zero effect on Birmingham and stuff which have gone up by 25% in three years because of the capital it's quite hard to pay because they've reduced it below 925 so fundamentally the stamp duty has affected the higher ends within London and stopped mobility and outside in Birmingham okay great Carol 2020 what's going on well I was going to answer the question actually that you posed I was very hungry so I'll do it go on then will the new decade have any answer to the old question of Britain's housing crisis tell us yes what you're asking yeah go on then we'll see how it goes tell us yes have you heard of a rule called better ridges law no so in journalism there is a rule any headline that contains the a question mark can be answered with the word no is that you giving us a clue there so Ian betteridge coined this phrase in 2009 roughly a decade ago now a decade ago the average house price across the UK was 163,000 in today's money that's 215,000 what do you think the average price is today 215,000 the average wage was 144 a week which is roughly 550 in today's money and today it's 544 pretty much the same interest rates were 0.5 today they're 0.75 pretty much you know just as low so on the surface nothing has changed in a decade but underneath there's been masses and masses going on there was one man between May 2010 and July 2016 George Osborne and he introduced I mean I mean chat no matter if I forget them but help to buy rent to buy mortgage market review phasing out of mortgage interest rate relief restructure stamp duty introduced an extra 3% on additional home buyers the starter home initiative I mean shout out if I've missed any but I mean he went for it and each of those policies had an effect on a different part of the market it changed things it had an impact and he's just one man but there were different policies a succession of policies that have given and taken for different parts of the market so when you ask the question it's partly depends what you're asking and who you're asking so if you look at the rental market built to rents completions are going up they've gone up 30% in the last year they've gone up only 20% in London but 50% out in the regions the buy-to-let market is finally stabilizing I think but we've yet to see the changes to the lending rules to councils come into effect and bring on more social housing rents are still high enough to thwart some people in there saving for deposits we've got some good things we've got rent to buy shared ownership they're not perfect but they could be improved and extended and rolled out in the coming years on the first-time buyer market the totally inept starter the totally inept starter home initiative which national audit office said didn't deliver one extra home I mean pathetic is is going to be replaced by the first homes initiative unless let's hope it's not a repeat we need to learn from our mistakes affordability is easing slightly first-time mortgage applications are up so it's looking fairly positive for first-time buyers the government has pledged to bring in this lifetime long-term fixed high-loan-to-value mortgage I mean there's there's lots has gone into the first-time buyer market almost nothing has gone into the next step I mean if you're helping people onto the first run of the ladder you've got to let them get beyond that first run so slinging everything at the first time buyer market and not doing anything further up is madness second-steppers have been left you know improving not moving and improving not moving takes a whole section of the market up a price point if you dig out the basement extend the loft and build out the side return you're turning a second step home into a forever home the gap between flats and houses is growing the price gap in the west midlands has grown by 30% since 2017 more needs to be done for them and if more needs to be done for them definitely more needs to be done for downsizes there's no incentive for people to move aside my mom is 78 and she's just decided to stay in her three bedroom semi-detached because a smaller much smaller bungalow costs more than she'd get for a house the supply and demand we need to build more appropriate housing for that market at the top end as we've heard from Rob stamp duty has has stymied things I'd say on the eve of Brexit it's absolutely the wrong time to introduce another 3% tax for the non-residents I think that could stop any Boris bounce dead in its tracks in London at least which brings us on to Daniel's point about regional variation I totally agree with Rob it's part of the natural cycle you get this rising wealth pulsing out rising wealth pulsing out but I think it might be different this time I think it might I'm an optimist lots of people are moving out of London we know that more people moving out to to Birmingham Manchester and so on not just people but investment investors are moving out businesses are moving out and they're staying out and if Boris follows up on his promise in the budget on March 11th and invests more heavily in these cities we could see things starting to change it may not pull back and be a London-centric market so much we might see more mini mini sort of markets out there but I think the point that Rob made that wherever we build we need to build good quality homes I think climate change sustainability air quality these are going to be key terms for the next 10 years and we really need to start building happy healthy communities we need to link up health and housing a lot more we need to I think the design report is out today we need to look at design and its effect on health and communities all of that needs to be taken into account 10 years ago Instagram was launched in October 2010 and for better or worse that's changed how people view a market property there's lots more technical innovation going to come in the next 10 years blockchain is going to be used I'm not sure I understand how it's going to be used and we're going to change the way we buy, sell, plan, design and build and we need to embrace that so when I look at this question I really hope Betteridge is wrong because I think we have the ability to do this we have the pilot trials we have the