The housing *situation*

When there is a housing shortage:

How is it that very rich people can buy up numerous properties and charge exorbitant rents? How is it that foreign investors can do the same? How can landlords charge what they like for properties? And how can letting and estate agents collude in this seemingly almighty scandal?

I need answers WAN. I'm fucking unhappy about this and I beseech thee to impart your thoughts and feelings about the *situation*. I know some of you have very strong feelings about this.

Grrrr don't get me started on foreign investors, he said, getting started on foreign investors. I too have strong feelings about how the housing market is being manipulated for the benefit of the very rich. Very poor.

I sympathize with BB and DeFrev. £250,000 invested in a 2 bedroom furnished flat would cost £10,000 a year over 25 years to repay the capital. The interest would be another £7500 in the first year, declining in subsequent years. That's £17500 expenditure in year 1 - plus agent's fees, maintenance and repairs, "lost time" when the property is vacant between tenants. Oh - and then there's income tax, at around 25% on net profit - but this can usually be avoided/evaded. And Capital Gains Tax when it's sold - but again this can be avoided/evaded. So at the going rate of £1000 a month, it's not a great moneymaker! What tips the balance is the appreciation in value of the housing market - 10% a year is not unusual and that's a good return. And with the returns so meagre, the landlord is tempted to cut outgoings by reducing the maintenance and repairs and increasing income by raising the rent. Once you have accumulated some capital through appreciation of the property value, it can be used as security to buy further properties.

For the residents of some countries (particularly China at the moment) buying a property in the UK is a secure and appreciating investment - and a way of getting money out of China. Similarly for some other countries - eg Eqypt, Malaysia, Nigeria - an investment in UK property is politically very safe and untouchable by the home country government. Another feature of the housing investment (in a rising market) is that the investment can be financed - at least partly - by a mortgage - so the value of your property goes up but your payments are (relatively) fixed - the landlord's investment appreciates thus generating more worth.

Landlords are severely affected if the property market is falling or static - they then have to look at the only variable they can control - the rent paid by the tenant. So the landlord needs property prices to keep going up - and the tenant needs to put a maximum effort into buying a property and getting out of the rental market. Often easier said than done!

How can it be changed for the better? That's what I'm trying to get my head around. Should property owners be limited to a certain number of properties? Is that even feasible?

The housing market in Cambridge is utterly bonkers at the moment. We moved in December and even since then prices seem to have gone up loads.

Perhaps the council should look to create a few more sink estates and general no-go areas. Then young people can buy up the houses there for cheap and begin the cycle of gentrification again.

Give me 50 quid and I'll tell you the answer BB

It's 55 quid now

Troll demonstrates the point well! If you introduce legislation to control rents, people will find a way round it. For example, in Egypt rents are fixed at a historically low level - by law. eg around £4 per month. And the rent can't be increased for the life of the tenant. So what happens -"key money" arose where the tenant is paid a small fortune to give up the tenancy by the incoming tenant. Or you build shacks like sam i suggests, to satisfy the need and damp the demand.

Radical measures are needed but no politician has the brains or the guts to do it. For example - a large part of the rental rise in Cambridge is due to its growth as a commuter suburb of London. Raise the season ticket price to reduce the attraction. Build cheaper houses in London. Maybe the prices in Cambridge will be capped by the planned housing developments in South Cambridgeshire - 40,000 at the last count - which means 100,000 extra people in a 10 mile radius of Cambridge. But those people may be sucked in from further out by the attraction of the area to the commuter - particularly with the new stations at Chesterton and the expanded station at Waterbeach.

I get the impression that these days a lot of the poorer people have now been forced out to places like March and Ely because Cambridge has been overpriced out of their reach.

To my mind it is rather like like playing monopoly. At the start everyone goes round and rents are about £10 and it's all fine. Then money gets invested in it, everyone builds hotels and then rents skyrocket to £1000 or more. Most players are forced out of the game and then at the end one person owns everything, and sits smugly looking at their empire.

