A one-page synopsis of ‘The House Price Solution’, especially for newcomers

There are two aspects. The first is about how to make all local housing markets across Britain work like free-market economic models.

This would involve replacing estate agency as we know it with a new, better and properly licensed service which I am calling Residential Housing Agents or (RHAs). This is the first radical change. These buyer and renter-advising agents would primarily work for buyers and renters instead of for sellers, as happens at present.

Individual RHAs working with clients would need to have gained an approved new qualification showing their level of competence. The reason for this is that the existing estate agency service breaks the economic market rules and generally talks prices up. This skews all residential property marketplaces by over-valuing most of the individual houses and flats. This is a fundamental misrepresentation and is damaging all the housing marketplaces.

What is needed instead is a service that records all genuine offers (whether to buy or to rent), and immediately submits these to the relevant vendor (or the landlord for rentals), for consideration. After the decision is made and one of the offers is accepted by the vendor or the landlord, the RHA handling this will arrange for a pre-worded lock-out agreement or contract with that vendor as well as with their legal adviser such that they all agree not to accept any other offer for the agreed period of time that it should take for the conveyancing to be concluded (or the tenancy agreement if its a letting).

Once the sale or letting is completed in this way, the RHA would collect their fee from the satisfied buyer or renter, via the solicitor dealing with completing the transaction (or from the landlord if appropriate).

The second radical change, deals with the town and country planning rules relating to residential property. What it proposes is the substantial change necessary to make the best and most efficient use of all housing units, whether already built, or yet to be constructed.

A main reason for this is that housing is in great demand as well as in unprecedentedly short supply. As a result, each viable existing housing unit should be zoned within the local Neighbourhood Development Plan (NDP), such that whenever that property becomes vacant (and/or changes hands), the appropriate NDP zoning for that house or flat must take effect. For example, if the house was previously used as a second home, but it has subsequently become zoned on the NDP for local housing use, then after the vacation of the property, the new use must comply with the current NDP zoning. Enforcement action could follow wherever this is not the case.

Clearly, because it is the local town or parish council that draws up local NDPs, the best organisation to administer this would be that same one. I therefore propose that all residential planning decisions should therefore be devolved to each local town or parish council to determine them exclusively and in accord with their adopted NDP.

This would mean the existing arrangements for regional councils to decide such planning applications would no longer be needed, which is a third radical change, this one designed to speed up planning decisions.

As a result, there would be no need for government planning inspectors to deal with residential planning appeals centrally. In other words there would be no need for an appeal process for individual residential planning matters anymore. This would save inordinate amounts of time as well as great expense and bring clarity as to exactly which use designation each residential property should have, for the benefit of the town or parishes’ local housing economy primarily of course.

For more on this please follow the link below:

The house price affordability crisis

Posted by: Peter Hendry, Housing Valuation Consultant

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

The best thing to do to resolve the national housing crisis

A leaked set of proposals to The Guardian newspaper recently has resulted in a front page article outlining the content of a recent report by The Labour leader of Hammersmith and Fulham Council, Stephen Cowan, about to be sent to the Labour Party.

Among some serious issues being highlighted is the cost of living itself and the problem of rising rents deemed as a result of insufficient supply of available rental properties coming onto the market.

I think there is a lot more to this than meets the eye however.

Mr Cowan suggests solutions could range from putting restrictions on the amount of rent increases and their frequency, to possibly considering scrapping no-fault evictions.

A significant problem with these ideas would of course be that such actions are likely to further restrict the already dwindling supply of private rental property being offered on the market.

Sir Kier is said to have promised to tackle England’s housing crisis if elected as Prime Minister, in part by relying on a massive socially rented house-building programme. However, there are other alternative proposals that I would like to advance for consideration and debate.

From my viewpoint, as a retired surveyor, the best solutions to be applied should retain and nurture an open market for privately rented housing, without excessive restrictions on rent levels or discriminating against good landlords simply wishing to operate in the private rental sector. I don’t think Mr Cowan has been able to consider proposals such as the ones I have been putting forward.

Firstly, it is clear that the way houses are currently marketed via estate agents, is an economically imperfect way to do so. This has to change as a matter of urgency so that buyers and renters are considered equally in any negotiations on rents and/or prices.

What is causing the increasingly unaffordable house price increases is being driven by the fact that traditionally, house price increases are being decided in liaison with estate agents and letting agents acting solely for vendors and landlords. This is what needs to change. There needs to be open market consideration by buyers and renters so that their affordability criteria can be fed into the equation. Agents need to be tasked with balancing any price / rent increases with buyer / renter affordability in the market. Local buyers and renters ought to be included for full consideration when determining which applicant is the best applicant for the house or flat in question.

The only and long overdue answer for this would be to re-regulate the marketing of all privately owned and rented residential property by improving the way all houses are marketed both from a buyers’ and a renters’ perspective.

Secondly, it is vital as part of this to make sweeping changes to residential planning rules so that local town and parishes absolutely decide user types of all residential properties in their areas, and no one else should be involved. This could also be done with immediate effect by our central government.

It is clear that to assist with the provision of additional residential dwellings in the locations where they are most needed, important changes to the planning rules are brought in such that local town and Parish councils, (which are democratically elected), should decide the residential use classes of all the houses or residential properties in their designated areas. They could do this by putting the required classifications into the next five-year Neighbourhood Development Plans. These, once adopted, would then be decided until further superseded, as housing demand locally may fluctuate and change.

For those owning residential property that has had changes to its use class, such owners must accept that when the property is next vacated, the new use class must take effect under the Neighbourhood Development Plan then in existence.

