Home Ownership at Lowest Level for 30 Years

economic

ukcarper wrote: »

I suppose they all should take some responsibility but ultimately it's the student who makes the decision. I wonder how much of that student debt will be paid back.

Yeh agree. Been a whilst since I was in school but do they teach about debt and personal finances? I remember I never got taught.

It's so obvious some degrees are a waste of time and money so why do students still do them? I guess for a three year chill and party as well as sleeping around. Why not hey?

GreatApe

Living in London is not that much more expensive than elsewhere. People exaggerate the differentials or specify the more expensive London areas.

One of my London tenants pay £1500pm for a nice 3 bedroom semi. A friend in the midlands pays £800pm for a similar sort of terrace. The difference is £700 per month.

For a working couple that's only some £350 per month higher pay packet to make London worthwhile


Also we know the housing mix is different in London compared to much of the rest of the country. So it is not even realistic to compare like with like. It might be better to compare a 3 bedroom house in the Midlands to a 2 bedroom flat in zone 3 London in which case the differential falls further.

Not forgetting the young who tend to share irrespective of local house prices. 4 people sharing a 3 bedroom house would be just £400-500 a head which is very affordable even on lower wages

GreatApe

The talk of London housing being expensive or the move to London being a bad financial move is/has been wrong.

London housing has been the cheapest housing in the land so much so that most Londoners have gained money from their homes much more so than anyone in rUK so it wasn't even a cost it was a free cash.

About 50% are owners so their London housing cost was free or cheaper than free.

About 25% is social so their costs are very low

That leaves the 25% of London that are private renters who have indeed had higher housing costs in London. Provably £500-600pm more. However they have likely in most cases been more than compensated by higher wages a working couple or friends sharing only need to earn £5k before taxes to hit the break even. Also if the job outside London means having to have a car while the one inside London doesn't there is a significant saving there. Second hand Cars provably cost some £3k a year all in while a London travel card is closer to £1.5k a year.

economic

GreatApe wrote: »

The talk of London housing being expensive or the move to London being a bad financial move is/has been wrong.

London housing has been the cheapest housing in the land so much so that most Londoners have gained money from their homes much more so than anyone in rUK so it wasn't even a cost it was a free cash.

About 50% are owners so their London housing cost was free or cheaper than free.

About 25% is social so their costs are very low

That leaves the 25% of London that are private renters who have indeed had higher housing costs in London. Provably £500-600pm more. However they have likely in most cases been more than compensated by higher wages a working couple or friends sharing only need to earn £5k before taxes to hit the break even. Also if the job outside London means having to have a car while the one inside London doesn't there is a significant saving there. Second hand Cars provably cost some £3k a year all in while a London travel card is closer to £1.5k a year.

do you think london property is a good long term buy even now? you think inner london (zone 1-2) will be better or outer (zone 3+)?

GreatApe

economic wrote: »

do you think london property is a good long term buy even now

I would not buy right now as I think we have momentum slightly downward this year in London.

However longer term thinking ahead 30 years I do still see a very positive picture for London

you think inner london (zone 1-2) will be better or outer (zone 3+)?

I think inner London will continue to outperform outer London over the next 20 years for the same reasons as it has over the last 20 years

always_sunny

GreatApe wrote: »

Living in London is not that much more expensive than elsewhere. People exaggerate the differentials or specify the more expensive London areas.

One of my London tenants pay £1500pm for a nice 3 bedroom semi. A friend in the midlands pays £800pm for a similar sort of terrace. The difference is £700 per month.

For a working couple that's only some £350 per month higher pay packet to make London worthwhile


Also we know the housing mix is different in London compared to much of the rest of the country. So it is not even realistic to compare like with like. It might be better to compare a 3 bedroom house in the Midlands to a 2 bedroom flat in zone 3 London in which case the differential falls further.

Not forgetting the young who tend to share irrespective of local house prices. 4 people sharing a 3 bedroom house would be just £400-500 a head which is very affordable even on lower wages

Shush don't tell that or more people will come down! London like many large cities around the world it's very misunderstood when it comes to housing!

westernpromise

It's important to note the political hypocrisy around this topic. 30 years ago the left thought the level of home ownership was too high, that council houses should not be sold to their occupants to raise it, and that council tenants should instead be forced to rent for life.

