House Prices?

ICBM

What about oil prices? They're not an asset bubble.

They're also being significantly manipulated for global political reasons.

ThePrettyDamned

ToneControl said:

ThePrettyDamned said:

ToneControl said:

ThePrettyDamned said:

rlw said:

robgilmo said:

I think second homes, buy to lets etc should have the shot taxed out of them until its just not worth it anymore, this way hard working people like myself might actually be able to afford to put a roof over my families heads and no longer be subject to a ruthless renting market run by greedy landlords and despicable estate agents, seems only fair, there is a housing crisis and you are either part of the problem or it's victim.

Hard working people buy second homes too you know..............

Yes. And this contributes to the destruction of local economy. See ghost towns in the lake district, Dorset coast etc. 

It's not as simple as "I can afford a second house". There is a direct economic impact to the local area, which costs money. More than a bit of council tax. 

I'm not so convinced:
take some seaside village in Anglesey like the one I visited, everyone skint, plenty of Dads collecting their kids from school

So the theory is that people with jobs living in Manchester (like my Welsh mate) buying a house in that village, and paying council tax without claiming it back from the council as benefits, are in fact taking something away from the area?
What is that then? They aren't using the schools or GPs, they are paying council tax (for real), but don't buy groceries quite as often. What is the negative economic impact to the area?

They're not using the services. Schools not being used is a *bad* thing - it's a waste of resources. Schools could close because there are not enough students. Which is fine, but for the few local kids who need that resource and now have to travel further. Which also increases the pressure on neighbouring schools. 

Not using gp surgery - part time surgery, or reduced staffing. Both of these are negative impacts on local rural economy. 

Don't buy groceries as often/not at all, bar a few weeks per year. Not a problem if it's a handful of houses, but when it's several handfuls that's a real economic impact. How is the local shop keeper to stay in business if throughout the year, bar a few weeks in summer, only half of his village is populated to buy from them? 

It's not about being convinced - it happens. Holiday home ownership seems more common in rural areas that are more dependent on local economy - although there are impacts felt even in London. 

and when people are on holiday, do they eat out more, and go out for drinks more?
I can't believe that people bringing money into an area, that they have earned elsewhere, would be damaging the local economy overall. I could accept they disrupt the social fabric, but if people are driven out of the area by increasing prices, that's down to crap local councils and planning departments

But they only bring that industry in a few weeks per year in some cases - not a couple of weeks per month. Why would a restaurant or pub owner stick around for a whole year when they'd get business only through 6 weeks of summer? 

Fretwired

ICBM said:

Fretwired said:

Out of interest how would you work it out? I've lived in my house for 29 years and in that time have probably spent just shy of £200K on it - the kitchen has been replaced twice, the two bathrooms three times, house rewired, new roof, trees removed, new garage doors, garage roof .. the list is endless. Add this all up and the amount I've made on my house isn't that great and yet I guess you're looking to simply take the purchase price and the house value and ignore interest and maintenance costs.

No. I would account for inflation, and the cost of any upgrades. The idea would be to penalise only the unearned part of the rise due to house price inflation alone, and only make it applicable on sale as well - so if you inherit a house and want to keep living in it, you shouldn't be forced to sell it in order to pay tax. But if or when you do sell, you become liable.

It's the rise in "value" due to no genuine input which is the problem. It's seriously distorted the economy for no real benefit other than to the bankers who we now pay a much higher proportion of our incomes to in the form of mortgage interest, and people at the downsizing end who have taken advantage of huge unearned windfalls.

The problem is calculating this - inflation over 29 years? Proving how much I have spent, interest charges on a mortgage and the value of the house - will the interest on any loans for home improvements count? This is getting complicated. And why shouldn't this apply to a '59 Les Paul or an E-type Jag? Why only property?

Emp_Fab

House prices.... are fecking insane and no longer bear any resemblance to the real value of the property.

Fretwired

Emp_Fab said:

House prices.... are fecking insane and no longer bear any resemblance to the real value of the property.

So what's the real value of property? A piece of wood, some wiring, pickups, tuners and strings can be worth anything from £199 to £1.2 million .. why should a '54 Strat or a 59 Les Paul be worth a fortune? Or a Rembrandt or a Turner?

ToneControl

Common sense would determine that a house should be worth the cost of construction, plus the normal, undeveloped cost of the land it stands on. In cities this will be high, but there is no reason to intentionally make it expensive to build outside cities

Trouble is, that's what planning laws normally do, with the exceptions mostly seen in Northern Ireland and Eire

ICBM

Fretwired said:

The problem is calculating this - inflation over 29 years?

