If my dad wasnt dead I'd kill him

[Lons]

If you want to demonise anybody it has to be Thatcher

Now where have we seen that before?
Oh yes I remember - give it a rest!

 

[Nigel Burden]

I hate the term "affordable". It's a misnomer. A ten million pound mansion would be affordable to a billionaire or multi millionaire.

Down here in Dorset there's virtually nothing under £180000. My children were both in their thirties before they could buy their flats which cost just short of £150000 which on one salary requires careful budgeting.

I can understand the resentment levelled at second home owners by young people. Just a couple of miles from Swanage is the old quarry mans village of Acton. My daughter bought her German Wirehaired Pointer from a breeder who then lived in the village. She told us that out of, IIRC, thirty three houses, twenty eight were second homes.

Nigel.

 

[Jacob]

Re Lons:
I think you would find that I'm not the only person in the universe to make this observation!
Selling off council houses is widely acknowledged as a disaster. OK some benefitted like Trevanion's dad but others coming after did not. Many have ended up as private rented at much higher rates and with less security than council houses ever were.

 

[sunnybob]

Colour me simple, but if there was one word that was NOT in my mind when I started this thread, it was "politics" :roll:

I just thought it was funny.

I have to admit I did well on property prices, between 72 and 06, but we both worked our bluudy asses off while bringing up 2 kids to be able to pay for them. in 50 years of working there was never a penny of state aid came our way.

anyway, having been boggled yet again at how cantankerous old people are, I think this thread has run its course.

8) 8)

 

[Andy Kev.]

This shows the depreciation of the Pound more than the value of the house. It's the same house (with fewer bedrooms but indoor plumbing), but is fundamentally the same sort of housing.

According to the bank of England's inflation calculator (lying thieves), £900,000 in 2018 is the equivalent to £31,800 in 1952. And yet, the house could be bought for £90, in the real world. Even if that was an insanely cheap price, it wasn't £31,710 too low - probably half-price at best. A really good example of how financial engineering has enriched a tiny few, and impoverished just about everyone else. You now pay 300 times more for a London house in real terms, than in 1952. In real terms. The banks are getting good value for money, but are the people?

Edit: I got my maths wrong, and initially posted 3,000 times more, but it is only 300. Only.

I think you've put your finger on something with that post. It's not the system as such i.e. a free market in housing that's wrong but rather the fact that some people have skewed it in their favour. Clearly as demand goes up, prices follow suit. However, if the demand is coming from the very rich, then prices go haywire. The chief problem for London is that a lot of foreign money flows into the place e.g. when rich Greeks looked like being threatened with tax bills, they rapidly shifted their capital into property in London, Berlin and a few other places.

It seems to me that the property market is one of the few areas where government intervention would be acceptable and you could probably achieve a lot in e.g. London with a "one family, one property" rule and the overwhelming majority of properties being classified as "not for sale to foreigners". You could exempt the really luxury stuff from the final category which would free up the vast bulk of the market to people who actually work in the place. The only people who would dip out would be estate agents.

 

[Jacob]

This shows the depreciation of the Pound more than the value of the house. It's the same house (with fewer bedrooms but indoor plumbing), but is fundamentally the same sort of housing.

According to the bank of England's inflation calculator (lying thieves), £900,000 in 2018 is the equivalent to £31,800 in 1952. And yet, the house could be bought for £90, in the real world. Even if that was an insanely cheap price, it wasn't £31,710 too low - probably half-price at best. A really good example of how financial engineering has enriched a tiny few, and impoverished just about everyone else. You now pay 300 times more for a London house in real terms, than in 1952. In real terms. The banks are getting good value for money, but are the people?

Edit: I got my maths wrong, and initially posted 3,000 times more, but it is only 300. Only.

I think you've put your finger on something with that post. It's not the system as such i.e. a free market in housing that's wrong but rather the fact that some people have skewed it in their favour. Clearly as demand goes up, prices follow suit. However, if the demand is coming from the very rich, then prices go haywire. The chief problem for London is that a lot of foreign money flows into the place e.g. when rich Greeks looked like being threatened with tax bills, they rapidly shifted their capital into property in London, Berlin and a few other places.

