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Pavo on the hard at Alperton


PaulJ

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2 hours ago, David Mack said:

So what we need is a strategy that keeps house prices stable at their current prices (in £) but allows their value to fall in real terms as inflation takes effect. Over time that results in houses becoming more affordable without existing home owners actually losing money, and in particular without putting mortgage payers into negative equity. Unachievable over the last decade or so when inflation has been so low, but maybe more possible as we move into an era of higher inflation.

That would indeed be the "painless" way of doing it for homeowners who've recently taken out massive mortgages. The problem is that it would take a *long* time to bring real prices down, still not good for the "have-nots" -- and being brutal, it leaves all the other homeowners (including me...) sitting on massive piles of unearned (and largely untaxed) cash from the huge house price increases since they bought them.

 

A fairer solution would be to tax *all* property more, especially property bought for investment, because the taxes on this are somewhere between zero and a lot less than that on income. Other countries with less broken housing markets seem to make this work with a property tax of a couple of percent of value per year. That would automatically bring prices down somewhat in the short term, and bring in revenue for new house building.

 

I'd happily pay such higher property taxes if it meant that the resulting money was used to build decent quality affordable housing, which probably means the local authorities doing it not developers -- and it not just disappearing into the government slush bucket to spaff up the wall on things like HS2.

 

But I guess a whole lot of homeowners would scream blue murder and claim that it was unfair to put new taxes on them to build houses for feckless benefit scroungers and asylum seekers, even if it fixed one of the biggest problems in the UK today... 😞

Edited by IanD
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Be careful what you wish for regarding local authorities doing it rather than developers - we are in the midst of a 'buying off plan' that has become a bit of a nightmare as Milton Keynes Council are now involved and are just basically being arse'oles. It would take far too long to go into detail, but for example getting tenders from builders for a 120'ish flat development, because MK Council own the land, is taking in excess of 6 months because of the hoops the builder is being made to jump through. Yet other councils get this sorted in far shorter time - MKC does have a bit of a reputation regarding development approval which is surprising as the whole area is one big development!

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5 hours ago, David Mack said:

So what we need is a strategy that keeps house prices stable at their current prices (in £) but allows their value to fall in real terms as inflation takes effect. Over time that results in houses becoming more affordable without existing home owners actually losing money, and in particular without putting mortgage payers into negative equity. Unachievable over the last decade or so when inflation has been so low, but maybe more possible as we move into an era of higher inflation.

Whilst I agree that fear of upsetting current house owners is probably a large part of the failure to achieve a better strategy (much easier to blame the developers or, even more, the planners) your solution is not as you suggest. If prices do not keep pace with inflation then the owners will indeed be losing out. It is probable that new houses will rise with inflation, of necessity, so the ability of owners to tradeup or move for work etc will be seriously impacted , thereby worsening the housing market. In a fairly short time the market would come to a stand still as there would be no buyers for the new houses, unless the developers reduced the quality/size even further.

 

Since free market developers will inevitably constrict the rate of build to that which maintains prices, the only option for a government intent on ensuring that everyone has a decent home , is to reinstate public financed housing where some form of subsidy can be applied (a bit like council house sales?) The problem however is how to frame restrictions that does not lead to the subsidised owners quickly taking that amount out in capital gain.

 

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7 minutes ago, Mike Todd said:

If prices do not keep pace with inflation then the owners will indeed be losing out.

Losing out in terms of not getting the gain that the same money could achieve elsewhere, but not actually losing money (in the same way that keeping cash under the bed does not lose money). Any move to bring down the real cost of housing will inevitably impact on the stored value of existing houses.

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24 minutes ago, Mike Todd said:

It is probable that new houses will rise with inflation, of necessity,

Why? New houses will always be a small part of the market compared with existing houses, and so if developers are to sell them they will have to remain broadly competitive with the prices of existing houses.

Any effective housing strategy has to manage the level of pricing in the market as a whole. Which is where things like help to buy have got it wrong. Providing money to eligible first time buyers gets a few people on the bottom rung of the housing ladder, but just stokes the amount of money in the market and stimulates price rises which further exclude the rest.

