Cost of living crisis.

[Górnik Leicester]

1 hour ago, adejo92 said:

A lot of places say the rates will drop throughout 2024.

That's the hope, but given how some of the predictions of where the rates would peak have panned out so far I'm sceptical.

 

Without wanting to incorrectly signal myself as some kind of financial expert, I'm yet to be totally convinced that the BoE know whether their plan to reduce inflation is the right one. 

[Lionator]

1 hour ago, adejo92 said:

A lot of places say the rates will drop throughout 2024.

When it comes to housing/mortgages, they've been saying things will eventually burst and get cheaper for years, yet the opposite has happened. It's all about fleecing you for everything they can get. 

[leicsmac]

4 minutes ago, Lionator said:

When it comes to housing/mortgages, they've been saying things will eventually burst and get cheaper for years, yet the opposite has happened. It's all about fleecing you for everything they can get. 

I feel horrible for saying it because a lot of decent people would get caught in the crossfire, but the bottom falling out of the housing market, soon, would help far more people than it hurt.

[Zear0]

7 minutes ago, leicsmac said:

I feel horrible for saying it because a lot of decent people would get caught in the crossfire, but the bottom falling out of the housing market, soon, would help far more people than it hurt.

Not sure it'll really help anyone tbh and I definitely don't think a crash will benefit the young or less well off.  Prices will drop, but the interest rate hikes just offset any benefit to this from affordability perspective.  For context, my next renewal rate is going from 1.29% to 6+% and will likely put £900p/m on the bills which is equivalent to borrowing an additional £300k on my original mortgage (they've not dropped that much as wages are offsetting that damage).  Prices are what they are due to the amount of money available for the housing market.  It'll never change as people will always put x% of wages towards housing.

 

Once again those laughing to the bank (no pun intended) are those with high equity and disposable income who aren't affected by the current situation.  Another aspect to this would be if the market did collapse, then the affordable properties would be swept up by the cash rich who can easily outbid first time buyers and are more appealing to buy from(no mortgage).  I've never agreed that a property crash would benefit those struggling and think a stable market is the best thing for them.

[Bordersfox]

4 minutes ago, Zear0 said:

Not sure it'll really help anyone tbh and I definitely don't think a crash will benefit the young or less well off.  Prices will drop, but the interest rate hikes just offset any benefit to this from affordability perspective.  For context, my next renewal rate is going from 1.29% to 6+% and will likely put £900p/m on the bills which is equivalent to borrowing an additional £300k on my original mortgage (they've not dropped that much as wages are offsetting that damage).  Prices are what they are due to the amount of money available for the housing market.  It'll never change as people will always put x% of wages towards housing.

 

Once again those laughing to the bank (no pun intended) are those with high equity and disposable income who aren't affected by the current situation.  Another aspect to this would be if the market did collapse, then the affordable properties would be swept up by the cash rich who can easily outbid first time buyers and are more appealing to buy from(no mortgage).  I've never agreed that a property crash would benefit those struggling and think a stable market is the best thing for them.

Well said.  Only disaster capitalists benefit from a housing crash.

 

The issue with house prices is a longstanding, systemic one which at the heart has a lack of affordable housing and rentals and a lack of good, cheap housing stock generally.   Which is what happens when you flog off council houses and prevent Housing Associations from borrowing to acquire sites to build more.    Both New Labour and the Tories culpable.  

 

Developers land bank in order to artificially inflate prices (I used to act for several national house builders in a professional capacity) and nothing is done about that either. They will also do everything within their power to avoid having to build any affordable housing on a site.  Their relationship with local planners is often unhealthily close.  I have seen more than one planning officer get a nice cushy job with a house builder.  Nowt will change when the likes of John Bloor are donating a million quid to the Conservative Party.  This is not a man who gives his money away out of the goodness of his heart.  

 

Profound change is required to sort the UK housing market out, which won't happen, not a housing crash. 

[Zear0]

2 minutes ago, Bordersfox said:

Well said.  Only disaster capitalists benefit from a housing crash.

 

The issue with house prices is a longstanding, systemic one which at the heart has a lack of affordable housing and rentals and a lack of good, cheap housing stock generally.   Which is what happens when you flog off council houses and prevent Housing Associations from borrowing to acquire sites to build more.    Both New Labour and the Tories culpable.  

