How best to provide rented social housing accommodation for those currently needing it

Instead of building more rented social housing in concentrations on housing estates we should build these as integral parts of all the new-build communities we construct.

Those renting socially-provided housing would then be seen as a part of society and could be taken into the bosom of that society.

If the country actually does need as much as 100,000 extra houses per year for the social rental sector, as has recently been claimed, it would be essential, both from a planning viewpoint and a society one, that those whom are dwelling in them should be located within our communities and not sectioned off as if to be marginalised on separate and distinct estates. Doing that would tend to attract what is bad about those needing such help instead of helping them to become fully fledged members of a truly modern society.

The cost of integrating the social rental sector in the next new housing estates to be constructed would, most likely, be less in financial terms than if building complete estates of social housing, as used to happen in the past.

However, the key thing, should be to provide this housing separately from the present arrangements for private landlords, who let property to those wishing to rent privately.
Of course unlike privately rented housing, rent-levels for social housing ought to be set and collected by councils and/or the housing associations and not by private landlords.
It is likely that rent-levels set by social housing associations should, over time and to a certain extent, influence the rent-levels being set in the private sector and this would be another advantage to having such properties spread within the whole of the housing provision, across Britain.

To bust another myth, it would be crazy to try and apply the ‘Right to Buy’ strategy to all private tenants – as Labour is currently said to be considering, because the housing market now depends upon the supply of this form of housing, to accommodate the bulk of residential tenants needing accommodation for themselves and their families. If the ‘Right to Buy’ strategy was applied, large swaths of privately rented housing would, if not sold to tenants, simply be withdrawn by the owners and disappear overnight, leaving a serious supply shortage for those currently unable to buy houses outright or qualify for social housing. This, sadly, would repeat past failures if attempted. Anyone who thinks otherwise, arguably doesn’t fully understand the complexities of the housing marketplace operating in Britain today and I would be happy to debate this.

For full information about what it is that I am advocating ought to be done instead, please see:

The House Price Virtuoso Solution.

Peter Hendry, Author:– The House Price Virtuoso Solution previously The Hendry Solution

How to best improve the Housing Market in England and Wales.

Resolving rental and buy price problems right across England and Wales

As far as building an estimated 100,000 new houses each year for social housing to rent is concerned, there are perceivable downsides to throwing money into this. This is a laudable policy of The Labour Party currently, but for the reasons I am about to argue, it would be a difficult one to put into practical effect. I would naturally welcome their spokesperson’s thoughts on this counterargument for further discussion however.

In the Thatcher era, it was generally understood that the existing council estates around Britain were tending to degenerate towards becoming urban ghettos or concentrations with poorer class-distinctions and lesser prospects and opportunities being available to those from within them.

In the 70’s the then Conservative government, as well as simply selling off individual council houses to newly aspiring home-owner residents, using ‘Right To Buy’ as it became known, knew the twin effect would be to slowly start to break up the localised concentration of social housing for rent.

It may be clearly seen afterwards, that to have allowed the capital raised from these sales to be used to build more council estates would simply have recreated the original societal problem once again.
A more creative solution would be needed and whilst no such solution was forthcoming at the time, it was understandably more prudent simply to sit on the cash raised instead.

The question was (and still is) if upwards of 100,000 new houses were to be needed for social rent all around Britain each year and for a decade or more to come, how could that be achieved without creating places tending towards becoming urban ghettos once again?

The only answer surfacing at the time and the one still surfacing now is to turn the problem of housing more of these families (but by no means all) over to private landlords.

In the process of bringing private investors into the business of managing multiple tenancies in locations across the whole country, it soon became clear that this could only be achieved if the tenants under this model were given practically no security of tenure. Without that, the private landlords simply would not invest. The Assured Shorthold Tenancy was conceived.

The result has been quite a success from the point of view of actually housing lots of people and families in large numbers of locations across the whole country.
It is also clear that the reduction in concentrations of people living in social housing estates has had a number of advantages and the mix of council and privately owned houses brings a worthwhile added variation.

The question still remains however – what is the next way forward?

Attempts have been made to force the developers of new housing estates to incorporate a proportion of low cost housing within all new developments but this has not turned out to be a great success and the commencement rate of such new developments has dwindled recently.

