UK House prices: News & Views

[TrueNorth]

If I could find a decent, big enough house to rent, I would be all over it like white on rice. I am renting at the mo, having STR, and am dying to get a place to call my own. I think it is the area we have just moved to (north of england), there is very little on offer. People are not interested in renting out their nice homes, as they need to sell them to get another place to live.

 

In the biggest flat I could find (a large 2 br) I am feeling very squeezed and seriously thinking of buying for the first time since I sold. Places we are looking at are big vacant houses, whose owners have moved "down south" and who haven't yet shifted their homes here.

 

It's no doubt too soon to buy, as I am anticipating further falls in the market, but I am just fed up renting.

[Carlton]

...The simple solution is to create a legal and tax climate where people no longer want to buy a house because their needs are met through renting - long term security of tenure with built in ceilings on rental increases and with the balanace of power firmly tipped towards the renter. A tax environment that makes home ownership a very expensive luxury and which will reward investment in small and medium sized businesses. This is exactly the situation that exists in Switzerland - the population there invest their money in thriving Swiss businesses and rent throughout their lives. The government actively discourages home ownership through taxation. The only people I knew who owned their own homes in Switzerland were foreign tax exiles. Its also interesting to note the shift in attitude in Ireland (which has the highest levels or home ownership in the world) - where mortgaged property has gone from being considered an "asset" to rightly being seen as a liability.

 

It would be very easy to change the attitude of the population from pro home ownership to pro renting with a few straightfoward changes to the tax code and pension arrangements. Just think of all the billions currently being "invested" into unproductive property that could be use to finance businesses that actually create and produce things...

 

I don't think governments need to do anything to make home-ownership unattractive or prohibitively expensive. Making it a very expensive luxury would further entrench the power of corporations. If I had to choose between "mortgage slavery" and "rent slavery," the former is an easy choice to make. Mortgages end; rent doesn't.

 

Yes, governments have done too much pumping up the housing sector, but we don't need to swing to the other extreme.

[drbubb]

If I could find a decent, big enough house to rent, I would be all over it like white on rice. I am renting at the mo, having STR, and am dying to get a place to call my own. I think it is the area we have just moved to (north of england), there is very little on offer. People are not interested in renting out their nice homes, as they need to sell them to get another place to live.

 

In the biggest flat I could find (a large 2 br) I am feeling very squeezed and seriously thinking of buying for the first time since I sold. Places we are looking at are big vacant houses, whose owners have moved "down south" and who haven't yet shifted their homes here.

Prices are cheap up North.

If you are spending "london housing currency", you get plenty for your money.

[drbubb]

...Mortgages end; rent doesn't.

Yes, governments have done too much pumping up the housing sector, but we don't need to swing to the other extreme.

Only if you pay them off.

It is a way of buying a property on an installment plan. Few folks hold until they make the last payment.

 

Cash buyers make the last payment on day one.

[BoldAsBrass]

Shortly after the start of the great house price crash / recession of the late 1980s, I decided to downsize (to get the mortgage down). This involved moving about 20 miles further away from London - to an area we didn't know at all - but where house prices were a lot lower. And, of course, this was (can you IMAGINE this) before the internet!

 

So, agent rings up and tells us about a fantastic house new on the market (blah, blah, etc.) and I duly took time off work to go and view it with my wife. The garden was very short - about 30 feet I guess and at the end was the ubiquitous leylandii hedge.

 

We were standing at the bottom of the garden looking back at the house, chatting to the agent, when a noise of massive intensity and volume happened instantaneously. I, literally, hit the deck in terror. As a train spotter when I was a lad, I realised after a second or two of trying not to piss my pants what it was. Standing about 10 feet from an express train doing 100 m.p.h. that you cannot see coming is an extremely intense experience.

 

My wife had almost dropped our son when it happened and was standing there hugging him to her as if her life depended on it. My son was bawling like a banshee and I, as I say, was shaking like a leaf. I said to the agent 'why the **** didn't you warn us about that?' and he said 'If you tell people about it it puts a lot of people off!'

 

Yet people buy them. Baffles me.

[BoldAsBrass]

There was a phone in on Radio 2 about this the other day and some chap rang in very pleased with himself. He rented a cottage on an estate somewhere (up North I think) - the rent was low, he'd been there for 18 years, didn't have to worry about bothering himself with repairs etc.

 

The host of the show asked him how he was going to pay the rent when he retired - and he said 'housing benefit'. So in this new 'renting' society we are developing, people are going to work for 40 odd years and pay their rent - and then expect other people to pay their rent for 20 years in retirement. What about the landlords - don't they have to do anything? Just borrow some money from a bank, buy a property and get other people to pay you rent forever.

