There is lots of land in and around London. I live just outside the M25 and traveling into London about 15 min of the 30 min train ride is traveling through lush green fields. The powers that be choose which land can be used for building and this in inflates prices. Keeping those fields is more important than housing human beings.
Does anyone still think the housing market isn't broken?
- Thread starter Uther
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There will be a certain amount of land required to support the population for farming, etc. though which I assume isn't taken into account there. Though even then we could adapt to accommodate things like that.
It's finite in the sense that all the boomers will reject and oppose any applications to build houses anywhere near them in case their inflated wealth gets dented.
We're nowhere close to self sufficient, and I doubt we could be. There probably isn't enough suitable land for farming, never mind the number of people who'd suddenly need to take up farming.
There are huge areas that aren't particularly economical to farm but are viable farmland if it came to it - which also aren't suited to housing due to being for instance being in areas of wetlands, etc.
Soldato
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Oh of course, but how is that calculated? And how many people want to live in the middle of nowhere/on top of a mountain? All the land is still owned anyway, even if it's empty, so it needs selling in the first place.
Permabanned
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Millennials weren't taught finance or economics at school unless they chose it at A-Level. Just yesterday a millennial was telling me how he was going to buy gold or premium bonds as a long term investment for his young child.
Supply
House builders are building houses, but never enough to keep up with demand, such that profits continue to rise.
http://www.independent.co.uk/news/u...-keep-prices-unnecessarily-high-a6906016.html
Demand
- Millennials still want to buy houses. They'll rent if they have to in their 20s, but by the time they're hitting 30 and having children (later than previous generations) they recognise it's important to have home to raise their child.
- The capability to buy a house depends on the combination of deposit and mortgage. Low income affects millennials' ability to save deposits and to obtain sufficient mortgages. High rents (linked to house prices) reduce the amount millennials can save each month. Thus it feels like a race, as house prices go up faster than income.
http://monevator.com/house-price-to-earnings-ratio-2012/
- Buy-to-let is a very good way of investing for retirement. Simply buying as many houses as possible, allowing the rent to pay off the mortgage at first, then that rent becoming your income in later life. There is some regulation against this now, but it's still worth doing and there are plenty of people rich enough to do it. The simple act of buying up all available housing serves to protect the value of the houses, greatly reducing risk for the investor.
Supply
House builders are building houses, but never enough to keep up with demand, such that profits continue to rise.
http://www.independent.co.uk/news/u...-keep-prices-unnecessarily-high-a6906016.html
Demand
- Millennials still want to buy houses. They'll rent if they have to in their 20s, but by the time they're hitting 30 and having children (later than previous generations) they recognise it's important to have home to raise their child.
- The capability to buy a house depends on the combination of deposit and mortgage. Low income affects millennials' ability to save deposits and to obtain sufficient mortgages. High rents (linked to house prices) reduce the amount millennials can save each month. Thus it feels like a race, as house prices go up faster than income.
http://monevator.com/house-price-to-earnings-ratio-2012/
- Buy-to-let is a very good way of investing for retirement. Simply buying as many houses as possible, allowing the rent to pay off the mortgage at first, then that rent becoming your income in later life. There is some regulation against this now, but it's still worth doing and there are plenty of people rich enough to do it. The simple act of buying up all available housing serves to protect the value of the houses, greatly reducing risk for the investor.
I dare say the level of societal collapse needed to make farming such land viable is near unthinkable, and certainly not a good reason to hold off building on land that is good for housing.
Farms feed you.
Who said anything about living on top of a mountain? There's plenty of viable land out there.
Yes, but once again you're missing the point. We can't farm enough land in this country to sustain our population.
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We also shouldn't discuss housing prices without also discussing feminism, believe it or not it's crucially related to income.
- Women get convinced they should work.
- The supply of workers competing for the same roles is increased.
- The salary that job pays is therefore reduced.
- A tipping point is reached where a single salary can no longer support a family.
- Both parents now have to work.
- Ta-da!... magic moment... twice as many people are working, for the same cost to the corporations.
- Children still need looking after, so the family pays someone to do it. If only one of them was working they wouldn't need to at all!!!
- Childcare is very expensive, basically removing that family's capability to buy a house until the child is old enough to go to school.
- Parents do a better job of raising their child than a nursery employee.
- God knows what effects that has, very scary.
- Women get convinced they should work.
- The supply of workers competing for the same roles is increased.
- The salary that job pays is therefore reduced.
