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This is explicitly what the OP said was happening several times during their post, except according to them it makes the shortage worse because the former renters buy more rooms than they were previously renting.
This may lower housing prices, but it seems like it would, paradoxically, raise rental prices for those that can't buy for some reason (don't make enough money/make money irregularly, can't get a loan, lack of documentation, need to move frequently, etc).
But each person who buys a house is taken out of the pool of would-be renters, so how is the shortage worse? The number of houses is the same, the number of people living in them is the same.
How are these people better off renting rather than paying off a mortgage? If they don’t have money or documents they’re screwed anyway. A certain number of people are not going to be able to manage in either system and will either be homeless or in government housing. I don’t see how that varies between our two scenarios.
The final about needing to move house regularly is a concern for me too. I speculate that a bigger market with more buyers and sellers might make things easier in this regard but I can’t know for sure. And at least these people would be able to get a property when they settle down rather than have spent a lifetime subsidising other people’s.
This argument presented is these people are buying formerly rented units, so those units are now forever denied to future renters. And also people occupy more square feet per person when buying than renting. And NIMBYism prevents significant amounts of new units, so we aren't going to build to make up for the loss.
Things just get a bit worse for renters. They get to fight over fewer rented square feet of living space.
Thanks, that’s an interesting nuance that I missed. It seems to me like an unfortunate consequence of large mortgages and housing-as-assets in that people usually buy houses as a conscious investment now and take out large amounts of money to do so, thus they get as much as they think they can get away with. Houses for sale also tend to be built differently from rentals because people assume that owner occupiers are starting a family.
A larger, more flexible market with less borrowed money might reduce this problem. However, I concede that’s a self-serving assertion and I can’t back it up.
This argument only works if the majority of people are renters by choice, ie that the pool of buyers and the pool of renters are inherently separate. I don’t think they are. They appear to be because of financial pressure on house buying. If you assume that would be buyers and would be renters are mostly the same people, a house being bought by someone is no different from a house that is being rented by someone. It’s removed from the pot either way. If anything, it’s an argument for punishing people who buy too much, which is the underlying logic behind most anti-landlord resentment.
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Maybe England is different but I would expect people having more rooms to result in individual rooms for rent, which trades off against demand for two bedroom and studio apartments.
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