The 2018 Autumn Budget offers nothing much for the housing market

Published / by Peter Hendry / Leave a Comment

There was very little in the Autumn 18 budget to address the ongoing housing crisis across Britain.

Neither was there anything specific to deal with the increasing homelessness, with rough sleeping more than doubling since the numbers for 2010.

There was nothing much either for private renters, when the swiftly rising number of households in this sector cries out for change.
There wasn’t much to help those in home ownership either, other than a slight extension of the stamp duty cut for shared ownership properties.

At last year’s general election, the worsening housing crisis clearly became political for the Conservatives, as younger families and renters turned out to deprive the government of its assumed majority!

The backdrop is the dramatic growth in the private rented sector (PRS) over the last 20 years, meaning that renting privately is now the new norm and is no longer seen as a transitional form of tenure simply for students or mobile young professionals.

Instead, this sector is now housing more people for longer periods of their lives, including low-income groups, families with children and young people under 35. Unfortunately however, private renters are, in many cases, paying a higher proportion of their income on housing costs than either homeowners servicing mortgages or social renters. This is a particular concern for those on low and/or insecure incomes, as unpredictable earnings make it ever harder for them to meet their monthly housing costs.

On the plus side, one advantage to tenants renting in the private sector is that whenever they should need to re-locate, they can simply end their tenancies with a single months notice and move.

Another advantage for those renting from the public sector is that social housing provides a more secure anchor than what’s available for those renting privately.

Either way however, it’s abundantly clear that more affordable housing is urgently needed, whether to buy or to rent but the knee-jerk reaction of simply building more houses in every corner of the country that it appears feasible to, isn’t the right answer.

What is the right answer is to change the way all houses are priced, so that prices accord more closely to buyers’ actual ability to afford them in the specific locations in which each house-move needs to happen. The problem of the finance industry capitalising on house price rises won’t be solved by those with financial interests!

The Hendry Solution addresses this problem directly and comes up with a new, and innovative way to achieve this. It sits separately from but right alongside the need to start increasing the overall stock of housing, both for purchase and for rent, whether in the private or the public housing sectors. In essence it deals with the matter of having a continually rising population in a far more equitable way than is currently the case.

For a fully reasoned explanation of how this may be achieved, economically, please go to:

The Hendry Solution: Full details of our proposals for properly reforming the UK housing market..

Peter Hendry, Consultant in Housing Valuation

Buyers need far better representation in the British housing markets

Published / by Peter Hendry / Leave a Comment

With estate agents acting primarily for sellers and land owners, buyers get poor advice or representation all too often.
Even though they are the ones raising (and usually borrowing) the money for each transaction, they are often the last ones to be told how things are progressing, especially where chains of other sales are involved. A lot of patching up of interlinked chains is frequently going on behind the scenes which is not necessarily to the advantage of buyers further down the chain.

This is inefficient and unproductive and needs to change so that the various local housing markets across England and Wales can begin to function more like perfect marketplaces; as they truly should.

All this is because estate agents are primarily motivated to try and obtain the best price they can for whatever asset it is they are selling since they are contracted to act on behalf of the seller. The buyer is often the last person to be told when things are going against them and by then the only remedy remaining is for them is usually to find more cash to feed into the situation!

House prices are now returning to all time highs, but they are also increasing beyond average couples’ annual earning capacities for borrowing requirements. This is a big problem. It’s vital that a more holistic approach is offered to everyone embarking on a house move, especially if it’s a first-time purchase.

The only way this could be done would be to change the way residential property is sold by having agents acting for buyers instead of only for sellers.

What stands in the way of this happening is that existing estate agents are naturally going to be reluctant to consider such a change for as long as they can continue to control sales progress in the way they have done historically, essentially since the 1920s.

It would need the buying public to start seeing the anomalies they are having to contend with when using agents and to lobby government to make the necessary improvements to bring about fairer competitive pricing across all residential property markets. Only then could house prices more appropriately track buying power in the locality in which a particular property is located.
This situation does need further in-depth explanation in order for the concept to be fully understood.

For a fully reasoned explanation about this, explaining exactly how this should be achieved please go to:

The Hendry Solution: Full details of our proposals for properly reforming the UK housing market..

