Housing

[CropleyWasGod]

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Only if you're a buyer!

If you own your own home, the last thing you want is to see the price fall, or worse still, leaving you with negative equity. For a lot of people, there home is there only meaningful asset.

Think of the news headlines any time you see prices falling - nobody is pleased when it happens.

Building huge amount of new homes is the answer. Problem is, nobody wants them built near them. Environment, roads, schools, doctors etc etc being used as the excuse.

It may be tough on the younger generation, but they will also be one of the first generations where most of them will inherit their parents homes. That was generally only available for the well off previously.

If you have no intention of moving, the value is irrelevant.

If you are planning to move, within the same environment, price falls across the market are largely irrelevant. If you sell your house for a lower price in a depressed market, the likelihood is that you will have to pay less for your next house in that same market.

[RyeSloan]

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Only if you're a buyer!

If you own your own home, the last thing you want is to see the price fall, or worse still, leaving you with negative equity. For a lot of people, there home is there only meaningful asset.

Think of the news headlines any time you see prices falling - nobody is pleased when it happens.

Building huge amount of new homes is the answer. Problem is, nobody wants them built near them. Environment, roads, schools, doctors etc etc being used as the excuse.

It may be tough on the younger generation, but they will also be one of the first generations where most of them will inherit their parents homes. That was generally only available for the well off previously.

There is a large body of work from many sources that suggests a ‘huge amount of new homes’ is not really the answer at all.

The evidence suggests that it’s almost impossible to build your way out of high prices in any sensible manner. To increase the available housing stock by a big enough percentage is simply not feasible in any reasonable timescale.

To understand high prices it’s useful to understand the root cause and the evidence suggests that lack of primary supply is not a meaningful contributor.

By far the biggest contributors have been policy (think the buy to let boom…now brought to a shuddering halt by the belated tax rule changes), stamp duty increases squishing the secondary market (fewer people move as it’s so expensive to do so thus limiting supply at any one point) and of course the biggest culprit of all; availability of credit and the cost of that credit.

I totally understand that the build build build mantra seems intuitively obvious in terms of a basic supply and demand dynamic but it really doesn’t stand up to scrutiny.

[Ozyhibby]

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There is a large body of work from many sources that suggests a ‘huge amount of new homes’ is not really the answer at all.

The evidence suggests that it’s almost impossible to build your way out of high prices in any sensible manner. To increase the available housing stock by a big enough percentage is simply not feasible in any reasonable timescale.

To understand high prices it’s useful to understand the root cause and the evidence suggests that lack of primary supply is not a meaningful contributor.

By far the biggest contributors have been policy (think the buy to let boom…now brought to a shuddering halt by the belated tax rule changes), stamp duty increases squishing the secondary market (fewer people move as it’s so expensive to do so thus limiting supply at any one point) and of course the biggest culprit of all; availability of credit and the cost of that credit.

I totally understand that the build build build mantra seems intuitively obvious in terms of a basic supply and demand dynamic but it really doesn’t stand up to scrutiny.

We do build significantly less that comparable European countries who have lower property prices.


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[danhibees1875]

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Only if you're a buyer!

If you own your own home, the last thing you want is to see the price fall, or worse still, leaving you with negative equity. For a lot of people, there home is there only meaningful asset.

Think of the news headlines any time you see prices falling - nobody is pleased when it happens.

Building huge amount of new homes is the answer. Problem is, nobody wants them built near them. Environment, roads, schools, doctors etc etc being used as the excuse.

It may be tough on the younger generation, but they will also be one of the first generations where most of them will inherit their parents homes. That was generally only available for the well off previously.

I think yes, and no.

House prices increasing is only really good for anyone that's more likely to downsize than anything else. I own a house, and would look to move in a bit and probably to a more expensive house - if there's a universal (I appreciate that’s not how it works) 10% drop in the market tomorrow that is actually good for me on that front.