startups we're getting there we just need to join it all up and kind of bring it all together great thank you very much good luck to Mr. Gending yep you're going to be as perky as that well I don't I don't know well I have to see where I come out thanks to Austin and thanks for inviting me I think it's a really good publication it's great that someone's pulling together all this data and putting it into a digestible form so well done to Dan and colleagues I guess I would say that what I'm going to say and some of you may have heard this before so hopefully it won't be quite as fresh as the other speakers but hopefully interesting nonetheless is that really the policy emphasis over the last 20 years has been wrong so if we want to not go around the houses again for another decade on the housing crisis then we need to change the emphasis a little bit in terms of what we see as the problems and what we see as the levers for solving it I'll start with the UK average story because that gives us the tools to at least understand what we do and we don't know about the regional divergence which I think is a really important thing that you're shining a light on today so on the UK average story there is this positive evidence for what is going on and there's also negative evidence for what's not going on and both of those are important parts of the story positive evidence we have is that we know that house prices are determined by the cost of capital and so when interest rates fall it is inevitable that house prices will rise and that's broadly what's happened that's been the story over the last 20 years since house prices bottomed out in the late 90s and that's why house prices have risen by 160% in real terms they have roughly doubled in terms of proportion of income average incomes but people can still afford that because the cost of capital is low so that's broadly the national story but there's also negative evidence for what hasn't been the driver because it could be that supply has been a massive problem too of course but in practice we don't really see much evidence of that if we look at rents which are the key indicator of how much demand there is for places to live on an annual basis because they're not affected by interest rates if we look at rents rent affordability is actually increased in the market sector in the social renter sector it's declined but in the market sector in the private renter sector it's actually increased not to say it's low enough but it's improved people's average incomes have moved have grown faster than rents which is not something you can really very easily square with the idea of there having not been enough housing supplied over the last 25 years and then also when we look at spare capacity in the housing sector again we see a similar story the surplus stock in England has doubled pretty much over the last 20 or years and it continues to do so as the ONS predicts we have household formation at about 160,000 a year and last year we added 240,000 dwellings in England and Wales so we don't really see much evidence it's very hard to find evidence that there isn't that supply has been a contributor when it comes to the regional divergence though there is a really interesting story going on and here if we take the negative evidence that's pretty clear once again even in London I mean London's supply has been tighter than elsewhere but it hasn't been it's still the case that rental affordability has in the market sector has actually increased over time slightly in the rest of the country has increased a lot faster because supply has been looser but it's not clear that things haven't got worse because of supply in London they just haven't improved as much as elsewhere but the positive evidence isn't there because as Daniel said interest rates are uniform across the country so there is a genuine puzzle about how this divergence has occurred and what's driving it and I think there's a lot in what Carol and Rob have just said in terms of some of this is just markets take time to equilibrate and they come back and they go out of line they come back into line and that kind of thing but other researchers like the IMF have noted that actually this phenomenon is happening in a lot of countries around the world at the moment so we see for example Sydney and Vancouver and places like this where prices have accelerated over the last decade during a period of very falling global interest rates and the hinterland in the rest of the country has really not done very much at all so you've had this divergence happening in other countries so I think a lot of the answer lies in that international story and the IMF Global Financial Stability Report puts it down to increasing synchronicity of globally connected cities so that if you want to know what's happening to London prices you need to check the index in Sydney not the index for the North West which is an interesting idea and I think probably has something to do with it as well A comment on the benefit unit story I think there is an interesting discussion to be had about whether we should look when we're thinking about supplier family units or whether we should look at benefit units and this has a particularly interesting implication for London because what we do see is that there are many more people sharing housing in London now than there were before which does raise the legitimate question of whether households are the right unit of analysis and this is broadly for two reasons one that's more national and one that's very much a London story or much more strongly a London story the first is benefit cuts now we obviously had very deep cost housing benefit over the last 10 years that inevitably means that people who are reliant on housing benefit can't afford to move out on their own anymore we've also seen specific cuts targeted under 35s who are single but they can't get housing benefit except to share a house so policy is directly telling people to share a house this is nothing to do with supply this is just policy telling people to share houses and then also we've seen the longer term trend of the erosion of social housing which is given many people I think 600,000 more young