UK House prices: News & Views

[fitkid]

Worth watching if you have not seen it even though it is now over 3 years old.

 

http://video.google.com/videoplay?docid=-8...16145694781888#

 

 

Dispatches: Britain’s Bad Housing.

48:35 - 3 years ago

What is the real reason behind Britain’s housing shortage. Is it really because of a true shortage of new houses or is there another reason. Well, like most things today, it’s really caused by powerful corporate groups lobbying the government to get their way and make sure their money making schemes go through – without any though of those who can’t find / afford anywhere to live.

[drbubb]

Street after street after street of terraced houses have been bought in towns like Preston and Bolton - tarted up with a 5k kitchen/bathroom/carpets makeover and rented to DHSS tenants for a guaranteed minimum of £395 a month - more if the local market average rent is higher.

 

So, £4.8k in guaranteed annual income for the landlords.

 

And lots of those houses were bought for 20k 10 years ago. They've already paid for themselves twice and are now real cash cows.

 

There was a program on the box years ago - must have been 2002 ish - featuring a woman in Preston who had bought her council house using Right to Buy in the late 90s. A few years later she wanted to move but decided to rent it out and buy another place for herself.

 

And, off she went. A couple of years later she had 17 properties - all within the same few streets. She bought them all on 15 year repayment mortgages. They'll be paid off in the next few years and, apart from the 70k income they must bring in, she will have - even in today's market - at least 1.5 million quids worth of property owned outright. She was, if memory serves, a hairdresser.

 

She should have run courses on how to become a property millionaire - because she's actually done it - all on borrowed money and with the government (us) paying the rent.

This government largess did improve neighborhoods (somewhat), but at a huge cost to taxpayers.

 

Now that the UK is virtually bust, they may need to un wind such generous spending. And don't be surprised to see rents fall, now that the "sucker bid" is being taken out of the market.

[drbubb]

To CTR, for his misleading signature:

(I am suspending you for 24 hours for failure to get the point.)

 

QUOTE (crushtherents @ Feb 26 2011, 12:57 AM)

39 minutes later

UNQUOTE

Get the point, Crush.

 

I was ON TOPIC there, talking about property, and the subsidies going to landlords, not attacking others on GEI.

[Kurtz]

 

BBC Libya coverage tweet, 1127: Finance columnist for the UK's Daily Telegraph Jeremy Warner tweets: "Top end of London property market apparently v busy again. Lots of Middle Eastern buyers. Wonder why."

[marceau]

Street after street after street of terraced houses have been bought in towns like Preston and Bolton - tarted up with a 5k kitchen/bathroom/carpets makeover and rented to DHSS tenants for a guaranteed minimum of £395 a month - more if the local market average rent is higher.

 

So, £4.8k in guaranteed annual income for the landlords.

 

And lots of those houses were bought for 20k 10 years ago. They've already paid for themselves twice and are now real cash cows.

 

There was a program on the box years ago - must have been 2002 ish - featuring a woman in Preston who had bought her council house using Right to Buy in the late 90s. A few years later she wanted to move but decided to rent it out and buy another place for herself.

 

And, off she went. A couple of years later she had 17 properties - all within the same few streets. She bought them all on 15 year repayment mortgages. They'll be paid off in the next few years and, apart from the 70k income they must bring in, she will have - even in today's market - at least 1.5 million quids worth of property owned outright. She was, if memory serves, a hairdresser.

 

She should have run courses on how to become a property millionaire - because she's actually done it - all on borrowed money and with the government (us) paying the rent.

 

Yeah, I remember that programme. It was one of the first things that made me aware we were heading into a bubble. I thought at the time, wow this looks easy, maybe I should try it, and then thought better of it because of the leverage and risk involved. Guess I should have just stumbled in without any research.

 

If I recall correctly she tried buying upmarket houses and found she couldn't make money. Only now do I realise that was because the gov't rent subsidy hadn't stretched that far at the time. It probably does now, what with benefit families being given house in Kensington etc.

 

People are going to look back at this period in 50 years and just shake their heads in disbelief.

 

 

[drbubb]

BBC Libya coverage tweet, 1127: Finance columnist for the UK's Daily Telegraph Jeremy Warner tweets: "Top end of London property market apparently v busy again. Lots of Middle Eastern buyers. Wonder why."

LOL

Think it will be enough to sustain the luxury end?

Those new buyers will be in for a surprise. The UK will find a way to tax them eventually. Fairness will demand it.

[Kurtz]

LOL

Think it will be enough to sustain the luxury end?

