Housing - the silent crisis?

[CrisisTime]

The shocking state of housing in this country for anyone who didn't get on the gravy train in earlier decades, that is.

The homelessness. The sheer costs of housing. The tiny rooms and tiny houses. Storage rooms converted to miniscule 'bedrooms'. The dirt and dilapidation of so many rentals. Increasingly greedy landlords and letting agents. A cool house-share like The Young Ones would never exist now. The gentle landlord I once had (a vicar's wife) and her relaxed tenants - is no more. Just the sheer lack of decent affordable housing for so many.

300,000 more people coming to UK every year as well, which makes bad matters even worse, if they could be worse that is.

Is any politician from any party ever going to do anything on this issue? All I ever heard is daft initiatives that are a drop in the ocean.

Actually what about a requirement that BTL mortgages have a fixed rate of interest over the life of the loan? As tenants pay council tax it would eliminate interest rate risk for LLs.

Personally I think house prices need to be deflated and yes there will be millions left in negative equity. I think the best way to manage that is to bring in fixed rate mortgages or hand over the keys to the state if payments can't be made.

It's a win win win overall. Those who want to stay in their home can do so with a mortgage that is fixed at the rate they are currently paying. Those who don't want to stay in their home and have negative equity can give the keys to the government who can use the housing as social housing and the banks don't end up with huge losses eroding their balance sheets.

Of course rules would need to be brought in to prevent this happening again. I'd like to see a benchmark of interest rates, house prices and income with the Bank of England explaining what their plans are for fixing it.

I live in Manchester. It's very much not a 'silent' crisis here.

It is a SE issue

Speaking from (very far) outside the SE, it's really really not. Many of us here are stuck in insecure private rented accommodation, struggling with house prices rising far more than pay, can't save enough for a deposit because rents are skyrocketing too, competing with BTL cash buyers and yep, even foreign investors in some areas, for houses. Moving more jobs to somewhere like Manchester isn't going to fix housing - Manchester is already expensive enough.

It's not (yet) as bad as London but it's not good, and for most of us it's getting worse.

Population in Manchester is growing 15 times faster than houses being built here.

But no- definitely a SE issue

its a SE Issue
Tourist areas suffer hugely as well, why would you rent out a house to a local for £400 a month when you could rent it as a holiday let for £800 a week?

Yes this above confirms my views.

Rugby is one town in the midlands that isn't really close to many places other than Coventry. It doesn't confirm anything. And it's all very well talking about it being less than an hour to London because the cost of a season ticket is absolutely eye watering. And if Rugby is such a great crack then why doesn't everyone from the SE move there if it's so handy for the capital? Surely it is pretty much the SE anyway. There are also even cheaper places nearby like Daventry and Northampton. Equally there are far more expensive places in the Midlands.

Manchester has a rapidly expanding population. It's insane how quickly it's growing. It's also mind blowing that they have known about this impending increase for the past 15+ years based on immigration and birth rates yet cry out that you can't build more houses because we would lose out on lovely rolling green fields.

Green fields are lovely, don't get me wrong, but people need a roof over their heads. Let's build more housing and be smart about what we build. Single detached family homes are not what is needed so much as a good mix of 1-4 bedroom homes with good storage, parking for two cars and outdoor space bigger than a postage stamp.

Also I would like to see HAs run properly. Most are hidden property developers if you look at their payroll. Local HA in the NW sponsors employees to go volunteer in Africa for 6 weeks. The employees have all costs covered and are paid during the 6 weeks they are away. I think it's disgraceful this goes on. It's government money or funds from low income people paying for these jaunts taken by employees who IMO are overpaid for what they do.

The Manchester points bring me back to Colne and the lack of infrastructure.....it is around 35 miles from Colne to Manchester but it takes between 100 and 127 minutes to travel there on an unreliable and expensive train service. Investment in a proper transport infrastructure would solve the Manchester housing crisis....as well as bringing new life to depressed - but beautiful- Pennine towns.

Perhaps we need to stop overseas investment. DB worked for a few years in Far East but very difficult to buy there as he was not a national.

As a Mancunian, it is much worse in the south east. The affordability ratios there are far worse than ours, for a start.

Agree that wrt Manchester, we need better transport infrastructure. There's no shortage of housing in the wider region, not at all. But people need to be able to travel those quite short distances to Manchester where the jobs are.

That can include areas within Greater Manchester itself. I'm not just talking about the likes of Burnley and other similar places down the road. There are oodles of family houses for five figures, some areas where homes are nearer to 50k than 100k and rents less than £500 a month. But they're in the poorer parts of the conurbation and if there isn't at the very least a reliable express bus service into the city centre, huge numbers of people won't be able to consider living there.

