Affordable homes shortage in Sussex (From The Argus)

nothing new here, the problem has existed since the last century

what is classed as 'affordable'? we keep seeing this phrase, but what may be affordable to one, won't necessarily be affordable to another. can someone please state what exactly affordable housing is? if they mean local authority, or 'council', housing, many councils have out shopped their housing to housing trusts, and no longer own any properties themselves. those that do have thier own housing stocks have let many get into disrepair, and will not fund the jobs of putting them right. how many properties in the brighton area are boarded up awaiting modernisation, yet there is a long waiting list for homes. the council, and many other councils, need to address this situation most urgently, and fill the empty homes, before building new ones.

Stop building firms putting up expensive houses on any land however small and make the council or even private builders build low cost housing.

the problem is that about 85% of the geographical surface of Britain is owned by The Duke of Westminster, the Duke of Sutherland, the Duke of Buccleigh (who got his head knocked 'orf by a golfball) and evil twin evils of the Duchy of Lancaster and the Duchy of Cornwall. This means that there's hardly any other land left for people to build houses on and the prices are sky high. It's been going on since about 1066 when these evil Plantagenate Norman loons invaded and stole all the land.

I too would like to know what is meant by the term "Affordable Housing". Does this mean that all the other houses within the county are unaffordable?

And what qualifies someone to be at the front of the queue to purchase an "affordable home"? Is it someone that has only ever paid tax after tax after tax under this goverment and taken nothing in return in the way of benefits and handouts? No I suspect not. Those of us in that position would be told we fall outside the requirements no doubt.

Pandering to those who want to live on hand outs is ruining this country. Thats why I'm moving to the UAE in 6 weeks where I plan to spend as much of my huge tax free salary pumping petrol into my gas guzzling 4x4 (or do I plump for the Porsche Cayman?).

They don't have a welfare state in the UAE. If you cant be a**sed to work they chop your hands off, or just throw you into the foundations of a new high rise tower. My kinda place.

So long.

"I will not let the housing market rise out of control" (c) G Brown 2004

... and then he did because he needed it to prop up his failing economy.

And look where we are now!!

Masterchav wrote:
"I will not let the housing market rise out of control" (c) G Brown 2004 ... and then he did because he needed it to prop up his failing economy. And look where we are now!!

I love that quote by Mr B.

This country is seriously f**ked.

Building some "affordable homes" in Adur is not going to rescue it!!

Dwayno wrote:
I too would like to know what is meant by the term "Affordable Housing". Does this mean that all the other houses within the county are unaffordable?

And what qualifies someone to be at the front of the queue to purchase an "affordable home"? Is it someone that has only ever paid tax after tax after tax under this goverment and taken nothing in return in the way of benefits and handouts? No I suspect not. Those of us in that position would be told we fall outside the requirements no doubt.

Pandering to those who want to live on hand outs is ruining this country. Thats why I'm moving to the UAE in 6 weeks where I plan to spend as much of my huge tax free salary pumping petrol into my gas guzzling 4x4 (or do I plump for the Porsche Cayman?).

They don't have a welfare state in the UAE. If you cant be a**sed to work they chop your hands off, or just throw you into the foundations of a new high rise tower. My kinda place.

So long.

it is not only those on benefits who live in council housing, but those who work for lower than average wages. shop workers, bus drivers, postmen, council workers, the list is endless. there are also some well off people in local authority homes, as they qualified before they did well for themselves. i firmly believe that people on benefits should get no preferential treatment, and join the queue like everyone else. the same should apply to kids who have kids, if that makes sense, and if they want kids at 16 then their own families should foot the bill. this is a debate on its own, so i won't go there, but hopefully you get my drift!

Affordable means that the council has offered a developer something they wouldn't normally be given which allows them to make an enormous profit and in return they build some cheap houses that will be slums in a few years time. Another name for this is corruption.

Affordable means that the council has offered a developer something they wouldn't normally be given which allows them to make an enormous profit and in return they build some cheap houses that will be slums in a few years time. Another name for this is corruption.

Soundbites from Shelter. The only way to pay for 'affordable' housing is off the back of bigger non-affordable schemes and Shelter must have been living on a different planet for the last 18 months if they think there's much of that going on.

davyboy wrote:

Dwayno wrote: I too would like to know what is meant by the term "Affordable Housing". Does this mean that all the other houses within the county are unaffordable? And what qualifies someone to be at the front of the queue to purchase an "affordable home"? Is it someone that has only ever paid tax after tax after tax under this goverment and taken nothing in return in the way of benefits and handouts? No I suspect not. Those of us in that position would be told we fall outside the requirements no doubt. Pandering to those who want to live on hand outs is ruining this country. Thats why I'm moving to the UAE in 6 weeks where I plan to spend as much of my huge tax free salary pumping petrol into my gas guzzling 4x4 (or do I plump for the Porsche Cayman?). They don't have a welfare state in the UAE. If you cant be a**sed to work they chop your hands off, or just throw you into the foundations of a new high rise tower. My kinda place. So long.

it is not only those on benefits who live in council housing, but those who work for lower than average wages. shop workers, bus drivers, postmen, council workers, the list is endless. there are also some well off people in local authority homes, as they qualified before they did well for themselves. i firmly believe that people on benefits should get no preferential treatment, and join the queue like everyone else. the same should apply to kids who have kids, if that makes sense, and if they want kids at 16 then their own families should foot the bill. this is a debate on its own, so i won't go there, but hopefully you get my drift!

