Stamp Duty Ending

MobileSaver

Crashy_Time said:

What I actually said was that people who couldn`t afford a garden before Covid still probably can`t afford one, and I have yet to see any sensible statement from anyone that refutes that.

Huh? The very article that you linked to refuted that by stating "tenants swapped an urban life for the suburbs, smaller towns and villages"; despite your disbelief that people "probably can`t afford one", people actually are moving from cities to less populated areas.

I'm not really sure on what basis you are making such a claim; isn't it a simple verifiable fact that in general terms you can get more for your money buying in a rural area than in a city? Simple supply and demand economics.

Crashy_Time

Getting_greyer said:

Do you not think the rise and increasing efficiency of home working has had an effect though?  People living close to London are no longer tied to location,  they could sell their property and move to a cheaper area. Or if renting get more for their money.  Is wasn't the finances that held them back but the commute.  It's obviously a different story for those that didn't have the finances before but these are two different things.

But who would buy their property at the price they paid if everyone is home working away from London? Some might have the savings to make the move anyway, but that is a yet smaller sub-section of people, most would be relying on a house sale to make the move. It is important also I think not to confuse an emergency fix with the "rise" of anything, the technology has been around for years that makes home working easily possible for many people, people used to work from home with landlines and fax machines? However I don`t believe the majority of companies want the majority of their employees "home-working" in normal times, so what happens if someone relocates to Somerset or somewhere and the pandemic dies out and the London based company says "Right, everyone back to the office!"? Property bubbles make it harder for people to relocate not easier IMO because they stretch people`s finances and they make it harder to sell to other stretched people when times get tougher, and "home-working" isn`t going to be encouraged after Covid lifts, there are just too many big players who would lose money from the "commuter economy" TBH.

Crashy_Time

MobileSaver said:

Crashy_Time said:

MobileSaver said:

Interest rates increased three fold between Aug 2016 and Aug 2018... transactions remained constant at around 100,000 a month throughout the entire time until the obvious drop in transactions when Covid hit.

Sure, but if you look at the graph and the bigger picture that increase is essentially meaningless.

Four years worth of data is meaningless because it doesn't fit your narrative? 

Crashy_Time said:

You still seem to be saying that transactions have become set at a particular level and can be affected by something like Covid but not by other threats to affordability like rising rates?

Um, no, I've not said anything of the sort. I'm simply challenging your and @mrlegend123's claim that a 1% increase in mortgage rates will result in a 20% drop in transactions or house prices; historical figures clearly prove this isn't the case.

Crashy_Time said:

Getting_greyer said:

Which is a different to what mobile saver is saying regarding the substitution effect between rental and ownership.

He also says that "the supply of rental properties will naturally decrease"? But we have had around 15 years of the biggest BTL boom in history as banks got more and more people with existing mortgage debt on their main home into even more property debt on BTL homes!

As @Getting_greyer pointed out, I think you have forgotten the context of my statement...

Poster mrlegend123 claimed BTL was already "not worth it" and then predicted with glee that BTL would be taxed even more. I don't think you have to be Einstein to work out that such a scenario would result in "the supply of rental properties will naturally decrease."

But as you admitted earlier an ex-rental doesn`t stop being a house, someone is going to buy it and probably live in it themselves if renting it out is no longer feasible, so that is one less renter or one less renter family? FOM has ended so where are the people coming from, Hong Kong perhaps, surely even if they all came that doesn`t compare to the effect of the EU countries having access to FOM?

What caused the 50% drop in transactions in your opinion?

Getting_greyer

Crashy_Time said:

Getting_greyer said:

Do you not think the rise and increasing efficiency of home working has had an effect though?  People living close to London are no longer tied to location,  they could sell their property and move to a cheaper area. Or if renting get more for their money.  Is wasn't the finances that held them back but the commute.  It's obviously a different story for those that didn't have the finances before but these are two different things.

But who would buy their property at the price they paid if everyone is home working away from London? Some might have the savings to make the move anyway, but that is a yet smaller sub-section of people, most would be relying on a house sale to make the move. It is important also I think not to confuse an emergency fix with the "rise" of anything, the technology has been around for years that makes home working easily possible for many people, people used to work from home with landlines and fax machines? However I don`t believe the majority of companies want the majority of their employees "home-working" in normal times, so what happens if someone relocates to Somerset or somewhere and the pandemic dies out and the London based company says "Right, everyone back to the office!"? Property bubbles make it harder for people to relocate not easier IMO because they stretch people`s finances and they make it harder to sell to other stretched people when times get tougher, and "home-working" isn`t going to be encouraged after Covid lifts, there are just too many big players who would lose money from the "commuter economy" TBH.

