Home ownership drops faster in Greater Manchester than in London

Sapphire

mwpt wrote: »

Well Germany doesn't appear to do boom and bust in the housing market. Perhaps people their don't strive to fund their lifestyles and retirements through property inflation but instead do so through actual work and investment in other productive assets. They rent while required given their nice security of tenure and eventually buy when they want / can afford knowing that property prices haven't rocketed out of reach in the meantime.

I agree (for a change!). Homes should never have been allowed to become 'investments' – they should be for living in. Relying so much on property as an investment is (I believe) bad for other parts of the economy, which should have been developed. I also think that keeping the bank interest rates so low for a prolonged period of time was crass stupidity (partly a way of kicking the can down the road after the financial crisis of 2008), which resulted in people taking on far too much debt without actually realising (having never experienced house price crashes), or perhaps closing their eyes to the possibilities, what could happen once interest rates do go up again – which will occur sooner or later.

I have relatives in Poland who have lived in a large, rented flat since before the war (though it was much larger before the war and was split in half during the Stalinist period). They are quite affluent (she is a dentist), yet do not attach massive importance to owning property, 'doing it up' at great expense, and other such things which people in this country have been seduced into thinking they 'must have'. I'm very much afraid that sooner or later, given how the global financial elites have messed up the world's economies to their own benefit, it's all going to come crashing down…

Crashy_Time

cells wrote: »

This should surely be enough evidence that price is not the primary driver of affordability.

With the average terrace in Manchester costing £136.5k and the average flat at £133k prices are very affordable so much so that the interest on the mortgage is less than the cost of renting from the local social landlords.

If people want affordability to return people need to be able to afford to buy which means lowering the upfront cost of buying. The report itself says one of the factors was that 100% mortgages are no longer available although the FT didn't mention that part.

Please stop with this nonsense, for your own sake. :rotfl:

Crashy_Time

mwpt wrote: »

Because if you make it easier for people to borrow money, they will buy homes? That is accepted.

But if credit is at least as easy and cheaper than 1995, which is home ownership lower than then?

He knows the answer, he just made the wrong bets that`s all.

cells

mwpt wrote: »

Well Germany doesn't appear to do boom and bust in the housing market. Perhaps people their don't strive to fund their lifestyles and retirements through property inflation but instead do so through actual work and investment in other productive assets. They rent while required given their nice security of tenure and eventually buy when they want / can afford knowing that property prices haven't rocketed out of reach in the meantime.

Germany has spent far more capital on building its housing stock than the UK both on a real basis and a per capital basis.

They have now almost 41 million units for a population of about 81 million persons. In comparison the UK has about 28 million units for 65 million persons.

Relative to the UK the Germans overbuilt. They over build about 6 million homes. All that wasted manpower which could have gone to better productive assets.....right nwpt?


This is one bit of the house prices are too high group I dont understand. They claim the uk spends too much on homes when the truth is we spent far less on homes than German or France for that matter. Instead of the silliness that is 'buy to let borrowing money that could go into productive economy blah blah blah' the truth is that the uk has historically and right now spend a lot less capital on the housing sector which leave more manpower and resources for other sectors


Anyway. Germany got into a position of excess because it subsidized into existence lots of housing. Some of it through the communist period some of it later in the reunification period.

London in the early 1990s was close to where germany is today imo with regards to an excess of homes relative to demographic and population needs. It has about 30-40 years of falling population during a period when the councils were building like mad subsidized housing so much so that by the 1990s anyone in London could get a council home and many were empty and they were trading for prices of 1x income

cells

mwpt wrote: »

Because if you make it easier for people to borrow money, they will buy homes? That is accepted.

But if credit is at least as easy and cheaper than 1995, which is home ownership lower than then?

Why did ownership crash from 2005-2014 in England when prices in England (excluding London) only went up about 8% nominal and down in real terms?

mwpt

cells wrote: »

Why did ownership crash from 2005-2014 in England when prices in England (excluding London) only went up about 8% nominal and down in real terms?

Probably a combination of things. Prices reached an affordability ceiling at the credit levels in 2005. After 2008, credit tightened, people lost their jobs, sentiment wasn't good, etc.

But if credit is at least as easy and cheaper than 95 (or prior) then why has ownership declined and why are prices still at a level that is supposedly unaffordable at the current credit levels? Why have prices not dropped to match credit conditions?

mwpt

cells wrote: »

Germany has spent far more capital on building its housing stock than the UK both on a real basis and a per capital basis.

They have now almost 41 million units for a population of about 81 million persons. In comparison the UK has about 28 million units for 65 million persons.

Relative to the UK the Germans overbuilt. They over build about 6 million homes. All that wasted manpower which could have gone to better productive assets.....right nwpt?


This is one bit of the house prices are too high group I dont understand. They claim the uk spends too much on homes when the truth is we spent far less on homes than German or France for that matter. Instead of the silliness that is 'buy to let borrowing money that could go into productive economy blah blah blah' the truth is that the uk has historically and right now spend a lot less capital on the housing sector which leave more manpower and resources for other sectors


Anyway. Germany got into a position of excess because it subsidized into existence lots of housing. Some of it through the communist period some of it later in the reunification period.

