Housing minister Grant Shapps has called for a period of house price stability to prevent generations being priced out of home ownership.
Speaking at the Housing Market Intelligence conference in London, Shapps argued that buying a property should not be seen as an investment so much as a home.
He said: “This country is in danger of letting down the aspirations of a generation if homes do not become more affordable in the long term.
“So what is required now is a period of house price stability. A home should first and foremost be thought of as a place to live and bring up a family.”
The minister promised Government support for housebuilders by cutting through the ‘alphabet soup’ of red tape. He said the Government would simplify the system, with housebuilders’ help.
Shapps said: “Last year, house building hit its lowest level for any peace time years since 1924 as developers have been hampered by regional targets that put them in direct conflict with local communities and an alphabet soup of regulations and red tape they have to navigate.”
But house builders demanded more detail on the policies behind the promises.
HBF, the house builders’ trade body, asked for information as to how the Government intends to reduce regulation, as well as detail on the proposed new planning system.
It said that information had been “painfully slow in coming” five months after housebuilding targets were scrapped.
HBF executive chairman Stewart Baseley said: “Grant Shapps’ commitment to the removal of red tape is welcome and we are keen to work with Government to create their planned climate for delivery. But we urgently need clarity on this and on how the new incentive and planning systems will work.
“A firm timetable for implementation of the Coalition’s new policies would give industry and communities the necessary clarity and help end the current house building hiatus.”
Shapps calls for house price stability
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Comments
Hey Lads!!
Weve got one of thoose blokes on the site that thinks the price boom was all us - quick, come and see him - its mad, he really does think we control prices!!
Jonnie
10 years too late Mr. Schapps. Gordon 'I will not allow a house price boom to put at risk the sustainability of the recovery' Brown beat you to it - and stage managed a property market increase of between 300% and 600% (depending where you live).
Aided and abetted by banksters and the ludicrous estate agency industry - the market has sown the seeds of its own destruction. There are many hundreds of billions secured against over priced property which means that technically the banking industry is bankrupt and that we now face 20 years of a war of attrition in the market.
I hope you all saved up plenty of money in the good days, you're going to need it now.
What Shapps could do (I'm sure its within his power) is dismantle the planning laws in this country.
I'm sure the NIMBYs wouldn't like it - but at the end of the day we need to build more homes, and I'm sure there could be a forum between homebuilders, neighbouring homeowners and potential buyers about building decent property that is not only fit for purpose but fits into the landscape aesthetically too - most new builds look awful, I'm not sure what's happened to architecture in this country!
There is a lot of unused farmland where I live, probably being subsidised by the taxpayer to be kept unused. I'm not saying we bulldoze huge swathes of the countryside, but I can't see a problem with a few small housing developments dotted here and there. OK, so this doesn't solve the problems in London - but that is whole other issue about working and commuting (we should be able to work from home - anywhere in this day and age!)
Emma. Sharing and discussing opinions: arguing. Where is the acutely fine line you are drawing here? Why am I not entitled to such an opinion? You clearly do not agree with me - that is your opinion. Put forward your "ideas and opinions" and we can debate these. So far, I just see you sticking your tongue out at little old me ;-( and saying nothing about nothing...
wooden top: noted! ;0) By the way - whilst I agree with you about personal insults [numpty not counting as one, of course... ;0) ] or attacks, I would suggest that much of what we see here is simply difference of opinion manifesting itself. The written word is always the hardest to undertand, as it depends on how it is read by others, not how it is intended to read. I am quite happy to debate day in, day out with anyone - but likewise agree that frustrations should not be allowed to get in the way of said debate. Had to laugh at this one, by the way: Steve said (to me) "...we are all entitled to an opinion yours just happens to be immature..." Is that his opinion? If so, then he should have stated so!! ;0)
Steve, you're right about PeeBee. But . . . he sees this space primarily as a platform for argument - as opposed to a place where people can share ideas and opinions. He responds to a lot of posts but you will notice that few respond to him. Best thing to do is leave him alone. He just likes to spout It's a shame that he has to be rude but that's his problem. (Maybe in the real world, no one listens to him so he comes here to feel important.)
