An analogy using Central Heating to show how the house buying process can be improved and made more efficient

Eureka – Not a bath but a shower moment! The Heating Analogy

Think of the housing market (local to where you want to buy), as being like the central heating system in your house.

Imagine having a single dial thermostat which controls the inside or ‘desired temperature’ of the house.

There is an inherent latency in the system, meaning that when you turn the thermostat up, it takes quite a while for the house to reach the temperature you have set on the thermostat dial.

There is also a timer which can start the heating each morning, a short while before you want to get up to wash but this requires to be separately programmed and has not yet been set.

Suppose you wish the shower room to be comfortable enough for you to slip out of bed into the shower and not start shivering once you get out of the shower!

In order to achieve the ‘desired temperature’ you turn the heating dial up to about 24 Deg C on the first morning. The boiler kicks-in and starts heating. The radiators start becoming warm, then hotter and hotter. The fuel consumption is going up.

By the time you get out of your shower, the house is really toasty, so you then turn the dial down to the more comfortable temperature of 22 Deg C.

Measuring the amount of fuel used for the whole day (if you could), you realise that you have spent around £7 that day.
Wishing to economise somewhat, since the price of fuel is increasing by the year, you start to experiment!

Supposing you set the thermostat to turn on 15 minutes or so before you get up. You could obviously then try a lower setting to start with, say 21.5 Dec C. Then, this would make things comfortable to begin with. Next morning, the heating comes on before you are up, just as planned and it brings the house up to 21.5 Deg C.

You get up feeling sufficiently warm enough to go and have your shower but just to make sure, before you get in, you turn the dial up to 22 Deg C (an acceptable ambient temperature). It stays there for the rest of the day.

This time, when you measure the amount of fuel used (or cost expended), it’s less. It has cost only £5 that day.

By doing things this way you have achieved a saving of £2 per day without shivering or feeling uncomfortable so that’s a more efficient way of doing things. You’ve saved yourself £2 and saved the planet a little too.

It’s the same with house buying.
If you go rushing in to try and purchase the house you want, having found it using the existing system of vendor-commissioned estate agency, you nearly always find you have to turn the ‘offer price’ UP, well above what might be your comfortable (or the ambient) offer price level – just in order to get the house!

If there was a way of avoiding doing that and instead saving some of the capital you need to spend when buying, who wouldn’t want to go for that?
There could also be an additional saving attainable by selling the house you are moving from at a price more in line with, or relating to, the amount you are about to pay for your next property. The difference between the two prices could then become less.

The way to achieve this would be to engage an agent, not only to help you to find the next house you want but also to simultaneously sell the one you need to part with. What could be better!

The way to achieve this is for all estate agents to move away from using simple seller contracts and start using ‘Moving Contracts’ between themselves and each buyer.

Quite a few of you, reading this, may be wondering how this somewhat quirky analogy fits in with the overall concept of Registered Housing Agencies? The latter concept is what’s fully explained in the following link in case you haven’t read this yet. My heating analogy is simply a way to stimulate some lateral thinking and it is here to encourage you to comment with your own thoughts and views on whether these processes could genuinely improve the housing markets around Britain and if not, why not?
All comments on this are very welcome and would be treated as such in any further discussion.

For more information about how to get the housing markets across all regions of our country working more efficiently and more economically, please see our leading article, The House Price Virtuoso Solution:

The House Price Virtuoso Solution.

Posted by: Peter Hendry, author of:– The House Price Virtuoso Solution.

Correct Policies For Resolving The Housing Crisis Have Not Yet Been Implemented

Correct policies for resolving the housing crisis have not yet been implemented. More work needs to be done in order to resolve this crisis.
There are two specific indicators both showing that the correct housing policy adjustments for economic recovery have still not been implemented.

Firstly:
The fact that the existing financial stimuli for kick-starting the British housing market have, if taken together, instantly resulted in higher house prices – the very opposite of the result which ought to be sought in the teeth of what is the toughest financial climate which the western world has faced since the dark days of Hitler.

If one were to take a judicious step back from simply welcoming increases in house prices whenever they manifest, the promotion of general affordability would be seen as being by far the better thing to promote for stimulating an improved circulation in housing transactions – not more price increases!

Secondly:
Price increases in relation to housing are an economic NEGATIVE when it comes to getting our economy going, because for every extra pound spent buying roofs over their heads, people will be unable to spend that on buying goods and services. This will impact negatively on our economic recovery and the effects of this lack are being felt equally instantaneously.

