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Property crash, just maybe it really is different this time


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Bandit Banzai
1 minute ago, goldbug9999 said:

Plus I'm guessing tiny back garden, one allocated parking space if they are lucky, pavement that goes right past your font door.

No allocated. And it's in the arse-end of nowhere so everyone will need a car. So lots of cars and nowhere to park.

To be honest it's all clear to see. But people still buy this stuff. But all the while HTB is new build only and people are desperate to use HTB then....

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I know everyone on here is clued in to the ridiculous state of UK housing and none of this is news to you lot, but I need to vent... A mate of mine has just exchanged on a new-build (yeah, I know

Should have mentioned that first. What the fuck do people expect, living in fucking Croydon? Its like complaining your foot stinks after deliberately stepping in dog shit.

My mate whose sale of a 125k house fell through for the third time since June was lamenting how he can’t shift his 125k house yet the nice 300k ones in his area seem to go quick mostly to cash buyers.

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goldbug9999

Cant get over how small it is must be what 800 sqft ? 

I'm paying less than £280k for double that with large driveway, front and rear gardens garage and it still feels expensive.

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Bandit Banzai
2 minutes ago, goldbug9999 said:

Cant get over how small it is must be what 800 sqft ? 

I'm paying less than £280k for double that with large driveway, front and rear gardens garage and it still feels expensive.

but is it new-build?

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goldbug9999
1 minute ago, Bandit Banzai said:

but is it new-build?

Fuck no. Well over 50 years old, built back when they used to do it properly, not a single drywall partition in the whole thing.

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Bandit Banzai
6 minutes ago, goldbug9999 said:

Fuck no. Well over 50 years old, built back when they used to do it properly, not a single drywall partition in the whole thing.

Yeah, me too. It's as old as me - 49. I wanted older but this place took a cheeky offer. No carboard walls and if it's been stood here for fifty years then I reckon it's fairly sound.

I have a friend who I have known for 35 years. He's a building project manager type. He's built everything from houses to shops to hospitals. The most successful yet humble man I've ever met. I asked him once if he would buy a new-build. I never forgot his answer - he said he would buy one, but the companies he would buy off I would not have heard of. Small companies that maybe only build five or ten houses a year. A quality product. He would never buy from the main british builders cos he knows they are shite.

The other cracker that I particularly like is the garage door that's too narrrow to take a modern car. It's beyond laughable. It's tragic. Building is heavily regulated and yet they are allowed to  put in a garage that's impossible to park a car in. Only in Britain.

And people buy this shit.

 

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sleepwello'nights
On 14/12/2020 at 22:26, Bandit Banzai said:

Yes - I had no idea. he mentioned something about this. He has to pay some monthly charge toward the upkeep of the surrounding environment. I guess this is part of these new build estates? I have no idea about any of this. I was worried the daft bastard had bought a leasehold house, but I checked and it's freehold.

I bought a standard 50 year old freehold house. I don't pay towards the grass verges being cut - the council get council tax for that.

As I understand it is the council who's planning departments approve the developers landscaping for the obvious benefit of enhancing the visual amenity of the area to make it more pleasant to live in. Not wanting to impose future maintenance costs onto the local authority they pretty much compel the developer to make arrangements to keep the cost from the local authority. Despite the fact that each dwelling will add to the local authorities council tax base and future income.

"In designing any landscaping scheme, it is imperative to give serious consideration to the future maintenance and management requirements, how they will be carried out, and by whom whether public or private. This should be made clear at the time of submission. Early discussion with the Planning and Leisure Services Department is recommended particularly in relation to any proposed Public Open Space. Every effort must be made to exclude from designs any landscaping which either has high maintenance costs but low amenity value such as grass verges, or areas where maintenance responsibilities cannot be clearly delineated into for instance private plots or where maintenance would be impractical. With regards to future management a development must consider the alternatives.  Where a site is to be dedicated to the Council, a budget - committed sum - will be agreed between the developer and the Council prior to the finalisation of the development. The sum will be based on the current contract rates and tender prices.  Where landscaping is to pass to new private ownership, the owner(s) must be clearly informed of their responsibilities, and if communal areas are to be held in joint ownership responsibility, evidence of the means of future maintenance management must be given to the Council prior to finalisation and included as a legal responsibility (in perpetuity) within contract papers for new and future owners."