When I play Monopoly I like to buy all the cheap ones like Old Kent Road, buy just FOUR houses on all of them until there are no green houses left. A little known rule is that there are only 32 houses and you can't built more if they run out, nor can you jump directly to hotels because the rules say that you need four houses to build one. No one can build any more so I win, very very slowly. It always makes me extremely unpopular with the other players. I think that we need some sort of rule like this in real life to limit the hotel building and expansion, though I'm not sure how it would work.

How about scrapping stamp duty for owner-occupiers but doubling it for other buyers? In other words, if you can prove you're going to live in the house, you don't pay stamp duty. If you're buying to let, you pay twice.

Nice idea but unworkable.

Is there not another more 'controversial' argument that city centres have no requirement to be affordable places to live? (Outside of 'affordable' and state housing, of course). No, I'm not saying that we should push the plebs out to the suburbs, I'm just saying that that's how it works, here and everywhere and always will.

I agree that the housing market in Cambridge at the moment is nuts, but the price rises are much more about demand from people who want to live/work here than from rich foreign investors wanting to buy places up. I mean buying a small 3 bedroom mid-terraced house with single glazed windows, a tiny garden and one bathroom in Cambridge for roughly HALF A MILLION POUNDS is not a savvy investment, is it? Even at the heady heights of £1,200 a month in rent, there's only so much higher the prices can get, so even the benefit of appreciation will level off before long.

Yes, there's the CB1 development and other flats and new builds around the place that can be acquired by investors, English or otherwise, but the house prices near the city centre (which are the craziest part of this whole thing) are going up because people want to live here, and, in the vast majority of cases, it's normal people who currently live in them who are benefiting from the profits made, not investors. Equally, these people need to live somewhere when they move on/sell up, so unless they're moving away to somewhere where the house prices are more reasonable, they're spending the same again, if not more, on their new house. So it all evens out really. It's demand for the city that's the 'problem', more than anything else.

Written by someone who's house has gone up in value by almost £200K in 2 years (lucky sod) and is currently looking to move somewhere central with more space and experiencing the exact issue explained above (oh right, so I haven't *really* made any money then?!)...

But it's not only the city centre... even in the Arbury or Abbey estates you'll be paying two to three times what you'd pay for a house in, say, Peterborough.

They'll get there....

http://uk.finance.yahoo.com/photos/the-uk-s-best-cities-slideshow/pete...

I think it's the 'gentrification' thing, really. As more people flood to an area, the prices, naturally, go up, particularly once the ceiling for new buildings is reached...

The longer I own a flat the more absurd I think buying a property is. I feel guilty about participating in the housing market, but the rental market is just as nonsensical.

P.S. putting the price of season tickets up even more is a terrible idea.

Just had this pop up on my Facebook feed. Can't even be arsed to rant about it on there and teach them a lesson not to post this shit on my wall. Just thought I'd chuck it up here so if any of you get it you can have your scorn ready, if you so wish.

http://www.barrellison.co.uk/legal-news-and-views/property-capital-gai...

In places like the Isles of Scilly you have to have a local connection to buy a house now. I think that needs to be introduced here, without sounding like a UKIP policy. But if you've actually lived here for over so many years then you can buy a second home to rent out or something.

I know what you mean arthurcrs, I do own my house and feel I'm adding to the chaos but the rental market moves quicker than house buying around here. That said, when we did consider selling up, I was only going to offer the house to a couple who wanted to live it, the prospective landlord who came around to see it's rental potential was told to 'do one' much to the estate agent's horror.

Yeah, when we were selling our previous place, the bloke from Cambridge Property Lettings came sniffing around, quibling about the price and his "yield" and how he was surprised the estate agent had said it was worth that much and how he needed to do some sums. Apparently it it tough to make piles of cash buying property and renting it out for a massive profit in Cambridge (not even his money, mind you, but that of his investors). "If you do find that you have a sale but it falls through at the last moment and you need to move quickly, do give me a call, because I can move on things very quickly", he said, clearly wishing that I would be put in a desperate position and he could pick it up cheaply when it became a distressed situation. I reached out, shook his scaly claw and preyed that I would never have to encounter him again. Mercifully, I didn't, that time. He was a shitbag and I wish him ill.

http://www.theguardian.com/commentisfree/2014/feb/10/overseas-property...

