The Housing Surplus Timebomb

macaque_2

One of the features of ultra low interest rates is that people can sit on unproductive assets with little penalty. The statistic of 1 million empty properties in Britain must be well out of date by now. It was being quoted 6 or 7 years ago. The figure has to be millions higher as amateur BTLs, speculators and hoarders enjoy a field day. Unprecedented numbers of properties are lying empty across the country (although the government won't admit it). Its true. I have seen tons on empty properties as I walk around local streets. Anxious owners sit waiting for the next house price boom! All I can say is, I hope they have comfortable chairs.

The scaffolding that kept UK house prices bubble inflated is being quietly dismantled and will be gone completely 2 months after election day. Cheap money is gradually being phased out and the hoards of immigrants who flooded into our airports 3 years ago are now catching planes home. Why would they stay when jobs are shrinking by the day?

So what happens when people start dumping property onto the market and visitors leave. It is called the housing surplus timebomb.

HAMISH_MCTAVISH

macaque wrote: »

some simian nonsense.

When I read this, (all complete nonsense of course, but creative nonsense none the less), I actually wonder what the surprised look on your face is like every month when the indices come out showing prices rises.

I also wonder how many years it will take for you to grasp reality, and whether you will by then have developed a look of permanent surprise.....

Oh well, at least it'll be cheaper than Botox. Or not, if you still haven't bought by then.:rotfl:



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System

It's a nice try but the difference is Hamish used sources for his thread whereas you've spouted a load of fiction.

Thrugelmir

Empty homes in England (Recorded) 2009 - 651,993

http://www.emptyhomes.com/usefulinformation/stats/2009breakdown.htm

The Empty Homes Agency estimate that bringing just a quarter of the UK’s empty homes into use would provide homes for 700,000 people, save 160 square kilometres of land and save 10 million tonnes of CO2 over building the same number of new homes.


If you know of one, report it.

http://reportemptyhomes.com/

November 2009

1. Data released by the Halifax bank shows that there are over 300,000 privately owned long-term homes in England. In total there are 970,000 empty homes in the UK
2. The Audit Commission reported in September 2009 that a 5% cut in the number of empty homes would save councils £½ billion a year in homelessness costs.
3. Surveys show that the average cost of returning an empty home to use is £10,000. The average cost of building a new social home is £100,000
4. Government statistics show that there are 4,800 government owned empty homes, yet just one government agency: Defence Estates admits to have over 9,500 empty homes. If the government’s property portfolio has an average vacancy rate they would own about 40,000 vacant homes.
5. VAT is charged at the full rate for works to return empty homes to use. (A discounted rate is applied to homes empty for more than two years). VAT is zero-rated for building new homes. Council tax is generally exempt from properties during the first 6 months they are empty; after 6 months Councils can set their own policy on discounts for council tax on empty homes. 55% of councils apply a discount. Uninhabitable empty properties are frequently removed from council tax charging altogether.
6. Many councils are very effective at helping get empty homes back into use, but last year sixty English councils returned less than five empty homes to use and twenty four didn’t do anything.

brit1234

HAMISH_MCTAVISH wrote: »

I actually wonder what the surprised look on your face is like every month when the indices come out showing prices rises.

You mean the rises as a result of once in a life time emergency measures to cut interest rates to 0.5%.

Strange at thiese historical levels house price affordability is at its worse stage in last 50 years. I wonder what happens when interest rates go up this year, building societies are all putting up their mortgae rates. I have also seen buy to let landlords now selling up which will increase the supply further.

HAMISH_MCTAVISH

brit1234 wrote: »

You mean the rises as a result of once in a life time emergency measures to cut interest rates to 0.5%.

And where can I get one of these mythical 0.5% mortgages?

Strange at thiese historical levels house price affordability is at its worse stage in last 50 years.

Mortgage affordability is currently at 30% of after tax income, versus the long term average of 38%, and a peak of 68% in 1990.

Get a grip man........ Your fairy tales are becoming more ludicrous by the day.

I wonder what happens when interest rates go up this year, building societies are all putting up their mortgae rates. I have also seen buy to let landlords now selling up which will increase the supply further.

Building societies are a "failed business model". They can't compete with the banks.

Supply is at record lows.

Interest rates won't increase significantly for years, and the likely average for the next decade is less than 3%.

It's over, this crash of yours. Best just admit it and move on.....;)

brit1234

HAMISH_MCTAVISH wrote: »

And where can I get one of these mythical 0.5% mortgages?

Please can you get it into your head that interest rates are 0.5% set by the BOE

stueyhants

HAMISH_MCTAVISH wrote: »

Mortgage affordability is currently at 30% of after tax income, versus the long term average of 38%, and a peak of 68% in 1990.

Hamish, will you please stop comparing apples with oranges. Your comparing long term single incomes as a % of mortgage costs against household incomes now.

Back in the 1990 according to national statistics http://www.statistics.gov.uk/STATBASE/ssdataset.asp?vlnk=5140
The average % of household income spent on a mortgage was 25.1% (Owner/mover)

If we look at today, take a 180k house, 10% deposit and your looking at about £960 per month mortgage. Compared to the average household income of about 30k http://www.statistics.gov.uk/cci/nugget.asp?id=334

This gives 38%. If people want to use 37k as the household income (as some people like to use) then it's still 31% and that is still more unafforable.

nembot

That was like watching early episodes of Batman

Yoshua

brit1234 wrote: »

Please can you get it into your head that interest rates are 0.5% set by the BOE

Not for long, its obvious when the base rate goes up a little mortgages will go up a lot.

People can afford their monthly payments right now but not when they have to pay almost double and wages are still falling.


Lots of repos always mean huge falls in house prices.

dopester

Yoshua wrote: »

Lots of repos always mean huge falls in house prices.

The falls will come through the falling velocity of money. House prices can't remain at these levels when the economy proper is in a nose dive - for jobs and pay and prospects.

Some areas will really crash hard, become the new slums, or experience deteriorating infrastructure as they become less of a priority to divert support money to. Save your money to buy near economically active areas. We're in a real game changer.

When opportunity is cut off in one direction, people will move in another. Where there is freedom to move, the process is practically as automatic as that which inclines plants towards sunshine. It is all part of the mechanism through which individuals actively seek their happiness and societies maintain their balance.

And the Local Data Company said on Thursday that about 12,000 independent shops and nearly 7,000 branches of major chains have closed so far this year in England and Wales.

But the most damning report was the Commission for Rural Communities' (CRC) briefing note on the future of market towns, which was handed to Hilary Benn, the Secretary of State for Environment, Food and Rural Affairs, a few days ago. The report looked at how market towns are being affected by the recession and how they can fight back. The report not only shows that market towns are suffering, but suggests that they are being hit by the recession disproportionately.

Market towns saw steeper unemployment than the national average over the year to May – 120pc compared to 90pc for England as a whole. Among the hardest hit are middle-class and professional groups with links to urban communities – commuters, in other words.

So market towns are being simultaneously hit by a declining number of businesses and a decreasing number of people with jobs to support the ones that remain – a dispiriting cocktail.

Our market towns are full of holes, literally. "In the majority of market towns surveyed, the number of vacant shop units has increased over the last six months; around 60pc of existing vacant retail premises have remained empty during that time. This damages both the look and economic vitality of town centres," the CRC report said. Around 70pc of Woolworths' 800 stores remain empty.

http://www.telegraph.co.uk/finance/newsbysector/retailandconsumer/5955144/Market-towns-fit-for-the-future.html