h2g2 The Hitchhiker's Guide to the Galaxy: Earth Edition

Snakes alive!

This may not be the most interesting subject for everyone, but personally I am fascinated by the way house prices keep on rising here in the South of England!

What do you think will happen to house prices over the next few months?

Will intereste rates be raised?

What are your personal experiences?

Share if you dare!

I am a reasonably well paid public sector professional living in a two bedroomed house in Brighton. In the four years that I have owned it, its value has increased by more than my take home pay for the same period.

The knock on effect of this is that recruitment into healthcare jobs from outside of the area has become impossible. For example about 2 months ago we advertised for 6 nurses to work in a Special Care Baby Unit, and we recieved not one external application.

Increasing interest rates will not have a significant effect on the price of housing as it will not choke off the demand in the market. The problem lies in the supply side. Where we need a major housing building programme in the UK to supply affordable homes in the locations where the jobs are. This will not come about unless there is some government intervention, which I can't see happening any time soon. In the intervening period education, health and other public services will come under increasing stress and will start to fail on a more regular basis.

I have a feeling that house prices will continue to rise at least for the medium term and that mortgage lenders are going to have to change their terms so that people on an average wage can afford them. That means the 50 year mortgage or the 50% equity mortgage may well be in the offing.
This is not confined to the south east of England - the average house price in Dublin is now 4 times the average wage and the resultant housing crisis is causing real problems for the employers.

Frankly it is ludicrous.
The crash may not come short term, but it surely will come and people are going to be digging themselves out of huge holes when it does.
I'm 36. A fifty year mortgage is a no-no for me-at that's presuming I buy today-i'll only be 8ing6 when I finish paying it off.
As I have an equity mortgage at the moment, nothing on God's green earth would tempt me to do that again either, as we are facing a serious shortfall on the figures expected.
Wanna buy a copy of the Big Issue gov? Because when i reall y look at it, homelessness seems a very real possibility, atm.

Equity mortgage?<blush.
Of course, I meant *endowment* mortgage...

Like many people I abandonned the North East to take advantage of the better opertunties in the South. I now live in Oxford, and pay the price in the form of sky high rents, buying is not an option.

The problem is that too many people want to live here, which is understandable, but means high rents and morgages, and massive pressure on green belt land.

With a 'family home' now approaching a quarter of a million in my area, I am wondering who these families are that can afford one! I am defining a family home as somewhere larger than a 2 bed flat.

With interest rates so low it is actually cheaper to buy than rent if you are at the lower end of the market, with rental on a two bed flat from 750-950 pcm you could easily get a mortgage at that rate.

I don't think the supply problem can be solved in London, surely every 'ripe for re-development' brownfield site has been turned into luxury apartments now. Short of building over the whole of the south east (stupid, disaterous etc) we are all eventually going to be pushed up north if we want to own a house.

Don't know how to fix it

The only way I could afford to buy would be to buy my council house, and I don't think I would be comfortable doing that at all.

There is always house building going on in my town. An entirely new estate was ready to move into from February this year, and building is still going on, there and other places. The demand is way more than the supply. Yet I can't understand where the people are coming from.

No there is plenty of brown field space in the South East and London. The problem is that the dirtier of the space is expensive to clean up. And then when you have your land or buildings for redevelopment, the builders get a better margin building "luxury" as opposed to "affordable", so naturally build for the upper end of the market. The majority of these sort of flats are then sold as investment properties with the buy to let scheme.

What needs to happen is for the government to release the funds that are ringfenced in local authorities from the (forced) sale of coucil houses, and redirect that to new building. They also need to force developers to include a large percentage of affordable housing in any development, possibly including some tax breaks as a bit of a carrot.

The next step is to sort out the infrastructure in the UK so that we can get around more easily and commute to jobs from areas of lower housing cost. And finally regional development needs to be stimulated to encourage new business out of the SOuth East and away to other areas in the UK.

I thought those funds had been released? Which is why my local council is spending the next three years double glazing all of their houses?

The money can't be spent on new houses, but improving the current ones afaik. New social housing in my area is all owned by housing trusts, with the accompaning huge council tax and pricey rent.

I think the only way around this problem is to just ignore it and hope that it goes away. Like the impending recession, people must start realising that the only way around problems such as these is to make sure that it is NOT YOUR PROBLEM to sort out. As soon as responsibility can be passed on to someone else then the problem suddenly does not seem so bad anymore.

Personally it doesn't bother me as I can claim my house off the taxpayer, where me and my family can all live in comfort for as long as is necessary. You should all take a leaf out of my book and stop complaining. Anyone would think that you need some kind of protection from the elements in this country.
What do you think the Greenhouse effect is for?

Anyway must get back to Whitehall - my colleagues will be wondering where I am. Please excuse me.

Why own a house anyway - the majority of French householders are renting and they seem happy enough (apart from the natch.) and I think the same goes for Belgium.

Goes for most of Continental Europe and North America, I think.
Ownership is a pain, I wish i'd never done, to be honest.

But when it costs more to rent than buy, why pay through the nose for somebody else to get the capital increase for where you live?

Maybe it isn't the same if you can find a long-term let where you have more control over your environment but I hate living with a landlord's horrible decor, and having to chase them to fix things that you would otherwise fix yourself, and having to ask for written permission if you want to hang a painting or put a shelf up, and not being allowed pets etc.

Also, the landlord can kick you out at any time, so you have to move unwillingly.

Renting is a pain.

k

I'd say what is needed is 5 year leases...that way you look after the property as if it were your own but aren't dragged down by it...and who would want to stay in one place for more than 5 years anyway?

(Incidentally - how much do house boats cost?)

>having to chase them to fix things that you would otherwise fix yourself<

Believe you me, when it's a potential bill for £192,000 to have the roof shored up, you'd be delighte3d to be chasing a landlord not contemplating ways to pay it yourself...

I have to contribute 7k to the cost (400k) of having the roof of my block of flats shored up - you must live in quite a mansion if your have to find 200k to fix your own roof!

If the mortgage is £200 a month cheaper than the rent on an equivalent property then you make quite a saving on your monthly outgoings by buying rather than renting...

The problem is that the tax system in Europe is geared to make renting an attractive option which is why it is so popular. Here it is just money down the drain!

Hardly a mansion but we leasehold of the basement and ground floor of a four story block of converted flats. There are two other leaseholders who own flats two and three.
The managers of the building have consistently not done any work on the property for the last twen years or so (despite the fact that the roof had actually caved in at one point just before they bought the freehold).

They refusse to acknowledge any form of communication, merely sending us ever spiralling demands for cash every six months.
The last one quoted £192,000 to repairs to the building following leaks caused by the roof. They refuse to even discuss whether the building is insured againmst it, despite the fact that our insurance contribution jumped from £250 per flat last year to £779 per flat this year.

One problem keeping house prices high in Oxford is that any affordable new property is bought up by landlords to let. And the rents are high because the letting agencies control a large fraction of the market and operate a cartel.