Peter Hendry, Consultant in Housing Valuation

House Prices Are Relatively Meaningless Numbers Today

Published / by Peter Hendry / Leave a Comment

House prices can’t measure your buying power because the moneylenders have already completely skewed that by offering a huge and ever increasing borrowing ability to most applicants (except perhaps those sleeping rough or unemployed)!

Secondly, house price levels don’t indicate your level of wealth because the taxman will take in taxes, most of any equity you’ve made when you do sell – unless of course you buy somewhere else. Similar price-levels will obviously apply so little is actually gained or indeed lost here, relatively speaking.

Thirdly, estate agents generally exaggerate all the house prices because they are taking a rake-off! As long as they can carry on ‘pulling the wool’ of a few people’s eyes, they’re making themselves a goodly amount of commission on each sale, as and when these eventually complete.

This whole process therefore needs a fundamental and wide-ranging reform.

The Hendry Solution is the best way to achieve this. It has been developed, over several decades, as a clear way to do it in the most efficient way possible. It does this after looking at the difficulties being experienced by those in both the buying and the selling situations across all housing marketplaces in England and Wales.

Coupled with the fundamental reforms recommended, those wishing to invest their futures in the housing markets also need much swifter methods for legally transacting sales and purchases. Pre-contract ‘information packages’ and high speed conveyancing processes, are among the several ideas seriously worth considering or re-considering.

For a full explanation of exactly how this may be accomplished, please follow the link to:

The Hendry Solution: Full details of our proposals for properly reforming the UK housing market..

Peter Hendry, Consultant in Housing Valuation

David Dimbleby’s Question Time, BBC 1, 3rd May 18, The broken housing market.

Published / by Peter Hendry / Leave a Comment

As was emphatically stated in David Dimbleby’s Question Time on BBC 1 10:45pm on Thursday the 3rd May 18, the housing market in England and Wales is completely broken.
Martin Lewis, a panel member and founder of Moneysupermarket.com voiced similar conclusions during the show.

The only way new buyers can get onto even the first rung of the ladder is to save upwards of £50,000 when joint salaries are in the majority of cases well below such an amount.
This, coupled with the fact that with interest rates staying so low for so long, while buyers are working to build such a nest-egg, the value of their savings is diminishing all the time they are saving.
With inflation running at over double the interest which is capable of being earned, savers are having to battle against the interest tide just in order to stand still!

The clear message is, housing has now become too expensive to remain attractive to first timers. Total annual completed sales of houses have taken a dive as a result. This is a form of housing poverty as so many simply cannot afford to house themselves and their families, based on their current earning abilities.

What we are clearly seeing here is deja vu.

A similar pattern and situation presented itself after the end of the First World War and the Housing Act of 1936 was government’s response. It intervened to deal with the acute lack of sufficiently well equipped housing by usually clearance orders to have substandard housing demolished and new and better quality properties built on the land released.

Government action was the catalyst which dealt with the need at the time.

A fairly similar scenario in history occurred after the Second World War as once again, the government acted as a catalyst to deal once again with substandard housing using the Housing Act of 1957 to clear property which was deemed uninhabitable and uneconomic to upgrade to a habitable and acceptable standard.

In both cases, in concert with dealing with unsatisfactory standards, significant numbers of new housing, particularly municipal / council property was built at huge cost to the exchequer.

This was instrumental in holding house prices stable at the time.

The problem today is that since there have been no more wars involving our country, a very welcome situation of course, there has been little incentive for government to wish to involve itself a third time in dealing with the current housing crisis.

But; there is quite plainly little point in administering similar medicine a third time as it is also plainly evident that doing it has not permanently mended the nation’s housing market.

Instead what is needed (in addition to a program for constructing lots more housing within the private sector but crucially also in the public sector), is a logical and reasoned overhaul of the way in which each local housing market around the whole country actually functions.

Instead of allowing vendors simply to pitch asking prices at any amount they happen to consider feasible, more research is needed when determining the correct and finely-balanced level of price in the marketplace concerned. To achieve this would involve a root and branch reform of estate agency as we currently know it.

The way this could be done would be to re-orientate agency so that it primarily serves all the buyers instead of working solely for the sellers as happens at present. Smoothing out house prices using this method would have a dramatic and permanent stabilising effect everywhere – just what is now needed to stimulate new buyers to save and buy at prices within their financial reach.

For a full explanation of exactly how this may be accomplished, please follow the link to:

Improve The Housing Market in England and Wales.
How to Improve the Housing Markets in England and Wales before it is too late.