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haroldshand
On 14/12/2020 at 14:09, spygirl said:

Now imagine having the 90s recession again

The metal thing is that all the ingredients are in place to at the very least be having a 90's style recession + right now, accept the powers that be are doing everything within their power not take it's course. Using a poker analogy we have gone ALL IN in the hope our hand that we know is s*** comes out the winner

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Frank Hovis
2 hours ago, sleepwello'nights said:

As I understand it is the council who's planning departments approve the developers landscaping for the obvious benefit of enhancing the visual amenity of the area to make it more pleasant to live in. Not wanting to impose future maintenance costs onto the local authority they pretty much compel the developer to make arrangements to keep the cost from the local authority. Despite the fact that each dwelling will add to the local authorities council tax base and future income.

"In designing any landscaping scheme, it is imperative to give serious consideration to the future maintenance and management requirements, how they will be carried out, and by whom whether public or private. This should be made clear at the time of submission. Early discussion with the Planning and Leisure Services Department is recommended particularly in relation to any proposed Public Open Space. Every effort must be made to exclude from designs any landscaping which either has high maintenance costs but low amenity value such as grass verges, or areas where maintenance responsibilities cannot be clearly delineated into for instance private plots or where maintenance would be impractical. With regards to future management a development must consider the alternatives.  Where a site is to be dedicated to the Council, a budget - committed sum - will be agreed between the developer and the Council prior to the finalisation of the development. The sum will be based on the current contract rates and tender prices.  Where landscaping is to pass to new private ownership, the owner(s) must be clearly informed of their responsibilities, and if communal areas are to be held in joint ownership responsibility, evidence of the means of future maintenance management must be given to the Council prior to finalisation and included as a legal responsibility (in perpetuity) within contract papers for new and future owners."

Yes; a surprising number of estate roads and green areas are "unadopted" as in not the responsibility of the council to maintain.

There are two main types:

Council housing estates transferred to Housing Associations along with stock.  These are well maintained by the HAs so are not obviously private roads.

Private estates where the roads simply deteriorate.  I regularly walk along a narrow one and it is a mixture of decent tarmac outside individual houses, dirt, gravel, and exposed bedrock.  The houses are expensive but with maybe twenty along that stretch nobody is going to bother to try to corral every householder into joining an association to contribute to keeping the road up so it will simply continue to worsen albeit with piecemeal patching by individuals.

I have heard of HAs managing to have roads adopted long after they were built by bringing them up to the council standard and paying a fee.  This is very expensive and I can't see private householders making similar effort.

Having seen some of the costs of bringing up to council standards, given that you are renewing everything: drains, drainage pipes as well as tarmac,  I would be extremely wary of buying a house in a private road however good it looks when new.

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Frank Hovis
12 hours ago, Bandit Banzai said:

Yeah, me too. It's as old as me - 49. I wanted older but this place took a cheeky offer. No carboard walls and if it's been stood here for fifty years then I reckon it's fairly sound.

I have a friend who I have known for 35 years. He's a building project manager type. He's built everything from houses to shops to hospitals. The most successful yet humble man I've ever met. I asked him once if he would buy a new-build. I never forgot his answer - he said he would buy one, but the companies he would buy off I would not have heard of. Small companies that maybe only build five or ten houses a year. A quality product. He would never buy from the main british builders cos he knows they are shite.

The other cracker that I particularly like is the garage door that's too narrrow to take a modern car. It's beyond laughable. It's tragic. Building is heavily regulated and yet they are allowed to  put in a garage that's impossible to park a car in. Only in Britain.

And people buy this shit.

 

 

Whilst I can't call them to mind there are decent housebuilders of which you have heard but they don't build in volume; their estates tend to be about ten homes and very impressive.   Though priced accordingly.

Persimmon seems to be winning the prize for the shoddiest new builds at present though it is a hotly contested market.

Most people don't use their garage for cars though usually that's because their house is too small in the first place!

A good indicator of quality is the size of the roof beams.  My parent's 1950s house had beams like naval timbers.  My 1970s house and my parents 1970s house both have thick beams but not to the level of that 1950s house.

Everything I have seen going up since the 1980s on seems to have roof timbers like toothpicks in comparison and made from softwoods.

They won't last and in a fire will catch immediately.  The 1950s timbers in contrast would have gently charred.

 

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sleepwello'nights

I suppose our development was fortunate that the roads were adopted by the highways agency. 

It is worth bearing in mind that the developers have to make a contribution to the area infrastructure through a S.106 contribution imposed as a condition of planning approval. These can be quite significant. 

On the small development we're moving to soon each house has paid just over £17k to the local authority. 