If we look at the available evidence critically, some exciting new options start becoming clear.
First though, we need to rule out the options that won’t work. For example:

  1. As explained above, building more large scale social housing estates would not solve the societal problems resulting from doing that.
  2. Giving tenants of the private landlords more security of tenure, would alienate the private investors whom are risking their capital by providing housing for those people in their need.
  3. Rents over the past decade or so have increased beyond expected levels, partly owing to the degree of scarcity of available houses to rent.

So, what we are left with, however unlikely the solution may be, by deduction; must be the only correct way forward. This philosophy was declared to be used by a certain well known Baker Street private investigator through his knighted author, so one would have thought this philosophy has validity and merit. In this particular scenario, there’s one thing and only one thing left to be done.

It is restricting the degree of profit which may be made by these private landlords and when seriously considered, this must be the way forward. To do this effectively however would require a big, bold and extensive new set of policies and agency regulations to be set up by a truly responsible government.

To a smaller extent this may be partly achieved by forcing landlords to properly maintain the structure of their let properties in fully satisfactory condition. This is already now happening but that is not the final answer..

The main way of restricting the degree of profit which may be made, both by private landlords and by owner occupiers too, would be to bring in such new regulatory methods for the marketing, purchasing and renting of residential property using the procedures proposed under The House Price Virtuoso Solution already set out elsewhere in these pages.

For all the details about what this is and how it could inexpensively be fully and quickly implemented throughout England and Wales, please go to the main page covering this:

The House Price Virtuoso Solution.

Peter Hendry, Author:– The House Price Virtuoso Solution previously The Hendry Solution

House-price affordability is absent in UK, except for the wealthy minority

House-price affordability is absent nowadays except for the wealthy minority, unless huge mortgage loans are taken out by everyone else needing to borrow to buy.
This cannot be right or proper.

This problem is running out of control in all regions of Britain. It’s called the un-affordability problem. It affects probably more than half of the house-buying population!

Why is it that those in regular employment on average earnings simply cannot afford adequate housing, whether to rent whilst saving or to buy?

The newspapers have been covering this serious dilemma for many moons now yet the plight of the lack of affordability remains with us.

Is it because those whom have ascended several rungs of the property ladder themselves are the ones making the policy for affordable housing? It does seem that there is a certain credibility to this accusation.

It seems that those in the position of making the big decisions on what to do about this problem have seen that they themselves are benefiting from long term capital value appreciation and low interest rates and so it’s all too easy to let things stay as they are. This is like pulling up the drawbridge and leaving those left outside the castle to be forced to fend for themselves. It leaves those without the ability to save enough to buy even a basic house for themselves out in the cold.

Not doing much to address this problem is demonstrably not good enough. It is clear from all the statistics which loudly speak for themselves.
Not dealing with the house affordability issue is leaving those without enough capital practically defenceless.

Unless somebody ‘up the ladder’ so to speak, flags this problem in a stark and prominent way, the drawbridge mongers are going to get a way with their shoddy tactics.

Having spent my whole career in housing and property related matters I have crafted, using my valuable experience, the primary solution to this dilemma and published it online.

Policymakers have been writing in the press. They have had innumerable meetings.
Policymakers have been on television but the house-price problem continues.

The answers are not in reducing interest rates, nor in mass producing hundreds and thousands of more un-affordable houses. it’s not by providing 50% shared-ownership schemes, it’s not indeed by advancing near 100% mortgages, extending the repayment period beyond 25 years, reducing stamp duty or, indeed, offering extra help to first-time buyers to be able to borrow enough to bridge the gap in their finances.

The one common denominator to all these clearly failed policies is that they do not resolve un-affordability vis-à-vis the house-price crisis. House prices themselves have stayed un-affordable to most middle incomers and especially to first time buyers.
Let’s hope soon there is a meeting of minds on how this vital issue may at last be resolved. It must be resolved for the sake of the post-brexit evolution of our economy across the whole country.

There is a positive and pragmatic way to deal with this crisis.

For more information about what it is that I am advocating must be done, please see:

The House Price Virtuoso Solution.