Scroll forward 30 years and their issue is not that there should be more homes built to buy, but more council homes built to rent. So renting is still the left's preferred way of housing people. What they can't stand is private landlords doing it, with property allocation determined by price. They think the state should be a landlord, with property allocated by ration and queue.

And once housed on that basis, people find immobility is baked in. If you find a better job - or even a job - in another part of the country, you can't take it, because the state lets your house to you and if you move you'll lose it. If t'pit closes down, you can't move to where jobs are because your council house is next to t'pit and so a new job must come to you.

ukcarper

westernpromise wrote: »

It's important to note the political hypocrisy around this topic. 30 years ago the left thought the level of home ownership was too high, that council houses should not be sold to their occupants to raise it, and that council tenants should instead be forced to rent for life.

Scroll forward 30 years and their issue is not that there should be more homes built to buy, but more council homes built to rent. So renting is still the left's preferred way of housing people. What they can't stand is private landlords doing it, with property allocation determined by price. They think the state should be a landlord, with property allocated by ration and queue.

And once housed on that basis, people find immobility is baked in. If you find a better job - or even a job - in another part of the country, you can't take it, because the state lets your house to you and if you move you'll lose it. If t'pit closes down, you can't move to where jobs are because your council house is next to t'pit and so a new job must come to you.

Much better to let taxpayers pay your rent to a landlord who in turn pays most of it to the bank, and hope he don't kick you and the kids out.

davomcdave

ukcarper wrote: »

Much better to let taxpayers pay your rent to a landlord who in turn pays most of it to the bank, and hope he don't kick you and the kids out.

Or better still allow people to build houses where they want to live (in the SE near public transport and/or motorways). Is it just me or is it utterly ridiculous that M25 mostly goes through land that you aren't allowed to build houses on? Ditto much of the suburban railway system.

The record price for farmland around Sevenoaks is £45k/acre. So for £10k you could have a very nice plot of land even if you pay a record price.

http://www.ibbettmosely.co.uk/case-studies/kent-farmland-sells-at-auction-for-nearly-%C2%A390,000-per-acre.aspx

Say £50k for access and to connect to services and £150k to put up a nice, 4 bed 3 reception house including all fixtures and fittings. Cost of a lovely house with a decent garden in the SE c. £210k. Actual price? A million? More perhaps? So the restriction of planning permission costs buyers of family homes perhaps £800k each. That is stupid.

GreatApe

davomcdave wrote: »

Or better still allow people to build houses where they want to live (in the SE near public transport and/or motorways). Is it just me or is it utterly ridiculous that M25 mostly goes through land that you aren't allowed to build houses on? Ditto much of the suburban railway system.

The record price for farmland around Sevenoaks is £45k/acre. So for £10k you could have a very nice plot of land even if you pay a record price.

http://www.ibbettmosely.co.uk/case-studies/kent-farmland-sells-at-auction-for-nearly-%C2%A390,000-per-acre.aspx

Say £50k for access and to connect to services and £150k to put up a nice, 4 bed 3 reception house including all fixtures and fittings. Cost of a lovely house with a decent garden in the SE c. £210k. Actual price? A million? More perhaps? So the restriction of planning permission costs buyers of family homes perhaps £800k each. That is stupid.

That's not really close to what happens. Build costs down south are closer to £2k/sqm which would put a 100sqm house build costs at £200k

If you want to build say 100 homes in or near London you will have to do something closer to the following

Assuming affordable land at £50k a plot
£200k build cost per house inc utilities

That is £25m cost for 100 homes so £250k a home right? Wrong

If the development takes a year add 5% for finance so £1.25m there. Add in s106 obligations and fees and CIL fees which could be very significant but probably looking at £3m. Not forgetting planning fees and delays and risk and profit but for now we will ognofre those

So total cost is closer to £30 million for 100 homes. The real problem is that the councils require the developer to give 50% of the homes to the council at a price the council can afford to rent it as social council homes for at £500pm to the asylum seekers or work shy. That probably means selling 50 of your units to the social landlord for £80k a pop.

That gives you £30 million cost minus £4m for selling 50 units to the council. It leaves you with 50 units and £26m cost. Thus you need to sell each of your saleable units for £520k a pop to break even

And remember we only took £50k for the plot of land often it will cost more than that. However even if you could get land for half that price it only Knocks your saleable unit break even price to £470k a pop

And London homes especially in outer London where the space is are not valued at £1m. You are probably looking at half that as more reasonable estimated sale price