To relieve the housing crisis we need to introduce the correct solution to the actual problem

It’s no good, it’s time to react to the situation. We need clear thinking at a time of crisis. There’s no time to lose!

If we want to resolve the house price crisis (and by definition the housing crisis itself in doing so), we need to introduce the correct solution to the actual problem. 

Without insight, this is not going to happen. With such insight, it can.

Firstly, we need a complete change in the way houses are transferred from one owner to another. This would speed up house moving and restore price levels to the affordability levels of those most needing to purchase them.

Secondly, we need a new residential planning control system that gives the decision-making to elected local planning committees under a set of new democratically agreed Neighbourhood Development Plans.

In this way, local town administrations could zone each road (and even each existing property) for predetermined residential user types.

This way, supply of such property types could be balanced with future demand for such accommodation within each town and its hinterlands.

If both of these new policies were to be put into effect, the housing crisis could be swiftly and economically resolved – and local residents could move forward with the rest of their lives. These are bold new proposals worthy of proper debate which is thoroughly welcomed.

In peacetime (i.e. whilst our country is not at war with another), residential planning consents should be delegated to all local town or parish councils for them to determine, depending upon local housing need.

This way, genuinely democratic decisions may be arrived at using local decision-makers whom are best able to understand what the current needs of the community are at any particular time.

For more detail as to how these straightforward but game-changing solutions to the present housing crisis could be put into effect without delay, please follow the link below and by all means see the other information about this within these blog pages:

The house price affordability crisis

Posted by: Peter Hendry, Housing Valuation Consultant

Author of:– The House Price Solution, otherwise known as The Hendry Solution.

All we need are our forward-looking councillors to get together and vote for these changes!

If they really are genuinely representing their constituents, they will be keen to examine these new proposals, discuss their merits, and champion them for adoption soon. Nothing more need be said.

The notion that we can build our way out of The Housing Affordability Crisis is utter nonsense

Politics is sub-optimal at present, especially in regard to housing, which is the last thing people want.
Here’s why:

The notion that we can build our way out of the Housing Affordability Crisis is NONSENSE !!

When you consider that in this country, the total existing number of dwellings is probably well in excess of 30 Million AND …

If you accept that the maximum possible number of new dwellings that could be built in any one year these days is say 250,000, then you must deduce that the percentage of extra dwellings that could in practice be added to the existing housing stock in each year can only be a single digit number of percentage increase in any given year!

Assuming that you understand the economic theory behind house prices, to achieve a material change in such price levels by increasing the overall supply of dwellings, one would have to build in excess of 10%, more dwellings to begin with. If not that number, the effect of pursuing such a policy would be negligible, in actual practice.

In conclusion therefore, you would need upwards of two to three Million new dwellings to come onto the housing market, to even begin to affect house prices sufficiently to bring them down to more affordable levels by these means alone.

Also, as population growth continues, more and further residential development shall be necessary, even though this would be at the expense of the loss of agricultural and amenity land and would further damage our environment in the process.

The mathematical explanation:
Here’s the mathematical proof of why the current policy of building only a third of a million new houses each year, cannot be expected to have the effect of lowering the level of house prices currently prevailing in housing marketplaces all across the United Kingdom.

As explained, the expected proportion (in valuation terms) to have any material affect on current house prices to even begin to take place, would be an increase in the stock of housing of approximately 10% at least initially.

Formula 1:
Calculating the minimum number of dwellings that would be initially required to be added to the existing housing stock, to achieve a 10% increase in stock – i.e. in the first year?

Say the total number of existing houses is (conservatively estimated) at 25 Million.

The original number of houses + 10% = 27,500,000 . This would be the total number required. The total number – original number = number of extra houses required.

27,500,000 – 25,000,000 = 2,500,000 the number of extra houses required. This is far in excess (i.e. approaching ten times the number that our government are expecting to be building i.e. 250,000 on an annual basis) !!

Formula 2:
Calculating the actual percentage, of dwellings which would be added to the existing housing stock, if only say 250,000 additional dwellings were to be added in the first year?

New number – orig. number
——————————————- . X 100 = %
orig. number.

25,250,000 – 25,000,000
——————————————- . X 100 = 1% only.
25,000,000

Formula 3:
Calculating the actual percentage, of dwellings required to be added to the existing housing stock, if supposing as much as 400,000 additional dwellings were to be added – for comparison purposes.
(Note the orig. number of housing stock would increase in each subsequent year.)

