Monthly Archives: March 2019

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

Published / by Peter Hendry / Leave a Comment

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

The Hendry 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 Hendry 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 Hendry 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, Consultant in Housing Valuation

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

The primary justifications for sales and marketing reform in all housing markets across the UK

Published / by Peter Hendry / Leave a Comment

The cause of the failure of large numbers of buyers to be able to continue to afford to get onto the housing ladder is primarily on account of government banking and finance policy.

10 years have past since the 2008 financial crash and the effects of using quantitative easing (QE) are, at last, beginning to reveal themselves.

Virtually all capital assets have increased in value against sterling, whilst savings have simultaneously experienced a decrease in value – in real terms.  This situation, as everyone will now undoubtedly realise, does include significant price increases right across the housing markets.

The effect of this policy has resulted in a majority of millennials (i.e. people coming-of-age around the turn of the millennium) becoming unable to afford to buy houses.  Instead they will have to accept becoming long life tenants as being the only viable alternative to having to stay with their respective parents into middle age.

In my opinion, along with many others, this is a sufficiently bad effect to warrant a complete re-think of the way monetary policy is managed both by government and equally as importantly, by the separate institution of The Bank of England itself.

Here is the brief reason for this conclusion:

10 years ago (2008), the government was faced with coming up with a rescue plan to deal with the global financial crisis which was seriously affecting Britain as well as the currency markets in America and other major nations’ currency markets.  The required decisions were extremely time critical.

As a response, the government decided to authorise The Bank of England to issue digital money to purchase government bonds as loans for use to fund public borrowing by financial institutions.

The effect of this (which was well known at the time) would be to reduce the yields on such bonds owing to the increased demand for them.  The secondary effect (which would also have been known at the time), was that we were going to have to accept permanently lower interest rates across all financial markets.

This would result in banks everywhere having access to more funds to lend but (and this is a big but), they would then need to lend more money in order to earn enough from the lower rates of interest able to be earned from it.

The scale of QE engaged upon following the crisis was huge and at unprecedented levels.  Indeed such a course of action had never been tried to such a massive extent previously, even though it was deemed essential and the only plausible course to take.

Knowing that this was about to happen in the USA our government decided, along with The Bank of England, to follow suit.

The effect was going to be that suddenly, practically everyone in employment would start to have more borrowing ability and hence more purchasing power.  This was intended to help the economy to recover and save it from diving into a full blown recession.

The policy however would, at the same time, adversely affect those with savings to the extent that the interest earned on all such savings would no longer keep pace with the erosion of the value of their savings both by the risk of inflation as well as the severely reduced interest rates expected to be obtainable.

What the government was perhaps understandably somewhat coy about however was, knowing the only way to counteract the resultant inflationary pressures following the severe dose of QE which was about to be prescribed, they would have to simultaneously engage in a severe program of austerity cuts.  This they did with a determination that suggested their lives (or at least their appointments) depended upon it!

The unavoidable difficulty in doing this was that more substantial mortgages, to be available to those who could afford to borrow, would cause house prices themselves to increase very substantially.  In some places house prices have actually increased by between 40 and 60% over the past five years alone because of these policies.

As wages were never going to be able to keep pace with such increases, those having to save for a deposit to buy a house were soon finding themselves unable to save enough fast enough to keep up with expected house price increases.

The result of this, as we can now clearly see, is that many hopeful first-time buyers have had to defer and in many cases completely give up the aspiration of ever becoming home owners in their own right.  This is a tragedy for all of them and is now clear for everyone to see.

Owing to the resultant house price increases the direct effect of QE has been to cause a very significant slow-down in the numbers of houses being sold across all housing markets, certainly in England and Wales.  Whilst this is true it has not been very well documented, perhaps for fairly obvious reasons.

A further side-effect is that estate agency is suffering significantly, since they generally get paid after the sales they have actually arranged are completed.  Thus they are suffering a similar fate to other organisations more directly subject to the targeted austerity measures.

The true aftermath of the risky QE approach embarked upon is now becoming clear.  We are destined to be stuck with very low interest rates for years to come and our house prices, like a mirage appearing to stay just out of reach of the thirsty, will remain similarly out of reach of a large proportion of future home-makers or home owners.  There seems to be no easy alternative – now that we have been driven down this particular road for such a great distance and to a large extent, in our own ignorance.

There is however one way in which houses may be priced more competitively and market sales turnover thus restored.  It is what is advocated by The Hendry Solution which is explained more fully in the link below.

Implementing this solution would greatly help both the present and future affordability of all houses by improving open market conditions.  This would allow the prices paid, to more closely match peoples’ ability to buy instead of having prices set based largely on the projected financial returns of house builders and developers – as generally happens at present.

The Hendry Solution is a new and innovative way to make all housing markets across the land behave more in accordance with what local people can actually afford, by placing less reliance on vendors’ asking prices as being the primary price mark.

In the long run The Hendry Solution, if implemented, would begin to restore confidence by enabling successful house purchasing across all areas, both within our towns and in our country.

I therefore strongly suggest that this proposal should receive detailed examination and I would encourage healthy debate in regard to it by all those with genuine knowledge in the housing sector.

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

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

Peter Hendry – author of The Hendry Solution

Supplementary reading:

BBC article on QE

propertyindustryeye article about first-time buyers and the housing market

Further justification for changing the way houses are marketed within the U.K.

Published / by Peter Hendry / Leave a Comment

Justification 2:
Before much is said about the reasons for the pricing problems perhaps the most important thing to be known and understood, is the fundamental reason why house price rises have been happening recently, despite our general economic trends falling.

