How far will house prices fall [volume 4]
Discussion
Helicopter123 said:
skwdenyer said:
Here's what I would do...socialism
I've edited that down a touch for you.I'm a landlord and have been a long term tenant of employer-provided accommodation (MOD). Very few right-thinking people can feel that what we have now, for anyone, is the best way possible, surely?
Interesting as this discussion is, it’s not on the subject of house prices and there is a BTL thread running concurrently. I thought I was reading that in fact :laugh;
There is a massive tax advantage for owner occupiers; CGT exemption for the principal private residence. But the effect of CGT is to reduce churn of BTL property, which must be counter-productive to a free market.
There is a massive tax advantage for owner occupiers; CGT exemption for the principal private residence. But the effect of CGT is to reduce churn of BTL property, which must be counter-productive to a free market.
Rovinghawk said:
edh said:
Nothing must interfere with the landlords "right" to his rents....
It's a business contract. Nobody is forcing anyone into it. I provide a good service for a sensible price & have happy clients. Why does anyone feel the need to interfere for some alleged greater good? The only result of the interference & higher cost is higher rents & a shorter supply. Thanks to the additional rules & regulations I won't be buying/refurbing/letting any more houses & won't improve the shortage of decent places. If you think that's a good thing for society or anyone else then you're welcome to your delusions of social justice.
Btw Adam Smith, a noted proponent of free markets, characterised them as "free from rent seeking".
There are many voices on the right, centre and left who are proposing the Henry George solution of a land value tax. This would capture the rental value of land while leaving property owners free to make money from their own improvements to that land.
This is not a socialist solution, in fact many on the left have a blind spot wrt land.
High land prices are a disaster for our economy and skew investment massively towards land and property.
"Happy clients" maybe, but perhaps they could be much happier with cheaper land? Then they could afford their own house. (Dont try and tell me the % of renters has increased dramatically because people have decided its much more preferable to owning.) Your action or inaction doesn't affect the supply of land so why would anyone lose out if you and others decided to forego the joys of being a landlord?
Rovinghawk said:
You want change for what you see as societal good but I have to take the pain for it when I don't see the gain.
Can you see why I don't like your idea?
All investments have political & regulatory risk. Given the increase in renting (and just as important parents worried that their kids will be stuck) BTL does have risks. I can see why you don’t like ideas that would reduce your wealth or income doesn’t mean they won’t happen (see Osborne’s tax changes)Can you see why I don't like your idea?
edh said:
You (and / or your finance company) get rich on the work of others.
Power to the people, comrade. I thought I'd got rich on my own work.edh said:
"Happy clients" maybe, but perhaps they could be much happier with cheaper land? Then they could afford their own house. (Dont try and tell me the % of renters has increased dramatically because people have decided its much more preferable to owning.)
Pretty much regardless of house prices there are many who can't handle (& don't want) the responsibilty of owning their own home.edh said:
Your action or inaction doesn't affect the supply of land so why would anyone lose out if you and others decided to forego the joys of being a landlord?
1 I'd lose out & don't see why I should just for your Utopian vision.2 Those who now can't rent anywhere would lose out from the shortage of rental housing supply.
talk about a chip on your shoulder chapedh said:
Unfortunately not, as by your own definition you are a landlord.
Buying a wreck, buying tools and materials, occasionally hiring contractors and mostly doing the refurbishment myself is work. Doing the LL admin and repairs is work.
Whilst some marxists believe that LLs just sit back oppressing the masses whilst artificially inflating house prices beyond the reach of 'proper' people there is an awful lot of work involved & a certain amount of societal benefit. I earn my money by providing a needed service.
House prices will not magically come crashing down within the reach of the proletariat if we punish the bourgeois capitalists, comrade.
I also like the way you admit to believing in taxing others than yourself.
Jobbo said:
Interesting as this discussion is, it’s not on the subject of house prices and there is a BTL thread running concurrently. I thought I was reading that in fact :laugh;
I'd say that it is one of the biggest factors in house prices at the moment, in my area at least.My area has a lot of BTL, and the lack of new money coming in has been noticeable. One and two bed flats have really fallen in price over the past couple of years, whilst houses have dropped much less.
Where flats are selling, I am not seeing the classic situation of the 'Sold' sign being taken down and immediately replaced with a 'To Let' one. In fact, a few of the flats in my direct area that I know have been long term rentals are now on the market themselves
kingston12 said:
One and two bed flats have really fallen in price over the past couple of years, whilst houses have dropped much less.
Where flats are selling................
In fact, a few of the flats in my direct area that I know have been long term rentals are now on the market themselves
You say flat prices have dropped significantly but reading between the lines they're still not selling- is that the case or am I misunderstanding you?Where flats are selling................
In fact, a few of the flats in my direct area that I know have been long term rentals are now on the market themselves
Rovinghawk said:
You say flat prices have dropped significantly but reading between the lines they're still not selling- is that the case or am I misunderstanding you?
The market has really slowed, but those at the new lower prices seem to be selling. As ever, the message is understandably a hard one to take and a lot of people are still putting flats on at last year's price plus a few percent. Those ones definitely aren't selling and look a bit disconnected from where the market now seems to be.
Houses seem less affected in that prices have flattened or only slightly reduced and they still selling.
Only the 'trophy' houses are selling quickly at prices higher than last year (anyone who comes from outside the area would rightly ridicule my use of the word trophy here, but it is based on convenience of location rather than anything else.)
The politicians forcing landlords out by increasing taxation doesn’t really work.
The above kind of proves it. Less landlords, cheaper property, but not enough private buyers, just more tenants fighting over a decreasing supply of housing which, yup, puts the rents up. And puts increasing pressure on councils to provide more housing.
