tallim

I think your maths is a bit squiffy, more wine last night? I make it: 470,000 additional population / 2.3 people per household = ~205,000 households at current household density 205,000 households required - 128,000 houses added = 75,000 houses missing to maintain current household densities To put it into perspective: Total population = 62,262,000 Current density = 2.29 people per household Current households or houses = 62,262,000 / 2.29 = 27,188,646 Houses missing to maintain density = 75,000 Population density with missing households = 62,262,000 / (27,188,646 - 75,000) = 2.296 So to soak up the extra population in the current housing stock would need 6 extra people to live in every 1000 houses.

I think it's odd that they are even seen as radical, I'm not sure you can blame it on a very vocal minority either, it's become quite a pervasive mindset. "Won't someone please think of the horror of having to move house?" What's radical about people under 35 sharing a house, or that total benefits should be less than an average working household, or that the state doesn't need to control exactly how benefits are spent by having the payment relationship with the service providers? It could just be that people are scared of change, it could be that people have lost perspective when doing risk management scenarios, or it could be that people don't understand that markets adapt to changing inputs quite quickly. Who are the landlords of these low-end 1-bed flats that LHA 25-35 year olds are living in going to rent them to if they don't drop the rents to the LHA shared allowance? I'm not sure the private renters are going to take up the slack in the market. Some individuals might move, but they leave an empty house behind. For all this talk of a tight rental market there's still enough slack that I have a choice of suitable places at suitable prices I could move into tomorrow across most of the country (not true for London).

Hidden in plain sight at the bottom of the new housing starts release is a link to: http://www.communities.gov.uk/publications/corporate/statistics/netsupplyhousing200910 Net UK housing supply data!!! Annually released in October. So, we have net housing supply, we have net immigration, we just need net population change from births / deaths. That's available here as the natural change series... http://www.statistics.gov.uk/cci/nugget.asp?id=950 More detail Is this natural change being driven by birth rates, extending lifespan or both? UK total fertility rate is here http://www.statistics.gov.uk/cci/nugget.asp?id=369 Still slightly below the number estimated to be required for a consistent population in the UK of 2.075 (to allow for deaths of women before childbearing). So although births are no longer massively negative, they are still negative, leaving extended lifespan as the only driver for the natural population increase. So, go long bungalows unless you think we're about to see falling life expectancies.

Doesn't that roughly even things out, 239,000 extra people Average household size 2.29 people per household. http://www.greenenergyinvestors.com/index.php?showtopic=11696 (Interestingly, google UK result 8 for search term "uk average household size") Number of houses required for new households = 239,000 / 2.29 = 104,367 Housing completions in 12 months to March 2011 = 105,930 http://www.communities.gov.uk/publications/corporate/statistics/housebuildingq12011 Total fertility rate in the UK is less than required to replace existing population, so the net pressure on household size is coming from increasing lifespan minus the fertility rate loss? I can't find info to estimate what this would be? Edit - Also do we have a housing loss rate to offset the housing completions?

I can't find a family home in an area you'd want to live in long term that's cheaper to buy than rent. They must be appearing soon, but I can't find them. My assumptions, please feel free to alter them if you disagree: Funding mix cost 4% 90% of asking on purchase 95% of asking on rental 1% of purchase price per year in ownership responsibilities The best I ever find on the open market is that the costs are roughly equal and the places at auction are never family homes in reasonable areas. So for zero cash benefit you're becoming illiquid and taking on risk with few signs of an imminent upside. If you wish to make it mean more to me then somewhere in one of the following places: Lymm, Altrincham, Weybridge, Reading, Bath, Wetherby, Yarm or S10/S11 in Sheffield. Otherwise I'll trust your judgement on areas you know well.

Link to actual report here http://www.lslps.co.uk/documents/buy_to_let_index_jul11.pdf I thought it seemed odd that the headline was rents rising, but that's because I live in an area where they are declining. It was pretty obvious around here about six weeks / a month ago from just browsing adverts that rents started stalling or falling.

Can't find the BoE report, but this article from July 2011 says: http://www.independent.co.uk/money/mortgages/mortgage-debt-reduced-by-58bn-2306511.html I think other lending to households is growing slowly. The BoE July 2011 trends report has a couple of tables that appear to back this up, secured and consumer credit, but I'm not sure how to interpret them; http://www.bankofengland.co.uk/publications/other/monetary/TrendsJuly11.pdf I'm also going to stick my neck out and call a reversal in rental prices, does anyone have a particular flavour of rental price index they prefer?

Is that game still available to BTL guys? I thought (hoped) the application processing places had started following their rules and were getting better at weeding them out. I suppose I'll never know, because neither side is going to trumpet the fact that it's still going on. There's an auction near me that regularly has 8%+ gross yields, not much goes over top guide: http://www.theauctionpeople.co/Auctions/SummaryOfLots But it's only on the very cheap or weird stuff, I suppose you need a higher yield on the cheaper stuff because a lot of the operational and maintenance costs are the same no matter what location or size of house (within reason). I still struggle to find family houses in average locations that would give much over 4%.