I totally get your drift. It is more to do with the fact that so many homes are now "unaffordable". I'm a high earner, but cannot get together the £40K deposit required to buy a modest two bed flat. As you say, a different debate. I think it's fair to say the UK is in a bit of a pickle!!!!

Affordable yes we need more, but please not more social housing for lazy bums that can't be bothered to work, what we need is low cost housing of good quality for people that are working and simply can't afford to get a mortgage! I'm not saying all people out of work are lazy bums, some unfortunately may have lost their job or be disabled in some way or ill, and yes these people deserve help, but there is an increasing amount of people that have no wish what so ever to work (even on a voluntary basis) and expect everything given to them! it is this type that I am talking about!.

Crikey, not this old debate again, private developers have to make a profit otherwise why would they bother doing it, the builders building the houses have to be paid, suppliers of building material have to be paid.... the only way to make housing more affordable is for councils to make available land they own, to developers to build on thereby the 33% typical land cost of a development can be omitted, i.e. houses are 66% of TRUE market value, and make it a condition that only those on an average income can buy them... Tricky isn't it....

Failing that, people will have to move to more affordable areas, rather than the most popular ones like Brighton & Hove!

For example my parents large 4 bed detached house with large garden & garage, up North is only worth around £180k, and a friend has just bought a huge 3 bed semi in Peacehaven for only £225k, that was 3 months ago!

It's known as supply & demand folks, if nobody wanted to live here, a typical 2 bed flat would be around £50k not the average £180k/200k plus in Brighton...

Either accept it, or move somewhere less fashionable, it's not rocket science is it!

Masterchav wrote:
"I will not let the housing market rise out of control" (c) G Brown 2004

... and then he did because he needed it to prop up his failing economy.

And look where we are now!!

The single most stupid thing that man has said, before proceeding to do exactly that, relying on his ponzi scheme to win votes and make everyone feel rich.

save for a deposit like we used to, or go and live up north. we have far too many affordable boxes already built spoiling the south east. the more that are built the more people will come and the infrastructure does not accommodate so many people. builders will not build these affordable homes when they can get better money for more attractive homes and I dont blame them, we need attractive homes not boxes that will not last the test of time.

Dwayno wrote:
I too would like to know what is meant by the term "Affordable Housing". Does this mean that all the other houses within the county are unaffordable?

And what qualifies someone to be at the front of the queue to purchase an "affordable home"? Is it someone that has only ever paid tax after tax after tax under this goverment and taken nothing in return in the way of benefits and handouts? No I suspect not. Those of us in that position would be told we fall outside the requirements no doubt.

Pandering to those who want to live on hand outs is ruining this country. Thats why I'm moving to the UAE in 6 weeks where I plan to spend as much of my huge tax free salary pumping petrol into my gas guzzling 4x4 (or do I plump for the Porsche Cayman?).

They don't have a welfare state in the UAE. If you cant be a**sed to work they chop your hands off, or just throw you into the foundations of a new high rise tower. My kinda place.

So long.

Lots of Brits work and live in the UAE, a Muslim state. At the moment it is sort of friendly to westerners. But how long is that going to last for? Also look at their laws. Not allowed to show affection to your loved one in a public place!

I respect other countries laws and the people. They have their laws and the bottom line is that foreigners obey them. But I for one would never recommend anyone to set foot in any Muslim country - not if you value freedom and democracy.

"Affordable homes shortage in Sussex"
Yup. Tell us something we don't know....
Until a strong government penalises all those 'buy to let' investors nothing will happen, and prices will continue to rise.

Nyberg wrote:
"Affordable homes shortage in Sussex"
Yup. Tell us something we don't know....
Until a strong government penalises all those 'buy to let' investors nothing will happen, and prices will continue to rise.

Apparently the taxman is going after all the buy to let and property 'investors' with a vengance because all this misplaced faith in the property market has led, ironically to the government coffers being empty!

Now, where's my violin.

Big Nasty wrote:
Affordable yes we need more, but please not more social housing for lazy bums that can't be bothered to work, what we need is low cost housing of good quality for people that are working and simply can't afford to get a mortgage! I'm not saying all people out of work are lazy bums, some unfortunately may have lost their job or be disabled in some way or ill, and yes these people deserve help, but there is an increasing amount of people that have no wish what so ever to work (even on a voluntary basis) and expect everything given to them! it is this type that I am talking about!.

i fully believe that to be at the top of the ladder, you need to be working, but not earning enough to get a mortgage, i.e helping yourself. those that don't pay in by deliberately not working don't deserve the help. those in receipt of certain disability benefits should also qualify, as they cannot work. there is too much take and not enough give from certain parts of the community.

