Nationwide- +0.8% MoM +3.9% YoY

ukcarper

92203 wrote: »

Absolutely, and I am happy to hold my hand up in this situation :beer:

Back onto house price:earning ratios.

Going by the data I have at my disposal (from a cursory Google search), House price:earnings ratios are still above the peak that they reached at the height of the property bubble which occurred in the late 80s. Historically, excluding the booms, ratios were much lower. This is according to ONS/Nationwide data http://www.telegraph.co.uk/finance/p...s.html?image=4

Incidentally, my dad purchased his first house (in York) during the late 1960s for 2.5 times his wage, as a newly qualified teacher.

Irrespective of the cost of buying a house, having more and more money going towards enriching the rentier class at the expense of others is hardly conducive to having a progressive and fair society.

Yes house prices to earning are the highest they have been apart from last boom. But just as they are high now they were low in the 90s. I don't really buy into the conspiracy theory.

Late 60s a good time to buy house prices went from 3x average earning to almost 5x average earnings in the early 70s now about 5.2x I believe .

Thrugelmir

92203 wrote: »

Furthermore, if privately renting is to become the norm. Increased regulation of the market is required, with particular attention being focused on security of tenure and ensuring that repairs and maintenance are performed in a timely manner.

Logistically a nightmare to supervise. Moving to the continental model would see an industrialisation of property letting. One German company lets around 93,000 properties to give a perspective as to the scale of operations.

92203

ukcarper wrote: »

Yes house prices to earning are the highest they have been apart from last boom. But just as they are high now they were low in the 90s. I don't really buy into the conspiracy theory.

It's not so much a conspiracy, but rather more economic policy.

We have an aging population, with increased life expectancy and often a need to fund expensive residential care over the last 3-5 years. Furthermore, we have many people with pension shortfalls and a contracting economy to boot.

The House price boom of the early 00's achieved numerous things;

• Improved the balance books of the banks
• Provided a vehicle to fund end of life residential care for old people
• Increased demand for goods and services, due to people being able to finance purchases using Mortgage Equity withdrawal
• Gave the Middle classes (many of whom were not traditional Labour voters) a feel good factor as their properties became worth more, and they were able to sink the money into other properties and make even more money out of rental income and capital gains.
• Gave poorer people the opportunity to leverage money into property, and even borrow more than the value of the house to spend on other things. Existing working class homeowners were able to afford holidays and cars they could only dream of.
• Increased GDP via imputed rent calculations

Gordon Brown knew exactly what he was doing and, against advice from the treasury, removed house price inflation from RPI back in 2003, when it looked like price increases were beginning to slow. GDP increased not only due to the funny money coming out of houses, but also out of imputed rent which is calculated against homes, irrespective of them being owned or rented.

Despite the Conservatives acknowledging that high housing costs are strangling the economy, rather than increasing supply, they're engineering round two. This, just as previously, will boost their popularity amongst existing home owners and take most mortgages out of negative equity, thus cleaning the balance books of the banks so that they can be reprivatized. To the common man, this is little more than blatant and cynical electioneering.

In both cases, the people worst affected are new entrants to the housing market, who have to collectively pay for the credit party enjoyed by others before them via increased housing costs.

In essence, we are seeing an unprecedented transfer of wealth from the young to the old.

92203

Thrugelmir wrote: »

Logistically a nightmare to supervise. Moving to the continental model would see an industrialisation of property letting. One German company lets around 93,000 properties to give a perspective as to the scale of operations.

I think that if we are to pursue a private rented model, this is what we need.

I would far rather rent from a large accountable organisation who have a reputation to uphold, than an amateur landlord who is only in it because they got lucky in the property game.

I've rented from small time landlords, and more recently the market (private, non-subsidised rent) arm of a housing association. I by far preferred the latter. They were quick to repair things and managed the entire block of flats very well indeed. I didn't have to raise things via a Lettings agency either. Everything done directly with the housing association, who communicated very proactively. A gleaming contrast to renting from a BTL landlord via a lettings agent.