Richard Whitehouse of Cornwalllive interviewed The Rt Hon Robert Jenrick MP for Housing, Communities and Local Government Secretary, on Thursday September 3rd. He wrote in their online newspaper the following day:

A major concern has been the impact on the provision of affordable housing with the new proposals suggesting that developments of less than 50 homes will not have to provide any.

Cornwall Live asked Mr Jenrick about concerns in Cornwall around what precisely is classed as “affordable” with many people finding that homes marketed as such are still out of reach.
“We asked whether there was anything that the government could do to try to help address the issue.”
Mr Jenrick did not answer the question directly but said the government was trying to provide more affordable homes.
He said: “The thrust of our policy is to build more homes and by doing that, we will make more homes available for all types and tenures in all parts of the country but we are also doing specific initiatives to address the challenge.”

In response to this I’m saying the explanations given on this web site clearly explain why these proposed new policies won’t achieve the results which are hoped for. I give the following reasons to help explain my viewpoint:

The fact that house prices are now at an all time high, when the economy is at an all time low, clearly shows that the present financial policies of boosting the housing market are not only unnecessary but are indeed quite unwarranted?

We need price ‘reality’ within the housing markets across all regions, in order to stimulate house ownership, not more and ongoing pricing excess.
Our housing markets are being driven by abject profiteering rather than by need and so are badly skewed, economically speaking.

Price rises do not indicate more sales or housing completions – quite there reverse!
They suggest less and less people being able to complete purchases.

They allow developers to afford to build fewer houses and still make their projected sales figures.

They suggest desperation on the part of wealthier buyers to get onto the housing ladder. That is certainly not solving the housing crisis.

For more information about how to get the housing markets across all our regions working more efficiently and more economically, please see our leading article: The House Price Virtuoso Solution on the link below:.

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

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

Estate agents need to reform themselves or be reformed in order to help more people to move house successfully

This work is new economics called Market Design, which is a relatively recent area of economics.
It has the potential to utilise established economic theory to rescue the British housing market.

It involves asking the question: ‘What is our goal?’
Its goal is to develop a way to make housing markets throughout the UK more inclusive, so that new buyers can further increase home ownership everywhere, as opposed to large numbers of people continuing to rent whether by choice or otherwise.

The ‘designed’ change would be to make estate agency operations within the housing sector become oriented towards listening to every buyer’s requirement so that those owning property can more easily both buy and sell when moving between two properties, by getting both transactions to happen in a synchronised way.

Instead of agents primarily working to satisfy sellers, as happens now, they would take on a far more holistic role, by listening to and acting directly for buyers primarily.

Estate agency, as a service provision, is not a fully functional service any more because if anyone is thinking of buying a property to live in, they currently need to go to various selling agents to try and establish what properties are currently available on the market in the location(s) they prefer and at what asking prices. Selling agents rarely know what real market prices are since it is only the buyers who decide these and traditional estate agents do not act for buyers.

Today’s buyers are understandably wary of estate agents for this reason in particular. Why? Because today’s estate agent doesn’t act in the best interests of buyers. Secondly, they charge high fees to sellers and then usually try to increase the price of houses to cover such fees!!

This makes it harder for buyers to find the best properties for themselves at reasonable prices. Current-day agents therefore actually slow down the turnover of house sales, rather than achieving the opposite.

From a marketing point of view, the new innovation outlined here would involve RHA’s (or Registered House Agents) hosting well publicised online property auctions, where all the buyers interested in each house on offer would bid against one another to secure a property for themselves.

Bidders would have to be legally ready as they would be exchanging contracts at the fall of the hammer.

Prices arrived at would be fair open market prices if arrived at using this method.

RHA’s could easily arrange each auction either through their own offices or through an existing auctioneer which they may invite to hold auction sales on their behalf.
The incentive for sellers would thus become to present the best maintained and best designed houses to each sale – the very opposite of what currently happens with traditional estate agents!

If ‘those in high places’ i.e. The House of Commons should decide to release the existing brakes on house sales which I’ve referred to, the housing economy would start to flourish rather quickly without the need for more give-away tax reductions in order to achieve it.

For more information about how this improvement could be achieved straightforwardly and without massive new investment by licensing RHA’s (or Registered House Agents which are fully explained in the following link), please go to:

For full details of this root and branch marketing change please visit the link below:

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

The Chancellor has recently stated following Covid19:-
“We’re entering the most severe recession this country has ever seen.”
He also says:-
“We will need ‘dynamic’ marketing for businesses”.

