Jump to content
House Price Crash Forum
Sign in to follow this  
munimula

Mp Letter - Draft 2

Recommended Posts

Dear XXXXX

I am writing this letter to tell you about something that deeply concerns me at the current time. The issue is that of housing and house prices. I’m 30 years old and live in Hampton Wick with my partner who is 26. My partner and I would like to buy a house and start a family but the cost of housing is prohibitive. We have reasonable savings and are debt free. We don’t have a fancy car, buy all the latest gadgets etc yet, after 5 years of saving hard we are still no nearer to buying a first home.

Perhaps I could get a bank to lend 5-6 times my salary but with the risk of interest rates rising higher in the future I would not be happy to take on the risk. As I get older and approach the age of the average first-time-buyer (34) it isn’t a 1-bed flat that I need any longer either. With the cost of buying and selling now very high thanks in part to the cost of stamp duty there is no point buying a 1-bed flat if I want to have a family, I require at least a 2-bed property or preferably a 3-bed property if we are to have 2 children as we would like within the next 5 years. In the current climate of high house prices these properties are simply fantasy.

It appears to me that the yearly increases in house prices over the last 10 years, which should have been unsustainable have opened up a massive divide between the haves and the have-nots. By that I mean those that bought property before the recent, huge price increases and those that didn’t.

My parents generation and older generations (the over 50’s), having paid off their mortgages thanks in part to higher inflation in the past are now reported to own four-fifths of the nations’ wealth. My parents bought a 5-bed family home in Devon in 1981 and had four children. My mother didn’t work and my dad has always earned below average wages. A 1-bed flat in the same place today would be four times my earnings and I earn considerably above average for that area. Things are very different now.

How can we be living in a civilized society where those that don’t have dependent families living at home own all the family housing and those that do have families or would like families can’t afford the family sized houses? In fact, those that would like to have families are having to put the decision of having children off until later in life and will, undoubtedly have fewer children than they might like due to housing restrictions and the problems associated with fertility etc that are a cause of waiting too long. You can’t bring up children in a 1-bed flat.

Even when younger people are buying houses, the repayment costs of the super-sized mortgages that they are taking on will be taking up most of their income. This income could otherwise be spent on bringing up children, saving into a pension, benefiting the economy through spending etc. If a couple have to work just to pay a mortgage and living costs how are they ever going to afford to have children? Are children not beneficial to our society, will they not be providing the taxes in the future to support the larger proportion of elderly people?

So why do we have this current situation? To summarise, these are the reasons that I think we have unaffordable housing in the UK at present;

- Low interest rates

- House building restrictions

- Relaxing of mortgage lending criteria

- Buy-to-let investment

- Growth in 2nd home ownership

- Property speculation

- Home owning psychology and the housing ladder

Low interest rates

The growth in house prices seems to be largely due to the cheap credit that has been available due to low interest rates which has been a global trend. Interest rates in this country, controlled by the Bank of England are largely used to control inflation. However, the CPI figures have certainly become questionable. A new Independent inflation index gives a figure double the current official CPI figure and most services costs are increasing at far higher rates of inflation. The things that people have to spend their money on are going up higher than the rate of inflation and yet, generally the things that people don’t have to buy are what have been keeping inflation low.

With interest rates going up rapidly around the world and inflationary pressures all on the upside why is the, supposedly independent Bank of England so slow to increase the interest rates in this country?

House building restrictions

There seems to be a problem with the planning regulations in this country. The current government is happy to allow large-scale immigration to take place and therefore a net population increase but they don’t appear to be providing the housing needs to match this population increase. There are lots of flats being built (46% of new builds) in inner city areas, more and more people squeezed into smaller and smaller spaces but what about building on some of those fields outside of the towns and cities?

Take any train journey out of London in any direction and for nearly all of the journey you will be looking out on countryside and fields. It appears that the rights of the minority, again generally the over 50’s are being put in front of the rights of the majority. People in built up areas are expected to lose all of their open spaces, many of which improve the quality of living in built up areas immeasurably and yet on the edges of towns the building stops. If governments want increasing populations they should meet the housing demands and flats are not the answer.

Why is the current government not meeting the housing needs of the growing UK population? Why are so many new build properties now flats?

Relaxing of mortgage lending criteria

Banks have been throwing their old lending regulations out of the window, the old three times salary lending rule disappeared along time ago. These rules seemed sensible because interest rates are variable and the rules prevent people from borrowing too much. Now you can get self-certified mortgages where you can basically make up a figure for your salary.

