Home ownership drops faster in Greater Manchester than in London

cells

England is many regions.
The north East would be closest to Germany on price, rent, vacancy and population growth (not the same, just the closest)

Then you can ask your question again mwpt but keep it in England

Do you think the housing situation for tenants or OOs is better or worse in the NE than the SE?

Yes

But do you want to live in the North East or the South East?

Errrrr....

mwpt

I appreciate you take a lot of time to put together your thoughts and figures, but I have no time to check your working I'm afraid. I did answer your question btw, the answer was right there in my post which you quoted.

We were debating the theory that we need to keep easing credit and lowering the cost thereof in order to make more home owners. I have no doubt that doing so would make more home owners.

But I'm curious if this is relative. Is the price of a property fixed which you seem to think and we need to adjust credit levels to this price to enable people to buy, or is the price of property a function of credit conditions (as well as numerous other factors)?

I myself don't quite understand how the price of a property is X is people are unable to buy at price X with current credit conditions.

cells

mwpt wrote: »

I appreciate you take a lot of time to put together your thoughts and figures, but I have no time to check your working I'm afraid. I did answer your question btw, the answer was right there in my post which you quoted.

We were debating the theory that we need to keep easing credit and lowering the cost thereof in order to make more home owners. I have no doubt that doing so would make more home owners.

But I'm curious if this is relative. Is the price of a property fixed which you seem to think and we need to adjust credit levels to this price to enable people to buy, or is the price of property a function of credit conditions (as well as numerous other factors)?

I myself don't quite understand how the price of a property is X is people are unable to buy at price X with current credit conditions.

So you do accept the reasonable view that mortgage rationing is keeping some marginal would be owners from owning.

Then I believe your fear is that if these 10%?? of households who are currently locked out of the mortgage market are given mortgages they will bid up prices which will gift landlords a large sum of money and hurt the would be 60%?? who can be homeowners with current mortgage regs with higher prices.

I think you might be right. These people would add to purchase demand (but subtract from rental demand) and prices will go higher.

You are then in a difficult position.

Do you keep the current system of mortgage rationing and see more homes move to landlords as you use rationing to keep prices down (and yields up which is why the landlords are buying)

Or do you go back to full free lending and see a one time price increase and see a stop/reversal of landlords buying.


I feel full free lending with increasing home ownership and possibly increasing prices (aka 1995-2005) is probably better than mortgage rationing and falling ownership and flat prices (aka 2005-2015). Surely given the two options the period 1995-2005 was better than the period 2005-2015 for would be owners?

of course the most recent policy is to try and keep mortgage rationing and stop/reverse the increase in renting with targeted taxes on sole trader landlords. No one knows for sure what the result of that will be its going to take at least 3-5 years to find out.

My guess is that 2015-2020 is going to see more renters. >20% higher prices and the poor 10%? of those locked out of the mortgage market will still be locked out of the market and have to pay twice as much in rent than as a mortgage so that those who can get a mortgage can enjoy prices maybe 10% lower than they otherwise would be.

cells

mwpt wrote: »

I appreciate you take a lot of time to put together your thoughts and figures, but I have no time to check your working I'm afraid. I did answer your question btw, the answer was right there in my post which you quoted.

We were debating the theory that we need to keep easing credit and lowering the cost thereof in order to make more home owners. I have no doubt that doing so would make more home owners.

But I'm curious if this is relative. Is the price of a property fixed which you seem to think and we need to adjust credit levels to this price to enable people to buy, or is the price of property a function of credit conditions (as well as numerous other factors)?

I myself don't quite understand how the price of a property is X is people are unable to buy at price X with current credit conditions.

If the aim is for more affordable housing there are lots of possible but never going to be implemented solutions.

The closest one that I think would work and would be effective but still in the pile of never going to be implemented would be a big incentive for a population (and thus jobs) migration out of London and out of the SE to the rest of the UK.

Maybe something like allowing council/social tenants in London to use their £104,000 right to buy discount to buy a house elsewhere in the country.

So a social tenant in inner London could give up their 1 bed flat and get to buy a this perfectly nice 3 bed semi in stoke for £85k and still have £19k change left over. The 1 bed flat they vacate should be sold for £250,000+ to pay for this and still leave the best part of £150,000 for the state

http://www.rightmove.co.uk/property-for-sale/property-55337305.html

mwpt

cells wrote: »

So you do accept the reasonable view that mortgage rationing is keeping some marginal would be owners from owning.

Then I believe your fear is that if these 10%?? of households who are currently locked out of the mortgage market are given mortgages they will bid up prices which will gift landlords a large sum of money and hurt the would be 60%?? who can be homeowners with current mortgage regs with higher prices.