This from the newspaper that cheers every report that announces an increase in the price of houses?

Surely you can spot the correlation between a lack of affordable housing and government sponsored house price inflation?

First time buyers needn't despair as there will be affordable housing soon enough. Once the government runs out of the tax payers money it is using to keep banks balance sheets intact by propping up inflated house prices.

fatboyjim wrote:
This from the newspaper that cheers every report that announces an increase in the price of houses?

Surely you can spot the correlation between a lack of affordable housing and government sponsored house price inflation?

First time buyers needn't despair as there will be affordable housing soon enough. Once the government runs out of the tax payers money it is using to keep banks balance sheets intact by propping up inflated house prices.

Exactly. Every increase in house prices is a total disaster for our economy. Cheering a rise just shows a total lack of understanding of the situation.

There are thousands of empty homes across Britain which are owned by 'companies', some from overeas investors, who do not let them out, they sit empty as part of an investment portfolio, waiting for the value to improve enough for re-sale. This type of purchasing should be heavily taxed as it is a practice which takes homes out of circulation.
In addition to this, councils are renting homes from private landlords for tenants and paying rents which are kept artificially high by the fact that councils do not have commercial departments which tender for competitive rental prices. I know councils paying £800 a month for a two bedroom flat for its tenants when the flat next door is rented by a non-council couple for £650. This failure to drive rental prices down by councils has also kept all rental prices high and fuelled the buy-to-let market.
Renting used to be cheaper than having a mortgage, now it is cheaper to have a mortgage if you can secure one which is why the British scramble to buy properties unlike in Europe where renting is normal.

TheInsider wrote:
There are thousands of empty homes across Britain which are owned by 'companies', some from overeas investors, who do not let them out, they sit empty as part of an investment portfolio, waiting for the value to improve enough for re-sale. This type of purchasing should be heavily taxed as it is a practice which takes homes out of circulation. In addition to this, councils are renting homes from private landlords for tenants and paying rents which are kept artificially high by the fact that councils do not have commercial departments which tender for competitive rental prices. I know councils paying £800 a month for a two bedroom flat for its tenants when the flat next door is rented by a non-council couple for £650. This failure to drive rental prices down by councils has also kept all rental prices high and fuelled the buy-to-let market. Renting used to be cheaper than having a mortgage, now it is cheaper to have a mortgage if you can secure one which is why the British scramble to buy properties unlike in Europe where renting is normal.

Excellent post.
In additon renting is more normal in Europe because they deal in long term, assured tenancies, whereas here everything apart from council and housing association lets are short term, giving no security to the tenant.

Nyberg you are also right about tenancies. I took out a mortgage after 20 years of renting and getting fed up with being moved on every two to three years as landlords don't like long term tenants.
Also rents sky-rocketed as amateur buy-to-letters got mortgages and charges rents to cover the sky high mortgage they had, unlike previous landlords who had made money themselves in business, then bought a property and the rents were realistic.
I have friends who are still renting who now phone letting agents and barter for prices as there is so much rental property on the market.
Go for it renters. Drive down the prices.

No council has ever and will ever keep up with demand for housing.It is a non starter and will continue to be a non starter to house the whole population.Private sector renting is crucial and will continue to be so."Councils can't deliver affordable homes",what's new?

TheInsider wrote:
Nyberg you are also right about tenancies. I took out a mortgage after 20 years of renting and getting fed up with being moved on every two to three years as landlords don't like long term tenants.
Also rents sky-rocketed as amateur buy-to-letters got mortgages and charges rents to cover the sky high mortgage they had, unlike previous landlords who had made money themselves in business, then bought a property and the rents were realistic.
I have friends who are still renting who now phone letting agents and barter for prices as there is so much rental property on the market.
Go for it renters. Drive down the prices.

Indeed, I bartered my rent down by £50pcm.

And before you decide to employ a landlord, make sure you credit check them to make sure they're not about to be repossessed!

TheInsider wrote:
There are thousands of empty homes across Britain which are owned by 'companies', some from overeas investors, who do not let them out, they sit empty as part of an investment portfolio, waiting for the value to improve enough for re-sale. This type of purchasing should be heavily taxed as it is a practice which takes homes out of circulation.
In addition to this, councils are renting homes from private landlords for tenants and paying rents which are kept artificially high by the fact that councils do not have commercial departments which tender for competitive rental prices. I know councils paying £800 a month for a two bedroom flat for its tenants when the flat next door is rented by a non-council couple for £650. This failure to drive rental prices down by councils has also kept all rental prices high and fuelled the buy-to-let market.
Renting used to be cheaper than having a mortgage, now it is cheaper to have a mortgage if you can secure one which is why the British scramble to buy properties unlike in Europe where renting is normal.