 

Developers land bank in order to artificially inflate prices (I used to act for several national house builders in a professional capacity) and nothing is done about that either. They will also do everything within their power to avoid having to build any affordable housing on a site.  Their relationship with local planners is often unhealthily close.  I have seen more than one planning officer get a nice cushy job with a house builder.  Nowt will change when the likes of John Bloor are donating a million quid to the Conservative Party.  This is not a man who gives his money away out of the goodness of his heart.  

 

Profound change is required to sort the UK housing market out, which won't happen, not a housing crash. 

Quite. My sister was looking to buy one of the new builds at Newbold Verdon and I tagged along to speak to the sales rep. The whole site was nearly finished but only 10% were available as she said they can just create demand and then stick an extra 5/10% on the next batch of houses on the same estate. As I said they'd already been built so the costs were fixed and they were just making more margin. 

 

Not being one to moan (not true) without any ideas, I'd like for them to stop making crappy "affordable houses" on the new build sites and just put a profit cap on a fixed % of the development. Given they make, on average, about £70k per sale it will make them more affordable and the estates more inclusive. Need to somehow make the snobbery associated with "affordable housing or social housing" go away. 

 

The points you make on land squatting are so irksome even thought I'd heard it before. It's one of those problems that's so easy to fix and nothing happens to the buggers for doing this shady practise.

[FoyleFox]

46 minutes ago, leicsmac said:

I feel horrible for saying it because a lot of decent people would get caught in the crossfire, but the bottom falling out of the housing market, soon, would help far more people than it hurt.

If that could not happen in the next 7 ish weeks until my sale completes, though, that would be great. Ta!

 

Although, I'm not so sure that it's the answer. Stability and lower interest rates would be more beneficial.

[Bordersfox]

11 minutes ago, Zear0 said:

Quite. My sister was looking to buy one of the new builds at Newbold Verdon and I tagged along to speak to the sales rep. The whole site was nearly finished but only 10% were available as she said they can just create demand and then stick an extra 5/10% on the next batch of houses on the same estate. As I said they'd already been built so the costs were fixed and they were just making more margin. 

 

Not being one to moan (not true) without any ideas, I'd like for them to stop making crappy "affordable houses" on the new build sites and just put a profit cap on a fixed % of the development. Given they make, on average, about £70k per sale it will make them more affordable and the estates more inclusive. Need to somehow make the snobbery associated with "affordable housing or social housing" go away. 

 

The points you make on land squatting are so irksome even thought I'd heard it before. It's one of those problems that's so easy to fix and nothing happens to the buggers for doing this shady practise.

I think the issue of snobbery and the stigma that's been placed on affordable housing generally is huge.  Of course there are some wrong 'uns but so many people qualify for affordable housing who are just ordinary, hard working folk on low incomes. My cousin lives in affordable housing, she works for the NHS in a low paid job.

 

The other solution is, of course, to actually pay such people properly whilst curbing the horrific excesses of the wealthiest to create a society that is less fvcked up generally. But that's another topic altogether and one that will likely find me in the how long is my ban thread of the forum.  

[Footballwipe]

3 minutes ago, Bordersfox said:

I think the issue of snobbery and the stigma that's been placed on affordable housing generally is huge.  Of course there are some wrong 'uns but so many people qualify for affordable housing who are just ordinary, hard working folk on low incomes. My cousin lives in affordable housing, she works for the NHS in a low paid job.

 

The other solution is, of course, to actually pay such people properly whilst curbing the horrific excesses of the wealthiest to create a society that is less fvcked up generally. But that's another topic altogether and one that will likely find me in the how long is my ban thread of the forum.  

Absolutely, I've heard stories about New Lubbesthorpe in terms of one developer trying to wriggle out of their requirement for affordable housing. The planning authority have also written in rules about affordable housing requirements... they're not allowed to be stuffed at the back of the development all together. In fact you're not allowed to have more than five (I think it's five) affordable units next to each other. This splits the housing and integrates it into the whole community.