It seems to me that the property market is one of the few areas where government intervention would be acceptable and you could probably achieve a lot in e.g. London with a "one family, one property" rule and the overwhelming majority of properties being classified as "not for sale to foreigners". You could exempt the really luxury stuff from the final category which would free up the vast bulk of the market to people who actually work in the place. The only people who would dip out would be estate agents.

Phew! Congratulations on making such a radical proposal on such a sensitive issue! Possibly a bit too soviet Russia for Britain? :shock:
It would solve the housing problem at a stroke if you could sort out all the details, but it would be revolutionary. Stalinist in fact.
Most lefty proposals are for more gentle - more incentives and pressure via taxation and other influences, such as the obvious one of making council tax proportional to land/property value.

 

[Andy Kev.]

Jacob,

I think that the difference between my idea and a classical left wing approach (we need to try avoiding turning this into a straightforward political issue) is that I wouldn't want to get down into the weeds of regulation. My idea is rather to set the parameters within which the market can operate and to set them such that most people i.e. working, middle and upper class people benefit while removing factors which distort the market to the disadvantage of most of us. In this case it is the influx of wealth from abroad which has too large an effect on the market. However, I've got nothing in principle against foreigners owning property in e.g. London. It is just that opportunities for them to do that should be pretty severely limited to a sector of the market where they are not in competition with 95%+ of the natives.

The second thing is how many properties one family can own. Should it be just one, as I proposed for London or should people be allowed to own more? For instance, if a family has historically had its residence in e.g. Wilts but has always kept a town house in London, is that OK? Personally I think it is. The problems seem to start with townies who distort rural markets with weekend houses.

 

[Jacob]

Jacob,

I think that the difference between my idea and a classical left wing approach (we need to try avoiding turning this into a straightforward political issue)

Your idea IS a classical very hard left idea! And how you can talk about political issues without bringing politics into it?

.....In this case it is the influx of wealth from abroad which has too large an effect on the market.

It's one factor, made attractive by low tax and lax UK regulations, but there are many others

However, I've got nothing in principle against foreigners owning property

Nor me

The second thing is how many properties one family can own. Should it be just one, as I proposed for London or should people be allowed to own more? For instance, if a family has historically had its residence in e.g. Wilts but has always kept a town house in London, is that OK? Personally I think it is. The problems seem to start with townies who distort rural markets with weekend houses.

Can't see that going down too well! Too many in-betweenies, or left out altogether and variations.
Seems to me that the conventional nudge-nudge incentivisation via taxation leaves the market free but with different costs - adjustable to take account of changing circumstances. Property taxes could be fed into council house building, which in its heyday was an amazingly successful solution to the prob.
Council housing opening celebrations in the 50s:

 

[Yojevol]

How do you guys find the time to write all this stuff?

 

[RogerS]

.. In this case it is the influx of wealth from abroad which has too large an effect on the market. ....

How does this affect the sort of properties that you or I would buy ? The influx of wealth affects those top-end properties.

 

[Trainee neophyte]

Ahh, it's all starting up again. Another of those threads.

@Andy: my property is mine, to use as I see fit. Anything else, and it's not my property. It's bad enough paying huge taxes on property - in other words you rent them from the government.

I would add that the government is already extremely active in manipulating the property market: planning restrictions, planning "permission" (why do I need permission? It's MY property, isn't it?), zoning laws, greenbelt, etc. All conspiring to keep the housing stock limited, so prices and rents high.

I'm off to look at videos of kittens - much more fun.

 

[Jacob]

.... (why do I need permission? It's MY property, isn't it?), ......

But you have neighbours and there may be other occupiers after you who need protecting from jerry building, bad planning etc etc.
Planning and building laws are ancient. Were given a big boost after 1666 Fire of London but date back a lot earlier, for perfectly sensible reasons.

 

[Andy Kev.]

.. In this case it is the influx of wealth from abroad which has too large an effect on the market. ....

How does this affect the sort of properties that you or I would buy ? The influx of wealth affects those top-end properties.

I'm no expert whatsoever in the economics of the property market but I think that what happens is this: wealth flows in and people buy properties according to the wealth at their disposal. They will do this at different levels of the market. For instance, not every foreign tax avoider has, say, 14 million at his disposal. He might only have 1 million.