Recent Links:
The bank of mum and dad is one of UK’s biggest mortgage lenders
L&G’s research, based on a poll of 1,600 parents
The BBC

A million more youngsters to live with parents, says Aviva
By Brian Milligan
Personal Finance reporter
The BBC

Peter Hendry, Author:– The House Price Virtuoso Solution previously The Hendry Solution

New buyers-eye view could massively improve the UK housing market

Let’s look at current-day estate agents as being rather similar to scores of fishermen trawling for their daily catch.

Secondly, consider the housing market in which they work to be like a giant sea, the size of the whole U.K..

Basically, knowing there are always buyers (the fish) swimming in the sea, estate agents simply take properties that their vendor clients wish to sell, bate them up a bit (or write glowingly about them), then  advertise them colourfully, before placing them for sale in the sea of buyers swimming around.

Some of the buyers, spying these attractive looking ‘houses’, which appear to be of the type they want and in a good location, will decide to home-in and view!

Unlike most fish in the sea, house buyers are quite familiar with the fact that most good looking houses may have ‘hooks’, tied to one particular estate agent and, just as a tasty morsel is to a fish, they may well have to negotiate a safe way round the hook if they decide to home-in for a closer look, or even consider buying.

The problem with this way of selling, for houses, is:- buyers aren’t actually matched with all the best houses that may be available for them to view because the selling agent only knows about the houses that his particular clients are selling.

The other problem is that the current-day estate agent is only in business to close the sale on each property on their books and is not actually in business to serve each buyer that happens to saunter past their offices.

Estate agents as a whole seem to see the whole pool of houses currently on their ‘collective books’ as representing the housing market but in reality they are only actually offering the houses they have instructions to sell, not the rest!  This is a serious flaw in their business model.

In this analogy, the order of the four distinctive market parameters should simply be re-ordered thus:

A. The sea of houses available – The housing market. This becomes C

B. Fish – All the buyers. They become A

C. Houses – the bait – the product being sold. This becomes D

D. Agents – someone earning a living by selling property. They become B

Below is a link to the Home Owners Alliance; with a story uncovering a similar aspect and explaining the flaws within estate agency.

Estate agents’ tricks

Having worked in the property industry for decades, and in estate agency too, I have realised exactly how all the flaws may simply and finally be resolved.  By doing this the whole business of moving house would be made massively more efficient.

All that is needed is to re-order the four market parameters into the correct order for their proper and efficient function – i.e. slightly changing the arrangements in the above fisherman’s analogy!

The new order would then be:

A. The buyers: (still the fish.)

The buyers (are still represented by the fish), but they will know that there isn’t a nasty barb hidden in each tasty morsel, (the houses) to be viewed.

More confidence will automatically be generated in all buyers this way.

They will see the house more in the true light of day, without the downsides being hidden (all too often surreptitiously by vendor-centric estate agents).

B. The buyer-agents: (the main change is the type of agent used.)

Buyer agents – people earning a living by helping buyers to find the best property for their needs, not the houses individual agents happened to have on their books at the time and were enthusiastically trying to push!

If instead, the agents were now acting for buyers and were out there looking in the whole locality where the buyer wants them to, many more properties would come up as matching the buyers’ requirements.  The buyer would have the maximum choice as to which houses they preferred the most.  This could be achieved without the buyer having to go registering with loads of different agents (as generally happens at present), because the buyer-agents would be doing that locally for them already.

They would do this by comparing the requirements each buying client has with the local properties which all registered buyers have of the houses other buyers simultaneously wish to sell.

The houses currently available for sale will be the local area in which the buyer is choosing to move to, not anywhere the agent has a house to sell !

C. The housing market – (still the housing market but focused more locally.)

D. The houses – (still the products being bought.) These houses would be the ones the buyer really wanted to viewnot, as I have already explained, the ones individual agents happened to have on their books at the time, and which they were most enthusiastically trying to sell!

Once again, the following link describes some of estate agents’ tricks – currently!

Link to the Home Owners Alliance Estate agents’ tricks

The remedy or solution for this obvious lack of efficiency within all housing markets, especially those across England and Wales is to change the way these markets are operated by making them far more efficient than currently.  Unless the housing marketplace as a whole works efficiently, prices will keep drifting up beyond those which would exist in a perfect marketplace, in accordance with well-established economic theory. The eventual and inescapable result of such inefficiency is stagnation – which is exactly what we are seeing in the housing marketplace at present.

