New housing white paper

Thrugelmir

GreatApe wrote: »

The reason renting has boomed over the last 10 years is that those who work in the black economy could get a mortgage

Liars mortgages had nothing to do with the black economy.

GreatApe

CLAPTON wrote: »

perfectly happy to accept that credit restrictions have affected the ability of some to buy
that doesn't explain why SE houses prices have increased nor rents.

no Clapton, not some it has impacted the ability of MILLIONS to buy

could people pre 2008 who worked in the black/grey market get finance via self cert, yes, can they now? no. How big is the black/grey market? about 10-15% of the economy thus its some 3-4 million persons/households.


As to the reason why house prices are up big time in London, its partly down to your pet topic of migrants, however there are migrants plenty of them in middles-borough yet prices are down on the decade. Likewise much of the north and midlands where prices are flat or lower than a decade ago.

The primary reason renting has boomed is the black/grey market was kicked out of the mortgage market

The primary reason London and to a lessor extent the SE has boomed is because it started from a silly low price so the moves up look more exaggerated than they should do. This is because of the fairly unique set of circumstances that saw London become a cheap ghetto by the mid 1990s where you could buy flats for less than cars. The primary reason was that from 1950-1990 the population crashed yet the silly councils kept building silly amounts of council homes so much so that in the 1990s london has a persons to homes ratio lower than many of the other regions

GreatApe

restore self cert 90% LTV mortgages and watch ownership levels stabilize and start to go up.

The ability of self cert probably has a 5% perhaps 10% point swing in ownership levels. 5% sounds a small number but its 1.5 million households.

There is no housing crisis in much of the country buying a three bedroom terrace has a mortgage interest cost less than the local poor housing aka the council estate rents. The reason ownership is lower than a decade ago in these very affordable locations is that they are locked out of the finance market while self cert is regulated out. Even if 0% interest 25 year fixed mortgages existed these people could not buy. Clapton arguments of migrants pushing up prices so the local can not afford them is nonsense in those said areas where prices are cheap

CLAPTON

GreatApe wrote: »

no Clapton, not some it has impacted the ability of MILLIONS to buy

could people pre 2008 who worked in the black/grey market get finance via self cert, yes, can they now? no. How big is the black/grey market? about 10-15% of the economy thus its some 3-4 million persons/households.


As to the reason why house prices are up big time in London, its partly down to your pet topic of migrants, however there are migrants plenty of them in middles-borough yet prices are down on the decade. Likewise much of the north and midlands where prices are flat or lower than a decade ago.

The primary reason renting has boomed is the black/grey market was kicked out of the mortgage market

The primary reason London and to a lessor extent the SE has boomed is because it started from a silly low price so the moves up look more exaggerated than they should do. This is because of the fairly unique set of circumstances that saw London become a cheap ghetto by the mid 1990s where you could buy flats for less than cars. The primary reason was that from 1950-1990 the population crashed yet the silly councils kept building silly amounts of council homes so much so that in the 1990s london has a persons to homes ratio lower than many of the other regions

struggling to see how credit restrictions explain high London prices (relative to the regions), nor the fact that there is a high level of council houses, nor the fact that many family sized houses have been converted into multi occupancy houses;
indeed all these should lead to lower prices rather that higher prices.


PS : at least 90% and maybe near 100% of my posts about house price reference London and/or the SE

GreatApe

Thrugelmir wrote: »

Liars mortgages had nothing to do with the black economy.

im sure a lot of legitimate persons in the 'white' economy also used self cert

I can imagine a 25 year old couple with two legitimate lower paid jobs might have inflated their earnings to buy a 4 bedroom house, rent the other 3 bedrooms out, and pay their way until they earn a bit more or pay down the mortgage. Now said 25 year old couple and their 3 buddies need to go to a landlord and say 'sir the middle class !!!!! in the government and regulatory bodies got rid of self cert so I and my GF cant buy directly so me and my buddies need your middleman help to get a roof over our heads we understand we will need to pay you double as all overheads cost money'

the end result is still lower ownership

GreatApe

CLAPTON wrote: »

struggling to see how credit restrictions explain high London prices (relative to the regions), nor the fact that there is a high level of council houses, nor the fact that many family sized houses have been converted into multi occupancy houses;
indeed all these should lead to lower prices rather that higher prices.


PS : at least 90% and maybe near 100% of my posts about house price reference London and/or the SE

by what metric do you come to the conclusion that house prices in location x are expensive?
If it is just, oh they are more expensive than x years ago, then that is a very silly way to go about things

My view is that London today is about fair price (plus or minus 20%)

I understand why people feel London is expensive compared to London of 5 years ago or 10 years ago or 20 years ago. That could just as well mean London of 5-10-20 years ago was under-priced rather than London of today being overpriced


Edit: Oh I just noticed you say London is expensive relative to the regions. Yes it is. That is just an observation. London is more expensive than Stoke on Trent, Yes. This is an easy game Clapton but what the hell can you deduce or conclude from it? Nothing at all. It is like saying is Ferrari more expensive than Fiat? Yes it is. So what does that mean? Ferrari prices are in a bubble or due to fall or unsustainable or unjustified?

