House prices to rise 50% in next 10 years, London to double...

Uh_huh_him · Nov 6, 2024

Weststander said:
I largely agree, but we need millions more private homes too. Not least to give the huge overall contribution from S106, CIL and land at cost for the social housing. No UK government would ever have the vast sums required to build millions of council houses. I see in my work the true development costs ... even excluding land and developers profits, building homes in 2024 in the UK is incredibly expensive, we've a belt n braces approach with a raft of standards, concerns, rights, planning battle costs.

I'm sure you're right, but continually looking to partner with private companies to "solve" the problem, isn't going to work.
Drip-feeding new properties into the private sector is not reducing the overall increase in rent and ownership costs.

There is a need for some radical changes in this area.
The situation is only going to get worse.

Weststander · Nov 6, 2024

Uh_huh_him said:
I'm sure you're right, but continually looking to partner with private companies to "solve" the problem, isn't going to work.
Drip-feeding new properties into the private sector is not reducing the overall increase in rent and ownership costs.

There is a need for some radical changes in this area.
The situation is only going to get worse.

I was referring to hard cash from developers paid to councils/social housing providers.

We already see housing associations develop significantly eg Hyde.

abc · Nov 6, 2024

dazzer6666 said:
How do you collect that from all those that have a house but no spare cash ?

If you have large amounts of equity in your house then you can borrow, if necessary, against this to pay your tax. Perhaps the tax should only apply to houses over a certain value and no doubt an allowance for typical repairs etc.

abc · Nov 6, 2024

dsr-burnley said:
Supply and demand, that's what drives prices.

When I did my economics degree, the law of supply and demand was fundamental to every theory that followed. But there were examples where even this model failed when either the supply side or demand side got way, way, out of kilter. World food supply and demand was (still is) an example.

Housing is now in this bracket. Building more is absolutely essential but direct intervention (state financed council housing, rent controls etc) is required now and urgently, as the gap between S and D is increasing rapidly

Weststander · Nov 6, 2024

abc said:
When I did my economics degree, the law of supply and demand was fundamental to every theory that followed. But there were examples where even this model failed when either the supply side or demand side got way, way, out of kilter. World food supply and demand was (still is) an example.

Housing is now in this bracket. Building more is absolutely essential but direct intervention (state financed council housing, rent controls etc) is required now and urgently, as the gap between S and D is increasing rapidly

There's also the fundamental of construction/experts costs, materials costs.

New house prices won't necessarily fall because a load of them are being built.

dsr-burnley · Nov 6, 2024

abc said:
When I did my economics degree, the law of supply and demand was fundamental to every theory that followed. But there were examples where even this model failed when either the supply side or demand side got way, way, out of kilter. World food supply and demand was (still is) an example.

Housing is now in this bracket. Building more is absolutely essential but direct intervention (state financed council housing, rent controls etc) is required now and urgently, as the gap between S and D is increasing rapidly

If there is not enough supply, then you need to either increase the supply or reduce the demand. If it's council houses, that's fine because that will increase the supply. Rent controls will do neither; experience of when that has been tried (eg. in Scotland now) is that it will increase rent prices and push houses from the rental sector to the buy sector, but that won't affect supply or demand because there is still 1 house in the market, and the reduction of 1 demand unit of the house buyer is offset by the increase of 1 demand unit by the homeless tenant.

It's possible via government intervention to increase supply by putting huge penalties (or repossession) on people owning empty houses, and by heavily restricting the holiday market, but surely that's getting too statist and intrusive. (Besides driving people abroad for their holidays and hitting the economy that way.)

dsr-burnley · Nov 6, 2024

Weststander said:
There's also the fundamental of construction/experts costs, materials costs.

New house prices won't necessarily fall because a load of them are being built.

If more houses are built, the prices of older houses or houses in slightly less popular areas will fall.

If costs of land are excluded, it's certainly possible to build good quality semis for £200k and less. Terraces could presumably be built cheaper. Over most of the country, that gives good potential for profit even allowing for house price reductions and (presumably, if the government's planning rules go well) reduction in cost of building land.

Peteinblack · Nov 6, 2024

happypig said:
Rent control, as seen in other parts of Europe, and far more aggressive taxation on rental income would be a good start in helping to stop this madness.

Yeah, but given the outcry from wealthy vested interests and Tory newspapers after last week's budget hikes on Inheritance and Capital Gains Taxes, we can imagine the apoplectic fury if government tried to place limits on rents (or the number of properties that any individual can own), or raised taxes on rental income.

We'd all drown under the crocodile tears of landlords moaning about how the people who would suffer the most would be their tenants and other renters.

Personally, I think that every time a greedy, parasite, buy-to-let landlord sells-up (moaning that they've been driven-out by a vindictive government), that is another property that a young couple or family have the chance to buy themselves, and escape from a lifetime of renting.

Weststander · Nov 6, 2024

dsr-burnley said:
If more houses are built, the prices of older houses or houses in slightly less popular areas will fall.

If costs of land are excluded, it's certainly possible to build good quality semis for £200k and less. Terraces could presumably be built cheaper. Over most of the country, that gives good potential for profit even allowing for house price reductions and (presumably, if the government's planning rules go well) reduction in cost of building land.

We could be both be correct.

