Wednesday, July 11, 2007

House !

LONDON (Reuters) - The government announced a series of initiatives to boost the popularity of long-term fixed-rate mortgages on Wednesday in a push to make the housing market less vulnerable to interest rate swings.

Oh cripes what on earth do they know about interest rates ! We have just been selecting a mortgage and we have gone for a three year fixed rate . Our thinking is that if by any chance the rate has gone up steeply between now and then most people are so highly geared there will be a revolution and it won’t matter any more . If you were thinking of following our example I should warn you that Mrs N and I have along history of getting almost everything wrong. Experts judge stupidity to have been a contributory factor.
I noticed the Mail went with a Home Buyer crisis front page rehashing all the old worries about the earnings lending ratio .The problems young people face and so on.
The solution soi disant is to concrete over the South of England thus equalising supply and demand but I see two problems .

1 Overcrowding is caused entirely by immigration and cheap housing will only suck in more.
2 The existence of lots of property noone wants will not affect the market .There is already market dumped property all over the Inner Cities . East London and South. Flats can be obtained for £50,000, easily whithin the grasp of anyone with any right to be thinking about buying . Of course these are not salubrious areas but then will the new soulless concrete jungles be any better . I doubt it.


Old BE said...

Overcrowding is caused by two things:

Migration to London and South-east from other parts of the country.

Immigrants brought into London and South-east from abroad to fill low paid jobs which locals refuse to do.

Solve these and you will solve the "crisis", but in the meantime we need more houses!! I predict the "crisis" will resolve itself with a different "crisis" called a "crash".

Old BE said...

What has happened to Mr EK's blog?

Philipa said...

He nuked it Ed - I hope he starts up again but he's still around. I've got about a week before I loose my connection :-(

CityUnslicker said...

massive underbuilding due to planning regs is a key factor. I am not in favour of destroying the green belt.

but building regs have been so tough that money has been made out of converting flats instead. So less of the much needed houses.

Also the obsession with key workers ( why so key I always ask? I never get an empirical answer) menas developers have built loads of flats.

Flast in the south eat have not gone up all that much. 11% since 2001. Houses have gonve through the roof, up over 100% in the same time.

lesseing immigration will help at the bottom end of the market and building more houses on brownfield sites will help too.

Contorversially(?), businesses should get tax breaks for moving oop north. More jobs up there would help stop a chunk of the inward migration.

Old BE said...

It is true that developers have been encouraged to build flats, but with land in short supply, do not higher densities make sense?

Key worker housing makes my blood boil, because what is the definition? How do you stop people cheating? Doesn't it distort the market yet further? My solution would be for the public sector employers to sort out their own "key worker" incentives, for example by doing their own shared ownership schemes or by paying their employees more!!!!

Why did EK nuke it? I enjoyed his blog a great deal!!

Philipa said...

I think he's keen to just comment. Maybe he'll return, Newmania did :-))

Old BE said...

Yes, N is back with a vengeance!

Newmania said...

I hope EK comes back he such fun , I `m trying to keep the comments ion my own blog down to a reasonable level this time9i which is noy easy ) so i can go and see other peopls . Its easy to get carried away

CU I saw the thing about flats as well , nonetheless the opeople who are supposed to be struggling asre first time buyers . Well it never occurred to me i could afford a whole house . Are expectations too high ?#

I see noone has picked up on my remark that there are loats of affordable houses already .

Old BE said...

I picked it up Mr N, but where are these 50k flats? There were none within the radius of search I did when looking for my pad. I considered all sorts of Calcutta-style black holes but even in these places there isn't much under what I paid for my 2 bed ex-LA flat.

Anonymous said...

I dont think you are right about flats - its what I would like but I don't find anything under £120,00 0r so... I am prepared to consider anything at all..

Newmania said...

my 2 bed ex-LA flat.

2 Bed ?

OK I `ll find one now

Newmania said...

Look on Rightmove there are loads all over the place , quite afew in London and if you increase the price a bit hundreds. That my point , the accomodation is there , its just that people don`t like it . And you can share ...ALL SORTS OF WAYS TO GET ON THE LADDER ....but people want a HOuse with Land for nothing . It isn`t going to happen

Old BE said...

Yes 2 bed. 1 bed and 2 bed flats don't differ hugely in price I found. I bought on my own and have a lodger. So I suppose I am 50% evil buy-to-let landlord!

I suppose I could have been a bit less choosy than I was (I wanted an easy commute and 2 good size bedrooms) but if there had been anything at half price I might have seriously considered it. Perhaps the market is finally falling N.

I agree that there is no God-given right for first time buyers to own a nice house in a nice area with a big garden.

Old BE said...

ps I refuse to look at property websites and programmes now that I'm on the ladder. The paper value of my flat is now irrelevant until I want to move. All I care about is interest rates...

Electro-Kevin said...

The thing tha you forgot - as everyone does, is that there is a HUGE potential for the contraction in the demand for housing.

All it takes is a lowering of expectation.

Couples prepared to live on top of each other with Mums & Dads like the old days. Kids 2 to a bedroom and staying until middle age or until inheritence. Immigrants prepared to hot-bed 12 to a bedroom ...

This is NOT a boom as I keep telling everyone - it's Britain going down the pan and everyone getting poorer while the country is being turned into a soulless toilet.

A Gordon Brown con-trick. At least the grinning jackanapes Blair used to kiss us before he fucked us. Doubtless mouth-breather Brown could barely managed a peck.

Sorry for the homo tendancy since my return - I've spent far too much time over at Hitch's pad. Bad influence.

(Thanks for missing me BTW)

Newmania said...

You are popular chao EK..there are 300,000 homes in the North that are unoccupied but my main poit was that the effect on the market of providing a lot of units is not a strightforward as people seem to assume. There are good theoretical reaosns at least whuy it will make little difference

Old BE said...

There could be a million empty homes up north, but that wouldn't kill the London boom off. Northerners, Poles, French, Germans, Dutch and the rest are moving to London because it's the only bit of Europe growing. But it won't last forever as Mr EK correctly says.

As for my place, when the going gets tough I'll let the Brazilians back in who lived here before I bought it. Seven of them I think there were.

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