I think there is some truth in the cliche that there's a great cultural pull in London and the SE which - to be frank - has no compare in the north.

I feel allowed to say that as a born and bred Londoner who has spent the past 20 years in the Midlands.

Probably, but given our unbalanced economy it's not really possible to state how much is down to people having to be in the south east and how much is down to what you call the cultural pull. We know that there are some people there because they have to be and some because they want to be and some a mixture.

In the Manchester region specifically, regardless of whatever cultural pulls there may or may not be elsewhere, we do have housing issues that need to be solved. Fortunately for us, there's still the option of improving transport links rather than building more. There are still areas of cheap housing within convenient geographical distance of the city, and indeed within the conurbation itself, that more people could access if they could get to work.

There is so much culture in the north. It's all there. Lots of it. It's also available at a fraction of the cost of London.

Theatre arts are stronger for younger people in the Manchester region compared to London. The stage schools are all down south so much more opportunity for someone who doesn't have a family who can pay for private tuition.

Regional theatre in the north is also strong.

What needs to happen:

• remove right to buy
• restock council houses/flats
• not allow property to be built and only sold to non UK residents
• make 75% of new builds be affordable and actually affordable rather than 50% of the local prices
• create more student accommodation type housing for single adults

The banks ate working on the assumption that the housing bubble is going to burst, interest rates will shoot up to at least 10% and house prices will drop by 20%

That's the reason that someone who is paying rent of £1000pcm can't be approved for a mortgage that would have repayments (at current interest rates) of £750pcm. When interest rates are 10% the maximum debt that can be serviced for £1000pcm is about £110,000 so that is the maximum that person should be lended even though they can get a deal at 2.5% with £493pcm repayments for the next 2 years - because God alone knows what kind of shit-creek we are all going to be up come 2019.

And obviously when this shit hits the fan house prices will crash as noone will be able to buy. So obviously the banks require a 20% deposit because that means they won't lose out when they repossess the house.

this is all entirely serious and likely. No one should be stretching themselves to buy at the limits of what the banks will lend because the banks are only protecting themselves. Not you.

If rates went up to 10% the drop in prices would be much much higher than 20%. I think 35-50% is more likely the outcome. I say this as a former bond trader who knows my way around yields and housing works in a somewhat similar way. There is no way the banks would be able to absorb this.

This is why I would put every existing home owner on a fixed rate and hike the rates up. The monthly payment would be the same but the required deposit much much lower. If homeowners want to sell their home and have negative equity they can handover their home to the government. The government can use it for social housing.

Job done.

Kpo58 - It's the "affordable" housing that is the problem not right to buy. Right to buy enables people on normal incomes who have lived as tenants, buy their property.
Affordable housing means another few houses on someone's property portfolio.

The £325k house my son bought - I stand by my comment that two graduates in their 20s could buy it as long as they can get the deposit together which is by far the hardest thing, very very hard if it is 10% (even 20%), not so hard if it is 5%. It is the lack of 95% loans which is the worst thing and that is caused by state interference in the market setting very stringent lending criteria. I would rather people were allowed riskier loans and take their own view of risk.

I think lenders currently test borrowers against ability to pay 6% interest (on a repayment mortgage) when current rates are more like 2 - 3% in the UK.

As for new graduates being on £21k my postman son (graduate) earned £26k last year. Obviously these graduates on muchl ower than postmen have picked the wrong jobs!

Incredible amount of ignorance in your post janet.

The £325k house my son bought - I stand by my comment that two graduates in their 20s could buy it as long as they can get the deposit together

Love the way you casually throw in that 'as long as' like the deposit is some mimsy little trifle.

Janet How many jobs do you think people have to choose from?

And obviously when this shit hits the fan house prices will crash as noone will be able to buy. So obviously the banks require a 20% deposit because that means they won't lose out when they repossess the house.

House prices wont crash, they may well go down a little at times, but it's dependent on demand and supply. As there is a shortage of decent property it is overpriced. The Irish crash for example was based on building more than was needed, that is unlikely to ever be the case.

The Irish crash was largely due to the dry up of credit at low rates. It's bullshit to say it was caused by oversupply. The country had deregulated their credit rules and it resulted in a bubble. The bubble burst when Lehman went down. There was basically zero supervision by the government of the banks.

The Irish banks were basically insolvent. It was an absolute disaster for many. However today they are coming out the other side in a much stronger position.

I also think rates of 6% are probable in the next 18-24 months in the UK. Here in the US I expect rates to be about 5% by the end of the year. The UK has other issues going on along with a lag time wise. I see rates going back up to normal levels of 6-9%.