Action must be taken on house prices in London

wotsthat

Graham_Devon wrote: »

That pressure can come from many angles. Just the rising housing benefits to keep people residing in London (and the many more that become eligible as house prices rise) is one pressure.

Money seems to flow out of London to other parts of the UK. Neither of us wants to live in London so shouldn't we be glad to live in other part of the UK where there are cheaper houses and we can freeload off the nutters in London?

Graham_Devon wrote: »

When the pressure from other factors outweighs the "investment" of someone buying a house and leaving it empty, they will look to do something. That pressure is building, hence the EY Item Club's response.

Ignoring the fact that a few tens of high end flats being left empty is almost nothing to do with rising prices in London why can't some of the responses involve increasing supply rather than restricting demand?

wotsthat

Joeskeppi wrote: »

I'm looking forward to the flood of returning members the next time an index shows a minus.

Same here. I'm hopeful that for extra excitement it coincides with Nigel Farage wining a parliamentary seat, SMI being scrapped, interest rates rising, and the 'tripple' dip being reinstated by the ONS.

Graham_Devon

wotsthat wrote: »

Ignoring the fact that a few tens of high end flats being left empty is almost nothing to do with rising prices in London why can't some of the responses involve increasing supply rather than restricting demand?

Increasing supply would be wonderful and should be included in any policy response.

However, I'd assume the greenbelt poses problems with the extent of how broadly supply could be used in response.

Needs to go hand in hand with other measures. Theres obviously not one "fix all" approach. Though clearly "do nothing" is creating issues.

wotsthat

Graham_Devon wrote: »

Increasing supply would be wonderful and should be included in any policy response.

However, I'd assume the greenbelt poses problems with the extent of how broadly supply could be used in response.

Needs to go hand in hand with other measures. Theres obviously not one "fix all" approach. Though clearly "do nothing" is creating issues.

Doing nothing? There's been a supply response which Ernst and Young say is very encouraging. They also suggest how the government could do even more.

The Government should be doing more to resolve rigidities in the planning system, with a particular focus on ways to increase supply in and around the London area. The Government still owns a sizeable amount of brownfield land which could be sold off to house builders more quickly than it is currently. On a larger scale there is also a case for the Government to use its own low borrowing costs to fund a programme of house building. Large public sector building programmes have been pursued in the past, but in recent years local authorities have built only a couple of thousand properties a year.

Jason74

Cornucopia wrote: »

I have to say that you seem a little obsessed with the idea of central Government action towards the housing market, which is clearly completely unprecedented in recent UK history. All flavours of English politician are now committed free-marketeers.

I think the problem is that when it comes to housing, politicians (and our central bankers), are "free marketeers" when it suits them when it comes to UK housing. There have been a number of interventions in the Housing Market (FLS and HTB being the obvious ones) that have been designed to keep the market afloat. People may feel that these are good ideas, but what they do demonstate is that our "leaders" are quite happy to intervene in the "free market", if the market isn't generating the outcome they are looking for.

As for what's going on in London, I can only talk with any authority about my own local market (zone 4 South London). That is certainly exhibiting bubble like tendancies, with prices shoooting up at a ridiculous and imho damaing pace. I would also suggest that while the report is probably right that HTB is a "red herring" in prime central markets, it certainly isn't the case in some of the less expensive areas away from the centre. The local market environment went from busy to insane almost the day that HTB when live, and more than one local agent has said to me that it has been a huige factor driving the local market.

A cut in the HTB level to £250k (a "natural" cut off given the stamp duty thresholds) would take a lot of the heat out of the London areas where HTB most certainly is an issue, while having next to no impact on the scheme for first time buyers outside the capital. If we're going to have HTB in place, this seems a sensible approach given the two speed market that appears to be in place at present.

HAMISH_MCTAVISH

Jason74 wrote: »

A cut in the HTB level to £250k (a "natural" cut off given the stamp duty thresholds) would take a lot of the heat out of the London areas where HTB most certainly is an issue, while having next to no impact on the scheme for first time buyers outside the capital.

I think almost everyone now agrees that HTB is useful and is not causing any issues in areas outside of London.

As for London, I think a 600K cut-off is high, but then again I'm not sure there is actually much (if any) lending with HTB going on at the 600K level.

A 250K cutoff is too low in my opinion, many London FTB-s have the income to support lending at 300K or 400K. But I think reducing it closer to those levels might be sensible.

Graham_Devon

HAMISH_MCTAVISH wrote: »

I think almost everyone now agrees that HTB is useful and is not causing any issues in areas outside of London.

Really?

Who is "almost everyone"?

Doesn't seem to chime with anything I have either heard on the TV or read in the press. And certainly doesn't chim with any comments section underneath any of these articles, which, if everyone agreed it was useful, would surely be very different in terms of how they see HTB?

This, for instance, is the 6th "best rated" comment on the BBC article surrounding this (out of 586 comments so far). Hardly seems everyone agrees considering so many normal folk have "recommended" such a post saying it is ludicrous?

The London property market was never allowed to fully correct after 2008. The UK government has done everything in it's power to try to support prices, from 300 year low interest rates to the ludicrous help-to-buy. When this does finally correct - and it will happen, it's just uncertain when - its going to be very unpleasant. I just don't want my tax paying for it

It's here....stick the comments in order of best rated and you will see it yourself.
http://www.bbc.co.uk/news/business-26006214

ukcarper

Graham_Devon wrote: »

Really?

Who is "almost everyone"?

Doesn't seem to chime with anything I have either heard on the TV or read in the press. And certainly doesn't chim with any comments section underneath any of these articles, which, if everyone agreed it was useful, would surely be very different in terms of how they see HTB?

"Despite analysts’ concerns about the capital, the housing market in the rest of the UK is returning to normality. "


From your original article.

Graham_Devon

ukcarper wrote: »

"Despite analysts’ concerns about the capital, the housing market in the rest of the UK is returning to normality. "


From your original article.

That comment isn't even about HTB, though they do comment on it. And it's hardly representative of "almost everyone"!

wotsthat

Graham_Devon wrote: »

Doesn't seem to chime with anything I have either heard on the TV or read in the press. And certainly doesn't chim with any comments section underneath any of these articles, which, if everyone agreed it was useful, would surely be very different in terms of how they see HTB?

This is what Ernst and Young say...

Some have suggested that Help to Buy should be altered or cancelled but this is a red herring. The scheme has only a very limited impact on the capital and withdrawing it could risk choking off the recovery in housing transactions across the rest of the UK without solving any of London’s issues.

and as you said yourself...

Graham_Devon wrote: »

It should be noted that the EY Item Club are very influencial when it comes to the BOE, as the BOE use their reports and analysis apparently.