Peter Hendry, Consultant in Housing Valuation

The top 8 reasons for house sales falling through

Published / by Peter Hendry / Leave a Comment

Here are the top 8 reasons for a house sale falling through currently:
(The information was gathered from a small cluster of recent sales transactions.)

Notice the majority of the reasons for each house sale failures are buyer related decisions, therefore buyers are the group needing improved representation in the housing marketplace not sellers.

1. The seller decided not to sell their home after all: 26%
(incl. unable to find a house to buy)
2. The buyer’s own house sale fell through: 24%
3. The buyer found somewhere else they wanted instead: 12%
4. The buyer was gazumped: 11%
5. The buyer later decided they didn’t like the property enough: 9%
6. The buyer decided the process was taking too long and pulled out: 7%
7. The seller decided the process was taking too long and pulled out: 6%
8. The buyer and seller couldn’t resolve the final terms of the sale: 5%

The Secretary of State for Housing, Communities and Local Government, Sajid Javid said and the new Housing Minister with effect from 30th April 18, James Brokenshaw MP is so far suggesting:
“Buying a home is one of the biggest and most important purchases someone will make in their life. But, for far too long buyers and sellers have been trapped in a stressful system full of delays and uncertainty.


We’re going to put the consumers back in the driving seat. We will require estate agents to hold a qualification so that people are no longer at risk from a minority of ‘rogue agents’ and can trust the process when buying or selling their home.”

My response is:
Simply requiring those carrying out estate agency work to be suitably professionally qualified won’t resolve the dilemma of the broken housing markets all around the country with prices stretching further and further beyond people’s reasonable ability to afford them.

The only way this could be achieved would be to improve the way each local market itself operates, by making all of them more efficient. If this needs further explanation I’d be happy to provide it.

The necessary way to do this is to remove the incentive for agents to hype up all the prices, by making them work for the buyer (or the renter) rather than for the seller as at present.

There needs to be a more fundamental and wide-ranging concept for dealing with this significant problem. Simply trying to get more houses built isn’t the whole answer either.

The only practical and thought through solution is being championed by a retired Chartered Surveyor, (myself) primarily. People working within the estates sector are simply too reluctant to propose or to accept the necessary changes.

The method by which this substantial improvement could be made is fully explained on my blog pages but does require some study. See:

Improve The Housing Market in England and Wales.
How to Improve the Housing Markets in England and Wales.

I would welcome reasoned discussion about this and I may be contacted via the blog site initially of course.

Peter Hendry, Consultant in Housing Valuation

Latest government funded research into the crisis within the housing markets across England and Wales

Published / by Peter Hendry / Leave a Comment

Here’s news (published in February 2018) on the then recent government funded research into the crisis existing within the housing markets across England and Wales.

An awful lot remains to be done to assist those wanting (and needing) to start buying their first houses or flats and thus later to be able to move to better accommodation as and when, and wherever, they may need to.

The Economic and Social Research Council have funded the recent research through the Secondary Data Analysis Initiative (grant number ES/N011872/1) and the Centre for the Microeconomic Analysis of Public Policy at the IFS (grant number ES/M010147/1).

The online link to the IFS research is:
https://www.ifs.org.uk/uploads/publications/bns/BN224.pdf
The decline of homeownership among young adults.

The IFS are so right about the decline in home ownership. It’s a societal loss.
I have worked on producing a policy designed to resolve the current problems within all housing markets across England and Wales.

In my opinion there is only one certain way to resolve this dilemma. My latest blog-published explanation covering this and taking you on to the actual hypothesis and solution may be found at the following link.

The Hendry Hypothesis and solution.
How to Improve all Housing Markets in England and Wales.

Peter Hendry, Consultant in Housing Valuation

It’s an earnest attempt to be a useful contributor to the future prosperity of our nation.

The Hendry Hypothesis and Solution

Published / by Peter Hendry / Leave a Comment

“The Way to achieve free, civilised and secure trading within the housing market of England and Wales.”

Building sufficient houses to have enough of an effect would take years therefore, by definition, other remedies will be needed.

This hypothesis/solution, as well as stepping up the rate of construction of new houses as a side effect, proposes to retune the housing market itself.

If this hypothesis were to be implemented the effect on house price re-calibration would be swift, fair and effective.