 

[Bordersfox]

2 minutes ago, Footballwipe said:

Absolutely, I've heard stories about New Lubbesthorpe in terms of one developer trying to wriggle out of their requirement for affordable housing. The planning authority have also written in rules about affordable housing requirements... they're not allowed to be stuffed at the back of the development all together. In fact you're not allowed to have more than five (I think it's five) affordable units next to each other. This splits the housing and integrates it into the whole community.

 

Yep which is exactly as it should be!  Stick people on a ghetto and they'll act like they're stuck in a ghetto.  

 

They will also threaten just not to build.  Which of course stuffs local authorities with new build targets imposed on them by central government.  

 

The old, we can't make this site work with the affordable on it rubbish.  So drop it or reduce it or we'll just walk away and develop one of our other sites over the border.  

[Lionator]

One of the other problems of course is nimbyism. We need more houses, we need more social housing, in order to make things cheaper. Everybody knows this but so many people object to these houses being built. This is why the Green party did so well in the local elections, not because people are all of a sudden green activists. Excuse the party political nature of this quote but Labour seem to be the only party with a plan for this but will need to go hard on planning laws which will be deeply unpopular, but are necessary to ensure the economic security of the UK. 

[leicsmac]

1 hour ago, Zear0 said:

Not sure it'll really help anyone tbh and I definitely don't think a crash will benefit the young or less well off.  Prices will drop, but the interest rate hikes just offset any benefit to this from affordability perspective.  For context, my next renewal rate is going from 1.29% to 6+% and will likely put £900p/m on the bills which is equivalent to borrowing an additional £300k on my original mortgage (they've not dropped that much as wages are offsetting that damage).  Prices are what they are due to the amount of money available for the housing market.  It'll never change as people will always put x% of wages towards housing.

 

Once again those laughing to the bank (no pun intended) are those with high equity and disposable income who aren't affected by the current situation.  Another aspect to this would be if the market did collapse, then the affordable properties would be swept up by the cash rich who can easily outbid first time buyers and are more appealing to buy from(no mortgage).  I've never agreed that a property crash would benefit those struggling and think a stable market is the best thing for them.

 

1 hour ago, Bordersfox said:

Well said.  Only disaster capitalists benefit from a housing crash.

 

The issue with house prices is a longstanding, systemic one which at the heart has a lack of affordable housing and rentals and a lack of good, cheap housing stock generally.   Which is what happens when you flog off council houses and prevent Housing Associations from borrowing to acquire sites to build more.    Both New Labour and the Tories culpable.  

 

Developers land bank in order to artificially inflate prices (I used to act for several national house builders in a professional capacity) and nothing is done about that either. They will also do everything within their power to avoid having to build any affordable housing on a site.  Their relationship with local planners is often unhealthily close.  I have seen more than one planning officer get a nice cushy job with a house builder.  Nowt will change when the likes of John Bloor are donating a million quid to the Conservative Party.  This is not a man who gives his money away out of the goodness of his heart.  

 

Profound change is required to sort the UK housing market out, which won't happen, not a housing crash. 

You know what, you both have made incredibly strong and compelling counterpoints here.

 

I'm convinced, then - systemic, complex reform it must be, rather than just a straight crash, for exactly the reasons stated here. It clearly needs a stronger government not in hock to the idea of laissez faire in order to execute it, though. The market clearly isn't browbeating the building companies into doing the right thing, so government must.

[CosbehFox]

2 hours ago, Bordersfox said:

Well said.  Only disaster capitalists benefit from a housing crash.

 

The issue with house prices is a longstanding, systemic one which at the heart has a lack of affordable housing and rentals and a lack of good, cheap housing stock generally.   Which is what happens when you flog off council houses and prevent Housing Associations from borrowing to acquire sites to build more.    Both New Labour and the Tories culpable.  

 

Developers land bank in order to artificially inflate prices (I used to act for several national house builders in a professional capacity) and nothing is done about that either. They will also do everything within their power to avoid having to build any affordable housing on a site.  Their relationship with local planners is often unhealthily close.  I have seen more than one planning officer get a nice cushy job with a house builder.  Nowt will change when the likes of John Bloor are donating a million quid to the Conservative Party.  This is not a man who gives his money away out of the goodness of his heart.  

 

Profound change is required to sort the UK housing market out, which won't happen, not a housing crash. 