That may mean when marketing their property, that a different class of occupier may involve a different level of affordability. The risk of this would naturally have to belong to the owner of the property concerned, not the town or Parish.

Doing this would allow local areas to be able to balance the supply of suitable properties in their area with the actual demand for these.

More about this may be found in the various articles published on this web site of course.

Whilst I was finalising these unique proposals I needed to explain, to my professional body the RICS, having qualified as a Chartered Surveyor back in 1974, all about these solutions to the housing crisis which had come to my attention. They are based upon the valuation knowledge and my market awareness gained whilst conducting my inspections mostly on behalf of buyers and renters. Unfortunately, it was clear at that time (some years ago now), that RICS was not willing to sanction these changes and instead vehemently supported the existing estate agency model which is now as old and archaic as the hills!

The only realistic possibility open to me in such circumstances seemed to be to have to resign my membership of the institution, which I rather reluctantly then did. I hoped that this might not result in my proposals being ostracised by RICS as a result, but I seemed to have had little alternative except to take such a risk at the time.

In the final analysis, there can be only one preferred solution to successfully being able to solve the existing and worsening housing crisis; namely my solution.

Having arrived at such a viable solution myself, I believe RICS ought ultimately to acknowledge the validity of this cure, along with others who will hopefully consider my alternatives with fully open minds. I remain open to discussing the details of these proposals with RICS if and when they may be interested in doing this of course.

Meanwhile, I hope the next British government might take these proposals seriously and perhaps debate these either within these pages or indeed elsewhere.

For more on this please follow the link below:

The house price affordability crisis

Posted by: Peter Hendry, Housing Valuation Consultant

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

Our two-stage proposals for solving the price and availability of housing nationally

Planning reform is one of two main arguments currently being made for bringing forward new policies which would completely reshape local housing markets across the whole of the U.K.

The other equally pressing argument is about the inadequate way in which houses are marketed currently. Price issues are not simply because of an insufficient supply of new housing. This is not what is causing house prices to escalate beyond the reach of so many people in this country.
(For more on this, please see the other articles on this web site.)

As far as the planning part of the solution is concerned, the required planning reforms should be incorporated into new Neighbourhood Development Plans.

Set areas within each town in these plans ought to be designated as having users restricted to primary residences only – on a permanent basis.

Under these provisions, any houses not being used as primary residences prior to the designation taking effect should have the planning use reverted to primary residential use, as soon as the house in question should become vacant.

Under such proposals, those owning houses falling within such use restrictions ought to have to accept these restrictions for the good of the local community, to bring about good planning for the future of the town. (This could, of course, also cover out of town or parish locations as well.)

These new policies would allow towns to retain sufficient suitable housing for use by those in the local workforce wishing, either to buy or to rent the housing they need for their local occupancy.

The planning system should be tilted away from its excessively stringent development control method and instead be moved towards a new, open and locally focused, rules-based zoning system, based on ‘types of user’.

I am saying towns and their associated hinterlands should zone all existing and future housing within their administration into the following specific categories:

Owner occupation: (by those working locally or retired)

Affordable to buy: (for those starting off in life and by those working locally)

Private rental: (by those working locally)

Social housing lettings: (by those working locally or retired)

Second homes: (for those not working locally)

Holiday lettings:

If considered advantageous planning-wise, a mix of these user designations, which should be specific to each individual house, might be allowed in the same street or location.

This would give planners, advising and, acting in accordance with democratically elected local councillors, appropriate authority to oversee how the local environment should be developed and nurtured, taking into account present community aspirations.

These criteria should all be enshrined within new and upgraded Neighbourhood Development Plans lasting at least for five years at a time.

Towns and Parish councils which only have the current right to comment on planning applications within their area, should instead be given the power to decide them. This would be an absolute game-changer.

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.

Planning enforcement should fully apply to such new use criteria and should naturally be fully implemented by the appropriate planning enforcement authorities.

For one thing, these proposals would have the effect of limiting the amount of holiday lets within each town and this would be one of the best methods to solve the present housing crisis.

If you investigate, the overall lack of housing supply is not being caused by a total lack of existing housing stocks but by too much of it being put into uses such as holiday use. “These ideas are thankfully up for debate in Parliament imminently.” says Peter Hendry, author of The House Price Solution.

Any new planning uses, should certainly define and identify precisely where in each locality, houses should be reserved for primary residences only. The preferred user-type should be defined by each local planning authority – in consultation with local owners, but the local planning authority alone should of course have the final say.

No holiday lets, no socially rented units and of course no second homes should generally be permitted In certain zones. Instead, properties there should be reserved for local buyers and renters alone.

Having this would be equivalent to the construction of previously set but demonstrably unachievable house-building targets. The advantage would be that the housing released this way would be exactly where it would be required within each town and parish location.

Local areas desperately need this. In this way local communities could benefit from a re-designation of sufficient residential properties, as may be required, without having to ruin the existing built environment with excessive and inappropriate over-development.

As the property which would be involved would have already been built, this policy could be brought in without undue delay. After all, in most cases, this was what these properties were originally built for in the first place!

There certainly needs to be further regulation of the use of residential property, so that enough housing  can be retained for local people to buy or to rent. Otherwise, whole communities will be ‘hollowed out’ by holiday lets etc., as was explained and has been happening for some time, especially in tourism hot spots.

This web site proposes changes to the whole way in which houses are marketed as well as bringing in more effective planning controls.

For more information on the necessary house marketing changes, go to:

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

All your comments on this subject would be appreciated.