 

Which makes the whole argument about buying/owning nonsensical. The fact is that most property is paid for by way of a mortgage (in the first instance). It is academic whether Fred buys it, lives in it and pays the mortgage off or Fred buys it, Pete lives in it and Pete pays Fred's mortgage off for him. And then, even when Fred's mortgage is paid off, Pete carries on paying Fred rent forever - or at least until the day when Pete can't pay anymore because he is old (retires) or sick - and the rest of us chip in and pay Fred.

 

It is truly nuts. If Fred owns the property outright and Pete is now too sick or old to work and pay Fred rent, why the hell should I pay tax so I can pay rent to Fred. F*** Fred, he owns property outright that has nothing to do with me, why should I pay him rent so Pete can live in it when he's old?

[drbubb]

...My son was bawling like a banshee and I, as I say, was shaking like a leaf. I said to the agent 'why the **** didn't you warn us about that?' and he said 'If you tell people about it it puts a lot of people off!'

 

Yet people buy them. Baffles me.

Estate Agents worry: an ugly truth may put people off.

While some here think "all should be revealed."

[drbubb]

There was a phone in on Radio 2 about this the other day and some chap rang in very pleased with himself. He rented a cottage on an estate somewhere (up North I think) - the rent was low, he'd been there for 18 years, didn't have to worry about bothering himself with repairs etc.

 

The host of the show asked him how he was going to pay the rent when he retired - and he said 'housing benefit'. So in this new 'renting' society we are developing, people are going to work for 40 odd years and pay their rent - and then expect other people to pay their rent for 20 years in retirement. What about the landlords - don't they have to do anything? Just borrow some money from a bank, buy a property and get other people to pay you rent forever.

But the Ponzi scheme that is the UK housing market and its generous benefits not last so long.

It will collapse long before that.

 

A few can "game the system" when it is a new game and not well understood, but when everyone wants to game it, it will collapse.

[BoldAsBrass]

But the Ponzi scheme that is the UK housing market and its generous benefits not last so long.

It will collapse long before that.

 

A few can "game the system" when it is a new game and not well understood, but when everyone wants to game it, it will collapse.

 

There must be a lot of people in rented accommodation that will have no way of paying the rent when they retire or get too old to work. What's going to happen to them?

[Concrete Jungle]

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.theauctio...er/20110602/119

http://www.theauctio...er/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.housepric...C+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.theauctio...er/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'll tell you now and I'll tell you firmly

I don't never want to go to Burnley

What they do there don't concern me

Why would anybody make the journey?

[drbubb]

There must be a lot of people in rented accommodation that will have no way of paying the rent when they retire or get too old to work. What's going to happen to them?

They will have to live with relatives, or in very poor housing.

Isn't this normal? Shouldn't it be normal?

Someone who maintains a good relationship with his family deserves a better life

than selfish and difficult loners, don't you think? Why have we forgotten that?

 

(My attitude is more "MORAL" than those who think the taxpayer should pay, I believe)

 

IN TOUGH TIMES of the 1930's ...

The slowdown was aggravated by a collapse in credit. In the roaring twenties, it was easy to borrow money, for building new homes or buying new cars. Some, like my grandfather who had worked as a piano tuner, got credit beyond what that they could readily service. So when the work dried up, and money got tight, the payments became impossible. In the thirties, America became glutted with repossessed cars and houses for sale. Demand for new products faded, and the wheels of industry slowed to a crawl.

 

With no pay coming in, my father's family lived for awhile on the property of his maternal grandfather, who was better off than they were. My father was very impressed by the apparent wealth of his grandparent: he possessed his own home and even a housekeeper. But there suddenly there were too many hopes riding on one old man.

 

"There was not enough room in this grandfather's house for our entire family so we were forced to pitch a tent in the front yard. We had use of the house for tending to our personal needs and for some of our meals."

 

/source: Lessons of the Grandparents, predicted hard times in 2005 (before the peak)

[John Doe]

IN TOUGH TIMES of the 1930's ...

 

Ah, but that was before QE and the IMF's backing of the UK plan B should growth stall, inflation persist etc etc..

 

If low growth comes to pass - if growth stagnates and unemployment refuses to fall back - the IMF recommends a new round of quantitative easing by the Bank of England combined with "temporary tax cuts" aimed at people on low incomes, investment and job creation.

 

This is in line with what senior coalition figures have been briefing, that the "stabilizers" - in the form of increased cyclical spending on welfare benefits - would be allowed to rise; and that they would favour more QE from the Bank over any change to the spending cuts outlined.

 

http://www.bbc.co.uk/news/business-13672752

 

You can't beat the system

 

Stabilizers! Ha

[drbubb]

Somebody has s clever business idea (how 2007-ish is this?):

 

One simple route to secure Expat Mortgages

 

Mortgage choices, lending criteria and conditions from both UK and Offshore banking groups can currently seem very restrictive. Since 2007, there are 90% fewer mortgage products available in the UK lending market. This reduced mortgage availability, coupled with more challenging application processes, means expat clients now more than ever need a simple route to the widest panel of mortgage lenders meeting their requirements.

