UK House prices: News & Views

[DoctorSolar]

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

 

Relative to other mortgages maybe. But does it offer a good enough deal that folks should buy as oppose to rent? Clearly with the numbers I have presented it doesn't stack up at all.

 

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

 

Do you mean "Also, if you think inflation is here to stay" AND believe that this will result in much higher wages as a result?

High inflation without higher wages will not help house prices one bit.

[drbubb]

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.

Great observation !

 

It is obvious when it is pointed out:

The removal of housing benefits should REVERSE the trend of falling household sizes.

 

Instead of building new homes to house parasites (whoops! those on benefits), the UK can just let free choice operate.

Hand people the money, and you will find that more people decide it makes sense to share, and suddenly the number

of houses need in the UK will go down.

[drbubb]

Great observation !

 

It is obvious when it is pointed out:

The removal of housing benefits should REVERSE the trend of falling household sizes.

Maybe the "projected" need for 2-3 million homes will evaporate:

 

Calculations (2005/6 and 2016):

 

60.0 million in 2005

22.8 million households in Great Britain

========

2.63 Ratio

 

2016 there will be:

63.5 million in 2016*

25.1 million households in Britain

========

2.53 Ratio

 

*The population of the UK is predicted to rise from 60 million in 2005, to 62 million in 2011, and nearly 65 million by 2021

 

Numbers for "English Households" are lower:

"from 3.1 in 1961 to 2.29 today"

 

More Data - UK Govt forecasts:

 

,,,Great Britain /

Household numbers to 2001- / Household projections 2006-21

 

Year ------- 1981 : 1991 : 2001 / 2006 : 2011 : 2016 : 2021 :

Gr.Britain : 20.18, 22.39, 24.14 / 25.29, 26.20,

,, London : 02.64, 02.84, 03.17 / 03.25, 03.38, 03.52, 03.65,

,, So.East : 02.64, 03.03, 03.35 / 03.57, 03.74, 03.91, 04.06,

,, So.West: 01.64, 01.90, 02.10 / 02.21, 02.32, 02.42, 02.52,

= =

,England : 17.31, 19.21, 20.75, / 21.73, 22.52, 23.31, 24.00,

,Wales....: 01.02, 01.13, 01.19, / 01.24, 01.28, 01.31, 01.34,

,Scotland : 01.85, 02.05, 02.19, / 02.31, 02.41,..,..,

 

/source: http://www.statistics.gov.uk/cci/nscl.asp?id=7482

 

/posted: http://tinyurl.com/gpc-hhsize

[drbubb]

I think the Coalition has wisely observed that:

 

+ The REAL beneficiaries of excessive housing benefits were Private Landlords

+ Give people the money, without strings attached, and they will spend it differently

[BoldAsBrass]

Great observation !

 

It is obvious when it is pointed out:

The removal of housing benefits should REVERSE the trend of falling household sizes.

 

Instead of building new homes to house parasites (whoops! those on benefits), the UK can just let free choice operate.

Hand people the money, and you will find that more people decide it makes sense to share, and suddenly the number

of houses need in the UK will go down.

 

Sounds like a recipe for slums to me.

 

I am, unfortunately, old enough to remember the conditions some of my uncles, aunts and cousins endured in Brixton in the post war years. 7 of them living in 2 rooms in the basement of a terraced house. 2 more families on the floors above. Damp, wallpaper peeling off the wall, lino with holes in it, threadbare mats, a smell and a 12' x 12' yard out the back that was always full of washing. No housing benefit in those days.

 

After a visit we couldn't wait to get back to our council house with its 100' back garden and a recreation ground behind it. Seemed like paradise at the time. Now its pretty much a no go area.

[drbubb]

Sounds like a recipe for slums to me.

 

I am, unfortunately, old enough to remember the conditions some of my uncles, aunts and cousins endured in Brixton in the post war years. 7 of them living in 2 rooms in the basement of a terraced house. 2 more families on the floors above. Damp, wallpaper peeling off the wall, lino with holes in it, threadbare mats, a smell and a 12' x 12' yard out the back that was always full of washing. No housing benefit in those days.

 

After a visit we couldn't wait to get back to our council house with its 100' back garden and a recreation ground behind it. Seemed like paradise at the time. Now its pretty much a no go area.

People will have a choice how to spend the money.

Some will spend it badly. Others will spend it well.

