Trying to buy a house in this area is near impossible

[Loz]

StraferJack Wrote:

-------------------------------------------------------

> but if we imagine a scenario where "all"* of the

> homes which supposedly need building are built -

> who sells them and how much would they be?

I think a better question is where would they be? There is no shortage of available housing in the outer suburbs of Manchester and Liverpool, but no one really wants to live there. On the other hand, London seems to be the place most people want to live, but where can we build the necessary number of houses there?

Maybe a better approach is to work out how we can people to want to live in the places we actually have spare housing capacity? i.e. jobs.

[????]

Supply & demand innit - building enough* (and I think it's a lot) new homes makes property cheaper, or decelerates rises Taking steam out of the market itself encourages those just sitting on empty properties (and I don't think there's many of them in 'normal' residential areas to be honest) to sell. Makes people cautious about housing as a pure investment opportunities.

Why we in London (almost uniquely) avoided a significant and long term crash in 2008 is becuase there's not enough supply to satisfy demand...

[????]

Loz Wrote:

-------------------------------------------------------

> StraferJack Wrote:

> --------------------------------------------------

> -----

>

> > but if we imagine a scenario where "all"* of

> the

> > homes which supposedly need building are built

> -

> > who sells them and how much would they be?

>

> I think a better question is where would they be?

> There is no shortage of available housing in the

> outer suburbs of Manchester and Liverpool, but no

> one really wants to live there. On the other hand,

> London seems to be the place most people want to

> live, but where can we build the necessary number

> of houses there?

>

> Maybe a better approach is to work out how we can

> people to want to live in the places we actually

> have spare housing capacity? i.e. jobs.

Well the market driven answer to that is that rising property prices will do that themselves(see the Telegraph artice which concludes that London's mad prices could result in a renaissance in other cities as creatives the yopung etc move away> State intervention will not do this to any significance.

Of course, that still results in people saying they are forced out of London etc etc

[StraferJack]

"where" - yep that's a good one too Loz

I dunno - whichever way you look at it it's problematic

instinct says build houses - but is that much different to saying "people are poor, print money"?

I still think the underlying, real problem is systemic - people with property want and need property prices to be high. Building more - even if I agree with the logic in quids post - will I expect lead to just more expensive property

[Otta]

How exactly do people propose that this tax on people's "windfalls" should work? Should properties be valued yearly and home owners sent a tax bill based on any increase?

You are aware that the value of a property is meaningless unless it's actually sold aren't you?

[XIX]

mikeb,

whilst most people would agree the current rate of house price increases is unsustainable and hugely problematic for huge numbers of people, I don't think aiming to create a market at the other end of the spectrum where prices are stable and don't rise is a good thing either.

That would ensure more people are stuck with what they started with. (ie wealthier people will be able to buy within the pool of expensive houses, and poorer people will buy from the pool of cheaper houses. And not only that, but generally richer peoples' larger salaries will mean they will be able to improve the pool which they choose from faster than those who don't earn enough to save, thus increasing the distance between the two groups). Thats hardly the equitable society you want is it?

Property is one of the drivers of 'mobility' (or whatever you want to call it), and appreciation (particularly where it varies regionally) provides an opportunity for people to improve their home in a way they might not otherwise have been able to. Most people's salaries alone are not big enough to really fund a proper upsize/scale (particularly if, as you and others are suggesting, taxes on properties are increased). Clearly the market is out of kilter at the moment, so far too many people are finding it far too hard to purchase their first property and something needs to be done about it. But I don't think taxing home-owners and/or creating a stable market where value does not increase are the solutions.

You mention this tax tempering house prices if they start to rise. I still don't understand how this would work. With increased taxation, less people will sell/move, meaning less supply of property on the market.

A general point:

In trying to re-dress the balance between the 'haves' and 'have nots', we should aim for a more postive focus on what can be done to assist the 'have nots' turn themselves into 'haves', rather than a fairly simplistic 'lets tax the haves' (and therefore just push them a little further back down the scale) type attitude that SOME people seem to subscribe to.

