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Property Hoarding

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Some argue that the current price of property is a product of supply and demand problem, but is this true? It is well know that hoading is an effective way of artificially pumping up commodity prices. To what extent has the UK housing market been distorted by hoarding?

Hoading can take many forms. In recent years many people have been able to make healthy profits simply by sitting on empty properties. Others have bought second homes which they use for less than 8 days a month. Even rented properties have lower occupancy than owner occupied homes. Some people live in houses which are bigger than they need purely because they see this as a good investment.

All of these people are effectively hoarding property because they believe that the capital gains will more than compensate them for the hassle and cost of ownership. If they start to believe that the housing has genuinely topped out however, will we see a flood of under-utilised properties come onto the market?

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Er, okay. I confess...

I keep a 4-bed detached in a cupboard in the kitchen...

:P

Gordon: "Oh gosh I need some TAX TAX TAX and more TAX, where am I going to find it? Who knows???"

EDIT:

He's done in SIPPs already. When the shit REALLY hits the fan, do you think the government will turn on property? Swingeing tax rises for second home owners?

Edited by megaflop

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Isn't this common practise? Usually it big landowners keeping land in their "Land Bank", then only selling it when the price of land is high.

Don't know fact/figs etc, but essentially there has been plenty of land for building on in the UK for years and years (none of this 'no room to build - we're an island' stuff), but only in the last 5 years (when it became very valueable) was any of it sold by the owner's for building.

Any consumer in any capitalist country is at the mercy of the banks and the suppliers.

Edited by stillill

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Isn't this common practise? Usually it big landowners keeping land in their "Land Bank", then only selling it when the price of land is high.

Don't know fact/figs etc, but essentially there has been plenty of land for building on in the UK for years and years (none of this 'no room to build - we're an island' stuff), but only in the last 5 years (when it became very valueable) was any of it sold by the owner's for building.

Any consumer in any capitalist country is at the mercy of the banks and the suppliers.

I don't buy that argument - farmers and landowners would gladly sell off land at high prices. They can only get high prices if the land has planning permission. Most land cannot get planning permission.

If you want lots of cheap housing, the planning laws need to be relaxed so that supply of houses increases massively - this would drive prices down to a cheap level very quickly.

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Some argue that the current price of property is a product of supply and demand problem, but is this true? It is well know that hoading is an effective way of artificially pumping up commondity prices. To what extent has the UK housing market been distorted by hoarding?

Hoading can take many forms. In recent years many people have been able to make healthy profits simply by sitting on empty properties. Others have bought second homes which they use for less than 8 days a month. Even rented properties have lower occupancy than owner occupied homes. Some people live in houses which are bigger than they need purely because they see this as a good investment.

All of these people are effectively hoarding property because they believe that the capital gains will more than compensate them for the hassle and cost of ownership. If they start to believe that the housing has genuinely topped out however, will we see a flood of under-utilised properties come onto the market?

My local empty housing officer told me that this is a big problem which they are powerless to do anything about. He was passionate about how amoral it is.

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I'm fed up of seeing empty houses in my area that have been up for sale or rent for 12 months or sometimes even longer. They just sit there empty month after month.

Housing shortage..my @rse

I would put a tax on any property that is left empty for more than six months.

That would put the wind up a few OO who move out and then sit on their original house happy to leave it empty rather than lower the price.

It would also be a nice windfall for GB too. Perahps he could plough it back into social housing (on second thoughts that is just wishful thinking!!)

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I wondered whether a crash would solve the problem. But then again it could make things worse. People might hang on to empty properties for grim death in the hope of making their money back.

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Landowners hang onto empty properties when prices slump in the hope they can make a profit when prices rise again. There were loads of derelict houses and commercial buildings during the early 1990s that were not for sale.

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People might hang on to empty properties for grim death in the hope of making their money back.

Human nature is to hang on in hope whilst prices fall then to capitulate and sell up just as the market hits the bottom.

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My local empty housing officer told me that this is a big problem which they are powerless to do anything about. He was passionate about how amoral it is.