New number – orig. number
——————————————- . X 100 = %
orig. number.

25,400,000 – 25,000,000
——————————————- . X 100 = 1.6% only.
25,000,000

Both formulas 2 & 3 disclose the very significant shortfall of sufficient houses able to be added, to gain anything like the 10% minimum increase necessary, as calculated using formula 1, to start bringing house prices down significantly enough for them to be adequately affordable to a majority of current-day potential buyers.

This shortfall is far too large to even contemplate let alone justify a course of action such as the one currently being suggested, in order to attempt to bring house prices down over the relatively short term. The actual affect on price levels themselves would be both marginal and insignificant at best!

Further explanation regarding the proposed/revised selling process advocated under The House Price Solution:
In full response to the ‘lack of supply’ pontificators, whom are rather prevalent currently, the whole rationale or philosophy behind my carefully considered solution for restoring the housing markets around Britain to good health, embraces the wisdoms of bygone days. How so? There was a time when latin was in general parlance and the words: “Caveat Emptor” were in frequent use. The meaning of this should never have been forgotten.

This used to be an express warning which was applied especially where property or real estate was concerned. The words of the warning mean: ‘Let the buyer beware – unless they are covered by the seller’s warranty in terms of quality and worth’. The meaning of this simple latin saying amply describes why the current failures are occurring, manifesting within all housing markets up and down our still great country. 

We should remember this because in actual fact it is the one thing which is required, in order to restore and correct the damaging anomalies surrounding today’s accelerating house prices. As explained, these anomalies arise from our having departed from and forgotten what were previously well-known and established wisdoms, to be relied upon whenever undertaking commercial transactions such as those involving the buying of houses for family use.

The problem of unaffordable house prices today simply isn’t a supply-side matter at all. It is a price-side problem not a supply-side one. A-level students studying economics ought to know this! Once this is understood, the requisite changes to the way in which our housing markets operate across the whole country may be realised so that they may, once again become normality. Central government necessarily would need to take a lead in resolving this current-day house price crisis of course.

In the local area where I live for example, there are clearly more than a sufficient number of houses that certainly could be used to satisfy both present and future demand for residential housing but they are not coming onto the market. Instead they are being used for non-residential uses. It is this that needs addressing most urgently, not the headlong rush to build more houses to satisfy a purely notional lack of supply when in fact, there is a more than adequate supply of suitable property both in our locality and in plenty of other locations all over the place!

Please consider what is being explained here and raise any relevant questions on this for public scrutiny and discussion. A campaign ought to be mounted to bring this matter to the attention of our government should those interested in this wish that to happen.

For the full details of how to address all these issues simultaneously, please follow the link:

The House Price Solution

How to Improve all local housing markets in England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant

Author of:– The House Price Solution otherwise known as The Hendry Solution.

I invite questions and comments regarding this complete new way to restore all housing markets up and down the country, to return appropriate operational housing market conditions once again.
With better prospects for all wishing and needing to move house at any particular time I propose this as being the best and only practical solution to the house price crisis.
Market economics would be substantially improved using these newly explained techniques.

A Challenge to Estate Agents to Improve The Housing Market in the UK

We all deserve a better housing market in which to find and purchase houses and flats for ourselves so I now challenge all estate agents and the landed professions to a full debate on the merits of my prescribed solution to the present and unacceptable house-price crisis, as well as to discuss the pressing need to correct the insufficient number of houses currently being purchased for owner occupation.

“There’s currently NO genuine competition between sellers who employ their own agents, as happens at present. I propose that instead, estate agents should be working for buyers in a similar way to travel agents and sales of tickets in the airline industry.” Travel agents help travellers to find the best value holidays for their chosen destinations.  This is what should also be happening with housing.

House prices themselves should find a level based on real competition. For this to happen, housing should be priced in a similar way to the methods used in the travel industry.

Fair competition should be introduced into our housing markets so as to achieve best throughput in the market, whilst maintaining price stability by using The House Price Solution.

The proposition:
Here is the essence of what I am saying by using this method.

It involves a complete and permanent change in the way estate agents deal with residential house sales.

As far as residential sales are concerned, to use this solution, only Registered House Agents (RHAs), would be licensed to deal with residential sales & purchases. The key difference is, this would involve a new type of agent which would always be acting for the purchaser rather than the vendor.

