High property prices

beorhthelm · Jan 23, 2015

larus said:
I always find these type of comments amusing. Whenever I fly over Sussex I look down and nearly all I see is fields/open spaces and a 'relatively' small amount of land that is actually built on. (I accept that local services need to be upgraded as well, but that's a separate issue).

i cant recall the exact number, but its between 8-9% of the country is "developed". and that included anything and anything non-argricultral: roads, airports, old industrial sites, parks!, in additional the obvious houses. it follows that if we increased the size of every town and city by ~10% we'd build upon <1% of the countryside lost. but people like their fields, hedgrows and woods. even when they live in a nice house that didnt exist 20, 40, 60 years ago, they want to preserve some nearby fields or trees. of course building on green field isnt the only option, but if you try and build on a brown field you have to pay to clear and clean it (so its expensive) or you cant go about 3-4 stories otherwise everyone cries its an eyesore and blocks a view of such and such. the view of historic buildings, built when there weren't such strict regulations, must be preserved over affordable housing.

Deleted member 22389 · Jan 23, 2015

Westdene Seagull said:
I utterly agree .... too many nimbys and as BHA fans we should know all about them. It still doesn't deflect from the fact that low interest rates do not make for higher property prices.

I agree with what you say. Housing boom is being created because of the number of people. People for example wishing to get out of London, sell up and buy a much bigger property down this way, they still have cash in the bank afterwards. This is what is fueling these rip off house prices down here, and that in turn is making it impossible for local people especially youngsters to get anywhere near a property. Low interest rates make zero difference for first time buyers because the house prices are too high. If they really want a take up of first time buyer the prices need to reflect the wages that people earn, which is why this whole economy is BS. It's only really working for some and not all.

Herr Tubthumper · Jan 23, 2015

yxee said:
Such as what, 4.5% on a ten year fixed rate mortgage?

I'm looking to buy over here and I'm looking at 1.80-1.90 for a 10 year fix.

beorhthelm · Jan 23, 2015

Herr Tubthumper said:
A British obsession with home ownership also plays a big part.

partially, but the people have to live somewhere, if not buying they need to rent and there's not enough rental stock either as seen by the high rents. same problem, same root cause.

Triggaaar · Jan 23, 2015

Westdene Seagull said:
Now comment on how the two graphs I posted ( and I could do similar ones for the 90's and 00's if you like ) have ANY correlation between each other at all ?

The graphs you've posted are completely irrelevant because the Bank of England base rates were not available to home-buyers. It's obviously not the base rate the affects prices, but the rate available to consumers. Obviously the base rate effects the rate available to consumers, but it's not the same.

There has been such a massive change in home ownership since the 70s that it's not possible to pick one determining factor over that time. Women weren't even able to get a mortgage back then.

As someone with BTLs, you should know about yields, and obviously these are determined by house price, rent, and interest rate. If the interest rate goes down you can afford to pay more for the property given the same rental value, and keep your yield. I can't believe we're even discussing this.

Offer me a £300k valued property, and I pay the interest at market rate, or offer me the same property for £1,000,000 with a government guaranteed loan at 0.01% for 100 years, and I'll take the latter please.

Westdene Seagull · Jan 23, 2015

Herr Tubthumper said:
A British obsession with home ownership also plays a big part.

You're probably correct HT. Please could you answer me one question though, and it came up during a discussion at work yesterday and nobody knew the answer, given Germans like renting, and indeed I believe a majority actually do rent, how do they afford the rent and live after retirement ?

jimbob5 · Jan 23, 2015

Westdene Seagull said:
You're probably correct HT. Please could you answer me one question though, and it came up during a discussion at work yesterday and nobody knew the answer, given Germans like renting, and indeed I believe a majority actually do rent, how do they afford the rent and live after retirement ?

Maybe they have very reasonable landlords. I don't know if you come into that category.

Westdene Seagull · Jan 23, 2015

Triggaaar said:
Offer me a £300k valued property, and I pay the interest at market rate, or offer me the same property for £1,000,000 with a government guaranteed loan at 0.01% for 100 years, and I'll take the latter please.

Putting aside the yields bit of the BTL as that's a whole different minefield ..... the normal consumer has no ability to buy their home via a government loan. So instead they are tied to the general market .... most of which offer fairly similar interest rates .... many tracking the base rate. Given lending criteria now has to take into account various levels of interest rate there can be little influence by the interest rate on the property value rate - i.e. when you take out a mortgage the lender assesses your ability to pay at various interest rates.

seagullsovergrimsby · Jan 23, 2015

Westdene Seagull said:
You're probably correct HT. Please could you answer me one question though, and it came up during a discussion at work yesterday and nobody knew the answer, given Germans like renting, and indeed I believe a majority actually do rent, how do they afford the rent and live after retirement ?

Anything to do with decent workplace and state pensions ?

yxee · Jan 23, 2015

Herr Tubthumper said:
I'm looking to buy over here and I'm looking at 1.80-1.90 for a 10 year fix.

Where?! Is the term length >>10 years?