When I, as a single person, first wanted to buy a property in 1983 I approached the building society where I had been saving for a decade or more. At the time lenders had tight criteria on income multiples and loan to value ratios, and the manageress of my local branch looked sneeringly down her nose at me and explained they couldn't possibly lend enough money to someone in my position to buy even the cheapest flat in the area. The following year, government and the Bank of England had loosened the purse strings, and the new manageress of the same branch was falling over herself to lend me more than I was really comfortable with, but seeing prices beginning to rise I leapt in with both feet before I got priced out again. It was a good decision for me. In the 3 years I owned that flat it earned me more money than the day job! But it illustrates that making mortgage finance easier just pushes prices up.

Edited by David Mack
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31 minutes ago, David Mack said:

and the manageress of my local branch looked sneeringly down her nose at me and explained they couldn't possibly lend enough money to someone in my position to buy even the cheapest flat in the area.

 

Lol, I had a rhyming experience. 

 

A personal interview with the branch manager of the BS I had been saving with resulted in me being condescendingly lectured that the 3-bed Victorian terrace in a good part of Surrey I wanted to buy for £5,000 was badly built and would only ever go down in value, therefore my mortgage application was refused. 

 

I saw it for sale a few months back for £500,000.00. A 100-fold increase in value 45 years later. What a grass-hole that man was. It still grates. 

 

 

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Ban multiple property ownership. Each adult / married couple to be allowed to own one property. No more.

 

This would cause a large drop in property values so no government would be able to do it due to the voting pleb issues. 

 

It would be technically quite interesting to put this sort of policy to a plebiscite and see what people actually think about the acceptablility of some people owning multiple properties and just bleeding others for profit on something which is a necessity not a luxury. At the same time you get people who will never have a chance in their entire lifetime of owning their own home. Crap situation innit.

 

Obviously it can't happen but it does seem sensible to me as a non property owner who also has no intention of ever buying any property under any circumstances. I do have children but I expect they will sort their own stuff out.

 

Start with compulsory purchase of ex local authority properties which have been bought by tenants at a reduced rate. The buy-back price paid to have the same reduction.

 

It might put some people in an awkward position but guess what. If you can't afford housing and can prove it then in a lot of cases you can get a council house. This was the idea in the first place. Subsidised rent reduced housing for people who need it. Then of course Thatcher thought maybe she could get some more votes and did the scam, which wrecked the whole setup.

 

Anyone who is a tenant in a council property should be offered the right to buy then if they accept it they have demonstrated they can raise funds and are given 6 months notice to vacate the property.

 

None of this can happen because people who run the place have their fingers in the pie.

 

 

 

 

 

 

Edited by magnetman
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2 minutes ago, magnetman said:

Ban multiple property ownership. Each adult / married couple to be allowed to own one property. No more.

 

So, what about the millions of people without the creditworthiness to get a mortgage? Their ONLY option is to rent so at a stroke you condemn anyone in this category to homelessness.

 

 

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Like I said if you can't afford housing you can get local authority help. This is a welfare state and quite well known.

 

Another side effect would be a very big reduction in the price of housing because the 'hoarding' problem would disappear. Therefore more people would be able to afford housing, by definition.

 

The argument that rental properties alleviate homelessness is a red herring.

 

 

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5 minutes ago, magnetman said:

Like I said if you can't afford housing you can get local authority help. This is a welfare state and quite well known.

 

 

Errrrr, local authority help to do what? 

 

Lemme think. Oh yeah, rent a house in the private sector you plan to demolish. Lol. 

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11 minutes ago, MtB said:

 

Errrrr, local authority help to do what? 

 

Lemme think. Oh yeah, rent a house in the private sector you plan to demolish. Lol. 

 

 

Obviously property prices would need to go a lot lower. I'd say 1/3 of current 'values' or less would be appropriate.

 

This would put more people in a position where they can buy property.