The only thing imoral here is the Non Job at taxpayers expense of sending someone round the town looking at empty houses.

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Some argue that the current price of property is a product of supply and demand problem, but is this true? It is well know that hoading is an effective way of artificially pumping up commondity prices. To what extent has the UK housing market been distorted by hoarding?

Hoading can take many forms. In recent years many people have been able to make healthy profits simply by sitting on empty properties. Others have bought second homes which they use for less than 8 days a month. Even rented properties have lower occupancy than owner occupied homes. Some people live in houses which are bigger than they need purely because they see this as a good investment.

All of these people are effectively hoarding property because they believe that the capital gains will more than compensate them for the hassle and cost of ownership. If they start to believe that the housing has genuinely topped out however, will we see a flood of under-utilised properties come onto the market?

I think you make one very good point there. Rented properties do suffer on average from lower occupancy. Time between tenants means that there is property out there not being used to full efficiency. That translates into many properties owned but not used. So the BTL boom has soaked up these places & effectively put many off them off the market for both sales and lettings when you take combined voids into account.

So for example if you have a bunch of new build flats, hard to let in a new area, if the void is 2 months on average, every 6 properties means 1 is never full.

Interesting.

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The only thing imoral here is the Non Job at taxpayers expense of sending someone round the town looking at empty houses.

That's funny! Or it would be. But his job is to understand local housing needs and ensure that property is put to use as quickly as possible as well as finding out why property is empty. These people often help out elderly who have been put into homes etc as well as trying to influence the cartels that operate to remove supply and increase demand. A thankless task according to this guy, mostly due to the 'cooperation' between some EAs, some landlords and some developers.

Empty housing officers are good folks to know if you're interested in buying somewhere to do up.

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Guest magnoliawalls

Gordon: "Oh gosh I need some TAX TAX TAX and more TAX, where am I going to find it? Who knows???"

EDIT:

He's done in SIPPs already. When the shit REALLY hits the fan, do you think the government will turn on property? Swingeing tax rises for second home owners?

Find out how many houses the average politician and spouse owns and then forget about the "Swingeing tax rises for second home owners".

Much more likely to target STR funds and the deposits of would be FTBs :blink:

Since when has life been fair?

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I think you make one very good point there. Rented properties do suffer on average from lower occupancy. Time between tenants means that there is property out there not being used to full efficiency. That translates into many properties owned but not used. So the BTL boom has soaked up these places & effectively put many off them off the market for both sales and lettings when you take combined voids into account.

So for example if you have a bunch of new build flats, hard to let in a new area, if the void is 2 months on average, every 6 properties means 1 is never full.

Interesting.

I put forward this idea many months ago....

Can any of you resourceful people think of a way to find out how many properties are vacant and available to let in the uk each day?

I thought it would be interesting to find out how many "property days" are effectively wasted by properties lying empty in void periods. The average number per day would equate to the number of properties that could be owned and occupied by UK citizens, if it were not for the scourge of the BTL landlord.

Ok, so that seems a little extreme, but if we can compare the proportion of the housing market that is in BTL hands currently to what it was say 5 or 10 yrs ago, it may go someway to explaining the boom in house prices. If there has been a huge increase in BTL properties, each with a few weeks void a year, they will have taken property out of circulation that would otherwise have been occupied by owner occupiers.

When owner occupiers move, they typically move from one property to another on the same day (hence the notorious "chains" in the market traditionally). This means that are no wasted "property days".

With BTL properties, there are voids of often several weeks or longer, leading to wastage of "property days". This wastage is an inefficiency in the housing system, meaning that more properties are required than would be the case if all participants were owner occupiers who move immediately from one property to the next.

So, the rise of BTL may have increased the overall number of "property days" required in the UK in the last 10 years, hence an imbalance between supply and demand and rising prices of this last bull run.

Empty BTL properties

:)

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The Council and the Government should look to themselves first before they waste taxpayers money going round looking for empty houses in private ownership.

