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Housing War

Re: Housing War

Postby diy » Fri Jul 19, 2013 8:13 am

Raise interest rates. Then you'll see plenty of B2L LL dumping stock. Me for one - I am a reluctant LL, though I don't rent to HB. I'd much rather make 5-6% in a nice bank with zero effort. Rents wont go down all the time there is demand - people have to live somewhere. Better IMO to go for shared house arrangements for those on HB to reduce costs and demand.

People did it not so long ago.
My suggestions are not legal advice
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Re: Housing War

Postby caffiene » Fri Feb 27, 2015 1:14 am

There is plenty of cheap housing in the UK. There is no overall shortage, only a shortage in the south. The OTT prices in London and empty streets of Burnley and Hull are a symptom of an unequal distibution of industry and employment oppourtunity. Improved infrastructure, investment and tax breaks in the north could take pressure off the south without much house building.

The HB levels paid out by the govt might seem high, but the money paid is partly for housing and partly for risk, inconvenience and negative sterotyping. Risk, inconvenience and image mean only a few LLs are willing to offer housing for HB, limiting supply. Policies to make HB tenants more attractive would result in more LLs preferring HB. Increased supply would bring rents down for HB. A policy of the govt trying to use size of bargaining power to force rents down will turn more LL's away, reducing supply and keeping costs higher.

My prediction: There will be policies to fuel another low cost credit bubble to force property prices up further away from their true 'utility value'. Later, the difference between market price and utility value will be redistributed. Pension reforms and pensioner mortgages will encourage a huge wave of BTL pushing prices higher. (Cynically, pensioners can't be conned out of their money unless they have access to it). A few years later, billions of pounds of tax money will be given to banks to subsidise huge building programs of new housing all owned by banks. Policies will encourage tenants out of obsolete brick houses into bank owned 21st century housing 'solutions'. 'Bank estates' will have modern facilities old fashioned housing cannot compete with drawing tenants away from private rentals. Neighborhoods with a high percentage of rented housing will fall off a cliff, get CPOd, bulldozed and given to banks to build on. The govt will have a deal to house HB in bank estates in exchange for subsidies and land. There will not be a return to the 60's. It is a new era of housing market consolidation that we have not seen before.
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Re: Housing War

Postby dls » Fri Feb 27, 2015 6:28 am

A lot of that is rather easily denied. I am sure that life is a lot more complicated.
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Re: Housing War

Postby Slartibartfast » Fri Feb 27, 2015 7:29 am

caffiene wrote:There is plenty of cheap housing in the UK. There is no overall shortage, only a shortage in the south. The OTT prices in London and empty streets of Burnley and Hull are a symptom of an unequal distibution of industry and employment oppourtunity. Improved infrastructure, investment and tax breaks in the north could take pressure off the south without much house building.


I agree. Vast sums of public money are poured into the London infrastructure, including subsidising accommodation far below the market rate. This just feeds an expansionary cycle and raises the costs further. A decisive effort to move North would be sensible.
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Re: Housing War

Postby caffiene » Fri Feb 27, 2015 11:12 am

dls wrote:A lot of that is rather easily denied. I am sure that life is a lot more complicated.

It's hard to speculate in a forum post and even professional economists can't predict markets accurately. Most pensioners are probably more cynical than I am and smart enough to avoid being conned. It may also be a shift from institutional/state pensions to DIY pensions, but pensioners and buy to let investors need to be careful. Those who are may still do better than with an annuity.

A lot of commercial activity is in London for a reason but there is some movement to the north such as the BBC and media city and a lot of back office/admin for financial services. It should be given a helping hand to balance prosperity and demand for housing nationwide.

The issue of 'bank estates' is not being discussed at all in the media who prefer to go on about 'rogue landlords' and the 'housing shortage'. 'Bank estates' will not totally wipe out homeownership but will have an unprecedented impact on the housing market due to the sudden and huge increase in supply they will bring to cities. They will offer predictable rents, secure tenancies for 25 years or longer and other benefits to tenants (such as pseudo hotel services, high energy efficiency, on site gym, child care, spa, social communal spaces, etc) that small landlords will struggle to compete with. Bank estates will also be the council estates of the future and provide much needed social housing. The provision of child care facilites on site may assist lone parents in getting work ( the 'nanny state' :lol: ). Planning laws may still restrict traditional house building but may not obstruct bank estates.

In the long run, although rental yield may be low, a nice traditional home in the countryside with good city connections could be the safest option if buying or retiring.
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