Wednesday, Aug 16, 2017

Fewer houses for sale

Business Insider: Barclays: housing transactions are in structural decline

Nothing to add.

Posted by stillthinking @ 01:36 AM (5333 views) Add Comment

4 Comments

1. icarus said...

No attempt to link determinants of transactions to the timing in the chart, which shows that since HTB transaction numbers have risen or stabilised, not fallen, and council house building (one of his factors in raising transactions) declined a decade or two before transactions peaked. And if an ageing population doesn't move it's little to do with ageing or retirement - it's to do with stamp duty, low returns on the cash they receive on downsizing (compared with keeping the house and watching it go up in value - at least in their eyes - with no CGT), cost of moving, inheritance taxes and maybe providing a home for their 'children' in their 30s and 40s, and some do well out of airbnb-ing etc.

Wednesday, August 16, 2017 09:43AM Report Comment
 

2. khards said...

Many people can't move as they cut back and save up. They then take out a mortgage base on that standard of living and their lives change.
They have kids, change jobs etc effectively locking them into the house and out of the mortgage market for years.
If houses were more affordable people would be able to afford to move more. Longer mortgages aren't the answer because as time goes on terms get shorter and worsen the effect.
If I moved the costs alone would be £4k with stamp duty and solicitors, not to mention it took 4 months to complete last time! In the past extending terms and falling rates could help hide this cost. Rising house prices don't help movers either as the house you are moving to goes up equally in price.

Thursday, August 17, 2017 10:19AM Report Comment
 

3. sneaker said...

That's the basic problem. Housing has become so expensive that it is taking away from other forms of spending. And much of the spending that housing absorbs ends up being sent overseas as rent to offshore landlords.

Is it any wonder we're in such a mess?

Friday, August 18, 2017 02:04PM Report Comment
 

4. reticent said...

I've been saying that BTL is the real cause of the transactions lull for years, but that obviously doesn't explain all the movement in the chart. I don't think most of his other factors do either. Transactions peaked in 1989, but that was off the back of RTB and other phenomena greatly increasing homeownership. You don't go from 50 to 70% home ownership in a short space of time without a big surge in transactions.

However, I am sure you've all seen data showing how BTL has largely displaced FTB transactions (obviously, since both complete chains). I suspect that the main reason transactions fell is the cumulative acquisition of 1.5m properties by BTL has led to 2m+ resales not happening (because since 2003, when BTL took off, many properties would have been resold twice now. FTBs tend to move after around 5 years. BTLs tend not to sell at all.)

Consider that much of the justification for help to buy was the second steppers stuck in their first home, with too little equity in their property and too little borrowing potential to get that extra bedroom. Hardly surprising after 10 years of FTBs being relegated to 1/2 beds, while 2/3 bed starter homes were snapped up by investors who never sold them on. To say this is purely an affordability problem misses the point: BTL is what made them unaffordable.

I suspect that affordability has had a massive impact on baby boomers not downsizing until they absolutely have to, as they've seen the prices of large houses keep rising for so long, they put off selling up. This also affects the middle of chains, albeit further up. Now that the growth has stopped, in inner London at least, it's the stamp duty that puts them off.

Saturday, August 19, 2017 10:14AM Report Comment
 

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