Trying to buy a house in this area is near impossible

[Loz]

It's that Guardian-esque misuse of historical terms for emotional effect. See also Workfare - "slavery" and reduction of any government benefit or service- "Victorian London".

[DaveR]

To be clear, when I said that SJ should read some history re feudalism I wasn't (only) being snarky. As noted above, feudalism was rooted in the concept that personal obligation attached to possession of land. At the bottom of the pyramid were serfs who were almost like fixtures; they were attached to the land and the service they owed to the landlord was part of the asset.

The irony arising from SJ's comment is that the freedom to rent property was essentially the end of feudalism. Once there was a market for rights in land, landowners became as much prey to market forces as any one else.

[LondonMix]

Exactly DaveR. But I thin SJ is just trying to wind people up at this point.

The idea that is wrong to buy someone elses house effectively means no rental sector at all which is obvious madness. Renting has a vital role to play-- how would anyone ever people to try a new area of the country, live on their own after university etc. Moreover, not everyone wants to own at every stage of their life.

[StraferJack]

It's almost as if people take what I say, and say I said the opposite

In many a post I say hurrah for a rental market. I also say there are several reasons why people end up with multiple properties and many of those reasons are sound. Disclosure. I have been a landlord myself.

So why talk to me/about me as if I have said something else?

What I HAVE said is that, if you are lucky enough to have acquired property in the years where it's inflation is obscene, and you deliberately use that unearned wealth to buy more housing stock (no longer supply and demand there) then that is where things get whiffy

[Alan Medic]

How is buying something which increases in value 'unearned' wealth? You took a risk and it could have gone down in value and left you with a loss. Taking a risk and earning a profit is earned in my view.

[Zebedee Tring]

Heavens, is this thread still running? I would have thought that the subject would have been exhausted weeks ago.

[StraferJack]

No one takes a risk buying a house. They look at the price of the home they want to live in and decide if they can afford the payments

That's it. Wether the house goes up or down should be irrelevant. They have a home

You have a son alan. How do you expect him to buy a place in years to come?

[Jeremy]

Its a sign of the times that SJ is in the minority here!

I guess there is a line somewhere between renting out your former home for a bit, and the kind of rampant speculation which distorts the market. But I'm not entirely sure where it lies.

[Loz]

StraferJack Wrote:

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

> No one takes a risk buying a house. They look at the price of the home they want to live in and

> decide if they can afford the payments

Apart from negative equity causing you problems and forcing you to stay in a house that may no longer, for whatever reason, suit your needs.

Apart from maintenance costs - especially big ticket items. When the boiler goes and there is no landlord to ring. Or the roof is leaking.

Apart from subsidence making it virtually unsaleable and worthless.

Apart from interest rates rising considerably leading you to lose your house.

Yep, no risks at all.

[maxxi]

I think the grocery/food analogy works if (for example) there was a chronic food shortage (as there is housing) and the well-off bought up as much as they could - more than they themselves needed - then made a profit by selling it on to those who needed it.

Nothing wrong with that - it's capitalism at work, innit.

Not so sure how many buy-to-let fans there would be if housing stock was plentiful but then that's supply and demand which is also capitalism, innit.

[Loz]

maxxi Wrote:

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

> Not so sure how many buy-to-let fans there would be if housing stock was plentiful but then that's

> supply and demand which is also capitalism, innit.

The housing shortage is pretty much just a London/SE problem, but BTL is popular UK wide, so that probably answers that.

[maxxi]

Loz Wrote:

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

> The housing shortage is pretty much just a

> London/SE problem,

I think Manchester and Birmingham and Newcastle and Liverpool would disagree - but then you probably meant some other part of the UK where there are hundreds of empty houses.

[binary_star]

It's clearly not percieved as risky since there are so many people trying to do it. Pretty much anyone who can, is.

I'm sure there are a minority of people who are put off buying a house 'in case the boiler goes' but honestly, can you think of a single person who actually thinks like that?

Most people are not happy staying with family into their late twenties/thirties, or sharing with flatmates into their forties, or alternatively seeing the majority of their income swallowed up by inflated rents. Most people would bite your hand off for the chance to buy a house. But they can't.