In that NE Lancashire is an entirely different economic case than southern England.

To give you an idea, Blair's actions increased house prices 4 fold in just ten years in Brighton and House [sauce: HM Land Registry], making most boomers and Gen X a shedload of paper wealth. Relatively speaking, hurting another generation and those from the wrong side of the tracks here up sh1t creek.

Guinness Boy · Nov 6, 2024

Weststander said:
We could be both be correct.

In that NE Lancashire is an entirely different economic case than southern England.

To give you an idea, Blair's actions increased house prices 4 fold in just ten years in Brighton and House [sauce: HM Land Registry], making most boomers and Gen X a shedload of paper wealth. Relatively speaking, hurting another generation and those from the wrong side of the tracks here up sh1t creek.

Brighton is almost uniquely constrained though. Sea to the south, downs to the north and already a part of a conurbation. You have to build up, find old, disused sites or build on green or brown field.

We saw that with the club’s battle for Falmer. There was nowhere in the city centre to build a football ground on.

Weststander · Nov 6, 2024

Guinness Boy said:
Brighton is almost uniquely constrained though. Sea to the south, downs to the north and already a part of a conurbation. You have to build up, find old, disused sites or build on green or brown field.

We saw that with the club’s battle for Falmer. There was nowhere in the city centre to build a football ground on.

Land Registry data for Mid Sussex:
Average house price in May 1997 £83k, in March 2008 £284k
A 342% rise for us doing nothing.

Those not on the ladder and future generations lacking wealthy nsc'ers able to write huge deposits for their kids, saw their financial hopes in life dealt a severe if not fatal blow.

A mex eyecan · Nov 6, 2024

abc said:
If you have large amounts of equity in your house then you can borrow, if necessary, against this to pay your tax. Perhaps the tax should only apply to houses over a certain value and no doubt an allowance for typical repairs etc.

you try getting a mortgage or similar loan if you’re past retirement age, well unless you want to use an equity release shark at rates/deals so unfairly balanced they are not far short from being criminal.

jordanseagull · Nov 6, 2024

abc said:
If you have large amounts of equity in your house then you can borrow, if necessary, against this to pay your tax. Perhaps the tax should only apply to houses over a certain value and no doubt an allowance for typical repairs etc.

In other words, nobody will ever truly own their home.

Giraffe · Nov 6, 2024

Weststander said:
It's not going to change is it? Market forces. Labour don't claim to be able to.

The only hope is supply, Labour have a plan unlike decades of selfish nimbyism to date.

The plans include social and below-market-rent housing.

They can plan all they like but if builders don't want to build more houses they won't build more houses. It has always been thus. No chance of Labour getting anywhere near their targets.

raymondo · Nov 6, 2024

dsr-burnley said:
If there is not enough supply, then you need to either increase the supply or reduce the demand. If it's council houses, that's fine because that will increase the supply. Rent controls will do neither; experience of when that has been tried (eg. in Scotland now) is that it will increase rent prices and push houses from the rental sector to the buy sector, but that won't affect supply or demand because there is still 1 house in the market, and the reduction of 1 demand unit of the house buyer is offset by the increase of 1 demand unit by the homeless tenant.

It's possible via government intervention to increase supply by putting huge penalties (or repossession) on people owning empty houses, and by heavily restricting the holiday market, but surely that's getting too statist and intrusive. (Besides driving people abroad for their holidays and hitting the economy that way.)

Generally agree, but I would like to see restrictions on air bnb - get many/,most of these back into the market for long term lets.

Guinness Boy · Nov 6, 2024

Giraffe said:
They can plan all they like but if builders don't want to build more houses they won't build more houses. It has always been thus. No chance of Labour getting anywhere near their targets.

Why would builders not want to build houses? That's literally what they get paid for.

Bry Nylon · Nov 6, 2024

Guinness Boy said:
Why would builders not want to build houses? That's literally what they get paid for.

The big developers have 'land banks' capable of accommodating about half a million homes, but they prefer to drip-feed developments into the market over time to limit supply and keep prices at a premium. It's in their interest to build homes but definitely not in their interest to create a glut.

Weststander · Nov 6, 2024

Giraffe said:
They can plan all they like but if builders don't want to build more houses they won't build more houses. It has always been thus. No chance of Labour getting anywhere near their targets.

First bit is a fact. And where would all the additional skilled consultants and tradesmen come from?

An expansion of the developments carried out by housing associations is required.

A massive undertaking in terms of capital, training, land and other resources. Most probably only touched the sides by 2028.

In the inter-war years and post-WW2 large tracts of beautiful countryside eg the Coombes around much smaller Brighton were bought up and just built on an army of cheap labour. Not a care in the world for special fauna and flora.

clapham_gull · Nov 6, 2024

I can embarrassingly confirm that house prices in London at least double every ten years.

Justice · Nov 6, 2024

raymondo said:
Generally agree, but I would like to see restrictions on air bnb - get many/,most of these back into the market for long term lets.

I have clients who rent many properties from landlords on long term lets and then rent them again on Air B&B for profit as a business.
Air B&B have a 90 day ruling unless you invest a bit into the property and satisfy the local authority who then give you license to rent on Air B&B all year. It’s basically one below an HMO.

House prices to rise 50% in next 10 years, London to double...

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