Well a mortgage can be cheaper, but only because of such low interest rates. When they go up, this will change.

It can appear cheaper to 'own' just based on monthly repayments but that doesn't factor in all the other costs involved.

But generally, to get a 95% loan to value (which you can't anymore) you'd be paying a lot more per month than renting the same place, with prices being as overvalued as they are at the moment, despite the recent reductions from the first stage of the crash.

There is a BUYERS STRIKE going on in the UK property market, and has been since the beginning of 2008 - with no sign of the BUYERS STRIKE ending. Why is there a BUYERS STIKE going on? Simply because Estate Agents have not woken up to the new economic reality which means that the money that supported the boom time house prices (and current asking prices) does not exist - if it did the Banks, economy, etc. wd go bust again. The Buyers Strike is evidenced by the Land Registry data for completed house sales. For eg in Worcester the number of properties sold each yr since 2006 is as follows:
2006 - 2690 properties sold
2007 - 2179 sold
2008 - 1180
2009 - 811 sold by end of October, so heading towards about 973 for the complete yr.
So, in Worcester in 2009, property sales collapsed by 64% compared to 2006. In effect, 64% of the population that wd normally be buying property are taking part in a Buyers Strike.
The same pattern of collapsed property sales in found in cities and towns right across the country including Brighton, Hove, etc. (check for yourselves).
Estate Agents are living in fantasy land are are still setting fantasy, boom time levels of asking price. The Buyers Strike will continue (& grow bigger) if they keep doing this, and will continue until asking prices are reduced by 30% or more.

The lack of affordable homes is only being created by unrealistic asking prices set by Estate Agents. House prices have to (this is the economic reality) reflect the amount of credit available for lending. Credit availability crashed because the amounts that were available (and supported the boom time house prices - which are still reflected in todays asking prices) caused Banks and the wider economy to go bust. Estate Agents are in fantasy land if they think credit levels will ever go back to 2007 levels again (certainly not in our life times). Estate Agents are being shouted at by the Banks (the credit does not exist to support your stupidly greedy asking prices) and potential buyers are also shouting at Estate Agents (we will remain on a Buyers Strike) until you start reducing asking prices to levels that we can actually afford and get credit for - ie 30% - 40% lower than now. But Estate Agents seem to be totally deaf, living in their own fantasy land, and not intelligent enough to understand the economics of the environment they are trying to run a business in.
The more they dig their heels in and don';t cut prices drastically the longer and bigger the BUYERS STRIKE will go on/become. The more they try to talk up the market the more people will join the Buyers Strike. The ball is in your court Estate Agents.
Inevitably house prices will fall 30% or more and we will have our affordable housing.

my wife and I are more people on buyers strike!, we were going to move out of Worthing to somewhere in the country but due to the silly money being asked for by greedy estate agents and sellers that cannot see the truth about the state of the housing market we have decided to stay where we are until prices inevitably come down to sensible levels, it's not that we can't afford it, it's that I WON'T line the greedy agent's pockets!.

Totally agree with the BUYERS STRIKE comments. I have a very healthy deposit and run a business which gives me a decent wage. And i'm perfectly happy renting until normality resumes and houses currently valued at £500k are closer to £250k.

If you are one of the 90 Brightonians who put your house on the market in the last 2 weeks asking for in excess of half a million pounds - then good luck to you. At traditional lending levels (which like it or not the banks will be reverting to later this year when they need to start repaying their own huge loans) you are waiting for someone earning in excess of £100k per year with a very decent deposit. You will at least get to enjoy the thrill of chasing the market down though.

fatboyjim wrote:
Totally agree with the BUYERS STRIKE comments. I have a very healthy deposit and run a business which gives me a decent wage. And i'm perfectly happy renting until normality resumes and houses currently valued at £500k are closer to £250k. If you are one of the 90 Brightonians who put your house on the market in the last 2 weeks asking for in excess of half a million pounds - then good luck to you. At traditional lending levels (which like it or not the banks will be reverting to later this year when they need to start repaying their own huge loans) you are waiting for someone earning in excess of £100k per year with a very decent deposit. You will at least get to enjoy the thrill of chasing the market down though.

If you're waiting on a 500k house dropping to 250k,you'd be wasting your time as it's not gonna' happen.Advising the people you don't like to rent until house prices drop is a good idea,lol.Renting is throwing your money,they'll never be any return on it.

affordable homes are for useless people and/or keyworkers
these subsidized homes are mostly paid for by people who are stuggling to pay their mortgages and market rents

jon s wrote:

fatboyjim wrote:
Totally agree with the BUYERS STRIKE comments. I have a very healthy deposit and run a business which gives me a decent wage. And i'm perfectly happy renting until normality resumes and houses currently valued at £500k are closer to £250k. If you are one of the 90 Brightonians who put your house on the market in the last 2 weeks asking for in excess of half a million pounds - then good luck to you. At traditional lending levels (which like it or not the banks will be reverting to later this year when they need to start repaying their own huge loans) you are waiting for someone earning in excess of £100k per year with a very decent deposit. You will at least get to enjoy the thrill of chasing the market down though.