[DaveR]

So maybe SJ can explain the morally sound circumstances in which someone can end up owning two houses and renting one out? Like if your gran (who was lovely to everyone) dies and you inherit her house, and then you decide to keep it and rent it out, though of course you charge less than market rent, and make sure you rent it out to lovely people, and if god forbid you make any money via capital appreciation you only keep a bit and donate the rest to poor Guardian readers (if you can find any).

Is that how it goes?

[Loz]

binary_star Wrote:

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

> I'm sure there are a minority of people who are put off buying a house 'in case the boiler goes'

> but honestly, can you think of a single person who actually thinks like that?

That's not what I said. SJ said "No one takes a risk buying a house." I merely pointed out that there are, indeed, risks. I never claimed they all would would be seen as deal-breakers. You need to understand and mitigate risk, and that mitigation is not necessarily to run away from the deal.

But, on the other hand, if you do not take possible interest rate changes and potential of negative equity into account when buying a house, you would be not giving these significant risks the necessary due diligence. That is why they are the basis of the new 'harder mortgage checks' that have just been implemented.

If you buy something worth hundreds of thousands of pounds thinking there is no risk, then the old adage of fools and money would spring quickly to mind.

[maxxi]

DaveR Wrote:

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

> So maybe SJ can explain the morally sound

> circumstances in which someone can end up owning

> two houses and renting one out? Like if your gran

> (who was lovely to everyone) dies and you inherit

> her house, and then you decide to keep it and rent

> it out, though of course you charge less than

> market rent, and make sure you rent it out to

> lovely people, and if god forbid you make any

> money via capital appreciation you only keep a bit

> and donate the rest to poor Guardian readers (if

> you can find any).

>

> Is that how it goes?

methinks the money grabbing, poor-exploiting, nest-feathering bastard doth protest too much - nah, I'm only kidding.

[PokerTime]

Just to support SJ a little here. There's a different between taking a risk in a market that geniunely is susceptible to the swings of genuine market forces, and buying into something that has been to a large extent shielded from normal market forces (whatever the rights and wrongs of that may be). When the recession hit at the end of the 80s, 300,000 homes were reposessed or thrown into negative equity. But the housing market didn't crash. It simply saw a dip for around three years before bouncing back stronger than ever. Sucessive governments have learnt from that which is why, in the latest financial crisis, one far worse than anything in the last 30 years, and whilst jobs have been lost, business has struggled and the economy per se has seen drastic austerity policy, the Housing Market has continued to grow and be as strong as ever.

Whilst demand and supply is definitely one factor, the transformation of housing into a sure fire high return investment through the 90's and 00's is also part of the problem. That was absolutely enabled by government deregulaton and the new mortgage products banks could dream up from that. Banks are not in business to care about who can buy a home, just that homes can continue to be bought and sold at a profit. So SJs disdain is valid imo.

[Jeremy]

maxxi Wrote:

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

> I think Manchester and Birmingham and Newcastle

> and Liverpool would disagree

Housing shortage in Liverpool? The place is full of empty houses.

[PokerTime]

That is true Jeremy, as it is in other places in the North and Midlands. It is true to say that some of the problems in London and the South East are the of a result of a south east centric economy. It's all very well telling people to move to find work but imagine if all the unemployed of the North moved to London! So for me, some of the solution lies in regenerating the economy outside of the South East, so that people want to move there. Presently we have a climate of bash the jobless, but what can the jobless do in areas if high unemployment (as much as 25% in some towns). The shift in population density accross the country over the last 50 years is a huge part of the story when it comes to the supply and demand factor. Instead of tackling that in any kind of meaningful way, we end up with hugely expensive capital projects like HS2 and vanity projects like the Olympics.

[Jeremy]

I doubt many would disagree, PT.

[mariababe]

I get updates from rightmove so having a look at what houses etc were going for noticed this shocker...

123 Choumert Road, London, Greater London SE15 4AP

20 Mar 2014

Terraced, Freehold

?999,950 Land Registry

19 Oct 2012

Terraced, Freehold

?611,000 Land Registry

In 18 months approx. its nearly 400k increase that's a lot of diy!

[Saila]

not sure it's just DIY

http://www.cityam.com/1403280687/focus-peckham-only-fools-wouldnt-invest-se15

[the-e-dealer]

Its not just DIY prices are going mad! Pity anyone who buys with a mortgage at this level. The bubble will burst!

[ultraburner]

Good post by poker.