[Jeremy]

I believe the London Assembly recently published a report calling for a housing corporation to build homes directly. It doesn't seem that far fetched to me. Perhaps purchase prices could be means-tested, so that the net result is break-even. Maybe the units could be finished to a very basic/minimal spec to keep prices down, allowing owners to upgrade and add value the properties as and when they were able to.

As for the printing money comparison... if printing money has the effect of devaluing a currency, the analogy doesn't seem so bad...

[david_carnell]

DaveR has said this is a market problem with supply and the market (i.e. housebuilders) can supply the solutions.

???? has said that a lack of building is also the issue, blamed the state and said the state should fix it and build more.

Which is correct?

[LondonMix]

PokerTime Wrote:

-------------------------------------------------------

> I did offer an answer to motorbirds Q LM. And made

> the point that most development in London over the

> last 30 years has been the wrong kind of

> development.

Not really, you said they developed the wrong type of housing. Given there is an under supply of all housing types it's hard to see how that is at the root of the issue. From the brief reading I've done to learn more about the issue has more to do with land availability, public policy, brown field development requirements, supporting infrastructure development etc. It's rather complex.

http://england.shelter.org.uk/__data/assets/pdf_file/0004/120919/pdp_building-more-and-better-homes.pdf

http://www.policyexchange.org.uk/images/publications/why%20arent%20we%20building%20enough%20attractive%20homes.pdf

For instance, Shelter (the housing and homelessness charity) research paper accuses the SouthEast Regional Assembly of under planning by 20 percent for new homes in the area needed by 2020 in the South East Plan. Part of the issue faced by regional and local govt is a reluctance to develop new homes for a variety of political issues.

For anyone genuinely interested in learning more about what the issues are I recommend reading these two source documents I've found which provide a very detailed exploration of the supply side issues. Without dealing with and understanding the supply side, a lot of the solutions being bandied about in here seem premature. Fundamentally, the UK is not developing enough houses to keep apace with the net formation of new households.

If this isn't appropriately addressed none of the demand side policies being proposed will have the desired outcome. Rent caps will simply lead to long wait lists / a black market for private rental accommodation. Taxing housing more as a stand alone policy might drive down the headline price of housing but won't make it fundamentally more affordable. For instance, if you increased stamp duty across the board, house prices would fall as people only have do much they can spend regardless of how much goes to the gov't vs the seller. However, would a drop in in the headline price induced by an increase in tax effectively make houses more affordable from the buyers' perspective? Not really. An increase in council tax will do the same as the new buyers will swap any reduction in price / lower mortgage for higher monthly tax bills. CGT won't result in any reduction in price for first time buyers but movers will have less equity to move which may again reduce headline prices but won't actually make it easier or more affordable to move.

If your idea is that the gov't should use these tax windfalls to create more housing, again, you should try to understand the supply side issues as the first step before drawing the conclusion that this is the best way to tackle the problem. I'm not saying it isn't but there is a lot if cart before the horse discussion going on here and while so e very openly admit they aren't well informed others have made some pretty self-assured statements about what needs to be done...

[LondonMix]

Also, the fact there is a shortage of homes isn't really debatable.

Anyone who has spent anytime researching this is 100 percent clear on the stats.

Dave Carnell, govt is a huge element in a complicated system but why not read Shelter's report and draw you own conclusions if you are interested.

[nxjen]

Thanks LM for bringing some realism and sanity to this thread.

[PokerTime]

I agree LadyD. Only when we look at the breakdown for age groups can we know what is really happening population wise. No of people does not equal number of households for example. A large family will show as a population of 6, which gives us more insight on the type of homes needed rather than the number. It's a complex thing to analyse correctly.

The other thing I do know about the last census is that LAs worked harder than usual to collect forms. The reason being that government funding is linked to population. Southwark repeatedly visited the large estates door to door to collect forms for example. It would be useful to know how many forms were collected compared to exisitng households for recent census data too, to know whether or not, better collection strategies have played a part in showing an increse in population.