Of course it's also true that relatively new into my mortgage (and even more so for those who bought more recently than myself) then a large crash could result in being in a higher LTV bracket at the next remortgage, or even have the concept of negative equity hanging over their head. Should my circumstances drastically change and for whatever reason I want to sell up and not buy something else then I'm more limited after a crash (or even stuck if it's bad enough), or if I were looking to do some sort of equity release.

[Mibbes Aye]

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We do build significantly less that comparable European countries who have lower property prices.


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We do have one of the highest population densities in Europe, notwithstanding the Scottish Highlands, which is roughly the size of Belgium.

There are a number of inhibitors on supply, a number of varying factors shaping demand. It is no wonder the housing market is so distorted but building ever more houses is a simplistic answer to a complex question.

[Ozyhibby]

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We do have one of the highest population densities in Europe, notwithstanding the Scottish Highlands, which is roughly the size of Belgium.

There are a number of inhibitors on supply, a number of varying factors shaping demand. It is no wonder the housing market is so distorted but building ever more houses is a simplistic answer to a complex question.

Absolutely. There are many factors at play in the UK market. That’s just one of them.

https://twitter.com/resi_analyst/sta...dxJXScFNwz8V4A

Is a good follow on Twitter on these issues. It’s complicated, which is why it’s being ignored. Best just to launch another counter productive help to buy scheme.


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[WhileTheChief..]

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There is a large body of work from many sources that suggests a ‘huge amount of new homes’ is not really the answer at all.

The evidence suggests that it’s almost impossible to build your way out of high prices in any sensible manner. To increase the available housing stock by a big enough percentage is simply not feasible in any reasonable timescale.

To understand high prices it’s useful to understand the root cause and the evidence suggests that lack of primary supply is not a meaningful contributor.

By far the biggest contributors have been policy (think the buy to let boom…now brought to a shuddering halt by the belated tax rule changes), stamp duty increases squishing the secondary market (fewer people move as it’s so expensive to do so thus limiting supply at any one point) and of course the biggest culprit of all; availability of credit and the cost of that credit.

I totally understand that the build build build mantra seems intuitively obvious in terms of a basic supply and demand dynamic but it really doesn’t stand up to scrutiny.

Leaving prices to the side for a moment, whenever there's talk of homelessness on the news, it always comes round to there being a shortage of homes.

So, even taking all your points into account, do we not still need a huge number of new homes being built every year?

[WhileTheChief..]

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If you have no intention of moving, the value is irrelevant.

If you are planning to move, within the same environment, price falls across the market are largely irrelevant. If you sell your house for a lower price in a depressed market, the likelihood is that you will have to pay less for your next house in that same market.

Sorry, can't agree on that point at all.

Anyone looking to reportage for any reason, get additional borrowing for home improvements or whatever, leave their home to their kids or considering equity release in their later years are very much affected.

Personally, I've never known or heard anyone say they were pleased if their house value stagnated or fell. I'd be really surprised if I ever do hear that.

[Ozyhibby]

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Sorry, can't agree on that point at all.

Anyone looking to reportage for any reason, get additional borrowing for home improvements or whatever, leave their home to their kids or considering equity release in their later years are very much affected.

Personally, I've never known or heard anyone say they were pleased if their house value stagnated or fell. I'd be really surprised if I ever do hear that.

Of course but I think that if house prices are outstripping inflation then that’s not a good thing. And when they are outstripping inflation for 50 years straight as they have done in the UK then that is unsustainable.
Housing is sucking in every spare bit of capital in the UK to the point that we don’t invest in anything else.


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[McSwanky]

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Personally, I've never known or heard anyone say they were pleased if their house value stagnated or fell. I'd be really surprised if I ever do hear that.

Hi!

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[WhileTheChief..]

Is the solution more affordable homes available for people to buy, or more homes in general available for rent?

I think in general, most people still prefer buying to renting, but accept there will always be a need for rental properties. I've no idea of the numbers or proportions though.