If you're waiting on a 500k house dropping to 250k,you'd be wasting your time as it's not gonna' happen.Advising the people you don't like to rent until house prices drop is a good idea,lol.Renting is throwing your money,they'll never be any return on it.

Well it's happened before, and as markets are notoriously cyclical - it could happen again, yes even in Brighton, particularly as the Brownturn in the economy is so much worse this time than previous recessions.

jon s wrote:

fatboyjim wrote: Totally agree with the BUYERS STRIKE comments. I have a very healthy deposit and run a business which gives me a decent wage. And i'm perfectly happy renting until normality resumes and houses currently valued at £500k are closer to £250k. If you are one of the 90 Brightonians who put your house on the market in the last 2 weeks asking for in excess of half a million pounds - then good luck to you. At traditional lending levels (which like it or not the banks will be reverting to later this year when they need to start repaying their own huge loans) you are waiting for someone earning in excess of £100k per year with a very decent deposit. You will at least get to enjoy the thrill of chasing the market down though.

If you're waiting on a 500k house dropping to 250k,you'd be wasting your time as it's not gonna' happen.Advising the people you don't like to rent until house prices drop is a good idea,lol.Renting is throwing your money,they'll never be any return on it.

It will happen here in the south. Wait and see. The BUYERS STRIKE is happening right now, whether you like it or not. The housing market is entirely based on supply and demand. No demand? - no sale at that price.
The market cannot continue to be propped up by the government's artificially low interest rates, because those rates are totally unsustainable, and will change as soon as the general election is over in May - no matter which party gets in.
And then watch those prices fall....

jon s wrote:
"If you're waiting on a 500k house dropping to 250k,you'd be wasting your time as it's not gonna' happen.Advising the people you don't like to rent until house prices drop is a good idea,lol.Renting is throwing your money,they'll never be any return on it."

When you look at local incomes and long term trends of UK house prices and the history of boom and bust in the UK property market + the context of the worst economic crisis since the 1930s then a 50% fall in prices is not beyond the realms of possibility for the UK. A 30% - 40% nominal fall in house prices is almost unavoidable and a further 10% - 20% fall in real terms is certainly there on the cards of possibility. We had a 20% nominal fall from Autumn 2007 to Spring 2009 - only 18 months!! Also look at Japan which experienced the same financial crisis we have now but at the start of the 1990s and they also used QE and near zero Base Rate interest rates (just like our Gov) and house prices fell by 60% in 5 years followed by a further 12 years of falling prices ending up with the average house price down 75% from their peak. Currently, house prices in Japan are still lower than they were in 1990. The worst falls were in Tokoyo - in the Financial District of the City property prices fell by 99%. Across the country though, as I say, they fell by 75% on average.
Also look at the USA, Spain, Ireland etc. where house price falls of close to 50% have been experienced after the Global crash of 2007.
I have a house in Spain (no mortgage) which has already dropped by about 40% in value since the peak - I expect it to fall a lot further yet before the bottom is reached. I don't care as I plan to never sell that house + alturistically I wd like to see the younger generation get on the property ladder.
The BUYERS STRIKE in the UK will continue until Estate Agents wise up and start slashing asking prices drastically.
50% falls may not happen but they are certainly a real possibility.

Also in response to the claim that UK house prices won't fall by as much as 50% - I would point out that at the end of 2007 when the Global Crash arrived people said the UK property market would slow down. You had the usual nonsense from Estate Agents along the lines of - "prices may dip a little but will essentially stagnate" then prices dropped by 20% in 18 months. Estate Agents also said - the number of property sales may dip a bit, possibly by 2% - 4% but nothing like as big as say 10%, that just never, ever happens. In 2008, if you look at the Land Registry data for completed property sales, you will find that in, for example, Worcester the number of property sales crashed by 60% and then in 2009 they kept on crashing and collapsed by 64% compared to 2006. You find this pattern of collapsed sales numbers in towns and cities right across the country ....... but Estate Agents claimed that it was impossible, could never happen in the UK property market - but it did and is continuing right now. The Buyers Strike will continue until Estate Agents stop setting fantasy boom time asking prices and start setting realistic, sensible, sober and affordable asking prices - ie 30% or more lower than current asking prices.
Just to note - in Worcester (yes, I know it's not Brighton, etc. but you can check the stats for here yourself) during 2009 the 28 Estate Agent outlets sold, on average, just 0.7 of a property per week on average. The longer Estate Agents try to stick to their guns and refuse to face reaklity the longer and bigger the Buyers Strike will become.