Yes, I’m a landlord. I’ve dragged three Btl properties into the modern world so far, mostly with my own hands. Discussion here about selling up and buying Fundsmith - oh yes. Frequently.
Keep the pressure up on landlords and you would get more and more selling up. Prices drop. Great. People can now buy not rent. But in my admittedly limited experience, tenants are tenants due to a past history that prevents banks lending to them. So they don’t buy. The way round it was America’s wheeze of giving mortgages to anybody that asked. 2008 was the result.
Those btl-ed to the hilt will go bankrupt if prices drop too much. Serves them right, right? Further drops. Which then affect private owners with similar properties. With now seriously neg-eq mortgages.
Dunno what the answer is, but restricting the rental market too much will see people sleeping on the streets and has the potential to cause another recession.
The above kind of proves it. Less landlords, cheaper property, but not enough private buyers, just more tenants fighting over a decreasing supply of housing which, yup, puts the rents up. And puts increasing pressure on councils to provide more housing.
Yes, I’m a landlord. I’ve dragged three Btl properties into the modern world so far, mostly with my own hands. Discussion here about selling up and buying Fundsmith - oh yes. Frequently.
Keep the pressure up on landlords and you would get more and more selling up. Prices drop. Great. People can now buy not rent. But in my admittedly limited experience, tenants are tenants due to a past history that prevents banks lending to them. So they don’t buy. The way round it was America’s wheeze of giving mortgages to anybody that asked. 2008 was the result.
Those btl-ed to the hilt will go bankrupt if prices drop too much. Serves them right, right? Further drops. Which then affect private owners with similar properties. With now seriously neg-eq mortgages.
Dunno what the answer is, but restricting the rental market too much will see people sleeping on the streets and has the potential to cause another recession.
kingston12 said:
The market has really slowed, but those at the new lower prices seem to be selling.
As ever, the message is understandably a hard one to take and a lot of people are still putting flats on at last year's price plus a few percent. Those ones definitely aren't selling and look a bit disconnected from where the market now seems to be.
Houses seem less affected in that prices have flattened or only slightly reduced and they still selling.
Interesting stuff - do you think the stuff stuck at last years prices is private or landlord?As ever, the message is understandably a hard one to take and a lot of people are still putting flats on at last year's price plus a few percent. Those ones definitely aren't selling and look a bit disconnected from where the market now seems to be.
Houses seem less affected in that prices have flattened or only slightly reduced and they still selling.
andy43 said:
Interesting stuff - do you think the stuff stuck at last years prices is private or landlord?
Hard to say, I think it is a mixture of both. I only know for sure about the ones really local to me and it is too small a sample size. There is one that is definitely still tenanted and it is on the market for a slightly lower price than it would have been last year, but still doesn't look too competitive now.It used to be easy to spot a long term rental when it came onto the market just because it would be in worse condition than most of the others. That just doesn't cut it any more and those flats are just as likely to be in good condition as the owner occupied ones.
andy43 said:
The politicians forcing landlords out by increasing taxation doesn’t really work.
The above kind of proves it. Less landlords, cheaper property, but not enough private buyers, just more tenants fighting over a decreasing supply of housing which, yup, puts the rents up. And puts increasing pressure on councils to provide more housing.
Yes, I’m a landlord. I’ve dragged three Btl properties into the modern world so far, mostly with my own hands. Discussion here about selling up and buying Fundsmith - oh yes. Frequently.
Keep the pressure up on landlords and you would get more and more selling up. Prices drop. Great. People can now buy not rent. But in my admittedly limited experience, tenants are tenants due to a past history that prevents banks lending to them. So they don’t buy. The way round it was America’s wheeze of giving mortgages to anybody that asked. 2008 was the result.
Those btl-ed to the hilt will go bankrupt if prices drop too much. Serves them right, right? Further drops. Which then affect private owners with similar properties. With now seriously neg-eq mortgages.
Dunno what the answer is, but restricting the rental market too much will see people sleeping on the streets and has the potential to cause another recession.
This is exactly what I could see happening. The above kind of proves it. Less landlords, cheaper property, but not enough private buyers, just more tenants fighting over a decreasing supply of housing which, yup, puts the rents up. And puts increasing pressure on councils to provide more housing.
Yes, I’m a landlord. I’ve dragged three Btl properties into the modern world so far, mostly with my own hands. Discussion here about selling up and buying Fundsmith - oh yes. Frequently.
Keep the pressure up on landlords and you would get more and more selling up. Prices drop. Great. People can now buy not rent. But in my admittedly limited experience, tenants are tenants due to a past history that prevents banks lending to them. So they don’t buy. The way round it was America’s wheeze of giving mortgages to anybody that asked. 2008 was the result.
Those btl-ed to the hilt will go bankrupt if prices drop too much. Serves them right, right? Further drops. Which then affect private owners with similar properties. With now seriously neg-eq mortgages.
Dunno what the answer is, but restricting the rental market too much will see people sleeping on the streets and has the potential to cause another recession.
To put some numbers to my previous post, what I am seeing is average 2 bed flats coming down from, say, £425-£450k to more like £350-£375k.
That is a fairly large percentage fall, but I am not sure it really helps that many more people to afford them if they have got limited incomes and/or previous credit issues.
A further fall to below £300k would allow a lot more people to buy, but that represents quite a significant crash and probably requires more than just BTL bailing out of the market.
It is similar to the new build situation. Plenty of tiny one bed flats are being built near me for near-£600k, but most potential owner-occupiers can't afford them and BTL don't want them because the yield and potential for capital growth is far too small.
I don't know what the right answer is, but most of what has been proposed so far certainly doesn't seem to solve much.
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