 

Why should "poor areas" be reserved for the working poor - as now ?

[BoldAsBrass]

People will have a choice how to spend the money.

Some will spend it badly. Others will spend it well.

 

Why should "poor areas" be reserved for the working poor - as now ?

 

Are you under the impression that poor areas are populated by the working poor and that those on housing benefit are all renting nice houses in Kensington?

 

I know there have been a few examples of this in the press - but in the area of West London I grew up in - the whole area is a mix of the working poor and the unemployed poor - some on housing benefits, some not. But all pretty hard up and with some real poverty in the mix. My youngest brother never made it out of there - I hate it there - I feel that it sucks the life out of you just being there. The people mostly have this terrible pale, pinched down-trodden look about them.

 

I'm not sure what you think is going to happen when the housing benefit rules change ... but I'm pretty sure that what you are expecting is the opposite of what will actually happen.

 

We'll move back in time to slums - simple as that.

 

What I don't understand is why, in a country full of unused land, we can't organise ourselves so that everyone has decent accommodation without having to mortgage their soul to the devil for their whole working lives.

[John Doe]

Relative to other mortgages maybe. But does it offer a good enough deal that folks should buy as oppose to rent? Clearly with the numbers I have presented it doesn't stack up at all.

Nor has it for many years, I don’t think the figures have stacked up since about 1998.

 

Do you mean "Also, if you think inflation is here to stay" AND believe that this will result in much higher wages as a result?

High inflation without higher wages will not help house prices one bit.

 

If inflation stays, then it is inevitable that wages will start to rise. It is a myth to think people will just sit back and allow their incomes to fall year on year. They will stand it for a while, especially while scared for their jobs, but the point will be reached when they say enough is enough.

 

This is already happening in the private sector and will eventually spread to the public sector.

 

Either that or the alternative, mass industrial action (and maybe worse, which helps no-one) as people get poorer and poorer. The government know this.

[John Doe]

Are you under the impression that poor areas are populated by the working poor and that those on housing benefit are all renting nice houses in Kensington?

 

I know there have been a few examples of this in the press - but in the area of West London I grew up in - the whole area is a mix of the working poor and the unemployed poor - some on housing benefits, some not. But all pretty hard up and with some real poverty in the mix. My youngest brother never made it out of there - I hate it there - I feel that it sucks the life out of you just being there. The people mostly have this terrible pale, pinched down-trodden look about them.

I know exactly what you mean (different city, similar story).

 

It's clear from some of the naive comments raised, that many here have never even been to places like this, let alone lived there.

 

I remember Paddy Ashdown (Ex Lib Leader) once went to live in Moss Side (a sink in Manchester) for a few months. He told afterwards how he was more terrified than when he was fighting wars in the jungle. He also added that even through all that, he still knew that he would be going back to his comfy home. The people that live there know they are stuck.

 

Perhaps it should be mandatory education to have to live in one of the sink estates for a few months, a bit like national service. It would make some posters realise how hope, ambition and drive can be crushed and fade and why people "give up".

 

Great observation !

 

It is obvious when it is pointed out:

The removal of housing benefits should REVERSE the trend of falling household sizes.

 

Instead of building new homes to house parasites (whoops! those on benefits), the UK can just let free choice operate.

Hand people the money, and you will find that more people decide it makes sense to share, and suddenly the number

of houses need in the UK will go down.

As usual, the headline is missleading. It's only being repackaged and renamed. Not removed.

[wee Jinky]

What I don't understand is why, in a country full of unused land, we can't organise ourselves so that everyone has decent accommodation without having to mortgage their soul to the devil for their whole working lives.

 

C'mon you do understand why,poverty is essential for the wealthy to succeed

It drives the poor to escape from their misery by working harder for their masters

and introduces the fear to the middle classes not to take their foot of the pedal

lest they end up in the gutter,its the carrot and stick approach and it works very well

(for the wealthy)

 

 

[John Doe]

Mortgage approvals have just "unexpectedly" jumped to their highest level for a year. BoE Figures.

 

Nationwide report MoM up 0.3% Crash cruise speed?

 

What a crazy country.

 

House prices "should" be down about 33% from peak. Yet, here they are level (nominal).

 

The UK market has defied logic for decades.