It seems to me that people generally don’t have much concept of even the basics of economics, interest rates, inflation etc. I know many examples of people really stretching themselves to buy property, taking on mortgages that they won’t be able to afford if interest rates go up, which it looks like they will do.

Why is lending by banks not more closely regulated, perhaps by the FSA?

Buy-to-let investment

One recent trend has been the large growth in the buy-to-let mortgage market. People have moved into this type of ‘investment’, in many cases to provide some kind of pension. The yields on these ‘investments’ don’t even stack up anymore, many buy-to-let investors reportedly have to subsidise their flats and yet people keep purchasing buy-to-let properties with the hope of future capital gains.

How can my generation, the first time buyer compete with those people that get tax breaks on this kind of investment and can leverage equity from their existing homes to provide the deposits to make the purchase when we have to save to make the deposit?

Growth in 2nd home ownership

I am originally from Devon, my parents family home was bought as a 2nd home, empty for most of the year. My parents current home in Cornwall is about to be bought as a 2nd home. The house opposite my grandmother, again in Devon is a 2nd home and is empty for most of the year. In each case the homes are owned by a generation (over 50) that already have a primary home. The prices of housing in these rural areas is now so prohibitive, especially in proportion to the wages in the area that my generation has no choice but to migrate to the towns and cities to find better paid work. The towns and cities where, due to planning restrictions and population growth, not enough housing is being built.

How can we call this a civilized society when those that would like to have a family can’t afford family housing but those that have no dependent family are able to own, in some cases, more than one family-sized home and due to the lack of building reduce the supply of housing and push prices up?

Home owning psychology

People don’t seem to have much grasp of the effect of inflation, we now live in a low inflation environment - there isn’t going to be the inflation to erode the mortgage debt and feed into increasing salaries that there was in the past. And yet there still pervades in British society this idea that you have to get on the ‘housing ladder’ at all costs. High inflation in the past helped people move up the ‘housing ladder’ and there weren’t the high costs associated with buying and selling in the past either, largely now due to stamp duty.

Without higher inflation is there such a thing as a housing ladder? How are people going to move up the housing ladder if inflation isn’t eroding their mortgage debt and providing them with decent wage increases? If I buy a 1-bed flat today, how am I ever supposed to be able to afford a small 3-bed family home to bring up children in?

The only thing I hear politicians talking about are “affordable housing” and “shared ownership” but this is not the answer as it can only provide support to very few people. House prices are artificially high. The housing market is supposed to be a free market and yet supply is restricted and lending is not regulated. Most of us don’t want to make money out of housing, we just want somewhere to call home, to call our own, somewhere we can bring up a family, do we not have a right to housing at a reasonable cost?

I would be very interested to hear your views on this subject and what the [PARTY] policies on housing are and how these problems can be addressed.

Edited by munimula

Share this post


Link to post
Share on other sites

It reads very well, but it's just too long to send to your MP. Simply asking for their views on your house price thesis, some of which may or may not be correct, and some of which is anecdotal, won't get a useful response. They'll probably just reply to you with generic details of their housing policy.

If you want to get them thinking and have a chance of getting an interesting response, try to aim for a single page that expresses your concerns. Ask for a direct response to no more than one or two key points, clearly expressed at the end.

You can always include references to further reading if they're interested - e.g. links to government statistics, research, etc.

Share this post


Link to post
Share on other sites

Dont use "etc." so much. In fact, dont use it at all.

It can give the impression etc. that writer is too lazy etc. to actually list stuff etc.

Share this post


Link to post
Share on other sites

Good letter. Some of the language looks familiar - I like it.

It is long, but this shows that the issues are complex and not something to be brushed aside. Perhaps you could break it up into 3 or 4 separate letters and send one a day – so as not to over whelm them.

Seriously it’s good and complete and they should be able to empathise with your situation.

Send it and if you don’t get a full answer you can question them further on the specific points they chose to missed out.

Share this post


Link to post
Share on other sites

You may wish to add that most people want to live in 'houses that they can afford', although far fewer will want to live in something called 'affordable housing'.

An excellent letter - yes, perhaps a little too long - but otherwise smashing!