Could a government legislate to pretty much ban anyone owning more than one property, thus eliminating the entire private landlord / tenant system? Forcing loads of properties on to the market at the same time would also see prices everywhere fall ;)

Could councils buy homes from existing landlords and then rent them out as affordable housing?

Could they legislate to make it that you have to be living in, or have lived lived in the UK for X number of years, to buy a property?

Just throwing some thoughts out there. Pretty radical stuff, and a bit of an unfair attack on existing landlords, but if you're going to fix a problem that's been 50 years in the making, you're going to need to do something special / different!!

[WhileTheChief..]

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Hi!

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Interested to hear why, if you're happy to share?!

[Andy Bee]

I'd be interested in banning overseas buyers who have the sole intention of renting the properties out or at least a vastly inflated stamp duty on those types of buyers who predominantly don't pay taxes on the income of those rentals. Properties are being bought up in blocks of 10, 20, 30 properties at a time and just handed over to letting agents to manage.

It'll also be interesting to keep an eye on the new Skipton 100% mortgage deal for people who can show they've got a good credit rating in the rental sector. 5.49% interest rate IIRC which isn't that bad in this market.

[Ozyhibby]

The tax system in Scotland means that there are very few people now going into buy to let. The numbers no longer stack up.
LBTT now works out at about 8-11% which is too high to make it a worthwhile investment.
The UK govt tax treatment (there is no longer tax relief on mortgage payments) of landlords, especially higher rate tax payers is also a massive disincentive.
All these costs get passed onto the tennant as the end user is always the person who pays but it also puts people off investment.


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[RyeSloan]

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Leaving prices to the side for a moment, whenever there's talk of homelessness on the news, it always comes round to there being a shortage of homes.

So, even taking all your points into account, do we not still need a huge number of new homes being built every year?

Or is it a shortage of availability of suitable housing?

It’s a subtle difference but there is plenty of empty or under occupied homes that wouldn’t need a huge building programme to mitigate the issue if they were brought into the mix.

Clearly building new homes is part of the answer but it’s not THE answer.

And that’s before you even begin to work out what type of home needs built, where it is built and how you build it at an ‘affordable’ cost.

Again there is plenty of evidence that new builds are actually a premium priced product and building them does not lower surrounding prices of existing stock but actually raises them.

I certainly don’t have all the answers that’s for sure but it’s also true the law of unintended consequences lives strong in the housing market.

[wookie70]

I've long thought that rising house prices are bad for the vast majority of working people. Like the railways, water, power etc I feel housing is a vital infrastructure and should be controlled for the most part by the state. The way it is going we are just making the situation worse year on year. There needs to be a plan where future population numbers, technology requirements, climate change and building communities that work with proper schooling, health and wellbeing resources are all taken into account.

I live in Newtongrange and there is a massive development planned and approved. The infrastructure simply isn't there to support it. The idea is it would be a 15 minute city type city set up but all the resources are already in place and oversubscribed. It is simply a developer maximising profit and the existing village will negatively impacted with traffic and further dilution of vital services. If I look at my village it is surrounded by what looks like farmland. However, much of that land is already owned by developers having been sold by the good Duke who owns most of the county. I suppose that is a bit of NIMBYism on my part but I would have no issue if what was being built included the resources that were required to support the new occupants. If the village grows as do services and infrastructure that is fine but this is like expecting a 1.0L Fiesta to start towing a massive caravan.

I would like to see housing/land reform as the number 1 priority of the Scottish Government. It is fundamental to the common good and there needs to be some far sighted thought and solutions that look at the next couple of hundred years not the next election or brown envelope. I like the idea of 15 minute cities and I think I would go down that route but not piggy backed onto existing towns. I would go the new town route and build self contained communities, completely powered by onsite renewables with a community that is designed to have the needed doctors, nurses, cleaners, sparks etc within its number. I don't think it could be done in the current financial model but then the world is doomed if we continue down that path.

