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

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

Simply building more houses can’t solve the housing crisis

Obviously we need to get more houses built, both for rent and to buy but developing this as a strategy for calming the housing market is not going to remedy the prices uplift which we have recently experienced. It cannot do that simply because building more can’t achieve anything for as long as the considerable time it would take to actually complete the building of the extra housing needed!

The market itself is in need of intervention and this does need the steady hand of an experienced government. One that can put effective policies into practice faster than the simple and well-thumbed ‘build more’ idea.

My solution is to overhaul the way in which houses are marketed, both for sale and to let by changing the way agents themselves operate.

A more market friendly method is needed so that house prices can be attuned more towards peoples ability to pay, with less of the speculative pricing by agents, whom currently act only for the vendor legally. It is this which needs urgent attention.

A more transparent housing market would not only take the froth out of asking prices but would have the added effect of calming rent levels too. For more information please go to the link below:

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