people would be in a social house today if the proportions of them were the same as they were in the late 90s so you have this kind of longer term trend as well which is making it harder for people to form homes but none of those things are to do with the amount of housing we're building they're just in aggregate they're about social housing sure and they're about benefit availability but the second and perhaps more interesting thing is the immigration story and I don't think we can talk about London housing without talking about the influence of immigration and not my view is that it's had next to negligible impact on prices but what is really interesting is the impact it has on household size so London's household size has increased while the rest of the countries has basically continued to sort of stagnated sorry that's not quite true the UK's household size has ticked up a bit but London's has really really got jumped massively and this is largely an immigration story and the reason for that is that migrants disproportionately congregate in London so London is proportion of foreign born people resident London is something like 38% I think at the moment and it's obviously increased massively it's the main beneficiary of the immigration boom we've had since 2004 and when you look at people's housing decisions as migrants what's really interesting is that within the first three years of arriving if you look at the latest LFS data 66% of those migrants share a house with another adult who's unrelated 66% now after 10 years of arriving that's down to about one in 10 of them are sharing so you have a kind of just there's a choice and it stands to reason that new arrivals tend to share with other people that know tend to be finding their feet in the city or the rest of it so there's a flow effect and when you get an increase in immigration specifically concentrated on London the just the effect out of choice of those people is that sharing will rise and benefit the number of benefit units per household will rise again it's a matter of choice it's not a first plush an indicator of a general market supply problem so I guess I'd have four conclusions from this one is that we have spent much of the last decade two decades talking about supply and how that's really the problem but we should think about that problems in housing could be caused by aggregates is there enough of the stuff in total or it could be caused by distributional things who's got what and who and should we think about those kind of problems we've been focusing on the aggregates for 20 years the problems are all distributional if you cut benefits to people who need support to get housing don't be surprised if they can't afford any housing a few more houses isn't really going to help them so we should think about housing poverty like we do about relative income poverty nobody says about relative income poverty if we could only make GDP grow faster maybe we'd solve the poverty problem they say we actually need to do some redistribution here and we should think about housing the same way nobody's going to solve the housing crisis by building millions more new homes it might help with margins it will help a bit but it won't solve the problem because fundamentally the major problems are in the distribution secondly on prices nationally this is not a bubble prices are justified low very high prices even though rents have hardly moved are sustained by the fundamentals they're justified by low interest rates now of course that is at risk of changing and you know recent work from the Bank of England suggests that if guilt yields would arise by about two percentage points then you could expect to see 33 percent coming off prices and London has an added level of vulnerability on top of that because yields are absolutely at rock bottoms and that doesn't look healthy or desperately sustainable in my view so the fourth and final thing I would say then is that that tells us something about home ownership which is in the other major plank of housing policy for the last 20 plus years 40 years in fact and we really need to rethink whether or not pushing housing home ownership as a policy is wise in these conditions whatever you think about the supply situation we can all agree that house prices and London house prices in particular are extremely high compared to rents and incomes and there is a significant risk of a substantial correction we don't know what's going to happen in the world economy in the years ahead but there's got to be a significant risk of a shock which would leave a lot of people losing their shirts and the people who would be here hardest would be the people who in the last 10 years we've encouraged onto the housing market with all sorts of goodies and trinkets and inducements to do so that would cause a lot of political fallout as well as being deeply unfair it would cause a lot of anger and resentment so I think we really need to rethink whether or not policy should be a bit more neutral on tenure rather than constantly pushing people into a situation where they could be very vulnerable to what happens in the next 10 years that's definitely not a perky finish but thank you very much okay we've got lots of things to pick up here let's cover a bit of this convergence divergence thing as classic people spending your time talking to market types we think everything is like London it's all about London investors London house prices go up and then the kind of provincial types catch up is slightly the feel I'm getting from these I just want to push back slightly on that which is if that was true then we wouldn't have seen rent divergence and then convergence we would just have seen it in house prices and that is not what we've seen over the last 15-20 years we've seen London prices like rental prices rising faster not rising hugely in real terms in the recent past but relatively London rents rising significantly faster than the rest of the country where basically they've been flat since the early 2000s and then more recently that trend reversing so that can't be that is not just investors working out that actually like that so that I'll push back slightly on it's just a