Good luck

Son of Limahl

:rolleyes:

Share this post


Link to post
Share on other sites

The letter is a good idea but, as others have suggested, it's too long - I'd say too long by far - though I realise there are many salient points that need to be aired. Could you give the letter a different structure? To be honest, I haven't thought it through, but if it were possible to get the principle gripes into a summary structure and perhaps have a second more detailed section with sub-headings (??) so that a speed reader would just grab those headings and understand what you were getting at? I'm guessing here.

Also, I'm not happy that you seem initially to be complaining - quite justifiably - about inflation figures being fiddled and then later on you go on to talk about 'low inflation environment'. That doesn't seem to quite work.

But it's definitely a laudable project.

Share this post


Link to post
Share on other sites

take out the etc. its a problem I have as well, its so much easier to put in etc. but the reality is people are dumb and won't know whats in your head and on the list of things you are etc. put down the most important things, you may have so many points there are too many to list.

I agree this letter is way too long, and sounds too much like a rant. You need to shorten it, also try and predict and destroy any opportunity for a simple reply such as here are our stratergies, find out what they are going to do.

If I was doing it I would try to stick to hard hitting facts not opinion or personal experience. eg. The average age of a FTB is ... on a salary of ... x% above the average wage. The average FTB has a loan on an income multiple of... The number of personal bankrupcies has increased in the last x years at x% due to the unsustainable level of personal debt which as a country is now at £1.1trillion an average of £x0,000 per person. The average new home floor space is now x square m, x% less than ten years ago, the percentage of new houses that are flats is x%

Only x% of the UK is used for housing, the price of land with planning permision is x times its agricultural value an increase of x%, driven up only by its rarity.

Have a look at priced out for some good statistics.

Reference your statistics if you can eg. (ONS), even if it is only a rough idea of the source it gives a lead if they need to explore it further and gives the statistics some weight, if it needs a long reference put it at the bottom of the page (in very small type if necessary). Put atleast one fact for each of your points if you decide to stick with your system of a paragraph for each of your points (which perhaps you could number), consider bullet pointing your facts, if you structure them right they are much more hard hitting, oh and use Bold to highlight significant points.

If you have personal experience in their try to format it in a way that it can be used to inspire debate etc. Often if you are lucky enough to have your MP ask the question in parliament they will use a quick quote of what their costituant said.

Directed questions are better than open ones.

Share this post


Link to post
Share on other sites

take out the etc. its a problem I have as well, its so much easier to put in etc. but the reality is people are dumb and won't know whats in your head and on the list of things you are etc. put down the most important things, you may have so many points there are too many to list.

I agree this letter is way too long, and sounds too much like a rant. You need to shorten it, also try and predict and destroy any opportunity for a simple reply such as here are our stratergies, find out what they are going to do.

If I was doing it I would try to stick to hard hitting facts not opinion or personal experience. eg. The average age of a FTB is ... on a salary of ... x% above the average wage. The average FTB has a loan on an income multiple of... The number of personal bankrupcies has increased in the last x years at x% due to the unsustainable level of personal debt which as a country is now at £1.1trillion an average of £x0,000 per person. The average new home floor space is now x square m, x% less than ten years ago, the percentage of new houses that are flats is x%

Only x% of the UK is used for housing, the price of land with planning permision is x times its agricultural value an increase of x%, driven up only by its rarity.

Have a look at priced out for some good statistics.

Reference your statistics if you can eg. (ONS), even if it is only a rough idea of the source it gives a lead if they need to explore it further and gives the statistics some weight, if it needs a long reference put it at the bottom of the page (in very small type if necessary). Put atleast one fact for each of your points if you decide to stick with your system of a paragraph for each of your points (which perhaps you could number), consider bullet pointing your facts, if you structure them right they are much more hard hitting, oh and use Bold to highlight significant points.

If you have personal experience in their try to format it in a way that it can be used to inspire debate etc. Often if you are lucky enough to have your MP ask the question in parliament they will use a quick quote of what their costituant said.

Directed questions are better than open ones.

I agree too long but - I would present as a summary and condense down to three main points and keep it no more than 1 page long with your signature at the bottom (to show that its finished) - then I would ADD an appendix with all the content you have above, if they are interested they will get some one to take a look for them and the assistant will recommend what they should do. So I would also make explicite your suggested courses of action (TAX on second property?, FSA regulated lending...) .

