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Harringay, Haringey - So Good they Spelt it Twice!

'Haringey Labour councillors vote to press ahead with controversial £2bn HDV regeneration plan'

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Do please write to Professor Pettifor copying us into both your email and her reply.
She is on twitter:   @AnnPettifor

I'm actually with Kotkas a little bit here. The thing that drives house price inflation is purely lending. Allowing people to pay way more than they could ever possibly afford NOW for a house drives up its price and therefore its value. If used to be able to find plenty of unmortgageable properties on right-move to prove my point but there are none on there at the moment.

Building more homes will not reduce the price of them, it's a really, really messed up "market" and requires heavy regulation. Making things a bit crap and reducing the desirability of the area by allowing it to become a well utilised rat-run will however reduce the price of housing. Who wants to be poisoned in their own back yard?

There are links to the data this article is based on and I think they tell the story.

1.  The increase in housing supply has exceeded the increase in households in London and the South East - the areas of greatest housing pressure

2. The proportion of vacant housing in London and the South East has risen to between 4-4.5%

3.  Rent and sale values have risen in London and the South East.  Sales prices rose by over 45% between 2005 and 2015.

That poses a number of questions

if the increase in housing supply exceeds the growth in households, why are so many people still unable to get suitable accommodation?

Why is there such a high level of vacant property when the demand is out there?

if it is true that excess supply depresses prices, why is that not the case in the data?

Perhaps the answers are about the type of housing that is being constructed (the increase in sale value would indicate that it is at the higher end of the market), who is buying it and what the incentive is not to occupy it.

There are two issues that throw the empty homes numbers.

The council tax discount for empty properties changed and there is no longer an incentive to register a dwelling as empty.  Empty homes data was extracted from council tax records so this is no longer a reliable source even though the GLA report uses council tax data in its figures.

The GLA figures do not count the number of second homes in London, mainly concentrated in the most expensive areas.  Many of these homes, though owned, remain empty for all or large periods of the year.

It is actually highlighted in the GLA report and then not included in the data, I don’t know why.  The GLA data quotes around 21k empty homes but footnotes over 46k Second homes.  I’m not sure why more of this wasn’t picked up in their analysis as a contributory factor

i suppose it all begs the question, why does the one report quote a far higher figure for empty properties than the data sources used in the GLA report?

Hi Michael - the supply/demand data state that the growth rate of supply is greater than that of demand, not that the total supply exceeds demand (which would mean that the two curves have met and subsqeuently passed and that supply would indeed exceed demand.) This is not the case, hence the increase in house prices. Also the vested interests of government to support prpoerty values due to the UK banking system being first and foremost a residential mortgage system (40% of retail banks profit pools are drawn from mortgages.) another reason why government is supporting the propertied is that more than 50% of uk wealth is concentrated in property equity. The issue is mostly generational - 2/3 of over 55s are private landlords and almos 50% of them own an investment (second) property. Compare that with under 34s for whom renting overtook homeownership I’m I believe 2011. Foreign investors and speculators have bugger all to do with it...

Are you sure that 2 thirds of over 55s are private landlords and 50% own a second property?

1) yes, although it should say 60% of landlords are >55 and 2) yes with a 10% margin of error. On 1) you can refer to the CML - someone kindly posted the research in a post below. on 2 - i believe that was in the one ONS bulletin or one of the banks who regularly report on housing transactions etc. 

Edited to add: almost 90% of landlords are private landlords, so you are looking at >50% of BTLs being in the hands of >55s

Seems implausible as expressed.  A look at this long report on The Profile of Private Landlords from the Council of Mortgage Lenders in Dec 2016 (  ref   https://www.cml.org.uk/documents/the-profile-of-uk-private-landlord... ) gives the statement 

"Over 60% of the landlords in our sample were aged 55 or older" which isn't the same thing.

Оn a sample size of 2,500 landlords, that's pretty much the same thing.

It’s not.  2 thirds of landlords are over 55 is not the same as 2 thirds of over all 55s are landlords.  It’s like saying that 70% of those who play darts are men therefore 70% of all men play darts.

That’s fair - my initial post didn’t convey the research finding correctly. Doesn’t change the fact that much of the property wealth is concentrated in the baby boomer generation be it owner occupier investment or BTL



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