Tinkering is not going to solve the housing crisis and for me that crisis is really a lack of functioning communities alongside crumbling and overused infrastructure more than just bricks and mortar. Britain is completely broken and it needs a blank sheet of paper approach not more doodling over the scribbles of past government incompetence.

[McSwanky]

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Interested to hear why, if you're happy to share?!

A combination of 'the greater good' and the fact that house price rises have been outstripping income rises since probably the 70s.

Don't get me wrong, a crash would be a nightmare for a lot of people, I'd much prefer a steady drop in relation to wages over the next 10-20 years. Not going to happen though.

The whole thing is a bloody mess, and it's been perpetuated by all our governments' short term approach over the years.

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[danhibees1875]

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Sorry, can't agree on that point at all.

Anyone looking to reportage for any reason, get additional borrowing for home improvements or whatever, leave their home to their kids or considering equity release in their later years are very much affected.

Personally, I've never known or heard anyone say they were pleased if their house value stagnated or fell. I'd be really surprised if I ever do hear that.

Their house alone in isolation? Or as part of a general market decline?

If it's the later then I'd imagine anyone active in the market would be happy enough for their house value to fall along with everyone else's. Within limits.

[WhileTheChief..]

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I'd be interested in banning overseas buyers who have the sole intention of renting the properties out or at least a vastly inflated stamp duty on those types of buyers who predominantly don't pay taxes on the income of those rentals. Properties are being bought up in blocks of 10, 20, 30 properties at a time and just handed over to letting agents to manage.

It'll also be interesting to keep an eye on the new Skipton 100% mortgage deal for people who can show they've got a good credit rating in the rental sector. 5.49% interest rate IIRC which isn't that bad in this market.

A few year ago I got a new boiler installed in my flat in Longstone.

The plumber that did it generally worked for 1 client, an elderly lady that owned over 300 flats in Edinburgh. She was in her late 80s and had built up the portfolio with her husband over the years.

It just feels wrong that one person / company can own so many properties.

I remember when I bought the flat as a new build, I could have left it a month or so and then sold it for a decent profit. Thinking this is maybe something people do?

[Ozyhibby]

https://www.theguardian.com/business...box=1683792161


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[RyeSloan]

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A few year ago I got a new boiler installed in my flat in Longstone.

The plumber that did it generally worked for 1 client, an elderly lady that owned over 300 flats in Edinburgh. She was in her late 80s and had built up the portfolio with her husband over the years.

It just feels wrong that one person / company can own so many properties.

I remember when I bought the flat as a new build, I could have left it a month or so and then sold it for a decent profit. Thinking this is maybe something people do?

I get that some will disagree with that amount of ownership as a principle and fair enough, not going to argue that.

But I’d suggest that those types of rental businesses are what the sector needs (there is after all an indisputable need and demand for rental properties) as they are much more likely to be run correctly as a long term business, where maintenance and associated rental returns are at the core.

One of the biggest issues (and drivers of price inflation) has been the ‘speculate to accumulate’ types who have the ability to leverage short term and are simply looking for quick investment returns.

That type of investment is coming to an end due to the tax changes and may have short term consequences in raising rents but I think it’s one positive change that has finally happened and will help to stabilise the market over the long term.

[wookie70]

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I get that some will disagree with that amount of ownership as a principle and fair enough, not going to argue that.

But I’d suggest that those types of rental businesses are what the sector needs (there is after all an indisputable need and demand for rental properties) as they are much more likely to be run correctly as a long term business, where maintenance and associated rental returns are at the core.

One of the biggest issues (and drivers of price inflation) has been the ‘speculate to accumulate’ types who have the ability to leverage short term and are simply looking for quick investment returns.

That type of investment is coming to an end due to the tax changes and may have short term consequences in raising rents but I think it’s one positive change that has finally happened and will help to stabilise the market over the long term.