I still think a 20% shift from rental to home ownership nationally over the past 30 years has been the driving force of prices, combined with all the other tangible reasons people have offered (deregulation etc). According to the ONS there are 26.4 million households in the uk. 20% of that is 5.2 million, which is much great than any population increase shown by the census data of the last thirty years.

Localised problems caused by migration and immigration (both of which London are subject to) are a different matter, and imo one which should be taken into consideration when formulating policy. Debates around migration often refer to net migration (where emigration equals immigration). Whilst it may be possible to balance that through legislation (we'd have to be outside of Europe to do that) controlling migration is a different matter entirely. You can't restrict free movement within the coutry if you are a free market economy. So the answer there has to lie in economically regenerating other areas, and fast. Someone mentioned all the empty homes in Liverpool and Machester. The same is true of the Midlands - all former srong industrial bases with mass employment. There's definitely been a sizeable migratory drift south from those areas. In some cities population has decreased by as much as a third or more over the last 50 years. That is a huge shift of people.

On LLW. There was huge opposition to the minimum wage before it's introoduction, and all the same arguments were presented, that it would drive small businesses to the wall. That hasn't happened. I often think the debate around minimum wgae is one of opponents protecting free market interests over labour interests. I think London could support an enforced LLW. I think most companies could pay it. We already subside low wages with tax credits and benefits. Wouldn't it be better to sudsidise genuinely struggling employers instead? I think that would cost the taxpayer far less than it does now in helping those on low wages to get by.

I agree with you Jeremy and X1X. There is no sense in taxing capital profit unless someone downsizes and has surplus equity to show for it. I think it would disincentivise downsizing too. I just don't feel that it would be a helpful policy and would have little or no impact on affordable housing shortage. There are better ways to take the heat out of the market.

I don't think anyone is calling for stagnation of house prices X1X. It's not unreasonable though to 'slow' the rate of increase in value. Appreciation over the long term is what we had before. Now we are seeing annual increases of 18% or more in some areas. Salaries though are not rising in line and that's a huge problem. It's why the goalposts on mortgage lending were changed, numerous times, to allow people to buy on higher multiples of salary, to keep the market rising. It's not sustainable long term.

There was a time when people saw buying their own home as a thing of freedom and security, and an asset to leave to their children maybe. Now we have something completely different. Buying a home is about trading up, to end with the biggest valued asset possible, to pay for a fabulous retirement. It's a fundamental change in mindset. That's a very black and white view of course, and I still think most homeowners are looking for just that, a home. But speculation is definitely part of the game in London. We are just one big monopoly board.

[PokerTime]

I entirely agree LM, with everything you write. It is all very complex. All I was trying to say with my post on development is that when you look at what's been build (housing/ flats), the market it is aimed at, and what it sells for, there has been disporpionate results compared to need. I guess my point is that private development is interested in market only (and profit) over town planning a social infrastructure. I wasn't trying to say it was the most dominent reason, just that housing need and shortage can't be left to private developers to solve (i.e. the free market) alone. There needs to be more government backed incentives.

On Land. I'm not so convinced by that one. The UK has plenty of Land. 90% of us live on just 6% of it though. There is a plan to build a new garden city , maybe we need more of those?

[mikeb]

"Property is one of the drivers of 'mobility' (or whatever you want to call it), and appreciation (particularly where it varies regionally) provides an opportunity for people to improve their home in a way they might not otherwise have been able to. Most people's salaries alone are not big enough to really fund a proper upsize/scale (particularly if, as you and others are suggesting, taxes on properties are increased)."

Your house should only "appreciate" in value if it actually gets better - there is no god-given right to house price escalation. Homeowners who wish to "trade up" should generally be happy if house prices fall overall - for the same percentage fall, the reduction in price for the bigger house is cheaper in ? terms than for a smaller house.

Stability seems better than appreciation or deprecation (though maybe at lower levels). The way to move up to a better property should not be to use a windfall (which comes at the expense of non-homeowners) but to earn more or do something tangible to improve your house.

