Wednesday, February 16, 2011

Confusion

15th February

You and Yours devoted yesterday's program to the housing market (54 minutes.) The program kicks off with a declaration from potential first time buyer Sarah Leighburn that "I'm a first time buyer. I've just turned 37 - that's the average of a first time buyer now. I now have enough savings to put down a 60% deposit on a house but I've refused to buy into this overpriced market. The best Mr Shapps can do is let this bubble deflate and let this market come back to its natural level." Relaxing planning permissions to make it easier to build is discussed by some contributors but tax reform wasn't explored at all. The presenter expressed disbelief that 40% of mortgages are self-certifed. RICS emphasised how solidly prices are being "underpinned" by lack of supply. More in the comments...

Posted by quiet guy @ 08:46 PM (5097 views)
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11 thoughts on “Confusion

  • Continued … At 35:00, one caller suggested compulsory land purchases (at pre-planning permision prices) to start a big national building programme – predictably this was squashed. Another interesting idea was to place strict time limits on planning permissions to discourage land banking by builders. Lastly, the presenter put it to Shapps that the governemnt should stop trying to inject more finance into the property market. Shapps replied that he did not want to see a boom but didn’t want to see a bust either. All in all, the programme was not encouraging.

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  • I didn’t have time to listen to all of it, got through about 50%, there were some very good calls from people making the basic point about loose lending creating the bubble. However the team in the studio all mentioned repeatedly that the problem of unaffordable prices was because of a lack of supply. It got a bit annoying, it must have been stated half a dozen times in a few minutes at one point, I have no idea if supply is a big problem but I do know there are plenty of half empty new build developments within twenty minutes walk of me in the South East. That is obviously a valueless anecdote. But they seemed to gloss over the point that prices are just too bloody high. There is a shortage of sensibly priced properties perhaps.

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  • So you don’t have a position after all Mr Shapps.

    As I expected.

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  • Around 45:00, a 21 years old inherited some money from his dead granddad, who (like any prudent old people would do) was hoping that the brat would pay off his student debt and sort out his life. Instead, being a brat, the boy put that money down as 25% deposit for a house. So he has not cleaned his student loan and is in more debt. Now he has to pay back two big debts.

    Then at 46:00, an EA wants right to buy to be granted to tenants stayed as little as 6 months.

    You just can’t calculate people’s madness.

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  • Do you mean right to buy from a BTLer ?
    Doesn’t sound such a bad idea.
    Get to live in a place/house first then choose to buy it if you like it.
    Not sure I’d want to be a btler if that were the case which is a good thing as others wouldn’t want to be either.

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  • RTB from BTLers is a great idea. I recall floating it and being shot down a long time ago.

    Home owning democracy and all that.

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  • Thanks for the downloads, I’ve now listened to the programme.

    I do find it desperately disappointing how they always manage to skirt round the real problems. Trying to find ways to ‘help’ ftbers disguising the fact they’re simply trying to help themselves still further.

    Talk of ‘lack of available housing’ but not really approaching multiple ownership with any vigour.

    It really is so blindingly obvious that allowing people to buy holiday homes and btl investments is the main route of the supply problem then combined with 10 years of lax lending to add fuel to the fire.

    It seems ok to support those daft enough to have over extended themselves and do absolutely nothing for those without a house atall.

    All I see is more of the sane and it’s very depressing.

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  • More of the same – definately not sane !

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  • general congreve says:

    There is no lack of supply, the argument is a total lie. Does anyone here know of anyone who doesn’t have a roof over their heads?

    The only factor affecting supply is negative real interest rates and SMI keeping the overleveraged BTLers and home buyers that came late to the HPI party from being forced sellers.

    In a free and fair market we would have all the supply FTBers required, and at sensible prices to boot.

    The BoE and government’s meddling will eventually backfire on them, as the inflation that their ZIRP and QE policies are causing is still creating financial pressures for homeowners and landlords, just from a different direction and ultimately will force up interest rates via the gilts markets when bond holders decide enough is enough.

    Unfortunately ZIRP and QE don’t just negatively effect the overleveraged, they also punish savers and anyone who earns pounds or buys stuff in pounds.

    But to be fair, when they sink the pound and the country with their recklessness, I’ll be laughing, so I shouldn’t be too critical.

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