This sounds like it is along the right lines, though it does stop short of outlining exactly waht all the tax benefits for landlords are. Maybe because people would go up the wall if they were all laid out in one place. Am I right in thinking that you get 10% of all your earnings in ayear, tax-free for wear and tear and wasn't there something about all renovations being VAT-free? So if you want to get your house (or houses) done up, it makes sense to own more than one and move around, doing up the one you are not living in, saving the VAT AND not having to live with the upheaval of all the work being done. Tenants beware, if your landlord suddenly shows an interest in doing up your shabby let that he has been content to ignore for years, he is probably planning to sell, move in, up your rent or kick you out for more lucrative tenants. Marvellous.

I've decided to sell and I've taken the very easy decision not to sell to a landlord. I would also like to sell without using an agent because they're mostly cunts too.

Someone on our street has just sold their house through a website B-Bam ... apparently had a cash offer within 48 hours or so. I'll look at the sign outside the house tonight and let you know.

I also feel guilty owning my own place (or at least having a mortgage on 30% of a shared ownership). But after having lived in 8 houses in 8 years, having to move on average once a year, I couldn't take it any more. The constant letting agents fees, the costs and stress of moving house so often meant that I quickly fell into debt and it was a real struggle for those years of renting. Life is so much easier now I don't have to rent in Cambridge anymore, I count myself lucky every day that I managed to get out of it.

I don't feel guilty about owning, I just can't handle the insecurity of renting so want to buy a bigger place I can live in and rent out a room.

Didn't mean to suggest owning was wrong BB, I get the impression you are / were one of the few good landlords out there. Like Arthur CRS I feel a bit guilty participating in the housing market, though there is no real viable alternative.

A property owner opposed to the housing market.
Isn't that like being in the SS, but opposed to being a Nazi?
Hypercritical or what.....

Hey brenda, long time no see!

Don’t hate the player hate the game.

Godwins Law applies on your very first post. That must be a world record.

Isn't there a non-profit letting agents in Cambridge? I don't know what they are like.

Not convinced that Help to Buy in combination with record low interest rates has done anyone any favours. Housing bubble? Best deny it until it pops.

David Cameron, George Osborne, Mark Carney: 'We're all in you together'.

http://www.newviewresidential.co.uk/
This place donate all their profits to charity, which is nice.

Yeah, I know the owner and he's very nice, and a buddhist.

Local person, read my initial post again and then comment. I make it very clear what I'm opposed to, which is EXPLOITATION of the housing market. People buying houses to live in is not exploitation in my view.

Oh la la liberté de pensée accordée à la bourgeoise!

Just wondering, has anyone recently bought in Cambridge?
Can you recommend a good solicitor / Conveyancer

thanks in advance

What's hypocritical is consistently and persistently complaining about folk being on benefits after themselves being on the sick for years and years. Ain't that right Lp?

tyres, check this link:

http://www.wereallneighbours.co.uk/idlechat/message.php?sv=workshy&id=...

And I'd repeat my post from that thread:

"we did use a solicitor recently for moving house (most people use a removals firm but...yeah yeah yeah very funny).

I can wholeheartedly recommend them and would strongly suggest at least talking to them for a fair quote:

http://www.irenaspence.co.uk/index.php

Our solicitor was Christina Sheppard and she was absolutely superb. Endlessly patient, helpful, in constant contact (easy to get hold of and happy to answer dumb questions from poorly informed fusspots). Nice to have someone good, especially in a field where you are not necessarily expecting it ;0)

Seem to remember most of the quotes we got for the job were pretty similar, so they may not be ridiculously cheap, but I would think that they'd give you a quote and I'd trust it to be fair/representative.

Sorry, reads like a plug, but they were good and it's always nice to be able to recommend someone.

That's how this place works, no?"

Thanks for the links Noodles, looks like you made your exchange a couples of years ago.
Can I ask a couple of further questions?

did you have a solicitor lined up before you made your house offer, or did you do this after your offer was accepted.

also from the moment your offer was accepted how long did it take the solicitors to do the survey , conveyancing etc until you picked up the keys ?

cheers

We used Gary Mader at Woodfines for our house move last year, and he is a nice guy who did a good job.