[LondonMix]

Poker, the government poses restrictions on developing greenfield land which is a large part of the land access issue highlighted in the research. Again, this is policy driven not a market issue.

MikeB as Otta says, you can only benefit as a homeowner from falling prices if it doesn't push you into negative equity. For most homeowners who want to eventually buy a bigger house would prefer flat prices. Building equity for you move is best accomplished through mortgage payments.

Also, only those planning to leave London benefit from increasing prices or those planning to downsize. I would personally prefer to see prices that would allow my children to live in London without waiting for me and my husband to die...

[Jeremy]

LondonMix Wrote:

-------------------------------------------------------

> only those planning to leave London benefit

> from increasing prices or those planning to

> downsize. I would personally prefer to see prices

> that would allow my children to live in London

> without waiting for me and my husband to die...

Yep. I'm not sitting on stacks of equity, but even if I was, it would mean nothing unless I was going to leave London (or the SE altogether). Which is probably never going to happen. Most people realise that there's no benefit in all of this... The tales of people at parties non-too-subtly boasting about how much their house has appreciated just don't tally with my own experiences.

[PokerTime]

I agree LM, which is why I think land and planning reform is needed more than anything. No-one ever talks about land but you are right, all the majors reports and research are pointing to the same conclusions.

And I'd add to that Jeremy that even former retirement areas for ex-Londoners, like the South coast, have rocketted in price equally.

[numbers]

Deleted

[picmicnic]

Re examples of overpriced East Dulwich properties check this out.

http://m.zoopla.co.uk/for-sale/details/32769612?search_identifier=374c2d3a3d2de0d79a55f89dfe3852eb

[minder]

Crazy. But in Thursday's Southwark News a report about 'First new Heygate flats go on sale - in Singapore'

Here's the full article: Elephant and Castle: The first new homes on the former Heygate Estate went on sale nearly 7,000 miles away at the weekend.

Singapore property buyers and investors were able to learn more about the first 360 homes in Elephant Park, described as one of London's up and coming areas at an exhibition at a posh hotel in the city-state on Saturday and Sunday.

Guide prices go from ?380,000 for one bedroom units to ?460,000 for two bedroom 'apartments'.

Critics have accused Southwark Council and developers, Lend Lease of social cleansing after a chunk of social housing was lost in the sale of the Heygate, with only 76 social rents included in the new 'Heygate Masterplan'.

Southwark Council says the money made from sales such as the Heygate will fund social housing elsewhere in the borough, pledging to build 1,000-1,500 new council homes in the next four years as part of a commitment to build a total of 11,000 over 30 years.

[SteveUK1978]

This maybe purely anecdotal, but my sense is that things are cooling somewhat. Most of the properties posted on this link as being wildly overpriced haven't sold and there are lots more coming to market (the daily rightmove alerts have many more new properties than before). Yes, they are probably coming to market because owners have seen the crazy prices but perhaps with a bit more supply will come some realism that a 3br terrace is not worth ?1m (yet). Not saying prices will go down...but I sense the increase will slow and some power will shift to the buyer.

Just my view and as I say based on nothing more than a sense.

[Earl Aelfheah]

There have definitely been a couple of properties sitting on the market even after price reductions of late. I think that the local market may be cooling a little.

[MissKing]

I think it has cooled too, although the asking prices are still rising - but pre Xmas, stuff was going under offer the first weekend they were coming on the market

[Lizziespangles]

I left ED five years ago... the lure of a beautiful big period property, mortgage free and living in another city.... But I'm heading back in the next 2-3 months!! ED/Herne Hill/Forest Hill and surrounding areas are fab. I love London and although my time away was productive, I realise I don't like living away from there! I much prefer it to beaches and countryside (yawn). The grass isn't always greener - far from it. I'm house hunting and not too put off by the price rises....eeek!

[easytiger]

House prices continue to rise. Houses being withdrawn from sale only to be put back on the market for more money. 6 bed on cp rd sold for 1.4, withdrawn and now back on for 1.5. 2 bed flat near station sold for late 400's and back on selling for mid 500's. Happening alot.