Self-build: Should people build their own homes?

shortchanged_2

I'm not disputing that supply and demand affects prices and that what you say has some direct effect on house prices.
However there are other factors which I stated earlier that also have a bearing on house prices such as mortgage lending. You keep going on about mortgage rationing, I call it sensible lending. If this country goes back to any form of loose lending then house prices will rise as loose lending is basically like adding fuel to the fire. That is why I don't want to see a return to the previous lending practices and although you state on here you don't, I actually am not convinced you do. You are a blatant property ramper Hamish and you obviously have a VI in rising property prices hence your call to loosen mortgage lending again because you know it will probably result in price rises.

Eventually the continued tighter lending will result in lower prices because the property chains will continue to collapse, which is why there are so few transactions at the moment.

Put it this way Hamish if house prices were more affordable (i.e lower house prices) under the current lending criteria then I'm sure the market would be moving along nicely now. So I think that indicates that high house prices are the barrier to a functioning housing market.

wymondham

What about these?

http://www.bbc.co.uk/news/world-south-asia-14172605

vivatifosi

Wymondham's post above points to one of the big issues that we have in the UK. It isn't about whether or not we should self-build, it is about lack of imagination. If we continue to live in a small country where when people try to convert shops into houses, or build non-standard houses or use different materials, or try and self-build the answer is almost always "oh no, you can't do that". There is no one panacea to the housing issue. For a country known for its design capabilities and quirky and eccentric thinking, we are really lacking on this one.

seven-day-weekend

Loughton_Monkey wrote: »

I'm guessing, but this probably stems from 'Marketing' of the self-build merchants [of which Potton is a market leader].

It's a nice idea, but not one, I think, that solves the issue at hand.

The first issue is always trying to find the right 'plot'. Unlike commercial builders, you are looking for a single plot of the right size and location. These are as rare as a bacon sandwich at a Bah Mitzvar.

After this, you have a choice of literally self-build or 'outsource' the build to 'professionals'. The former is only cheaper if you don't 'charge' for your own labour. [Incidentally, would you ever buy a house from someone who literally built it themselves?].

If you go the 'professional' route, then I remain unconvinced that this is 'cheap'. Getting mains pipes/cables to your plot costs money whether for one house or 15. No economies of scale....

You might end up with a very 'individual' and well-designed house that meets your needs perfectly, but I strongly suspect it ends up being reasonably expensive.

Personally, I think the best 'self build' [if you can call it that] comes from buying a distressed old house very cheap and then gutting it before tastefully extending and improving it.

I agree with all this and am in priciple against using new land for one single house when there are houses available. A brownfield site is a different matter.

HAMISH_MCTAVISH

shortchanged wrote: »

I'm not disputing that supply and demand affects prices and that what you say has some direct effect on house prices.
However there are other factors which I stated earlier that also have a bearing on house prices such as mortgage lending.

Supply and demand is all there is.

Mortgage lending is a component of demand however..... Without lending you can't convert need into effective demand.

You keep going on about mortgage rationing, I call it sensible lending.

And you're wrong. I've already explained to you in depth what sensible lending looks like.

Historically normal, prudent, lending, the same as was available in 1990 and 1967. Where a 5% to 10% deposit and a decent job was enough to get you a mortgage at a decent margin above base, versus today's punitive rates above base to discourage borrowers.

Not the current absurdly tight lending, where banks must reduce the pool of borrowers to match available funds by any means.

No matter how good your credit, or whether you have the "right" deposit, there are only enough funds to lend approx 45K mortgages a month.

If a million people showed up tomorrow with saved deposits and perfect credit scores, the banks would move the goal posts yet again, because they simply don't have the funds to lend to any more people than the current 45K or so a month.

It's rationing, plain and simple.

If this country goes back to any form of loose lending

Historically normal, prudent, lending. Not loose lending.

But yes, prices will rise regardless unless we build a lot more houses......

In fact, prices will eventually rise whether or not a penny more is allocated to mortgage funding.

Mortgage funding restrictions can never prevent HPI, they can only delay it.

then house prices will rise as loose lending is basically like adding fuel to the fire. That is why I don't want to see a return to the previous lending practices and although you state on here you don't, I actually am not convinced you do.

It's not loose lending, it's historically normal, prudent, lending.

But yes, of course prices will rise. They'll rise anyway, even without lending increases.

But without lending increases, we won't build the houses we need, and the end result will be far, far worse.

You are a blatant property ramper Hamish and you obviously have a VI in rising property prices hence your call to loosen mortgage lending again because you know it will probably result in price rises.

You are a blatant crash-ramper Shortchanged and you obviously have a VI in crashing prices.....

Everyone has a VI in something.

Mine is clear, I don't hide it. But in this instance, my interests align perfectly with the interests of the majority of people.

What your "solution" (absurdly tight lending) has done is ensure that even less people can afford to buy than could in 2007, despite both prices and interest rates being far lower.

The irony of it all is absolutely sublime. A "priced out generation" that wanted the value of other people's assets to fall, got the falls they wished for but now can't take advantage of the lower prices and low interest rates because they can't get a mortgage.

