News that House prices rise, worried for FTB.

frugalgdubs

A house purchase is a wonderful occasion, it allows us to wonder in its paintwork, it's woodwork, the plasterwork and then wonder how we can afford the bloody thing! Although I fell for the last 20 years of Sarah Beenie and location 3x3 etc, our countries obsession with home ownership is barking. It gives people a sense of security and the thought that we are making our mark. But...the rest of Europe see house purchase as a multi generational purchase-many generations of all classes living under one roof..

Itismehonest

frugalgdubs wrote: »

A house purchase is a wonderful occasion, it allows us to wonder in its paintwork, it's woodwork, the plasterwork and then wonder how we can afford the bloody thing! Although I fell for the last 20 years of Sarah Beenie and location 3x3 etc, our countries obsession with home ownership is barking. It gives people a sense of security and the thought that we are making our mark. But...the rest of Europe see house purchase as a multi generational purchase-many generations of all classes living under one roof..

Completely true.

A property is also only worth what it sells for. While one owns it the value is only 'on paper' & will rise or fall as times change.

Also the concentration on doing everything for the FTB (understandable) should have been tempered by stopping the rush of BTL.
Every home sold to let means one less for ownership. A BTL landlord is not freeing up a home for another to buy but, in fact, denying them the opportunity as BTL & FTB mainly aim at the same type of properties on the lower rungs of the ladder.
That just perpetuates the shortage of houses, pushes up rents/house prices & means youngsters are even less likely to be able to afford to buy.
If only the bottom end of the market moves & nobody is climbing the ladder then the whole ladder grinds to a halt. It becomes harder for those at the top to downsize & free up the larger properties wanted by families wishing to move from the 2nd step on.

Loughton_Monkey

Itismehonest wrote: »

A property is also only worth what it sells for. While one owns it the value is only 'on paper' & will rise or fall as times change.

True, but surely that's the same for any 'non cash' asset? It applies to your gold ring, your pension fund, your Stocks & Shares IAS, your car.....

Itismehonest wrote: »

Every home sold to let means one less for ownership. A BTL landlord is not freeing up a home for another to buy but, in fact, denying them the opportunity as BTL & FTB mainly aim at the same type of properties on the lower rungs of the ladder.

Here, I take issue. As far as I know, every house is available for a non-landlord to buy. So equal opportunity. If a BTL person comes in and 'gazumps' me, I'm not happy, but I had the opportunity to buy. I just didn't pay enough... or couldn't complete quick enough...

Itismehonest wrote: »

That just perpetuates the shortage of houses, pushes up rents/house prices & means youngsters are even less likely to be able to afford to buy.

More BTL pushes up rents and pushes up prices? Can these wretches who buy 4% of the houses be that powerful? I think we should be told....

Itismehonest wrote: »

If only the bottom end of the market moves & nobody is climbing the ladder then the whole ladder grinds to a halt. It becomes harder for those at the top to downsize & free up the larger properties wanted by families wishing to move from the 2nd step on.

Not sure I follow this. If "only" the bottom end moves, then where are they getting their houses from? New builds obviously, because you think no-one is moving 'up'. But surely it won't take long for the starter home' to move up to the value of a 'stage 2' house. That would be a really perverse market....

Perhaps you could explain a bit more?

Itismehonest

Loughton_Monkey wrote: »

True, but surely that's the same for any 'non cash' asset? It applies to your gold ring, your pension fund, your Stocks & Shares IAS, your car.....

True. However, a house is the most expensive investment the average person makes &, while other investments are good to have, they aren't looked on in quite the same way as a roof over the head.

Loughton_Monkey wrote: »

Here, I take issue. As far as I know, every house is available for a non-landlord to buy. So equal opportunity. If a BTL person comes in and 'gazumps' me, I'm not happy, but I had the opportunity to buy. I just didn't pay enough... or couldn't complete quick enough...

BTL mortgages have been & still are relatively easy to get. FTBers have the problem of affording a deposit. Refinancing against existing properties is not available to them.

And David Whittaker, managing director of Mortgages for Business, said: ”Demand for rental property remains red-hot. Landlords are refinancing in their droves to raise enough capital to make further additions to their portfolios.“

Matthew Pointon, a property economist at Capital Economics, said that many would-be first-time buyers living in the rental sector are still finding it a ”challenge“ to make the jump onto the property ladder, which is helping to keep rental demand up. Low mortgage rates are also making the potential returns landlords could make more attractive.