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wherebee
7 hours ago, Frank Hovis said:

 

Whilst I can't call them to mind there are decent housebuilders of which you have heard but they don't build in volume; their estates tend to be about ten homes and very impressive.   Though priced accordingly.

Persimmon seems to be winning the prize for the shoddiest new builds at present though it is a hotly contested market.

Most people don't use their garage for cars though usually that's because their house is too small in the first place!

A good indicator of quality is the size of the roof beams.  My parent's 1950s house had beams like naval timbers.  My 1970s house and my parents 1970s house both have thick beams but not to the level of that 1950s house.

Everything I have seen going up since the 1980s on seems to have roof timbers like toothpicks in comparison and made from softwoods.

They won't last and in a fire will catch immediately.  The 1950s timbers in contrast would have gently charred.

 

The timbers in our house (over 100 years old) are like rock, floor and ceiling.  Australian hardwood, that just gets harder over time.  I was doing some work under the house in the winter and the floorboard joins from below have not moved more than a hair in 100 years.

 

And that, dear reader, is why I have never owned a house less than 70 years old.

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Before we get too carried away, a lot of 1930s builds were thrown up by men who were found work to do after WW1 (Don't want combat veterans getting too pissed off due to unemployment) and can be a minefield.

They are made of good materials so survivor bias less obvious, but things like soakaways will be full, mortar possibly failing.

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Noallegiance
13 hours ago, Loki said:

Before we get too carried away, a lot of 1930s builds were thrown up by men who were found work to do after WW1 (Don't want combat veterans getting too pissed off due to unemployment) and can be a minefield.

They are made of good materials so survivor bias less obvious, but things like soakaways will be full, mortar possibly failing.

Funny you should say that. The bungalow we rent has soakaways front and back. With the amount of rain in the last 18 months they've backed up and we now have water-laden walls and regular small floods front and back. Heavy rain goes nowhere.

Still, not my house! B|

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Wight Flight
On 16/12/2020 at 13:12, Frank Hovis said:

A good indicator of quality is the size of the roof beams.  My parent's 1950s house had beams like naval timbers.  My 1970s house and my parents 1970s house both have thick beams but not to the level of that 1950s house.

My previous house dated back to 1650.

It was reckoned that the beams were 200 years older. Ex ships' timbers.

Absolutely nothing would make a dent in them.

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ILikeCake
On 16/12/2020 at 19:28, sleepwello'nights said:

I suppose our development was fortunate that the roads were adopted by the highways agency. 

It is worth bearing in mind that the developers have to make a contribution to the area infrastructure through a S.106 contribution imposed as a condition of planning approval. These can be quite significant. 

On the small development we're moving to soon each house has paid just over £17k to the local authority. 

My sister bought a new build last year (against my advice) and the quality is shocking.  She has to pay a monthly fee for the small green space in the middle of the estate.  Judging by the width of her road I don't think it will ever be adopted as I'm guessing there is some minimal width standard for adoption and I doubt this meets it.  Will be interesting to see the state of it in 20 years time.

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Frank Hovis
1 hour ago, ILikeCake said:

My sister bought a new build last year (against my advice) and the quality is shocking.  She has to pay a monthly fee for the small green space in the middle of the estate.  Judging by the width of her road I don't think it will ever be adopted as I'm guessing there is some minimal width standard for adoption and I doubt this meets it.  Will be interesting to see the state of it in 20 years time.

 

I've posted this before in another context; you go into a new street and the pavements just end.  You can see where they would have been as there is a faint line under the grass and a division along the drive but if you are walking down that street then you are walking in the narrow road.

The road construction - bricks on their sides - is also something you would usually use for a drive rather than a road.  It is also the sort that can tear up in patches and if I was at the start of the road I wouldn't see it as my duty to keep repairing it so it will continue to decay with bricks coming loose.

It's reasonably recent but if I remember I will go back in twenty years to see the state of it; there is no way the council will ever adopt that.

https://www.google.co.uk/maps/@50.2833526,-5.2110715,3a,90y,258.76h,94.3t/data=!3m6!1e1!3m4!1s2DDusdS6TjlW4SM7AQAe7g!2e0!7i13312!8i6656

Note the lamp post now in somebody's front lawn.

Edit to make link live.

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On 17/12/2020 at 10:21, Noallegiance said:

Funny you should say that. The bungalow we rent has soakaways front and back. With the amount of rain in the last 18 months they've backed up and we now have water-laden walls and regular small floods front and back. Heavy rain goes nowhere.

