Intro to: The House Price Virtuoso Solution – the key to fairer house prices

The Independent newspaper recently published in its online version the headline:
More than 8 million people in England are living in unaffordable, insecure or unsuitable homes, the report says.
If accurate, this predicament is unacceptable and in urgent need of remedying.

There have been many claims of similar housing crises over the past decade in the media. These claims suggest that all is very far from well in the housing sector. The adage goes, there’s no smoke without fire!

This is why over the decades past and as I’m a now retired valuation surveyor, I have views on the reasons for these failings, particularly as they adversely affect poorer communities.

Because of this I’ve devised a new and better way to deal with the currently unaffordable level of house prices and other housing issues because purchase prices currently being claimed as being ‘affordable’ are clearly not really affordable at all.

Once you take a look into this, it should become crystal clear that it is the poorer buyers whom are propping up house prices for the rest of the home owners.

Why is this so? Because it is they who must borrow the humongous sums of money, by mortgaging the very properties which they need to live in (at extreme levels of borrowing), so that the present very high prices prevailing in a so-called open marketplace may be maintained. Who effectively gains the most from this?

It is primarily those fortunate enough to already have substantial property assets who enjoy a healthy and almost guaranteed rise in the capital values of their relatively extensive holdings. Secondly it is the banks and financial organisations which gain from earning interest on the substantial loans they arrange. The profits all depend on the ability for both sides of this equation to be able to recoup large financial rewards each time these assets sell, without having to do much to earn such profitable gains.

Borrowers today by comparison, have increasing job insecurity issues, especially borrowers on the lower rungs of the property ladder who have to commit to high mortgages by taking on burdensome, risky and long-term borrowings. These families and individuals are the ones who need relief, by way of a lessening of their large and onerous borrowing commitments.

It is time the whole screwed-up house-selling regime being played out by the historic role of estate agency is re-balanced, such that those wishing to make money from owning property are seen as causing the excessive un-affordability issues experienced by an increasing number of aspiring but poorer home owners in this country.
Is there a political party in the land that might contemplate such a re-think? It seems the jury is still out on that one!

Those needing housing require an efficient and fully functional housing marketplace for people wishing to move house so as to reasonably afford to buy, or alternatively rent, their next housing accommodation.

Judging by the slowdown of sales transactions shown in the recent sales completion statistics earlier in the year, efficient services such as these are simply not available at present.

For anyone interested in the best and only way to correct this unacceptable shortcoming, please read / study the proposals I am tabling within: The House Price Virtuoso Solution.
The specific page covering The House Price Virtuoso Solution is at:

The House Price Virtuoso Solution

The background leading to this logically deduced conclusion is available on the whole web site:

Home Page – improvethehousingmarket.co.uk

I would be happy to engage in online discussions about the technicalities and/or the necessary strategies needed in order to reach the conclusions set out. How, precisely, local housing markets within the whole of England and Wales may be improved for the benefit of owner-occupiers, private tenants, and everyone using all forms of housing right across our Country is fully set out there.

Posted by: Peter Hendry, Housing Valuation Consultant
Author:– The House Price Virtuoso Solution
Copyright © 2019.

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

Instead of building more rented social housing in high concentrations on housing estates we should build these as integral parts of all the new-build communities that 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 as occurred in post-war Britain. Otherwise, doing that would tend to attract what is bad about those requiring such help instead of helping them to be fully fledged members of a truly modern society.

The cost of integrating this 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.

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

More private investment in supplying housing accommodation to rent must be encouraged and so ‘Right to Buy’ options for all these tenants would be unsuitable because the housing market now depends upon the supply of this form of housing if sufficient accommodation is to be provided for residential tenants requiring accommodation for themselves and their families.

It is likely that if the ‘Right to Buy’ strategy was applied to these, large swaths of privately rented housing (if not sold to tenants), would simply be withdrawn by the owners and disappear overnight. This would leave a serious supply shortage for those currently unable to buy houses outright or to qualify for social housing.

I would argue that anyone who thinks otherwise doesn’t fully understand the complexities of the housing marketplace operating in Britain today. Whilst I can see why an argument in favour of this could be made, I would be happy to debate this to see which proposal is best. What is required instead is a way to re-evaluate house prices such that actual affordability is properly taken into account. There is only one way in which that could be achieved.

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

The House Price Virtuoso Solution.

Posted by: Peter Hendry, Housing Valuation Consultant
Author:– The House Price Virtuoso Solution
Copyright © 2019.

The best way to improve the Housing Markets in England and Wales.

Resolving rental and buy price problems right across England and Wales

As far as building an estimated 100,000 or more 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 quickly. 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 (by using ‘Right To Buy’ as it became known), knew that the twin effect would be to slowly start to break up the localised concentration of social housing for rent.

It may now clearly be seen 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 right now is to turn the problem of housing these families over to more private landlords.

In the process of bringing private investors into the business of managing both single and 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 best 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 but the provision rate of such affordable houses 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 is there’s one thing and only one thing to be done.

It is restricting the degree of profit which may be made by private landlords and when seriously considered, this must be the best 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.

Posted by: Peter Hendry, Housing Valuation Consultant
Author:– The House Price Virtuoso Solution
Copyright © 2019.