The Election and First Tume Buyers

sebadee

Wage growth does need to match house prices, and house prices need to taper off and allow a catch up. Its unfair on current FTB's.

However I can't see that happening for anyone who is waiting out for it over the next few years.

The only way I can see this happening at all is:

1. We relax planning laws and get building on a huge scale. Way beyond the little figures being proposed by both parties (i think between 400 to 500k). Those figure will just about cover the years of previous net migration and lack of building.

2. A housing crash.

Now for point 2. I don't even really believe it will make much difference. We had one of the worst crashes in living history in 2007 and that was negligible beyond the short term. We only need to look at where we are now just a few years later, with prices in the south seeing 10% growth each year. Of course government intervention has played a part, but no where near the drive that comes from pure demand.

The other factor with a crash, is those that are primed to buy and pounce on low prices, won't likely be able to borrow from the banks, as the banks will likely go into incubation and undergo huge regulatory changes. And still with all of that, there will be a big supply problem, people will simply decide to stay where they are and weather the storm. The only place which might be in real danger, is London, as London is more investor heavy, than owner-occupiers who try to buckle down and ride out market fluctuations.

Fact is, we are an Island, with very little room for new housing (with current planning laws), we have a lot of people who want to move here to live and work. Even if we have a huge building program, that will take at least 5 years to start to have a noticeable effect on house prices.

mayonnaise

The way David and George have been building recently, I'd be surprised if we still had a housing shortage.

Philuk

princeofpounds wrote: »

I find it fascinating that so many people on this thread think that the conservatives are somehow more anti-building than labour.


The reality has been very much the opposite. The coalition have done three really important structural things

(...)

The sad fact is that because all these issues are proper matters of economic and development policy, they basically have little popular understanding or coverage (apart perhaps from stamp duty).

Very well indeed but London is 50% to 100% more expensive than it was before 2010 and number of housing built remains desperately low. They may have had good intention but results are an epic fail. And on the top of that, that sense of satisfaction and self congratulating posture that emerge from the "housing miracle" situation is simply unbearable for young, priced out, prospective buyers.

Labours just come out as less concerned by keeping the housing market up there at all cost as it appears with the current government with those ridiculous schemes pilling up at the taxpayer expense. Well, that is what i can sense from my entourage of young Londoner although to be fair, it seems that no one actually give a s**t anymore.

princeofpounds

Very well indeed but London is 50% to 100% more expensive than it was before 2010 and number of housing built remains desperately low. They may have had good intention but results are an epic fail.

Yes and no. In some sense I agree with you. The problem is not sorted yet.


I am not sure comparing prices immediately after the crisis is a fair starting point, not at all! That result could easily have been achieved by simply starting another crisis, but that would be no kind of solution, just as it wasn't then!


But even by 2008 standards very little progress on prices has resulted -they are about the same (which is slightly lower in real terms due to inflation in the meantime).


Mind you, much of this can only be resolved structurally on a longer timescale. Judging the results of the coalitions planning policies (enacted in 2012) is simply not possible yet - those sites are only just getting through the planning system this year given how long it takes (the actual planning application is typically the result of two years of soil surveys, newt surveys, noise surveys, often repeated several times in response to official questions and proposals).


It would be a bit like judging your success of failure as a person based on your achievements at age 16.


So it's simply not possible to call it an 'epic fail', unless you are the sort of person who expects instant solutions to every problem.


Now, having said all that, it provides little comfort to sufferers in the meantime. I totally understand your alienation from the 'housing miracle' and in fact personally I would have backed far more aggressive action on the issue (as you will see if you ever read my past comments on planning).


Now, Labour might appear less concerned by keeping the housing market inflated, but that is an easy thing to claim when you are in opposition and not dependent on it for your economic performance.


The sad truth is that the housing boom - for those with actual memories - is that ~89% of it since 1995 happened under Labour. So I'd just take their claims with a gigantic pinch of salt, though I think both parties have got a little bit more serious about it in recent years, the Conservatives were just ahead.

Philuk

princeofpounds wrote: »

I am not sure comparing prices immediately after the crisis is a fair starting point, not at all! That result could easily have been achieved by simply starting another crisis, but that would be no kind of solution, just as it wasn't then!


But even by 2008 standards very little progress on prices has resulted -they are about the same (which is slightly lower in real terms due to inflation in the meantime).

(...)

Just to be clear, I am London centric on this one. Since 2007, inflation adjusted prices are practically flat across the UK, but shows tremendous disparity between north and south, and London is probably the most staggering example of price resilience. Simply said, here, we haven't seen any downturn, no one lost his job and house prices never collapsed either. Quite the opposite in fact, prices have rocketed in 2013 to unprecedented level.

Now, coming back to your main point, I do appreciate political action do take more than the mandate given to effectively yield result, and by no mean do I blame this particular government for the current situation. What I do regret though, is the lack of acknowledgement and the sense that the tories are nurturing their natural voters against what is right. Or put clearly, that they confort the equity rich old boomers into believing house price increase is a good thing. I mean, for the vast majority of homeowner in London since early 2000s, their house earned more money for them through capital appreciation than their own salary. No one else sees this as dysfunctional?

princeofpounds

Well I think you may have a point in London. The planning reforms will probably be less effective there simply by virtue of the fact that it is a more 'real' problem of less space to build (more a matter of density than land availability).

and I do agree the housing market is messed up and probably has been for 20 years

CLAPTON

Philuk wrote: »

Just to be clear, I am London centric on this one. Since 2007, inflation adjusted prices are practically flat across the UK, but shows tremendous disparity between north and south, and London is probably the most staggering example of price resilience. Simply said, here, we haven't seen any downturn, no one lost his job and house prices never collapsed either. Quite the opposite in fact, prices have rocketed in 2013 to unprecedented level.

Now, coming back to your main point, I do appreciate political action do take more than the mandate given to effectively yield result, and by no mean do I blame this particular government for the current situation. What I do regret though, is the lack of acknowledgement and the sense that the tories are nurturing their natural voters against what is right. Or put clearly, that they confort the equity rich old boomers into believing house price increase is a good thing. I mean, for the vast majority of homeowner in London since early 2000s, their house earned more money for them through capital appreciation than their own salary. No one else sees this as dysfunctional?

what is your solution to London's housing issue?


about 100% of new building is on brown fill
35% of the population of London is foreign born
major issue of the compulsory social housing burden
should we scrap HB?