Financial watchdog tells the elderly to downsize to tackle housing shortage

[TheDaddy]

Originally Posted by Chrysalis

that would make the problem worse given the shortages are in small properties, so old people moving to smaller properties is bad not good.

Nail hit on head

All the small bungalows round here cost more than the sale of my 3 bedroom would fetch..

[Kursk]

Originally Posted by Ramrod

A first time buyer can always get one over on a buy to let buyer because the btl buyer has to make a profit on the property and the margins are already fairly slim. A btl buyer is looking to get a property under value whereas a 'normal' buyer can bid a smidge more and secure the property from under the btl's nose.

Hmm, not so sure about that. A lot of btl's are cash purchasers who are putting their money into property because interest rates on savings are dire and have been dire for 6+ years. The profit made only has to cover maintenance and provide a yield that beats the best available investment rate, both of which are easily achievable.

Property is an illiquid asset but it suits those with 'money to spare' as there is no urgency for immediate access. Sellers like cash buyers for obvious reasons and buyers like having a tangible asset when QE otherwise diminishes their pot.

[Ignitionnet]

Originally Posted by Maggy J

All the small bungalows round here cost more than the sale of my 3 bedroom would fetch..

I've seen new builds costing 50% more than comparable houses in their area more and more recently.

Crazy.

People can't downsize because smaller practical properties are not being built and many have been demolished to accommodate fewer but much more profitable housing. Our problem isn't so much people under occupying its successive governments of all colours basing our economy around stupid property prices and being too scared to implement a practical house building programming of any worth. I know a lot of people will be hurt by a rebalancing of property in the UK including most of my family but it's inevitable as the current situation isn't sustainable for much longer.

[Chrysalis]

indeed, councils have even been trying to give cash incentives to builders to build 1 bed properties but the builders turned down the offers, thats how bad the situation is.

[Osem]

Maybe people need to migrate to Ireland, Spain, China and the like where there's an abundance of empty properties.

[tweetiepooh]

My folks live in the same 4 bed house I grew up in. They host "the family" at Christmas and other times as well as parties for friends and put up visitors. If they downsized they couldn't do this so why should they?

It's not simply a shortage of small properties but the high cost of up sizing. If people can't afford to move out of their current property they will stay, maybe extend (loft extensions are a good way to go where possible) but not vacate to a bigger property releasing theirs for others.

[arcimedes]

Do we have something like a catch 22 situation, if people cant afford to move then shouldn't prices fall?

[Osem]

We have 300,000 more people in the UK this year over last and several millions more over the last 15 years or so. It's not the only factor but I dare say that helps keep demand high and therefore prices.

Originally Posted by arcimedes

Do we have something like a catch 22 situation, if people cant afford to move then shouldn't prices fall?

Everyone is trapped in what they've got! I think though most people probably could move as long as they're moving between areas with different prices. I.E London to Glasgow could be fine, the other way not so much.

The problem is just finding them. People can't find the homes to move too.

The answer to this is surely a massive building program but there is a vested interest from the Government to keep prices level or slowly increasing. The Government would literally rather pay people a subsidy to ensure demand doesn't collapse than address the constrained supply and risk people seeing their home values fall.

[Ignitionnet]

Originally Posted by arcimedes

Do we have something like a catch 22 situation, if people cant afford to move then shouldn't prices fall?

Even without that many people moving there's enough demand from immigration, shrinking households, and first time buyers using taxpayer guarantees to more than account for the low level of supply.

Nothing a few hundred thousand council houses wouldn't fix but the odds of that?

[TheDaddy]

Originally Posted by Ignitionnet

Nothing a few hundred thousand council houses wouldn't fix but the odds of that?

Used to be a time when the Tories and Labour used to compete to see who could build the most council houses, it can happen again if the politicians can be convinced it's in their best interests.

[tweetiepooh]

But homes always get built in the same places leading to more overcrowding, more over demand in that area, pressure on infrastructure.

Could spread the building out more, instead of (figures out of imagination) 1,000 new houses in one place, build 10 new houses in 100 smaller places. Spreads load, provide homes for "locals". Down side is these are spread out where jobs aren't but many towns are becoming more dormitory areas anyway with people working elsewhere and just sleeping in the houses.

And look at some of the builds, 5 bed houses with little or no garden.

[Chrysalis]

Originally Posted by Ignitionnet

Even without that many people moving there's enough demand from immigration, shrinking households, and first time buyers using taxpayer guarantees to more than account for the low level of supply.

Nothing a few hundred thousand council houses wouldn't fix but the odds of that?

and bingo.

Here is the true reason we no longer have en masse council housing been built.

It would trash the precious booming housing market.

Funny enough now the lib dems are back in the wilderness they have good policies again as if by magic.

http://www.bbc.co.uk/news/uk-politics-34330676

Selling off council and housing association properties has been extremely damaging.