House prices

[Biker Biggles]

Abolishing stamp duty might have some effect,but building more houses is a non starter at present.Construction firms are teetering on the edge now because they cant sell what they have built as the credit crunch has totally stifled money supply.
Prices will really start to tumble when we get the effect of forced sales due to reposessions and unemployment.No option to hold on for better times then,and properties will go at auction to the highest bidder.
Its not enough to have demand in the form of aspirations to own property,there has to be real demand in the form of wealth and finance to satisfy the aspiration.That appears to be absent in our economy now,and I struggle to see where it will come from in the future.

Originally Posted by SoulKiss

Your solution does nothing

All that will happen is that the houses built will be shared ownership so that the value of the property is unaffected, but people will not actually own anything.

Also are these new houses going to spring up from no-where overnight, this situation has been brewing for 5 years plus, and look no new tracts of new homes, due to developers knowing a good thing when they see it and NIMBYism from the people who already have houses but dont want more built near them.

There are more than enough homes in the UK already for those that want to buy IF there was less Buy-to-Let "Investors". It seems to me that regulation of THAT sector to the point where people had to get out would hurt the fewest people in the long run, and is technically affecting businesses (which is what Buy-to-let is) rather than people.

As for the sour grapes comment - why make things personal?

I am simply giving my viewpoint from the view of someone who looked at the situation and made a decision to not get involved.

We have a lack of space in the UK. Too many people, more an more living on their own and with too few houses to go around. It was a greater demand for properties combined with a lack of supply that the caused increased competition for them, and easily available credit gave people the ability to bid for the huge prices.

Oh, and making thousands (millions?) of people homeless when their land lord is forced to sell isn't a solution either. As BB says, those that rent might like to buy, but that doesn't necessarily mean they're in a position to.

[SoulKiss]

Originally Posted by Flamin_Squirrel

We have a lack of space in the UK. Too many people, more an more living on their own and with too few houses to go around. It was a greater demand for properties combined with a lack of supply that the caused increased competition for them, and easily available credit gave people the ability to bid for the huge prices.

Oh, and making thousands (millions?) of people homeless when their land lord is forced to sell isn't a solution either. As BB says, those that rent might like to buy, but that doesn't necessarily mean they're in a position to.

How can you in your previous post say that the solution is to build more houses, yet turn around and say there is no room to build more houses in this post, some consistency please.

The only reason there is a greater demand is because more and more people are not living in the properties they own - as I said take out multi-ownership and you you have enough (well maybe just more, but a lot more) to go round.

If thousands become homeless because they were greedy - then so be it - they put themselves into the hard place by getting onto the bandwagon instead of not playing that game and forcing prices to cool.

Why should anyone be concerned over what a persons greed or short-sightedness got them into, they chose to buy while the market was grossly over-inflated (by up to a factor of 3 according to experts), so can now pay the price.

Originally Posted by SoulKiss

How can you in your previous post say that the solution is to build more houses, yet turn around and say there is no room to build more houses in this post, some consistency please.

The only reason there is a greater demand is because more and more people are not living in the properties they own - as I said take out multi-ownership and you you have enough (well maybe just more, but a lot more) to go round.

If thousands become homeless because they were greedy - then so be it - they put themselves into the hard place by getting onto the bandwagon instead of not playing that game and forcing prices to cool.

Why should anyone be concerned over what a persons greed or short-sightedness got them into, they chose to buy while the market was grossly over-inflated (by up to a factor of 3 according to experts), so can now pay the price.

I was being consistant. We have a shortage of space, so we're going to have to think about building in places we'd perhaps rather not. Or build more flats, whatever.

Enough house to go around if we get rid of buy to let? Got anything to back that up?

As for making people homeless, I wasn't talking about 'greedy' house owners. I was talking about their tenants. Land lord sells, where do they go? Buy? Good chance it'll still be out of reach for them. Rent somewhere else? Well if you get your way and ruin all land lords, congratulations, you've just decimated the letting market, so rent will cost you as much as a mortgauge.

[SoulKiss]

Originally Posted by Flamin_Squirrel

I was being consistant. We have a shortage of space, so we're going to have to think about building in places we'd perhaps rather not. Or build more flats, whatever.

Enough house to go around if we get rid of buy to let? Got anything to back that up?

As for making people homeless, I wasn't talking about 'greedy' house owners. I was talking about their tenants. Land lord sells, where do they go? Buy? Good chance it'll still be out of reach for them. Rent somewhere else? Well if you get your way and ruin all land lords, congratulations, you've just decimated the letting market, so rent will cost you as much as a mortgauge.

No solid figures to back up - but look at the fact that letting ads outnumber the sales ads and I would say I was onto something.

