C4 Dispatches - The British Property Boom

TickersPlaysPop

The idea that solely building more properties will fix the problems in the housing market without any other changes is pure fantasy.

It would have helped to start and continue to build more 15 yrs ago. Maybe labour should have worked this out especially with the high net movement of people coming to the UK.

It is too little too late to start building more now without any other laws, regulations or changes.

jjlandlord

TickersPlaysPop wrote: »

It is too little too late to start building more now without any other laws, regulations or changes.

It's never too late to implement a solution.

The root cause of the issue is the imbalance between supply and demand. Therefore, this is what must be addressed.

All the new laws and regulations proposed do not address that issue, they make it worse.

Cornucopia

I agree. In the context of an imbalance between demand and supply, I don't see what legislation would possibly achieve other than (re)moving properties from one group to give to another.

Unfortunately, if that were to be done, I can't see any situation in which young, working single people and couples would be anything other than the lowest priority.

I'm wondering what other legislation ideas might be in store?

Cornucopia

ukcarper wrote: »

It could easily be devised and there has always be people who can not afford to buy but need long term security. I don't think you could build enough houses in the London and the South East to bring prices down to a level where people on low earnings could afford to buy do you.

It's already been noted that people are often paying more in rent than they would for a mortgage. So, I'll ask the question again (which received no response the last time): is the issue that 100% mortgages are no longer readily available?

lisyloo

is the issue that 100% mortgages are no longer readily available?

Not having a deposit could be an issue for a relatively small proportion.
Not qualifying for a mortgage for other reasons (such as a zero hours contract) is probably a bigger proportion.

Increasing mortgage availability does not increase housing availability, so those at the margins of affordability would compete with BTL landlords. My guess is that the "haves" would still beat the "have nots".
So there is still an under-supply of housing.

ukcarper

Cornucopia wrote: »

It's already been noted that people are often paying more in rent than they would for a mortgage. So, I'll ask the question again (which received no response the last time): is the issue that 100% mortgages are no longer readily available?

What I mean is that the cheapest two bed house in my area is about £180k while 20% of full time employees earn less than £18k and I don't see prices falling enough for them to be able to buy. While 100% mortgages would help some people and I'm not totally against them I think they are risky in the present climate and can see why banks do not want to give them.


As to whether buying is cheaper than renting in the short term I'm not sure. In my area rents for 2 beds appear to be around £850 a month whereas the cost of a £180k repayment mortgage at 4% would be £960 a month , interest only would be cheaper £600 but I don't think that would be available or is good idea.

lisyloo

As to whether buying is cheaper than renting in the short term

Absolutely definitely not cheaper than renting in some cases.
Depends of course on what your lost opportunity/term etc. is, but for me renting is much more liquid, diverse, flexible.

ukcarper

lisyloo wrote: »

Absolutely definitely not cheaper than renting in some cases.
Depends of course on what your lost opportunity/term etc. is, but for me renting is much more liquid, diverse, flexible.

Although I have never rented I can see that renting can be better for some people and realise that there have always been people who can not afford to buy. That is why I think we need a balance housing market and as far as I can see the thing we are lacking the most at the moment is long term rental accommodation.

Cornucopia

chucknorris wrote: »

I would welcome 3-10 year contracts...

I can certainly see the case for 3-5 years, and these would tie in to commonly available fixed terms for BTL mortgages. I could go beyond that, if the banks matched the commitment.

With regards to termination of tenancies, I still think that there need to be separate routes for termination with cause and without cause.

Without cause, I would be happy to have a fixed 3 year tenancy, followed by a rolling commitment on both sides with an agreed break window perhaps every year, and at least 3 months notice on the LL's side.

With cause, I think there needs to be an overhaul of what we currently do...

- an official list of transgressions
- 3 written warnings
- ability for LLs to access deposit funds when rent debt arises
- 30 day notice to quit
- official appeal tribunal

Cornucopia

ukcarper wrote: »

What I mean is that the cheapest two bed house in my area is about £180k while 20% of full time employees earn less than £18k and I don't see prices falling enough for them to be able to buy.

I'd like to know whether the lowest 20% of earners have ever had the ability to purchase homes. It seems unlikely to me. (There is a school of thought that says that the price of housing relates directly to affordability across the top X% of earners in the area, where the number of households in the X% is related directly to the number of available houses).

While 100% mortgages would help some people and I'm not totally against them I think they are risky in the present climate and can see why banks do not want to give them.

Yes. What I am getting at is that this is a complex, multi-dimensional issue, and there are other factors aside from BTL.

As to whether buying is cheaper than renting in the short term I'm not sure. In my area rents for 2 beds appear to be around £850 a month whereas the cost of a £180k repayment mortgage at 4% would be £960 a month...

I can't see that a difference of £110 per month would make the difference between being out-priced or not for many people.

It strikes me that £850 per month is somewhat expensive, and therefore there may be other, cheaper areas nearby that would be affordable.