market that reverberates in London and everyone basically catches up that may have been true in the initial phase of like housing boom in when people worked out basically that we've liberalized credit a lot but I'm nervous about concluding that is the only thing going on it also can't tell us why the West Midlands is so different to other places that are some distance better but the so how sure are you that that is what is going on that's not a subtle question I mean no no basically there's a certain view so like I think you have to also come back to yields so fundamentally long-term value is yields and then you get to perfect marks are in perfect markets and I'm slightly going to disagree with Ian on this but I'm going to get that in as well the fundamental thing about yields are yields in Manchester and Birmingham were over 5% and London you were absolutely right has been driven down to sub net yield to two so you're going to have equalization of yields so they are going to happen by search by investors and that's why Manchester has had a lot of inward investment from so that's going to have to level up yeah but that is the convergence point even from the rents data yeah but that's the point that is a that is a so it's going to so London's being pushed down further so that the regional towns are going to be pushed up in pricing that's going to happen and that equalization is going to happen and that's why that's that's affecting what's happened just on the terms about ownership I don't quite agree that you know the full economic point of the Conservatives pushing home ownership what worries me about rental if you don't sort out home ownership is what they haven't sought out is that percentage of income to rents when people retire and it's going to jump from 31% to 62% if you have real rates of you know of your pension income so this is a story and a real issue for the future so we have to really resolve that and that's why I think the home ownership point is critical or we're going to sort out the rent controls to a degree which I totally disagree with in terms of we must stop interfering in the markets as well that's why I do believe we've got to supply more but anyway sorry that wasn't your question but I hadn't made that point I just disagree with that one thing English I really worry about the rental point about people not now how you really resolve the rental long-term rental models though the argument against that is that's what happens internationally so why why will it happen in the UK unless rent gets pushed out of pensions to a degree or somewhere I mean how they benefit if we do that today then the housing benefit bill picks up the even with a very large increase in the housing benefit bill basically that's what we do for richer pensions they have pensioners they have lower living standards and then for the state we have a higher housing benefit bill if we reduce home ownership amongst order which is broadly what we're on track to do anyway like go on in to fend yourself let me come back on your yields point or well you didn't put it yields but you're absolutely right that London rents have risen more but they have been flat in real terms I mean flat in real terms it's 2005 so we shouldn't over magnify the impact of of this divergence the rest of the country they've fallen relative to prices and London as I say has been tighter than the rest but it's still you know flat in real terms is not to be sniffed at so the nominal rise is twice as large so like we can say we're like yeah it's not a thing from it's twice as large okay so the way all this comes together is in yields and ultimately if yields have fallen then your problem is not explained by supply it's as simple as that so sure there is an element of it in the divergence in London where London's rental situation or London's supply and demand has supported prices more that is definitely true but the point that the fact that the yields have diverged so much that wouldn't you know yields wouldn't move if it was supported by rent if prices were supported by rents yields in fact have diverged massive no that's not no I don't think anyone is arguing that the price rises supply is driven house price thing in London is driven by just by changes in rents there's two different questions there's what's the sustainable level of house price differentials across the country which comes down to rent differences and we're saying that that that difference has got to be difference must be explained by something not by interest rates yeah and the most obvious thing on rents is population growth over this period which is very differential around the country it just doesn't why would that not be reflected in rents there's no reason there's twice as high normal of rent and so you're implying some kind of multiplier effect that that's one percent of rents might have a three percent impact on prices or something like that isn't that no no no remember the whole argument is that we're expecting further convergence so we're not the yields do need to in the end come back in converge so that I think is a share across the panel that should happen we don't know whether that happens by prices going down in London or going up elsewhere but some level of convergence should happen given that yields do need to converge I think the other thing do our real interest rates change in the next 10 years let's come back that's our next whole one topic don't ruin that idea it's literally next on the list it's level it's like I mean absolutely level they can't go lower they're minus two and a half percent number you can't go lower you can't go lower than they are now ring reality that's a whole other argument this is not a macroeconomic situation let's not do negative interest rates okay well let's come on to that then okay so we have touched on one aspect of this so big picture what have we learned over the last 10 years that lower than we ever thought possible interest rates can stay like that for a very long period of time okay that's what's driving the big things we're talking about now two and we've got something odd going on which is we are running a macroeconomic policy i.e. the Bank of England in asserting