Sellers will never drop their prices

myhouse_2

Just as a buyer refusing to pay high prices in a rising market misses out, a seller in a falling market misses out too. In both cases there can be a significant loss realised before buyer/seller decide they need to adjust their expectations.
A stubborn seller doesn't set the market price - those that actually sell set the market price.

toby3000

Mallotum_X wrote: »

Do we really have a fundamental lack of homes, im not so sure we do, some stats might indicate this, but they have been saying that consistently year after year, so where are the masses of tent cities? Or are the immigrants finding places to live within the current property market.

I've wondered about this for ages. For years and years we've been told that household creation was outstripping housing supply, so where are all these hypothetical households going?

myhouse_2

Always had a problem with the undersupply argument - it made sense years ago when more people were divorced and more were marrying later but don't see why the difference between now and 10 years ago should be so big - even including immigration.

HAMISH_MCTAVISH

toby3000 wrote: »

I've wondered about this for ages. For years and years we've been told that household creation was outstripping housing supply, so where are all these hypothetical households going?

Several things at play here.

1. The percentage of vacant houses has been decreasing, but this can only go so far. At any given time there are a number of vacant houses. Houses can be vacant for all sorts of reasons, but the most common are whilst they are for rent (and sometimes for sale), being refurbished, etc. Some level of vacancy is needed for the market to function smoothly, and so this trend can't last.

To put it in perspective....

The housing vacancy rate in Ireland is 17%

The housing vacancy rate is the USA is 11%

The housing vacancy rate in the UK is just 3% (and falling)

2. People living in overcrowded conditions. The latest estimate from Shelter puts it at 1.7 million people. This number has been increasing, as multiple families or households live in a house. The number of houses in multiple occupation has been rising steadily for years.

3. "Temporary" accommodation. We don't have tent cities in this country because the government is legally obliged to house the homeless. We fill many tens of thousands of bed and breakfast rooms at taxpayer expense on any given night in the UK. 140,000 people last year alone, from memory.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Several things at play here.

1. The percentage of vacant houses has been decreasing, but this can only go so far. At any given time there are a number of vacant houses. Houses can be vacant for all sorts of reasons, but the most common are whilst they are for rent (and sometimes for sale), being refurbished, etc. Some level of vacancy is needed for the market to function smoothly, and so this trend can't last.

To put it in perspective....

The housing vacancy rate in Ireland is 17%

The housing vacancy rate is the USA is 11%

The housing vacancy rate in the UK is just 3% (and falling)

2. People living in overcrowded conditions. The latest estimate from Shelter puts it at 1.7 million people. This number has been increasing, as multiple families or households live in a house. The number of houses in multiple occupation has been rising steadily for years.

3. "Temporary" accommodation. We don't have tent cities in this country because the government is legally obliged to house the homeless. We fill many tens of thousands of bed and breakfast rooms at taxpayer expense on any given night in the UK. 140,000 people last year alone, from memory.

Regarding number 2, isn't this a move to how things often used to be? Granted, we don't have the larger homes in abundance anymore.

Regarding 3, this is just transitional. Will always happen, happens in Ireland too, even with their high vacancy rates. There are some living in B&B's for extended periods, but thats mainly due to very localised issues, such a kids in school and no immediately available houses in the surrounding area.

HAMISH_MCTAVISH

myhouse wrote: »

Always had a problem with the undersupply argument - it made sense years ago when more people were divorced and more were marrying later but don't see why the difference between now and 10 years ago should be so big - even including immigration.

Divorce is some of it, but increased life expectancy, increased birthrates, and increased migration also all play a part.

Last year we added 408,000 people, created 252,000 additional households, and built just over 100,000 houses.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Regarding number 2, isn't this a move to how things often used to be? Granted, we don't have the larger homes in abundance anymore.

Yes.

Exactly how it used to be.

Multi-generational families of 11 people in a two room tenement flat were absolutely the norm in the 30's, 40's and 50's, and remained common as little as 40 years ago.



Wouldn't have thought you'd be advocating a return to such living standards though....

Regarding 3, this is just transitional. Will always happen, happens in Ireland too, even with their high vacancy rates. There are some living in B&B's for extended periods, but thats mainly due to very localised issues, such a kids in school and no immediately available houses in the surrounding area.

True.

But people keep asking why we don't have tent cities, or thousands sleeping rough, if we have such a housing shortage.

That's the answer, like it or not.

The government is obliged to house everyone. Even when there aren't enough houses for everyone.....

So some end up in B&B.

Graham_Devon

I think I've got it... (or at least got another angle)

We may have created 100,000 new houses. But what about those large victorian or georgian houses which have been split into flats? I'm assuming these wouldn't be included in the houses we created.

What about those large mills being converted into 20, 30 apartments? What about the barn conversions? 15 homes recently created here, in last three years, from barns alone on one plot.

What about the riverside apartments being created right now near me, out of old industrial buildings?

Are these included in the "new homes" figures...as could go someway to explaining why people are falling out onto the streets. These are not new buildings.

asc99c

toby3000 wrote: »

I've wondered about this for ages. For years and years we've been told that household creation was outstripping housing supply, so where are all these hypothetical households going?

A lot of them are potential households. 'Children' in their 20s and 30s still living with parents. Remember rental costs have risen in line with mortgage costs. I'm not sure how you can afford any property on minimum wage, unless you can get a housing association place.

Plenty of people in their 20s and 30s want to move out but can't afford it.

Linton

By definition of "household" there cant be much difference between the number of households and the number of houses.

I would think the housing pressures arise where people are members of a household but wish they werent.

for example...

1) Children in their twenties still living with their parents because they cant afford a house

2) People sharing a rented house again because they cant afford to buy one of their own.

As to Graham Devon's point that this a return to how things used to be....

Agreed, but the trouble is expectations have changed. Such problems used to be restricted to the poor majority. Now many more people have good office jobs and see themselves as middle class deserving of the benefits that used to be reserved for the rich. Unfortunately, relatively speaking, people with those sorts of jobs are no longer rich, they are part of the majority.