The media really should be reporting about the UK property market Buyers Strike.

economist wrote:
Also in response to the claim that UK house prices won't fall by as much as 50% - I would point out that at the end of 2007 when the Global Crash arrived people said the UK property market would slow down. You had the usual nonsense from Estate Agents along the lines of - "prices may dip a little but will essentially stagnate" then prices dropped by 20% in 18 months. Estate Agents also said - the number of property sales may dip a bit, possibly by 2% - 4% but nothing like as big as say 10%, that just never, ever happens. In 2008, if you look at the Land Registry data for completed property sales, you will find that in, for example, Worcester the number of property sales crashed by 60% and then in 2009 they kept on crashing and collapsed by 64% compared to 2006. You find this pattern of collapsed sales numbers in towns and cities right across the country ....... but Estate Agents claimed that it was impossible, could never happen in the UK property market - but it did and is continuing right now. The Buyers Strike will continue until Estate Agents stop setting fantasy boom time asking prices and start setting realistic, sensible, sober and affordable asking prices - ie 30% or more lower than current asking prices. Just to note - in Worcester (yes, I know it's not Brighton, etc. but you can check the stats for here yourself) during 2009 the 28 Estate Agent outlets sold, on average, just 0.7 of a property per week on average. The longer Estate Agents try to stick to their guns and refuse to face reaklity the longer and bigger the Buyers Strike will become. The media really should be reporting about the UK property market Buyers Strike.

Economist - your posts have been fascinating.
I think there is a conspiracy of silence within the media about reporting the facts and figures of the buyers strike. It's almost as though no-one wants to mention it, because they all have houses that will devalue overnight if they bring the problem out in the open.
Instead there are endless, wall to wall tv programmes about buying houses with ludicrous asking prices, hysterically feeding an already overhyped market, hoping that if they say it often enough someone will believe them. Fiddling while Rome burns. Self serving in the extreme.
One thing you haven't mentioned with regard to this, is what I think is one of the major causes of the buyers strike.
It is absolutely impossible for most young people to get on the bottom rung of the housing ladder. If there is an extreme shortage of first time buyers, the market stagnates, and when that happens, prices have to be adjusted.
Our boys are all adult, in fulltime employment and earn reasonable money, but none of them can afford to buy without crippling themselves financially for possibly their entire working lives. So they live with us, and are waiting to see what happens in the market.
Yet another contributory factor to the BUYERS STRIKE....

"If you're waiting on a 500k house dropping to 250k,you'd be wasting your time as it's not gonna' happen.Advising the people you don't like to rent until house prices drop is a good idea,lol.Renting is throwing your money,they'll never be any return on it."

If renting is throwing your money away, what would you consider taking out an IO mortgage on a depreciating asset.

If I can't afford my rent, I can walk away. Traditionally with a mortgage, you lose your house - and still have to pay your debt. I think at that point you'd take the 'throwing money away' option.

I say traditionally because at the moment house prices are being kept inflated because hundreds of thousands of 'home owners' and 'hard working property speculators' who can't afford their repayments are being given a moratorium courtesy of the tax payer. This is not just a vote winner but mainly so that the banks can avoid revealing just how under water their loan books are.

When this QE money runs out - these debts will be called in. And when this wave of hundreds of thousands of repos hit the auctions they will set the new market price.

I'm backing my original comment by putting £250k (which I have currently sat waiting for a home) on that price being a lot lower than the madness is still being peddled today. And i'm using logic to make my decision.

Have you based your comment on anything more than wishful thinking? LOL.

fatboyjim wrote:
"If you're waiting on a 500k house dropping to 250k,you'd be wasting your time as it's not gonna' happen.Advising the people you don't like to rent until house prices drop is a good idea,lol.Renting is throwing your money,they'll never be any return on it."

If renting is throwing your money away, what would you consider taking out an IO mortgage on a depreciating asset.

If I can't afford my rent, I can walk away. Traditionally with a mortgage, you lose your house - and still have to pay your debt. I think at that point you'd take the 'throwing money away' option.

I say traditionally because at the moment house prices are being kept inflated because hundreds of thousands of 'home owners' and 'hard working property speculators' who can't afford their repayments are being given a moratorium courtesy of the tax payer. This is not just a vote winner but mainly so that the banks can avoid revealing just how under water their loan books are.

When this QE money runs out - these debts will be called in. And when this wave of hundreds of thousands of repos hit the auctions they will set the new market price.

I'm backing my original comment by putting £250k (which I have currently sat waiting for a home) on that price being a lot lower than the madness is still being peddled today. And i'm using logic to make my decision.

Have you based your comment on anything more than wishful thinking? LOL.

Nicely put sir.

fatboyjim wrote:
"If you're waiting on a 500k house dropping to 250k,you'd be wasting your time as it's not gonna' happen.Advising the people you don't like to rent until house prices drop is a good idea,lol.Renting is throwing your money,they'll never be any return on it." If renting is throwing your money away, what would you consider taking out an IO mortgage on a depreciating asset. If I can't afford my rent, I can walk away. Traditionally with a mortgage, you lose your house - and still have to pay your debt. I think at that point you'd take the 'throwing money away' option. I say traditionally because at the moment house prices are being kept inflated because hundreds of thousands of 'home owners' and 'hard working property speculators' who can't afford their repayments are being given a moratorium courtesy of the tax payer. This is not just a vote winner but mainly so that the banks can avoid revealing just how under water their loan books are. When this QE money runs out - these debts will be called in. And when this wave of hundreds of thousands of repos hit the auctions they will set the new market price. I'm backing my original comment by putting £250k (which I have currently sat waiting for a home) on that price being a lot lower than the madness is still being peddled today. And i'm using logic to make my decision. Have you based your comment on anything more than wishful thinking? LOL.

