Twenty years on – the winners and losers of Britain’s property boom

CLAPTON

redux wrote: »

I don't know. They may well also be looking at 50 year old estates and coming up with a range of options, pessimistic about the prospects, and taking 10 or 12 years to make up their minds.

But I was only discussing one particular example of which I'd seen some details, where redevelopment comes at the cost of including less social housing than originally hoped for, new properties costing 2.5 times the current values, national government subsidising interest free terms to new buyers but perhaps not to dispossessed existing owners.

I'm much more on the fence than you might assume. Someone I know might become one of the new owners there. The purchase might involve government Help to Buy loan of 40% interest free for 5 years, mortgage of about 40% of the value, parental loan, and partly proceeds of estate or gift from grandparent generation.

Clearly not everyone can be this fortunate, and although she tallies a bit with Osborne and Cameron claiming to make housing more affordable, I don't think their initiatives stretch across everybody when they seem to be talking about properties costing quarter of a million and more as affordable housing, and the government subsidy may well be helping push prices upwards (the government's Help to Buy share may lose money if housing prices fall).

I guess there is a vast difference between the current market price of an ex-council flat in a run down estate and the replacement in a rebuild, posh block with all the social tenants expelled.

wotsthat

mwpt wrote: »

What a lot of crap. It is pretty much the summary of some of the views here ie. renters are losers.

I've re-read what I wrote and don't know how you managed to make that interpretation.

cells

redux wrote: »

I don't know. They may well also be looking at 50 year old estates and coming up with a range of options, pessimistic about the prospects, and taking 10 or 12 years to make up their minds.

But I was only discussing one particular example of which I'd seen some details, where redevelopment comes at the cost of including less social housing than originally hoped for, new properties costing 2.5 times the current values, national government subsidising interest free terms to new buyers but perhaps not to dispossessed existing owners.

I'm much more on the fence than you might assume. Someone I know might become one of the new owners there. The purchase might involve government Help to Buy loan of 40% interest free for 5 years, mortgage of about 40% of the value, parental loan, and partly proceeds of estate or gift from grandparent generation.

Clearly not everyone can be this fortunate, and although she tallies a bit with Osborne and Cameron claiming to make housing more affordable, I don't think their initiatives stretch across everybody when they seem to be talking about properties costing quarter of a million and more as affordable housing, and the government subsidy may well be helping push prices upwards (the government's Help to Buy share may lose money if housing prices fall).

Your mixing and matching different things.

1. Compulsary purchase. Why should an estate of 500 flats to be redeveloped to 1000 flats be stopped bwcuase 5 people took out right to buy back in the 1990s for £16,000 a flat and now you are annoyed that they are only getting offered £300k plis 10% plus perks above market value to vacate when you feel they should instead be given a brand new flat in place of their old one

2. Governments loans. I'm with you on this one the government should just kick the regulators !!! so they don't stop interest only self cert loans

mwpt

cells wrote: »

2. Governments loans. I'm with you on this one the government should just kick the regulators !!! so they don't stop interest only self cert loans

What is your plan when prices rise 20% a year again and within a few years the same houses are unaffordable on the same mortgages? Lower interest rates? Government printed money into buyers bank accounts?

redux

cells wrote: »

Your mixing and matching different things.

1. Compulsary purchase. Why should an estate of 500 flats to be redeveloped to 1000 flats be stopped bwcuase 5 people took out right to buy back in the 1990s for £16,000 a flat and now you are annoyed that they are only getting offered £300k plis 10% plus perks above market value to vacate when you feel they should instead be given a brand new flat in place of their old one

2. Governments loans. I'm with you on this one the government should just kick the regulators !!! so they don't stop interest only self cert loans

I didn't say it should be stopped. I didn't say someone should simply be given a new flat.

However, the numbers were £175k offer and £425k new flat.

I think that if the government is willing to offer interest free loans of 40% value to first time buyers to help them buy at £425k, there should also be something hacked up between national and local government, housing association and developer, that the compulsorily dispossessed owners could also be given some proposals roughly equivalent to that generosity, such as buy 40% then interest free loan or rent free occupancy on the rest, even rest of life for some people.

The fact it had to be done as compulsory purchase amid protests by rather more than 5 people implies a degree of coercion, rather than something done using common sense negotiation and respect.

I saw another scheme where the rent on the non owned share plus lease and maintenance fees amounted to under 1% p.a. of the amount involved. Fewer protests there, I suspect.

thequant

mwpt wrote: »

What a lot of crap. It is pretty much the summary of some of the views here ie. renters are losers.

I don't see any of them "winning"

thequant

CLAPTON wrote: »

no examples from socialist councils?

I know the examples Redux has quoted, they are ALL from Labour run councils. The tories may not be the biggest advocates of social housing, but where did anyone got the idea Labour is the best friend of those in social housing ?

Thatcher built built more social housing in her last year of government than in whole of the new Labour years.

For those who blame all their housing ills on the Tories, and see Labour as there saviour, please tell me what Labour did to help you between 1997-2010 ?

You wouldn't be here moaning now if they had.

cells

mwpt wrote: »

What is your plan when prices rise 20% a year again and within a few years the same houses are unaffordable on the same mortgages? Lower interest rates? Government printed money into buyers bank accounts?

what happened when they were last around is that ownership went towards 100%*

Is that not something you think is a positive? the current system has reversed that from 70% owners towards 60% now and if things dont change it may well go to 50% owners.

The bright idea of the crash wishers was that if the government restricted mortgages then prices would have to fall and they could afford to buy a house for two shillings.

The reality is that people instead decided not to sell for two shillings and chose to rent it out. The evidence for this is clear, 440,000 homes added to the rental stock last year (while only about 100,000 BTL mortgages were given out) so what is happening is that people are simply choosing to let them out rather than sell them at depressed prices.



* it went to 70% and 20% social and the min requirement of 10% PR so effectively it was as high as it could be

redux

thequant wrote: »

I know the examples Redux has quoted, they are ALL from Labour run councils.

I said the example I was thinking of, with the compulsory purchase at 175k and the new flats cost over £400k, with £10,000 repair fees only 8 months ahead of demolition, is in a Conservative controlled council.

Apparently you don't know where this is, or you would not falsely impute that I was lying.

Edit: one place I did actually name was Poole. This is not a Labour area either.

mwpt

cells wrote: »

what happened when they were last around is that ownership went towards 100%*

Is that not something you think is a positive? the current system has reversed that from 70% owners towards 60% now and if things dont change it may well go to 50% owners.

The bright idea of the crash wishers was that if the government restricted mortgages then prices would have to fall and they could afford to buy a house for two shillings.

The reality is that people instead decided not to sell for two shillings and chose to rent it out. The evidence for this is clear, 440,000 homes added to the rental stock last year (while only about 100,000 BTL mortgages were given out) so what is happening is that people are simply choosing to let them out rather than sell them at depressed prices.

Mortgage rates were slashed, owners didn't have to sell. BTL products introduced in the 90s, rates on these also slashed and they allow IO. Properties start taking off in value again too because of the slashed rates. Of course the sector started to balance towards BTL because of all this. Your view is supported not by evidence but how you choose to interpret it.

If a floor had been set on mortgage rates, then prices may not be so stratospheric and perhaps MMR wouldn't be proving so restrictive. I honestly don't know where to from here but I think it's pretty clear that the private sector is not producing the housing we need. Why is demand so high yet the private sector is not willing to build at the correct prices to enable sales? Surely in any properly functioning market, supply rises to meet demand at the prices people can actually pay.