Those new buyers will be in for a surprise. The UK will find a way to tax them eventually. Fairness will demand it.

 

Desperation.

 

It's all the UK has left. A gray little island with some houses on it.

 

Just working on yet another manufacturing plant demolition and remediation in the UK, although thankfully from a long way away. A chemical production site that had been in operation since the early 1830's. Done so many of these, I feel like the UK's undertaker.

 

Now, usually it's known in advance what the next intended site use will be and even the final development plan (need all this for remediation and groundworks design) but I've noticed on this and another one recently no one knows what to do with the site. There is no appetite for building houses there right now.

[drbubb]

Now, usually it's known in advance what the next intended site use will be and even the final development plan (need all this for remediation and groundworks design) but I've noticed on this and another one recently no one knows what to do with the site. There is no appetite for building houses there right now.

A CRASH is needed to clean out certain excesses, and unhealthy expectations.

 

And then maybe, there is room for more sensible taxation policies - a la Georgists / Fred Harrison

[BoldAsBrass]

Yeah, I remember that programme. It was one of the first things that made me aware we were heading into a bubble. I thought at the time, wow this looks easy, maybe I should try it, and then thought better of it because of the leverage and risk involved. Guess I should have just stumbled in without any research.

 

If I recall correctly she tried buying upmarket houses and found she couldn't make money. Only now do I realise that was because the gov't rent subsidy hadn't stretched that far at the time. It probably does now, what with benefit families being given house in Kensington etc.

 

People are going to look back at this period in 50 years and just shake their heads in disbelief.

 

Yes, I think you're right. She had a son who was going to do the same as her and they started him off with a flash, new-build, 'executive' flat which they couldn't make money out of and, I think, sold.

 

I'd love to know how many 2 up, 2 down terraces were bought in Newcastle, Leeds, Wigan, Blackburn, Bolton, Liverpool etc. etc. for 15k in the late 90s for which the Government is still handing over £395 a month - every month - year in, year out - in rent.

 

It's pure genius. Let's sell off the council houses and then let private landlords buy up cheap housing and pay them the cost of the house in rent every 4 to 5 years - FOREVER.

 

Where would we be without the government to run things for us?

[John Doe]

And it's back!

 

The 90% mortgage makes a return to the UK.

 

And guess who's offering it?

 

Yep, the Northern Rock!

 

http://www.guardian.co.uk/business/2011/fe...-cent-mortgages

 

[Jake]

Yes, I think you're right. She had a son who was going to do the same as her and they started him off with a flash, new-build, 'executive' flat which they couldn't make money out of and, I think, sold.

 

I'd love to know how many 2 up, 2 down terraces were bought in Newcastle, Leeds, Wigan, Blackburn, Bolton, Liverpool etc. etc. for 15k in the late 90s for which the Government is still handing over £395 a month - every month - year in, year out - in rent.

 

It's pure genius. Let's sell off the council houses and then let private landlords buy up cheap housing and pay them the cost of the house in rent every 4 to 5 years - FOREVER.

 

Where would we be without the government to run things for us?

It hurts to think that at that time I was studying for my nearly utterly useless degree when it would have served me better to have been leveraging up to the max.

Hats off to those who saw the opportunity back then!

[neil324]

Latest land reg

 

 

London - MoM 1.6 YoY 2.4

South West - MoM 1.6 YoY -0.4

South East - MoM 0.5 YoY -0.1

East - Mom 0.4 YoY -0.2

West Midlands - MoM -0.4 YoY -1.4

East Midlands - MoM -0.5 YoY -1.9

North East - MoM -0.6 YoY -2.5

Yorkshire & The Humber - MoM -1.3 YoY -2.6

North West - MoM -2.0 YoY -2.1

Wales - MoM -4.2 YoY -6.1

 

North south divide.

 

Look at Wales

[neil324]

And it's back!

 

The 90% mortgage makes a return to the UK.

 

And guess who's offering it?

 

Yep, the Northern Rock!

 

http://www.guardian.co.uk/business/2011/fe...-cent-mortgages

 

Meh.

 

Wait till they roll out the 125%

[G0ldfinger]

Latest land reg

YoY: subtract 5% inflation. ---> CRASH!

[Concrete Jungle]

The site one of our clients sold to a housebuilder at the peak of 2007 still sits empty. The previous industrial buildings have been demolished nearly 4 years ago, but the 'luxury young professional' shoeboxes have not (yet) materialised.

 

Desperation.

 

It's all the UK has left. A gray little island with some houses on it.