What that does mean though is that this incoming money is competing with the budgets of ordinary earners in cities like London. So if the very rich snap up the luxury end, the not quite so rich must shop a stage down and so on until we get to the bloke with 1 million at his disposal. All the way down, people who don't have ready cash available are squeezed out of the market due to people with ready cash snapping up property as soon as it comes on the market. Inevitably this all drives prices further up.

My idea was only to let foreign money loose on the absolute upper end of the market, thus placing a lower limit on their knock-on economic impact. I'm ready to stand corrected on this notion due to my inexpertise.

After more thought, it also occurs to me that any foreigner coming to live in e.g. London as a normal resident, should not be subject to the limitations I mentioned.

 

[Andy Kev.]

Ahh, it's all starting up again. Another of those threads.

@Andy: my property is mine, to use as I see fit. Anything else, and it's not my property. It's bad enough paying huge taxes on property - in other words you rent them from the government.

I would add that the government is already extremely active in manipulating the property market: planning restrictions, planning "permission" (why do I need permission? It's MY property, isn't it?), zoning laws, greenbelt, etc. All conspiring to keep the housing stock limited, so prices and rents high.

I'm off to look at videos of kittens - much more fun.

I agree with you entirely: Englishman's home is his castle and all that. What I am on about is the distorting effects of massive amounts of wealth skewing property markets to the effect that "normal" people cannot buy. That seems to me to be a phenomenon which it is legitimate for government to look at, provided of course that its moves enjoy public approval.

Consider the other side of the coin. There are one or two Italian towns which are offering homes for €1 in the hope of attracting people to the town. All they have to do is to promise to renovate the homes to an acceptable standard and meet other conditions e.g. there might be a requirement to live in the town for a number of years before being allowed to sell. Apparently the locals like this as their towns have a chance of a new lease of life as money comes in. So it would appear that in principle, sensible governmental intervention can play a role in the property market.

 

[RogerS]

.. In this case it is the influx of wealth from abroad which has too large an effect on the market. ....

How does this affect the sort of properties that you or I would buy ? The influx of wealth affects those top-end properties.

I'm no expert whatsoever in the economics of the property market but I think that what happens is this: wealth flows in and people buy properties according to the wealth at their disposal. They will do this at different levels of the market. For instance, not every foreign tax avoider has, say, 14 million at his disposal. He might only have 1 million.

What that does mean though is that this incoming money is competing with the budgets of ordinary earners in cities like London. So if the very rich snap up the luxury end, the not quite so rich must shop a stage down and so on until we get to the bloke with 1 million at his disposal. All the way down, people who don't have ready cash available are squeezed out of the market due to people with ready cash snapping up property as soon as it comes on the market. Inevitably this all drives prices further up.

My idea was only to let foreign money loose on the absolute upper end of the market, thus placing a lower limit on their knock-on economic impact. I'm ready to stand corrected on this notion due to my inexpertise.

After more thought, it also occurs to me that any foreigner coming to live in e.g. London as a normal resident, should not be subject to the limitations I mentioned.

If you can provide me with ANY evidence that what you say is happening then I'll buy a pint...in fact, several pints because it simply does not hold water. Or you can put another spin on the impact of foreign people on the country..namely too much immigration places too much demand on our resources. Two sides of the coin.

I'm not saying that you're suggesting the latter...just that your initial premise has no evidence.

 

[RogerS]

Ahh, it's all starting up again. Another of those threads.

@Andy: my property is mine, to use as I see fit. Anything else, and it's not my property. It's bad enough paying huge taxes on property - in other words you rent them from the government.

I would add that the government is already extremely active in manipulating the property market: planning restrictions, planning "permission" (why do I need permission? It's MY property, isn't it?), zoning laws, greenbelt, etc. All conspiring to keep the housing stock limited, so prices and rents high.

I'm off to look at videos of kittens - much more fun.

I agree with you entirely: Englishman's home is his castle and all that. What I am on about is the distorting effects of massive amounts of wealth skewing property markets to the effect that "normal" people cannot buy. That seems to me to be a phenomenon which it is legitimate for government to look at, provided of course that its moves enjoy public approval.

