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homedaq

Controlling House Prices

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I am interested in the groups views of ways we could try to prevent future house price bubbles in the UK. Clearly we need to keep housing affordable to prevent people being crippled by debt from either borrowing too much or finding themselves stuck in a property due to negative equity.

I bought my first flat in 1991, some time after the slide had started, just when Norman Lamont was telling us that "the green shoots of recovery" had arrived. That said, our flat soon lost 25% of its value and we would have been stuck there forever (size ok but abusive neighbour/freeholder next door) but for help from the family.

Could it just be a case of limiting borrowing multiples to reduce the amount peple can pay on credit, forcing prices to come down to meet buyers limits or are there more effective measures?

Would limiting borrowing multiples, if introduced now, produce a prolonged but soft landing from the highs of 2004?

Just interested in your two penneth's worth.

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Making second and buy-to-let houses more expensive would remove a lot of speculation from the market. I also think anyone buying a home outside of a certain radius of their main address should pay an out-of-town tax. This should compensate for the loss of investment in the local economy a person actually living there would bring, and importantly would scupper many wealthy urbanites looking to buy holiday homes in rural areas.

There are too many imbalances in the market, and the playing field is not equal. Yeah, yeah, "Life isn't fair" etc., but that doesn't mean there shouldn't be a certain level of protectionism in the market. The speculative free-for-all has been a disaster and should never be allowed to happen again.

This is my view of course and I'm sure many other Alan B'Stard types will disagree.

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I am interested in the groups views of ways we could try to prevent future house price bubbles in the UK. Clearly we need to keep housing affordable to prevent people being crippled by debt from either borrowing too much or finding themselves stuck in a property due to negative equity.

I bought my first flat in 1991, some time after the slide had started, just when Norman Lamont was telling us that "the green shoots of recovery" had arrived. That said, our flat soon lost 25% of its value and we would have been stuck there forever (size ok but abusive neighbour/freeholder next door) but for help from the family.

Could it just be a case of limiting borrowing multiples to reduce the amount peple can pay on credit, forcing prices to come down to meet buyers limits or are there more effective measures?

Would limiting borrowing multiples, if introduced now, produce a prolonged but soft landing from the highs of 2004?

Just interested in your two penneth's worth.

I don't think tinkering with borrowing multiples etc. will stop property being seen as a way to make a fast buck; I believe it would take a massive shift in mentality to avoid future bubbles. If people viewed houses as just somewhere to live rather than an investment, we would have a more uniform, sensible inflation of prices.

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Sound lending by banks

if there's money to be made, people will find a way of getting hold of the cash.

If you remove the incentive for it in the first place, the money lending becomes irrelevant as property would cease to be worthy of 'investment'.

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There will always be speculators, buying and selling for a profit, I don't think that is a bad thing in general, but I do agree with your point about shifting mindsets of the regular homeowner. However, how do you think you could do to achieve this?

Limiting borrowing has been the best suggestion I have seen so far from other threads on HPC. This could be done in several ways from incentives to the less preferable iron fist with the banks.

Edited by homedaq

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I don't want to stop boom-and-bust.

The last boom has been fun - I am looking forward to the bust.

And I look forward to successive boom-busts with relish.

It's a fun hobby, why knock it ?

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It's a fun hobby, why knock it ?

Because it ruins lives. The spread of the 50/50 purchases in the early nineties left many people in such deep debt they would not have been able to participate in the subsequent rises but faced many years of hardship just because they bought "at the wrong time".

That is clearly not fair.

Edited by homedaq

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Because it ruins lives. The spread of the 50/50 purchases in the early nineties left many people in such deep debt they would not have been able to participate in the subsequent rises but faced many years of hardship just because they bought "at the wrong time".

That is clearly not fair.

But surely that's the issue - it's people like this that fuel the bubble? If they'd thought to themselves long and hard and decided that prices weren't affordable or represented too great a risk then they would remove themselves from the search for property, and as such remove some of the fuel to the fire.

Caveat Emptor. Nobody forced them to buy.