- A tipping point is reached where a single salary can no longer support a family.
- Both parents now have to work.
- Ta-da!... magic moment... twice as many people are working, for the same cost to the corporations.
- Children still need looking after, so the family pays someone to do it. If only one of them was working they wouldn't need to at all!!!
- Childcare is very expensive, basically removing that family's capability to buy a house until the child is old enough to go to school.
- Parents do a better job of raising their child than a nursery employee.
- God knows what effects that has, very scary.
Pretty good house prices in Stoke on Trent, 2 bed terraces for under 80k, and a semi with drive for under 90k! That's literally an hour north from where I am now, and less than half the price of a comparable house here.
Probably not a great area but if I was young and looking to buy it would certainly be worth thinking about.
Probably not a great area but if I was young and looking to buy it would certainly be worth thinking about.
Soldato
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It is all about timing and currently a fair chunk of the population have had a perfect series of events. I'll give you an example:
My brother in law is 5 years older than my wife. No student loan, just a grant. He finished uni, got a job and saved 20k in 2 years living at home. He bought a 3 bed semi for 120k. Sold it after 3 years for 230k with about 150k equity in 2007. He put this into a 4 bed at 420k.
My wife had a 12k student loan after finishing uni. Saved 15k living at home. Bought a 2 bed flat for 130k and sold it for 150k after 3 years with about 35k in equity in 2012. His house was worth 500k by this time.
So two people, 5 years apart equates to an equity differential of almost 200k, with his extra capital repayments making up about 40k. He is 160k better off through nothing but timing. About the equivalent of a 50k per year annual salary before tax for those 5 years.
Those on the way up benefited from building equity while interest rates have fallen massively, giving them excellent LTV at the same time. The balance to this equation will be people losing equity while interest rates eventually rise. There is a pretty clear age disconnect, with most people over 40 benefiting, those in their 30s relatively neutral and those in their 20s in a position where they could very well come out of this badly.
My brother in law is 5 years older than my wife. No student loan, just a grant. He finished uni, got a job and saved 20k in 2 years living at home. He bought a 3 bed semi for 120k. Sold it after 3 years for 230k with about 150k equity in 2007. He put this into a 4 bed at 420k.
My wife had a 12k student loan after finishing uni. Saved 15k living at home. Bought a 2 bed flat for 130k and sold it for 150k after 3 years with about 35k in equity in 2012. His house was worth 500k by this time.
So two people, 5 years apart equates to an equity differential of almost 200k, with his extra capital repayments making up about 40k. He is 160k better off through nothing but timing. About the equivalent of a 50k per year annual salary before tax for those 5 years.
Those on the way up benefited from building equity while interest rates have fallen massively, giving them excellent LTV at the same time. The balance to this equation will be people losing equity while interest rates eventually rise. There is a pretty clear age disconnect, with most people over 40 benefiting, those in their 30s relatively neutral and those in their 20s in a position where they could very well come out of this badly.
Soldato
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Because the form the greatest % of disused space:
Arable and horticulture - 25 per cent
Grassland for pasture, silage or recreation - 25 per cent
Mountains, heaths and bogs - 16 per cent
Semi-natural grasslands - 13 per cent
Coniferous woodland - 6 per cent
Broadleaf woodland - 6 per cent
Urban areas - 6 per cent
I don’t have a car on finance, I drive a 12 year old Peugeot! I have no debts and no real modern luxuries apart from a PS4 Pro.
I’m lucky that my partner and I can afford rent and run a run London whilst still affording good food and occasional treats. We both earn good wages yet and save every month yet the hopes of ever owning are distant pipe dream.
I am not cry baby generation, I am realistic with my expectations.
I don't know whether it's cause or effect that women have to work and kids go into childcare. Cost of housing and living in general is high enough that people have to work two jobs unless one of them is minted. It would be a huge step back to say women have to stay at home and not work.
So use the semi-natural grasslands if the mountains aren't suitable. It's not rocket science.
Soldato
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Absolutely. But the same still applies just to a lesser extent; how many people want to live in West Wales, Cornwall, Northern Scotland etc.
Brexit
Being slightly less flippant - it would be a pretty dire situation but IMO it isn't a good idea to not have reserve capabilities should it come to it even if things would have to go pretty badly wrong for it to be needed. It is part of the reason farming gets quite a bit of subsidiary and there used to be (not sure if it is still the case) subsidiaries for maintaining some land in a condition that could be put back into service in a time of need.