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Keeping house prices low. Property values to be tied to rise in wages (UK); These homes should be considered homes, not assets. It's not all about ladders and working your way up.
Topic Started: 30 Dec 2016, 08:29 AM (1,769 Views)
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How to keep house prices low for generations to come

18 November 2016

Imagine a world in which the price of housing stopped rising as predictably as a hydrogen-filled balloon.

And imagine a country in which houses would be just as affordable in 10 years' time as they were 10 years ago.

There would be no race to buy a home, no fear that prices would accelerate faster than you can save up for the deposit.

Houses would cease to be a means of profit, and instead become just a place to live.

But this is no John Lennon-inspired fantasy.

It is about to come to fruition in the East End of London, in an extraordinary experiment.

For the first time, future property prices will be tied to the rise in wages.

In a couple of weeks the first of 23 families will move in to an old mental health hospital in Tower Hamlets that has been converted into flats. They will pay a third of market value.

When they come to sell, the price they are allowed to charge will be limited by the increase in local wages, as measured by the Office for National Statistics.

Amongst the buyers are Rachael and Nathaniel Evans and their young son Griffin.

Despite their joint income of £33,000, and savings of nearly £70,000, they have been unable to afford anything in the area.

But now, thanks to the local Community Land Trust (CLT), they will soon be moving into a home of their own.

"It is amazing. It is life-changing for us," says Nathaniel, who has lived in Tower Hamlets all his life.

"I imagine walking into the flat and thinking, 'this is ours,' and we don't have to leave."

But the wage link is significant.

When Rachael and Nathaniel eventually decide to sell, their property's value will not have gone up in line with the market.

Typically, wages have risen by less than 2% a year over the last decade, dipping as low as 0.7% as recently as June 2014.

At the same time, despite a few dips, house prices have soared by up to 9%, easily outpacing wages.

If that trend continues, the relative value of their flat will decline, making it hard for them to move elsewhere.

As a result, linking house prices to wages requires a very different attitude, says Calum Green, co-director of the London CLT.

"These homes should be considered homes, not assets," he tells the BBC.

"It should be a place where you want to live for many, many years. It's not all about ladders and working your way up."

Read more: http://www.bbc.com/news/business-37941426
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newjez
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Controlled economies never end well.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Trollie
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Yeah there shouldn't be any incentive to do well in life.
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newjez
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If you don't understand a comment trollie, then you probably shouldn't reply to it.

The UK has much more demand than supply. The solution is to reduce demand (brexit) or increase supply.

Price controls will just create a Soviet style queuing system.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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Rufus
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newjez
31 Dec 2016, 02:01 PM
Controlled economies never end well.
It's only one development, which will hardly have any effect on the market, which will in the future be privatised in any case.
Take risks - if you win you will become wealthy, if you lose you will become wise
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herbie
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I'd get inta one a them cheap, then make tha most of me good fortune ta buy IPs - LOL

Hmmm - Wonder wot tha deal is wif rentin' tha f***ers out?
newjez
31 Dec 2016, 02:01 PM
Controlled economies never end well.
Indeed ... :)
Edited by herbie, 31 Dec 2016, 07:26 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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Rastus2
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newjez
31 Dec 2016, 02:01 PM
Controlled economies never end well.
out of control ones don't either.

IMHO, some kind of rent control on construction in major cities like Sydney is required.. the American model is not perfect, but we could learn instead of mocking.
Shadow - Defrauded his Bank ? 2015 I have 9 different loans and my bank had no idea which ones were personal and which were investment. They had half of them classed incorrectly. When this change came in they asked me to tell them if any personal loans were incorrectly classed as investment, which I did, and they switched them to personal for the lower rate. They also had a couple of investment loans incorrectly classed as personal. They didn't ask me about those. So they stay on the lower rate too. Worked out pretty well. :)
Shadow - 2008 Sydney Median House Price 1.25M by 2014-2015

Shadow : I think this boom has already begun in several cities. My prediction :
Peak of boom: 2014-2015. Sydney Median Price: $1,250,000 Bottom of bust: 2017-2018. Sydney Median Price: $1,100,000

Shadow's Original 2010 House Boom and Crash prediction http://s836.photobucket.com/user/rastus22/media/shady-orig-2010-chart.png.html?sort=3&o=0

Shadow's attempt to edit his 2010 chart in 2015 and replace it with one that does not show a crash in 2013 http://s836.photobucket.com/user/rastus22/media/Screen%20Shot%202015-06-06%20at%207.12.52%20pm_1.png.html
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Jimbo
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Trollie
31 Dec 2016, 02:49 PM
Yeah there shouldn't be any incentive to do well in life.
Your idea of doing well in life is to use the advantage of your age and ownership of property bought cheaply, to outbid those without the same advantages and then rent to them the very thing they can't afford to buy.

You add no value to society by doing so. You produce nothing.

You simply transfer capital from the least advantaged to yourself.

You justify this by asserting that the people you have taken advantage of can do the same thing as you in 20 years time.

You believe that this can go on forever.
newjez
31 Dec 2016, 02:01 PM
Controlled economies never end well.
When Thatcher decided to sell off council housing stock and denied local councils the ability to use those funds to increase housing stock, was she not controlling the price of houses?

When the Tories gave notice of scrapping "MIRAS" were they not controlling the price of houses?

Etc.
Edited by Jimbo, 31 Dec 2016, 08:30 PM.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be :?: rising.
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Trollie
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newjez
31 Dec 2016, 06:10 PM
If you don't understand a comment trollie, then you probably shouldn't reply to it.

The UK has much more demand than supply. The solution is to reduce demand (brexit) or increase supply.

Price controls will just create a Soviet style queuing system.
Where did I reply to you?

If you can't understand a comment, then you probably shouldn't reply to it.
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herbie
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Rastus2
31 Dec 2016, 08:12 PM
out of control ones don't either.

IMHO, some kind of rent control on construction in major cities like Sydney is required.. the American model is not perfect, but we could learn instead of mocking.
Sydney's problems are Sydney's problems - Brought upon 'emselves by Sydney. F*** Sydney.
Edited by herbie, 31 Dec 2016, 08:56 PM.
A Professional Demographer to an amateur demographer: "negative natural increase will never outweigh the positive net migration"
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