CLAPTON

GreatApe wrote: »

by what metric do you come to the conclusion that house prices in location x are expensive?
If it is just, oh they are more expensive than x years ago, then that is a very silly way to go about things

My view is that London today is about fair price (plus or minus 20%)

I understand why people feel London is expensive compared to London of 5 years ago or 10 years ago or 20 years ago. That could just as well mean London of 5-10-20 years ago was under-priced rather than London of today being overpriced


Edit: Oh I just noticed you say London is expensive relative to the regions. Yes it is. That is just an observation. London is more expensive than Stoke on Trent, Yes. This is an easy game Clapton but what the hell can you deduce or conclude from it? Nothing at all. It is like saying is Ferrari more expensive than Fiat? Yes it is. So what does that mean? Ferrari prices are in a bubble or due to fall or unsustainable or unjustified?

so you're saying that London houses prices are about 'right'.

but you're also saying that credit restriction arre holding down owner occupaction;
so it would seem that if the credit restriction were relaxed then London house prices would be over-priced

oh dear.

GreatApe

CLAPTON wrote: »

so you're saying that London houses prices are about 'right'.

but you're also saying that credit restriction arre holding down owner occupaction;
so it would seem that if the credit restriction were relaxed then London house prices would be over-priced

oh dear.

its unclear how much prices would move if self cert was returned. you are making the implied assertion that it will be at least a 20% upswing but you dont know that at all.
I dont think it will be that much my best guess is 0-10% HPI but a huge swing of 2 million from renters to owners.

Right now you have a situation in the north where houses are very cheap and properties stay on the market for months sometimes years. Why arent the renters buying them? We know historically more renters could buy them when prices were about the same (or about 1/3rd more expensive in real terms!) so which groups are not buying that historically could/would. It is those in the black and grey markets who have to rent irrespective of cheap prices as the regulators said no mortgage for you

Now imagine self cert was returned, these 2 million or so households who earn their bread from the black market would surely buy like they were in the past. This will shrink the rental sector and expand the owner sector. Landlords are human they cannot hold onto property for ever even if they wanted to they die. when the property comes to market it can become a rental or an owner property.

In London it is more complicated as it has always been a higher rental market even when prices were much cheaper. But even there can you not imagine a situation like a couple who would go down the self cert route and take in a couple of lodgers for a few years to afford it who now cannot do the self cert so the couple and their would be two lodgers need to go to a landlord and in effect have the landlord bid in their behalf


Why is london expensive? It is not expensive the economy can and does support it
Why is stoke so cheap? its just what the local economy can support

Why is ownership falling and renting rising in both extremes? primarily because of the change in self cert availability pre and post 2008

We could theoretically run an experiment Clapton, let the regulators allow banks to give out self cert in say one town in the north east which has a little distance from other towns and observe the result going forward a few years.

the_flying_pig

Self cert is totally mental. The proportion of self cert borrowers who ended up in arrears last time was absurd. If a bank is offering self cert at anything other than very unfavourable terms then there has to be an implicit assumption in there somewhere that the taxpayer is acting as guarantor for the borrowers and/or the banks, which is a completely unacceptable use of taxpayer funds.

CLAPTON

GreatApe wrote: »

its unclear how much prices would move if self cert was returned. you are making the implied assertion that it will be at least a 20% upswing but you dont know that at all.
I dont think it will be that much my best guess is 0-10% HPI but a huge swing of 2 million from renters to owners.

Right now you have a situation in the north where houses are very cheap and properties stay on the market for months sometimes years. Why arent the renters buying them? We know historically more renters could buy them when prices were about the same (or about 1/3rd more expensive in real terms!) so which groups are not buying that historically could/would. It is those in the black and grey markets who have to rent irrespective of cheap prices as the regulators said no mortgage for you

Now imagine self cert was returned, these 2 million or so households who earn their bread from the black market would surely buy like they were in the past. This will shrink the rental sector and expand the owner sector. Landlords are human they cannot hold onto property for ever even if they wanted to they die. when the property comes to market it can become a rental or an owner property.

In London it is more complicated as it has always been a higher rental market even when prices were much cheaper. But even there can you not imagine a situation like a couple who would go down the self cert route and take in a couple of lodgers for a few years to afford it who now cannot do the self cert so the couple and their would be two lodgers need to go to a landlord and in effect have the landlord bid in their behalf


Why is london expensive? It is not expensive the economy can and does support it
Why is stoke so cheap? its just what the local economy can support

Why is ownership falling and renting rising in both extremes? primarily because of the change in self cert availability pre and post 2008

We could theoretically run an experiment Clapton, let the regulators allow banks to give out self cert in say one town in the north east which has a little distance from other towns and observe the result going forward a few years.

I'll say again, I am completely comfortable with the concept that lack of credit limited the ability of OO to buy. It certainly seems reasonable that this may be a large factor in lack of OO buying in the regions. After all, price is determined by supply and demand (wilings and ability to buy).
In London, it would seem to me that the number of people is a significant factor in price, and that if credit was released then prices would rise by a significant amount. 3 million foreigners in London are sgnificant factor in current demand and so of price.

In any event I am less concerned with either price or the percentage of people who are OOs, but with families being able to live in a family sized house.

I