I know that there are moves afoot to encourage institutional investment into "Build to let", though I suspect like most things in this country, it will take time, though in my opinion can't come soon enough.

ukcarper

I think you look for things to support your theory where as in fact various things conspired to increase prices.

Supply does need to be increased but how do you suggest they do it. It's a lot easier for government to come up with schemes that will not need a big outlay than build council houses.

ukcarper

92203 wrote: »

I think that if we are to pursue a private rented model, this is what we need.

I would far rather rent from a large accountable organisation who have a reputation to uphold, than an amateur landlord who is only in it because they got lucky in the property game.

I've rented from small time landlords, and more recently the market (private, non-subsidised rent) arm of a housing association. I by far preferred the latter. They were quick to repair things and managed the entire block of flats very well indeed. I didn't have to raise things via a Lettings agency either. Everything done directly with the housing association, who communicated very proactively. A gleaming contrast to renting from a BTL landlord via a lettings agent.

I know that there are moves afoot to encourage institutional investment into "Build to let", though I suspect like most things in this country, it will take time, though in my opinion can't come soon enough.

As far as I know there is nothing stopping large organisations providing rental accommodation but none are doing it.

Thrugelmir

92203 wrote: »

Despite the Conservatives acknowledging that high housing costs are strangling the economy, rather than increasing supply, they're engineering round two. This, just as previously, will boost their popularity amongst existing home owners and take most mortgages out of negative equity, thus cleaning the balance books of the banks so that they can be reprivatized. To the common man, this is little more than blatant and cynical electioneering.

The only way of deflating the property bubble is slowly. Given the exposure of UK banks and building societies to mortgage lending. Any sudden significant drop in prices could result in yet another financial crash. The Governments aim with Help to Buy etc is to boost construction activity. Providing mortgages are advanced on sensible lending criteria etc. Then HPI 2 won't happen. The days that interest rates rise is getting ever closer. When they do. How will the consumer react then?

ukcarper

Thrugelmir wrote: »

The only way of deflating the property bubble is slowly. Given the exposure of UK banks and building societies to mortgage lending. Any sudden significant drop in prices could result in yet another financial crash. The Governments aim with Help to Buy etc is to boost construction activity. Providing mortgages are advanced on sensible lending criteria etc. Then HPI 2 won't happen. The days that interest rates rise is getting ever closer. When they do. How will the consumer react then?

I agree I can't see to much wrong with Help to Buy as long as sensible lending criteria is used.

92203

ukcarper wrote: »

I think you look for things to support your theory where as in fact various things conspired to increase prices.

Supply does need to be increased but how do you suggest they do it. It's a lot easier for government to come up with schemes that will not need a big outlay than build council houses.

I think they need to ruthlessly redefine planning regulations and also revise what is classed as greenbelt land. In areas where there is massive demand, rundown Victorian terraces close to towns and cities need to be torn down and replaced with higher density accommodation. This will increase population density, making it easier to justify investment in public transport infrastructure for those areas.

House building is (at least in part) so low due to the complex and obstructive nature of the planning system, which creates massive legal costs and also makes building land incredibly expensive for builders to buy.

If the planning system wasn't so profoundly obtuse, building land would be cheaper and the legal costs faced by builders would be lower.This would ultimately lead to building costs reducing, more houses being built, and ultimately cheaper housing for the population.

Obviously, I appreciate that banks (and their customers) are heavily leveraged into property, so any moves to alter the supply/demand ratio will need to be engineered very carefully.

I do believe that the first boom was down to electioneering by Labour. Increased immigration, deregulated finance sector, and nothing done to increase supply. What did they expect to happen?

In conclusion, it is highly regrettable that this situation ever arose, and I do wonder whether or not any political party will ever be brave enough to deal with it.

92203

ukcarper wrote: »

As far as I know there is nothing stopping large organisations providing rental accommodation but none are doing it.

I believe that Prudential are entering the Build-to-Rent market, and another consortium is even building some rental properties in Southampton.

I know that this idea was first discussed at the time of the General Election, and that there is a £1bn pot to help finance institutional investment