Easy. http://www.bankofengland.co.uk/education/Pages/resources/inflationtools/calculator/default.aspx

Fretwired said:

Proving how much I have spent, interest charges on a mortgage and the value of the house - will the interest on any loans for home improvements count?

Why should it?

Fretwired said:

And why shouldn't this apply to a '59 Les Paul or an E-type Jag? Why only property? 

Indeed, why shouldn't it? I never suggested it shouldn't. It's all unearned income from capital gains and so should be subject to Capital Gains Tax.

It's the anomaly that houses (first homes, anyway) *aren't* included. By not doing so, it further encourages putting money into houses as opposed to any other investment, which is precisely part of the problem… this and the idea that house prices will always rise has created a tax-free, apparently risk-free magnet for money and led to excessive amounts of debt being taken on and interest paid to service it, to create nothing in terms of real wealth.

Evilmags

Brown reduced the importance of houseprices to inflation hence allowing a borrowing binge in private and public sectors with stupidly low interest rates. That is the main driver of housing bubbles. 

ToneControl

ThePrettyDamned said:

ToneControl said:

ThePrettyDamned said:

ToneControl said:

ThePrettyDamned said:

rlw said:

robgilmo said:

I think second homes, buy to lets etc should have the shot taxed out of them until its just not worth it anymore, this way hard working people like myself might actually be able to afford to put a roof over my families heads and no longer be subject to a ruthless renting market run by greedy landlords and despicable estate agents, seems only fair, there is a housing crisis and you are either part of the problem or it's victim.

Hard working people buy second homes too you know..............

Yes. And this contributes to the destruction of local economy. See ghost towns in the lake district, Dorset coast etc. 

It's not as simple as "I can afford a second house". There is a direct economic impact to the local area, which costs money. More than a bit of council tax. 

I'm not so convinced:
take some seaside village in Anglesey like the one I visited, everyone skint, plenty of Dads collecting their kids from school

So the theory is that people with jobs living in Manchester (like my Welsh mate) buying a house in that village, and paying council tax without claiming it back from the council as benefits, are in fact taking something away from the area?
What is that then? They aren't using the schools or GPs, they are paying council tax (for real), but don't buy groceries quite as often. What is the negative economic impact to the area?

They're not using the services. Schools not being used is a *bad* thing - it's a waste of resources. Schools could close because there are not enough students. Which is fine, but for the few local kids who need that resource and now have to travel further. Which also increases the pressure on neighbouring schools. 

Not using gp surgery - part time surgery, or reduced staffing. Both of these are negative impacts on local rural economy. 

Don't buy groceries as often/not at all, bar a few weeks per year. Not a problem if it's a handful of houses, but when it's several handfuls that's a real economic impact. How is the local shop keeper to stay in business if throughout the year, bar a few weeks in summer, only half of his village is populated to buy from them? 

It's not about being convinced - it happens. Holiday home ownership seems more common in rural areas that are more dependent on local economy - although there are impacts felt even in London. 

and when people are on holiday, do they eat out more, and go out for drinks more?
I can't believe that people bringing money into an area, that they have earned elsewhere, would be damaging the local economy overall. I could accept they disrupt the social fabric, but if people are driven out of the area by increasing prices, that's down to crap local councils and planning departments

But they only bring that industry in a few weeks per year in some cases - not a couple of weeks per month. Why would a restaurant or pub owner stick around for a whole year when they'd get business only through 6 weeks of summer? 

I was challenging your comment:

Yes. And this contributes to the destruction of local economy. See ghost towns in the lake district, Dorset coast etc. 
It's not as simple as "I can afford a second house". There is a direct economic impact to the local area, which costs money. More than a bit of council tax. 

I can see that having lots of people with more cash coming in displacing the current inhabitants would change an area. This happens everywhere, it's normally labelled as gentrification, but for some reason people think this is especially bad when it happens to pretty seaside or rural towns. Ironically, it's in the power of the local councils of these places to enable the replacement of homes bought by incomers, and by doing this they could mirror the normal effects of tourism in the Greek islands, for example, where poor farmers and fishermen now live alongside tourists and holiday home owners, and are considerably wealthier than they were.
This is why I don't understand how you can say " this contributes to the destruction of local economy"
I can see that it disrupts the local society, but surely not the economy, and the example you give with schools and GPs does not make sense - an overloaded GP suddenly has more time for patients, yet you think that's a bad thing, both would not happen anyway if the local council spent all the new extra council tax coming in on replacement homes for locals

VimFuego

Axe_meister said:

The only way to get house prices down is to build more. Not quickly though a rapid deflation of house prices will cause the economy to collapse (thing 2008 type collapse) it needs to happen slowly so people can adjust

wrong as I've already explained to you.