The House Price Virtuoso Solution is the only current proposal for resolving this problem for the benefit, both of estate agents and also, and most importantly, for first-time buyers.

For more information about what it is that I am advocating must be done, please see:

The House Price Virtuoso Solution.

Peter Hendry, Author:– The House Price Virtuoso Solution previously The Hendry Solution

Copyright © 2019.

There needs to be a route and branch change in the way houses are marketed

The truth is:

Rank capitalism, as we have come to know it, does not work for a majority of us especially when it comes to house ownership.

Whilst I haven’t exactly been a fully committed socialist over recent decades I can see the difficulties in the existing capitalist model, especially in the way it has fuelled large house-price increases over the past 50 or more years.

Basically, those who already own houses themselves naturally hope for prices to keep increasing.  Above inflation price-increases are preferred by such owners and anything more is very much applauded whereas price falls are most unwelcome for them.  Not unreasonable logic one might think, on first gaze.

For first time buyers however, price falls are desperately hoped for especially nowadays, as being a possible way to enable these people to somehow afford to buy whilst many still find it absolutely impossible to even contemplate doing so.

For these people the only alternative to living in a house of their own once they become adults is to rent, especially when they have family responsibilities to consider as being their top priority.

This alternative involves paying what are already high rents compared with average earnings, and these rents keep on increasing year on year.

Renting therefore impacts on such peoples’ ability to save to eventually buy their own home and in quite a few cases, renders it completely impossible for them to do so.

Banks are, it must be seen, complicit in seeing that house prices stay high, especially as it allows them to lend more money whilst having the security of loans secured on property by way of a mortgage.

The bulk of many bank and building society net profits understandably comes from earning interest on mortgage loans.

The problem is, none this helps would-be buyers!

Yet by not helping these buyers, the banks and everyone else in the business of supporting the economy, including dare I say estate agents themselves, are actually loosing out by not selling to the buyers out there at sufficiently affordable prices to allow sufficient sales to take place.

A more uniformly priced housing market is urgently needed and a return to true affordability and availability has been needed for decades.  If only one of our political parties would wake up to this fundamental need by including a workable strategy in their manifesto, change for the better could soon start to be introduced into the existing housing markets.

The recent labour proposal to replace Council Tax with a property value tax would not only add further taxation to an already highly taxed part of our economy but would also do nothing to deal with the market inefficiencies to which I am referring.

Taxing specific markets is not the correct way to reform and improve their function.  This was historically shown not to work in the 70’s when the Labour government brought in Development Land Tax.  Instead it is time new policies were crafted to fully address the specific problem of increasingly unaffordable house prices.  I would have thought Labour, of all parties, would have understood this by now.

The only way to restore price affordability and availability in the housing markets up and down England and Wales would be to make these markets perform more efficiently and more transparently. 

If true and fair market prices were established, without such high borrowing requirements, more people could step onto the housing market and they would generate many new transactions as they began to do so.

These new people would, of course, be utilising the housing they have just purchased, whereas currently there are far too many houses bought simply for capital gain and some are even left empty in the process!!

Restoring the prospect of owner-occupation as a feasible option for average families once again, would appear to be an essential policy to adopt for any prospective new government.

If you want to read about how changing to having efficient property agents could be put into practice go to the following link:

The House Price Virtuoso Solution

Full details of our proposals for properly reforming all housing markets in England and Wales.

PS:
This and other similar arguments presented here are intended to be A-political, based on the merits of humanity and not seen as being vote-catching devices of any kind.

Peter Hendry, Author:– The House Price Virtuoso Solution previously The Hendry Solution

How can the housing market be made more efficient in Britain?

[Article expanded – 20th June 2019]
On face value one might be forgiven for thinking that if you want to sell a property, you might simply advertise it for sale or employ an agent to do just that.
But have you ever thought; Can the housing market be made more efficient in Britain?

To help answer this, if you were selling any other item such as a car or a boat for example, advertising it or using an agent to do so would be a reasonable thing to do but not with houses as I will explain.

With houses things are different because houses are capital assets, rather than depreciating ones. In other words, they are not mere chattels to be chalked up at a notional price and simply sold.