Existing Estate agents could continue to offer both sales and management services to all their existing clients except on residential or part residential property sales. In other words, sales of all types of property other than residential property may be dealt with in exactly the same way as before by existing estate agents.

Only Registered House Agents (RHAs), would be licensed to act in dealing with the sale and purchase of residential property. They would also be licensed to manage such property.

Those licensed to act in such matters would be expected to have passed a new qualification prior to obtaining a license to carry out this type of business.

You may ask in this case, would anyone else be allowed to act on behalf of those wishing to buy or sell residential property?

The answer is no. Market forces will be harnessed to act both for sellers as well as buyers by using different and competing Registered House Agents, tasked with the work of obtaining for their clients, the best combined buy and sell prices in the market whenever moving house.

Competition would be achieved because the selling process would normally be done using a separate and competing RHA in every case.

Whereas selling residential property may only be carried out by Registered House Agents (RHAs), existing professional buying agents may continue to operate as normal by negotiating terms of purchase on behalf of buyers as they do at present. The difference for them would be that they would be dealing with Registered House Agents when buying rather than with estate agents as at present.

This unique plan is designed to eliminate the exaggerated house prices which are being quoted and are seriously damaging our housing markets.

By stabilising prices in this way many more people would be able to transit between properties, as and when they may need to.

Your thoughts are welcomed on this new idea for smoothing rising house prices whilst helping to stabilise the capital values of privately owned residential property as part of this process.

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

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The Cure For The Malady Across All British Housing Markets

The cure for the malady across all British housing markets is to use a combination of two cures, in a similar way to a doctor using two specific antibiotics to cure a bacterial infection.

The expertise required to achieve that would involve first acquiring an accurate knowledge of the causes of such infections and following this, the ability to diagnose the correct medicinal cure for the specific infection involved.

It is of course imperative to be able to understand precisely how and why a specific illness or malaise will have occurred. Only then can the correct medicinal cure be prescribed.

Peter Hendry says, “I can explain in simple terms why house prices are continuing to rise despite the increasing lack of affordability affecting ever more prospective buyers.”

In a nutshell, the housing market should find the values of houses in a quite specific way.

The true value (or the correct buy price), of any house being offered for sale should be arrived at by adding THREE separately-assessed components together:

1 The land value – which depends in part upon location.

2: The construction cost (including a profit element to the builder or developer).

3: A further amount of equity or profit produced as a result of having combined these two.

These are the things that a sensible buyer should theoretically be considering, even if only subliminally.

All too often however, anxious buyers will base their offers on a combination of how much they could possibly afford and borrow, together with knowing the asking price being quoted.

“What makes this task particularly difficult to quantify is that house prices in today’s housing marketplaces are not derived in perfect market conditions at all. The reason for this is because in a perfect marketplace, the whole amount of homes on the market would be sold and the demand for them would also be fully satisfied at all times.”

IF, housing markets around the whole country were near perfect, economically speaking, it wouldn’t take a year or more for each house-move to happen. Houses and flats going onto the market would take much less than a year to attract a buyer ready to complete on their purchase. 

There would then be fewer unsold and empty properties waiting to find buyers. Supply and demand would be in balance. House prices would enable this to happen and would facilitate sales to take place more swiftly than upwards of a year.

On the rental side of things, here markets are in a very different situation. There are far more people wanting to rent than there are rental properties available. Also, the supply of flats and houses is shrinking currently, which is forcing rent-levels to inflate. Demand for these properties seriously outstrips supply, economically speaking. Here, the obvious solution clearly has to be to provide more properties available for rent.

It should be noted however, if there were to be less unsold properties at any one time, there would be a lessening of demand for properties to rent, because more tenants would’ve become buyers! Therefore, improving buyers’ markets would clearly help with lessening the rental-demand side of things as well. That would be an important added bonus for both marketplaces, which is why ‘The House Price Solution’ is the final answer.

Instead, the present day housing markets have large overruns where, either there is too much property being offered at any one time or alternatively, there are too few properties being offered to purchasers.

Both extremes are most unsatisfactory for prospective purchasers of houses in the regional marketplaces and especially in tourist and second-home prevalent communities.

Unfortunately, current day estate agency does not assess house prices in the way described just now. Instead they peg asking prices at the level they might simply guess they could sell a house for but also they may well often include what their client (the seller) might hope to achieve when determining an asking price!