Sorry tyres, I am not sure I can remember all this. I'll take guesses, but it is as likely to be bullshit as it is accurate!

It was two years ago at the end of March or so, I think.

Pretty sure we didn't have a solicitor lined up before we made the offer. Had some fairly detailed preliminary chats with our mortgage lenders (Co Op, we were already with them and had a genuinely blinding deal that we didn't want to lose, so we discussed how much more we could borrow and at what rate, as well as taking out some of the money we had managed to overpay on the old mortgage). So we had a good idea of what we could manage to get to. To their credit our estate agents actually talked us out of putting in an asking price offer and when we had the survey down we negotiated a slightly lower price, based on some "issues" the survey found, so it isn't entirely set in stone until later. If I am honest, we could maybe even have pushed a bit more, but it does always seem slightly childish to be haggling over £2500 when you are talking about 250 grands' worth of house. £2500 is still £2500, but the idea that someone would walk away from a more or less done deal or a house they wanted for the sake of it is questionable. It’s a game people play to make them feel like they got a good deal and are terribly smart!

I think in our case it took about three months, from offer to handover day. Pretty sure you could do it in a month, if all your ducks were in a row and everyone had somewhere to go, but it is the chains and the sellers finding somewhere to go now that they have offer money to spend that can take time (plus all sorts of other wrangles).

Good luck.

Let us know what you do and how it works out.

cheers Noodles:)

Noodles is a lovely chap.

"Let's Lynch The Landlord"

The Landlord's here to visit
They're blasting disco down below
Sez, "I'm doubling up the rent
Cos the building's condemned
You're gonna help me buy City Hall"

But we can, you know we can
But we can, you know we can
Let's lynch the landlord man

I tell them 'turn on the water'
I tell 'em 'turn on the heat'
Tells me 'All you ever do is complain'
Then they search the place when I'm not here

But we can, you know we can
Let's lynch the landlord
Let's lynch the landlord
Let's lynch the landlord man

There's rats chewin' up the kitchen
Roaches up to my knees
Turn the oven on, it smells like Dachau, yeah
Til the rain pours thru the ceiling

But we can, you know we can
Let's lynch the landlord man
DEAD KENNEDYS

Don't hate the player, hate the game.

There is a solution, but you probably wouldn't want to hear it. Build a road from around junction 11 of the M11 to junction 35 of the A14, and you have a Cambridge ring road. Anything inside is fair game for 2 & 3 bed houses (no university buildings), anything outside is the new green belt.

Wouldn't work? Take a look at York (a similar sized city) on Google Maps. Then compare both on Rightmove. York has 488 2+ bed houses from around £130,000. Cambridge has fewer than 220 when you ignore incorrectly listed flats, from around £220,000. If you want affordable housing, you are going to need lots of new builds, and no part ownership schemes designed to keep prices artificially high.

*goes to a road map to see where Junctions 11 and 35 actually are since I use a bike and that sort of thing is gobbledigook to me* :)

Interestingly enough pretty much all that land IS allocated for housing. Clay Farm is under construction, as is Glebe Farm. North of Newmarket Road has a planning application in and Marshalls Airport is still technically allocated for housing (but probably won't happen because Marshalls couldn't relocate. I'm sure that the few remaining bits around Fulbourn will come foward in the next 15 years. There's also massive new developments happening at Northwest Cambridge and the former NIAB site.

With all these extra people in the new developments, where are they all going to get jobs?

Most of the new developments I mentioned above also have room for business parks. There's tons of new university led industry going in to North West Cambridge, Addenbrookes is doubling in size over the next few years and so on.

One of the reasons why Cambridge house prices have exploded is because it's such a massively expanding region full of high tech industries and there's loads of work. Sadly this means that the poor have been mercilessly forced out to places like March and Chatteris. :(

This is worth a look as there's a section on expanding Cambridge, with at one point Evan Davis asking 'Why can't Cambridge expand to a city of 2 million residents?'.

http://www.bbc.co.uk/iplayer/episode/b03y3y8k/Mind_the_Gap_London_v_th...

house prices have gone crazy in the last few months.

this property , a 3 bed terraced sold for £210k nearly a year ago

http://www.zoopla.co.uk/property-history/54-crowland-way/cambridge/cb4...

on the same road, a 2 bed has just been sold for nearly £250k original asking price was £230

http://www.zoopla.co.uk/for-sale/details/32214545?search_identifier=28...