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That's a fair point too. Would you be more in favour of leaving house prices to fluctuate freely and promoting renting more to offer more stable long-term rents etc?

Is the answer in properly establishing renting as a long-term alternative to owning and leaving prices to go their own way?

I rent now, since returning to the UK in 2001 and am lucky as it is on a large private estate belonging to old money that have owned the land for hundreds of years that will never sell it or their other properties, but renting still makes me a bit nervous in terms of being kicked out before I am ready.

Probably false assurance, but I can't help but feel that with owning, you at least know that as long as you keep up your payments, you can be (pretty) sure you will be able to stay there as long as you like. If this could be the same for renting then I would be happy to continue doing so (as it is a lot cheaper for the same sized house etc)

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Future Bubbles could be stemmed simply by removing the British Passion to own their own home.

If property was transferred over time to the responsible Landlords then ownership could be made a thing of the past. It would stop a lot of Heartache for many people who constantly soul search for no real reason.

Its not a birthright to own a property, but is a right to have a roof over ones head. Landlords are very good at supplying this service and will ensure the prices never escalate again.

Looking at todays market place it is becoming apparant that we are moving to a Rental situation as people have less employment rights, and rarely are employed long term they need the flexibility that ownership does not offer.

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Let me think:

Responsible lending

Property bought to be let need to have planning permission before it can be rented out

I think the killer would be:

Treat any rise in house price (on PPR & other houses) above inflation as taxable income (why not people see this money as money they've somehow 'earned').

Not that it would ever happen of course...

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I have no interest in asset price controls of any kind. They distort markets, period, and can't be extended beyond our borders, so would be of little use.

I will however say this:

Asset prices rise and fall. At the extremes, these movements are illogical and are fuelled only by sentiment excess. If you want to stop th eworst economic disasters therefore, the answer is education. If a wider proportion understood market mechanisms and valuations, markets around the world would be less prone to excess, both to the up and downside.

Clearly better market understanding would have allowed us to avoid some of the worst excesses and hangovers of dot com. Benefits might also arise in shorter timescales. I look back at the ftse between 25th July and 8th August this year and see one thing: ignorance. How else can one explain the low dealing sizes coupled with day upon day of rises? Today half the people that joined in that period would have found themselves either in loss or at breakeven, and so we get panic selling on the 6th day of a fall, yet how many 7 day falls has the stockmarket thrown up in its history? Magnify this situation over months/years and you have a sadly typical boom-bust cycle.

Edited by Sledgehead

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I am interested in the groups views of ways we could try to prevent future house price bubbles in the UK. Clearly we need to keep housing affordable to prevent people being crippled by debt from either borrowing too much or finding themselves stuck in a property due to negative equity.

I bought my first flat in 1991, some time after the slide had started, just when Norman Lamont was telling us that "the green shoots of recovery" had arrived. That said, our flat soon lost 25% of its value and we would have been stuck there forever (size ok but abusive neighbour/freeholder next door) but for help from the family.

Could it just be a case of limiting borrowing multiples to reduce the amount peple can pay on credit, forcing prices to come down to meet buyers limits or are there more effective measures?

Would limiting borrowing multiples, if introduced now, produce a prolonged but soft landing from the highs of 2004?

Just interested in your two penneth's worth.

Better legal rights for tennants, the present AST arrangements are not sufficient and do not provide enough protection for tennants. This would discourage a large number of BTL's.

Land value tax, thereby discouraging builders from sitting on land and furthermore making ownership of large tracts of land a liability. Better planning laws would also be necessary.

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Mmmm tough one....

how about:

Land and property tax @ 1% of current market Value

CGT on all house owners

Re-introduce Tennets rights

ensure that there are better routes to invest and save

Make TV shows on property and finance adhere to FSA rules, (never heard kirsty say "The market can go down aswell as up, and past performance is not an indicator of future performance) FSA (be nice if we saw people taking them to court for miselling/ ramping)

reassess Fractional Bank rules

reassess rules on credit and lending

Make it easy to start business and easier tax system (encourge a more entrepreneur society)

ensure that minimum wage is able to get mortgage on average priced (bottom rung) flat or house

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Better legal rights for tennants, the present AST arrangements are not sufficient and do not provide enough protection for tennants. This would discourage a large number of BTL's.

