Age of home ownership coming to an end...

zappahey

marklv wrote: »

Home ownership has always been a peculiarly British obsession. Go to...Belgium and you'll find that many, if not most, people actually rent privately.

I don't think you will.

Living here, my perception is that, if anything, the Belgians are even more obsessive about owning their own house than the Brits. The saying here is that every Belgian is born with a brick in his stomach.

The difference is that Belgians will only buy one, maybe two, houses in their lifetimes and that might be a function of the buying costs being in excess of 17% (stamp duty is around 12%).

I'm not generally a fan of using wikipedia to support debates but it suggests that Belgian home ownership rates are a touch higher than the UK's.

http://en.wikipedia.org/wiki/Owner-occupier#International_statistics

StevieJ

Graham_Devon wrote: »

Look, "asset" is mainly a business term.

It's not generally used in personal living terms.

When it comes to housing, the only people who talk about housing in terms of assets, is those who have invested in it to make money from it.

I don't know anyone who's ever described their home, as an asset in the terms you guys are talking of.

To be told the whole of society does, is a bit of an eye opener to me.

A property is an asset to the householder just as sure as the mortgage is a liability, there is no reason why a family cannot draw up a balance sheet reflecting their current position.

Graham_Devon

StevieJ wrote: »

A property is an asset to the householder just as sure as the mortgage is a liability, there is no reason why a family cannot draw up a balance sheet reflecting their current position.

There is no reason they can't. But do the whole of society in general do this? Does the whole of society look at their home in business asset terms?

That was the point put across, and thats the point being argued.

StevieJ

Graham_Devon wrote: »

There is no reason they can't. But do the whole of society in general do this? Does the whole of society look at their home in business asset terms?

That was the point put across, and thats the point being argued.

It doesn't matter what they call it, what matters is what it is.

phil_b_2

I'm pretty sure almost all homeowners see their house as an asset to them. They obviously dont go around refering to it as their 'asset' in the overly dramatic example earlier on.

Strings

Graham_Devon wrote: »

Why?

Here's some definitions of assets...

In financial accounting, assets are economic resources. Anything tangible or intangible that is capable of being owned or controlled to produce value and that is held to have positive economic value is considered an asset. ...

An 'asset' in economic theory is an output good which can only be partially consumed (like a portable music player) or input as a factor of production (like a cement mixer) which can only be partially used up in production. ...

Something or someone of any value; any portion of one's property or effects so considered; Any component, model, process or framework of value that can be leveraged or reused

Doesn't really describe a place to live, does it. Describes a place you have bought to invest with, sure.

I think the term clutching at straws might be describe your argument

JonnyBravo

phil_b wrote: »

I'm pretty sure almost all homeowners see their house as an asset to them. They obviously dont go around refering to it as their 'asset' in the overly dramatic example earlier on.

Makes me laugh that as per usual we have the two sides arguing the toss. The truth as is often the case, is between the two.

Of course a house is an asset and whilst people don't call it such, most people do regard it as such.

IveSeenTheLight

Graham_Devon wrote: »

1. If we did go down the route of renting instead of owning, we would need measures put in place to give some security to the tennant, much like Europe.

As long as there would be increased security for both parties, there's no issue.

Graham_Devon wrote: »

2. Rent's do have an upper limit. That is, what people can pay, out of their wages. This is very different to what the housing market has seen over the past decade. I.e. the limit is what you can borrow. So anyone cheering on such a situation because they already own, would probably be majorly dissapointed when they find their investments struggle to keep up with wage inflation. Infact, I personally feel we would see a long fall in house prices if we returned to rentals instead of home ownership.

Your right in that the market sets the rent rates, but I fail to see how this correlates to lower house prices.
There would still be a demand (via requirement for properties for rent) and that demand would be filled (if longer tenancies were secure then the risk for investors lowers)

Graham_Devon wrote: »

3. Opportunistic landlords would simply be wiped out of the market. You cannot be opportunistic when your tennants have say 3 year terms. The landlords would be, in essence, locked in to the deal, unlike now.

As a landlord, I'd happily give 2, 3, 5, 10 year leases etc.
Especially if there was more security.
The longer leases would mean less costs i.e. advertising, EA finder fee's, credit checks, inventory inspections etc.
If anything gauranteed longer leases could make BTL less risky and therefore a safer investment.

Graham_Devon wrote: »

4. Rents would HAVE to be lower than they are now. People would still need to be able to save and plan their retirement. They would have no asset as their retirement plan. So for rents to be lower, asset prices would have to be lower.

Why would rents HAVE to lower.
Again it's a weighting of Supply and Demand
As demand for rental properties increased, the effect on rent would be for them to increase. This would only be countered by investors buying property to rent.
I doubt there would be much difference from now unless there was an over supply of properties

Graham_Devon wrote: »

In my humble opinion, houses would have to decrease for investors to take on all this, give the tennant more security, and allow the tennant to actually save. Would be nothing like it is now, as the benefit system (which was absolutely key in increasing rents) could no longer push up rents, as hundreds of thousands not on benefits could only pay what they can pay from their wages.

In other words, assets would become pretty much solely linked to wages. Not going to help HPI at all. Like I say, I think it would bring on a huge decline in asset prices, as people could only pay what they could afford to pay....and the true value would be found. That value is no where near todays value.

Your assuming there are an over supply of places for people to rent / buy.

IveSeenTheLight

Graham_Devon wrote: »

So far as I see, Hamish (and likely others) appear to want the following:

- Less people owning, instead renting.
- The contol to stay with the owners, and the government to keep it this way, even if owner occupancy was less than rented occupancy.
- Rents to keep increasing
- Their assets to keep increasing
- More people in the same house to enable those rents to keep increasing.
- The rules and regs surrounding rentals to be in favour of the owners.

Or In other words, I could have said,

So far as I see, Hamish (and likely others) appear to want the following:

- It all.

It's not a case of wanting, it's a case of looking at the fundamentals and assessing what the likely outcome could be.

We've also said an answer os to build more properties, increase the supply so it is greater than demand.
We've said this will reduce house prices and indeed rent prices.

We've given a solution to the problems you raise (although it may create other problems, hence why it is not so simple to resolve).

Why do you need to think we want something, when were simply and realistically showing what happens in the market?

What we need, is a period of real term stagnation. A solution which assist both home owners and those that aspire to be as house prices wouldn't inflate away.

IveSeenTheLight

HAMISH_MCTAVISH wrote: »

It took 100 years to move from 90% rented to 30% rented. It will take just as long the other way.

It's been discussed many times recently, that the rise in ownership has largely been as a result of ease of lending.

It's not so easy to simply take a reverse period i.e. 100 years.
It may depend on the ease of lending to investors.
The time period could be quicker or indeed could be longer.

Certainly on brief reflection you would have to think longer as larger deposits , higher interest rates etc are involved for invesotrs than had been seen for owner occupiers