 

C'mon you do understand why,poverty is essential for the wealthy to succeed

It drives the poor to escape from their misery by working harder for their masters

and introduces the fear to the middle classes not to take their foot of the pedal

lest they end up in the gutter,its the carrot and stick approach and it works very well

(for the wealthy)

 

Good points. I always assumed the "underclass" were necessary to keep wage expectations down in a capitalist system. With everyone working, wages have to rise. Problem is, the "underclass" got to hear the theory and so accepted their lot and gave up looking for betterment.

[BoldAsBrass]

I know exactly what you mean (different city, similar story).

 

It's clear from some of the naive comments raised, that many here have never even been to places like this, let alone lived there.

 

I remember Paddy Ashdown (Ex Lib Leader) once went to live in Moss Side (a sink in Manchester) for a few months. He told afterwards how he was more terrified than when he was fighting wars in the jungle. He also added that even through all that, he still knew that he would be going back to his comfy home. The people that live there know they are stuck.

 

Perhaps it should be mandatory education to have to live in one of the sink estates for a few months, a bit like national service. It would make some posters realise how hope, ambition and drive can be crushed and fade and why people "give up".

 

Yes, you're right. People who have never lived in these sort of places just have no idea. I grew up there so I knew how to live there. I remember the last time I visited my brother - a couple of years ago - I went up to his local high street to get a Chinese takeaway. About 6 o'clock on a Saturday night in winter. I was in there on my own when the door opened and three of them came in. One look and I thought 'here we go' - one of them was the regulation 'wild-eyed, nothing to lose, nutter' and his mates just looked like a lot of people around there - you know if you get into a fight with them they don't know when to stop kicking.

 

I was standing at one end of the counter and they started on the poor Chinese bloke behind the counter. The usual aimless insulting banter born out of the resentment that these people come to our country and make a living whereas they are on some kind of permanent half-life scrapheap. I could see into the kitchen through the serving hatch - the lads in there were getting agitated and tightening their grips on the various choppers and knives in their hand.

 

'Oh fuck' I thought - 'this is going to kick off'. How I wished I wasn't there and hadn't ventured out of my nice little patch in the Home Counties. Shall I just slip out and forget the food. If I do that will the nutters say 'Oy, mate, aren't you gonna wait for the shite you've ordered?' So I took my mobile out of my pocket and pretended it had rung - moved away from the counter - and started mouthing into it ... "What!! the fucking C*** - is he still there? - right tell the C*** to stay there, I'm coming round NOW!" I turned to the counter and shouted to the bloke behind .... "Keep my food 'ot mate, I'll be back in 10 minutes"

 

The nutters thought I was one of them and had a bit of business to sort out. Needless to say, I did not return for my food.

 

Our political classes and our middle classes have no idea. No idea whatsoever.

[Kurtz]

Yes, you're right. People who have never lived in these sort of places just have no idea. I grew up there so I knew how to live there. I remember the last time I visited my brother - a couple of years ago - I went up to his local high street to get a Chinese takeaway. About 6 o'clock on a Saturday night in winter. I was in there on my own when the door opened and three of them came in. One look and I thought 'here we go' - one of them was the regulation 'wild-eyed, nothing to lose, nutter' and his mates just looked like a lot of people around there - you know if you get into a fight with them they don't know when to stop kicking.

 

I was standing at one end of the counter and they started on the poor Chinese bloke behind the counter. The usual aimless insulting banter born out of the resentment that these people come to our country and make a living whereas they are on some kind of permanent half-life scrapheap. I could see into the kitchen through the serving hatch - the lads in there were getting agitated and tightening their grips on the various choppers and knives in their hand.

 

'Oh fuck' I thought - 'this is going to kick off'. How I wished I wasn't there and hadn't ventured out of my nice little patch in the Home Counties. Shall I just slip out and forget the food. If I do that will the nutters say 'Oy, mate, aren't you gonna wait for the shite you've ordered?' So I took my mobile out of my pocket and pretended it had rung - moved away from the counter - and started mouthing into it ... "What!! the fucking C*** - is he still there? - right tell the C*** to stay there, I'm coming round NOW!" I turned to the counter and shouted to the bloke behind .... "Keep my food 'ot mate, I'll be back in 10 minutes"

 

The nutters thought I was one of them and had a bit of business to sort out. Needless to say, I did not return for my food.

 

Our political classes and our middle classes have no idea. No idea whatsoever.

