Monday, July 17, 2006

Housing crisis in England’s housing timebomb

Disastrous news for first time buyers as house prices predicted to reach on average £300K by 2011

"Crisis is an over-used word but I make no apology for using it: we are already in crisis and this report shows that things are set to get worse. "High house prices are already having a disastrous effect on local communities. People are unable to find a home in the area where they grew up. Parents are forced to work longer hours and travel greater distances. Low-income families are forced to live in poor quality, cramped conditions."

Posted by Converted Lurker @ 12:14 PM (631 views)
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19 thoughts on “Housing crisis in England’s housing timebomb

  • Its articles like this that will fuel the FTBr’s to keep putting in offers on properties which they can’t really afford.

    You can almost see it being a self-fulfilling prophecy.

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  • The longer it goes on the harder will be the fall.

    It may well encourage FTBers to buy property they can barely afford. Which will mean that when interest rates DO rise, they will have an even more devestating impact.

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  • When the dust settles, I think some of these Spin monsters should be done for fraud, because I bet a lot of them have something to gain.

    fraud,n
    Definition: A deception deliberately practiced in order to secure unfair or unlawful gain.

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  • Bloody Annoyed says:

    can anybody tell me if there are any measures relating number of vacant properties to number of people requiring properties. I know everything is down to supply and demand but what changed so dramatically in recent years that we now find ourselves in the situation we are in. I am in a good job.I should be living well starting a family not living with my f*cking parents. If our country is so wealthy why are we running twice as hard for half as much.

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  • It’s actually in the BBC top 5 most popular articles this afternoon! I heard a girl in the office who has recently bought a place, mentioning the news story at lunch time. Amazing the articles suggesting a fall of 50% dont make the top 5, or for good lunchtime conversation?!

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  • This is a stupid headline and once more it is either lazy reporting on the part of the Blair broadcasting corporation, or it is another obvious attampt at spinning the housing market into life again. If anyone actually chooses to read the article, it is basically an attempt by the National Housing Federation to spur the Government to build more affordable housing for the benefit of the local housing associations. So there are VI’s coming out with these headlines that I never even dreamed would have a VI in talking up the house prices. It looks to me like the beeb are taking the headlines completely out of context though…

    Bingo out.

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  • George Monsoon says:

    The prayer for the FTB

    I WILL NOT BORROW MORE THAN I CAN AFFORD TO PAY BACK.
    I DO NOT BUY INTO THIS HYPE.
    I AM WAITING FOR PRICES TO FALL SIGNIFICANTLY BEFORE I EVEN START TO LOOK FOR A HOUSE.
    AND I DEFINITELY DO NOT STAND ALONE!!

    phew! that helped – I feel all better now…

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  • The only option for FTBers at the moment is ride this out until the dust settles – renting is an alternative and isn’t dead money as many think. You only have to look at our European cousins to see that they don’t have this obsession with owning their own home and they all seem to be OK. It is blo*dy annoying though that the government does nothing to help the working class, who I define as anyone who clears less than £300k/year, and never has! To add insult to injury they allow foreign investors to pilfer our limited space and take their profits without paying any UK tax – what’s up with that? Surely it’s done deliberately. Oh and another positive for the government is that whilst we’re all too busy anguishing over the basics in life, like somewhere to live, we have no time to question what they’re upto – and boy are they busy at the moment.

    In Australia foreigners can’t buy property without approval, and hence there’s little speculation as they can’t purchase – although the Oz housing market is also over-heated but at least FTBers can get on the rung of the ladder far easier. My wife and I earn very good salaries and we can’t afford to buy in Fulham, London. Not only that, the quality of these shi*y old victorian dumps is shocking, so even if we did there would be another 50-70k needed to do it up.

    Patience is your only allay in the short-term.

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  • Bloody Annoyed,

    Because the Inflation figure has been a total fabrication for the last 10 years.

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  • Northern Lad says:

    too true…Gordon and his fictitious inflation figures. THE TRUTH WILL PREVAIL!!!!

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  • I am by no means saying that everything happens for a reason, but i am starting to think that the best way to combat stupid house prices is to head to those countries where all our immigrants are coming from, and buy the properties they’re leaving behind. Try self sufficiency. I’ve always fancied the good life. If only felicity Kendall would return my calls, letters, faxes, emails, shouts from the street etc etc.