Good luck

HAL

Share this post


Link to post
Share on other sites

I agree too long but - I would present as a summary and condense down to three main points and keep it no more than 1 page long with your signature at the bottom (to show that its finished) - then I would ADD an appendix with all the content you have above, if they are interested they will get some one to take a look for them and the assistant will recommend what they should do. So I would also make explicite your suggested courses of action (TAX on second property?, FSA regulated lending...) .

Good luck

HAL

What are you expecting from this? What action would you like the government to take, in order to help you?

Share this post


Link to post
Share on other sites

What are you expecting from this? What action would you like the government to take, in order to help you?

A question asked in the commons would be good.

How about the validity of LR figures? Why are many properties not appearing on the register?

What effect does this have on government statistics?

How can we have confidence in the Chancellor etc...etc...?

This is a public database and is as such public property, dont we then have the right to expect the figures to be accurate?

How about that?

To be honest all this stuff about not having a fancy car and wanting to start a family is the human interest bit.

Its for the papers, not an MP.

An MP wants something that will get him onto the front pages and therefore elected. Full stop.

Sorry to be so blunt, I know your letter is well-intentioned, but its going nowhere.

Frame it right, and you could start a national debate.

Share this post


Link to post
Share on other sites

Also, I'm not happy that you seem initially to be complaining - quite justifiably - about inflation figures being fiddled and then later on you go on to talk about 'low inflation environment'. That doesn't seem to quite work.

Well the official inflation figures are low, have been low for 10 years now and look to remain relatively low if interest rate tool is used appropriately.

Unfortunately the official inflation figures are questionable.

But I see your point.

Thanks everyone for the comments. I think the resounding feeling is that this letter is too long. I agree that it could do with shortening which will be my next exercise.

I agree too long but - I would present as a summary and condense down to three main points and keep it no more than 1 page long with your signature at the bottom (to show that its finished) - then I would ADD an appendix with all the content you have above, if they are interested they will get some one to take a look for them and the assistant will recommend what they should do. So I would also make explicite your suggested courses of action (TAX on second property?, FSA regulated lending...) .

Good luck

HAL

Thanks, good idea

Share this post


Link to post
Share on other sites

Using bullet points might help you to shorten the letter. Also bullet points facilitate faster reading and provide a focus for each point you want your reader (MP) to address.

Share this post


Link to post
Share on other sites

What are you expecting from this? What action would you like the government to take, in order to help you?

There is no point just complaining. Action has to be taken to make MPs aware of the issues. I think a lot of MPs are very removed from 'real' life and most come from the baby-boomer generation so have no concept of what is facing the younger generations today.

Ultimately I'd like the following;

- tax 2nd home ownership considerably. If you are wealthy enought to own two homes then you should pay a considerable proportion in tax.

- FSA to control lending, far more regulation so that self-cert and 6 x salary mortgage lending are not allowed

- tax BTL. FTBs can't compete with people leveraging equity from existing properties for deposits and getting tax breaks. One of the reasons prices have escaped FTBs. Left unchecked we are heading towards a society of home-owners (haves) and renters (have-nots). It's a dangerous divide

- Regulate property programmes on TV. Kirsty and Phil should not be able to make claims like 'is expected to go up 50% in the next few years' without a declaration that prices can go down aswell as up - like all other financial advice

- Taxing property speculation. If you are buying a home not as a home for yourself there should be increased stamp duty.

Share this post


Link to post
Share on other sites

Excellent Munimula, the tone is perfect and the writing is clear.

My only critisisum is it's not as straight to the point as it needs to be.

If you were someone who has to read letters every day, how far into this letter would you get before you stopped taking the info in? (most people don't get beyond the first half or the first page). I think, maybe, putting all the important points in the first half of the first page (as much as you can) might work, or summarising at the end?

Share this post


Link to post
Share on other sites

There is no point just complaining. Action has to be taken to make MPs aware of the issues. I think a lot of MPs are very removed from 'real' life and most come from the baby-boomer generation so have no concept of what is facing the younger generations today.

Ultimately I'd like the following;

- tax 2nd home ownership considerably. If you are wealthy enought to own two homes then you should pay a considerable proportion in tax.

