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Discussion Starter #1
House prices in much of the south and south east are beyond a lot of first time buyers. The alternative is to rent, but rents are also through the roof in many areas. Example: Oxford.. £600 per month will get you a room in a house ! £700 per month will get you a crappy, cramped studio if you're lucky. London is worse, Cambridge the same. Even in somewhere like Coventry, £550 per month barely gets you a 1 bed these days. If you don't mind living in the rough end then you'll get more but who wants to be burgled and mugged twice a day !?! I just wonder how landlords and letting agents can justify these rents!

I'm coming round to the idea of introducing rent controls in towns and cities of the UK, what do you think ?
 

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Most of your examples are university towns. Not indicative of the national picture.

There are many part buy schemes already in place. There are lots of decent rents to be had circa 600.

We live in a capitalist country, rents should not be capped, price will always reflect supply and demand.

I do accept the last of social housing is an issue that needs to be addressed, but it didn't seem to be high on the list of priorities.
 
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Simple case of supply and demand. The rents are higher, because the purchase price is higher.
I can see no advantage of rent control in a private mkt.
I do believe there is a mechanism in place where you can get a fair rent assesment, but I think that only applies to those who are on benefits.(or something like that).
In any case, if I had tenants, and they started the tribunal lark, they would get their notice when their lease is up...simple.
If you are handing a property over to an H/O, Then maybe expect a rent cap.
 

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Discussion Starter #4
I might agree with the free market / supply and demand arguement if there was a cohesive policy of house building in this country. Fewer houses seem to be being built, it seems a deliberate policy of successive governments to boost the economy by creating a housing shortage and sending prices and rents higher.
 

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Personally, I disagree. We live in a free market economy, so things like this should really be left to market forces. If you want to live cheaper, go live somewhere further away and commute in. My house is 30 minutes walk from the station and 30 minutes by train from Euston (near where my Mrs worked before she went on maternity leave). I'm also about 35 minutes from the M1/M25 junction by car according to Google Maps but realistically most times it takes me about 45 minutes due to the 50mph bits. Its a 3 bedroom terrace, built in the 70s and in good condition with double glazing, central heating, instant hot water etc. It cost me £113,500, which works out to around £500 a month mortgage. And I moved down to Bedfordshire from York thinking it would be more expensive, but its not at all. I couldn't buy a house in York like mine for the same money.

Its been noted that housing benefit has artificially inflated rents in lots of what would previously have been 'poor' areas. But as the rents have gone up, house prices have gone up as well, keeping yields roughly the same.
 

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I might agree with the free market / supply and demand arguement if there was a cohesive policy of house building in this country. Fewer houses seem to be being built, it seems a deliberate policy of successive governments to boost the economy by creating a housing shortage and sending prices and rents higher.
In what way would the government benefit by creating a housing shortage? Especially considering the huge amounts that get paid out as housing benefit.....

One of the reasons for high rents is the number of tenants who fail to pay, even though they have been given the money in housing benefit. A relative of mine has had three properties repossessed because he couldn't pay the mortgages as the tenants had done a runner owing unpaid rent and other bills, not to mention the damage to property. In the days when councils paid the housing benefit direct to the landlord it was sustainable - when the money was given instead to the tenant, "to empower them financially and instill a sense of responsibility", it all went rapidly downhill.

Builders have been hesitant to build in recent years as demand and availability of mortgages has been low, whereas the land bank had been acquired at relatively high prices when the boom was building, so the inherent cost per unit was going to be relatively high, particularly as a percentage of any new development had to be "affordable" (ie profitless) housing.

I agree that in University towns in particular, where demand had been vastly inflated by the pointless drive to have ever-increasing numbers of yougsters "educated to degree standard" irrespective of the demand for their talents, rents have been driven ever-higher for relatively poor properties, as students are notoriously prepared to live in (if not create!) squalid surroundings, and what could be regarded as over-crowded conditions.
 

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We do need to build more houses though - however the problem is not enough people are buying the new houses because they can't get mortgages. They can't get mortgages because they haven't got big enough deposits. Landlords can't even afford to buy them to rent them out because you can't get a decent interest rate on buy-to-let anymore unless you can put down a big chunk.

I think a lot of this is due to our society's spend, spend, spend mentality. Buy it on the never-never etc. I don't think enough emphasis is placed on saving money for the future these days. From as young as I can remember my mum used to take me down to the Yorkshire building society after every birthday & Christmas so I could save any money I'd receive. I don't know of anyone who does that these days with young kids, even in my own family.
 