Seasidesage · Jan 23, 2015

Westdene Seagull said:
I'm not sure how your post backs up his 'low interest rates push up prices' argument ? What you've described is a lack of supply.

Yes, well done, if you don't have a decent argument then almost invoke Godwin's Law .... but only just !

I was backing you up old chap :lolol:

Westdene Seagull · Jan 23, 2015

jimbob5 said:
Maybe they have very reasonable landlords. I don't know if you come into that category.

Landlords rent at market values .... welcome to the capitalist world.

Given the state pension in the UK is around £113 a week and if you add around £200 per month for a standard private pension how would you pay rent and eat and heating and council tax with around £800 a month ? Landlords would have to make properties rent free for people to be able to afford that !

Triggaaar · Jan 23, 2015

Westdene Seagull said:
Putting aside the yields bit of the BTL as that's a whole different minefield ..... the normal consumer has no ability to buy their home via a government loan. So instead they are tied to the general market .... most of which offer fairly similar interest rates .... many tracking the base rate. Given lending criteria now has to take into account various levels of interest rate there can be little influence by the interest rate on the property value rate - i.e. when you take out a mortgage the lender assesses your ability to pay at various interest rates.

The various interest rates the mortgage lender uses are based on the current and future prediction of interest rates, which is what I said affects house prices.

A short term fall in interest rates won't allow everyone to to borrow more, as some are at their max already, but not all are borrowing at their max, and they may borrow more. Those who are cash rich will put more into property rather than going for low rates at the bank etc. So a short term drop will lead to increased prices, but not as much as a long term shift. And that's what we've had - interest rates are much lower than they were in the 80s, and it's had a massive effect on house prices. The shortage of houses and high demand has also had a big impact.

Notters · Jan 23, 2015

bashlsdir said:
Think it's a shame. It's looking like people in your age group will never be able to afford to get on this property ladder. I sometimes think the whole property market could do with a crash, because for what they are house prices in this country are now a complete and utter rip off. It will also serve as a lesson to all those greedy buggers who have been selling shoe boxes for £500,000

This is a fake property boom, because nobody is reallly any better off. Jobs still pay shit money, living standards have actually gone down, and the whole areas just keep getting built over.

People need to stop looking at properties for how much money they can make, and look at them as a roof over their heads.

It's ridicolous what's going on, they take one large bungalow, demolish this and put two small bungalows in their place. Hardly any garden, only space for one car at the front when lots of people have two cars. When you see the price, the size and you remember what was there before, you can see what a rip off things have become.

Spot on!... Although we have been fortunate enough to get on the ladder with a little help and by buying in Newhaven.

Agree with what you say though. As an Environmental Consultant, most of the work I do is for residential developments and the smaller and smaller spaces they try to pass as habitable dwellings are ridculous. Some studio 30m2 flats in not particularly nice parts of London are going for £500k!

jimbob5 · Jan 23, 2015

Westdene Seagull said:
Landlords rent at market values .... welcome to the capitalist world.

Given the state pension in the UL is around £113 a week and if you add around £200 per month for a standard private pension how would you pay rent and eat and heating and council tax with around £800 a month ? Landlords would have to make properties rent free for people to be able to afford that !

I suspect Germany has more joined up regulations regarding rental arrangements. They would not introduce such measures here. No votes in it.

middletoenail · Jan 23, 2015

Notters said:
Spot on!... Although we have been fortunate enough to get on the ladder with a little help and by buying in Newhaven.

Agree with what you say though. As an Environmental Consultant, most of the work I do is for residential developments and the smaller and smaller spaces they try to pass as habitable dwellings are ridculous. Some studio 30m2 flats in not particularly nice parts of London are going for £500k!

You should check out living conditions and prices in Hong Kong, it's like another world!

Deleted member 22389 · Jan 23, 2015

Notters said:
Spot on!... Although we have been fortunate enough to get on the ladder with a little help and by buying in Newhaven.

Agree with what you say though. As an Environmental Consultant, most of the work I do is for residential developments and the smaller and smaller spaces they try to pass as habitable dwellings are ridculous. Some studio 30m2 flats in not particularly nice parts of London are going for £500k!

I have zero sympathy for these overseas buyers and greedy developers if things go wrong again, these are the buyers who are spening upwards of a £1,000,000 for apartments in London. This is what is driving these ridicolous prices in the first place. This is what happens when your country sells out. You don't need to be an economist to realise, what goes up eventually has to come down. When that day comes there are going to be a lot of empty properties, or buildings that are incomplete, a lot of money is going to be lost.

Uncle Spielberg · Jan 23, 2015

HT is in Germany. You can get a 10 year fixed rate here under 3% now, 60% ltv

Tricky Dicky · Jan 23, 2015

jimbob5 said:
High property prices are caused mainly by low interest rates. This suits whoever is governing.

No, the prices were high before the rates were ths low

jimbob5 · Jan 23, 2015

Tricky Dicky said:
No, the prices were high before the rates were ths low

they were lowered to stop a property crash

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