Nah,I'm not convinced,renting is goofy.Sounds like you're cutting off your nose to spite your face by not buying.You must be wasting what,12k a year on rent.Your scenario of 500k properties hitting 250k could be five years off,potentially stanking 60k of your hard earned money,and that's if it actually happens.Take my advice,go buy a house,if you want to live in one.If you want to buy a house to make money on it,don't.My house could be worth five times what I paid for it,or it could be worth 10p.It doesn't make any difference as I'm not selling.

"Nah,I'm not convinced,renting is goofy.Sounds like you're cutting off your nose to spite your face by not buying.You must be wasting what,12k a year on rent.Your scenario of 500k properties hitting 250k could be five years off,potentially stanking 60k of your hard earned money,and that's if it actually happens.Take my advice,go buy a house,if you want to live in one.If you want to buy a house to make money on it,don't.My house could be worth five times what I paid for it,or it could be worth 10p.It doesn't make any difference as I'm not selling."
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Oh dear. Do you actually think that by paying £12k a year towards a mortgage - it is paying off the mortgage when in fact in the first five years only a small fraction of your payments are paying off the loan. And thats assuming we are talking about a repayment mortgage rather than the interest only mortgages that a lot of people have got in their desperation to participate in this madness.

I'm currently renting a place for £1k per month that the landlord is trying to sell for £340K. That is well below his current mortgage payment. He is watching it drop in value and also having to fork out for the upkeep on the place (which being a regency building aint cheap).

The £1k i pay wouldnt even cover the interest payment on £340k IO mortgage. And if you think that paying £1k a month to a landlord or £1k a month to a bank on a IO mortgage is any different then you've been far too busy sucking in the nonsense that the estate agents have been telling you.

Nyberg, Ystad ... thanks for your comment, and I agree with what you say.

I also agree with what is being said about renting NOT being money thrown away - do the sums. The 'renting is dead money' is just another Estate Agent myth, along with many other '2nd hand car salesman' patter that they come out with. None of their myths stand up to any sensible scrutiny.
Buying will make sense, rather than renting (in financial terms), when house prices have fallen back close to their long term trend. People who have bought in the last few years, or buy now, are the ones who are throwing away (very) large amounts of their money.

Nyberg - just to clarify - my comments about renting Vs buying we not aimed at you (probably obvious) but rather directed as part of the general discussion going on in the readers comments for this article.

fatboyjim wrote:
"Nah,I'm not convinced,renting is goofy.Sounds like you're cutting off your nose to spite your face by not buying.You must be wasting what,12k a year on rent.Your scenario of 500k properties hitting 250k could be five years off,potentially stanking 60k of your hard earned money,and that's if it actually happens.Take my advice,go buy a house,if you want to live in one.If you want to buy a house to make money on it,don't.My house could be worth five times what I paid for it,or it could be worth 10p.It doesn't make any difference as I'm not selling." . . Oh dear. Do you actually think that by paying £12k a year towards a mortgage - it is paying off the mortgage when in fact in the first five years only a small fraction of your payments are paying off the loan. And thats assuming we are talking about a repayment mortgage rather than the interest only mortgages that a lot of people have got in their desperation to participate in this madness. I'm currently renting a place for £1k per month that the landlord is trying to sell for £340K. That is well below his current mortgage payment. He is watching it drop in value and also having to fork out for the upkeep on the place (which being a regency building aint cheap). The £1k i pay wouldnt even cover the interest payment on £340k IO mortgage. And if you think that paying £1k a month to a landlord or £1k a month to a bank on a IO mortgage is any different then you've been far too busy sucking in the nonsense that the estate agents have been telling you.

Estate agents don't tell me anything,i'm not buying or selling .As a matter of interest,when will house prices drop by 50% as you predict?

