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In the UK it's normal practice to get in a chain. You sell yours, line up the one you want to buy, and all 14 people in the chain complete on the same day. Not

by awjr 12y ago

In the UK it's normal practice to get in a chain. You sell yours, line up the one you want to buy, and all 14 people in the chain complete on the same day. Not sure you should be selling your house, then deciding to look. You have to ask yourself what changed in the UK mortgage market to create this increase in housing value. It comes down to a bank regulation change the government put in place in 1996. Banks were able to offer buy-to-let mortgages. This has fundamentally distorted the housing market in the UK. In London you also have another issue. Apparently 40% of new build apartments are bought and never lived in. They are used as an investment to hold money 'safely' primarily by foreign buyers. [EDIT] Citation for "buy to leave" http://www.theguardian.com/business/2014/dec/04/property-investors-islington-london-homes-empty-jail http://www.theguardian.com/business/2014/dec/04/property-inv... http://www.theguardian.com/commentisfree/2014/dec/08/islington-council-buy-to-leave-investors-uk-housing http://www.theguardian.com/commentisfree/2014/dec/08/islingt... So you have a situation where the Banks leant like crazy inflating the housing market, the crash happened, the banks hardened their mortgage lending criteria, which forced most people into renting, enabling landlords to maximise returns and invest further in rental properties using buy to let mortgages that use rental income as part of the payment calculation. It's one hell of a vicious circle. From my point of view I have benefited, but I honestly cannot see my 11 year old daughter ever owning her own property.

CmonDev 12y ago
I thought a major reason was Thatcher letting people who should not be owning a house buy one at a cut price?
- matthewmacleod 12y ago
  No - 'right to buy' is not related to the UK's housing crisis, aside from the fact it depleted social housing stock (which is a separate issue that should not have been allowed to happen). Offering cut-price sales of social property to council tenants is an amazingly powerful tool for giving people ownership over their communities.
  - pjc50 12y ago
    Depletion of the social housing stock was an explicit objective of the policy. It was part of a transfer of power from the labour-controlled ""collectivist"" councils. That's why they were prevented from spending the revenue on new housebuilding. It gives people ownership of their houses, not their communities. It's a micro version of the general privatisation problem of selling public assets at a discount for the benefit of private interests; it's just a variant that everyone's allowed a crack at, like the royal mail shares.
- arethuza 12y ago
  "who should not be owning a house" I think that's a bit harsh - my wife's parents bought their house under the Thatcher Right to Buy scheme and they were both hard working and financially prudent - they could have purchased a house but it wasn't what skilled working class people did in Glasgow so they didn't do it for cultural, not financial, reasons. People used to joke that you could tell council houses where the owners had purchased because they had a new front door - and that is true - people look after property a lot more when it's there and whole neighborhoods have been improved that way. What I do think was wrong with the Right to Buy Scheme was that it didn't spend the money raised on building new social housing.
slap 12y ago
"Apparently 40% of new build apartments are bought and never lived in" : this is totally incorrect
- blakef 12y ago
  Can anyone provide a more accurate figure?
  - awjr 12y ago
    I posted above but here are a couple of links on "buy to leave" http://www.theguardian.com/business/2014/dec/04/property-investors-islington-london-homes-empty-jail http://www.theguardian.com/business/2014/dec/04/property-inv... http://www.theguardian.com/commentisfree/2014/dec/08/islington-council-buy-to-leave-investors-uk-housing http://www.theguardian.com/commentisfree/2014/dec/08/islingt... I'm guessing it very much depends on the development with some stating sales being 85% to foreign investors.
  - slap 12y ago
    << Only 2.1% of homes in London are empty compared to 3.12% of the rest of England >> http://www.londoncouncils.gov.uk/londonfacts/default.htm?category=10 http://www.londoncouncils.gov.uk/londonfacts/default.htm?cat...
- mwj 12y ago
  Errr... have you been following the Battersea Power Station development at all?
NotableAlamode 12y ago
I seriously doubt that 40% figure. Why would "foreign buyers" who by flats as investments not take home the (very substantial) London rents? It would be financially imprudent. I suspect that this is really a form of xenophobia, used, among other things, to sensationalise newspaper articles.
- suvelx 12y ago
  Use diminishes value. Having tenants requires work, adds cost, and might just not be worth your time. You might just want a house for a weekend, and not want plebs messing your shit up. And it probably has some degree of truth, You can stand outside 'new' buildings for a week and never see lights on in some windows.
  - NotableAlamode 12y ago
    Use diminishes value, but this is nicely compensated for by rent, and more than compensated by London rental levels. Leaving a property empty is also not without problems (think heating, burglary, squatting, taxes). The number of people rich enough to buy pied-a-terres in (one of) the world's most expensive real estate markets is too small to justify the 40% figure (or anything like it).
    - AmirS2 12y ago
      These buy-to-leave flats are generally newly built (and were bought off plan), in high rise buildings with concierge / security, so there are no worries about heating, burglary or squatting... I'd guess the price of these is around £350k - £1.5m (for a reasonable 1 - 3 bed flat in a new build), which is well within the reach of well off foreign middle class investors.
      - NotableAlamode 12y ago
        It is within reach, but it would be financially wildly imprudent to forgo the £1000 - £3000 monthly rental income that such properties would fetch. Bear in mind that you will have to pay council tax and other fixed costs anyway. It would be a desperately terrible investment, much worse than other, more liquid assets. The global middle class cannot afford such investments. Maybe members of the Saudi royal family, but they won't be that interested in 1 bedrooms in Islington.
AmirS2 12y ago
> Not sure you should be selling your house, then deciding to look. It's buying a house before you've sold yours that's a problem, not this way around (think cashflow), especially if you don't mind putting your furniture in storage and renting for a few weeks in between.