Tennants currenty have very good rights.

No pay no stay should be toughened up so a Landlord can evict within two weeks for non payment, but other than that the system works.

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Tax the living f&ck out of BTL landlords. After all, it's "unearned income", something the Labour Party traditionally wanted to discorurage, it diverts capital from industrial investment, and the BTL numpties cant hide it or 'offshore' it.

Go get em, Gordon.

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Tennants currenty have very good rights.

No pay no stay should be toughened up so a Landlord can evict within two weeks for non payment, but other than that the system works.

You have a heart of gold don't you Lj, hope the banks take you up on your offer when you have a financial 'hiccup' and can't pay for 2 weeks,

And what about thoses tennants that do pay every month but still get 2 months notice to leave

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Complete overhaul of the credit scoring system.

Given each financial institution makes up there own scoring system based on third party input (I.e experian), who in turn have very limited information, its no wonder the amount of credit cards and loans/mortgages issued has risen to astronomical levels.

Theres no risk to the lenders if they dont know about it in the first place.

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Tax the living f&ck out of BTL landlords. After all, it's "unearned income", something the Labour Party traditionally wanted to discorurage, it diverts capital from industrial investment, and the BTL numpties cant hide it or 'offshore' it.

Go get em, Gordon.

I have read too many accounts of NuLab parasites, sorry socialists, with their own BTL empires for this to happen, not to mention specifically large country homes I am aware of owned by Hain, Prescott and one or two similar slime. Turkeys won't vote for Xmas...

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Tennants currenty have very good rights.

No pay no stay should be toughened up so a Landlord can evict within two weeks for non payment, but other than that the system works.

Does it really?

Here in London there are an enormous number of landlords operating entirely outside the law.

These landlords claim to be living in the property themselves and demand rent in cash so that they can avoid any declaration of their rental income.

They do not maintain the properties (many BTLs forget that you have to spend money on maintain - some just see it as an income with few costs) causing areas to become run down.

I am not suggesting that all landlords are like this but it is clear that many are not respecting existing tenants rights and existing laws.

The only way to stop people playing with the rental market is to create better enforcement of tenants rights.

Some tenants do play the system but this BTL fever has created a lot of landlords who want the money but not the responsibilities.

A lot of people would be happy to rent long term if they believed that the landlord would do essential maintenance to the property and basically behave in accordance with the law.

When looking for rental accommodation myself I have been shocked at the high rents being charged for what I considered to be houses that were not fit for human habitation it had been so long since any maintenance was done.

I really don't think the system works for tenants or BTL investors. :(

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Some tenants do play the system but this BTL fever has created a lot of landlords who want the money but not the responsibilities.

I was a LL until recently.

I certainly objected to the idea of spending 'my childrens' money (effectively) on some whinging tenant. If they want to make improvemtns let them pay, dont nick mine or my childrens money.

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I was a LL until recently.

I certainly objected to the idea of spending 'my childrens' money (effectively) on some whinging tenant. If they want to make improvemtns let them pay, dont nick mine or my childrens money.

Its YOUR PROPERTY

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A lot of people would be happy to rent long term if they believed that the landlord would do essential maintenance to the property and basically behave in accordance with the law.

This is exactly why I wanted to buy somewhere (before doing the maths and then discovering this site). I don't mind about landlords profitting, but all too often they don't want to do anything for the money. If its a business, then the tenant is the customer, but in no other industry is it so much the norm to treat the customer so badly (at least not so openly).

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I have read too many accounts of NuLab parasites, sorry socialists, with their own BTL empires for this to happen, not to mention specifically large country homes I am aware of owned by Hain, Prescott and one or two similar slime. Turkeys won't vote for Xmas...

Gordon doesnt have any.

Tony does.

Go figure what happens next.

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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