 

Yup, intimidating places, lived in loads of them across the UK, on sites. Used to get pelted with stones, endless threats and abuse and even got shot at.

 

All I could think was, I'm working 14 hours a day in a brutally stressful job, living in a filthy hell hole, paying for this scum to live in houses I can't afford and do nothing but throw abuse at me and steal from me. We used to get regular break-ins and I'd have to stump up the money if my laptop got stolen, phone etc.

 

Throw in endless government regulator threats of 20k GBP fines and two years imprisonment in anything goes wrong . . .

 

I hated that country.

 

[drbubb]

Are you under the impression that poor areas are populated by the working poor and that those on housing benefit are all renting nice houses in Kensington?

 

I know there have been a few examples of this in the press - but in the area of West London I grew up in - the whole area is a mix of the working poor and the unemployed poor - some on housing benefits, some not. But all pretty hard up and with some real poverty in the mix. My youngest brother never made it out of there - I hate it there - I feel that it sucks the life out of you just being there. The people mostly have this terrible pale, pinched down-trodden look about them.

There should be no examples at all.

 

Benefits folk in middle class homes is pure madness. There must be an incentive to work. Not incentive to sponge.

[drbubb]

THE SPIN CONTINUES...

 

House prices increase by 0.3% in February

• House prices increased by 0.3% in February

• Prices 0.1% lower than one year ago

 

Headline says : +0.3%. But is it really?

 

Mortgage approvals have just "unexpectedly" jumped to their highest level for a year. BoE Figures.

 

Nationwide report MoM up 0.3% Crash cruise speed?

A rush to buy before rates rise perhaps. (?)

 

I will take a close look at the nationwide figures

 

(in edit):

Just as I thought... That "rise" is pure spin.

 

Actual figures are:

 

Average Price £161,183 £161,211 : the first number is Feb. NSA, compared with Jan.NSA

/source: http://www.nationwide.co.uk/hpi/historical/Feb_2011.pdf

 

Can you see any rise in these numbers ??

Looks like down 18 pounds in Feb. to me

[aliveandkicking]

There should be no examples at all.

 

Benefits folk in middle class homes is pure madness. There must be an incentive to work. Not incentive to sponge.

 

And the nature of your work is what exactly? You seem to me to have an amazing ability to live in a world of total denial.

 

Do you produce anything? Do you not suck from the productive economy?

 

Most of us here on this board are somewhat like parasites. In our defense i repair the houses i am hoping to get some profit from and you do some community organising, but the nature of our way of life is to be sponges on the backs of people who actually produce things.

 

No doubt you can ban me again for mentioning this while others talk about the social good provided by speculation.

 

Why do the poor have to live in shit holes so we can do what we do??

 

Stop kidding yourself man!

 

 

[drbubb]

MORE from the Nationwide report:

http://www.nationwide.co.uk/hpi/historical/Feb_2011.pdf

 

Supply versus Household formations*

 

Supply side also needs to respond

Part of the reason for stretched affordability lies on the supply

side of the housing market. The rate of building has not been

sufficient to keep up with the growing number of households

in recent years. Between 1992 and 2000, house building

broadly kept pace with household formation, with 145,000

homes being built in England each year. Between 2004 and

2008 there was a cumulative building shortfall of about

300,000 homes.

 

The pace of building was even more subdued over the past two

years, with the number of completions at around 100,000 a

year in 2009 and 2010. This is providing underlying support to

 

house prices, which is turn, is reducing affordability and

limiting the scope for first time buyers to enter the market.

Where next?

 

Looking forward, the number of first time buyers is only likely

to increase substantially when labour market conditions

strengthen.

 

With the UK economic recovery set to remain fairly modest, the

improvement in employment and wages is likely to be slow

going. This in turn suggests that first time buyers will be slow

to return to the market, further reinforcing our view that the

housing market will remain sluggish through 2011. The most

likely outcome is that wages will outpace house price growth

over many years, gradually improving affordability over time.

 

Over the longer-term, the supply side of the housing market

also needs to respond if affordability is to improve on a

sustained basis – the housing stock needs to grow at least as

fast as the number of households. A near-term loosening of

credit conditions would not solve the problem and could

ultimately prove counterproductive.

 

== == ==

*These comments ignore the fact that the modification of the Housing benefits,

will tend to reduce or even reverse the long term growth in household formations.

