House prices to fall further with public sell offs

brit1234

£60BN SELL-OFF FOR PUBLIC PROPERTY

Sunday October 17,2010
By Geraint Jones

THE Government may offload public property worth up to £60billion in the most radical sale of state-owned assets in recent times.

Selling a chunk of its property portfolio to the private sector is viewed by Prime Minister David Cameron and Chancellor George Osborne as a key strategy in reducing Britain’s £149billion deficit.

But the sell-off looks likely to be much more far-reaching than originally planned, dwarfing the £16billion property sale announced by Gordon Brown in the 2009 Budget.

The size of the sale, to be revealed on Wednesday with other details of the Government’s spending review, could have disastrous consequences for the property market, which is already teetering on the brink of a second crash, according to analysts.

Although the short-term benefit to the Exchequer of such a sale would be huge, the long-term consequences for the country’s ability to climb out of recession make it a dangerous gamble, they say.

Flooding the market with houses, flats and commercial premises on such a scale would place huge pressure on prices which are already falling because of limited mortgage facilities for first-time buyers and an increase in the number of homes on the market in recent months.

One analyst said: “Increasing the supply in the marketplace reduces price and, with house prices already under severe pressure, this is the last thing the market needs.”
:beer:

Ominously, last week Housing Minister Grant Shapps warned homeowners not to rely on the value of their properties to fund their retirement, declaring that the Government would try to ensure property prices rise more slowly than incomes to avoid another housing boom. “People should think of homes as a place to live rather than a pension,” he told the Housing Market Intelligence Conference.

Ministries have been told to produce property inventories and departments are believed to have been offered incentives to come up with cost-cutting ideas. Mr Osborne has asked efficiency expert Sir Peter Gershon, former Logica boss Dr Martin Read and Tesco executive director Lucy Neville-Rolfe to advise on property savings.

Earlier this year Dr Read said the Government should vacate 10 per cent of its buildings in London, move staff into fewer locations and dispose of the surplus properties.

Although the Office For National Statistics estimates Government property is worth about £370billion, there is no comprehensive register of the entire portfolio and some City experts believe it could be worth £500billion.

The Ministry of Defence alone owns just over one per cent of all property in Britain while the Department of Health owns 77,000 buildings. Among the assets that could go under the hammer are the Queen Elizabeth II Conference Centre in central London and the depots of the Defence Storage and Distribution Agency. Assets held by British waterways are also believed to be under review.

The Department for Environment, Food and Rural Affairs has sold 55 residential properties, most attached to former research facilities, for £15million in the past five years.

The Royal Institute of Chartered Surveyors is among those warning that increasing the supply of new property into the market will push house prices down.

Spokesman Ian Perry said: “The fresh influx of property combined with a lack of buyers remains the key problem. First-time buyers are in short supply as the high deposits required by lenders prevent their first steps on the property ladder. Without sufficient demand property prices continue to slip back.”
:T

http://www.dailyexpress.co.uk/posts/view/205850/-60bn-sell-off-for-public-property/

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More good new for first time buyers with even more pressure on prices to come down and this from the daily express lol.:j:rotfl:

ILW

Doubt if much of this is housing stock.

brit1234

ILW wrote: »

Doubt if much of this is housing stock.

Police, NHS, MOD has housing stock all over the place. The Met police are currently selling off theirs with married quarters and such like. The MOD have places you would even no existed like the odd maisonette here and there.

HAMISH_MCTAVISH

brit1234 wrote: »

Police, NHS, MOD has housing stock all over the place. The Met police are currently selling off theirs with married quarters and such like. The MOD have places you would even no existed like the odd maisonette here and there.

True. And of all those listed, the MOD is I believe the biggest owner of residential property by far.

The MOD sells off a lot of housing around military bases that have closed or downsized, and it's mostly sold quite cheaply.

But a lot of it was built using non-standard construction techniques, and can be difficult to mortgage, which is why it's cheap. It also tends to be concentrated in very small areas around their bases, so usually doesn't impact the wider area very much.

If Cameron does sell off the property assets, this will be his "Gordon Brown & Gold" moment though.

mbga9pgf

HAMISH_MCTAVISH wrote: »

True. And of all those listed, the MOD is I believe the biggest owner of residential property by far.