Myra, in what way did HIPs provide stability? Sellers resented paying for them, buyers didn't read them and their solicitors could not rely on them.
The story is more about politics strutting around sounding off as if they are doing something.
We are in a mess, there is no single answer, you can point the finger at anyone you like.
Affordability needs to return to Joe Public before it's over. Either they raise more money (deposit or loan) or prices come down to what they have got in their pockets.
Pepole who want to use this forum to bitch and make personal attacks, need to go away. Flamming isn't helping anyone.
Humour is fine Jonnie, (Pee Bee note I spelt it right this time, lol).
Wow - That's killed the discussion stone dead - EW's article says it all really. Excellent stuff - well said!
Eric. Maybe this country should find a different way to build houses then instead of just relying on developers to take all the risk. I would love to buy my own plot of land and build a house for my family but it's virtually impossible. Why can't we do what other countries do so successfully? That is, sort out the infrastructure and break up the swathes of land banks into building plots that can be sold to the general public. Not only would this put builders back in work again, it would also increase supply whilst improving the appearance and individuality of our houses.
I feel like being sensible and serious for a bit……………….
Eric (below) is a genius and has got it spot on.
The other piece to this is the raft of house price indexes banging around most of them with gaping holes in them like a hippos yawn – ive taken the Mickey out of many of them and rightly so (in my view) as they are based either on small numbers, one bit of the market, limited regions / one lenders valuations etc, etc…….it goes on
In short – there must be a standard measure that we can all consider to be correct –
My normal idiocy will resume tomorrow
Jonnie
Eric Walker for housing minister
Jonnie
Perfectly put, Eric.
I've read through most of the posts on here and it mostly consists of drivel and, embarrassingly, lots of playground bickering.
In a nutshell, it was completely "refreshing" to read the above.
Don't think I've read a more concise and intuitive post as this. Thank you, Eric.
The problem at the moment is the availability of finance for the first time buyers who underpin the market and the crippling loan to value required. As such, even a fall in house prices wont help the market. Many home-owners would be unable to sell due to negative equity. If prices fall, there will be fewer buyers willing to invest in bricks and mortar and as such prices would fall further. If this were to happen, then will come a time where another boom follows. The issue is that if house prices dont rise, lenders will not offer higher loan to value mortgages, in fact they will reduce.
Another issue is that of the huge jumps in stamp duty thresholds. A property that should be worth £260,000 will never sell for more than £250,000 as this extra £10,000 will cost a first time buyer and additional £7,800 in tax. Either the sale price drops, or the vendor asks a much higher figure so that the threshold is of little relevance. These stamp duty bands create barriers and prevent a proper graduation of prices where values jump from £250k to £280k and there is often a void in between. The answer would be to only pay the higher rate of tax on the amount above the threshold rather than the whole purchase price.
How the Government plan to create stability will be very interesting and as an industry we look forward to hearing their ideas. We detest boom and bust cycles and unpredictable markets. Steady growth which keeps pace with earnings and the economy's recovery would be lovely. Remember, 60% of the nations wealth is in property and we cant afford to let this be devalued.
Nevertheless, the issue remains, a stable market will only exist if there is a balance between supply and demand. Abolishing HIPs allowed more property to flow on to the market, but buyers need to be able to have the funds to buy.
There is a shortage of new homes as well so Mr Shapps proposes to cut through the red tape. There are three flaws in this proposal.
Firstly the required provision of social housing reduces potential profit. Secondly, developers are nervous to commit to projects where there is no guarantee of sales and where future prices are impossible to predict. Finally, banks are calling in loans and not refinancing as there were, increasing the pressure on developers.
The housing market is incredibly complex and really as Trevor said, idealistic 'think tank' ideas need substance, not rhetoric.