I think you might be right. These people would add to purchase demand (but subtract from rental demand) and prices will go higher.

Well, not quite. You can use the term mortgage rationing but I object to that on the basis that it implies we have abnormal credit conditions. I don't think we have tighter credit conditions than most of the rest of our history and therefore I object to the term mortgage rationing.

I'm also questioning the need to chase ever higher prices with ever cheaper and easier credit. And that is why I keep returning to the question about the price of the property being a function of credit, rather than a fixed price which you seem to think.

I could be wrong, but I just don't get how the price of property can be X if people can't afford with current credit to pay X.

I also do not know the correct percentage of home owners to renters. My main concern is that we witness a perpetual cycle of asset prices outstripping wage inflation perpetually, as we continue to chase the asset prices by making more credit available.

I return to my usual example, where if only I could get a mortgage of 1% interest only repayments then I could easily afford to own this:
http://www.rightmove.co.uk/property-for-sale/property-60059942.html

cells

mwpt wrote: »

Well, not quite. You can use the term mortgage rationing but I object to that on the basis that it implies we have abnormal credit conditions. I don't think we have tighter credit conditions than most of the rest of our history and therefore I object to the term mortgage rationing.

I'm also questioning the need to chase ever higher prices with ever cheaper and easier credit. And that is why I keep returning to the question about the price of the property being a function of credit, rather than a fixed price which you seem to think.

I could be wrong, but I just don't get how the price of property can be X if people can't afford with current credit to pay X.

I also do not know the correct percentage of home owners to renters. My main concern is that we witness a perpetual cycle of asset prices outstripping wage inflation perpetually, as we continue to chase the asset prices by making more credit available.

I return to my usual example, where if only I could get a mortgage of 1% interest only repayments then I could easily afford to own this:
http://www.rightmove.co.uk/property-for-sale/property-60059942.html

your fear of the removal of mortgage rationing for the ~10% that are mortgage rationed pushing prices higher and higher and higher is unfounded. For a start if it does push prices up it will do so one time not an infinite cycle of ever higher prices

cells

We have lots of regions in England and many more sub regions/cities/towns. When we look at the regions we find starkly differing price movements under the same mortgage regime and mortgage price

For example over the decade

North East - 4%
Middlesborough -7%

London +88%
Islington +108%

Something other than mortgages and credit is driving prices. Same laws same banks same mortgage products same mortgage criteria totally different outcome in price

however when you look at ownership levels there is a much more uniform trend in that all the regions saw ownership increase from 1995-2005 and all the regions saw ownership decrease from 2005-2015. This suggests price level and ownership are not strongly linked or certainly not the dominant factor

sann420

cells wrote: »

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.

Why dont they give out these empty apartments to the million odd refugees that Germany has taken in last 2 years. Surely this housing is better than living in Syria and Afghanistan and in return the occupiers will hopefully bring some life to the abandonment and maybe contribute to the local economies as well.

cells

sann420 wrote: »

Why dont they give out these empty apartments to the million odd refugees that Germany has taken in last 2 years. Surely this housing is better than living in Syria and Afghanistan and in return the occupiers will hopefully bring some life to the abandonment and maybe contribute to the local economies as well.

there are many more empty properties than there are migrants families.

Germany 'native' population is projected to shrink rapidly over the next 30 years which is going to make this problem worse

Germany continues to build hundreds of thousands of new homes per year as people wish to move from crap soviet built apartment blocks and into nice new efficient good sized detached homes.

There is internal migration within Germany, Same as there is internal migration within England. What this means is that places like the NorthEast England are losing people to places like London. So when the overall population is static you will find London still growing and the NE shrinking. This means you will have an excess in the NE causing similar problems. But because the UK overall is growing for now the NE was saved by the migrants. House prices in the NE are down about 5% over the last 10 years in nominal terms. Imagine if the millions of EU and non EU migrants had not come to the UK and the NE. We might have seen the NE resemble Germany with 10-20% of the stock empty and with house prices half of what they are. To some this might sound fantastic but people simple dont want to live in such places or right now a person can sell their 1 bed flat in zone 2 for £400,000 and go buy a 4 bed detached in the NE for £200,000 but they mostly dont


This is a problem that is going to come to almost all countries. The UK can avoid it if it keeps up positive net migration. People might think Germany even with its many empty decaying homes and apartments is not that bad but this is just the begining. Imagine Germany in 20 years where its population is down by 10 million and its built 5 million new homes. That means whatever its empty properties are now its going to be about 10 million units worses. But to be fair maybe the germans who are for some crazy reasons not having babies at a sustainable rate might become a nation of 1 person 1 home where that 1 person is going to be a never married or had kids pensioner.