 

But that last paragraph is sensible

[crushtherents]

And the nature of your work is what exactly? You seem to me to have an amazing ability to live in a world of total denial.

 

Do you produce anything? Do you not suck from the productive economy?

 

Most of us here on this board are somewhat like parasites. In our defense i repair the houses i am hoping to get some profit from and you do some community organising, but the nature of our way of life is to be sponges on the backs of people who actually produce things.

 

No doubt you can ban me again for mentioning this while others talk about the social good provided by speculation.

 

Why do the poor have to live in shit holes so we can do what we do??

 

Stop kidding yourself man!

plus one

[Kurtz]

And the nature of your work is what exactly? You seem to me to have an amazing ability to live in a world of total denial.

 

Do you produce anything? Do you not suck from the productive economy?

 

Most of us here on this board are somewhat like parasites. In our defense i repair the houses i am hoping to get some profit from and you do some community organising, but the nature of our way of life is to be sponges on the backs of people who actually produce things.

 

No doubt you can ban me again for mentioning this while others talk about the social good provided by speculation.

 

Why do the poor have to live in shit holes so we can do what we do??

 

Stop kidding yourself man!

 

Work for a living (if there's any work), no benefits, no medical, no investments, no gold, no 'hedges' . . . army of one.

 

[crushtherents]

Good points. I always assumed the "underclass" were necessary to keep wage expectations down in a capitalist system. With everyone working, wages have to rise. Problem is, the "underclass" got to hear the theory and so accepted their lot and gave up looking for betterment.

its true. rich and poor are relative terms. nobody would be rich if everyone was making mega bucks trading. there has to be loosers and them people may need a little help from the winners from time to time

 

[webmaster]

its true. rich and poor are relative terms. nobody would be rich if everyone was making mega bucks trading. there has to be loosers and them people may need a little help from the winners from time to time

You are welcome here, CrushTheRents.

But I would suggest you change your signature.

[BoldAsBrass]

There should be no examples at all.

 

Benefits folk in middle class homes is pure madness. There must be an incentive to work. Not incentive to sponge.

 

Fair enough - there should be no examples at all.

 

But, when this was first bandied about, there were some statistics bandied about too - showing how many people were receiving huge levels of housing benefit. There weren't that many and, although I agree there should be none and that things must change - to extrapolate this tiny number of poor people on housing benefits living in middle class areas is a bit - well meaningless to be honest.

 

There was a woman on the box a while ago living in a house in (I think) Lambeth. Now, as far as I can tell, it is not her fault that, apparently, the house is worth a million quid and the rent (therefore) is 2 grand a month (I've made those figures up - the story is true but I can't remember the actual figures). She has children in local schools.

 

Your remedy is to force her to move onto a sink estate and move her kids into the local ghetto school?

[drbubb]

I see BDEV is up 50% since early December.

 

Is this an encouraging sign for UK property prices?

Well spotted, Columbo !

 

Barratt/ BDEV is indeed at a critical level NOW! ... update : close-up/last12mos

 

I think BDEV will fall away from the key resistance level (near 110p-115p: 377d.MA is 113p) that it reached yesterday

 

Evidence of emerging weakness: Today's action BDEV-105.20p / Change: -2.20p / Percent Change: -2.05%

 

If not, and instead it breaks out above 115p on big volume, I will need to revisit my Bearish forecast.

[BoldAsBrass]

C'mon you do understand why,poverty is essential for the wealthy to succeed

It drives the poor to escape from their misery by working harder for their masters

and introduces the fear to the middle classes not to take their foot of the pedal

lest they end up in the gutter,its the carrot and stick approach and it works very well

(for the wealthy)

 

Obviously I understand that.

 

The bit I don't understand is why the downtrodden millions put up with it.

[BoldAsBrass]

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.

 

But, what if you make a few assumptions?

 

Like, maybe ...

 

The mortgage interest rate is quite high (in modern terms) - so, let's say it stays at about that level for the next 25 years.

 

And, say we have inflation of 3% - in wages, rents and house prices over that term.

 

In 25 years time your monthly rent will be £1524 a month. So, about halfway through the 25 year tenancy, your rent will be more than the repayment mortgage. And you'll carry on paying rent for the rest of your life.

 

Whereas, you could be living in a flat you own outright, worth £444k which is all yours if you decide to sell.