Harringay, Haringey - So Good they Spelt it Twice!
House prices
Speak to the estate agents, something unprecedented it's happening with the cost of home ownership, especially between wood green tube and ally pally.
It's possible this government may become known as seeing through the largest distribution of wealth from the poor to the rich ever ....
Replies to This Discussion
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Permalink Reply by Abi on
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Well...I'm not too sure about that actually. There is nothing to suggest that people who are being accepted for these mortgages are any more of a credit risk. To get that size of loan you still need to be on a very solid regular income - with a good credit rating to boot.
Are you suggesting that only people who already have large lump sums saved do not pose a credit risk? That's what you need for a standard deposit in London, which currently limits to higher earners (usually double-income) and those who inherit.
Plenty of friends of mine cannot buy ANYTHING even on a £50k salaries because they do not have rich parents or are single - they also would not qualify for shared ownership on that income. But there is nothing to suggest they are more likely to default than someone whose parents handed them a deposit.
Much as I have my reservations about the way the govt are doing this, I think something did need to be done to address the 'deposit problem'.
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Permalink Reply by JJ B on
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What about "help to build" or " FORCE to build" to increase the housing stock? We will have a hard fall sooner or later.
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Permalink Reply by VIX on
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I agree I think it's another bubble, and we the tax payers are going to be the ones paying if or when it pops. They needed to get a stagnant housing market moving in any way possible.
I saw this happen in Shoreditch years ago, every time i put an offer in to buy my apartment it had jumped by another 40k or so, a nice loft that I could have bought for 90k just kept going up and up and up, sold for £360k back in 2003! We moved to Tottenham to buy a decent sized house, without a giant mortgage, people are still blown away by what we paid, but even in Tottenham house prices are going up.
Whilst that's good for us I feel sorry for people renting, I can't believe how much rented property has gone up in our area. I've always thought it ridiculous that people cant get mortgages yet their rent is higher than if they owned a home.
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Absolutely. Friend of mine pays £800pcm to rent a cramped ex-council flat not far from here. She's not really holding out hope of owning any time soon, despite being a high flying senior fundraiser. It's single people like her who are hardest hit and most under-represented I think.
However this gets addressed, there IS something very wrong there.
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I'm no longer convinced it's a bubble. I used to think we were in a bubble for the last decade but I've reached the conclusion that it's not.
It's way worse, it's a fundamental shift in the increase in inequality between the haves (of capital or capital assets) and the have nots (anyone with a job and no hard assets).
The rich will get richer until it becomes politically untenable - a long way off, if ever.
A side effect of that is that it drives up asset prices, ratcheting up the inequality.
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Permalink Reply by Hugh on
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The no bubble things is what we all thought in 1989...........Historically, there have always been house price corrections. Personally, whilst having not an ounce of expert knowledge on this, and going purely by past precedent, I suspect that we will see another correction this time, but I have no idea when.
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Permalink Reply by Alan Stanton on
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I've been trying to get my head around this - and failing. Not least because I keep reading different experts who focus on different aspects and come up with alternatives. Each of the suggestions seems sensible in itself. But together they start to sound like Henry & Liza singing about the hole in the bucket.
So what needs fixing? Well, for some people it's the planning laws. For others, - deposits. Then it's mortgages. Or perhaps too much land banking; or local councils which need to be forced to give land to developers?
Or is it the unfairness of expecting developers to pay Section 106 Planning gain? And why ask them to pay any tax at all? (Bermuda's a lovely place I'm told.)
How about loosening the Green Belt? Or perhaps we need more competition to end domination of the building industry by a few large firms? Should we use tax money to subsidise small building firms? Or medium ones? Or building workers?
Didn't a big cause of our woes used be housing benefit paid to landlords? Or old people under-occupying homes? (Now, you *can* push your granny off a bus.) Or am I muddling that up with the impact of stamp duty?
Nor have I forgotten the large numbers of homes kept empty by foreign investors for whom London property is like a money tree with leaves of gold. (Thanks John McMullan for the link to the New York Times.)
Of course there are loads more explanations and panaceas - all entirely plausible. As well providing a way for people to wriggle endlessly to avoid the bleedin' obvious: that the market ain't gonna deliver homes for everyone who needs them. But the State/public sector could.
Anyway, I have to stop there. The phone keeps ringing with estate agents wanting to buy our garden shed to rent to Ruritanian students.
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I don't think the private market can supply rented homes to everyone. Look how much state money "private" landlords rake in via housing benefit.
The state should provide / ensure minimum levels of accommodation because its the civilised thing to do. Agreed, that doesn't mean home ownership.
But talking of state intervention, right now the state is doing everything it can to increase the value of privately owned housing, which is by no means good for everyone. Should it be doing that? -
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Exactly. But people want to own a home as an asset that will accrue value. Inflation is a threat except if you can down scale later in life and realise the Capital gains. What is happening supports this.
It is all in the timing. -
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Can anyone say why there is NO PROPERTY TAX, as distinct from an occupancy tax, in this place. At least those banking land would pay for it. And large scale landlords too. Maybe then we could abolish the section S106 agreements since if the landowner kept the freehold they would pay tax on it.
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All I can say on that one is that the rents are roughly in line with property prices. Rent is like the dividends on a share. I pay less for my 3 large bed house here in TPL than what the new tenants are paying for a small 2 bed house in zone 4.
You can buy a property and rent it out at profit, even with a BTL mortgage. That means you can buy it as an investment that has a return (and decent relative to the sub-inflation rates on saving), not just hoping prices go up pyramid scam style.
In 1989 the combination of the doubling of interest rates (7.5 -> 15%) along with the withdrawal of MIRAS (tax relief on interest) shut the show down.
If rates go up like that then definitely there will be a serious wobbly. Likely? Don't know, but Japan has been stuck near zero interest rate land for about 20 years now.
London has about 1 million more inhabitants while having smaller family sizes then back in 1989 and we've not been building to accommodate that, all of which supports rents.
Steep Interest rate rises and policy changes like Alan suggests are the main risk factors to house prices. With the Tories in charge, I doubt there will be much house price deflating policy.
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Permalink Reply by John McMullan on
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But rent has a natural cap on it as people will not starve for the privilege of working and living in London. So the dividend analogy is close but it doesn't cover it, houses are different.
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