Housing Rant

[Dom]

Just had a bit of a rant on G+, but I thought I'd post it here for you all to enjoy and/or laugh at. It was completely spur-of-the-moment, and as such, no thought went into it other than my initial reaction to this article, and the part that says, "...the average home rose in value by 0.4% in November to £165,798."

My erratic thoughts:

How is it that the housing market is the only market in the world where the usual "supply and demand" principle is just completely ignored? For everything else, when demand goes down (usually because everyone has one, or because things become too expensive) then prices fall to entice people to spend.

Yet with houses, and after a world-wide collective groan at house prices being too high, the price of your "average house" is still too high, and the government wonder why things haven't improved as much as they'd like them too.

I'll tell you why - it's because property prices are determined by the people that stand to make the most money out of the housing market, e.g. banks and mortgage companies, and not the poor sods wanting to buy the properties. Everyone, right down to the estate agents on commission, is looking to make as much money as possible by over-valuing property, charging the Earth for services like making 2-minute phone calls and licking stamps, and offering us all "great deals" on fees. (£1000 to "arrange a mortgage" by typing some things into a computer? No thanks, I'll do it myself.)

Of course, the government isn't going to want to do anything about it. When they promise things to us all, such as "no stamp duty on properties over £125,000", then they're going to want to see as many houses as possible being priced at over £125,000. And when it's the banks and mortgage companies that are the single biggest contributor to government funding via the tax system, the government is going to bend over backwards to keep them all operating in this country. Woe betide they actually do anything that the banks don't like.

When it comes to small businesses of all types, they're left to fail if that's what the Gods have decided. The owners are just given a pat on the back for trying, and are told that they should move on and do something else. So why is it that when the fat cats that decided to go into property and investments, then set themselves up for a mahoosive fall, does the government come a-runnin' with their bailouts and bankruptcy protection schemes? All they've done is make it harder for the honest folk of the country to get to where they have a right to be, and so if it turns out that a bank might collapse, or that property investors can't make as much money as they used to be able to, then tough poo. Why should the public be the ones to suffer?

[sarahA]

Well, they're going to bail out the banks because if the banks go down then it affects so many people around the country and would cause a massive problem for the economy. You or I going out of business wouldn't have as much of an impact. For us, our clients would just need new hosting (or someone would take over the server), and a new design/development company to look after their website. Annoying but not really going to worry Joe Blogs in Southampton

[Dom]

Yeah true. But it's evidence of a slightly more sinister problem though - the banks have this country in their pockets. Basically, if the government tries to pass any laws, or raise taxes, or do anything else that the banks don't like, they can simply threaten to move their operations abroad and cost the country hundreds of millions of pounds in tax revenue. And they know that it would be a massive blow to the economy of they did that, and that the government would do anything to prevent that from happening.

We shouldn't be so dependent on one sector to keep the country running, because it's Joe Blogs in Southampton that ends up paying the price.

[rutty]

I read something like this on Google+ a few days ago, about the advantages the super-rich corporations get from the government:

Privatise the profits, socialise the risk

Can't remember the source, but it does ring true. Banks get to keep their profits while things are going well (the 1%), but if it all goes tits up the repercussions are felt by everyone else (the 99%). Quite a few of the 99% do benefit a great deal from the banks, of course, but broadly speaking the few benefit while the majority stand to lose the most when things go wrong.

Not a lot to do with housing that, is it?

Hmmmm, well the housing market, in the UK especially, is a strange beast. There's always limited supply compared to the need for housing, so the price has been pushed far too high for too long. Artificially high? I don't know. The desire to own your own house seems to be a bigger factor than incompetent/evil estate agents to me.

[Dom]

The desire to own your own house seems to be a bigger factor than incompetent/evil estate agents to me.

That's certainly true to some extent, but it's that desire to own your own property that gets exploited by the corporations. And recently, that desire has been superseded by reality, in that people have come to realise that either they can't afford it, or it's just not worth the high price. But have the prices come down? No, not really. You get the odd report of house prices "slumping", but when you look at the actual numbers, a couple of thousand pounds off of the average £166,000 is a drop in the ocean.

The desire has diminished (or at least, reality has taken priority) and yet the prices have remained practically as high as they always have.

[sickpuppy]

The desire to own your own house seems to be a bigger factor than incompetent/evil estate agents to me.

You can thank Thatcher for that. Most european countries get buy without feeling the need to own a home. Some (like Switzerland) make it downright difficult.

[Dom]

That's true - a friend of mine who went to live in Germany for a year said the same thing. Most people rent property in Europe, as they don't feel the need or pressure to own their own homes.

Were it possible, though, I'd certainly like to. It'd be nice to know that £500 a month is being put into bricks and mortar that I own, rather than going to some landlord.

[familychoice]

Were it possible, though, I'd certainly like to. It'd be nice to know that £500 a month is being put into bricks and mortar that I own, rather than going to some landlord.

That's the drawback with renting, you pay a little bit extra so the landlord makes a return on his investment.

We're going to try and sell this place next year and move somewhere with jobs and where we can grow vegetables. Anywhere will do really. If we can't sell though then we'll put this up for rent and then rent something ourselves elsewhere.