 

Just working on yet another manufacturing plant demolition and remediation in the UK, although thankfully from a long way away. A chemical production site that had been in operation since the early 1830's. Done so many of these, I feel like the UK's undertaker.

 

Now, usually it's known in advance what the next intended site use will be and even the final development plan (need all this for remediation and groundworks design) but I've noticed on this and another one recently no one knows what to do with the site. There is no appetite for building houses there right now.

[Van]

And it's back!

 

The 90% mortgage makes a return to the UK.

 

And guess who's offering it?

 

Yep, the Northern Rock!

 

http://www.guardian.co.uk/business/2011/fe...-cent-mortgages

 

Most of the major lenders have had 90% mortgages for a while- you'll pay at least a 6% rate with such a small deposit, though.

 

[Meralti]

Land registry figures for January

 

+0.2% MoM

-0.9% YoY

 

See more details here

[James]

 

 

Quote: "Northern Rock has announced that it is to return to some level of riskier lending by offering mortgages of up to 90% of a property's value for the first time since it was nationalised. It is offering a two-year fixed rate home loan at 5.99%, a three-year loan at 6.49% and a five-year loan at 6.59%."

 

House prices: All property types 'dip in value'

[John Doe]

Most of the major lenders have had 90% mortgages for a while- you'll pay at least a 6% rate with such a small deposit, though.

 

Yep, but historically that’s still quite low for a FTB. (I had a capped 6% in early 2001).

 

Also, 10% deposit was the norm before the madness.

 

Quote: "Northern Rock has announced that it is to return to some level of riskier lending by offering mortgages of up to 90% of a property's value for the first time since it was nationalised. It is offering a two-year fixed rate home loan at 5.99%, a three-year loan at 6.49% and a five-year loan at 6.59%."

Wow, that's quite good

 

On the other hand, this article about bank lending in the future looks more interesting.

 

Annual real estate lending in the U.K. may fall to £100bn pounds over the next three to five years from £300bn pounds now, he added.

 

http://uk.finance.yahoo.com/news/UK-banks-...667934.html?x=0

[DoctorSolar]

Wow, that's quite good

 

Is it? The flat I rent would sell for at least £222k.

With a 10% deposit you need to borrow £200k to buy this place.

 

Mortgage payments at 6.59% over 25 year term work out at

 

Repayment: £1361

Interest only*: £1098

 

My monthly rent is £750 and I don't have to pay anything for repairs and maintenance etc..

 

So at a bare minimum I am saving £350 a month relative to this "deal". Interest is after all "money down the drain"

 

But then factor in the fact that my deposit is earning me cash and well buying this place is not good at all.

 

 

[John Doe]

Is it?

 

Compared with the best 5 year fixes with LTV 60%, yes.

 

Also, if you think inflation is here to stay, yes.

[drbubb]

Is it? The flat I rent would sell for at least £222k.

With a 10% deposit you need to borrow £200k to buy this place.

Why compare Renting with buying on a 90% mortgage?

 

You should calculate off a 100% mortgage (even if you cannot get such a mortgage.)

 

The point is: to "pay yourself" something for the equity you invest

 

NRC management must have "rocks in their heads" to go back to lending so aggressively.

What punishment could be suitable for such recklessness? The incentives must be wrong.

 

If the bank goes bust a 2nd time, I think top management should lose their pensions, to help cover any bailout

[John Doe]

NRC management must have "rocks in their heads" to go back to lending so aggressively.

I think it is under government pressure (as fully owned by uk tax payer).

[drbubb]

I think it is under government pressure (as fully owned by uk tax payer).

Then it represents a potential wealth transfer.

 

The "winners" are those selling at inflate prices IMHO

[Icarus]

I have seen a 41% figure.

That's 41% of the tenants of private landlords, are paid for by the state.

 

This is a ridiculously high figure IMHO, which is one of the things that triggered my "blood from a stone comment."

Taxpayers are bleeding to support landlords, made rich by aggressive monetary policy. (Vampires, you might say.)

 

 

Housing benifit is going to be phased out in 2013.

 

'The universal credit will see existing out-of-work and in-work entitlements, such as Jobseeker's Allowance, Income Support and Housing Benefit, paid as a single lump sum although it is unclear how many benefits will be included in the new payment.'

http://www.bbc.co.uk/news/uk-politics-12486158

 

I expect this will lead to a crash in the btl market. Given the choice some people may chose to share houses or live in cheaper 'bedsit' type accomodation and keep a larger portion of theior incomes. This may lead to many rental houses being split into smaller units.