Balls of steel needed to become a landlord in places like that; you only need apply if you already own a taxi firm, a chippy or the local snooker hall. Not a game for out of town hands off investment. BTL mortgage table here: http://www.money.co.uk/mortgages/buy-to-let-mortgages.htm You'll be lucky to fix at under 5% for much more than 2 years when you factor in arrangement fees of 2%+, trackers are 4%+. There's still not enough margin to make this anything more than a punt on house prices unless you're operating in poor areas, buying at auction and willing and able to handle 'demanding' tenants to keep maintenance and voids at a minimum.

I'm unsure as to how we would get much bigger real prices than 2007. I can understand why we've had real price rises as we've had transitions to double income households, falling mortgage interest rates, bigger risk appetites for investors, etc... I'm not sure what the next transition would be that would allow even higher real prices than 2007, the peak of silly multiples, liar loans and tiny mortgage interest rate spreads. Off the top of my head I'm thinking triple or quadruple income loans, double income with state subsidy loans, double income with lodger revenue loans. I'm not sure these will ever become mainstream products though?

I can't imagine it would sit well with the solictor's code of ethics, I know some solicitors are meant to be involved in odd dealings, but I can't imagine that many would put their reputation on the line for a 300 quid fee would they? This is my own version of dodgy dealings that I saw in the property section of the local free paper. Basically telling sellers to 'gift' cash to potential buyers rather than drop the price as it will help people meet LTV requirements: Key quote from the last few paragraphs: I can't find any firm evidence, but I think that major lender is HBOS.

Great, what could go wrong, introducing foreign citizens to unregulated money lenders in a dodgy part of Oldham. Is this kind of stuff beyond the reach of the FSA, or should I just not care and let the consequences come to whoever is silly enough to partake in this scheme? Disclaimer: Your kneecap is at risk if you do not keep up repayments on a mortgage or other loan secured on it.

I'd not thought about that, could be unmortgageable with less than 70 years left on the leasehold, or on a ground rent which is more than peppercorn.

Well, it's happened, the £10,000 2-up 2-down Northern terrace is back. Pugh's auction on 2nd June 2011, number 7 and number 9 Grange Street in Burnley were sold on behalf of the administrators for £8,000 and £9,500 respectively. http://www.theauctionpeople.co/Lot/Manchester/20110602/119 http://www.theauctionpeople.co/Lot/Manchester/20110602/120 Some poor mortgage lender probably lent on them valued at £47,500 each back in February 2008 according to the land registry. The street looks like a prime mortgage fraud hotspot, too many double entries for the same house on the same date, but with different prices for me to believe otherwise. http://www.houseprices.co.uk/e.php?q=grange+street%2C+burnley&n=100 Another 10 houses in Burnley at the same auction sold for between £10,000 and £20,000. Apparently 12 Herbert Street which sold for £15,500 is tenanted and producing £4,420 per annum. http://www.theauctionpeople.co/Lot/Manchester/20110602/141 Before your inner Rachman starts getting your chequebook out, tempted by that apparent 28.5% gross yield, remember that Burnley, while being in parts a rather nice faded industrial glory kind of place, in others is a racially divided hole.

I'm not sure that proposal makes any sense, the example given is a $180,000 mortgage on a house 'worth' $150,000 that for some reason the bank would be willing to sell to this scheme for $90,000 rather than foreclose to try to recover its 'worth' of $150,000 minus foreclosure costs. Does the foreclosure process really cost the bank $60,000?

I saw that minimum wage in HK was just introduced at HK$28 per hour (~£2.18) http://www.bbc.co.uk/news/business-13248027 Could a single HK person live without relying on the state, what would their living arrangement/lifestyle expectations be, what would they do without family? I think you've said before that social housing is the norm for a very large proportion of HK citizens, does it work well?

Just watched the first episode, quite shocking really, it's so far removed from any situation I've had to live in. I'm at a loss for what we do with the kind of people featured in the show. On the one hand they seem so hopeless and irresponsible that I can't imagine they'd ever be productive members of society, so paying to keep them away from me on a sink housing estate with just enough money to keep them in a poor lifestyle seems like a reasonable option. It's very hard to think of them as adults capable of rational thinking, beyond short-term gratification. But then I wonder if that system is just trapping them and making them more helpless and irresponsible? Are they actually better off living on state benefits? Inspired by a post on another website I read, I tried to calculate if someone in the UK could live a life on minimum wage without state help and the result sort of shocked me. My assumptions are based on a person living by themselves working a 37.5 hour week on minimum wage. £11,856.00 Annual Gross Income (£757.64) Income Tax (£450.89) National Insurance (£592.80) 5% Pension Contribution £10,054.67 Annual Net Pay £837.89 Monthly Net Pay Monthly Recurring Costs (£350.00) Private Rent for 1-Bed Flat (£6.00) Contents Insurance (£64.00) Council Tax (inc. 25% reduction for single person discount) (£20.00) Gas utility bill (£20.00) Electricity utility bill (£20.00) Water utility bill (£12.00) Television Licence (£110.00) Groceries (Based on £3 per day for food, plus £20 for cupboard items, cleaning supplies, toiletries, etc...) (£10.00) Medical (Medicines, Opticians, Dentist, etc...) (£55.00) Monthly Bus Pass (£667.00) TOTAL Monthly Recurring Costs £179.89 Monthly Remainder to choose how to split on; - Savings - Phone & Internet - Household items (furniture, electrical, repairs, etc...) - Clothing - Haircuts - Entertainment - Presents - Holidays I wouldn't say £40 per week in the UK after you've paid your recurring costs was living, it's just surviving really. What suprised me was quite how much tax would be taken once you've added up income tax, national insurance, council tax and VAT on purchases.