that low rates are here to stay okay they're here forever more or less like low-ish or definitely low historically you know we what we think of as normal rates in the past would have been kind of five percent the Bank of England's estimate now is under two okay so like there may not be it in zero which is basically where we are but they're not going to go up a lot but but and so if we believe that which we do on the macro policy bit of the Bank of England's job then we would start easing more requirements in the financial regulation part of the Bank of England's job because we would say right they're going to stay low forever we don't need to have the same deposit rules it makes no sense to have the same deposit requirement rules in a very low interest rates world as it does in a a higher interest rate world but going back to your question the same issue which is these house prices are now so sensitive to a change in those interest rates that even if they don't go back to five but they get a bit back you can see a big drop leads you to take the opposite conclusion and so we're now wrestling with it and regulators are basically currently dealing with this by keeping quiet like let's just not think about that we'll carry on in our macro world saying rates are going to be basically zero forever and in our financial stability world we'll carry on being like no we're going to keep to basically do what we want now I'm not even saying I basically broadly agree that maybe the optimal policy mix given that this is really hard to reconcile and I don't want to get off of people five percent mortgages or not percent mortgages and the like but we definitely haven't record there's no like public discussion of that there's just two different worlds carrying on in two different conversations I think it's also I think one thing I think you're right in that analysis I would just say that in the low interest rate environment you'd also expect volatility to be higher from smaller shocks so you know interest rate volatility is the lowest so there's two things obviously everyone says interest rates are low and they're here to stay well they are here to stay until they're not right we're not very good at predicting this stuff so who knows what's going to happen that's the first thing it's risky but secondly even if they do stay low there's lots of other things that drive outsporers too right so you have small shocks maybe someone in a populist move climbs down on foreign investment more or buy to let more or whatever and all of a sudden you you get some kind of shock that that can change things so I think the volatility is higher at low interest rates as well which the other reason you might not want to ease up on the on the rules so the question really is where do we put the risk if we want to have high home ownership where do we put the risk do we subsidize it with government saying let's subsidize loans for first up buyers do we hide it in the banking system by easing off on the regulations or do we just put it on the individual and say you know you might lose your shirt but it's not our problem which might come back to bite us all of those right Carol do we want these owners do we want all these owners or are we basically just setting people up for a massive wealth shock what do you think you're back to the we should be do you want do you want do you want do you want to home honest should people be like if the average house price should people be bearing kind of you know the risk of a 20% loss of their assets is that a good idea it's not a good idea no so we'll stop it then yeah just no we're not in a position to just stop it we're not Germany we haven't got this heritage of rental and we you know without major restructuring we will have the problems like I think Ian pointed to at the end of life or when you're when you've stopped working we don't have the correct supply at the moment do you we're not we're not there yet we're we're way behind parts of Europe on this we can't just switch so should we fix them should we fix those problems then we yes I think we need to fix some of those problems anyway definitely we need to give people the option definitely right let's get some questions from you guys everyone's got their best trend for the 2020s they're allowed that as well as a gentleman here at the front and I have a lot of this gentleman as well if I could give you the view from Tottenham I've already had that that's so much so we're all from Tottenham here we go have another view from Tottenham underrepresented today oh okay my view from Tottenham your view your view land is very valuable in London and it's a very very secure investment so what we seem to have observed in Tottenham is the council has allowed a developer to use the public land its enormous value because it's London public land to finance the building of houses that the houses are then sold into the private market so the people who were council tenants on that public land are now squeezed off it and there is not enough affordable housing left for the people who need to tenant need to rent because of their low to middle incomes we have 3,000 families living in temporary accommodation in Haringey borough and there is no plan no plan national or local level to find them truly affordable housing the land that could be used for it is becoming expensive housing which can't even be afforded by people who want to buy and it's squeezing the tenants off the land okay great my name is Anthony Breach I'm an analyst at the city where I focus on housing and planning so there's a consensus in government and kind of urban economists that part of the explanation for these geographic differences across the country is that you see very very local shortages of supply in places with successful economies there's kind of this local mismatch between supply and demand now there's been kind of noises made recently about whether there's going to be some kind of planning reform kind of going through government there was a policy exchange paper on this couple of days ago but I'd like to ask the panel if you had like a magic wand and you could make one reform to the planning system what would it be? great