Surely if prices drop, then the amount for a mortgage will also drop (once the banks get themselves sorted out), so mortgage costs will be equal or less to what they are paying now to rent - I know that if house prices were reasonable what I pay in rent could EASILY buy something - the factor against me was that 5x my salary wouldnt buy me anything in an area I would want to live in, and I wasn't prepared to lie to get the mortgage that my current rent would pay for which would have gotten a propery that was about 7x my salary.

Then in the last few years I didnt even bother keeping track because I saw this coming.

Yes, people are going to take a hit for this, thats unfortunate, but some people have also done VERY well on it in the same time.

Remember the value of your investment can go down as well as up.

Originally Posted by SoulKiss

No solid figures to back up - but look at the fact that letting ads outnumber the sales ads and I would say I was onto something.

No, all that tells you is that noones mad enough to sell in a declining market if they can avoid it.

Originally Posted by SoulKiss

Surely if prices drop, then the amount for a mortgage will also drop (once the banks get themselves sorted out), so mortgage costs will be equal or less to what they are paying now to rent - I know that if house prices were reasonable what I pay in rent could EASILY buy something - the factor against me was that 5x my salary wouldnt buy me anything in an area I would want to live in, and I wasn't prepared to lie to get the mortgage that my current rent would pay for which would have gotten a propery that was about 7x my salary.

How much money you have is meaningless unless you have something to compare it to - ie, how much other people have. You already understand this, as you pointed out the madness of people thinking they were rich because their house had gone up in value.

So, house prices are dropping because people can't afford the prices that they were being sold at. If house prices halved, that doesn't mean that houses have become twice as affordable as they were, it means that everyones got half the money to spend on houses they used to. So no, mortgagues won't be easier to get.

Maybe there needs to be a changing of mentality in respect of property ownership in the U.K. As mentioned land shortage will always ensure that a false premium has to be paid to own.

Maybe there should be more of a switch to purpose built residential blocks? Who needs a garden anyway? Much better to have one that is tended by a gardener paid for by the community? An underground garage would be provided along with lockable store room for each dwelling.My argument being that instead of a single or perhaps semi dwelling being built on a piece of land, a block providing say 12,(3 stories with 4 apartments per floor)

Trust me, not all apartment communities are what you see in inner city slums.Many are of the best quality and extremely attractive homes.

Dont forget most investors are professionals and would probably be the ones who will come out of this better than the avg joe that is up to their neck in debt. If you have half a dozen buy to lets that you have built up over the last 6 years there is a good chance there is a lot of equity sitting in them still. So long as interest rates dont start to peak which there is no reason to panic. If anyone is losing money then it will be from having to sell right now.

I doubt prices will drop down to less than what they were a few years ago and as there is a shortage of housing the real thing pushing the market down is the banks being cautious and not giving out money to buy. Once some stability comes back into the banks then it will continue to rise again.

Right now however the only thing to look at changing now should be our own personal earning potential. We should be focusing on increasing this rather than sitting on the fence waiting for the government to decrease house prices buy bringing in new legislation. If things are going up in price then someone is earning better money?

[SoulKiss]

Originally Posted by TuonoGrant

Dont forget most investors are professionals and would probably be the ones who will come out of this better than the avg joe that is up to their neck in debt. If you have half a dozen buy to lets that you have built up over the last 6 years there is a good chance there is a lot of equity sitting in them still. So long as interest rates dont start to peak which there is no reason to panic. If anyone is losing money then it will be from having to sell right now.

I doubt prices will drop down to less than what they were a few years ago and as there is a shortage of housing the real thing pushing the market down is the banks being cautious and not giving out money to buy. Once some stability comes back into the banks then it will continue to rise again.

Right now however the only thing to look at changing now should be our own personal earning potential. We should be focusing on increasing this rather than sitting on the fence waiting for the government to decrease house prices buy bringing in new legislation. If things are going up in price then someone is earning better money?

Of course they are - and they all work within about 1 square mile, about half a mile from me.

When people get bonuses that could buy streets of houses in other parts of the country then there is a problem.

Those of us in London have the high price thing to look at, but we also probably all know at least one person earning money at a rate that can be easily expressed as a fraction of £1,000,000.

However not everyone can be earning that kind of cash, certainly not the cleaners, etc.

[Biker Biggles]

Good point there.When you have people earning so much money they could retire on the proceeds of one years salary and bonus you have a situation where there are no consequences for these people when they screw up.Who cares if I cause a financial collapse hitting millions of ordinary people?Ive made my pile and Im all right jack.Until we address that issue we are destined to repeat the errors of the past and present.