Still, not my house! B|

They'll likely also be paying a sewerage fee in the water price for water not going into the sewer. xD

My parents' bungalow had a soakaway under the tarmac drive. Discovered when one day one of the car wheels started sinking. Could see a big hole under the tarmac where the foundation had been washed away. Fortunately not that expensive to repair as it had been discovered before getting to proper sinkhole size.

The downpipe that was running into the soakaway has been re-routed to the main drain. No idea why it wasn't like that in the first place, the main drain is only a few feet from the downpipe that was running to the soakaway.

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sleepwello'nights
3 hours ago, Frank Hovis said:

 

 

The road construction - bricks on their sides - is also something you would usually use for a drive rather than a road.  It is also the sort that can tear up in patches and if I was at the start of the road I wouldn't see it as my duty to keep repairing it so it will continue to decay with bricks coming loose.

 

There are areas of block paving on the roads of our development. The development was completed in 2006. Now 14 years later they still look OK except for two areas. The first of which was attended to by the developer as the Highways authority would not adopt the roads until it was acceptable. 

It is where the dustbin lorries reverse to turn round. There is also another area on a junction where the paviours are starting to work loose. 

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sleepwello'nights
3 hours ago, BoSon said:

 

The downpipe that was running into the soakaway has been re-routed to the main drain. No idea why it wasn't like that in the first place, the main drain is only a few feet from the downpipe that was running to the soakaway.

Friday afternoon and the ground workers were keen to get home >:(

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steppensheep

On the subject of roads, it struck me recently how stupid and depressing it is in so many suburbs, where the lovely old roads with lovely houses have become traffic choked thoroughfares with 18" wide pavements, and just of the side streets there are new build estates with wide, sweeping roads that are relatively unused. The old roads should be turned into access only, and any new developments should be obliged to incorporate new traffic infrastructure for the whole town, not just residents.

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Dogtania

I have long been under the impression, new builds not great.  Paper walls etc.

Now living in one (think 20 years old or something) I really appreciate the warmth, layout, plug sockets etc.  Was worried about neighbors and insulation but even with neighbor below and beside having a dog, never once heard a bark.  In fact it's only the top floor above that occasionally have heard stomping about.  No voices, music or anything else, and everyone in the block of 8 i seems to be 30 something in age.

Internally it's a different matter...I think the way the laminate flooring has been laid it echos throughout.  I don't have much ken with such things but seems strange that cant hear anything around, but internally not much insulation.

If it ever came possible to buy I would be more than happy to own somewhere like this, low stress, extremely heat efficient, no signs of mice, cracks in wall etc. Maybe give it another 20 and it will be falling down?

I'm learning towards the idea if I was ever to buy, since I'm not an insider, is to find one already established and considered a 'success'... Rather than some paper machie house that the wolf could huff and puff and would all fall down

Anyway....I really hope the consensus on hear is correct...I can't see it right now but usually when that happens and everyone believes it turns not to be true (maxim from other thread I've remembered thanks... Market turns and tires to hurt the most people).

But cash is trash and houses are real and tangible -  I keep returning to this.  Does seem that interest rate rises impossibly and permanently low... Which is folly to think. Unless we really are entering some kind of new dark age UBI pseudo marxist dystopia that is.

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Frank Hovis
On 16/12/2020 at 21:14, Loki said:

Before we get too carried away, a lot of 1930s builds were thrown up by men who were found work to do after WW1 (Don't want combat veterans getting too pissed off due to unemployment) and can be a minefield.

They are made of good materials so survivor bias less obvious, but things like soakaways will be full, mortar possibly failing.

A whole estate similar to what you're saying has been recently knocked down in Plymouth for just those reasons.

It was built post WWI in order to both provide work for WWI veterans and housing for same; it was mostly built by men with no building experience and it shows.

I've driven past it on and off for nearly forty and it has always looked shabby.

In the case of poorly built houses the older they get the worse they get and that's usually obvious to a casual glance.

Something very recent can look fine but be poorly built; especially brand new when the render has not begun to stain and the plaster to crack.

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spygirl
On 15/12/2020 at 22:16, wherebee said:

my great grandparents ran a pub; everyone under one roof.  my grandparents were working class (both sides), in service for much of their working life, but were able to buy a house with a mortgage in putney/wales in the 30's.  My parents were working class that moved into middle class due to house price inflation and generous pensions.  My sister and I are middle class, but a large part due to inherited wealth (certainly on my sisters side).  I've been in the top 10% of income earners for the last ten years due to luck and smarts, but I'd say I'm middle-middle class - still need to work a bit but enough savings for 5 year frugal living.  Earning a lot of income doesn't help that much when you have an expensive divorce plus income tax.  My pensions are going to be fuck all, and as I have said elsewhere I expect many pensions to collapse in the next 20 years until my retirement.  My sister got onto the Brown gravy train of public money and has caned it in since, but has spent all of it on her kids.