He said: ”Alongside a gentle recovery in overall mortgage lending, buy-to-let lending is also likely to continue its upward trend.

from http://www.independent.co.uk/money/mortgages/boom-in-buytolet-mortgages-could-lead-to-unsustainable-house-price-bubble-8754574.html

Loughton_Monkey wrote: »

More BTL pushes up rents and pushes up prices? Can these wretches who buy 4% of the houses be that powerful? I think we should be told....

4% of the total market but a much higher percentage in the FTB-type price bracket.
Prices may differ from area to area but I'm pretty sure that the BTL market has more properties in the 1,2 &, maybe, 3 bed market (therefore, FTB/stage2 market) than at the upper end of the property scale.

Loughton_Monkey wrote: »

Not sure I follow this. If "only" the bottom end moves, then where are they getting their houses from? New builds obviously, because you think no-one is moving 'up'. But surely it won't take long for the starter home' to move up to the value of a 'stage 2' house. That would be a really perverse market....

Perhaps you could explain a bit more?

Certainly. When a BTL or holiday home owner sells their investment property they don't need to buy another - either up or down the ladder.
BTL can cause much the same problems as the 2nd (holiday home) situation which has led to a steep increase in prices & a lack of affordable housing in certain areas. In both cases the owner has a primary residence & a 2nd (or more) which means others are denied the opportunity to own/occupy the 'investment' property.
Of course there's a need for rental properties but it may be better to limit their number to a certain percentage per area as some places (mainly abroad) have started to do with 2nd homes?

The whole market would probably move more if there was an overall SDLT holiday & not just for the low end. Those moving from stage 2 (& higher) homes are also finding it hard to trade up &, in many cases, the Stamp Duty is the problem. The whole market chain (bottom to top) needs to be moving.
I think the money generated by a Stamp Duty holiday would also have a beneficial knock-on effect on the overall economy. Home-buyers tend to spend on all sorts of goods & services when they buy a place.

Thrugelmir

markharding557 wrote: »

Ive seen the light wrote:
Battered, bombed and war indebted britian of 1945 did just that, but that was under more inspired leadership than we have today.

How about we flatten a million homes again and reutilise the land

TruckerT

IveSeenTheLight wrote: »

Ownership of any asset is not a right for all.
If you aspire for property to be affordable for 100% of the population then there needs to be a vast increase in the supply of property.

Those wealthier would also be able to afford seaside / countryside retreats.

You say the government need to address this, so I ask the question, how will they be able to afford such a mass building program?

markharding557 wrote: »

Battered, bombed and war indebted britian of 1945 did just that, but that was under more inspired leadership than we have today.

Thrugelmir wrote: »

How about we flatten a million homes again and reutilise the land

The post-war building boom went much further than simply replacing the war-damaged housing stock. A similar programme now would be at least partly funded by the savings in housing benefit, which mostly lines the pockets of BTLers. It would also stabilise property prices. Oh, I forgot - stable property prices are a Very Bad Thing. Are property prices included in the inflation calculations? I think not!

TruckerT

Loughton_Monkey

IveSeenTheLight wrote: »

Ownership of any asset is not a right for all.

.... think I know where you're coming from, but with my pedantic hat on today, I would suggest that everyone already has the right to buy a house (or other asset). I think you mean that not everyone has the means with which to aquire the house. Not enough money.

IveSeenTheLight wrote: »

If you aspire for property to be affordable for 100% of the population then there needs to be a vast increase in the supply of property.

Not all to do with supply. Given the (almost infinite) supply of new cars, mobile phones, i-pads.... we will never reach the position where 100% of people can buy all of these.

Consider the concept of nationalising all builders, and operate them on a non-profit basis. Even assuming (most unlikely) they would continue to be 'efficient' then what would that do to new house prices? 5% cheaper? 6% maybe? Doesn't make them 'affordable' - least of all to 'everyone'. So then consider subsidising their cost (or rent) and they will become slightly more 'affordable' to those who occupy them, but equally 'unaffordable' to the already-hard pressed taxpayer.

So that leaves us to nationalise the land, build the houses with state employed workers, and dole them out....

Hang about. That's communism. Are you a communist? I think not!