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'HPI should be capped at 5%' - RICS
Comments
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Graham_Devon wrote: »The point is, why would more BTLs be buying in such a market where potential gains are capped and actively being capped at the time.
You can't ignore this when coming to your conclusions.
..because there will be more demand for rental and upwards pressure on rents. Yield will increase. It's good news for BTL's - restricting credit will restrict new supply. With FTB's out of the way that yield may well cost less too.
So a 'safe' yield and they'll be 'allowed' 5% capital gain pa too.
This has been played out already. You know the likely results.
There's meant to be a housing shortage. It won't be solved by restricting supply. At some point we need to accept more houses are required.
This is going to require a grown up attitude and a realisation that builders need to make a profit, buyers need access to credit and planning needs to be simpler. Why not go the whole hog and stop new home buyers having to pay for 'affordable' housing too?0 -
5% is a great return on property so I doubt it would be much of a disincentive to BTL. If the removed the tax break on BTL mortgage interest that would be a slight disincentive at least.
Nothing other than a massive increase in house building in areas with excess demand is going to solve the problem.
That and a good proportion of that housing being delivered via a "council" housing building program with affordable rents."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »That and a good proportion of that housing being delivered via a "council" housing building program with affordable rents.
I agree that's what's needed but not much chance of it happening.0 -
The BoE toolkit is a bit limited
-it can increase interest rates but that affects the whole country and is unlikely to happen in the short term (until unemployment falls to 7%) and the next election
-it can change capital ratios for the banks but again that could affect all sectors
-it can't determine loan to earning ratios formally as it doesn't have the power; but unofficially maybe it does.
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I don't see why minimum mortgage lending rates, for residential property, couldn't be introduced
The BOE has used sector caps before I don't see why they couldn't in the future. Doesn't have to be only through capital ratios.
Who does have the power to earnings ratios? Who enforced them in the past?
None of it will be done without political direction so it is academic.
It wouldn't work for the regional variability either."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
...This is going to require a grown up attitude and a realisation that builders need to make a profit, buyers need access to credit...
it does, i'll admit, irritate me when the usual suspects pretend to believe that an even vaguely sensible way to increase the number of houses being built is to push the demand side.
it's plainly a bonkers suggestion. the people who bang that drum on this site are all, to a man, only bothered about price.FACT.0 -
presumably rics will be backing this up by forcing all of their members to strictly cap all valuations at the previous year's valuation for comparable property in the local area plus a maximum of 5%?
no?
thought not.'Be not deceived; God is not mocked: for whatsoever a man soweth, that shall he also reap.'
GALATIANS 6: 7 (KJV)0 -
Graham_Devon wrote: »......And personally I'm finding the insults and attempts to ridicule any posting of it interesting too.
Absolutely! Well said. We all knew they were getting very boring, when we would prefer them to be interesting.
Come on, lads! Let's go! Keep 'em coming. Graham says so!0 -
grizzly1911 wrote: »That and a good proportion of that housing being delivered via a "council" housing building program with affordable rents.
I think many people would agree with that... as long as none of the new social housing was built anywhere near them.
Nimbyism is a powerful force in this country.0 -
RUN_RABBIT_RUN wrote: »presumably rics will be backing this up by forcing all of their members to strictly cap all valuations at the previous year's valuation for comparable property in the local area plus a maximum of 5%?
no?
thought not.
Lenders can instruct surveyors as they think fit. As the purpose of the valuation is to secure the finance not say what price the property is potentially saleable at.
Many ways to skin a cat.0 -
Thrugelmir wrote: »Lenders can instruct surveyors as they think fit. As the purpose of the valuation is to secure the finance not say what price the property is potentially saleable at.
Many ways to skin a cat.
And any surveyor bending to such pressure and getting caught would be in breach of their professional standards and subject to disciplinary action including loss of their certification as a member of RICS.
As the purpose of the valuation is precisely to say "what price the property is potentially saleable at."
Which is not to say it doesn't happen of course.
Some surveyors will undoubtably be too snivelling or weak, and desperate enough to succumb to such immoral and unprofessional behaviour from banksters.
But they'd better be damn sure not to get caught or they're out of a job, and potentially liable in the event of civil action too.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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