My kids are smart, but will inherit less due to my lack of pension.  If they go to Uni, that will probably wipe out much of the free inheritance available.  The only plus side is that I think a re-industrialising of the west has to happen, which could kickstart wealth flows again.

Their kids.... who knows?

The high point, I think, was the boomer generation and their peak earnings of the 70's/80's and attached pensions.  All downhill since in most of the west.

One thing I try to do is to put things into longish term perspective.

As far as the UK n housing, IIRC the majority of Brits still rented in the 60s.

From the 60s to 70s mortgages were not really a mass market product.

Its only a combination of the financial deregulation in the early 80s and the bulk of baby boomers (mid age boomer was born in mid 1950s) hitting 30, prime house buying age.

The whole 'cant loose with property' is a daft mindset, prevalent in the UK, which doesnt put the demographic change into perspective.

A lot of baby boomers went bust in the late 80s to early 90s slowdown, so its not that theyve not seen it before.

The assumption that banks are going to lend like they did in ~85-89 or 2002-2008ish is wrong. You can see it in the post 2008 mortgage lending stats.

One, unlike the 89-96 slowdown , which saw borrowers go bust, the 2008-today slowdown has seen the borrowers 'saved' but the banks go under.

Huge amounts of lending capacity has been destroyed and is not coming back. Most boomers houses are not going to sell at anywhere close to what they think its 'worth'

 

Two, the finsec used to create its down demand - the mass expansion othe finsec ~82 -> 2009ish, saw 100k of employees, all well paid, some with access to cheaper products.

The biggest winner for this job bonanza was the south - I dont men The City, which is whole sale trade, I mean the large number of retail banks and the support services around housing sales/mortgages - lawyers, treasury management, debt, life insurers  selling endowments etc etc.

Theres barely a fraction of the people still employed compare to ~85-2007.

The jobs have been automated, regulated away.

You want a mortgage today?

You go to a bank with ~20% deposit and verified income with a good track record and get a repayment mortgages.

Theres no vat array of scammers offering liar loans, allowing people without a pot to piss in a mortgage, which pushes up housing costs.

There's no magic repayment like an endowment  mortgage, which was the cause of the 80s boom - the repayment method was a made up WP return, so allowed people to borrow 2x the amount they could afford.

The liar loans and IO mortgage were the cause of the 2002-2010 bubble.

These have gone for resi customers.

Theres a massive adjustment for UK housing esp. in the South where the mass well paying jobs have gone and the high LTE multiples are a no go.

 

 

 

 

 

 

 

 

 

 

 

 

 

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Frank Hovis
4 minutes ago, spygirl said:

One thing I try to do is to put things into longish term perspective.

As far as the UK n housing, IIRC the majority of Brits still rented in the 60s.

From the 60s to 70s mortgages were not really a mass market product.

Its only a combination of the financial deregulation in the early 80s and the bulk of baby boomers (mid age boomer was born in mid 1950s) hitting 30, prime house buying age.

The whole 'cant loose with property' is a daft mindset, prevalent in the UK, which doesnt put the demographic change into perspective.

A lot of baby boomers went bust in the late 80s to early 90s slowdown, so its not that theyve not seen it before.

The assumption that banks are going to lend like they did in ~85-89 or 2002-2008ish is wrong. You can see it in the post 2008 mortgage lending stats.

One, unlike the 89-96 slowdown , which saw borrowers go bust, the 2008-today slowdown has seen the borrowers 'saved' but the banks go under.

Huge amounts of lending capacity has been destroyed and is not coming back. Most boomers houses are not going to sell at anywhere close to what they think its 'worth'

 

Two, the finsec used to create its down demand - the mass expansion othe finsec ~82 -> 2009ish, saw 100k of employees, all well paid, some with access to cheaper products.

The biggest winner for this job bonanza was the south - I dont men The City, which is whole sale trade, I mean the large number of retail banks and the support services around housing sales/mortgages - lawyers, treasury management, debt, life insurers  selling endowments etc etc.

Theres barely a fraction of the people still employed compare to ~85-2007.