If house buyers were fully advised by agents acting on their behalf, then that would bring a new and ‘dynamic’ aspect to house-buying that has never before seen the light of day and which would be an unique innovation.
This is what the housing market requires in order to inject new activity across all levels including allowing buyers to determine the prices to be paid using actual market bids.

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

The crisis lurking within housing markets right across the UK

Things have changed but the very idea that the problems in the housing market might simply be a matter of restrictive planning and insufficient housing supply is not tenable.

The earlier analysis which advocated boosting house construction at any cost, ignores the question of market performance, which is something that the newly formed Conservative government would be well positioned to look into from a political standpoint.

Let’s face it even before the Covid 19 pandemic the housing market was in crisis, with a lack of sales completions and a lack properties being placed on sale on estate agents books.
The lack of appropriate response to dealing with the recent housing crisis has strong political similarities to the lack of appropriate response to dealing with climate change!
There remains a present reluctance to increase regulation, in case the policies may prove too unpopular with the electorate.

Lack of affordability and resultant homelessness derived from poor average wages are some of the fundamental concerns which need to be addressed.

If we focus in on the absolutely required policy changes, this helps to look at what politicians tend not to talk about when debating the various alternative interventions. These are the things that ought, in fact, to be the areas which should be given careful consideration for review. These include:

The marketing methods used by present day estate agents
Build quality
Design quality
Sustainability
Imposing foreign ownership restrictions
Promoting housing as a long-term investment for resident owner-occupiers and growing families.

Not focusing on these matters explains why the present problems still exist for house buyers whom continue to experience extreme difficulties purchasing private housing stock for themselves. This has been of such long duration and it has remained the unsolved problem for several decades in the UK.

The above issues are some of the main factors which ought to be pushed to the top of the political agenda and the most important issue for the swift recovery of housing markets across the whole country would be to deal with the over-pricing issue.

We therefore need to take a radical policy decision concerning this in order to both improve housing provision and house purchasing in the UK.

As the dust and the fallout from the Covid19 pandemic begins to settle, we should be moving forward and change the way private housing is marketed and sold.

The vital thing to do is make housing properly affordable to the majority of buyers and also to tenants requiring the rent option – but how?

The best way to accomplish this would be to incorporate the adjustments prescribed by The House Price Virtuoso Solution. See the link below.

Unless prices are made to match the buying power of the buyers within the localities where the houses themselves are located, only the limited few will wish, or be able to afford, to buy. To achieve the necessary increases in sales (which would be to everyone’s benefit), we must stop relying on selling agents who peg asking prices at fictitious levels and instead start using competing buyer’s agents’ offers to determine market prices.

Now is the time to make the switch; i.e. whilst the market is subdued both in terms of volume and in terms of true house price levels.

For more information about how this vital change may be put in hand please visit the link below:

The House Price Virtuoso Solution.

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

It is time to re-balance the price-anomalies in housing

It is time to re-balance the price-anomalies in housing by letting the buyer become more fully aware.

Housing markets, certainly in all areas across the U.K., have been a living nightmare from any buyers perspective for decades now. As a property valuer, having worked since the seventies in property, I am now free to comment with no axe to grind in particular, concerning the ever increasing gap between buying power and asking prices.

Most of those whom I chat with are of the same opinion which is that the general lack of affordability is unacceptable. The notion of trying to bridge the gap by increasing borrowing ability is a non-solution. Instead house prices, especially for those starting off with their first homes, ought to become lower so that transactions may be concluded by more people requiring housing. The question of course is how may this be achieved in practice?

In brief, it may seem a clever idea to build more houses to try and satisfy more of the present demand but doing so will only have an affect on buy-prices once very many houses and flats have been constructed. Essentially therefore, using this method simply isn’t going to have much impact on house prices for a good while. The house builders themselves would, of course, have been well aware of this when first suggesting it but it does not have to be this way.

The best way to lower house prices sufficiently would be to make the actual process of finding and purchasing a new home to live in, much easier. Doing that is absolutely critical. I say that because that really is the elephant in the room when it comes to finding the way to make housing markets more price-efficient at long last. The present arrangements are old and should now be seen as being Dickensian or unsuitable in terms of their methodologies and it is that issue which needs to be fully addressed.

