Jump to content
House Price Crash Forum
Bruce Banner

Solving The U K Housing Crisis - The Bow Group

Recommended Posts

I skimmed read this and found it very interesting. Many of the solutions proposed seem sensible and it is encouraging to read this.

That said, I think the arguments presented against the need for more building (and/or restriction immigration - was this mentioned?) is very weak. The document focuses purely on house prices and ignores rents,yields and the impact that a political commitment to massive new building would have one price expectations and percieved scarcity. I searched the document for reference to rent and there was not a sensible discussion of this point.

All authors have agenda and I wonder if this is a push from NIMBY landowners to prevent traction and consensus for much much for house building. The paragraph about the south of England being "ruined" by more building stood out.

Why not pursue these recommendations and build a ****** load more homes?

Share this post


Link to post
Share on other sites
Recommendations

We recommend:


• That the British Government establishes the principle of preference for UK owneroccupiership

within the UK property market.


• That the Government tasks the Treasury and Bank of England with maintaining average

UK house prices at no more than 4x average household income.


• The monitoring of property ownership. A full survey and map of property ownership,

starting in London, which will be published annually. This will allow analysis of the

housing market including more formal economic analysis, which is currently impossible

due to lack of data.


• The creation of a foreign investment monitoring and review agency, along the lines of

Australia’s FIRB, with Parliamentary oversight from a new Select Committee. This

agency would administer all of the restrictions listed below as well as monitoring

property ownership, demand, prices, and vacancy nationwide. The agency would also

be responsible for designating areas of low demand and high demand where special

purchase rules would apply.


• As recommended by Transparency International, transparency should be established

over who owns the offshore companies that own 36,342 London properties, through

making such transparency a Land Registry requirement.


• The registration of all property owners including fingerprint biometrics to ensure that

UK housing is not purchased with the proceeds of crime, whether foreign or domestic.

Two registers would be maintained, one for owners and one for properties, in much the

same way that vehicles and vehicle owners are registered. This would enable the UK to

prevent property being sold to foreign buyers with criminal records, and would enable

property to be more easily confiscated when tracing the proceeds of crime.


• A foreign-buyer surcharge of 5% of asset value, in order to fund the new agency.


• The restriction of property auctions to people resident in the UK, to limit the price

inflation and property vacancy associated with the auction process. Auction sales to

overseas buyers are often sold “unseen” and subsequently left vacant.


• The implementation of the “new only” rule, to limit non-resident buyers to new

properties, and to prohibit them from buying “landed property” such as detached or

terraced houses, in order to prevent the “ghosting” of UK town centres, and to

encourage vibrant neighbourhoods.


• A surcharge of 5% of asset value for any foreign buyer who sells a UK property within 5

years, in order to protect the UK market (and UK tenants) from overseas economic

turbulence.

S o l v i n g t h e U K H o u s i n g C r i s i s | w w w . b o w g r o u p . o r g | N o v e m b e r 2 0 1 5

54 | P a g e


• A ban on UK property being advertised exclusively abroad, with all sales needing to be

conducted within the UK.


• All buildings of multiple residences must be over 50% owned by UK citizens.


• A cap on the proportion of homes in any post code area that can be foreign owned of

30% (with higher caps for areas of low property demand).


• The statutory removal of the council tax discount for properties left empty, in order to

discourage vacancy (with exceptions for areas of low property demand).

Share this post


Link to post
Share on other sites

That the Government tasks the Treasury and Bank of England with maintaining average

UK house prices at no more than 4x average household income.
How would that work in Mayfair?
What is an average house?
Edited by cool_hand

Share this post


Link to post
Share on other sites

That the Government tasks the Treasury and Bank of England with maintaining average

UK house prices at no more than 4x average household income.

How would that work in Mayfair?

What is an average house?

Not just that, how are they supposed to achieve that outcome without any of the tools necessary to do so.

Share this post


Link to post
Share on other sites
Recommendations
We recommend:
• That the British Government establishes the principle of preference for UK owneroccupiership
within the UK property market.
• That the Government tasks the Treasury and Bank of England with maintaining average
UK house prices at no more than 4x average household income.
• The monitoring of property ownership. A full survey and map of property ownership,
starting in London, which will be published annually. This will allow analysis of the
housing market including more formal economic analysis, which is currently impossible
due to lack of data.
• The creation of a foreign investment monitoring and review agency, along the lines of
Australia’s FIRB, with Parliamentary oversight from a new Select Committee. This
agency would administer all of the restrictions listed below as well as monitoring
property ownership, demand, prices, and vacancy nationwide. The agency would also
be responsible for designating areas of low demand and high demand where special
purchase rules would apply.
• As recommended by Transparency International, transparency should be established
over who owns the offshore companies that own 36,342 London properties, through
making such transparency a Land Registry requirement.
• The registration of all property owners including fingerprint biometrics to ensure that
UK housing is not purchased with the proceeds of crime, whether foreign or domestic.
Two registers would be maintained, one for owners and one for properties, in much the
same way that vehicles and vehicle owners are registered. This would enable the UK to
prevent property being sold to foreign buyers with criminal records, and would enable
property to be more easily confiscated when tracing the proceeds of crime.
• A foreign-buyer surcharge of 5% of asset value, in order to fund the new agency.
• The restriction of property auctions to people resident in the UK, to limit the price
inflation and property vacancy associated with the auction process. Auction sales to
overseas buyers are often sold “unseen” and subsequently left vacant.
• The implementation of the “new only” rule, to limit non-resident buyers to new
properties, and to prohibit them from buying “landed property” such as detached or
terraced houses, in order to prevent the “ghosting” of UK town centres, and to
encourage vibrant neighbourhoods.
• A surcharge of 5% of asset value for any foreign buyer who sells a UK property within 5
years, in order to protect the UK market (and UK tenants) from overseas economic
turbulence.
S o l v i n g t h e U K H o u s i n g C r i s i s | w w w . b o w g r o u p . o r g | N o v e m b e r 2 0 1 5
54 | P a g e
• A ban on UK property being advertised exclusively abroad, with all sales needing to be
conducted within the UK.
• All buildings of multiple residences must be over 50% owned by UK citizens.
• A cap on the proportion of homes in any post code area that can be foreign owned of
30% (with higher caps for areas of low property demand).
• The statutory removal of the council tax discount for properties left empty, in order to
discourage vacancy (with exceptions for areas of low property demand).