I don't mind renting, some of the nicest places I've lived in have been rented. What I don't like is the lack of security. Once we were kicked out of a cottage we'd just spent 6 months doing up as the farmers' friend decided she wanted to live there now it was all nice and fixed up. I found the 7 day notice to quit letter on the doormat after returning from my mums funeral, a week before my daughter was due to be born.

Landlords make up some of the lowest forms of life on the planet. Of course they're not all bad, just the majority.

[Tony]

The government are holding interest rates at .5% so as to prop up the housing market and the banks. If they increased them which they would normally do to control inflation, then that would mean people who are way overstretched already on their mortgages due to the fairly criminal activities of the banks would then fall into default meaning a large amount of reposessions and when they come to offload them back into the market there would then be a glut and property prices would fall.

This would then mean that they have lost serious amounts of money on the reposessed properties, and thousands of others would be plunged into negative equity which even though it wouldn't be a problem if people didn't need to move, would show huge losses and liabilities on the banks books (even if they aren't real losses untl they default) which would then have a knock on effect of their share price dropping sharply, leading to a run on the bank and probably collapse (a la Northern Rock).

So, as long as they keep interest rates at the levels they are, the slower the bleed from the effects of inflation on the populace, the slower the collapse of the artificially controlled housing market which means that johnny banker gets to carry on creating wealth for himself and his chums whilst Cameron does all he can to ensure people continue committing to the market by offering to underwrite mortgages for people using our money.

I don't really mind becoming involuntarily recruited as a banker so long as my 5x salary annual bonus turn up on time - I'll even offer to pay tax on it being the good citizen that I am.

[sickpuppy]

Were it possible, though, I'd certainly like to. It'd be nice to know that £500 a month is being put into bricks and mortar that I own, rather than going to some landlord.

If it helps it's £499 going to some bank with £1 going into bricks and mortar that the bank owns. When you finally do own the bricks and mortar you can enjoy it for a short while until the nursing home sells it to pay for your care.*


* I am being willfully bleak, just don't get me started pensions or "paying someone else to piss your money down the drain like a tramp with cystitis" as I like to call it.

[Mr Sparkle]

How feasible would it be to go through the paperwork of selling/buying a house yourself?

[Dom]

Were it possible, though, I'd certainly like to. It'd be nice to know that £500 a month is being put into bricks and mortar that I own, rather than going to some landlord.

What I don't like is the lack of security. Once we were kicked out of a cottage we'd just spent 6 months doing up as the farmers' friend decided she wanted to live there now it was all nice and fixed up. I found the 7 day notice to quit letter on the doormat after returning from my mums funeral, a week before my daughter was due to be born.

Wow, that must have been a hell of a situation to find yourself in. Did you not have a contract that said how much notice the landlord has to give you before you're evicted? Even if you did, the law is on the side of the tenants more than the landlord I think, and you could have made it extremely difficult for them to get you out (if you could put up with the immense hassle, of course). He'd have to get a court order (I forget what they're officially called) but the quickest that would happen is within two months, and that's if you don't appeal in any way.

The government are holding interest rates at .5% so as to prop up the housing market and the banks. If they increased them which they would normally do to control inflation, then that would mean people who are way overstretched already on their mortgages due to the fairly criminal activities of the banks would then fall into default meaning a large amount of reposessions and when they come to offload them back into the market there would then be a glut and property prices would fall.

This would then mean that they have lost serious amounts of money on the reposessed properties, and thousands of others would be plunged into negative equity which even though it wouldn't be a problem if people didn't need to move, would show huge losses and liabilities on the banks books (even if they aren't real losses untl they default) which would then have a knock on effect of their share price dropping sharply, leading to a run on the bank and probably collapse (a la Northern Rock).

Sounds like a plan.

How feasible would it be to go through the paperwork of selling/buying a house yourself?

That's a good question; the fees are ridiculous. It wouldn't surprise me if you buy a few property law books and get an online degree in sales or some such, for less money than you end up paying in solicitors fees. And then you could do it yourself.

[robwhizz]

How feasible would it be to go through the paperwork of selling/buying a house yourself?

That's a good question; the fees are ridiculous. It wouldn't surprise me if you buy a few property law books and get an online degree in sales or some such, for less money than you end up paying in solicitors fees. And then you could do it yourself.

When you are spending Hundreds of thousands of pounds on a house do you really want to try and do the legal stuff yourself for the sake of a few hundred pounds?
Can you write a competent and legal document for the sale/purchase of the house? Would you be confident that you'd made sure the seller is the legal owner?
I would guess there are several areas such as the writing of legal documents that you, as an unqualified person, would not legally be allowed to do perhaps.
It is expensive, but it would be more expensive to end up with £100,000+ of debt and find out you don't have any claim to the house or something equally horrifying.

[Jem]

I didn't think the solicitors fees were that bad when we bought our place - I've wasted more over the years on estate agents fees with renting.

[spannaa]

When you are spending Hundreds of thousands of pounds on a house do you really want to try and do the legal stuff yourself for the sake of a few hundred pounds?

