to ask how we can sort out housing?

[Hullygully]

So. First time buyers largely priced out. Rents going up. No new building. HB cap. Little security of tenure for private renters. Landlords being stuffed.

When Right-to-Buy was introduced, both as cynical gerrymandering and vote gathering, and because the govt wanted rid of the responsibility for social housing, there was an encouraged explosion in Buy-to-Let to take up the slack.

Now we have a large number of landlords with a few properties operating on narrow margins who have little protection against rogue tenants (particularly those on HB who are told by their councils to wait it out until eviction) and who are able to pocket the first 8 weeks of rent before any action can be taken, and who are therefore understandably reluctant to take on HB tenants, plus, with the introduction of the Cap, HB tenants will be able to pay less than the market rent in large areas of the country.

Then renters have little security, they can be given two months' notice after six months, a nightmare particularly for families settled at schools etc. And of course there are some nightmare landlords around who don't carry out repairs etc.

Suggestions?
Solutions?

"And loads of people are quitting rather than moving, because their spouses have jobs in London, their kids are in school, etc."

So those people, presumably, are not priced out of the area. But if you are struggling to make ends meet, struggling to buy a house, don't have any spare cash left at the end of the month for treats, and your company says they're moving 200 miles away to somewhere that has affordable accommodation, good schools and enough jobs for spouses to make it interesting... why would you stay put?

I don't think people can complain on the one hand that London is too expensive a place to live and then, when offered an opportunity to slash their cost of living, turn it down. Makes no sense whatsoever.

Simple, but it's not palatable to most. Raise interest rates to the levels that actual reflect the cost of capital.

People who simply didn't understand the ridiculous sums they have taken on to buy overpriced homes (who I have a lot of sympathy for) and people who have released too much equity to spend on rubbish (who I have no sympathy for) have to sell their homes are repossessed, and prices drop.

People who have saved huge deposits - and there are quite a few of these on normal incomes regardless of what people think - who knew something was wrong all along will then buy themselves somewhere to live at a fair price. As prices drop, those who've lost their homes will be able to find somewhere to rent - probably also at a much, much fairer price as rents will fall along with prices.

Overall it would be extremely painful for some, but we'd eventually stop having so much fake wealth tied up in housing.

Fixed mortgages have been available for a long time - but they are obviously more expensive than a variable - that cannot change, unless the govt decides to subsidise first time buyers by, for instance, offering a tax relief on fixed mortgages. I am not sure the British public will support that change (govt ideology aside).

Btw, I say this again. The continent is not necessarily a happy place as far as housing is concerned. A lot of forever renters are forever renters becasue they have not got the option of buying...

You have to get back to the very basics and look at who requires housing; what are the different categories of people: each group requires different solutions.

Right, Cheryl, so where are you going to put all those families whose London/SE houses are repossessed becasue and do not have a place to live (and hardly any council housing?).

cogito "why would you stay put?" - some of us have family ties to the south east; DPs elderly mother who relies on us. Both of our extended families. All of our close friends. Moving up north would remove us from our families, our friends; our entire support network. We're about to have our first child and I think knowing your family is more important than "treats at the end of the month". Also I have long term health problems, they're under control right now, but removing me from the fantastic consultant who got me well (where several others have failed) and from the support I rely on when sick isn't going to do me or DP/our child any good.

Plus "enough jobs for spouses to make it interesting" - there aren't a whole lot of jobs anywhere right now. Moving and hoping that your partner can get a job, in an area where you know no one, have no family support etc is a very big risk.

And even if we did that, who's to say we could actually sell our house? We certainly couldn't get as good a mortgage as the one we have now. If we rent out our home we have to pay a higher interest rate to our lender and the rent we could achieve would not cover the costs of owning the house.

I actually agree that more companies could set up outside of the south east/London, but the idea that just shifting the jobs out of this area is a good solution for the people living here is a bit simplistic really.

Build more houses. Both private and public sector.

The prices are crazy because of demand.

People need to stop being so nimbyish.

minerva, the point is those people who are repossessed will end up renting the places that those that can afford their houses now will move out from. Market rents will drop alongside the price of housing.

The sooner we stop tying up so much of peoples income in housing, the better. We have lived through a credit fuelled bubble, and the sooner governments stop trying to stop it deflating the sooner things will rectify to a fairer system.

Prices are not crazy because of demand tardisjumper - complete myth. Prices are crazy because too much money has been lent.

The 'overcrowded island' thing is a myth. Have you been to Scotland? The UK is overcentralised not over populated.

Lynsey Hanlen.(sp?) Book 'estates' is good for anyone interested in housing.

Fwiw the biggest ever council housing building 0rogramme was done under the tories. If then, why not now?

What about new 'New Towns'? They were a great success.

In cities we need small developments, not large peripheral estates.

HB should apply to mortgages as well as rent. For someone who is going to claim long term benefits eg chronically disabled it would be cheaper for govt to pay their mort for 25yrs than rent for 50.

Private landlords and agents should be trained, regulated and crb checked. We need the police to take illegal eviction seriously. We need new, enforced housing laws which give tenants more security and so landlords need a reason to evict or raise rents. There also needs to be tougher requirements on repairs.

The definition of overcrowding needs to be extended to improve the health of tenants and requiring councils to rehouse overcrowded families. All homeless people should have the right to a home.

Council tax should be paid by owners not occupants.

Planning laws need overhauled. Communities need to be built, not just endless cul de sacs. Builders should be required to include parks, shops, leisure facilities in all new areas. Transport links need improved so people on estates arent so car dependent.

HB should be equal across the country, like other benefits.