Who would buy them? Anyone who could and wanted to.  You could be sell at a competitive price and still be quids in.  People are still buying aren't they? 

I think you may underestimate the desire for more remote working from the firms pov.  If productivity hasn't suffered, this is a chance to lower costs.  If an office building just becomes an inefficient fixed cost in the short run, why wouldn't a firm see an opportunity to remove this.  Why not just hire a conference room for when needed Now? Or better still conduct business off Zoom.  Now this is clearly not possible for every firm as it doesn't suit or they fail to innovate etc. It may be that only a specific branch of their labour staff are suitable for WFH. But I think you know I obviously didn't mean every single worker within the M25 is going to upsticks to Grantham.

MobileSaver

Crashy_Time said:

FOM has ended so where are the people coming from

Er, I know it's de rigueur for HPCers to be sad, lonely singletons but do I really have to explain the birds and the bees to you?

More people are born every day and less people are dying, even during a once in a lifetime pandemic such as Covid. That simple fact of nature on its own means we need more homes for people to buy and rent.

Add in to the mix that lifestyles have changed and now more people live alone than ever before and it should be obvious why converting rentals to owner-occupiers is bad news for those who choose to rent.

Crashy_Time said:

What caused the 50% drop in transactions in your opinion?

It wasn't mortgage rates increasing by 1%!

Mickey666

Crashy_Time said:

Getting_greyer said:

Do you not think the rise and increasing efficiency of home working has had an effect though?  People living close to London are no longer tied to location,  they could sell their property and move to a cheaper area. Or if renting get more for their money.  Is wasn't the finances that held them back but the commute.  It's obviously a different story for those that didn't have the finances before but these are two different things.

But who would buy their property at the price they paid if everyone is home working away from London? Some might have the savings to make the move anyway, but that is a yet smaller sub-section of people, most would be relying on a house sale to make the move. It is important also I think not to confuse an emergency fix with the "rise" of anything, the technology has been around for years that makes home working easily possible for many people, people used to work from home with landlines and fax machines? However I don`t believe the majority of companies want the majority of their employees "home-working" in normal times, so what happens if someone relocates to Somerset or somewhere and the pandemic dies out and the London based company says "Right, everyone back to the office!"? Property bubbles make it harder for people to relocate not easier IMO because they stretch people`s finances and they make it harder to sell to other stretched people when times get tougher, and "home-working" isn`t going to be encouraged after Covid lifts, there are just too many big players who would lose money from the "commuter economy" TBH.

But there will never be a situation where "everyone is home working away from London" will there?  At least not in our lifetimes.  It's a bit daft to extrapolate anything to ridiculous extremes because it only makes any conclusions also ridiculous.

You may have a point about WFH in normal times though and I'd say the jury is currently out on how companies are going to react when we are back to 'normal' times.  Perhaps they will clamp down on WFH but perhaps they won't.  Most likely IMO is that the net result will be more WFH than there was before the pandemic.  This is because, having been forced to try it, many companies and employees will find it suits them.  I don't know what proportion this will be but I'm guessing it won't be 0%.  This is how trends begin.  Plus, of course, even if the vast majority of companies decide to revert to no WFH, many, many employees have already had a taste of it and some will want to remain WFH.  If their employers won't allow it they may seek alternative employment away from city centres.  Again, it'll be a gradual trend, not an overnight revolution.

mrlegend123

MobileSaver said:

Crashy_Time said:

FOM has ended so where are the people coming from

Er, I know it's de rigueur for HPCers to be sad, lonely singletons but do I really have to explain the birds and the bees to you?

More people are born every day and less people are dying, even during a once in a lifetime pandemic such as Covid. That simple fact of nature on its own means we need more homes for people to buy and rent.

Add in to the mix that lifestyles have changed and now more people live alone than ever before and it should be obvious why converting rentals to owner-occupiers is bad news for those who choose to rent.

Crashy_Time said:

What caused the 50% drop in transactions in your opinion?

