Homes in the UK still very cheap/affordable

stator

The trouble is, it's not just poor people who can't buy, but people who are on middling incomes and don't have rich parents. Property ownership is turning into an inherited right.

westernpromise

stator wrote: »

The trouble is, it's not just poor people who can't buy, but people who are on middling incomes and don't have rich parents. Property ownership is turning into an inherited right.

In the south-east, that I'm afraid is the consequence of London now being an international city. Comparing London to say Northampton is now meaningless. They are constructively not in the same geography. London is a world city like New York, Singapore, or Hong Kong. So in the UK, we now have London, and then we have the sticks.

Those trying to buy outside London, and who can't because of MMR restrictions on mortgage multiples, should perhaps reflect on whether it was so smart after all to have ranted on about high mortgage multiples in the past. It's now much harder than it was before to buy because of, not despite, MMR.

cells

stator wrote: »

The trouble is, it's not just poor people who can't buy, but people who are on middling incomes and don't have rich parents. Property ownership is turning into an inherited right.

by design we can not have 100% ownership it is impossible

For a start the social stock is close to 20% of the homes in this country, that alone puts a hard cap of 80% owners assuming not a single private rental existed in the whole country.

But we also have a need for a minimium rental sector for multiple reasons from students to immigrants to people moving around the country for work to people with second rental homes closer to work and a main family home out somewhere else and a lot more reasons too. This minimum private rental market is about 15% imo

That reduces the hard cap to ownership towards 65-70% MAX while the reality is now 64% of the housing stock is owner occupied. So dont expect more than 65-70% to be able to own, ever, not while the hard caps (especially the social cap) limits the max numbers.


If you want ownership to increase the one thing that can make the biggest difference is to reduce the social stock. Sell half of them and you will see a jump in ownership from 64% to 74% which would be the highest ever in the country.

cells

The hard cap is also lower in London due to London having a higher percent of social homes and a higher need for rentals.

In inner east London the social stock is 60% so even if no private rentals existed ownership in inner east London would be less than 40%. But of course some level of rentals are needed if that is 25% in London (15% outside) that puts the hard cap of ownership within London at 50% (50% + 25% rentals + 25% social) while the hard cap in the London areas with more social stock (like inner London) is much lower

If people truly want more ownership they need to realise the biggest block is social homes. Especially in inner London there is no need at all for some areas to be 40-60% council stock they should be sold down towards 16% which is the national average outside of London.

stator

You're putting the cart before the horse and working backwards.
The percentages are not relevant. Home ownership percentages don't capture people who are sharing but don't want to including HMOs, people living with parents etc You could have 10 people sharing a house who all want to buy a flat.
The way to increase home ownership is to build more houses.
There will always be people who can't, I'm not suggesting 100% home ownership. The social housing stock should be left alone for people who can never buy. It's private rented, non-student accomodation that should be shrinking. That's where all the poor quality slums are.
It's people who have jobs with an income that could afford the mortgage that should be able to buy, but largely can't at the moment unless given a handout by their parents

Cloudydaze

I'd like to see examples of these £503k terrace houses in London.

I'm in Zone 3 in South West London and £500k gets you a nice one bed or cosy 2bed flat. A modest terrace is £1million.

I'm guessing these average £503k houses are not in parts of London where the average person would choose to live!

cells

Its very simple, the UK has 17% social homes and needs a minimum of ~15% private rentals*. That puts an upper range on ownership of ~68% while it stands at ~64% today. That means in a best case you can see a 4% increase in ownership

You can not pass 68% ownership irrespective of the price. If house prices were half what they are you still could not pass 68% ownership. Even if homes were just £100k you still are limited to this 68% max because the social stock is 17% and the renter stock wont shrink below 15%


*Its not just students who need/want to rent there are plenty of people who want to rent eg one of my friends owns his own 5 bed detached home in the midlands and rents a 1 bed flat within 10 mins walk of tower bridge in London. Likewise another friend is an accountant who gets contracts all over the country he might be in one place for 6 months to 3 years before his next move and he logically rents whereas owns a home in London where his family lives and he goes to at the weekends.

PS I know at one point the private rental stock was as low as 10% but that was in a time where there were fewer students more social stock and a lower demographic need for renting. I think the min need now is closer to 15%

cells

Cloudydaze wrote: »

I'd like to see examples of these £503k terrace houses in London.

I'm in Zone 3 in South West London and £500k gets you a nice one bed or cosy 2bed flat. A modest terrace is £1million.

I'm guessing these average £503k houses are not in parts of London where the average person would choose to live!

yeh those people living in the cheaper boroughs are sub humans probably vegitables I cant believe they live there they must be poor and ugly

cells

stator wrote: »

The way to increase home ownership is to build more houses.

not if the additional houses are social.
In London roughly half of new builds are social that means the new builds are growing the social stock (currently 24% in London) and actually making the hard cap on ownership levels lower.

steampowered

cells wrote: »

not if the additional houses are social.
In London roughly half of new builds are social that means the new builds are growing the social stock (currently 24% in London) and actually making the hard cap on ownership levels lower.

Social housing tenants have a right to buy their homes when they can afford to do so, no?