Am I missing something? How will building more houses lead to stability? If anything 'new' houses in my area have had the biggest impact in the market dropping and have suffered the most in the recession with huge BTL purchases when they were first completed, fuelled by the builders themselves. Now half of the investors have lost upwards of £100k and the owner occupiers have to suffer massively reduced prices while the BTLs are reposessed and sold off. Surely sorting out lending and getting the mortgage market a bit more fluid is the priority so that those who want to buy can do so? I understand the general sentiment of Shappsy's announcement but I don't quite see how his plan is going to unfold...
John Evans: Sorry? Where were you in 2003 - 2007, when new instructions topped SIX THOUSAND PER DAY?? Limited supply? I think not... Don't suggest I am naive, John. I simply pointed out that everyone involved in the housing market profited. You take the good with the bad. Trouble is that no nuts have been stored for what is going to be a very long and cold winter...
I don't know what all you estate agents are worried about. All we have to do is abolish the Hips and the housing market will start booming. that's what you told me any way.
Steve: Show me one word in my post (except 'numpty' - that was just a term of endearment which you have obviously taken umbridge at...) that was not totally relevant and a constructive counter to your post. AND I ensure that my postings are legible, so don't come 'immature' at me when you don't/can't even punctuate correctly! You want to debate - do it in a manner that reflects well on your profession, please. Hopefully, your happy clients won't be reading - or associate you with what you said. After all - you spent most of your original post slagging off Estate Agents - it is the likes of this post which gets noticed and consequently all are tarred with the same dirty brush you paint with. You have ABSOLUTELY NO IDEA how passionate I am about the housing industry. If you are ONE PERCENT as passionate and focused as me on the good of the market, then you are more than most; and we will get along just fine! Trust me - I used to be an Estate Agent...! ;0)
There will be ups & downs in the housing market, the only variable is timing - the length of an up or down.
Supply & Demand will ALWAYS dictate prices but prices will always increase over time.
So it depends on where one is in the cycle.
Good luck!
Helena, so it hasn't affected you. But you do accept that there is a recession? Im pointing out that 'yawn' thinks its ALL the fault of the media. ie the market fell because someone on GMTV said it would. I think its a bit more complex than that. Yawn thinks we will all be saved with higher LTV's. Like i said....nice planet.
Superbly well said Steve.
I actually agree with YAWN and although I don't think people are 'loaded' but they do have plenty income. I know me and my partner and most of my family and friends are no worse off, than years ago, we don't have to change our lifestyle, habits or spending.
Pee Bee - that is very naive. Prices go up when demand goes up and stock falls. Agents then slash fees to generate much needed stock. Values may go, commission may go up - but often we sell fewer units. Its a balance.
can i come and live on your planet please?
pee bee,insults weren't called for, I see you insulting or micky taking virtually everyone's comments week after week and not helping the issue,we are all entitled to an opinion yours just happens to be immature but my professionalism never gets called into question by those I deem relevant and important and that is my clients not yours
Its not the cost of mortgages its the amount of deposit ftb need now!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!! Will no one listen!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!The market is reliant on how much the banks want to lend!!!!! If prices came down to this x3 my salary crap the investers i.e the 50 somethings who took the piss in the 90's property boom would be buying 2 houses a week. Prople are loaded. The recession was a media creation. Every other industry not related to big ticket purchases is flying at the moment.
Why react to what is obviously an idea floated for the audience it was delievered to. These 'think tank' style ideas come out all the time and sink without trace. It's along the same lines as paying prison inmates the minimum wage that was last week's barmy idea. I used to work for a major building society (now the biggest) for donkeys years and I can tell you without fail that 4x joint income is the absolute maximum any couple can afford and even then that is a big risk. x3 income plus the other added on is still the best formula. The big problem though is deposits, both on mortgages now as well as tenancies!! No need to worry about where youngsters will live though - they'll either never leave home or if they have will return there.