by awjr 12y ago

CmonDev 12y ago

I thought a major reason was Thatcher letting people who should not be owning a house buy one at a cut price?

matthewmacleod 12y ago
No - 'right to buy' is not related to the UK's housing crisis, aside from the fact it depleted social housing stock (which is a separate issue that should not have been allowed to happen). Offering cut-price sales of social property to council tenants is an amazingly powerful tool for giving people ownership over their communities.
- pjc50 12y ago
  Depletion of the social housing stock was an explicit objective of the policy. It was part of a transfer of power from the labour-controlled ""collectivist"" councils. That's why they were prevented from spending the revenue on new housebuilding. It gives people ownership of their houses, not their communities. It's a micro version of the general privatisation problem of selling public assets at a discount for the benefit of private interests; it's just a variant that everyone's allowed a crack at, like the royal mail shares.
arethuza 12y ago
"who should not be owning a house" I think that's a bit harsh - my wife's parents bought their house under the Thatcher Right to Buy scheme and they were both hard working and financially prudent - they could have purchased a house but it wasn't what skilled working class people did in Glasgow so they didn't do it for cultural, not financial, reasons. People used to joke that you could tell council houses where the owners had purchased because they had a new front door - and that is true - people look after property a lot more when it's there and whole neighborhoods have been improved that way. What I do think was wrong with the Right to Buy Scheme was that it didn't spend the money raised on building new social housing.

slap 12y ago

"Apparently 40% of new build apartments are bought and never lived in" : this is totally incorrect

blakef 12y ago
Can anyone provide a more accurate figure?
- awjr 12y ago
  I posted above but here are a couple of links on "buy to leave" http://www.theguardian.com/business/2014/dec/04/property-investors-islington-london-homes-empty-jail http://www.theguardian.com/business/2014/dec/04/property-inv... http://www.theguardian.com/commentisfree/2014/dec/08/islington-council-buy-to-leave-investors-uk-housing http://www.theguardian.com/commentisfree/2014/dec/08/islingt... I'm guessing it very much depends on the development with some stating sales being 85% to foreign investors.
- slap 12y ago
  << Only 2.1% of homes in London are empty compared to 3.12% of the rest of England >> http://www.londoncouncils.gov.uk/londonfacts/default.htm?category=10 http://www.londoncouncils.gov.uk/londonfacts/default.htm?cat...
mwj 12y ago
Errr... have you been following the Battersea Power Station development at all?

NotableAlamode 12y ago

I seriously doubt that 40% figure. Why would "foreign buyers" who by flats as investments not take home the (very substantial) London rents? It would be financially imprudent. I suspect that this is really a form of xenophobia, used, among other things, to sensationalise newspaper articles.

suvelx 12y ago
Use diminishes value. Having tenants requires work, adds cost, and might just not be worth your time. You might just want a house for a weekend, and not want plebs messing your shit up. And it probably has some degree of truth, You can stand outside 'new' buildings for a week and never see lights on in some windows.
- NotableAlamode 12y ago
  Use diminishes value, but this is nicely compensated for by rent, and more than compensated by London rental levels. Leaving a property empty is also not without problems (think heating, burglary, squatting, taxes). The number of people rich enough to buy pied-a-terres in (one of) the world's most expensive real estate markets is too small to justify the 40% figure (or anything like it).
  - AmirS2 12y ago
    These buy-to-leave flats are generally newly built (and were bought off plan), in high rise buildings with concierge / security, so there are no worries about heating, burglary or squatting... I'd guess the price of these is around £350k - £1.5m (for a reasonable 1 - 3 bed flat in a new build), which is well within the reach of well off foreign middle class investors.
    - NotableAlamode 12y ago
      It is within reach, but it would be financially wildly imprudent to forgo the £1000 - £3000 monthly rental income that such properties would fetch. Bear in mind that you will have to pay council tax and other fixed costs anyway. It would be a desperately terrible investment, much worse than other, more liquid assets. The global middle class cannot afford such investments. Maybe members of the Saudi royal family, but they won't be that interested in 1 bedrooms in Islington.

AmirS2 12y ago

> Not sure you should be selling your house, then deciding to look. It's buying a house before you've sold yours that's a problem, not this way around (think cashflow), especially if you don't mind putting your furniture in storage and renting for a few weeks in between.