Not a single supply measure.

Comical.

Share this post


Link to post
Share on other sites

Not a single supply measure.

Comical.

But the paper is about how to suppress the influence of investment capital from the whole of the rest of the world on the price of London property. Do you seriously think that you could fix that with supply measures?

As best I understand matters the whole point is that London property is inherently scarce. Most of it is built on all ready, the rate at which you can replace low density stuff with high density stuff is limited so the ability of supply to respond to demand is minimal. Over the time scales that it takes capital to flood into the asset class, supply of the asset itself is effectively fixed.

Did you even read the paper? The author addresses your point at the top of the third para of the executive summary.

In the face of demand from both domestic and overseas investors who see housing as a safe haven for their money, building more houses will have no downward effect on prices. Although expansion of the housing stock has led to price stabilisation (and even decline) in many parts of the UK, in Greater London and the commuter towns of the South East (SE) of England, increasing the supply of houses can have no effect on prices, because of the scale of demand.

Share this post


Link to post
Share on other sites

But the paper is about how to suppress the influence of investment capital from the whole of the rest of the world on the price of London property. Do you seriously think that you could fix that with supply measures?

As best I understand matters the whole point is that London property is inherently scarce. Most of it is built on all ready, the rate at which you can replace low density stuff with high density stuff is limited so the ability of supply to respond to demand is minimal. Over the time scales that it takes capital to flood into the asset class, supply of the asset itself is effectively fixed.

Did you even read the paper? The author addresses your point at the top of the third para of the executive summary.

Highlighting the folly of treating housing - especially in London - as an export, rather than primarily as a consumption item for UK workers and residents.

Share this post


Link to post
Share on other sites

Highlighting the folly of treating housing - especially in London - as an export, rather than primarily as a consumption item for UK workers and residents.

In moments when I'm inclined to don a tin foil hat I am willing to entertain the idea that the London bubble has been allowed to run because it reduces the exposure of UK households and UK banks to property price falls. Despite the explosive growth in prices since 2009, net lending to UK owner-occupiers has been essentially flat. Regardless of who was amped up their exposure to UK property since 2009, in aggregate it ain't UK mortgaged owner-occupiers.

You can then read pieces like this from the Bow Group as acknowledging that you can have too much of a good thing. Under this reading moves to intimate that the UK might be preparing to shut up shop walk and talk like Donald Kohn calling BTL a "safety valve that may not be safe", (July 2014, for all those fans of Richard Dyson who thought that the attack on buy-to-let was "unexpected").

Share this post


Link to post
Share on other sites

Some of the suggestions sound good - but then


The registration of all property owners including fingerprint biometrics to ensure that UK housing is not purchased with the proceeds of crime

"All" property owners - a bit extreme?

Edited by billybong

Share this post


Link to post
Share on other sites

I skimmed read this and found it very interesting. Many of the solutions proposed seem sensible and it is encouraging to read this.

That said, I think the arguments presented against the need for more building (and/or restriction immigration - was this mentioned?) is very weak. The document focuses purely on house prices and ignores rents,yields and the impact that a political commitment to massive new building would have one price expectations and percieved scarcity. I searched the document for reference to rent and there was not a sensible discussion of this point.

All authors have agenda and I wonder if this is a push from NIMBY landowners to prevent traction and consensus for much much for house building. The paragraph about the south of England being "ruined" by more building stood out.

Why not pursue these recommendations and build a ****** load more homes?

That did strike me as very NIMBY. Mind you former Tory minister Nicholas Ridley who apparently coined the term quickly became a NIMBY when developers wanted to build near him.

Share this post


Link to post
Share on other sites

Not a single supply measure.

Comical.

I suggest you read the paper. It's very thorough. Possibly the best* paper ever to appear on HPC. That it's coming from a Tory think tank is very encouraging.

It might smell of NIMBYism but the author makes a very strong argument. He is also coming straight out and saying a HPC is a necessary and good thing. A rare event in politics!

Edited to add * apart from the Shoblerant, of course! ?

Edited by lastlaugh

Share this post


Link to post
Share on other sites

I totally agree. I assume they must have a NIMBY agenda.

All those rent increases - 'nothing to see here'!

It's chicken and egg as far as building goes. The builders will not reduce their prices which in turn reduces building as too few people can afford their products.

Sadly building volumes hide the simple truth, housing is now unaffordable to too many. Drop the costs to what consumers can afford and then we would see volumes surge.

Share this post


Link to post
Share on other sites

It's chicken and egg as far as building goes. The builders will not reduce their prices which in turn reduces building as too few people can afford their products.

Sadly building volumes hide the simple truth, housing is now unaffordable to too many. Drop the costs to what consumers can afford and then we would see volumes surge.

They would if they had to. See my sig.

Share this post


Link to post
Share on other sites

Very good paper, the have a petition which needs some more signatures

https://petition.parliament.uk/petitions/110560

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   100 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.