Excellent summary - to further underline this, at the 2017 election, I understand it was as high as 80% of MPs were landlords on second/third residential properties. 

[CosbehFox]

2 hours ago, Zear0 said:

Quite. My sister was looking to buy one of the new builds at Newbold Verdon and I tagged along to speak to the sales rep. The whole site was nearly finished but only 10% were available as she said they can just create demand and then stick an extra 5/10% on the next batch of houses on the same estate. As I said they'd already been built so the costs were fixed and they were just making more margin. 

 

Not being one to moan (not true) without any ideas, I'd like for them to stop making crappy "affordable houses" on the new build sites and just put a profit cap on a fixed % of the development. Given they make, on average, about £70k per sale it will make them more affordable and the estates more inclusive. Need to somehow make the snobbery associated with "affordable housing or social housing" go away. 

 

The points you make on land squatting are so irksome even thought I'd heard it before. It's one of those problems that's so easy to fix and nothing happens to the buggers for doing this shady practise.

Just to mention the labour isn't currently there either. Governments have completely abandoned the support of trade apprenticeships etc. Bricklayers are rocking horse-shit at the mo. 

[Bordersfox]

Just now, CosbehFox said:

Excellent summary - to further underline this, at the 2017 election, I understand it was as high as 80% of MPs were landlords on second/third residential properties. 

Absolutely.  I don't even see this as party political as such, although most developers are likely funneling money into the Conservative Party over Labour, as they all have fingers in pies when it comes housing. These turkeys sadly won't vote for Christmas.  

 

I believe (and I might be wrong or out of date) that renting until older on the continent is not such a big deal because there are more affordable rentals available.  In this country renting is very expensive and in some areas very competitive.  

[leicsmac]

10 minutes ago, Bordersfox said:

Absolutely.  I don't even see this as party political as such, although most developers are likely funneling money into the Conservative Party over Labour, as they all have fingers in pies when it comes housing. These turkeys sadly won't vote for Christmas.  

 

I believe (and I might be wrong or out of date) that renting until older on the continent is not such a big deal because there are more affordable rentals available.  In this country renting is very expensive and in some areas very competitive.  

And so we come back to the lack of affordable housing - both for rent and sale - in the right places, or any places at all.

 

Which is where government needs to step in.

[leicsmac]

Though as an addendum to the above, perhaps remote work will make location for at least certain groups of people less important when it comes to picking their home.

 

Of course, you'll have the landlord class screaming bloody murder about their office buildings being left empty then.

[JimmyB]

My 3 year fix at 1.49% ends in October, 2 year fix on offer is 5.84% which means more than a 50% rise on my monthly payments. 
 

I think I’ll opt for a 2 year tracker at Base +0.14%. From what I can tell for me to lose out by doing this the rate would have to rise another 0.75% (or worse) and not come down within 2 years. 
 

Tough decision, I could do with knowing exactly what my payments will be but I’m partial to bit of a flutter now and again. 

[kenny]

39 minutes ago, Bordersfox said:

Absolutely.  I don't even see this as party political as such, although most developers are likely funneling money into the Conservative Party over Labour, as they all have fingers in pies when it comes housing. These turkeys sadly won't vote for Christmas.  

 

I believe (and I might be wrong or out of date) that renting until older on the continent is not such a big deal because there are more affordable rentals available.  In this country renting is very expensive and in some areas very competitive.  

It's also forgotten that with the current material and labour costs, building a house is in the order of £160-200k without profit, professional fees and land purchasing. This is before the 15% increases bought about by the recent changes to the building regulations to improve the environmental credentials of buildings. 

 

As such, regular 3 bed houses will have to be sold for more than £250-300k otherwise they won't get built.

[Bordersfox]

1 hour ago, kenny said:

It's also forgotten that with the current material and labour costs, building a house is in the order of £160-200k without profit, professional fees and land purchasing. This is before the 15% increases bought about by the recent changes to the building regulations to improve the environmental credentials of buildings. 

 

As such, regular 3 bed houses will have to be sold for more than £250-300k otherwise they won't get built.

That's vastly more than my client housebuilders were knocking houses up for albeit ten years ago.  Do you have a breakdown of costings on that for a national house builder? Edit, sod the costings who can be arsed with that.  But it seems steep even given inflation etc. 