Liquid Expat Mortgages is a world leader in introducing Expatriate clients to well established lending partners and leading financial institutions.

 

Liquid Expat Mortgages are not a lender, provider of advice or financial services. Liquid Expat Mortgages provide introductions only to financial services firms in respect of products and services not regulated by the Financial Services Authority.

 

Ulysses Fulfilment Ltd, T/A Liquid Expat Mortgages, James House, 312 Ripponden Road, Manchester, OL4 2NY,

[tallim]

Somebody has s clever business idea (how 2007-ish is this?):

 

One simple route to secure Expat Mortgages

 

Mortgage choices, lending criteria and conditions from both UK and Offshore banking groups can currently seem very restrictive. Since 2007, there are 90% fewer mortgage products available in the UK lending market. This reduced mortgage availability, coupled with more challenging application processes, means expat clients now more than ever need a simple route to the widest panel of mortgage lenders meeting their requirements.

Liquid Expat Mortgages is a world leader in introducing Expatriate clients to well established lending partners and leading financial institutions.

 

Liquid Expat Mortgages are not a lender, provider of advice or financial services. Liquid Expat Mortgages provide introductions only to financial services firms in respect of products and services not regulated by the Financial Services Authority.

 

Ulysses Fulfilment Ltd, T/A Liquid Expat Mortgages, James House, 312 Ripponden Road, Manchester, OL4 2NY,

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.

[drbubb]

Great, what could go wrong, introducing foreign citizens to unregulated money lenders in a dodgy part of Oldham.

Is that Oldham's financial centre?

Impressive.

[denarii]

people have spent centuries living in mud huts and similar so why should the indolent be cut off?

[John Doe]

Hometrack negative 0.1% MOM

 

Now down 11 out of 12 months.

 

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/8600320/House-prices-fall-as-sellers-become-more-realistic.html

[LauraB]

Bank chief warns of wave of home repossessions if rates rise

 

More mind-blowing stuff from those in charge

 

Britain is facing a tsunami of house repossessions as soon as interest rates start to rise, one of the country's leading bankers has warned.

 

Richard Banks, the chief executive of UK Asset Resolution (UKAR), the body that runs the £80bn of mortgages bailed out by the taxpayer during the banking crisis, also said in an interview with the Guardian that the Labour government's pleas at the start of the crisis for lenders to keep families in their homes was forcing some homeowners further into debt.

 

In a warning that the industry may have been too lenient with some of its customers, he said he believed a policy of "tough love" would be fairer to people facing long-term difficulty in keeping up payments on loans taken out when house prices were at their peak and personal incomes on the rise.

 

His warning came the day after the international bank regulator said the Bank of England, which has kept rates at 0.5% for more than two years, would have to raise rates shortly to curb inflation.

 

The Bank of International Settlements said the policy of the Bank of England, whose rate-setting committee is split over whether or not to increase borrowing costs, was "unsustainable".

 

With 750,000 customers, UK Asset Resolution, set up to run the nationalised mortgages of Bradford & Bingley and parts of Northern Rock, is the country's fifth largest mortgage lender. But 23,000 of those mortgage holders are more than six months behind with payments and Banks admitted the projections for the number of people falling behind on payments could get "scary" if lenders did nothing to prepare for higher rates.

 

"You can see if you don't do something about it, you can see a tsunami," he said. "If you don't get into the hills you could get drowned by this. If you don't manage this properly it could get very messy."

 

He regards it is an industry-wide problem, albeit one that might be concentrated at UKAR as its customers include buy-to-let landlords and so-called self-certified borrowers – those without salaried income. UKAR, through three calls centres in Crossflatts, West Yorkshire, Gosforth, Newcastle, and Doxford, Sunderland, has begun cold-calling customers it believes are at risk of falling behind on payments in an attempt to keep their mortgage payments on schedule.

 

The bank is also trying to tackle customers behind with payments for six months or more and at risk of repossession.

 

His concern about a surge in repossessions is partly the result of moves by the industry early in the 2008 crisis to grant so-called forbearance to help customers stay in homes by, for example, reducing monthly interest payments. "We as an industry, as a kneejerk reaction in the emergence of the crisis, and because the government asked us to be forbearing to customers in the hope it would all go away, we have been too lenient with some customers.

 

"It's a tough love approach," he said. "It's treating customers fairly, not nicely, because if you can't afford your mortgage you are only increasing your indebtedness. If we allow you to increase your indebtedness, that's not really fair to you."