The council used to be that rental business. It worked very well until Thatcher destroyed it. I'm not convinced the private sector does a great job of providing the accommodation needed and that would particularly go for these volume landlords. I don't think anyone should be allowed to own a home they don't live in for at least 2 or 3 months every year or at the very least the tax on owning one should make it impossible to profit from rental income.

[Ozyhibby]

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The council used to be that rental business. It worked very well until Thatcher destroyed it. I'm not convinced the private sector does a great job of providing the accommodation needed and that would particularly go for these volume landlords. I don't think anyone should be allowed to own a home they don't live in for at least 2 or 3 months every year or at the very least the tax on owning one should make it impossible to profit from rental income.

That’s already happening. Buy to let business is no longer economical.
And while I think we should restart building council houses, let’s not forget that councils were pretty crappy landlords back in the day.


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[RyeSloan]

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The council used to be that rental business. It worked very well until Thatcher destroyed it. I'm not convinced the private sector does a great job of providing the accommodation needed and that would particularly go for these volume landlords. I don't think anyone should be allowed to own a home they don't live in for at least 2 or 3 months every year or at the very least the tax on owning one should make it impossible to profit from rental income.

I remember the state that some councils allowed their housing stock to get into but I also know there was a number of well kept council stock that served the country well.

I’m not going to argue one way or other to be honest. Both public and private landlords can be very good or very bad and everything in between from what I can see.

I also think if someone wants to own two houses then they should be free to do so without punitive taxation but I also get the fact that too many ‘holiday homes’ can be significantly negative in some communities.

In other words I well comfy on the fence here

But that’s maybe the point there should be balance and I’ve no definitive answer as to how that equilibrium can be found. What I do know is that many of the policies of the past and the present from all parties appear to have simply made the situation worse each time.

So maybe some mega interventions are required? But if so what and how can anyone say with any confidence that such interventions will actually have the required impact…which I assume is somehow making the housing market accessible for most (if not all) at a fair income / cost ratio.

So I’ll stay nice and steady on this fence in this subject for now I think

[wookie70]

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That’s already happening. Buy to let business is no longer economical.
And while I think we should restart building council houses, let’s not forget that councils were pretty crappy landlords back in the day.


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They were by no means perfect but at least the rent was affordable and there wasn't any no fault evictions etc. It would be interesting to see if the councils winding down their in house provision of building and other trades coincided with the housing stock deteriorating. My view is that the Tories always take out investment, privatise in-house provision to increase cost and reduce service, and then sell off what belongs to the public at vastly reduced cost. The only difference in housing was there were many benefactors that were working people. The big reason though was to make home ownership the norm which made striking harder and drove up house and rent prices so the rich and banks etc would profit. Giving the workers something was a bitter pill worth swallowing for the long term gain to the rich. Many of those ex-council houses are again being rented but for a huge mark up and without the security that they once had. I'm glad that it is becoming less economical to allow others to buy houses for you. I just wish it was a deliberate policy rather than an outcome of the mismanagement of every part of society and the economy

[Andy Bee]

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They were by no means perfect but at least the rent was affordable and there wasn't any no fault evictions etc. It would be interesting to see if the councils winding down their in house provision of building and other trades coincided with the housing stock deteriorating. My view is that the Tories always take out investment, privatise in-house provision to increase cost and reduce service, and then sell off what belongs to the public at vastly reduced cost. The only difference in housing was there were many benefactors that were working people. The big reason though was to make home ownership the norm which made striking harder and drove up house and rent prices so the rich and banks etc would profit. Giving the workers something was a bitter pill worth swallowing for the long term gain to the rich. Many of those ex-council houses are again being rented but for a huge mark up and without the security that they once had. I'm glad that it is becoming less economical to allow others to buy houses for you. I just wish it was a deliberate policy rather than an outcome of the mismanagement of every part of society and the economy

I'm not sure of Edinburgh but in West Lothian most towns had a council yard which employed tradesmen of all skills, plasterers, roofers, joiners, decorators, plumbers, electricians etc those yards are now all but gone and they were huge employers, ironically the land they were on has now been sold off to private sector housing.