The MOD sells off a lot of housing around military bases that have closed or downsized, and it's mostly sold quite cheaply.

But a lot of it was built using non-standard construction techniques, and can be difficult to mortgage, which is why it's cheap. It also tends to be concentrated in very small areas around their bases, so usually doesn't impact the wider area very much.

If Cameron does sell off the property assets, this will be his "Gordon Brown & Gold" moment though.

No housing is owned by the MOD. Its owned by a company called "Annington" (https://www.annington.co.uk), actually a japanese bank investment arm. Quarters were sold off in the 90s for an average of 4K each. Most now sell for 200K plus, as they actually have some land to them. The name quarter is a clue. The average plot is a quarter of an acre. And unlike most modern newbuild, are pretty damn solid, if a little chilly in winter.

Hamish should be worried at the prospect of Kinloss and Lossie closing, with the land getting sold on (as is currently planned) for housing development for Inverness. Want to guess how many houses you can fit on a base the size of lossie/kinloss Hamish? :rotfl:

Not to mention the effect on the jock economy once defence moves out of your area? :rotfl::rotfl:

antrobus

HAMISH_MCTAVISH wrote: »

True. And of all those listed, the MOD is I believe the biggest owner of residential property by far.

The MOD sells off a lot of housing around military bases that have closed or downsized, and it's mostly sold quite cheaply.

But a lot of it was built using non-standard construction techniques, and can be difficult to mortgage, which is why it's cheap. It also tends to be concentrated in very small areas around their bases, so usually doesn't impact the wider area very much.

If Cameron does sell off the property assets, this will be his "Gordon Brown & Gold" moment though.

Technically speaking, the Defence Estate arm of the MOD doesn't actually own any residential housing at all. It's all owned by a company called Annington which brought them in 1996, and leased them back to DE. See http://www.annington.co.uk/ - "our primary business is the refurbishment and sale of former MoD homes".

So Cameron can't sell these off because Major already did that in 96.

Edit: Okay, someone else beat me to it. Oy vay.

HAMISH_MCTAVISH

antrobus wrote: »

So Cameron can't sell these off because Major already did that in 96.
.

Well there you go, you learn something new every day.

MOD housing already sold off.

HAMISH_MCTAVISH

mbga9pgf wrote: »

Hamish should be worried at the prospect of Kinloss and Lossie closing, with the land getting sold on (as is currently planned) for housing development for Inverness. Want to guess how many houses you can fit on a base the size of lossie/kinloss Hamish?

Not to mention the effect on the jock economy once defence moves out of your area?

You seem to have a geography problem.....

Kinloss/Lossie are not in the Aberdeen area, and those closures will have almost zero impact on Aberdeen.

The clue should have been the fact that the housing is being planned for Inverness, not Aberdeen....:rotfl:

kabayiri

I still dislike how media stories play loose and fast with terms like deficit and national debt. No wonder the average public person gets confused.

These sales will provide a one time hit to the deficit in income for that year.

As for commercial property I hope they don't follow the path of HMRC who now lease back their offices. The company which is the landlord is now registered offshore, depriving the treasury of much needed tax coffers. We really can't afford the loss of even more tax income going offshore.

antrobus

kabayiri wrote: »

I still dislike how media stories play loose and fast with terms like deficit and national debt. No wonder the average public person gets confused. These sales will provide a one time hit to the deficit in income for that year.

Good point. The cash proceeds of asset sales won't actually cut the annual deficit, they simply reduce debt. Although granted the reduced interest payable on said debt will help shrink the deficit.

kabayiri wrote: »

As for commercial property I hope they don't follow the path of HMRC who now lease back their offices. The company which is the landlord is now registered offshore, depriving the treasury of much needed tax coffers. We really can't afford the loss of even more tax income going offshore.

Yes well quite. There's not that much point in selling assets if all you're going to lease them back. Bit of a fudge, as all you're doing is swapping one kind of debt for another.

The funny thing with the Mapeley-HMRC deal, is that HMRC didn't even realise that they were dealing with an offshore company until they'd more or less signed the deal. Didn't think to ask apparently.

Sibley

If FTB's can get on the ladder that can't be a bad thing. These type of properties will be perfect. It will bring reality back to a few people. A first time buy should be a property like ex council flat or the like. Stop idiots preaching that a FTB should be a 4 bedroom detatched.

Great news.