The modern way to cure the present house price anomalies would be to have a completely new breed of agent fully and exclusively representing the buyer instead of representing sellers. Prices struck in the market under such a new scheme would be entirely dependent on buyers’ purchasing ability rather than buyers + lenders ability as at present.

For more details of this exciting departure from the old regimes and a way of bringing new life to a moribund marketplace, please go to our article entitled:

The House Price Virtuoso Solution How house price stability may be achieved.

It is a full explanation of how to correct the present economic imbalances within the housing market and it provides reasoned explanations.

Posted by: Peter Hendry, Housing Valuation Consultant.

 

For arguments in support of these proposals please refer to:

Recent article in The Economist.

Recent article in The Economist.

Will house prices ever stop rising faster than inflation?

I have worked as a Chartered Surveyor in the property sector from the 70s to the 90’s. During this time I have seen the relentless upwards direction of travel of house prices as related to true affordability, based on general earnings at first hand.

The golden dream of becoming a home owner by purchasing using mortgage borrowing repayable over the next 25 years, was something that was every young family’s ultimate ambition. This has morphed into a nightmare more recently. Why?

First of all, landowners have increasingly scooped-up increasing gains on the value of the land involved – by relying on the increased amounts to be borrowed by both first-time buyers and others further up the property chains.

Secondly, the banking and finance sectors have hijacked most of the profit remaining to be found and taken a big slice of it for themselves. In other words those institutions lending capital on mortgages have annexed a greater and greater share of the profits by doing what they think they are supposed to be doing – i.e. advancing increasingly large amounts of finance. More recently, they are now even prepared to increase the mortgage term length beyond the original 25 year repayment period, moving towards 30 years or more, which is highly questionable.

Simultaneously, interest rates, which have dropped to extremely low levels at the moment are enabling buyers to over extend themselves using loans they should not be being advised to take out.

The super-rich, on the other hand, are able to utilise the same unrestricted availability of mortgage finance to outbid the rest, using the collateral they already possess. The difference between the two positions is stark.

Shared ownership schemes (part rent part buy) have begun to appear which further decrease the actual dream of owning a whole building and the plot it is built on, in one’s lifetime.

House prices are being talked-up increasingly by estate agents whose primary interest above all else is to make the sale at the best price possible.

Employment is becoming more uncertain with flexible working hours making earnings unpredictable.

The actual cost of living is going up whilst basic wages are not keeping pace.

The housing market’s core buy-prices are further adjusting to match the described ‘loosening’ parameters. This has tended to happen in the past but the graph is exponential and it is set to continue in the relatively near future because house prices themselves are pegged in a practically unregulated market. In such a heady market, those who will have over extended themselves will, as a result, suddenly find they have a big financial problem.

The more wary amongst potential first-time buyers, are understandably holding back.
Apart from being wary, the main reason for this is that asking price levels of ‘so-called’ affordable housing today, are no longer truly affordable to them.

The only solution to this pernicious problem:- is to lower the buy-in prices of housing for all owner occupation.

How? That is the question?

The answer, as provided by those in the financial sector, is to offer to build more houses to increase the supply so that prices will finally and in theory reduce!

The main flaw in this argument is that it will take many years worth of building new housing (certainly if traditionally constructed), before sufficient numbers of them could push the prices down even a little. In the meantime, builders, landowners and mortgage lenders would hope to be able to carry on making their profits unhindered!
By the time the planned massive building boom will have begun to have had any effect, the players described will have made all the profits they were hoping to make for themselves.

The other and far more applicable answer would be to make certain necessary changes to the way houses are bought, sold and let. Doing this now, alongside building more housing units, would be the ultimate and best way to restore the housing economy into good health once again.

To find out how such a significant market improvement could be achieved, please go to:

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

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

A new and dynamic Buyer-Orientated marketplace in housing

What this country requires for solving its housing crisis is, most of all, a new and dynamic Buyer-Orientated marketplace, where buyers can straightforwardly find and secure the most suitable houses for themselves, whenever this is necessary.

The objective is to create a housing market where prices also find their market levels depending upon the information supporting those prices. This should primarily come from within the housing location involved and would require this information to be genuine and accurate. If a true balance between buyer wealth and seller aspiration could be accomplished in this way, all local housing markets could start trading more smoothly and more effectively than has happened since the end of the war, i.e. since 1945. The rationale for this is more extensively laid out on this web site under The House Price Virtuoso Solution.