UK house prices fell by 20% from end of 2007 till Spring 2009, so about 18 months to drop 20% - that gives you a guide of the speed that UK house prices can fall.
Where's the money to keep house prices at the current boom time levels that Estate Agents think is a good level to set asking prices at? Current levels of prices were supported in 2007 and before by a huge wall of money that was going round the world that turned out to be all debt, not real money, and hence Banks and whole economies, including the UK, went bust. Last year UK house prices were crashing until the Spring which was interrupted by the Government injecting £300bn of taxpayers money into the mortgage market through the Special Liquidity Scheme (SLS) and Credit Guarantee Scheme (CGS) which have now run out, the Govenor of the Bank of England has said their is no chance of the SLS and CGS being renewed, and the Banks need to repay the £300bn back to BofE by 2012 and 2014 respectively - guess what this will do to mortgage lending and hence to house prices. Expect the house price crash that started in the Autumn of 2007, that was interrupted in Spring 2009, to resume this year (witness the house price falls last month - there will be some up months but the trend will be downwards) and will continue far into the future until house prices fall back to their long-term trend levels (as they always do after a boom). Remember that other countries around the world where their Govs did not use Schemes such as the SLS and CGS 50% (or close to) falls have already materialised. It would be very risky to think that it would be impossible to happen in the UK.
The £300bn used by the Gov to underpin the property market, for political reasons (think the General Election) could have been far more usefully used to save health and education services and also loans to small businesses - instead, all it bought was 11 months of delaying the inevitable house price crash that the UK economy desperately needs to happen and get out of its system so that the economy can start its journey towards real and sustainable recovery.

It is also worth noting that during the house price boom years (and still in the present day!), 2000 - 2007, Estate Agents were constantly claiming that house prices would only ever fall if interest rates were put up to 15% (as happened for a very short time in the 1990s - actually interest rates were falling most of the time house prices were crashing in the 1990s). But look at the 20% crash that happened between Autumn 2007 and Spring 2009 - interest rates were only at 5.5%.


We now have a Base Rate Interest Rate that is the lowest in the UK for 350 years ..... ie 0.5% ..... and yet house prices fell by 1.5% last month. According to Estate Agents this should have been impossible.
So, imagine what will happen when the Bank of England starts raising interest rates ..... say it went back to its long term trend of about 6% - that would be a 1200% rise in the Base Rate. In the 1990s house price crash the housing market was decimated by a 100% increase from 7.5% to 15%.
Japan watched its house prices fall for 17 years ..... and that was in the context of interest rates being at 0.1%.
Has there ever been a more risky time to buy property in the UK than now? - I very much doubt it. The Buyers Strike looks the safest place to be at the moment. Personally I will be waiting at least 12 - 18 months before looking at the situation again to assess the lay of the land.

Thank you Economist, for articulating what so many of us have know for a long time now. I couldn't agree more with what you have said. The road to recovery is going to be difficult for the UK. Fortunately i'm off to Australia for the forseeable future!

Thanks LimpWristed and hope you have a fantastic time in Australia.

Economist. Well put. In response to Jon S from Glasgow: How long until house prices fall by 50%? That's a tough one. So far the government have spend our childrens and grand childrens future taxes trying to keep prices artificially inflated. The question is will they decide to take out a loan against our great grand children or finally admit defeat and stop trying to put off the inevitable. Of course this is pretty sick when you consider that these future generations will be paying massive taxes to repay money that we used in an attempt to keep house prices unaffordable to them.

How about Prefabs? Remember how after the war they had a large number of houses that needed rebuilding after the bombing, so they put up these prefabs as a quick fix? Then in the fifties when they came to rebuild properly the residents living in those prefabs didn't want to leave them as they were nice and comfy inside. That's what we need, prefab houses where you buy the land for about £10k - £15k and then have a £50,000 house on it. That's the way to deal with this lack of housing. That's genuine affordable housing. Remember every house is affordable to someone, even if they are a lottery winner or a Multi-National C.E.O. What's needed is housing that's affordable to someone on £10k a year

Some of the post war ones are listed buildings now...

The only problem with your theory is your estimation of land price. Building the house isn't the expensive part. At the moment your average new build costs in the region of £50k to put up. It is the land prices that are prohibitive. This is due to a number of reasons including corporations buying plots in cities and then sitting on them to stop their competitors using them (supermarkets), developers buying land and sitting on it in order increase demand in the same way that De Beers does with diamonds (landbanks) and all this is brought about by restrictive planning permission which keeps things lovely but also reassuringly expensive for the people who own most of the land with planning permission to build on.

To give you an idea of exactly how wide of the mark your scheme is: there is a plot of land for sale on Woodland Drive with planning permission for 2 houses. You'd be hard pushed to get further out of Brighton and yet still be in Brighton. As its not central you could be forgiven for thinking it would be affordable. It is currently 'valued' at £700k.

corruptive wrote:
the problem is that about 85% of the geographical surface of Britain is owned by The Duke of Westminster, the Duke of Sutherland, the Duke of Buccleigh (who got his head knocked 'orf by a golfball) and evil twin evils of the Duchy of Lancaster and the Duchy of Cornwall. This means that there's hardly any other land left for people to build houses on and the prices are sky high. It's been going on since about 1066 when these evil Plantagenate Norman loons invaded and stole all the land.

I tend to agree.
Strange isn't it how the A27 narrows to a cart track at Arundel, ancestral home of the Dukes of Norfolk, and again at Fontwell where the road adopts a rather curious dog leg, in order to avoid the lands of the same family.
We all have to queue up and tug our forelocks so that the landed gentry shall not be disturbed.