 

Local authority would have bought back the right to buy scam properties and have them available to let at reduced rates to people who can demonstrate need and local connections.

 

This could also help with 'levelling up' because people would tend to stay in their home areas rather than living in areas they have no connection to.

 

I know what you are getting at and you are correct to an extent but that argument is a vicious cycle and simply leads to fewer and fewer people being able to afford to buy a home. From the point of view of a society it would be wiser to ensure people can have their own home otherwise bad things will start happening.

 

The basic issue is obviously overpopulation but that's not going to get sorted out in a hurry is it.

 

I suspect a lot of people actually have no idea what it is like to live "close to the edge" and can't fully appreciate the fact that shelter is a basic need and not a commodity to be traded.

 

 

Edited by magnetman
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18 hours ago, David Mack said:

Why? New houses will always be a small part of the market compared with existing houses, and so if developers are to sell them they will have to remain broadly competitive with the prices of existing houses.

Any effective housing strategy has to manage the level of pricing in the market as a whole. Which is where things like help to buy have got it wrong. Providing money to eligible first time buyers gets a few people on the bottom rung of the housing ladder, but just stokes the amount of money in the market and stimulates price rises which further exclude the rest.

When I, as a single person, first wanted to buy a property in 1983 I approached the building society where I had been saving for a decade or more. At the time lenders had tight criteria on income multiples and loan to value ratios, and the manageress of my local branch looked sneeringly down her nose at me and explained they couldn't possibly lend enough money to someone in my position to buy even the cheapest flat in the area. The following year, government and the Bank of England had loosened the purse strings, and the new manageress of the same branch was falling over herself to lend me more than I was really comfortable with, but seeing prices beginning to rise I leapt in with both feet before I got priced out again. It was a good decision for me. In the 3 years I owned that flat it earned me more money than the day job! But it illustrates that making mortgage finance easier just pushes prices up.

I was really referring to the impact of the extraordinary rate of inflation that seems to have hit building materials, together with the effect of serious labour shortages.

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Some councils are addressing the problem by buying land to build, “affordable,” housing.

 

https://www.oxfordmail.co.uk/news/19294998.council-spends-millions-purchase-green-fields-iffley-affordable-homes/

https://www.advertiserandtimes.co.uk/news/council-buys-field-with-plans-to-build-100-affordable-housing-scheme-9153285/

 

There are others.

 

Land cost are a large element of the house price, and though developers are supposed to provide ten percent affordable housing, they have only provided four percent.  They claim the scheme would not be viable after they have started because of one reason or another, blah de blah, and get away with it.

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On 30/11/2022 at 18:48, MtB said:

 

Lol, I had a rhyming experience. 

 

A personal interview with the branch manager of the BS I had been saving with resulted in me being condescendingly lectured that the 3-bed Victorian terrace in a good part of Surrey I wanted to buy for £5,000 was badly built and would only ever go down in value, therefore my mortgage application was refused. 

 

I saw it for sale a few months back for £500,000.00. A 100-fold increase in value 45 years later. What a grass-hole that man was. It still grates. 

 

 


you’ll probably find it was the branch manager who bought it

in them days didn’t anyone working in a bank get interest free mortgages ? or something similar?

 

On 30/11/2022 at 19:09, magnetman said:

Like I said if you can't afford housing you can get local authority help. This is a welfare state and quite well known.

 

Another side effect would be a very big reduction in the price of housing because the 'hoarding' problem would disappear. Therefore more people would be able to afford housing, by definition.

 

The argument that rental properties alleviate homelessness is a red herring.

 

 


 

 

On 30/11/2022 at 19:03, magnetman said:

Ban multiple property ownership. Each adult / married couple to be allowed to own one property. No more.


 

and bastard landlords put against the wall and shot with water pistols. 

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9 hours ago, Mike Todd said:

I was really referring to the impact of the extraordinary rate of inflation that seems to have hit building materials, together with the effect of serious labour shortages.

The price of a new house is the cost of the land + the price of building the house + the developer's profit. The overall market for new and existing houses determines the price. So if the house building cost goes up, one or both of the other two has to come down.