It wasn't mortgage rates increasing by 1%!

transactions dropping by 50% may be caused by the fact younger people cannot afford to buy and stuck in the rental sector.......common sense.....

any increase in long term mortgage rates would heavily affect the new borrower and may change the asking prices of houses..... common sense..... 

The system is against people who rent, on benefits etc..... common sense....... 

MobileSaver, are you a baby boomer? 

MobileSaver

mrlegend123 said:

any increase in long term mortgage rates would heavily affect the new borrower and may change the asking prices of houses..... common sense.....

Between 2003 and 2007 (so four years worth of data) interest rates increased from 3.5% to 5.75% and house prices also increased; how does that square with your "common sense" speculation?

mrlegend123 said:

MobileSaver, are you a baby boomer? 

No, I am not that old.

Crashy_Time

Mickey666 said:

Crashy_Time said:

Getting_greyer said:

Do you not think the rise and increasing efficiency of home working has had an effect though?  People living close to London are no longer tied to location,  they could sell their property and move to a cheaper area. Or if renting get more for their money.  Is wasn't the finances that held them back but the commute.  It's obviously a different story for those that didn't have the finances before but these are two different things.

But who would buy their property at the price they paid if everyone is home working away from London? Some might have the savings to make the move anyway, but that is a yet smaller sub-section of people, most would be relying on a house sale to make the move. It is important also I think not to confuse an emergency fix with the "rise" of anything, the technology has been around for years that makes home working easily possible for many people, people used to work from home with landlines and fax machines? However I don`t believe the majority of companies want the majority of their employees "home-working" in normal times, so what happens if someone relocates to Somerset or somewhere and the pandemic dies out and the London based company says "Right, everyone back to the office!"? Property bubbles make it harder for people to relocate not easier IMO because they stretch people`s finances and they make it harder to sell to other stretched people when times get tougher, and "home-working" isn`t going to be encouraged after Covid lifts, there are just too many big players who would lose money from the "commuter economy" TBH.

But there will never be a situation where "everyone is home working away from London" will there?  At least not in our lifetimes.  It's a bit daft to extrapolate anything to ridiculous extremes because it only makes any conclusions also ridiculous.

You may have a point about WFH in normal times though and I'd say the jury is currently out on how companies are going to react when we are back to 'normal' times.  Perhaps they will clamp down on WFH but perhaps they won't.  Most likely IMO is that the net result will be more WFH than there was before the pandemic.  This is because, having been forced to try it, many companies and employees will find it suits them.  I don't know what proportion this will be but I'm guessing it won't be 0%.  This is how trends begin.  Plus, of course, even if the vast majority of companies decide to revert to no WFH, many, many employees have already had a taste of it and some will want to remain WFH.  If their employers won't allow it they may seek alternative employment away from city centres.  Again, it'll be a gradual trend, not an overnight revolution.

 Ok, not "everyone", but if it became the norm to work from home a LOT of people wouldn`t bother relocating to London or would move out, so there would be downward pressure on house prices/rents?

Your second point is fair enough, but it is the Covid situation that is new not the technology to work from home, so why no push from employers to WFH before now? I honestly don`t think the "taste" people have had this last year is a positive one, many people will be desperate to get back into the office where they can probably focus more easily and don`t feel like some sort of prisoner under their own roof? 

Crashy_Time

MobileSaver said:

Crashy_Time said:

FOM has ended so where are the people coming from

Er, I know it's de rigueur for HPCers to be sad, lonely singletons but do I really have to explain the birds and the bees to you?

More people are born every day and less people are dying, even during a once in a lifetime pandemic such as Covid. That simple fact of nature on its own means we need more homes for people to buy and rent.

Add in to the mix that lifestyles have changed and now more people live alone than ever before and it should be obvious why converting rentals to owner-occupiers is bad news for those who choose to rent.

Crashy_Time said:

What caused the 50% drop in transactions in your opinion?

It wasn't mortgage rates increasing by 1%!

No, so it must have been a drop in demand? I`m taking your first point as saying that the end of FOM doesn`t really matter much? It will be interesting to see how that prediction plays out, especially for the BTL "industry" which strangely seemed to take off big time around the same time as FOM started pushing voters towards the Brexit decision?

Surely though you must see the point being made about how very small changes to affordability can affect transactions when a bubble is at full stretch, when people can barely scrape together the money to participate any more, when they jump on crumbs like the SD stunt to "get on the ladder" without the money to fix a boiler?