The result would be more houses being brought within the reach of those whom cannot currently afford to buy their own houses to occupy. The knock-on effect of this would be to stimulate the building of more houses to meet the extra demand arising from it.

For more information on how The Hendry Hypothesis proposes to retune the housing market itself please go to: ‘The Hendry Solution’

Improve The Housing Market in England and Wales.

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

Stamp Duty Reduction

Published / by Peter Hendry / Leave a Comment

The announcement, in the recent budget, of a reduction in Stamp Duty for first time buyers of houses up to £300,000 (and other buyers of houses up to £500,000), from next April is widely expected to cause prices of houses to further increase though the government is playing this down as likely to be relatively insignificant!

I disagree and believe this proposal will have the very opposite effect to that which is currently needed. House price increases could easily swallow up a larger part of this tax break under the present estate agency contract arrangements because there are no arrangements helping buyers determine the appropriate price to pay on any given property.

I fear that The Office for Budget Responsibility’s estimate of how much prices are likely to go up by, following this tax break may turn out to be very wide of the mark. It is only an estimate.

Instead of short-term tax breaks like this, what is needed is a root and branch upgrade of the way in which house prices are currently negotiated by providing far better negotiating leverage to all buyers and by improving the success rate of all housing transactions.

To achieve this would require a change in the client-agent relationship from the present one, which is a contract between vendors and the appointed agent, to a buyer-centric relationship which would involve the buyer instructing the agent instead.

This would place the all-important and necessary price negotiating information in the hands of buyers for the very first time and equip them to pay the true current market price in the local market in which the property is situated.

Buyers don’t currently have access to the specific price comparison figures when they are dealing with vendor-appointed agents and because they refuse to declare what other offers they have received, buyers tend to have to pay above true market price.

While banks, other lending institutions and developers may all prefer this arrangement there is no logical reason why this ought to be the case even though it has continued unchallenged, certainly since the end of the war.
This method is outdated and in need of urgent improvement.

The Hendry Solution is designed to correct this anomaly and thus substantially improve the efficiency of the housing marketplace across England and Wales.

The policies I am advocating could be put into effect easily, swiftly and inexpensively.

For more information about exactly how this special new policy could be put in hand, please see ‘The Hendry Solution’:

Improve The Housing Market in England and Wales.
How to Improve the Housing Market in England and Wales.

Peter Hendry, Consultant in Housing Valuation

Captivating research into house price growth since the late 60’s

Published / by Peter Hendry / Leave a Comment

No political party in power in the last 50 years has managed to curb excessive house price gains!!

See:
Which political party is best for house prices?
JUNE 6, 2017 credit: MARC SHOFFMAN
.

I would define excessive house-price gains as prices that exceed inflation by over 2%. Most years have seen house prices outstrip this benchmark.

As everyone knows, increases in house prices running in excess of average affordability are currently in the headlines as these are of concern both for those hoping to buy as well as those hoping to move house these days. The effect is to reduce the volume of house sales, resulting in a stagnation of sales volumes across all areas of the UK.

Here’s how to overcome this problem:
Instead of estate agents working on how many houses they can list and gain instructions to sell or let, they should work on how many buyers and renters they can register.

This would be the change that the housing market has been needing for the past few decades.

Estate agents should then work with their new clients to find the best and most suitable properties currently available for them as their primary clients.

They could also then advise and negotiate appropriate prices or rents for them as clients, and present all such offers to the vendors (or the landlords).

This way, more buyers and tenants could be united with the houses that best suit their purposes. This, in turn, would help the housing market to function faster and better.

Turnover of properties going on the market would increase and prices should be more equitably regulated dependent upon the true demand from buyers and tenants..

In other words; instead of each agent trying to get the most, for as many houses as they can get instructions for, buyers should be gathered as their new clients to more correctly ascertain what are the best offers currently obtainable, for each house or dwelling.

Doing things this way would get the housing market to start operating more like an auction, where buyers truly compete with one another to win the use and occupation of each property being marketed.

In auctions, the buyer effectively pays the consideration as the auctioneer takes his commission from the price paid. (He does also take a listing fee from the seller, which is reasonable).

For more on this new idea and how it could change the housing market in England and Wales very much for the better, please see my blog at:

Improve The Housing Market in England and Wales.
How to Improve the Housing Market in England and Wales.

Your thoughts or comments are welcomed.
Regards,
Peter Hendry, Consultant in Housing Valuation