Firstly, it is essential to know what distinguishes house sales and purchases from almost all other sales and purchases. It is that houses are capital assets and not chattels. This means that the values of all such assets vary in the market place, dependent upon the current demand for such assets.
In other words, such assets have an ‘intrinsic value’ which can both increase and decrease, depending upon current market conditions whereas things that are not within the class of capital asset, generally only depreciate in value as they age.

For this reason in particular, all those owning houses should treat them as such and not merely regard them as being something which can be marketed by the seller without taking the all-important ‘buyer’ considerations into account.

Justification 3:
It is of fundamental importance that houses should be regarded as having special characteristics in terms of their true current market values. If not, they cannot be bought and sold successfully in the marketplace.

The current way this is done does not have due regard to this aspect and the result is general chaos, with price disparities constantly rippling across the whole of the housing marketplace – generating unnecessary uncertainty.

The frequent delays and transaction failures which happen as a result, are testimony to this and they show that there is a need to substantially revise the way that things are done in these markets.

The way to resolve this situation correctly, is to alter the existing methods used to market these assets and instead treat them as capital assets in a similar way in which shares are traded on the stock market. I mean by this that buyers are and must be integral in deciding the prices-levels at which such assets ultimately change hands.

The Hendry Solution gives the detail of how this may be achieved without excessive cost or delay and I hope you find these new proposals to be both interesting and worthy of consideration.

Justification 4:
In essence, what is needed is to reform the methods by which estate agents operate in the housing market and this reform is now long overdue.

The necessary fix cannot simply be about building more houses to try and balance supply and demand, as claimed by many whom I have discussed this with. Instead it must be about making the housing market itself function far more efficiently. This may well (but perhaps understandably), be something which estate agents themselves are currently reluctant to seriously consider.
Nevertheless, this is what is needed, even more than starting to get additional housing units built as soon as possible.

There IS a better and quicker way, besides that of building many more houses which, by any degree of estimation, would have to take nearer ten years than just one if indeed such a proposal should even be capable of any degree of swift implementation somehow? More about that later!

Justification 5:
As stated, the housing market is broken, with prices being forced up beyond most people’s ability to pay.  This is not however solely about supply and demand, as I am keen to explain here.

It is also about money finding its way into the housing market illicitly, without sufficiently rigorous financial checks being made.  It’s essentially about selling agents (the estate agents) having become oblivious to this as well as a number of other issues – since their primary remit is simply to try and get the highest price possible for each property which they manage and sell on behalf of a vendor client.
Yes, estate agents will happily try and maintain that house prices are decided simply by supply and demand but this loose statement does not bear any serious scrutiny. A rudimentary knowledge of economic theory will undoubtedly confirm that.

Consider for a moment:
Dodgy money (or the money that requires laundering) which has caused significant house price inflation recently …
And:
Over-borrowing The rules for ascertaining who should be permitted to borrow, for what reason and exactly how much should be tightened – especially whilst such large sums are able to be borrowed so cheaply.
And:
Lack of valuation knowledge There’s a general lack of adequate valuation knowledge (and experience) possessed by most agents in the property sector currently …
And:
Bias towards vendor negotiations
There is a worrying lack of transparency concerning the way in which estate agents operate nowadays, especially as far as buyers are concerned.
Changes need to be brought in by government as agents themselves would clearly prefer not to do so whilst primarily supporting their clients, the vendors.
And:
Exaggeration
Meaning that lies, deceit and broadcasting misinformation are nowadays pretty rife amongst competing agents, whom are forced to utilise such tactics in their quest to each gain more instructions to sell or let.

It simply cannot be denied that each of these highly unacceptable behaviours are playing too great a part in deciding current-day house prices in England and Wales and that such matters have clearly not been adequately addressed so far by any responsible organisation including our government.

To find out how such a significant market improvement could be achieved, please go to:
Peter Hendry – author of The Hendry Solution

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

There needs to be a sea-change in all housing markets across England and Wales

Published / by Peter Hendry / Leave a Comment

Why? Because the existing methods of marketing houses across England Wales are discriminatory, irrational, unjustifiable and a violation of buyers’ rights and the general economic rules for arriving at fair valuations for residential property in the open market.

The methods used by estate agents are aimed at maximising prices for vendors at the expense of and to the disadvantage of buyers whilst also allowing banks to gain substantially by lending more. This is patently wrong and needs to be stopped.

To resolve this crisis I am asking our ‘government’ to stop the over lending by banks and borrowing institutions, causing house-price escalation in England and Wales currently. It’s time to fully re-assess this predatory and over-used policy.
It’s no good trying to prop up house prices at the expense of genuine open market affordability.

The solution to this crisis is, of course, not particularly simple or obvious.
It must depend upon absolutely logical arguments, explaining how to bring about a fair and an inclusive way to buy, sell and to let privately owned houses across the whole of England Wales, especially to benefit the all-important first-time buyers and of course tenants hoping to become buyers.

There are now clear answers to the problems which such buyers are undeniably facing and these are becoming clearer as time goes by but a certain amount of bravery would be needed to effect the changes necessary to secure a sound housing market providing fair opportunities to those currently trying to buy, sell and rent houses to live in. Also, this would benefit those performing the vital agency work involving marketing and advising particularly buyers but also sellers regarding the sales and purchases which they wish to execute.

Genuine debate at a high level needs to be held on this.

To find out how this could be done, please go to:

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

Peter Hendry – author of The Hendry Solution