Consider the other side of the coin. There are one or two Italian towns which are offering homes for €1 in the hope of attracting people to the town. All they have to do is to promise to renovate the homes to an acceptable standard and meet other conditions e.g. there might be a requirement to live in the town for a number of years before being allowed to sell. Apparently the locals like this as their towns have a chance of a new lease of life as money comes in. So it would appear that in principle, sensible governmental intervention can play a role in the property market.

Sorry, Andy, but I really can't accept your 'logic' in this. You've completely ignored every other factor such as the local economics, supply/demand, opportunities for work etc which explains why these towns are vacant in the first place. We simply don't have towns like that here.

There are NO massive wealth skewing the market..see my other reply.

 

[Jacob]

....... We simply don't have towns like that here.

Well we do a bit. There are post industrial towns and villages all over the place, not quite as empty as AK's example. e.g. average property prices in former mining town Blaenau Gwent £100k

There are NO massive wealth skewing the market..see my other reply.

Yes there is but again it's not that simple. We have low rates of building, high demand, made worse by housing investment for speculation or rent being made more attractive via low tax, lax regulation and easy borrowing.
It's a 'perfect storm' as they say but government has the power to change it but not the will. Or 'bubble' but it's gone on a long time in terms of bubbles.
Land/property taxation based on value would be a start, followed by higher inheritance tax, capital gains tax and a tax on planning added value, rent controls, security of tenure etc etc to make it less of a gamblers' monopoly game and better serve the people who need homes.
It's easy really but would need to be cranked up gently to avoid severe negative equity as prices stabilised/fell.
PS politics and economics are much simpler than they let out: Ignore theories about how things should be done from left, right or centre, instead just do what's necessary.

 

[Andy Kev.]

RogerS,

I can't provide you with evidence. As I said, I have no specialist knowledge in this area. I was also talking specifically about cities like London and Berlin where the property markets are very competitive and to an extent atypical. I've read articles in the past according to which the effect of foreign money coming into such cities has helped drive up prices. That seems plausible to me as it is simply a matter of supply and demand. If prices in some sectors of the housing market are driven up by foreign investors, then relatively wealthy locals will compete lower in the market, thus driving up prices there and so the whole market becomes more expensive.

It would be interesting to get the data for foreign property ownership in London, although I wouldn't know where to look for it.

And I was not suggesting that we have any towns like the Italian ones. I used the example to show that there is, under certain circumstances, a case for governmental intervention in housing markets, provided that it can be shown to be of benefit to the locals and they support it.

 

[RogerS]

RogerS,

I can't provide you with evidence. As I said, I have no specialist knowledge in this area. I was also talking specifically about cities like London and Berlin where the property markets are very competitive and to an extent atypical. I've read articles in the past according to which the effect of foreign money coming into such cities has helped drive up prices. That seems plausible to me as it is simply a matter of supply and demand. If prices in some sectors of the housing market are driven up by foreign investors, then relatively wealthy locals will compete lower in the market, thus driving up prices there and so the whole market becomes more expensive.

It would be interesting to get the data for foreign property ownership in London, although I wouldn't know where to look for it.

And I was not suggesting that we have any towns like the Italian ones. I used the example to show that there is, under certain circumstances, a case for governmental intervention in housing markets, provided that it can be shown to be of benefit to the locals and they support it.

Andy..the only information I found did not support your thesis as foreign wealth is high-end property only.

 

[Jacob]

.....
It would be interesting to get the data for foreign property ownership in London, although I wouldn't know where to look for it.......

Just google something like 'foreign ownership of london property' and you will hit on a choice of things like this https://www.theguardian.com/business/20 ... ign-buyers
London is 'atypical' but it's still part of the whole picture with effects radiating out to every part of the British Isles.
I live in a post industrial village (mining and quarrying) but we have newish neighbours from better off parts of the south who can sell up and retire here on the profits from house price inflation, and/or buy empty property to rent out, which is a worrying trend - a rentier economy - the better off with unearned income from the backs of the less well off. The rich getting richer in a very old fashioned way!
PS I forgot to say - claim your several pints of beer from RogerS :lol: there is loads of evidence, and quite easy to find.