How is this so?

It’s because the amount of work and expertise required to build a house is sufficiently great to cause its value in the market place to adjust, upwards or downwards, depending on buyer’s demand and their ability to pay to purchase the property.
Secondly, houses are expected to last for around a century, which is different to most other things that are sold or let.

Thirdly, the availability of finance or mortgage borrowing is another primary factor which affects the prices of houses in the marketplaces wherever they are situated.

Question:
Why can’t a selling agent just deal with all of that?

Because the important aspect when selling is to know and understand how many buyers are out there and what might they each be prepared to offer (or bid) once they have everything in place to make a final decision. Buyers also need to arrange things they need like a survey, a confirmed mortgage offer, completed legal searches etc…

The best people to deal with all these matters would unquestionably be an agent acting specifically for the buyer in question.

Only they could best represent each buyer and in fact therefore could also serve vendors to best advantage too.

Why would this be an improvement?

It would be an improvement because selling agents do not, in fact, act for any of the buyers whereas buying agents would be able to do so all the time.

Selling agents can only act for those selling their houses. This is half of the marketplace of course; and that’s exactly where the problem lies.

Registered House Buying Agents, [RHBs] on the other hand, would be acting for multiple buyers simultaneously so they would be fully in touch with these buyers as well as knowing what houses are currently available for sale on the market. They would know all of this because their other buyers will be among those selling too.

The difference between the two types of agents is that with selling agents, once they sell a property on behalf of their vendor-client, they aren’t interested in who else is buying. They’re only interested in who else may be selling!

Working in that way is, as I say, only dealing with one half of the housing marketplace at any one time. It is this which is causing the housing marketplace to malfunction or to perform badly. It is this which is causing wild price swings upwards and downwards, depending upon the availability of purchasing power (or buyer demand) at the time.

For as long as the existing estate agents are isolating themselves from being responsible for dealing with the buying side of the housing marketplace, price anomalies will continue.

The result must be more of what we see today, buyer frustration at what might have been, as regards home ownership.

Using this logic (as well as other arguments), I emphatically suggest that the existing vendor-centric estate agent model is no longer fit for purpose, is out of date and is way too inefficient.

If you want to read about how a change to having more efficient agents may be put into practice please Google ‘The Hendry Virtuoso Solution’, or go to the following link:

For more information about what it is that I am advocating must be done, please see:

The House Price Virtuoso Solution: Full details of our proposals for properly reforming all housing markets in England and Wales.

Extra reading:
Article in The Property Industry Eye dated 9th May 2019 giving the current market downturn information:
Estate agents are reporting a drop in property instructions: New instructions sink to a three-year low – and worse is expected.

Peter Hendry, Author:– The House Price Virtuoso Solution previously The Hendry Solution

How to get the British housing markets back up and running without waiting for Brexit to be resolved

Here are a few pointers to a better understanding of how to cure any stagnation developing within our housing markets:

The downturn for most local housing markets across England and Wales actually started to manifest before the Brexit uncertainties themselves began to take effect.

The best way to avoid cyclical downturns in housing markets is to lessen them by making sure the prices being quoted are as genuine, fair and as fully transparent as possible. That’s something that clearly isn’t happening and cannot happen whilst the agents negotiating each transaction are acting primarily for sellers with unrealistic expectations coupled with a percentage to be extracted by the agent on completion.

As buyers are being ‘turned off’ more and more because of over optimistic asking prices, sellers are simply failing to sell and so the markets are forced into stagnation.

Eventually, sellers have to lower their prices when they are forced to find buyers, because they need to move and cannot wait any longer. It’s an uncomfortable situation for both parties by this time. The one redeeming aspect of all this is that having just sold, the newly created buyer will be able to negotiate to a similar degree with the sellers of the next house they decide to buy!

This set of circumstances happens in almost predictable cycles across all housing markets and it has been doing so for many decades past.

It’s time to move to resolve this cycle of crises for the sake of everyone involved.

The ONE way this may be accomplished would be to change the way houses are marketed by using agents to assist buyers in searching for and purchasing their next house to live in and no longer use agents acting solely for vendors or sellers.