- FSA to control lending, far more regulation so that self-cert and 6 x salary mortgage lending are not allowed

- tax BTL. FTBs can't compete with people leveraging equity from existing properties for deposits and getting tax breaks. One of the reasons prices have escaped FTBs. Left unchecked we are heading towards a society of home-owners (haves) and renters (have-nots). It's a dangerous divide

- Regulate property programmes on TV. Kirsty and Phil should not be able to make claims like 'is expected to go up 50% in the next few years' without a declaration that prices can go down aswell as up - like all other financial advice

- Taxing property speculation. If you are buying a home not as a home for yourself there should be increased stamp duty.

Those all strike me as excellent, constructive points.

Isn't it about time this forum got away from daft debates about market cycles, interest rates, stock markets, gold, call centres, outsourcing etc etc etc and started concentrating on doing something constructive.

To do something constructive - you need stated aims. Those above are good ones.

Achieving these should be the purpose of this site. If it isn't, and people here really want to read endless posts about global interest rates, then you should accept this site has no real PURPOSE. Maybe those who want something constructive to do should move over to PricedOut and start working together with a sense of purpose.

Share this post


Link to post
Share on other sites

The points about the housing market are all correct (too long as others have said) but is the upshot that you want government to intervene in free markets to artificially fix house prices at a level you consider affordable or offer you tax benefits at the expense of other taxpayers? I think the implications of that are quite worrying. By extension, this price fixing, if that is what you want, could apply to any product that someone in the private sector sells, some equally vital such as food, fuel, transport and water. Why should the government then not also fix private salaries and benefits? Suddenly we are living in a fully controlled socialist system with no incentive for private enterprise, with the likely outcome a stagnant economy on a par with France, not something I want.

S.

Share this post


Link to post
Share on other sites

Those all strike me as excellent, constructive points.

Isn't it about time this forum got away from daft debates about market cycles, interest rates, stock markets, gold, call centres, outsourcing etc etc etc and started concentrating on doing something constructive.

To do something constructive - you need stated aims. Those above are good ones.

Achieving these should be the purpose of this site. If it isn't, and people here really want to read endless posts about global interest rates, then you should accept this site has no real PURPOSE. Maybe those who want something constructive to do should move over to PricedOut and start working together with a sense of purpose.

Marina, I think this site serves it's purpose. It's a place to come and talk about the markets, what's happening out there, are house prices coming down. That's what I enjoy it for but it is not an organisation that has a goal of pressuring politicians to do something.

The newly formed PricedOut is tackling that and I think it's an excellent site. It's an organisation that has stated aims.

The points about the housing market are all correct (too long as others have said) but is the upshot that you want government to intervene in free markets to artificially fix house prices at a level you consider affordable or offer you tax benefits at the expense of other taxpayers? I think the implications of that are quite worrying. By extension, this price fixing, if that is what you want, could apply to any product that someone in the private sector sells, some equally vital such as food, fuel, transport and water. Why should the government then not also fix private salaries and benefits? Suddenly we are living in a fully controlled socialist system with no incentive for private enterprise, with the likely outcome a stagnant economy on a par with France, not something I want.

S.

The problem is that it is not a freemarket.

Housing supply is artificially restricted.

And there is a good argument that the interest rates that determine the house prices which are linked to inflation figures are inaccurate and can be meddled with by Gordon Brown, cheaper OAP bus fares, omitting increases in duty on certain products (champagne etc)

Therefore how is it a free market? In all free markets it's illegal to form cartels and manipulate prices but in effect due to certain controls that the government has, the prices are actually being manipulated. In a real free market people could go to jail for this.

Share this post


Link to post
Share on other sites

Munimula,

I like the points you make and agree that one needs to organise to get things done - even getting some of the points on the table and debated by the MP will put the fear of god into BTL's - this alone may have a desired effect.

Press on...

HAL

Share this post


Link to post
Share on other sites

Press on...

HAL

There are a lot of people here happy to comment and add their views. How about we all join in and send a letter?

Share this post


Link to post
Share on other sites

Good letter - just need to be clear about what you'd like the MP to lobby for in parliament. At the moment you are just asking to hear his/her views.

Edited by Long Game

Share this post


Link to post
Share on other sites

Good letter - just need to be clear about what you'd like the MP to lobby for in parliament. At the moment you are just asking to hear his/her views.

that's a tricky one.

Is it a good idea to make policy suggestions to a politician or just outline your concerns and make them aware of them. Isn't it their job to come up with the policies?

Is it a good idea for me to include things like 'tax 2nd home owners more', 'regulate banks' etc

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 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%



×
×
  • Create New...

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.