New housing white paper

Graham_Devon

CLAPTON wrote: »

OK you believe that immigration has no impact on the numbers of people living in London and no impact on prices.

and of course you believe that easier credit would reduce he prices in London

Certainly an amasing view but so beit.

Is thegreatape the user who was named cells?

Such bizzare views can surely only be maintained by a handful of select people.

brit1234

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 and buy a house pre 2008 via self cert mortgages. Now they cannot. With a stoke of the pen the regulators took away the ability for some 3 million households (the black economy is estimated to be ~10% of GDP) to obtain mortgages and buy homes.

Self Cert /liar loans were banned because they were infested with mass fraud. Do you really think the solution is to get the population to lie?

https://www.youtube.com/watch?v=vT1UnGS91BY

The problem today was a lot to do with buy to let, too low mortgage rates and foreign investors.

Changes with buy to let, stamp duty, foreign money clampdowns will help. Low mortgage rates and help to buy remain a problem.

mrginge

Just heard a young lady on radio five.
She doesn't think it's fair that she can't afford to buy in London.
She doesn't like the idea of renting into her sixties.

Fair enough I guess.

But she *wants* to live there because her friends are there and she likes the lifestyle blah blah blah usual stuff.

And of course, as a 'young person', why shouldn't she be able to pick exactly where she wants to live AND be able to buy a property there.

Now she didn't sound like a nutcase, but as a spokesperson for the institute of entitled twenty-somethings she could earn a decent wedge.

Thrugelmir

westernpromise wrote: »

The problem will be when the institutions start expecting the same tax treatment as they get in Berlin, i.e. they write off the building against rent and thus pay very little tax.

You need to understand post war Germany a little better. Around 90% of Germany's housing stock was destroyed. Hence the totally set-up to that in the UK. With renting being quite normal.

GreatApe

brit1234 wrote: »

Self Cert /liar loans were banned because they were infested with mass fraud. Do you really think the solution is to get the population to lie?

https://www.youtube.com/watch?v=vT1UnGS91BY

The problem today was a lot to do with buy to let, too low mortgage rates and foreign investors.

Changes with buy to let, stamp duty, foreign money clampdowns will help. Low mortgage rates and help to buy remain a problem.

well yes for the 10% or thereabout of the population who work in the black or grey market they can hardly go to a bank manager and say hello sir I have x undocumented income or I earn y from illegal or immoral sectors.

I am not proposing needing these people to lie or produce fake pay slips, I am proposing that banks should be allowed and perhaps encouraged to offer 20% down self certified mortgage where the certifying is not lying or producing fake payslips but simply ticking a box 'I am an adult and I am confident I can meet the mortgage repayments'

Of course there is a moral question as to allowing families who earn their bread from the black market and should society try to support them or not. Personally I think it is in societies interest to allow them into home ownership as if we dont they will become renters in old age who will need housing benefits until they die.

Also I am unsure on the stats of defaults, however I recall hamish posting that the worst bits of the worst mortgages given out by the worst bank (northern rock) turned out to be profitable so I dont buy the arguments that these people do default en mass why would they default on a £100k house they put down £25k to buy

And yes I am aware this could mean allowing drug dealers or gang members or people traffickers or prostitutes or all manner of 'undesirables' a way to own their own home rather than rent. It is indeed a difficult moral question but I think overall 10% or 3 million families with kids can not all be evil so to lock them all out of the market would be negative. Even the undesirables lets say a prostitute is it better she buys now while she is working/earning or better to let her stay a renter and then pick up the tab for her rent via HB when she is a pensioner?

mrginge

GreatApe wrote: »

I am proposing that banks should be allowed and perhaps encouraged to offer 20% down self certified mortgage where the certifying is not lying or producing fake payslips but simply ticking a box 'I am an adult and I am confident I can meet the mortgage repayments'

And who do you believe should have to bear the risk of that statement?

GreatApe

mrginge wrote: »

And who do you believe should have to bear the risk of that statement?

75% LTV repayment mortgages would be risk free unless there is a more than 25% house price crash which has never happened in my lifetime so I am confident in saying that the lending would be very low risk.

Even people in negative equity will continue to pay their mortgages because they have to live somewhere and being evicted is no fun so even if there was a more than 30% house price crash I would not expect mass defaults. I would suggest at most the defaulters would be about what the rise in unemployment during a recession is. So if we hit a recession where unemployment goes from 5% to 10% that is 5% increase so I would expect no more than 5% of the self cert market to default and remember the default only costs the banks the LTV and the makret fall so a 75% LTV purchase defaulted in a 30% HPC is a 5% hit to the bank

Also there is a risk of not doing anything, already renting has rocketed and ownership fallen by some 2 million or thereabouts households. Who is going to bear that risk?? well you and me in current and future housing benefit payments to people who rented a lifetime rather than paid off a mortgage because middle class folk like you me and the bank regulators are blind or too silly to accept the black market exists and they were able to buy in the past thanks to self cert and they no longer can

its certainly a lot to think about

mrginge

GreatApe wrote: »

75% LTV repayment mortgages would be risk free unless there is a more than 25% house price crash which has never happened in my lifetime so I am confident in saying that the lending would be very low risk.

Even people in negative equity will continue to pay their mortgages because they have to live somewhere and being evicted is no fun so even if there was a more than 30% house price crash I would not expect mass defaults. I would suggest at most the defaulters would be about what the rise in unemployment during a recession is. So if we hit a recession where unemployment goes from 5% to 10% that is 5% increase so I would expect no more than 5% of the self cert market to default and remember the default only costs the banks the LTV and the makret fall so a 75% LTV purchase defaulted in a 30% HPC is a 5% hit to the bank

Also there is a risk of not doing anything, already renting has rocketed and ownership fallen by some 2 million or thereabouts households. Who is going to bear that risk?? well you and me in current and future housing benefit payments to people who rented a lifetime rather than paid off a mortgage because middle class folk like you me and the bank regulators are blind or too silly to accept the black market exists and they were able to buy in the past thanks to self cert and they no longer can

its certainly a lot to think about

It certainly is.
At the moment I'm thinking you need to lay off the crack.

Matt_L

GreatApe wrote: »

I don't have time for you if this is your MO

I said with self cert gone the black and grey market that make up about 10-15% of the economy can longer buy thus ownership levels have fallen almost irrespective of local population or house price. Something which you seem to have accepted multiple times

The conclusion is that if you want higher ownership levels its not primarily migration its not house building its returning self cert mortgages to the market.

The issue i take with your theory is the fact now that it is almost as difficult to rent as it is to get a mortgage. I know people that have been turned down by Estate Agents because they couldn't pass the credit checks to rent....

michaels

GreatApe wrote: »

what is that cost?

Are you talking about the sky high margins builders earn? something close to 6-7 percent (TW 2009-2015) on a cyclical business that should be looked at over a medium term?

Nope I am talking about the fact that a parcel of land can increase in value 100 fold simply through the granting of planning permission. In most of the SE it is this artificial comstraint on supply that results in housing costing so much more than the cost of farm land plus build costs.