Is having a second home in this country ever justifiable?

[Zog]

Given the amount of houses that we are told needs to be built to keep up with demand? Are they a luxury that is becoming unsustainable, like cheap air travel?

Xenia, your argument seems to hinge on the housing market in this country being "free". It is anything but free.

The available land for house building in this country is incredibly scarce. The price of land has increased tenfold in the last 10 years, mainly because land with residential planning permission is like gold dust.

If it was a free market, there would be no problem of housing, because enough people would build homes where they wanted to to meet demand, and the price would fall.

Where there is a bottleneck of supply like this, there are many options for how to distribute the scarce resource among people needing to use it.

It is more analagous to the supply of water in the South East of England in times of drought, or congestion on busy roads. As far as I know you can't buy your way out of a hosepipe ban, or out of a traffic jam.

A first home to live in is not a luxury, it is a fundamental human need. A heavily constricted supply situation and rapidly increasing demand has created an opportunity for speculators to make money from anyone who needs a home after they have driven prices up.

Any multiple occupation of the housing stock (second homes being a perfect example) is reducing the overall stock available for use by someone else - regardless of how large or small it is.

Many, many flats in central London are second homes or pied a terres (sp?) for people who mainly live elsewhere - including very many International citizens.

For example - many of the flats in my area of London were marketed initially in Hong Kong to residents who wanted to invest elsewhere before HK was handed back to the Chinese. Many of these flats are rented out, rather than owner occupied. It's a savvy and lucrative way of investing, and part of a diversified portfolio.

Without question, the demand has driven up the prices. Should investors not be allowed to purchase property as part of their portfolio?

dejags - really? You can't see how it would affect anyone else?

What I am trying to say is that the housing market is not free. Speculation and multiple home buying has driven up prices beyond reasonable levels for most people who don't already own. This isn't exclusive to chocolate box villages. Aberdeen and Preston are amongst the most 'unaffordable' places in the country in relation to the incomes of the people who live there.

If this were tulip bulbs or dotcom shares, then I couldn't care less. Let the speculators risk their money for a huge return.

But it isn't. It's a roof over people's heads that most people have little choice to opt out of.

If we are saying that things weren't so bad in Victorian times and that we are returning to the division between rich and poor that led to rented slums and live in employees, then I see that in itself as a rallying call for major political change.

I was reading the money pages of the guardian on saturday and was a bit disgusted by the pages suggesting that it is a good time to buy in Albania (somewhere like that in Eastern europe) - property was cheap, but soon to become more investors.

It sickens me that they were promoting a land grab in a poor economically recovering country. Increasingly these sort of properties are marketed to people who can't really afford to buy in this country but feel that they have to get on the property ladder.

Yep, my folks have three houses, any of which is bigger than our lovely three bed semi detached. They are not really part of the community in any of those places, they pretend they are but not really.

For them I think it is vanity, greed and a feeling that they earnt it so they can do whatever they want with it. As they have accumulated, they have increasingly lost their principles and compassion.

Rant over, as you can see they are not in my good books at the moment.

I agree it's hardly a free market. There are distortions of all kinds from the no CGT on private homes to CGT on second homes, council tax anomalies, planning restrictions etc. But I still would not stop people buying or add huge taxes to second home owners. Most buy to lets are like those the Blairs bought in Bristol - new builds in Cities. 25 years ago it was hard to find a flat to let for love nor money in the UK, I remember looking because once your tenant was in they were there for life becaues of the Rent Acts. Shortholds didn't exist so you were a fool to let anything. That was a very controlled market and there was a massive shortage of flats to let. When I presume the tories removed for new lets the rent act restrictions and allowed assured shortholds as long as they were a year long people could invest in property again and potential tenants could find homes. It worked. God saw the demise of the Rent Acts and saw that it was good.

We spend billions of pounds in Europe subsidising farmers and landowners to ensure a stable food supply at the right price.

When supply and cost of food was the main problem facint citizens, this was a necessary response to a problem.

Now that the cost and supply of food is marginal to people's concerns (in this country), isn't it time that governments acted to appease the masses on housing?

It is all very complicated with far reaching social ramifications.

I know several people who own multiple properties as investments, and they plan to purchase more. They see it as an alternative pension plan. Standard company pensions are often having difficulties, and investment growth is often not keeping pace with inflation and cost of living. The best investment, for a long time, has been property. Why invest and hope for an 8% return (on a good year), when you can get double or triple that growth per year in the property market?

Not saying I support this thinking, but can understand it....

Fear and greed drive markets. As long as the government plans to build many fewer houses than are needed, the price of buying into property will strain the limits of affordability for the average person.

Limits on supply are one side of the problem, additional demand is the other. Demand for second homes has gone up massively, and will continue to do so while the market spirals upwards.

When it eventually reaches a its apex and begins to even out, which must happen eventually, wait for the people bemoaning the collapse of their 'pension'.

When everyone piles in is usually a good time to leave a market actually. Some people may not be so wise to put all their money in property. I think over the last 100 years shares on average have done better than property, but that is rarely said by anyone and of course hasn't been the case more recently. We will see. There has never been a property crash which has meant that 20 years later property prices in real terms are lower.

Surely it's good to invest in Albania, Romania etc. Prince Charles has invested in Transylvania I think deliberately to attempt to preserve a very ancient saxon way of life and farming and foreign money helps particularyl if all the local are leaving to work in London to earn a bit more than they get pulling an ox driven plough

But you are not investing you are buying up cheap housing, pushing prices up in eastern europe and limiting options for natives.

This is not economic development, it is rape.

And citing Prince Charles is not very persuasive for anything!

lol at sobernow

second homes are fine. Just accept that everyone who lives in the village during the week thinks you are a twat.

"So (in France) the English have stepped in and rejuvenated almost derelict villages."

eh? thatsh just made-up hogwash shurely?

Don't know about rejuvenating villages but certainly a lot buy run down properties and bring them back to their original state. If the indigenous population aren't arsed to do it why not?

No, not hogwash, just an incredibly funny post, Enid .

god what is so fantastic about bringing properties back to their original state

anyway if taht were true they'd have a few cows living downstairs probably

bulldoze the lot and build affordable housing

Actually I think Nadine's right. It's one thing bagsying a country pile because you have a need for patronizing the country from time to time. However it's quite another to rennovate a house and thereby make it habitable. This is actually dh's job so I have visited (and sometimes lived in!) more rat-invested holes than I can remember. Clearly many of these places have been hideously in need of repair and not all home buyers are either skilled enough nor bothered enough to sort them out.

And Aviatrix not all of them have limestone flooring and three bathrooms - in many cases that would be over specifying not to mention bad economics!

Just butting in here as I think a tangent is starting to emerge!

Enid I hope you are joking about bulldozing a load of our country's unique heritage in favour of some homogenous rabbit hutches!

Message withdrawn

Message withdrawn

Why house those insufferable peasants when you can do up a semi-derelict barn into a stunning venue to host dinner parties from time to time?

Let them eat cake!

Message withdrawn