London in the early 1990s was close to where germany is today imo with regards to an excess of homes relative to demographic and population needs. It has about 30-40 years of falling population during a period when the councils were building like mad subsidized housing so much so that by the 1990s anyone in London could get a council home and many were empty and they were trading for prices of 1x income

Do you think the housing situation for tenants or OOs is better or worse in Germany than the UK? Do you think this incorrect use of German capital to provide "too much" housing for her citizens has resulted in an unhappy and unproductive population?

cells

mwpt wrote: »

Because if you make it easier for people to borrow money, they will buy homes? That is accepted.

But if credit is at least as easy and cheaper than 1995, which is home ownership lower than then?

be fair and answer my question above.

For why ownership is lower now than in 1995 even though, according to you, mortgages are easier (proof please) now. here are a few reasons and theories


Structural changes

Number of students has greatly increased. 700,000 more students than 1995 will means somewhere around 200,000 more rentals needed for them.

Later marriage or no marriage at all. Often people rent quite dense which is cheap than owning low occupancy and a necessity as the renter sharers dont want to buy together. For each 1 year of later marriage there is a potential 1.8 million persons who would be renters rather than owners. a news article says average age of a first time bride is 30.1 while it was 25.5 in 1991. Lets just use 5 years as a simple guess we dont need micrometer precision on this. 5 years of more singledom means a huge shift from owners to renters. I am going to guess if you look at the age of FTBs in 2005 vs 2015 the FTBs are older today. Some will cry that it is because house prices are higher (by a whole freking nominal 8% outide of London) but I am going to suggest its got more to do with age at marriage (or cohabiting equivlant). the 5 year sift will be around 9 million people at any one time. If they live 3 to a house thats a potential 3 million more rentals than owners. Now I know that back in 1995 and in 2015 there was a percentage who wouldnt have formed a marrage or relationship and theere were thouse who could and would buy irrespective of marrage so lets knock a two thirds off. I think that can account for ~1 million owners to rentals shift

Later death. This slows recycling of property and wealth. If grandma dies she might leave a house which gets sold and can be placed as a deposit on two homes for the 30 year old grandkids



so there are reasons why mortgage avilibility and price being constant you would expect more renters now than 1995 but we have not seen a huge shift only down about 4% points so maybe the easier credit today v 1995 has stoped a bigger fall due to structural reasons listed above (and im sure more reasons)

cells

mwpt wrote: »

Do you think the housing situation for tenants or OOs is better or worse in Germany than the UK? Do you think this incorrect use of German capital to provide "too much" housing for her citizens has resulted in an unhappy and unproductive population?

i was showing that clearly something the crash wishers, and you have said to me, that silly landlords are wasting capital on housing is plain wrong.

The UK has spent less capital, less materials, less manpower on homes than Germany or France. So please stop with the landlords taking capital from the productive economy nonsense


As for the good or bad in over producing housing. Did you know the Germans have about 10% of their housing stock vacant? Thats about 4 million units empty and rotting! In east Germany the average can be higher than 15% and closer to 25% in apartments. I guess they dont speak about that over on hpc? is that good allocation of resources and capital?

here is a paper on it
http://www.tandfonline.com/doi/abs/10.1080/09613210903166739?journalCode=rbri20

If you are a renter then I suspect you are correct its going to mean you have a bigger apartment for less money in a somewhat derelict apartment with 20% of the units empty and a magnet for all that brings.

The real question Mr mwpt is not if Germans can rent cheaper or bigger. The question is, how are you going to build the 4 million homes to leave them vacant in the UK so that prices and rents in the UK resemble those in Germany? where are you going to put these 4 million empty homes and where/how are you going to fund this £500 billion cost project?


The kindest thing I can say is, the two nations are not easily or directly comparable. But what I should say is that the mob that thinks they can compare the two are mad

cells

mwpt wrote: »

Do you think the housing situation for tenants or OOs is better or worse in Germany than the UK? Do you think this incorrect use of German capital to provide "too much" housing for her citizens has resulted in an unhappy and unproductive population?

http://www.spiegel.de/international/germany/demographic-shift-in-germany-leaves-thousands-of-empty-homes-a-866298.html

A Surplus Housing Conundrum

Urban planners are now starting to contemplate what should be done with all of the surplus housing. Simply letting them stand empty would lower the values of surrounding properties. Likewise, having more abandoned houses could cause the formerly idyllic suburbs to morph into problem neighborhoods. "What's happening in these places is starting to become a very major issue," says Gregor Jekel, a researcher at the German Institute of Urban Affairs (Difu). "Already today, there are abandoned houses in areas of single-family homes in regions with shrinking populations, and the razing of such structures is being discussed." In other words, the domestic bliss of an entire generation could soon meet the wrecking ball.