VimFuego

some facts for you, it's not as simplistic as saying not enough houses, it's more complex than that.

http://positivemoney.org/issues/house-prices/

ICBM

VimFuego said:

some facts for you, it's not as simplistic as saying not enough houses, it's more complex than that.

http://positivemoney.org/issues/house-prices/

Exactly.

However no politician is going to commit political suicide by suggesting fixing it, let alone actually doing something. So no matter how much we talk about it nothing will be done, until eventually either the economy totally stagnates or house prices crash disastrously, and the politicians say it isn't their fault. Which it very much is.

thomasross20

Who here that's typed on the thread has a vested interest (not just owning but being a landlord)? Just curious. 
FYI I never said those who can't afford to buy shouldn't be able to rent off a landlord - that's making stuff up from what I've been saying It's whether they should be private landlords, how they vet landlords, how much of a stranglehold should landlords have on the market etc.
Good link, @VimFuego  - agree with all that and with ICBM. There was too much money floating around in 2000's - arguments were made that folk COULD afford as they WERE getting mortgages but it was due to too much money sloshing around for loans. 
It's funny how they say mortgages are more affordable with lower rates but neglect the exponential rise in the asset itself compared to the interest component. 
I think the exponential rise wont be replicated again - a lottery based on when you were born as to whether or not you "made money" out of housing.

VimFuego

I have a vested interest in rising house prices, I am mortgage free on my own house and (hopefully many years form now) stand to inherit, along with my siblings, a 4 bed semi is a nice, home counties commuter village. And I still think rising house prices are a travesty.

ICBM

VimFuego said:

I have a vested interest in rising house prices, I am mortgage free on my own house and (hopefully many years form now) stand to inherit, along with my siblings, a 4 bed semi is a nice, home counties commuter village. And I still think rising house prices are a travesty.

I'm in a very similar situation.

thomasross20

Like I say, I'm going to be a home-loaner soon but that's about it. I put off buying for about 10 years (!) but thankfully they've at least remained approx flat where I am due to 2007 dip. I'd be alright if prices tumbled TBH; I also think it's a travesty. 

Fretwired

ICBM said:

VimFuego said:

some facts for you, it's not as simplistic as saying not enough houses, it's more complex than that.

http://positivemoney.org/issues/house-prices/

Exactly.

However no politician is going to commit political suicide by suggesting fixing it, let alone actually doing something. So no matter how much we talk about it nothing will be done, until eventually either the economy totally stagnates or house prices crash disastrously, and the politicians say it isn't their fault. Which it very much is.

Not that easy. We actually need some new cities not tinkering around with a few thousand houses dotted around existing towns. There is also a move away from ownership. Neither of my sons want to own a house as they want flexibility and according to them they are not alone. My niece prefers to rent as well as she's weighing up whether she joins her brother in Oz as she's fed up with the UK. Finding a deposit and paying a mortgage is a major commitment that many don't want, especially if you have an active social life. Many developers are reluctant to commit to major housing schemes  preferring small plots of 100 or so houses at a time they know they can sell.

ThePrettyDamned

Fretwired said:

ICBM said:

VimFuego said:

some facts for you, it's not as simplistic as saying not enough houses, it's more complex than that.

http://positivemoney.org/issues/house-prices/

Exactly.

However no politician is going to commit political suicide by suggesting fixing it, let alone actually doing something. So no matter how much we talk about it nothing will be done, until eventually either the economy totally stagnates or house prices crash disastrously, and the politicians say it isn't their fault. Which it very much is.

Not that easy. We actually need some new cities not tinkering around with a few thousand houses dotted around existing towns. There is also a move away from ownership. Neither of my sons want to own a house as they want flexibility and according to them they are not alone. My niece prefers to rent as well as she's weighing up whether she joins her brother in Oz as she's fed up with the UK. Finding a deposit and paying a mortgage is a major commitment that many don't want, especially if you have an active social life. Many developers are reluctant to commit to major housing schemes  preferring small plots of 100 or so houses at a time they know they can sell.

Interesting, I'm not especially enamored with living in the UK, and several of my friends have moved to Oz, New Zealand, Canada, Korea, Japan... 

thomasross20

Grass is greener..

Fretwired

thomasross20 said:

Grass is greener..

Grass is often better ... my nephew left overcrowded London (two bed flat you couldn't swing a cat in) to a four bed ranch style house with lots of parking and decent garden, swimming pool and is only a ten minute walk from the beach. He was a great job 5 mins from home with a wine producer and his wife works for the Oz equivalent of the NHS (she deals with mental health). Saw them at Christmas and they haven't regretted it at all - in fact there are lots of Brits where they live and the local hospital has loads of ex-NHS staff, so leaving the UK is proving popular.