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8 hours ago, Goliath said:


you’ll probably find it was the branch manager who bought it

in them days didn’t anyone working in a bank get interest free mortgages ? or something similar?

 


 

 


 

and bastard landlords put against the wall and shot with water pistols. 

Why. Without landlords you wont have homes. I have rented, bought , bought to rent, rented while being a landlord, been an involuntary landlord ,and recently made myself voluntarily homeless while renting out a property to others, rather than end their lease and inconvenience them.

Its not simple.

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6 hours ago, roland elsdon said:

Why. Without landlords you wont have homes. I have rented, bought , bought to rent, rented while being a landlord, been an involuntary landlord ,and recently made myself voluntarily homeless while renting out a property to others, rather than end their lease and inconvenience them.

Its not simple.

 

Exactly. 

 

The hard of thinking always need to make it black and white. Landlords are bastards, tenants are victims. Simple! 

 

 

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14 hours ago, David Mack said:

The price of a new house is the cost of the land + the price of building the house + the developer's profit. The overall market for new and existing houses determines the price. So if the house building cost goes up, one or both of the other two has to come down.

Depends on their elasticity (in economic terms)

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12 hours ago, roland elsdon said:

Why. Without landlords you wont have homes. I have rented, bought , bought to rent, rented while being a landlord, been an involuntary landlord ,and recently made myself voluntarily homeless while renting out a property to others, rather than end their lease and inconvenience them.

Its not simple.


yes, I’ve been a landlord too

 

ive nothing against landlords really, some of my best friends are landlords

 

and I can understand why one would have a tenant to pay the mortgage off, beats going to work oneself. As I’ve said I have been a landlord. 
I mean it’s double bubble isn’t it?

The house goes up in value and someone else pays for it, a win win situation 👍
 

 

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On the involuntary property the tenant failed to pay  the rent for fourteen months,  thus causing problems for my mothers care home fees( joint owner)

He caused 22000 damage.

He then chose to exit the planet following trying to set fire to it after court eviction. The house sold for less than the probate value in 2004 in 2019.

That added 15000to the losses.( iht payment)

The nottingham estate agency as agents continued to take their charges until threatened with negligence

 

win win ok….

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14 minutes ago, roland elsdon said:

On the involuntary property the tenant failed to pay  the rent for fourteen months,  thus causing problems for my mothers care home fees( joint owner)

He caused 22000 damage.

He then chose to exit the planet following trying to set fire to it after court eviction. The house sold for less than the probate value in 2004 in 2019.

That added 15000to the losses.( iht payment)

The nottingham estate agency as agents continued to take their charges until threatened with negligence

 

win win ok….

Shit!

Sorry to hear that. 
 

 

 

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On 30/11/2022 at 15:26, IanD said:

That would indeed be the "painless" way of doing it for homeowners who've recently taken out massive mortgages. The problem is that it would take a *long* time to bring real prices down, still not good for the "have-nots" -- and being brutal, it leaves all the other homeowners (including me...) sitting on massive piles of unearned (and largely untaxed) cash from the huge house price increases since they bought them.

 

A fairer solution would be to tax *all* property more, especially property bought for investment, because the taxes on this are somewhere between zero and a lot less than that on income. Other countries with less broken housing markets seem to make this work with a property tax of a couple of percent of value per year. That would automatically bring prices down somewhat in the short term, and bring in revenue for new house building.

 

I'd happily pay such higher property taxes if it meant that the resulting money was used to build decent quality affordable housing, which probably means the local authorities doing it not developers -- and it not just disappearing into the government slush bucket to spaff up the wall on things like HS2.

 

But I guess a whole lot of homeowners would scream blue murder and claim that it was unfair to put new taxes on them to build houses for feckless benefit scroungers and asylum seekers, even if it fixed one of the biggest problems in the UK today... 😞

 

What a hero.

 

If you are so wealthy have you considered releasing some equity from your property and simply donating it to Shelter?

 

 

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