That £10,000 Terraced 2 Bed house in a Northern Town is getting closer. Unsold at auction late April and now available with an asking price of £20,000. 50 Florence Street in Burnley http://www.theauctionpeople.co/Lot/Manchester/20110428/140

I followed the live feed from a property auction in the Manchester area this afternoon, big proportion of the 70ish lots went unsold, results not posted yet, but I'd say at least 50%, 4 or 5 were no bidded and I reckon the wall was bidding on a lot of others. We're not back to the £10,000 2 bed terrace yet, but I think we're certainly well into negative land values in the crap parts of the city.

Month on Month; food down, utilities slightly up. I've certainly noticed some price falls, carrots are particularly cheap even for the season. http://www.statistics.gov.uk/cci/nugget.asp?id=19

The thing that still makes me very uneasy is when I try to consider who the underbidder would be, i.e. the theoretical person who would buy the place if I didn't and who would buy it off me if circumstances meant I needed to sell. I'd be more confident if I was wanting to buy something / somewhere that had a likely cash-rich underbidder; landlord, retiree downsizer, banker stuffed with bonuses, etc... (So that's a bungalow within 45 minutes of London that would rent at a return of 8% gross rental income )

I think whe might see a tricky situation for Government. The UK has a total fertility rate of around 1.95, it's estimated that we need 2.075 to maintain population levels, but we're seeing increasing population due to increasing life expectancy and net immigration. If the younger generation starts to emigrate in significant quantity we may get a Government that wants to respond with more immigration, but we have a Government who would find it very difficult to propose that while the population is seeing poor employment prospects. We might also see a Government implement economic tools to encourage births (ideally tax breaks, not cash), but again that will be a difficult sell for the current Government. What we will hopefully see is a country coming to terms with the fact that much of it's economic prosperity was only ever based on increasing population (like a pyramid scheme) and that many of the programs implemented on this basis are undeliverable (unfunded final salary pensions, borrowing to infinity, etc...). Then some focus could be put back on how to make this an attractive place to live and raise a family. The most worrying bit about economic emigration for me is that it would tend to take away the people we need to continue to be prosperous, you've probably proved yourself to be an ideal employee or business owner; able to think long-term, take balanced risks, etc... On a personal anecdote, 3 friends (late 20's early 30's) have emigrated in the last 2 months to Oslo (hoping for better quality of life), Beijing (because that's where the jobs are in his industry) and Dubai (because the tax system means they will have a better income), incidentally all 3 are Chemical Engineering graduates, though only 1 still works in that field. Emigration of younger people would make this population pyramid look ever more unstable.

Yes, you're correct about the 1% minimum, I'll add an edit to my earlier post. Page 65 of the budget, section 2.155, it's also based on the mean, not the median which I thought it was. If the houses averaged at £249k then the bill for either 15 individual non-FTB buyers or bulk purchasers of 15 in one go would be exactly the same at 1% of purchase price. 1% of £249k is £2,490 times 15 buyers = £37,350.

EDIT - I had to change this example because bulk purchasers must pay a minimum of 1%, thanks to Mugged Saver for pointing this out. I have changed the example to £200k for a proper comparison. Specifically with the stamp duty thing. If in a single transaction you buy 1 flat for £200k you pay 1% stamp duty, do this 15 times and you've spent £3M and paid stamp duty of £30k. If in a single transaction you buy 15 £200k flats for £3M you used to pay stamp duty on £3M at 5% = £150k, you will now pay stamp duty at 15 times the mean price which is 15 times £200k at 1% = £30k. This is the most extreme example I could come up with, but it would have applied to any multiple purchase in a single transaction that took the total value into the next tax band. http://www.hmrc.gov.uk/sdlt/intro/rates-thresholds.htm The change just allows bulk purchases to occur in a single transaction without there being a tax penalty. I think it's for 2 reasons; 1) Allow bulk purchase of existing blocks/portfolios 2) Allow banks to package up repoed houses/developments into portfolios to sell in single transactions.

I thought people might find this amusing; http://money.uk.msn.com/money-saving/photos.aspx?cp-documentid=156830900 So simple really, why isn't everyone doing this?