 

Self building projects are obviously totally different animals with no economies of scale, experience and so on and really small scale builders won't make a jot of difference overall to the housing shortage.  

 

One only needs look at the absolutely obscene money paid out in Brucey Bonuses to the likes of  Redrow and Persimmon chief executives (£110m in 2018) to know that they're doing very nicely indeed as businesses. That's an executive bonus quite apart from other profits. 

 

In any event, whatever the costs all the more argument that we need government building a lot more of the houses via housing associations, then without the profit element more can be built, or profit can be ploughed back into more houses. 

 

The private sector has utterly failed to build enough houses. 

Edited 12 July 2023 by Bordersfox

[foxes1988]

1 hour ago, kenny said:

It's also forgotten that with the current material and labour costs, building a house is in the order of £160-200k without profit, professional fees and land purchasing. This is before the 15% increases bought about by the recent changes to the building regulations to improve the environmental credentials of buildings. 

 

As such, regular 3 bed houses will have to be sold for more than £250-300k otherwise they won't get built.

 

33 minutes ago, Bordersfox said:

That's vastly more than my client housebuilders were knocking houses up for albeit ten years ago.  Do you have a breakdown of costings on that for a national house builder? 

 

Self building projects are obviously totally different animals with no economies of scale, experience and so on and really small scale builders won't make a jot of difference overall to the housing shortage.  

 

One only needs look at the absolutely obscene money paid out in Brucey Bonuses to the likes of  Redrow and Persimmon chief executives (£110m in 2018) to know that they're doing very nicely indeed as businesses. That's an executive bonus quite apart from other profits. 

 

In any event, all the more argument that we need government building a lot more of the houses via housing associations, then without the profit element more can be built, or profit can be ploughed back into more houses. 

 

The private sector has utterly failed to build enough houses. 

Could be reading this wrong but looks like Redrow made a profit of £516million in 2022 (24% profit margin )  and Persimmon (generally recognised as poor build quality) £730 million profit in 2022 (30% profit margin ).

We do need these companies to make money doing it but considering house stock in the country that's hard to stomach.  Hoping i've misread their financial results somehow.

Edited 12 July 2023 by foxes1988

[Bordersfox]

1 minute ago, foxes1988 said:

 

Could be reading this wrong but looks like Redrow made a profit of £516million (24% profit margin )  and Persimmon (generally recognised as poor build quality) £730 million profit (30% profit margin ).

We do need these companies to make money doing it but considering house stock in the country that's hard to stomach.  Hoping i've misread their financial results somehow.

I think Barratts reported pre tax profit of £1billion in 2022.  That's after COVID and inflation.  

 

I'm not against them profiting in of itself but nobody will ever convince me that a) they aren't profiteering bastards - they are and b) they alone will solve our housing crisis - they won't.  

[Buzzard]

1 hour ago, JimmyB said:

My 3 year fix at 1.49% ends in October, 2 year fix on offer is 5.84% which means more than a 50% rise on my monthly payments. 
 

I think I’ll opt for a 2 year tracker at Base +0.14%. From what I can tell for me to lose out by doing this the rate would have to rise another 0.75% (or worse) and not come down within 2 years. 
 

Tough decision, I could do with knowing exactly what my payments will be but I’m partial to bit of a flutter now and again. 

I thought about that, but I'd find myself sh*tting myself each time a rate change was announced. 

[kenny]

46 minutes ago, Bordersfox said:

I think Barratts reported pre tax profit of £1billion in 2022.  That's after COVID and inflation.  

 

I'm not against them profiting in of itself but nobody will ever convince me that a) they aren't profiteering bastards - they are and b) they alone will solve our housing crisis - they won't.  

They are probably making £50k per house.

 

Just read the article, the £1b didn't include the £400m they spent on 'legacy repairs', so it was a more paltry £600m profit.

Edited 12 July 2023 by kenny

[Bordersfox]

1 hour ago, kenny said:

They are probably making £50k per house.

 

Just read the article, the £1b didn't include the £400m they spent on 'legacy repairs', so it was a more paltry £600m profit.

Haha legacy repairs or houses we ballsed up 🤭