very concrete okay and do you want to come in before we go to panel? and there's a lady here just on the left Becky, this is a lady Councillor Rachel Blake Deputy Mayor in the London Borough of Tower Hamlets I'm really pleased to hear people talking about pensions and actually long-term solutions I've just been upstairs a prospect discussion about supply from local authorities we've got a programme of 2000 new homes but at the macro level that you're talking about obviously the impact on pensioners and the long-term trends on this are a real issue one of my parting words upstairs were people are suffering in London because of a national economic problem and we call it a London housing crisis so I'd really welcome thoughts from the panel about how we need to change pensions in order to affect this London housing crisis which is really a national economic crisis and in terms of changing the planning system I've just spent about 100 hours at the town hall trying to sort out permitted development rights which I'm sure all delivery partners here would actually rather we'd have done in terms of planning properly so tinkering at the edges on the planning system is definitely not the solution and sorting out our pensions probably is okay very good so I think you know your answer to answer question which is not more permitted development is on your list right okay so on Paul's question so there's lots of things lying behind what Paul had talked about but let's just split it into two like manageable chunks so one is what is the effect of building on land in that land maybe it may have had a low density social housing before has high density probably been built on it with some provision but not but some for market sale who benefits from that which is actually quite a but it's actually quite a complicated picture it's nowhere near as simple as people forced off the land it's who actually economically benefits from that is a technical question and hard and there's a separate question which is housing affordability for the bottom end given cuts to housing benefit is seeing large numbers of rising people in temporary accommodation and we currently have no policy to deal with that so that's not huge numbers of people for the country as a whole but is an absolute catastrophe for the people that that is affecting and we see that particularly in large urban areas then everyone's going to give Ant 1 planning change only allowed one not 37 whatever it was earlier and then pensions right who wants to kick off I'm conscious we're going to lose you to your busy day in about three minutes so do you want to go first just on the the planning I think if you you have a you work out your targets if a site is allocated it needs to go through the system in a year and the example I give is we've got one that's taken us to get to the first commission over eight years we should have built the whole of that site by then so my one change is you know this out of London if you've got allocated sites it has to get through the system and that's why I say about the bureaucracy point so that's that's basically you cheating and so instead of having one it's basically everything should you just want to guarantee it no no if you go through look I think planning planning is absolutely really important and I don't think we should you know fundamentally people have local people have to have they say and in some ways I think these local people have been saying where you are as well and I think you go through that planning cycle but it has to go through in a in a way that hits the housing need and if you've allocated it's gone through that system then it has to go quickly you can't then hold it up for a lot of other issues and the other thing that they're trying to sort out housing is trying to sort out it's a whole load of other social issues and so when you get into the 106s and this is the party I think an issue slightly is you're trying to you know if you work out everything must be about delivering housing to live with you know the mayor has a fast track 35% follow the fast track if you've got a fast track policy it shouldn't take four years to get a planning consent through so London I think the fast track is really good but make it happen you know genuine fast track generally fast track not not you know still takes the same same time and that's my you know once you hit once you've decided what you want let's do it quickly what's happened to the Letwin review I mean you were supposed to sort that out wasn't either blockage Well Letwin was all about monotony and that house builders weren't building fast enough which is a different issue when you get on to site so once you've got on to site on these large sites are we building quickly enough and is it an issue that the and you're into another issue is who develops the affordable housing for society and then we get in the whole bigger issue about council homes as well should sorry should council build more which is a whole different issue which is another way of solving the issue is that councils build more which is a different issue which what's your favorite bit of planning change to what do you want to change come on I mean God I see a match isn't it I like I like to rub to go off slightly at a tantrum I like Rob's message about getting communities more involved at every level and I'd like to see I grew up on an estate where every house looked the same it's soul destroying I'm not sure where you're going to come out there I would really like to see better designed homes and as look at what we actually like about Victorian houses and put that into modern houses we don't have to copy them we don't have to make them mock sounds like you'd like more planning controls though no no I don't all right okay no not at all what I want to do is if possible can is there a way like they did in power be where you talk to the community you draw up a design book and you use that to get planning through faster you don't have to stop each time if you build this pretty one you can have it quick kind of thing well you do then pretty comes into it yes we want to give a nice face to this we do we want to give a nice face to this right then on Paul's