The House Price Virtuoso Solution is 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. As the adage goes, there’s no smoke without fire!

This is why over the decades past, as a now retired surveying practitioner, I have considered the reasons for these failings, particularly as they adversely affect the poorer communities.

I’ve devised a new and better way to deal with the difficulties of the currently unaffordable level of house prices and associated housing issues because purchase prices being claimed to be ‘affordable’ are clearly not truly affordable.

Once you really look, it should begin to become crystal clear that it is the poorer buyers whom are in reality propping up house prices for all the wealthier home owners.

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

It is primarily those fortunate enough to already have substantial property assets and who enjoy a healthy and almost guaranteed rise in the capital values of their relatively extensive holdings, so that when they choose to sell these they can recoup large financial rewards without having to do much to earn such 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 desperately need relief by way of a lessening of such large and onerous borrowing commitments.

It is time the whole out of kilter house-selling regime set up by the historic role played by 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!

After the Brexit issue has finally been resolved, we will need an efficient and fully functional housing marketplace for people wishing to move house so as to afford to buy, or alternatively rent, their next housing accommodation.

Judging by the slowdown of sales transactions shown in the recent sales completion statistics, 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 and study the proposals I am tabling and contained within The House Price Virtuoso Solution.

The background leading to this is available on the following web site:

Home Page – improvethehousingmarket.co.uk

The specific page covering The House Price Virtuoso Solution is at:

The House Price Virtuoso Solution

I would be happy to engage in online discussions about the technicalities and/or the necessary strategies needed in order to reach the conclusions of precisely how to improve local housing markets within the whole of England and Wales for the benefit of both owner-occupiers and all private tenants of residential property in our country.

Peter Hendry
Author of The House Price Virtuoso Solution (otherwise known as The Hendry Solution)

The new government leaflet on house buying

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

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

There’s also another leaflet on house selling.

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

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

It says:

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

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

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

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

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

USEFUL LINKS:

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

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

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

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

A pdf version of the government leaflet:

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

This is viewable at:

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

A pdf version of the other government leaflet:

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

This is viewable at:

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

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

The House Price Virtuoso Solution otherwise known as The Hendry Solution

Peter Hendry, Consultant in Housing Valuation

Why have UK house prices risen now and become way out of line with the rest of the economy?

If you don’t know, this would indicate that you, along with quite a few estate agents genuinely do not see that there is a need for improvement in the way houses are marketed and sold in this country.

There are 3 basic reasons for this happening.

1. Too many houses which go onto the market currently fail to sell at all.
This results in an increased shortage of available properties to buy, which also tends to move prices further in an upwards direction.

I estimate the current rate of failure on agent-instructed sales is approaching 50% currently, but there appears to be no reliable data on this for some peculiar reason. I wonder why?

2. The difference between the price one pays when buying and what is obtained when selling is greater than it ought to be, the result of which is fewer actual sale completions than might otherwise be attainable; when one thinks about this.

In theory, there should be little or no difference between buying and selling prices at any one time – except for tax and stamp duty plus area or locational differences and accommodation size and quality differences. Of course, the fees and the other ancillary costs of moving do need to be accepted as being payable.

3. The price differentials caused by 2 above, i.e. by estate agents’ general over enthusiasm to get more houses onto their books all the time, is what causes the problem described in 1 above. This is what is called a negative feedback loop. That is, it has a negative or opposite affect on the operation of the market.

Until this is satisfactorily corrected, the housing market will continue to operate in its present inefficient and imperfect way.

This must actually harm the national economy – especially when the country is trying to get out of the previous deep recession – and that is still the true situation in the UK.

IF, instead of agents continually competing with each other to increase their own individual share of the number of houses coming onto the market at any one time, agents were to actually work in harmony with each other to help those wanting to move house, the likelihood of individual house buyers simultaneously completing when buying and selling would be very greatly increased. This would have an equally substantial effect on the whole nation’s economy.

This is the primary reason why a fundamental CHANGE in the way houses are marketed in the UK is desperately needed.

My proposal for the way housing in England and Wales should be marketed, is based on changing from vendor-centric estate agencies to buyer-oriented ones as described in The House Price Virtuoso Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.

To read more about The House Price Virtuoso Solution (otherwise known as The Hendry Solution) go to the following link:

Improve The Housing Market.
How to Improve the UK Housing Market.

Peter Hendry, Consultant in Housing Valuation

A New Housing Market Model in a Nutshell

Without house price stability, people cannot move, at times when they ordinarily would. We can see this clearly at present owing to market stagnation.
Worse, all the allied trades, including estate agents, are unable to trade successfully as the housing market goes into the doldrums, at approximately 7 year intervals.

The idea of owning your own home (rather then just renting it) is partly so that YOU can decide when you want to move, and where to. It’s also to enjoy a return on your investment, over time of course.
I am concerned about helping large numbers of people, by creating a perfectly stable housing market that stays ‘stable in throughput’, no matter what the rest of the economy is doing over time. This has never been achieved before but at ImproveTheHousingMarket.co.uk we have discovered the correct formula to achieve this.

In essence, the estate agents past model, which is fatally flawed, has been to try and create a price stable market, with generally increasing asking prices.
The result, which we can all clearly see, is massive house price growth followed by stagnation in demand as prices fall back, sometimes over several years.

By comparison, our idea is instead to have a market that is primarily stable in throughput and that asking prices should reflect that. This would mean that people could move between houses more easily, whatever the prevailing prices, because prices should, of course, always be relative at any one point in time. Instead of using agent’s (or client’s) psyched-up prices, true market-driven prices, can instead generate a continually moving housing market and thus provide the ability for people and families to change between houses quickly, in any state of the market.

In my model proposal, asking prices would be capable of better self-correction than happens at present but because all the asking prices would stay close to each other, relatively speaking and everything would work more satisfactorily.

Additional advantages would become available, especially for first time buyers, as when prices are more stable, they would be able to get onto the housing ladder more easily.

My proposal for the way housing in England and Wales should be marketed, is based on changing from vendor-centric estate agencies to buyer-oriented ones as described in The House Price Virtuoso Solution. This would not cost much to implement and would bring massive benefits to all local marketplaces.

To read more about The House Price Virtuoso Solution (otherwise known as The Hendry Solution) go to the following link:

Improve The Housing Market.
How to Improve the UK Housing Market.

Peter Hendry, Consultant in Housing Valuation