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How I won the housing market without trying

theguardian.com

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Re: How I won the housing market without trying

#61

Post by pjc50 »

matthewmacleod wrote: post #7
CmonDev wrote: post #6

Earlier quoted context omitted.

I thought a major reason was Thatcher letting people who should not be owning a house buy one at a cut price?

No - 'right to buy' is not related to the UK's housing crisis, aside from the fact it depleted social housing stock (which is a separate issue that should not have been allowed to happen). Offering cut-price sales of social property to council tenants is an amazingly powerful tool for giving people ownership over their communities.

Depletion of the social housing stock was an explicit objective of the policy. It was part of a transfer of power from the labour-controlled ""collectivist"" councils. That's why they were prevented from spending the revenue on new housebuilding.

It gives people ownership of their houses, not their communities. It's a micro version of the general privatisation problem of selling public assets at a discount for the benefit of private interests; it's just a variant that everyone's allowed a crack at, like the royal mail shares.

Re: How I won the housing market without trying

#62

Post by Omniusaspirer »

lars512 wrote: post #58
Omniusaspirer wrote: post #52

Earlier quoted context omitted.

It's basically inevitable though that in demand property will rise in price, especially with regulation constraining building height/form factor. Home cost in urban areas is much more about location than it's about any real cost to building the residence. Lots of people buy large houses for very little a few miles out of town where land is abundant and demand is more reasonable. I guess I'm just having trouble really…

Well, picking a shorter commute is a reasonable choice to make. Longer commutes don't take time from work, they take time from family, and are associated with higher divorce rates, at least amongst Swedes. In a city like Melbourne, where I live, there's a lot of development which could still be done to reach a reasonable medium-density of 3-4 story apartment buildings in the suburbs immediately circling the CBD. It i…

My personal opinion is that the need to physically be at your job will only diminish in the future. I honestly believe that VR will eventually offer a lot of potential for virtual office spaces that give you the illusion of being there but let you sit comfortably at home.

Of course I may just be a dreamer and we'll continue to see housing prices skyrocket as we try to cram 10's of millions of people into small geographical areas- I'm certainly not dismissing that possibility.

Re: How I won the housing market without trying

#63

Post by mwj »

slap wrote: post #8
awjr wrote: post #4

In the UK it's normal practice to get in a chain. You sell yours, line up the one you want to buy, and all 14 people in the chain complete on the same day. Not sure you should be selling your house, then deciding to look. You have to ask yourself what changed in the UK mortgage market to create this increase in housing value. It comes down to a bank regulation change the government put in place in 1996. Banks were ab…

"Apparently 40% of new build apartments are bought and never lived in" : this is totally incorrect

Errr... have you been following the Battersea Power Station development at all?

Re: How I won the housing market without trying

#64

Post by JimmyM »

awjr wrote: post #23
brianmcc wrote: post #19

Earlier quoted context omitted.

In many places in the UK, it did crash big time. Plenty of people I know even today are in homes well below their 2007 levels or have sold for painful losses. London is unusual in that many properties sell for cash, to investors, and in fact the BoE and mortgage lenders have surprisingly little influence in terms of rate changes. Not sure letting anything "burn" particularly helps anybody. Edit: I suspect "let it bur…

My mother just recently bought a studio flat in Wales for 31k. Prices are dropping around the country. London prices are forcing people away from living in London. Businesses are moving away. (If you are a young developer, I'd suggest moving to Bristol.)

> Prices are dropping around the country.

> London prices are forcing people away from living in London. Businesses are moving away.

Wouldn't this force prices higher across the country?

As someone living in Bristol, I have to say that there's been a (noticeable) influx of people from London, and that this is what I believe has forced local prices up to the point where many can no longer afford to stay.

Friends of mine, who are local (I am an Essex import), have scattered as far as Darwen and Bournemouth.

Re: How I won the housing market without trying

#65

Post by mwj »

Omniusaspirer wrote: post #52
stana wrote: post #22

Thanks to banking deregulation housing has become an investment commodity. In major cities in Australia at the moment half the purchases are for investment rather than owner-occupier. Government incentives like first-home buyer grants (if you can't save for a deposit) have only lifted the prices and helped vendors. Another one is negative-gearing introduced a couple of decades ago allowing tax deduction for investmen…

It's basically inevitable though that in demand property will rise in price, especially with regulation constraining building height/form factor. Home cost in urban areas is much more about location than it's about any real cost to building the residence. Lots of people buy large houses for very little a few miles out of town where land is abundant and demand is more reasonable. I guess I'm just having trouble really…

"There's a reason that most people don't want to admit that 2008 was the housing bubble popping and instead insist that homes are "finally returning to their true value"."