point about one of the outlook chart shows how much of people's rent we have a clap which you're going off sorry sorry thanks a lot and so one of the charts in your outlook shows the amount of people's rent that is covered by housing benefit of those who are needs acclaim housing benefit which goes to the cause of lots of the problems you're talking about yeah so if you look at the data you can see that that those people in social housing and actually in the private rented sector whose housing cost who are low income whose housing costs are fully covered by housing benefit has declined quite significantly since 2010 which makes sense in the context of quite a few different cuts that we've seen to benefit both private renters and for social renters and it's worth putting a number on that so we we've looked to see over time how much of a drag has the rising cost of housing after housing benefit has on the income on low income families and we've seen that so 1200 pound drag on the living standards of low income families because of rising housing costs particularly in the social rented sector and I think if we were to think to the decade ahead lots of the policies that may help those people in terms of increasing supply and reducing unaffordability were introduced by the Theresa May government so we had the lifting of the HRA cap so councils could borrow more though now we've seen that the interest rate on that is set to double so that makes things a bit more difficult and then there was this really quite surprising and quite big turn from the Theresa May government towards social house building and supporting housing associations and yet if you look at the Tory manifesto under Boris Johnson things look a bit different the focus is much more on home ownership they have increased the they've said they're going to increase the affordable homes budget but not by as much I don't think as Theresa May would have done and so it's interesting to think about whether or not local authorities housing associations are going to be able to do the building that I think at least on that form of supply everyone could agree is needed to do would you want to just comment on the first part of that question which is when houses get built in an area who benefits I might leave that and say that I think the focus on the focus on the focus on affordable housing is the key thing or essentially more social housing and I do think then your your chart on rent covered by housing benefit is is really stark and that is just the fact that that is not the main thing we're talking about is I think a concern because it's pretty it's pretty bad and I just want to come in on the the point about pensions because I think Rob raised this before I left and I think it's really important to bring these things together what have we seen ever recent years that are past 20 odd years is a massive fall in annuity rates and a massive fall in interest rates and mortgage rates and those both have to the same kind of effects it means you need a much bigger pension pot to get the same level of income in retirement and it means you need a much bigger pile of cash to afford the same terraced house in Tottenham so young people today are going to have to amass loads of cash doesn't matter what they do in their pension and rent or does or do it in their house and have a smaller pension somehow they've got to save huge amounts of money this is the effect of the long term low interest rate environment and it's going to cause massive problems the housing crisis high house prices is just the canary in the coal mine if you like we're going to hit the pensions one for long and these are some of the long term effects that we're seeing that doesn't sound like an answer yeah sorry no I thought I'd do it you just said the world is grim again you're like right okay let's get more set of questions before everyone disappears for that day and then we've got an answer and then we've got their best trend of the 2020s and then we've got and then what a good trend yes you've got some good news at the back there's a mic coming there's a mic coming we definitely the market is good news interested in the point that you were making that there is no active discussion around the impact of investment returns going so low low interest rates and how one can bring a new form of housing funding to the marketplace which won't take people apart because they've got excess debt so in other words why aren't we talking more about novel ways of bringing new housing finance through co-investment between parties where there is a debt free relationship going to sort of more about what that means so a private sector shared ownership sort of structure where an institution may put long-term investment into a private joint venture with a consumer can choose their own and this is what I'm working on at Hop Homes okay it's interesting okay anyone else want to come in come on none of you just want to who's got an answer no pressure now but you're the last guy so this better be good Becky gentlemen in front of you Chris Ford from the collaborative centre rising evidence um sort of I think there seems to be Ian is the only one who kind of diverged from the home ownership consensus I was wondering what's what do the panel think of them being social benefits of home ownership because I mean one of the things we keep on getting here is that hearing is that people prefer home ownership but one of the reasons I'm pretty sure they prefer home ownership because because we've seen house prices rise and because there's massive taxes that does I mean it's a bit like saying do you prefer my left hand or my right hand where my left left hand's got 20 points in it and the other reason we sort of I'm curious because of the asset based welfare but I mean you can have an asset based welfare scheme without without the massive incentives for home ownership I mean you can Germany I think has roughly the same levels of home ownership once you reach higher higher ages um because people just go to home ownership later you can get that you can you can stabilise your rents without house or just German ownership is ticking up and all has been ticking down so well