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?

RealLifeIsForWimps but if house prices grow slowly you get the same effect in a more gentle way.

inflation is something like 5% at the moment so if house prices grow by 1% they are getting more affordable

TheRealTillyMinto - what you are asking for penalises those who didn't get involved - young savers. Whilst you have said you think there should be no pain for those who bought, what about those who didn't or are young and for whose savings are being destroyed via inflation to bail out others - or simply not being able to save at all because of inflation everywhere else.

You can be cash positive and still be being fucked.

a good point but to help them means raising interest rates (& stopping QE?). i dunno about stopping QE but i dont think raising interest rates is feasible at the moment.

DP & i have paid off the mortgage & are saving up for our new house but i still would not like to see a house price drop.

QE is plain and simple theft, and a complete misinterpretation of what Keynes intended by fiscal stimulus. He would never have intended it to be used when the debt levels had already reached such frightening levels (and make no mistake, the UK is just as bad as anywhere else...) - it was a tool for mild recessions.

I'm sure the really smart people in charge know this, and are using it for their own gains.

i wont disagree with you on QE but do i understand you think interest rates need to go up?

Yup. As I said in my first post on this thread if we are to learn anything from all this is that you can't continually try and hide the true cost of capital. It just won't work, and eventually things will collapse.

can't continually try and hide the true cost of capital

who is doing this? BoE?

Sorry was in a meeting! Yes, my understanding of what Keynes meant by fiscall stimulus was that it was to be used as an option in a mild recession to get the economy going again - and a very decent idea it is too. That way the debt that is incurred can be paid off once things are back on tracks.

Unfortunately it has been used far, far too many times as a get out clause without paying for it afterwards - Keynes was a smart man - he'd not have sanctioned that.

Yep, the BOE, the Fed, the ECB, the SNB, the IMF - you name it. They are all fighting a losing battle. Look at the size of the debts. If anyone thinks that they can be paid off or inflated away without extreme consequence they are deluding themselves

I absolutely want to see house prices to fall, because as others have said, they are killing our economy by making a uk living wage so very high.

And I do feel sorry for those who bought in the last five years, but it needs to happen. If they bought with no/small deposit and lose their homes, then they will have to rent. They'll be no worse off than many many young people who can't afford a house in the current climate.

And if prices fall, then yes banks will demand big deposits, but a big deposit on a cheaper house might well be managable with years of saving. Far better than a 100% mortgage, which is madness.

Also, I think shared ownership is one of the worst ideas anyone ever had. Total rip off which serves only to prop up house prices.

I think a tiered system of renting would be a good start.

You can choose either to rent a fully furnished, LL maintained property on a 3-6 month renewable lease OR a minimum of 2 years lease on an unfurnished property which the tenant takes following a survey (paid for by LL) and the tenant is responsible for all maintenance but can decorate / keep pets etc and generally treat it like their home.

In the meantime, a register of landlords, more HMO licensing schemes and HB paid directly to the LL would be a start.

Cheryl - you are right. Keynes would have been horrified at what is going on today. The misallocation of capital into wasteful investment and the bubble created in the housing market was not what he advocated. In fact he often spoke about irrational markets and bubbles and crashes.

Although modern socialist politicians and left wing economists love to quote him, he actually lived in a World where Govt was a very small part of the economy and he also believed firmly in markets. He made millions for St Johns College and for himself through shrewed trading of stock, bond and commodity markets.

If he was alive today he would be a hedge fund manager (rather than just an academic) and he would be betting against profligate Govts.

That sounds like quite a good idea azazello, although I still think the landlord should pay for major maintenance stuff - it wouldn't be fair for a tenant to have to pay for a new roof for instance.

azazello - some interesting suggestions here. why would a survey need to be done..what would they be looking for? if i was the tennant i would be looking to maintain the place as cheaply as possible. what would happen if the work failed shortly after tennant moved out? would there not be a danger of poorly maintained properties...at least the LL owns property so has an interest in keeping it sound.

as a LL i'd be a bit concerned about a tennant having free rain to decorate however they felt - they might not be very good and also have a penchant for mauve and black!! ie make the place look awful for future tennants

Absolutely morebeta. It's extremely sad that in general even those who do understand that oil is being poured on a fire also choose to rubbish Keynes' name because of what the governments/banks are doing.