The jobs have been automated, regulated away.

You want a mortgage today?

You go to a bank with ~20% deposit and verified income with a good track record and get a repayment mortgages.

Theres no vat array of scammers offering liar loans, allowing people without a pot to piss in a mortgage, which pushes up housing costs.

There's no magic repayment like an endowment  mortgage, which was the cause of the 80s boom - the repayment method was a made up WP return, so allowed people to borrow 2x the amount they could afford.

The liar loans and IO mortgage were the cause of the 2002-2010 bubble.

These have gone for resi customers.

Theres a massive adjustment for UK housing esp. in the South where the mass well paying jobs have gone and the high LTE multiples are a no go.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

A very good overview with which I agree.

Essentially house prices have been on a barely-interrupted ever-upwards trajectory because of the low initial level of home ownership and the momentum given by freely available debt.

The fall off on this graph shows that those jumping aboard the property ownership train is now on a declining trajectory after more than doubling in sixty years.  In 1950 30% owned their own home with a massive 50% private renting; in 2005 that was 70% owned versus 16%. 

Or to put it another way of those not in social housing 62% were renting and therefore potential buyers in 1950 but only 19% were renting in 2005.  The number of potential first time buyers has inevitably declined massively as ownership has gone the other way.

The desire to own is probably stronger than ever owing to the intense propaganda but personal finances, especially salary to house price ratios, means that the mortgage computer keeps saying "no".

That owner occupier line will keep falling and tax changes will do for BTL demand.  I expect social renting to go up as a lot of unsellable new builds from the massive town edge estates now going up are sold at a discount to Housing Associations; I have already heard of this happening in a limited way.

Even without higher interest rates overall house prices are going to start steadily coming down in real terms IMO although the rush out of the cities will make that a very patchy picture.  Big falls in London whilst coast and country properties keep climbing.

I'm not actually that convinced that high interest rates will have a big impact at first as so many people have either fully or mostly paid off their mortgages through this prolonged low interest rate era.  They will however serve to undercut the market by reducing the number of new entrants onto the "property ladder" and this will feed through until those peak homes - four beds with substantial gardens in desirable locations - find themselves adrift without any potential  buyers.

When will this happen?  It's already happening *.  It just isn't that obvious yet because of the vast flight of housing equity from the cities giving coast and country a big boost.

 

ownership-and-renting.png

* Here is where it is happening.  You're not seeing it because you're not looking there as these are not aspirational towns in Cornwall and so will mostly be first time buyers.  Obviously law of small numbers can apply but there is a clear pattern to this and that's down.

These are all percentage falls year on year.

Lanivet 17%

Tregantle 4%

St Blazey 6%

Callington 2%

Camelford 16%

Redruth 1%

St Columb Minor 5%

Lanner 10%

Dobwalls 3%

St Erth 16%

 

https://www.cornwalllive.com/news/cornwall-news/areas-cornwall-house-prices-going-4796145

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spygirl
10 minutes ago, Frank Hovis said:

 

 

The fall off on this graph shows that those jumping aboard the property ownership train is now on a declining trajectory after more than doubling in sixty years.  In 1950 30% owned their own home with a massive 50% private renting; in 2005 that was 70% owned versus 16%. 

Real or nominal?

Even in the go-go years of the 80s, the 'cant lose/mad gainzzz' disappeared when you adjust for  finance costs.

The 80s boom was nothing more than a Ponzi scheme driven by endowments mortgages, which should have been banned.

I means, its fucking nuts looking back - OK, Im going to take out a life policy, which will pay off the mortgage. Its a collective interest where the life co 'smooths' out the return to decide risk.

My bank (TSB) at the time of me getting my first FT job in 92ish dragged me in a for a financial review, which I agreed to, just for something to do at diner time.

I wasnt as clued up on all things financial but I was a sceptical fucker.

After listening to the bollox, I summarised it to the sales woman as -

My, a single 22yo, with no dependents has been recommend a life policy which will provide my non existing heirs ~150k on my extremely unlikely death or a 'superior' return.

I dont know the actually return as the fund return are 'adjusted' to make it 'fair'

And this product will pay out 2 years of contributions to you as commission. (She would have got ~1k of sales commission as well as my ~3k of premiums)

Whats to stop you the LI from gaming the returns to stay in the  top of the tables?

Theres not enough returns to keep everyone - me, sales person, life company etc solvent.

Its was the asme gormless lack of numeracy that killed of DB pensions.

 

 

 

 

 

 

 

 

 

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