what are the social benefits of home ownership um see the great okay innovative yes I like way used to raise I like that one yeah I think the we could do more with shared ownership models um particularly interested in the idea that we could perhaps do it backwards for down sizes where they down staircase if that's that's a word um I think I think that you're right there's lots of innovation and we should be looking at that definitely um on on the social benefits of home ownership as a as a tricky one I think I think if you've got rental right you could get the same social benefits but they'd have to be long-term secure good quality rental accommodation and we haven't quite cracked that um on benefits so yeah but I don't think you should place no utilitarian value on people want it as a thing in life like there's a reason we choose to have a democracy rather than like an in-life and dictatorship okay one so you should have some value okay not so you can choose but then you may think it had too much but it's not no value in what people will say they want and they say they want it a lot so it's not like this is a marginal choice all this nonsense about millennials they want to rent everything they don't want to own anything anymore is only true about cars in cities like they want that which makes a obvious sense because they're killing everyone but like they it's not true on homes then what is the then back to our if there was a dictatorship why might we want some of it well one thing we have learned is is quite basically people will under-save okay on everything the pensions is almost how do you get people to save in forced saving what in the real world across all countries that we found out was the only way to do that housing plus now forcing people into pensions but basically also one thing that home ownership does is not the public facing version product and everyone always says to me oh but we'll just invent another asset and it's completely you know the economics is neutral between these assets but it's totally true in your economics textbook all I'm saying is show me these other countries with these other assets that we managed to get people to actually save into and the only one that works is housing and enforced pension savings for people with jobs which does nothing for those without jobs basically probably but then and I think that's not that's a non-negligible problem you're gonna have to overcome people they will not just if they're not paying into a mortgage save that money into the pet which in the economics would tell you is exactly equal those are two and then there are the social benefits higher voting yeah like and that isn't just you know yes we could do better we should definitely do a better job of providing decent quality private rented with long term 10 years that are your home but even so the level of difference in like social engagement between owners and renters is astronomical like it's huge and it's not closing so you do want to think about people's feeling of permanence is different I don't think we should place no weight on that but less ownership given what is going to happen anyway I don't think I think this debate gets slightly silly because low home ownership is what's happening we're going to spend the next 50 years watching our home ownership rate tick down despite the recent tick back up again so you don't don't worry you're going to get what you want nobody else is there's also a bit of a problem if your house is where you're saving because obviously you've got to sell your house to release your asset no but you're going to live off it and you it's basically form of your pen it's the bit point he is making you need this house because you need no housing costs when you retire so you can you don't have to save into the house you could just save into a massive pension pot to pay your rent yeah all I'm saying is they won't do it but maybe you're all much more virtuous than I think Ian oh yeah I mean you said a lot of things I was going to say actually so so I'd agree with a lot of that I mean I think you know the social benefits are obviously tenuous stability we can tackle that by dealing with the private rents etc and make it better so that might even things up a bit I think but I think you're absolutely right the other one is is for saving and there is this myth that we've got to get people on the housing ladder because it's the only way to increase wealth and you know in and of itself that's a completely nonsense statement I mean only if you're betting on absurd price growth continuing and the level of the last 40 years due to a you know rapidly falling interest rates which aren't going to happen again do you think that's a good idea so that's mad but it is true that the behavioural economics insight is key that getting people to force to save their money every month is what you have to do to get people into a place where they're not in penuring in their retirement so I think that that is that is really important but I do think maybe it comes down to that's the shared ownership thing we do need to think about if the worst happens interest rates rise a bit two percentage points and there's a big house price perhaps particularly in London we're going to have to ask as a society how do we stop this happening again because it is not an acceptable level of risk to put on the shoulders of households so I do think we need to think about risk sharing and what is the optimum so what are the level of social benefits of home ownership and therefore who should subsidise it and should take a share of this or should banks be more on the hook or you know how do we get skin in the game to make sure that you know we don't end up where we are here again because it's not a good place to be great sorry every time I mean literally every time every time like honestly it must be electric like perk up a bit it's not a bad life right okay on that depressing note we're going to wrap up for Felicia today can we thank our panel for their contributions today thank you all for coming one thing we know is the 2020s are going to happen so whatever we said you're going to find out the answer at some point have a nice day everyone