Forced to enrich their landlords, permanently financially disadvantaged, and unlikely to ever catch up with the pre-2007 buyers in the "low lifetime housing cost" stakes, as they're missing the best interest rates in history for buyers, whilst prices hover just a small amount below peak.

The crashaholics have replaced a situation where some people could not afford to buy, with a situation where EVEN MORE people cannot afford to save for an absurd deposit.

And in the meantime the BTL train is rolling down the tracks again and picking up steam remarkably quickly, rents have soared to new record highs, the housing shortage is growing rapidly as mortgage rationing means we build even less houses than before, and the lowest level of house building in history is about to crash into the biggest generation of people in history.

With only one possible result..... (Hint, it isn't falling prices)

Eventually the continued tighter lending will result in lower prices because the property chains will continue to collapse, which is why there are so few transactions at the moment.

Well it clearly isn't happening. Prices have been bumping along the bottom with only minor fluctuations up and down for the last two years now.

Yet another discredited bear meme I'm afraid.

Put it this way Hamish if house prices were more affordable (i.e lower house prices) under the current lending criteria then I'm sure the market would be moving along nicely now. So I think that indicates that high house prices are the barrier to a functioning housing market.

Prices aren't the problem. Buying a house is already plenty affordable, the problem is most people can't get a mortgage.

And as we saw last time, falling prices actually decrease the willingness of the banks to lend, and decrease the number of people that can buy.

And even if you could convince the banks to keep lending into the face of falling prices, it would make little difference to the lending numbers anyway.

There are currently 45K approvals a month. A 20% fall in prices would mean an extra 9K people could buy. That still leaves us short of 65K mortgages a month.

The problem isn't prices. Never has been. It's mortgage rationing, cause by global credit conditions that had nothing to do with UK lending standards.

Only when lending increases will significantly more people be able to buy a house, and only then will more houses get built. And that's ultimately the only thing that can reduce prices over the long term, if that's what you want to see happen.

Anyway this has been fun and all, but now that I've comprehensively demolished the last of your arguments I'll be referring you back to this thread from now on every time you spout the "sensible lending" crap.

kabayiri

vivatifosi wrote: »

Wymondham's post above points to one of the big issues that we have in the UK. It isn't about whether or not we should self-build, it is about lack of imagination. If we continue to live in a small country where when people try to convert shops into houses, or build non-standard houses or use different materials, or try and self-build the answer is almost always "oh no, you can't do that". There is no one panacea to the housing issue. For a country known for its design capabilities and quirky and eccentric thinking, we are really lacking on this one.

I agree with this.

It strikes me that there is a shortage of 'living units' in places like London. The housing trend there will buck the national trend as long as this is the case and London remains a buoyant part of the economy.

The criteria which define where someone needs to live for a short time / specific need may be quite different to a family home. These accomodation types should be small and relatively cheap though.

Young workers may only want a place to rest their heads, preferring to be out with friends or at work.

Will these sort of living arrangements work? We can only know by trying them.

daveyjp

abaxas wrote: »

Since planning is based on legalised bribery (section 106).

A developer can throw a much larger bung to the local council than a person who self builds.

For a single house for owner occupation there would be no requirement for a s106 payment.

Conrad

shortchanged wrote: »

How many times Hamish, it's not mortgage rationing it's sensible lending.

If someone fulfils the criteria they can get a mortgage.

You are the one missing the point.

99%+ of homeowners DID NOT lose thier home, yet overly tight criteria now means 50% of would be owners are forced to rent.

So to save a relatively small number of repos, we put property out of reach of millions of people THAT WOULD NOT HAVE LOST THIER HOME.

For example a 55 yo divorcee wanting to start over. In the past they would have got a 25 yr mortgage and 99% would have sustained the property. But now they must proove they have a very substantial pension or they will be offered a 10 or 15 year term, but this then fails the affordability test as the mortgage is compressed over a short term.

Now you will say that this is sensible but again I remind you in the past 99% of such people would have muddled through. Grown adults in the main make good decisions.

Your blanket statments about liar loans are the typical misreading we get of what went on as hitherto perfectly capable borrowers are forced to rent.

Await the predictable reposte that I'm a VI, yawn.

Your zeal for sensible lending = make landlords rich.

lostinrates

Conrad wrote: »

99%+ of homeowners DID NOT lose thier home, yet overly tight criteria now means 50% of would be owners are forced to rent.

This is relevent. Are there figurs to show how many of those who haven't lost their homes have had other arrangement with mortgagees (reduced payments) or had help from other sources or forms of payment protection insurance? I don't see how these could be conclusive. e.g. if we really got into trouble my guess is one set of parents might offer to help out....who would know? If this weren't an option, if we hadn't got a mortgage under the current terms maybe parents would have offered some cash a deposit...either way its help that wouldn't show on stats isn't it?

Conrad

lostinrates wrote: »

This is relevent. Are there figurs to show how many of those who haven't lost their homes have had other arrangement with mortgagees (reduced payments) or had help from other sources or forms of payment protection insurance?

?

It would be nigh on impossible to find compile evidence, but suffice to say the big picture is that 99% of owners retain thier homes, but tight regulation now excludes these perfectly capable adults from home ownership as they do not fit neatly into lending criteria. So we punish millions of would be owners to what end?