Poor chap!

can i be checky & ask the pro house price fall posters if you own or rent? with or without a mortgage? Eng/Scot/Wales?

for me: DP & I own in London, no mortgage, looking to sell & trade up with an addition of large savings.I am anti house price fall, pro v slow house price growth or stagnation.

(hoping for a countrywide soft landing out of a shitty situation)

Establish the principle that a secure roof over one's head is a right, not a luxury

Massive investment in social housing

House price crash

Much cheaper private rents

Bring back 'Fair Rent' scheme from the 80's (got rid of by Thatcher) and ensure rented houses are fit to live in and fairly priced

Revive Do-It-Yourself-Self-Ownership DIYSO scheme: chose any house on the open market, buy a quarter, half or three quarter share with a Housing Association buying the rest. Pay a very low price on the rented portion

Zero tolerance for antisocial neighbours

CherylWillBounceBack
"my understanding of what Keynes meant by fiscall stimulus was that it was to be used as an option in a mild recession"

No, Keynes produced his great work in time for the Great Depression, though his ideas did not become mainstream until later.

Sadly the generation of economists who grew up in his way of thinking was pushed aside in Thatchers day with a simplified version of Monetarism.

all about supply and demand.

1. limit/stop immigration
2. encourage homeworking so people move to cheaper places and spread demand
3. stop single person council rate rebate to encourage housesharing
4. high council rates for empty homes - unless justified reason (eg trying to sell or in hospital)

Personally don't agree with 'just build more' argument. they want to build a further 400 where we live and i'm sure there would still be demand. we would end up living in a concrete jungle and being stuck in traffic jams.

if you make the prices cheaper then its not going to increase the supply.

Not cheeky at all. I rent - through choice despite having enough savings to buy outright. I don't want to waste my money on something that I know is overpriced. If we get wage inflation (i.e. that's the route the governments decide they'll hoodwink people with), I'll buy immediately.

My parents own outright. They would prefer a fall as they understand that watching their kids having to pay extortionate prices is terrible,

A friend of mine bought early and now owns outright. They want a fall, because they can see the economic damage that's being caused.

The only people I know who don't want falls are those who bought at peak, those who released equity and I'm sure those who have multiple homes on BTL mortgages (though I don't know many of those).

Change the rental laws, they give no security to renters AND force landlords to use short term tenancies, which give no security to renters....

interesting Cheryl ....my thoughts on 'overvalued' vary widely depending which part of the country.

DP's bro owns 2 house (with mortgages) in the North of England & i think his area is overvalued. if a house was worth £30k 10 years ago & its now 'worth' £180k, is it more likely to go up or down in the current economy?

I think with a longer leasehold, tenants redecorating wouldn't be an issue. Where you buy a flat you have a ground lease which sets out the number of years you own for and requires you to paint the flat every x years and before the lease ends, repaint everything in white.

You get a survey (like with homebuying) but shorter so you can see e.g boiler was put in 5 years ago so it should be good for 5 more years but we might need to replace it, would it save money on electricity bills to do so etc...

You would obviously pay very much lower rent on a property you had to maintain than on one where the LL is expected to do everything.

The other things which have occurred to me, is that building standards should be dramatically improved. The aim should be for new housing to be as energy efficient as humanly possible and have reasonable sized rooms so that they can fit families in reasonable comfort. If the cost of building went up, the price of land would decrease because htere wouldn't be the builders prepared to pay over the top amounts for hte land.

Finally, there should be a programme of bringing existing housing stock up to a really good standard - starting with HA properties and then making it available to everyone (possibly funded by an investment vehicle with guaranteed rate of return) to cut down on energy use. I'm not that bothered about cosmetic stuff but draughtproofing, damp proofing, triple glazing and really efficient boilers would be a good start and have quite an impact on the amount of power needed.

Sorry, just re-read comments. I think LL should be responsible for the structure of the building (in the same way as the owner of the freehold of a leasehold flat) but all internal stuff is down to the tenant.