This is the broad picture, which I am painting in outline here. The proposed new service would transform the existing experience of those trying to move house from that of experiencing the difficulties of a moribund housing market (the situation at present), into a certainty-orientated market, with plenty of buying opportunity and more choice.

Bringing such opportunities forward would transform home ownership and allow it to become more popular than ever before and be a way to enjoy added financial security as well as providing houses for individuals and families to live in.

To provide an example of why this change is so vital I would single out one scheme that was certainly intended to bring more buyers into the housing marketplace: Help To Buy. Whilst the name of the scheme ‘Help To Buy’ attempted to describe what it intended to do, it wasn’t long before it was rather more poignantly re-labelled by many users ‘Help To Sell’ because that is actually what it was doing. It was really functioning to do precisely that, at prices which were being set primarily by the big house builders.

We now hear that ‘Help To Buy’, which is already restricted to use by first-time buyers only, will soon be further restricted to be for loans only for new houses from 2021.
It will also have regional price caps, designed to try and reduce the maximum value of homes that can be bought through the HTB Equity Loan Scheme! This is clear proof that the scheme never fulfilled the purpose for which it was initially designed and therefore, has massively underperformed.
Help To Buy is due to be withdrawn completely by the government by 2023 but the question remains, what should be its replacement?

The path to be taken for adequately dealing with the present housing crisis is not clearly evident. At present there is no known or obvious path to be taken. Nevertheless logical deduction from an economic viewpoint unquestionably does now point towards one.

It is a path able to show the how and the why. How, exactly, it could be achieved is at:

The House Price Virtuoso Solution How house price stability may be achieved.

It is a full explanation of how to correct the present economic imbalances within the housing market and it provides reasoned explanations.

Now for the why:
Various changes to the operation of the markets are certainly required and what these changes are, becomes self-evident when the effects of the present distortions are better understood, using the analysis presented.

The most significant change involves the role of those within estate agency and as a significant number of players involved in this sector are qualified surveyors, I am drawing this to the attention of RICS. My web site gives the detail necessary to provide a clear overview of the problems needing to be dealt with together with their solutions.

Changes of this nature will always need to go hand-in-hand with the courage to actually put them into effect and, if both of these attributes are combined, amazing results can be derived.

At present new housing supply, even with a favourable wind behind it and with maximum impetus from the government, is only growing by a few thousand new houses per year.

Relying on this rate of growth in supply alone, would only bring a tiny net gain as a percentage of the overall number of houses built.
The effect on market prices of such a tiny net gain can, therefore, only be minuscule. Confirmation of this truism is plain for all to see – especially for valuers noting the continuing increase in house prices despite everything done to try and slow this. There has to be another way forward.

In essence, the way of progression which I am pointing out here, is to deal with the current oversupply of ‘borrowings’ which result, directly, in house prices becoming UNaffordable for those unable to access such mortgage finance themselves.
The effect of denying specifically new buyers from gaining reasonably affordable access to the the housing market in this way must, ultimately, cause market stagnation – something that no-one would happily encourage. Unfortunately though, many of us are already seeing this is beginning to happen.

In other words, without first time buyers buying at sustainable prices to them, the whole market for houses will eventually start becoming tentative, sluggish and may even stagnate – something which buyers are, worryingly, now seeing of course.

For years we have heard the finance industry telling us that we need to borrow more and/or that more finance is available to do this, especially for all house purchases.
What they haven’t been so keen to explain, is that more borrowing results in higher house prices. This is the dilemma which is causing new houses to become UNaffordable and that will, of course, proportionately affect first-time buyers much more than anyone else.

To resolve this dilemma would involve convincing ‘the main financial institution’, as the Big Muscle in the economy, to change tack and go along with the proposed new trajectory of travel which I am placing before you here. The arguments in favour of doing so now far outweigh those in favour of maintaining the status quo.

Please read as many of my supporting explanations as you would like to on this web site. They give viewpoints from various different positions, culminating in the thought-out new proposals set out in ‘The House Price Virtuoso Solution’.

Anyone can raise questions or make comments on the site itself if they should wish. I intend to try and respond to all such questions and comments with suitable replies to the best of my ability.

My aim in presenting these ideas now is to ignite interest in changing, for the better, housing markets in all locations, i.e. the individual ones which function locally across England and Wales. By providing a way for them to operate more efficiently, the improvements achieved would then filter across the whole country and all housing markets would start to function more dynamically and as a single entity.

Posted by: Peter Hendry, Housing Valuation Consultant

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

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

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