Worse, they base their asking prices on what other asking prices are, including what the other recent sales will have achieved, albeit these would have used skewed marketing comparisons themselves for the reasons just set out.

To justify what is being explained here, a year ago for example a typical estate agent had 37 properties available and 379 applicants on their register (according to statistics published by the NAEA). Today, after a spirited first half of the year and after COVID has started to reduce, a typical estate agent apparently has just 23 live listings and over 400 applicants on their register.

If knowledge such as this were to be broadcast, it would skew prices-levels downwards whilst the market is flush with houses for sale and it would skew prices-levels upwards when there were not enough houses coming onto the market – as now.

In the former case, sadly there is inherent pressure within estate agency to want to hide the true facts of an excess of properties being listed for sale compared with buyers so as not to spook the market and to keep things going as smoothly as possible, rather than face the reality of a downwards-changing market, with prices dipping.

In the latter case however, with too few properties on their books and too many buyers wanting them, broadcasting the lack of supply actually helps agents to justify trying for rising prices even against general economic trends! This has been what’s going on recently of course.

Selling agents may try to argue that it is the desperation of buyers which is forcing the prices up but that does not explain why the housing markets are operating at such low efficiency in terms of completed sales. This shows serious imperfections, resulting in their lack of stability which means these markets are in need of a completely new approach to buying and selling houses.

In my analysis and resultant diagnosis following understanding the true causes of these problems, two specific ways to deal with them emerge.

A: Firstly there should be restrictions on the right to occupy a proportion of houses in each locality as being permanent “Primary Residence” restricted. This would mean these houses would be for use only by local people, such as key workers for example.

Most people seem to agree that each locality absolutely needs housing to be affordable to those fulfilling the essential roles in their community. This should therefore be enshrined in each area’s local planning rules.

In peacetime (i.e. whilst our country is not at war with another), residential planning consents should be delegated to all local town or parish councils for them to determine, depending upon local housing need.

This way, genuinely democratic decisions may be arrived at using local decision-makers whom are best able to understand what the current needs of the community are at any particular time.

The different local housing markets could be brought to balance and price levels better able to reflect local demand for housing, more appropriately.

Secondly and very importantly:

B: The emphasis on all prices should be changed so that these are set by ‘buyer offers’ rather than seller price-rigging, which is of course not an open market practice in any way if this is carefully scrutinised.

This is where The House Price Solution (formerly described as The Hendry Solution) could come in. It allows for both of the essential changes cited above.

It would do this by re-shaping house sales methods entirely and by including the use of “Primary Residence” restrictions on certain properties.

AND

It would enable all buyers to be free to participate and establish the price levels themselves, (subject to declared “Primary Residence” restrictions, which would be locally established using the local planning rules).

For the full details of how to address all these issues simultaneously, please follow the link:

The House Price Solution

How to Improve all local housing markets in England and Wales

Posted by: Peter Hendry, Housing Valuation Consultant

Author of:– The House Price Solution otherwise known as The Hendry Solution.

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.

Buyers need far better representation in the British housing markets

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 interlinking chains is frequently going on behind the scenes, which is not necessarily to the advantage of unsuspecting buyers further down the chain. Sale prices at the lower end may require to be re-evaluated.

This is inefficient and ought to be changed otherwise the different local housing markets across England and Wales cannot begin to function more like perfect marketplaces as they should do.

All this happens 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 bids in competition with their own are are being negotiated by the selling agent and then the only remedy remaining for them is to have to find more cash to increase their offer!  It operates rather like a sort of clandestine bidding war usually conducted over a telephone.

House prices as a result, are now passing all time highs but also, they are increasing beyond average couples’ annual earning capabilities for maximum borrowing requirements. This is a big problem especially where earnings are falling. It’s vital that a more generally acceptable approach is available to everyone embarking on house moves, especially if they are first-time purchasers. Purchaser mobility ought to be what should be improved.

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 acting for sellers.

It is clear that existing estate agents are understandably likely 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 essentially since the 1920s.

It would require the buying public to start complaining about the anomalies they are having to contend with when using agents, as well as to prevail upon government to make the necessary improvements to bring about fairer but competitive pricing processes across all residential property markets. Only then could house prices track buyer purchasing power in the localities in which each particular property is located.
The correct solution to this problem does need further in-depth explanation in order for the concept to be fully understood.

What do you think about this idea for drastically improving the operation of all housing markets potentially across the whole of Britain?

Constructive comments are very much welcomed.