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Discussion Starter #8
Between 1995 and 2009 real house prices went up by 120% !! :wow: Short term benefits of a housing boom would be higher stamp duty income, inheritance tax income, VAT income and a false sense of prosperity (politicians love voters feeling prosperous just before an election ;) )

A few negative effects of a housing boom like we've had in the UK for the last 20 years are that the government ends up paying out in housing benefit.

High house prices and rents keep people poor by taking their money in mortgage payments or rent.

Social mobility, in other words the rich stay rich and the poor don't stand a chance.

Finally, high house prices push people into social housing. Priority in social housing depends on how desperate you are, people in that position are less likely to work adding to the welfare bill.

High housing costs hurt all of us in the end.
 

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My first thought was - no. Rents are according to buying prices.

But I guess if rents were controlled, then prices would drop because there simply wouldn't be the demand from people wanting to buy to let.

In which case, it might just cause the housing market crash we hear about occasionally. SO I think my answer, by a roundabout way, is still wrong.
 

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Incidentally, there are absolutely shedloads of houses going up in and around Congleton. We're talking a small town of maybe 20,000 people, and I can think of tens of new estates going up just off the top of my head.

The editorial in the local paper put it quite well the other week, saying that the paper was full of letters complaining about new houses going up in the backyard of their house ... which was built in the backyard of someone elses 10 years ago.

And this is all against the background of AZ, a very big local employee, promising to leave the area in the next 3 years. I wonder if that'll cause a bit of a local price crash?
 

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Discussion Starter #11
There are parts of the country where prices and rents are quite sane :) I wouldn't mind working and living up in the north west, I'd be coming home in a funny way.
 

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Yes, I guess I'm speaking from a relatively lucky position. Prices of stuff in the South East are ludicrous to me.

Another reason not to be willing to move to Cambridge with my employer.
 

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I've been pondering the whole house price boom/crash scenario for some time.....

And wondering who is to "blame", and what the long-term issues are likely to be.

House price rises are basically the seller's "fault"......They see a similar property sold for "£X" and think - "that's more than I thought - and ours is a bit better, so maybe we could get "£X+" for ours.....and that'll mean we've made a profit, so maybe we could do it again in a few years". And so they did. Only they borrowed a lot for the next house (or the next plus whatever) and when the crash came and things stopped selling and prices dropped a little, they were a bit stuck. But not as stuck as those who had just clawed their way onto the ladder at the bottom, and who found themselves in negative equity - who are often the offspring of those at the top end, who have effectively profited by driving up the prices of the houses their kids are now struggling to hold onto.

If interest rates ever start going up - and I can remember the pain of my mortgage in the early eighties when base rates hit 15% - there are going to be an awful lot of people screaming......

People say its alright for us Baby Boomers who have paid off our mortgages - we have the value of our houses to fall back on......well that may be so for me - I've been in the same house for 20 years and because I live in a low-wage area of the country its probably only worth £150K - so may still be affordable for somebody........but for those whose properties are "worth" multiples of that.....who are they going to sell them to? I seriously see a big correction in "higher value prices" if interest rates do recover, and that will puncture many people's plans for using their house as their pension....

However that's far too much gloom for a nice day, so I'll end there!
 

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There are parts of the country where prices and rents are quite sane :) I wouldn't mind working and living up in the north west, I'd be coming home in a funny way.

Of course the crux is in the "working" bit....wages in many industries are low compared to many other areas, and jobs scarce. However if you have a good job or one on a national payscale, things can work well. As I alluded above, my house, 3-bed detached, 30 year old, backs onto open farmland, would probably go for £150K. An adjacent 2-bed stone terrace with good back garden again backing onto farmland has just been let for about £550/month.

When I think of the £1000+ a month that my step-grandaughter pays for a room in a shared flat in Putney, it terrifies me ;)
 

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I think one of the problems is Buy to Let; it's good to see that the cheaper mortgages are giving preferential treatment to genuine first-time buyers.

I'm not against a free Capitalist market at all, but a few years ago, Europe's biggest housing estate (Buckshaw Village) was built with the proviso of a high proportion of affordable housing being created.

This was all well and good until private landlords snatched up the majority of the affordable housing, and then proceeded to rent out at exorbitant rates; out of the reach of young working families, but within the reach of unemployed, housing benefit receiving tennants.

I have nothing against people who are unemployed, or on housing benefits, but the whole premise of affordable housing was seemingly negated in one fell swoop.

Hopefully lessons have been learnt.
 

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Whether it's because of the incident you mention Stan, I believe affordable housing schemes (at least in this area) now require the buyer to live in the house themselves for a certain number of years.
 
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