Cogito, why do you assume if people don't want to leave London they aren't priced out?

Here's an example, my DH could potentially work anywhere, but my field is really limited to London and perhaps one or two other places in the south. That doesn't mean we would be rolling in cash living in London -- it's simply where the jobs are for me. To move north, we would be worse off, because only my DH could get a job.

You also have to think about work long-term. If my DH lost his job in london he could get another one within a week or two. Up north, where there are fewer jobs, it would probably take longer.

Moving might work for a lot of people but it's not going to work for everyone.

One of the problems seems to be that linking increased overcrowding, lack of housing, demands on NHS and schools etc to the influx of immigrant labour is kind of a taboo subject.

If it was compulsory for a certain element of the unemployed to do some sort of work whether they like that type of job or not then the ease with which immigrants could get work would reduce and pressure on housing/state funded services might reduce.

It should be unacceptable for a fit young adult with no dependants to be able to say no to doing any job of work, but it isn't and hence we import labour to do the jobs the British workers considers beneath them.

It's madness that the first weeks of HB get paid to the tenant, puts LLs off tenants in receipt of HB and this is unfair to so many good tenants who would look after a property.

It should also be easier to evict bad tenants, why do we protect this minority when in the long run the responsible tenants suffer due to LLs not wanting to take risks because they know it is such a longwinded eviction process.

reallifeisforwimps other european countries and the USA work primarily on long term fixed rate deals, old BBC article here. You can also get some in this country, but you usually have to have a large deposit, thereby putting the deals out of the reach of first time buyers. The independent have an article here with some information.

Trope- I'm not disputing the desirability of mortgage term fixed rates. If people want them, fine, but you have to realise that 2.5% is laughably low. No lender will lend for that on a 10/25 yr term.

Cogito's point is that the jobs need to be moved alongside the population. There is nothing special about London that those jobs have to be there too, unless you're a tube driver and that's all you could possibly ever do.

Cheryl is correct in that the mortgage rates offered during the boom did not reflect the cost of capital or the risk to the lender. When there is a lot of money circulating, it has an inflationary impact, hence house prices rose.

The problem with your argument Squeaky, is that it is grossly unfair. In the most simplistic terms, if you have two babies, one born to a heroin-addicted mother existing in a sordid flat on a nasty crime-ridden estate, and one born to Mr and Mrs Banker who provide private schools, healthcare, nepotism, connections, foreign holidays etc, then they hardly have the same life chances and opportunities to make a success of their lives

Eh? What does that have to do with housing? or my argument?

Cognito is right but government after government has tried to shift jobs into the regions and failed.

Your argument was that those who had worked hard to provide an inheritance for their child shouldn't be penalised. I am pointing out that people can work equally hard, but not achieve the same because of their start points.

You cannot expect the goverment to sort everything out, people need to take responsibility for their own lives.

If those lives are wildly different at the start, is that fair?

Inheritance tax is a very, very unfair tax. Imposing lower rates is no solution whatsoever, because you can guarantee that the revenue from the tax take will in no way be distributed fairly anyway.

It's also incredibly easy to get round, and always will be to those who know how. The only people it will affect are those who aren't poor, but aren't exactly wealthy either and don't know the tricks.

"minerva, the point is those people who are repossessed will end up renting the places that those that can afford their houses now will move out from. Market rents will drop alongside the price of housing.

Big assumption here. In the last main housing crash (80s-90s), rents increased as no one wanted to buy. In fact, the buy-to let "boom" started in the wake of the crisis. And besides, people who have their houses repossessed often find it really hard to rent privately (becasue of credit scoring), so they would have to be accommodated in DSS housing or B&Bs. Which the govt cannot afford to do at the moment, so taxes would have to increase (or ,make much bigger cuts around the country). A big slump in London is very likely, if history is a guide, to cause equal pain in the regions.

Disclaimer: I have hardly any mortgage left and not other debt so increasing int rates do not affect me, rather the opposite. If prices crashed, I could buy a miuch bigger house in London with no mortgage if I wanted! But devising a solution which would cause a lot of people on the street, further damage to some banks (which would have to be bailed out) is a little bit simplistic.

yy Cheryl.

Anyone with any sense signs the property over years before they might die and takes care of the associated paperwork.

I think you need to start off with the basic problem: people in the UK think rising house prices are a good thing!

This is absolute nonsense and it's that sentiment that really needs to be changed. People don't seem to get the fact that rising house prices just push up the cost of living, requiring people to be paid higher wages and reducing our competitiveness (particularly vs emerging countries).

Whilst lower house prices would hurt short-term, the benefits long-term would be huge. Lower cost of living and capital freed up for consumption and investment rather than tied up doing nothing in bricks and mortar. The only people hurt by a fall in house prices are those who have over-invested or downsizing (but a reallocation of wealth from the baby boomers to generation X and Y is required anyway.)

To reduce house prices is fairly straightforward: increase supply vs demand, reduce credit availability (delever), reduce tax breaks and increase holding costs of property.

But none of this can happen whilst the politicians knoew that their ability to get the electorate's vote is a function of whether their house price goes up!

So what's the solution minerva? Do we let a failed, broken and indeed corrupt system continue?

My feeling has always been it is far, far better to take the pain. There's something brutally unfair about how the current system rewards those who speculate and overborrow in good times, and bails them out (banks and individuals) in the bad at the expense of those who just want to let a free market operate as just that, a free market without intervention.

spot the fuck on ihatebabyjake!

The only people hurt by a fall in house prices are those who have over-invested or downsizing

what about young people who bought in the last 5 years?
what about the people in negative equity already?

(FYI i dont have a mortgage)