Unfortunately, I think this bubble is not going to end for another few years , February in Cambridge house prices rose over 3% in one month :S

bump

Hi Noodles,

"Let us know what you do and how it works out."

Thanks for all your help, specially with regards to Christina Sheppard and Irena Spence solicitors.

"Our solicitor was Christina Sheppard and she was absolutely superb. Endlessly patient, helpful, in constant contact (easy to get hold of and happy to answer dumb questions from poorly informed fusspots)."

totally agree, so It has been almost 8 months but I'm happy to say, we finally exchanged contracts this
morning, Christina Sheppard and Irena Spence solicitors have been totally brilliant, and very patient with me, considering 3 other properties fell through during our house search...

Anyone else thinking of buying in Cambridge, I totally recommend Christina, also Hugo prime for getting a home buyers report...

cheers Noodles, and WAN, you have made an incredibly stressful process more bearable, should be picking up keys by the end of the week.

Awwww shucks, you're making me blush.

Genuinely though, that has cheered me up no end on a miserable, pissing-it-down day. A little bit of someone's world just got better. Great stuff and, of course, congratulations!

Good luck in your new place!

Would you be prepared to give us a rough idea where you are going to be?

I'm glad it worked out and I am happy that, hopefully, given WAN's impressive SEO and regular appearances high up the Google search results, anyone Googling "Cambridge solicitor conveyancer" or whatever will get a good recommendation or two.

Nice to have closure on that story.

And congratulations again. Enjoy your new home!

Hi Noodles,

The property is on Whitehill Road:

http://www.wereallneighbours.co.uk/idlechat/message.php?id=48492&page=...

Oh aye. We used to live on Stanley Road, not far from there. You could hear the stadium roar from the garden.

We also looked at a place on Elfleda Road when we were moving. Seemed very nice.

You are nice and near Pipasha which is very nice (worth going and sitting-in rather than taking away, if all else is equal. The food is nice and fresh and the journey out as a takeaway means it loses a certain something - though it is still pretty good and is our Indian Takeaway of choice, even now). If you're a veggie but miss Chicken Tikka (which is a fairly small overlap on any sort of Venn diagram, but still...) I highly recommend the Panir Shashlik. The Wrestlers does nice Thai food round there too.

At the Coldham's Lane end of Cromwell Road there is the Veritas development of 136 flats. Most of these were sold "off plot" to buyers in Asia and Russia. Go past it now and all units have been sold - but many are unoccupied and not furnished. Similarly with the fire station development of flats on Parker's Piece - many are unoccupied. That's (partly) the reason for silly property prices in Cambridge.

Time for Britney to do some real research and write an in depth article!

I found this forum from google, also looking to buy a place in Cambridge

Still seeing some crazy prices in Cambridge, had a viewing recently for this property,
number 19 Whitehill Road
http://www.rightmove.co.uk/property-for-sale/property-45217210.html
last time I looked, it was listed for 295,000,
http://www.zoopla.co.uk/property-history/19-whitehill-road/cambridge/c...
it hasn't sold for over a year, an identical property next door sold for £228K last year,
The owner was such a grumpy old witch as well, I feel sorry for her neighbours
I expect her property is going to stay on the market for a long time, I can't imagine anyone being crazy enough
to pay her asking price, while other property prices have stayed stagnant in the same area, she keeps on putting
up her house price every couple of months..... :/

hey hal2000,

good luck with your house search, at least you're lucky stamp duty has changed. I recently bought a place on
whitehill Road, know the property you are talking about, viewed it last summer!

And I do remember the owner!!

Just saw this article about 'deluded' sellers, and she is definitely delusional ;)

House prices: Affordability ceiling and 'deluded' sellers stall the property market

http://www.telegraph.co.uk/finance/personalfinance/houseprices/1133221...

Ha! I remember viewing that house on Whitehill Road when we were looking back in 2007. The owner accepted our offer and then pulled out. Which in retrospect was probably a good thing as she was just as grumpy eight years ago.