It may have burst in the US, but certainly nowhere else

Re: How I won the housing market without trying

#66

Post by Jacqued »

Omniusaspirer wrote: post #52
stana wrote: post #22

Thanks to banking deregulation housing has become an investment commodity. In major cities in Australia at the moment half the purchases are for investment rather than owner-occupier. Government incentives like first-home buyer grants (if you can't save for a deposit) have only lifted the prices and helped vendors. Another one is negative-gearing introduced a couple of decades ago allowing tax deduction for investmen…

It's basically inevitable though that in demand property will rise in price, especially with regulation constraining building height/form factor. Home cost in urban areas is much more about location than it's about any real cost to building the residence. Lots of people buy large houses for very little a few miles out of town where land is abundant and demand is more reasonable. I guess I'm just having trouble really…

It is somewhat inevitable, but the problem we see here, I believe, is about the magnitude of this rise. I don't believe housing should be a _completely_ free market : investors should be regulated out of the tense areas (except of course for new developments).

Investment in older buildings in tense areas, combined with wealthy buyers who neither live in nor rent their property, are pushing prices way beyond acceptable ranges. I don't know about London, but in Paris for instance, 20 to 30% of the flats in the center districts are empty.

When young professionals and less fortunate people are struggling to find housing and putting more than 40% of their income into the rent, I believe those 30% of empty flats are unacceptable and the owners should be taxed out of them.

There are plenty of legitimate vehicles for investment, but already-built real estate is definitely not one of them. Such investment is not productive for the economy as a whole and is not much more than generational ransoming.

Re: How I won the housing market without trying

#67

Post by amirmc »

Omniusaspirer wrote: post #62
lars512 wrote: post #58

Earlier quoted context omitted.

Well, picking a shorter commute is a reasonable choice to make. Longer commutes don't take time from work, they take time from family, and are associated with higher divorce rates, at least amongst Swedes. In a city like Melbourne, where I live, there's a lot of development which could still be done to reach a reasonable medium-density of 3-4 story apartment buildings in the suburbs immediately circling the CBD. It i…

My personal opinion is that the need to physically be at your job will only diminish in the future. I honestly believe that VR will eventually offer a lot of potential for virtual office spaces that give you the illusion of being there but let you sit comfortably at home. Of course I may just be a dreamer and we'll continue to see housing prices skyrocket as we try to cram 10's of millions of people into small geogra…

We were promised paperless offices decades ago and we're still nowhere close. Right now we can barely get video-conferencing done properly. Hence, I doubt VR will help us anytime soon.

Re: How I won the housing market without trying

#68

Post by galfarragem »

mwj wrote: post #65
Omniusaspirer wrote: post #52

Earlier quoted context omitted.

It's basically inevitable though that in demand property will rise in price, especially with regulation constraining building height/form factor. Home cost in urban areas is much more about location than it's about any real cost to building the residence. Lots of people buy large houses for very little a few miles out of town where land is abundant and demand is more reasonable. I guess I'm just having trouble really…

"There's a reason that most people don't want to admit that 2008 was the housing bubble popping and instead insist that homes are "finally returning to their true value"." It may have burst in the US, but certainly nowhere else

With the current prices just with a gun pointing to my head, I would agree to buy a house in Australia as investment.

With the money needed to buy a crappy flat, you can buy a luxury house in a lot of places around the world. Prices are crazy.

Re: How I won the housing market without trying

#69

Post by barrkel »

pjc50 wrote: post #56
barrkel wrote: post #45

Earlier quoted context omitted.

You'll severely limit your career and earning potential if you do that, particularly if you're not a founder or otherwise in a position to insulate yourself from pure market salaries. Dev salaries are not high in Britain as a whole, outside of London.

Depends on whether you measure earning potential in pounds or houses. Someone earning £50k in an area of £250k houses is being paid 0.2 houses per annum. If they can get £40k in an area of £100k houses their spending power has gone up not down. If only it weren't so necessary to be physically present for the work.

I tend to measure things in disposable income: how much money I have left over after paying the big bills. And this is a fairly absolute measure, rather than relative to living costs, as I spend much of my disposable income on stuff that costs similar amounts no matter where I live.

50k is a mediocre salary, mind.

Re: How I won the housing market without trying

#70

Post by lentil_soup »

notahacker wrote: post #60
justincormack wrote: post #39

Earlier quoted context omitted.

Property is a zero sum game. People without houses lose the equivalent in future spending as homeowners gain. So propping up a market is directly taking money from the young and increasingly old non homeowners. So not doing anything is putting a large number of people in a bad situation.

Property isn't quite a zero sum game; as the last few years have show the overall losses from a crash outweigh the benefits of lower prices and greater liquidity to people without houses (especially if the result is that people without houses can't get mortgages even after the prices have fallen) That's not to say there shouldn't be more pressure put on property price appreciation, not to mention confiscatory levels…

Doesn't "losses from a crash outweigh the benefits of lower prices" depend on who you're talking about?.

For me this has to be looked at from the point of who it affects the most. A person that already has a house is much better suited to "take the hit" of property prices than someone that doesn't have one (in general terms). Obviously you have to manage it, but in the end you should strive to protect those that are more vulnerable.

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