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  • Wannabemigre says:

    Keynesian economic thought is that the government should try to spend its way out of a recession,(very simple analysis I know) but New Labour have come up with a New Slant on this old nugget of wisdom, get the general population to do this, through the vehicle of rising house prices, and letting the general population MEW and borrow themselves to oblivion. I remember reading an article in the times in about 2001 when some people were asking for a pre-emptory rise in the base rate to nip the over-heating housing market to its senses, the then Guv, Eddie George, said that house prices were not a concern of the B of E, and that interest rates would not be used to control the housing market. Strange now that house prices are of concern to the B of E, and that they are afraid to raise interest rates when they need to??

    As an aside, what is actually wrong with inflation, just an observation, but I thought that inflation was partly the result of of people bidding for scarce items and that inflation would cause the movement of assets from unprofitable sectors to more profitable sectors, so the pursuit of a low inflation low interest rate policy is baffling-surely the important issue is the inflation differential with the rest of the world, so why is this government continually fudging the inflation figures, especially now that we are a nation who belong to the shopkeeper and do not actually produce anything.

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  • Bubbles. . . . says:

    You are all right….Yes patience is they key. Nothing goes up forever..There is a person making a fortune in the boom (Oh sorry gordy I thought u said there would be no more Boom Bust senario) and in the bust..The day of reckoning will avail, and Gordon wants to be PM help PLEASE!!!! Maybe the goverment are getting back handers..from the source of all these headlines of booming property prices more SLEAZE!!! Bring it on…..Im a FTB can afford to borrow enough banks are still willing ish….

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  • Bloody Annoyed:

    Try asking your local council what they intend to do about the new ’empty dwelling management orders’.

    The Tories are kicking up about this (but shouldn’t be), while the Govt seem to be falling over not to publicise the new measures.

    Bottom line is that there are 3/4 million empty homes – many deliberately left empty. Local councils are being given the power to take them over and let them, with all costs involved in management and maintenance deductible from the rent (which means with usual local council inefficiency, the freeholders will get bugger all)

    I would advise all HPC’ers to push their local councils to use these new powers, by identifying to their local councils properties they know have been empty for more than six months (and are willing to testify to that effect) and asking the council for details of their council house waiting list.

    If they won’t do anything, ring your local newspaper, and give them the story…

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  • Uncle Tom,
    what you are suggesting , which I understand to be a policy some Local Councils want to pursue,sounds very much like fair redistribution of wealth by State intervention, an ideal which I found alluring during my youth, but that the Berlin wall and the folding of the USSR soon took the shine off.
    I’m much more comfortable with the market laws being the drivers of changes, which, though slow to come, will happen.
    These houses are empty because they are making money by just being there. The house price increases being fuelled by a rising market; with nothing else to support the madness this middle-class perpetually regenerating wealth will come to a sad end.

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  • The projections in this report are based on interest rates remaining at 4.5% throughout the next five years, which, given current developments in the global economy, seems a highly unlikely scenario. The same applies to disposable income and wage increases, both of which are projected to remain at current levels. With respect to disposable income, while ignoring the fact that much of this is currently bolstered by unsustainable borrowing and MEW, above inflation increases in essential items such as fuel, clothing and so on are liable to erode this substantially. Also, these factors will tend to create demand for ‘inflationary’ wage increases which, in turn, will set the scene for further interest rate rises.

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  • This is the silliest thing i ever read.

    UK PLC will have trouble keeping the lights on by then, we will manufacture nothing by then as the cost of energy will make it impossible.

    Peak Oil and Gas will be well and truly with us by 2011.

    How could house prices maintain there momentum whilst energy security begains to effect every way of our lifes.

    Utter Bullshit article.

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  • I just don’t understand this inflation thing.

    The BoE have stated that house prices are not their bag. Their concern is with inflation. More specifically wage inflation.

    They are now worried that if the prices of gas has gone up 35% then people will ask for higher salaries, so they must therefore raise interest rates.

    I must be missing something here because from what I can see, a 35% rise in gas prices pales into insignificance for the average British family, compared to the extra that they’d have to pay in mortgage repayments on their 5million pound rabbit hutch and 58 credit cards if the BoE put interest rates up.

    Why would they think that putting up interest rates will STOP people asking for higher wages???? Surely most people would need HIGHER wages. Particularly those BTLers that are ALREADY subsidising their tenants. How will they fund their lavish lifestyle when they are no longer able to MEW their BTL properties ?

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