 

http://www.guardian.co.uk/business/2011/jun/27/house-repossessions-wave-interest-rates-rise

[John Doe]

Bank chief warns of wave of home repossessions if rates rise

 

More mind-blowing stuff from those in charge

 

 

 

http://www.guardian.co.uk/business/2011/jun/27/house-repossessions-wave-interest-rates-rise

In other words, don't expect real rate rises for years.

[BoldAsBrass]

They will have to live with relatives, or in very poor housing.

Isn't this normal? Shouldn't it be normal?

Someone who maintains a good relationship with his family deserves a better life

than selfish and difficult loners, don't you think? Why have we forgotten that?

 

(My attitude is more "MORAL" than those who think the taxpayer should pay, I believe)

 

IN TOUGH TIMES of the 1930's ...

The slowdown was aggravated by a collapse in credit. In the roaring twenties, it was easy to borrow money, for building new homes or buying new cars. Some, like my grandfather who had worked as a piano tuner, got credit beyond what that they could readily service. So when the work dried up, and money got tight, the payments became impossible. In the thirties, America became glutted with repossessed cars and houses for sale. Demand for new products faded, and the wheels of industry slowed to a crawl.

 

With no pay coming in, my father's family lived for awhile on the property of his maternal grandfather, who was better off than they were. My father was very impressed by the apparent wealth of his grandparent: he possessed his own home and even a housekeeper. But there suddenly there were too many hopes riding on one old man.

 

"There was not enough room in this grandfather's house for our entire family so we were forced to pitch a tent in the front yard. We had use of the house for tending to our personal needs and for some of our meals."

 

/source: Lessons of the Grandparents, predicted hard times in 2005 (before the peak)

 

I heard a phone-in on a radio show recently - the subject was 'renting or buying - which is better' and it wittered on about how people on the continent rent all their lives (but not under 6 month poxy tenancies) etc.

 

A bloke rang in, very pleased with himself, he'd rented a cottage for 17 years (so far) from some big landowner - might have been his boss - lowish rent - didn't seem to have any prospect of being slung out - he thought people who tied big mortgages around their necks were nuts - let the landlord take the strain - do the repairs etc.

 

It was, of course, very one-sided and about as far from typical as you can get - nonetheless the presenter had the wit to ask him what would happen when he retired. He said 'I'll go on housing benefit'. Which, I must admit, pulled me up short, as they say. I'd always assumed that if you rented you would be on the street promptly if you retired and could not pay the rent but, of course, that is not the case. So you rent while you work and the rest of us are expected to pay your rent when you retire. Maybe the bloke is not so daft.

[BoldAsBrass]

From that Guardian article:

 

'"It's a tough love approach," he said. "It's treating customers fairly, not nicely, because if you can't afford your mortgage you are only increasing your indebtedness. If we allow you to increase your indebtedness, that's not really fair to you."'

 

What would have been fair was to not allow people to take on debts they could not afford in the first place. I know people have to take responsibility for their own actions - but the bloody banks should take responsibility for their stupid, greedy and indolent lending practices during the boom years. They, above all people, must be regarded as knowing that it could not last forever and they should pay the price for their irresponsible lending.

[John Doe]

Nationwide MOM 0%

 

Flat, for now. Not sure of the NSA figure.

 

http://uk.finance.yahoo.com/news/House-prices-flat-June-reuters_molt-3142278981.html?x=0

 

 

Edit** Full report here, with a few nice graphs at the end (NSA +0.6%)

 

http://www.nationwide.co.uk/hpi/historical/Jun_2011.pdf

[TrueNorth]

BBC Radio 4 "Today" segment on the demand for rental accommodation as people postpone buying.

 

Chief executive of the British Property Federation, Liz Peace, and Stuart Fraser, chairman of the Policy and Resources Committee in the City of London, debate how to tackle the shortage of affordable housing in Britain.

 

No segment mp3 of this piece, but can be heard at front end of complete show podcast:

 

Radio 4 Today

[John Doe]

BBC Radio 4 "Today" segment on the demand for rental accommodation as people postpone buying.

 

I don't know what the problem is, here, you can get a house for £10k

 

http://uk.finance.yahoo.com/news/Britain-cheapest-house-yahoofinanceuk-3448630172.html

 

(just needs a lick of paint)

[TrueNorth]

A snip at 10k!

 

Thought this was worth reading:

 

CRASH 2: Banking crisis? Wait until the UK property bust really gets going…. from a blog called "The Slog":

 

Wait til property crash. . .

 

. . . .The two reasons the UK housing crash hasn’t been enormous to date are (1) the banks have a gun to their heads from government forcing them to be tolerant of those behind on their mortgage payments; and (2) zero-rate interest policy (Zirp) has meant that only a fraction of buyers have actually handed over their keys to the provider.