For more information about how this may be accomplished, please read the following series of articles on this blog, especially the one found on the link below – The House Price Virtuoso Solution. It gives full details of my proposals for resolving this issue and explains the method to improve the workings of all housing markets across England and Wales:

The House Price Virtuoso Solution

Peter Hendry, Consultant in Housing Valuation

The new government leaflet on house buying

Did you know there’s a new government leaflet just published (on 9th May 2019) on house buying? It’s called:

‘How to buy, A guide for people looking to buy a home in England and Wales’

There’s also another leaflet on house selling.

Here are my comments on a first reading of the house buying Leaflet:

The over-riding problem about estate agents not positively advising buyers is misunderstood and greatly understated.

It says:

  • The estate agent will help guide you through the buying process and work with other parties to help the sale progress.  But remember please – their primary role is to help the seller sell their property.

Another shortcoming needing more emphasis is that surveyors are less able than previously to give good advice on the detailed condition of a property one is considering purchasing or indeed give a reliable assessment of its current value.

Sadly, most surveyors are associated with estate agency in one form or another in order to earn their livings these days!  These surveyors cannot therefore be independent of estate agency which is primarily involved in selling houses on behalf of sellers at the highest prices able to be achieved, irrespective of the true or current value of the property.  It is the latter value that buyers so urgently and importantly need, in order to make pragmatic and wise buying decisions at the time of their purchasing but they are usually unable to find or know this information.

The problems the current-day buyers of today face therefore include uncertainty in the absence of being able to obtain reliable and sufficiently independent surveyor’s reports on the condition and/or the current value of properties they are considering purchasing.

The leaflet merely advises buyers to look for more information on various types of home surveys which may be found on the Money Advice Service website.

USEFUL LINKS:

https://www.moneyadviceservice.org.uk/en

https://www.moneyadviceservice.org.uk/en/categories/buying-a-home

https://www.moneyadviceservice.org.uk/en/articles/estimate-your-overall-buying-and-moving-costs

https://www.moneyadviceservice.org.uk/en/articles/a-guide-to-homebuyer-surveys-and-costs

A pdf version of the government leaflet:

‘How to buy, A guide for people looking to buy a home in England and Wales’

This is viewable at:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/799883/How_to_buy_guide.pdf

A pdf version of the other government leaflet:

‘How to sell, A guide for people looking to sell a home in England and Wales’

This is viewable at:

https://assets.publishing.service.gov.uk/government/uploads/system/uploads/attachment_data/file/799884/How_to_sell_guide.pdf

For more information on resolving this issue and to improve the workings of the housing markets across England and Wales please read The House Price Virtuoso Solution:

The House Price Virtuoso Solution

Peter Hendry, Consultant in Housing Valuation

Despite the major economic indicators currently pointing downwards for house prices, inexplicably, they have still been rising recently!

We, at improvethehousingmarket.co.uk have THE fix for this which we are now going public with.

The House Price Virtuoso Solution explains how to use cutting edge methods to force house prices in England and Wales back down to levels of affordability which are suitable, not only for those wishing to become first time buyers but to all other home owners too. Rents for residential properties also desperately need to be more competitively priced within the marketplace.

Anyone interested in seeing this outcome take shape in the owner-occupier housing sector may read about the necessary methods for bringing this about right here:

The House Price Virtuoso Solution: Full details of our proposals for properly reforming all housing markets in England and Wales.

The cost of implementing this fundamental change would be low and perfectly feasible.

The objective of this new market-making concept is to allow all buyers to buy their next homes at prices which are truly affordable and within reach.

The difficulty at present is that practically unrestricted lending for house purchases is damaging the housing market and ruining the opportunity for many of those whom are ready to buy and ready to make their purchasing commitments.

The price problem needs addressing this year but the government are the ones to have to instigate these required changes and until they do they cannot be introduced for the benefit of the majority.

Besides helping in this respect The House Price Virtuoso Solution is also a way for those who have gained considerably from property price increases over the past 30 years or so, to pass some of this back to help those trying to climb onto the first rung of the property-owning ladder right now. The big win-win situation is, if everyone were to adopt this new policy, no-one would loose out financially.

Peter Hendry, Author:– The House Price Virtuoso Solution previously The Hendry Solution

Interesting Reading:
UK estate agents are at their gloomiest for 10 years, says RICS