Definitely not.

The actual solicitors fees for our recent move were £450+vat for the sale and £550+vat for the purchase which I didn't consider was too bad.

The other costs involved such as stamp duty, searches, land registry fees etc would still be payable if you did the conveyancing yourself.

[Dom]

I don't think anyone thought they could do it themselves. Except me, because I'm MAX POWER.

Anyway, isn't it time we had a public sector strike? Oh, wait...

[Steve Lampkins]

Can't you get those DIY will kits from the supermarket?

[Dom]

No, you're thinking of DIY prescription glasses. And instead of supermarkets, you're thinking of Savers.

[familychoice]

You can buy and sell without estate agents, we did that with Mrs FC's old place but I wouldn't fancy doing my own conveyancing.

[yawner]

How is it that the housing market is the only market in the world where the usual "supply and demand" principle is just completely ignored? For everything else, when demand goes down (usually because everyone has one, or because things become too expensive) then prices fall to entice people to spend.

Maybe its because houses are different. If the price of fags or drink goes up, we can choose to consume less of these, or pack in altogether. Everybody needs somewhere to live. And when one is finally lucky enough to have bought their own house and sees the bottom drop out of the housing market, do they say "Oh dear, never mind, we'll just sell the house for far less than we paid for it" or do they hang on, in the hope that values one day might recover. Which keeps values from dropping futher.

Everyone, right down to the estate agents on commission, is looking to make as much money as possible by over-valuing property

Absolutely not my experience! Surely it would be in their interests for prices to fall and houses to start selling in numbers again. Lots of commissions as opposed to the occasional one?

*Just to be clear here, I still detest estate agents with every fibre of my being. Thank you.

[familychoice]

Absolutely not my experience! Surely it would be in their interests for prices to fall and houses to start selling in numbers again. Lots of commissions as opposed to the occasional one?

Depends on the area, the agent and the amount of stock they have. If they don't have much on their books then they're more likely to hold out for a high price and so bigger commission.

[yawner]

Depends on the area, the agent and the amount of stock they have. If they don't have much on their books then they're more likely to hold out for a high price and so bigger commission.

I can only go by my own experience. I've sold 3 properties this year. Each in a different area. Every time the agents very much managed our expectations, advising us to drop our asking prices or forget selling. We had to do a lot of bullet-biting to get them shifted.

[familychoice]

Depends on the area, the agent and the amount of stock they have. If they don't have much on their books then they're more likely to hold out for a high price and so bigger commission.

I can only go by my own experience. I've sold 3 properties this year. Each in a different area. Every time the agents very much managed our expectations, advising us to drop our asking prices or forget selling. We had to do a lot of bullet-biting to get them shifted.

I guess things are different these days, and they'll bite the fingers off a buyer. In the past though I've experienced the opposite, and theyve tried to talk me into not accepting offers and holding out for the full price. Theyre weird around here anyway.

[Matt]

Ah, but to even have a hope in hell of being able to buy a house :/

[Whatever]

Ah, but to even have a hope in hell of being able to buy a house :/

Don't you class as a teacher Matt as I thought they could get help with purchasing? You may even qualify in your support role?

[Matt]

Ah, but to even have a hope in hell of being able to buy a house :/

Don't you class as a teacher Matt as I thought they could get help with purchasing? You may even qualify in your support role?

I applied for the first buy scheme, you need a 10% deposit, and £1.5k in cash ready before registering. I just haven't got that, and on the wages we are both on, cant save it either.

So will have to get another rented place next year - probably more a month, so even less chance to save.

[sarahA]

Is the home buy direct scheme not going still? We looked at that but this was pre Master A and they'd only offer us a 2 bedroom house and we needed a 3 bedroom one. Plus we were restricted to one area of new builds and that was it. Nice idea, but too restrictive for us.

[Matt]

Is the home buy direct scheme not going still? We looked at that but this was pre Master A and they'd only offer us a 2 bedroom house and we needed a 3 bedroom one. Plus we were restricted to one area of new builds and that was it. Nice idea, but too restrictive for us.

Yeah, thats what I applied for. None really that local to us, but I'd be willing to move out of area tbh.

But as I say, we fall at the first hurdle: having actual money. Or even having access to a way of getting any cash!!

[sarahA]

Must be different then as when we looked you needed about £99 minimum, and then they'd loan you up to 30% deposit depending on your circumstances and what you could afford

[Mike@TheWhippinpost]

Alright lads and lasses.

Like to pick up on a few points raised on this thread if anyone's still reading.

It'd be nice to know that £500 a month is being put into bricks and mortar that I own, rather than going to some landlord.

I could go on a long time about the fallacy of home ownership for the common man, given that most Title Deeds revert back to financial institutions sooner or later, if you think about it.

There are times, financially, when renting is astute. For instance, a friend of mine is locked into a 5 year fixed rate of ~5.5% which expires in 2 years; by which time, so "they" say, interest rates will be back on-the-up.

Meanwhile his property has fallen in value, plunging him into negative equity; plus he has to maintain it. His home is currently a prison, not castle.