Brexit is good for housing, it will bring about the correction sooner

buglawton

triathlon wrote: »

I am actually considering putting rents up this year

Rents on new contracts are going to rise sharply June onwards, as the rental agency business all but collapses. Someone in the government thought it'd be a good idea, that rather than cap or regulate the extortionate fees agents have been taking, to scrap them completely. Unintended consequences to follow as night follows day.

Agents will now be putting a scale of fees up in front of landlords instead. Who will pass that cost on in the form of higher rents. Will the market bear it is the only question. Since prospective tenants will be saving £100s in initial fees the answer is yes.

In all the net effect will be a bit like the new stamp duties introduced a few years ago. They slowed transactions to a crawl. I suspect tenants won't be moving about so much in future, supply will shrink as people stay put longer.

BobQ

I have no wish to sell my home, so why would I care if prices fall or rise.

The envy of those wish to engineer price falls is rather pathetic. Try saving for a deposit and stop wasting your money on the latest electronic gadgets, cars and foreign holidays. Then you can lecture others about how overpriced their houses are. We should build more houses and then prices would fall.

tom9112

BobQ wrote: »

Then you can lecture others about how overpriced their houses are. We should build more houses and then prices would fall.

Are you living in the world of CEOs with constant idea of "growth" "investment" "achieving"?

The UK housing market is a huge bubble, people pay £300k for a 30 year what I call a "submission payments" to banks who paid a significant amount of money to our "representatives of democracy" to make sure that they get away jail free when people realize how corrupted the system is.

If you think about this, you are paying £300k for 30 years for a decent property. Currently it's all good, everything is going up, business is doing great.

Lets think about next 5/10/15 years... The UK property market is so expensive that Minimum wage has to increase to £15ph to make sure the pheasants meet their months end and our bellowed landlord make 5-10% profits on renting annually.

The greed leads to a point where it becomes financially (and it will be) unstable due to costs for a basic living conditions that the UKs output and services will become affected, leading to job losses, unpaid rents, unpaid bank loans etc.

It is a nature of the political cycle, historically, nothing can stop it.

Can you, however, control it as a voter to implement new laws from making the honest and hard working people go into hard times due to political corruption?

ukcarper

tom9112 wrote: »

Are you living in the world of CEOs with constant idea of "growth" "investment" "achieving"?

The UK housing market is a huge bubble, people pay £300k for a 30 year what I call a "submission payments" to banks who paid a significant amount of money to our "representatives of democracy" to make sure that they get away jail free when people realize how corrupted the system is.

If you think about this, you are paying £300k for 30 years for a decent property. Currently it's all good, everything is going up, business is doing great.

Lets think about next 5/10/15 years... The UK property market is so expensive that Minimum wage has to increase to £15ph to make sure the pheasants meet their months end and our bellowed landlord make 5-10% profits on renting annually.

The greed leads to a point where it becomes financially (and it will be) unstable due to costs for a basic living conditions that the UKs output and services will become affected, leading to job losses, unpaid rents, unpaid bank loans etc.

It is a nature of the political cycle, historically, nothing can stop it.

Can you, however, control it as a voter to implement new laws from making the honest and hard working people go into hard times due to political corruption?

According to nationwide in relation to earnings house prices are about 50% above long term average, high yes but hardly a bubble.

lisyloo

ukcarper wrote: »

According to nationwide in relation to earnings house prices are about 50% above long term average, high yes but hardly a bubble.

But all other things have not remained equal.
Is it reasonable to expect the long term average to remain the same?
I can think of significant items that have become cheaper but also some that have become more expensive.

ukcarper

lisyloo wrote: »

But all other things have not remained equal.
Is it reasonable to expect the long term average to remain the same?
I can think of significant items that have become cheaper but also some that have become more expensive.

It probably hasn't as higher recent prices will have increased long term average, but affordability is mainly deteriorating by earnings.

The point I was trying to make is that although prices are high I don't think they are in a bubble,

phillw

ukcarper wrote: »

The point I was trying to make is that although prices are high I don't think they are in a bubble,

You never know for sure if you're in a bubble or not until it bursts.

I cautiously think you're right. However if help to buy was stopped then house prices would probably fall a little & if the economy tanks then all bets are off.

If there is a large amount of unexplained wealth orders issued then it might affect London prices, but there isn't much sign of them doing that quickly.

lisyloo wrote: »

I can think of significant items that have become cheaper but also some that have become more expensive.

Houses are relatively unique. Electronics goods for instance have become cheaper to make because production is moved to countries with lower labour costs or lax ecological laws. When one company does that and lowers their prices, so their competitors have to and the prices drop considerably.

For new houses you can use cheaper materials, but there is a limit & it's difficult to move production of your house to another country. You can use cheap immigrant labour and break building regulations as a way to cut costs further.

Generally existing houses can just go unsold if the market won't support the price the seller wants, which may be to clear their mortgage or just some number they are emotionally attached to.

Land itself is a scarce resource, so there is a lower limit on how far prices could fall unless society itself collapses.

London could probably be considered a bubble, I'm sure there are going to be examples of properties where the price has dropped from 10 million to 5 million. That isn't particularly relevant to me though.

Housing also works differently because if you can't afford to buy a house, then you still need somewhere to live and so there is demand for rental properties and people with money will see that as an investment and keep the prices high.

AG47

lisyloo wrote: »

Well if your my landlord then you’ll have to fix the broken sofa or I’m leaving.
Not so keen now?

The really scary part for LLs is the trend on reality property TV shows of the tenant asking for a grand or more cash to move out peacefully without smashing the place up.

Wise landlords will pay the cash to avoid several thousand pounds worth of damage to the property.

Whenever a tenant is unhappy these days they usually smash the place up before they go.

LLs would do well to keep their tenants happy at all costs.

lisyloo

No, I’m a tenant and simply would not behave like that.
Decent landlords get decent tenants and vice versa,

buglawton

AG47 wrote: »

...
Whenever a tenant is unhappy these days they usually smash the place up before they go...

Statistically proven fact?