The Government and Local Council have acres and acres of building land, and tens of thousands of empty properties. Grenwich and the land sorrounding the dome is a prime example of how this government put out one message about terrible property owners when they themselves are even worse.

An empty housing officer as a job is about as non job as you can get, and thankfully when the conservatives get back into office those jobs will be axed along with the many other glorius titles that have been concocted at taxpayers expense in our local authorities. They will have to return to what they do best, and that is being a servant to the public.

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Mate your sig is getting worse & worse. If you think 1.5% would leave me with no income, you've got serious problems.

The numbers are correct if you account for your business properly. Business assets should be depreciated. If they are being held as investments, they should be revalued to reflect their true market value.

HBOS indicates that they have dropped by 3%. This knocks £105k off your bottom line.

If you don't account in this way, you are not running a business. You are merely consuming your assets.

Edited by Smell the Fear

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The numbers are correct if you account for your business properly. Business assets should be depreciated. If they are being held as investments, they should be revalued to reflect their true market value.

HBOS indicates that they have dropped by 3%. This knocks £105k off your bottom line.

If you don't account in this way, you are not running a business. You are merely consuming your assets.

Are you making this up as you go along?

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The Council and the Government should look to themselves first before they waste taxpayers money going round looking for empty houses in private ownership.

The Government and Local Council have acres and acres of building land, and tens of thousands of empty properties. Grenwich and the land sorrounding the dome is a prime example of how this government put out one message about terrible property owners when they themselves are even worse.

An empty housing officer as a job is about as non job as you can get, and thankfully when the conservatives get back into office those jobs will be axed along with the many other glorius titles that have been concocted at taxpayers expense in our local authorities. They will have to return to what they do best, and that is being a servant to the public.

Good point laurejon,

The role of Governments, both Local and National is to GOVERN and not to MANAGE. Unfortunately all in government in the UK at the current time believe they know best and should manage every aspect (and service) of the citizens lives.

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Some argue that the current price of property is a product of supply and demand problem, but is this true? It is well know that hoading is an effective way of artificially pumping up commodity prices. To what extent has the UK housing market been distorted by hoarding?

Hoading can take many forms. In recent years many people have been able to make healthy profits simply by sitting on empty properties. Others have bought second homes which they use for less than 8 days a month. Even rented properties have lower occupancy than owner occupied homes. Some people live in houses which are bigger than they need purely because they see this as a good investment.

All of these people are effectively hoarding property because they believe that the capital gains will more than compensate them for the hassle and cost of ownership. If they start to believe that the housing has genuinely topped out however, will we see a flood of under-utilised properties come onto the market?

I think there is massive hoarding by the 50+ age group.

See my poll for the evidence.

1/3rd of 189 HPCers surveyed have parents whose house contains 3 or more empty bedrooms. I think it could be said to be hoarding.

frugalista

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I think there is massive hoarding by the 50+ age group.

See my poll for the evidence.

1/3rd of 189 HPCers surveyed have parents whose house contains 3 or more empty bedrooms. I think it could be said to be hoarding.

frugalista

Interesting poll. I wonder what the figures would look like if you included all extra property (holiday homes etc) I suspect it would move it into 40-50% zone. So much for the property shortage.

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Interesting poll. I wonder what the figures would look like if you included all extra property (holiday homes etc) I suspect it would move it into 40-50% zone. So much for the property shortage.

Quite possibly.

I think the question is, why do they continue to own this much property? Of course, one part of it is perhaps sentimental attachment. Another part is they like to have a few spare rooms for visitors. Older people don't like moving much either.

But, I think a lare part of it is speculation. The generation currently in their 50s and 60s have experienced HPI for most of the last 4 decades. Indeed unless they were in the market during the various crashes, they would only have seen huge nominal rises, and may have been oblivious to the various bearish phases there have been. A lifetime like this has turned them into incurable permabulls. This sentiment is preventing them from liquidating the asset.

The sad thing is that some of them are undoubtedly facing an impoverished retirement unless they do reduce their property holdings to something closer to their actual needs.

frugalista

Edited by frugalista

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  • 339 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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