Serious question: would you be comfortable with all private landlords putting their properties up for sale i.e. only social housing left for rentals and what would you think the outcome would be?

[Ozyhibby]

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They were by no means perfect but at least the rent was affordable and there wasn't any no fault evictions etc. It would be interesting to see if the councils winding down their in house provision of building and other trades coincided with the housing stock deteriorating. My view is that the Tories always take out investment, privatise in-house provision to increase cost and reduce service, and then sell off what belongs to the public at vastly reduced cost. The only difference in housing was there were many benefactors that were working people. The big reason though was to make home ownership the norm which made striking harder and drove up house and rent prices so the rich and banks etc would profit. Giving the workers something was a bitter pill worth swallowing for the long term gain to the rich. Many of those ex-council houses are again being rented but for a huge mark up and without the security that they once had. I'm glad that it is becoming less economical to allow others to buy houses for you. I just wish it was a deliberate policy rather than an outcome of the mismanagement of every part of society and the economy

It very much is a deliberate policy. Both the UK and Scottish governments have said so at the time of their changes that the policy was to discourage private landlords. It’s been SNP policy for a long time and the Greens have just cranked it up a bit. George Osbourne’s changes were to force small investors out in favour of large investors such as pension funds etc. They paid big dollars to the Tories for those changes. Its why you see all the student flats getting built. These things don’t just happen by accident.
Also, no fault eviction is long gone in Scotland. In fact evictions are banned totally just now in Scotland. It’s one of the reasons rents are rising faster here than in England. The rent freeze is the biggest reason.


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[wookie70]

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I'm not sure of Edinburgh but in West Lothian most towns had a council yard which employed tradesmen of all skills, plasterers, roofers, joiners, decorators, plumbers, electricians etc those yards are now all but gone and they were huge employers, ironically the land they were on has now been sold off to private sector housing.

Serious question: would you be comfortable with all private landlords putting their properties up for sale i.e. only social housing left for rentals and what would you think the outcome would be?

I would be quite happy if the council had a way of CPOing private rental properties so they were in control of purchase prices. I'd also like to see a controlled crash of housing prices with taxes used to make any second or further homes reduce in value drastically and the market reduce over time. Get housing, both bought and rented, back in line with wages and I would go further when they have reset and have both rent control but also house price control.

More secure tenancies for a lower price if done correctly would be the outcome if the council owned all rental properties. That would require resources and a solid plan and neither are likely given the way resource is syphoned off and the lack of any planning from government beyond a single election. It would be very difficult now as all the infrastructure that maintained housing has gone. Lots of land, as you said sold off, so harder to create new developments. The public also seem to think their house being worth huge sums is good for them. It is if you own more than one but a house is worth a home if you only have one and the general direction of travel is upsizing so that means high prices are bad.

[Ozyhibby]

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I would be quite happy if the council had a way of CPOing private rental properties so they were in control of purchase prices. I'd also like to see a controlled crash of housing prices with taxes used to make any second or further homes reduce in value drastically and the market reduce over time. Get housing, both bought and rented, back in line with wages and I would go further when they have reset and have both rent control but also house price control.

More secure tenancies for a lower price if done correctly would be the outcome if the council owned all rental properties. That would require resources and a solid plan and neither are likely given the way resource is syphoned off and the lack of any planning from government beyond a single election. It would be very difficult now as all the infrastructure that maintained housing has gone. Lots of land, as you said sold off, so harder to create new developments. The public also seem to think their house being worth huge sums is good for them. It is if you own more than one but a house is worth a home if you only have one and the general direction of travel is upsizing so that means high prices are bad.

If even half that happened I doubt another house would get built in the UK. Almost everything you posted was nonsense that would have the opposite effect to which you intend.
There is nothing stopping the state from building houses now. They should get on with it.


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[Ozyhibby]

https://twitter.com/s8mb/status/1657...dxJXScFNwz8V4A


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