The last lot aimed at circa 250K housing starts, now down to 65/70K. Where is everyone going to live then? The demand for housing will get higher and higher, over time and that will increase prices again. They may have a bit to fall, in certain areas more than others, NE and benefit hot spots, but I belive they will recover in the longer term. Get the lending sorted, 90& fewer 90% mortgages as reported on EAT. It would not be market intervention if the banks were capped in the interest rate, ledning is more costly than 2007 which cannot be right.
Abolish HIPs, help flood a drepessed market to kill it and don't sort lending, thats great leadership for stability!
I have been trying to cobble together some of Mr Shapps tweets in order to find an answer to this. Erm....i cant. I bet it envolves massive grants though.
Perhaps Mr Shapps would like to share with us all how he plans to control house prices? The last time I checked, we lived in a free country...
Maybe it is written in that secret document along with the Government plans to reverse global warming and hold back tides from our eroding coastlines?
Get the Corrie/Deadenders/Effingdale scriptwriters to put forward their proposal - it couldn't be more beyond the bounds of possibility...
Steve: "House prices do need to come down not only to become saleable and help the first time buyers and everyone thereafter but to prevent a potentially serious second dip." That WOULD be the second dip, you numpty! House prices only ever fall to a level that encourages buying - then they level or start to increase again. FTB's will have just as little chance to secure property if prices drop. BTL investors will snap them up immediately, as they have borrowing power with the banks. Lastly - and for the umpteenth time - house prices are NOT, repeat NOT, the 'fault' of Estate Agents. Agents do not control the market - they react to it. Their job is to work in the best interests of their clients. This usually means to secure the highest price achievable in the market. If you don't shoot - you can't score. Yes - some asking price recommendations are excessive - but at the end of the day, those properties simply won't sell. I surmise you are of the 'value cheap get rid quick' brigade. Hmm - ANYONE can sell a product below its' real value. Can you sell at FULL value? That is the test of a professional and competent Agent in today's market...
House prices do need to come down not only to become saleable and help the first time buyers and everyone thereafter but to prevent a potentially serious second dip. Yes there are greedy vendors out there but usually they are fuelled by stupid irresponsible,desperate and/or useless agents,I'd like to think there were few bad ones left but in desperate times agents do seem to do desperate things and its got to stop because it is counter productive for our industry and our businesses not to mention the good and future of our clients but as long as I have a hole somewhere in my body agents will rely upon that good old long sole agency and wear down their client and the price way behind the market,so much for good professional agents huh we may as well go bang our heads against the walls because no matter what is posted here the culprits will just blindly carry on.
...and I suppose you've been REALLY sick of the fact that your average Fee per unit doubled or more due to the house price boom also, Michael? Can't have it both ways, mate... On a more positive note - your comment that houses are first and foremost homes is spot on, by the way!
A call for 'house price stability'smacks of possible interventionism in what is a fundamental 'open market' model. Of course 'buying a home is an investment', why else would lenders become part of the process and buy-to-lets be so popular? If prices don't return to historical annual rises then lenders will never return to high percentage loans - the most basic 'chicken and egg' situation. By all means relax planning restrictions Grant - very welcome for all but Nimbies, but finance for builders and purchasers will always be restricted without a rising house price scenario. Big T can be serious too folks.
How does everyone see the market panning out in the next 6 months or so?? I am of the opinion that we are going to see another crash, similar to a couple of years ago...Thoughts??
He's right really. We agents do have a much easier time in a positive, lifting market ... but in the end, houses should be homes. Seems to me that the French usually see it this way, but the English seem to feel we have a right to make big money out of a house by putting in a new kitchen and expecting the agent to find a sucker to pay through the nose for this little improvement. I get sick of greedy vendors trying to profit from others in this way.
What do you call an Estate Agent who isn't currently talking down vendors' prices? A short-term contract worker.
I would have thought a flat/zero sales market was pretty stable!