Tuesday, July 17, 2007

The Great British Obsession

(House Prices, not the weather which is the other one!)

For most people house purchase is the biggest single financial transaction we enter into, so perhaps it is not surprising people take a keen interest in what they believe their home is worth, although I have never understood why so many people automatically think increased prices are a good thing. I am sure many of us get a warm glow when we hear our little pied-a-terre is worth a quarter of a million quid, but all that means is the next house up the housing ladder is probably £75,000 more rather than £50,000, well that doesn't strike me as much of a bonus (though if you are trading down, then that is). It is of course all right if your area is going up in value by more than the one you want to move to, but as for the poor sods trying to get on the housing ladder, my heart goes out to them, to get a house in Plumstead these days you need a joint income of at least £50,000.

I am not suggesting that falling prices are a good thing I well remember the misery of negative equity suffered by so many in the early to mid 90's, it's just one of those things, that really isn't as simple as, up good, down bad.
Nos 50,52 &54
In terms of the Plumstead market I think there is a bit of a boom going on, especially my end, nearer to Woolwich and the DLR. The 3 houses at the top of my road have all been sold over the last year and a bit, and are all a similar style, layout etc.
no 52. went for £172,500 in Feb 06, no 50 £182,500 in Aug 06, and no 54 was sold within a few days of going on the market last month so I expect it went for something near the asking price of £219,995. Of course, what this kind of fevered price increases tends to generate is a certain amount of greed in some people, as can be seen by the owners of the small rabbit hutch I look down on at the bottom of my garden, who are currently marketing their property at £245,000 and surprise, surprise, it is still on the market, unsold.

Rather than prices, what concerns me more is some of the wider issues, around housing. All the parties agree we need more of it, especially in London and the South East as this is the only long term answer to the problem of affordability, but then comes the problem of where. Nobody seems to want it where they live, the cry goes up of the Thames Gateway, but then you end up destroying unique habitats such as the Erith and Crayford marshes (more about these on a subsequent post), and you are also building on a floodplain which is a whole other can of worms.
But the lack of suitable new housing (whether for sale or rent) leads to other problems, one of which is HMO, or houses in multiple occupation as the jargon goes, as Plumstead has relatively low prices (by London standards) it is a target for buy to let purchasers, some of these houses are rented to families, which does not change the character of the area, but some are let off room by room to individuals. Now I am not having a go at every one who rents a room we all need somewhere to live, but this can cause problems, one is that it leads to a transient population with no roots in the area, it puts pressure on things like car parking, such houses are frequently not looked after, and there are often problems with noise. One house in my street was so comprehensively trashed that it is still vacant today.

The problem with HMO!
Another problem comes with the shortage of social housing for rent, there is so little available that when something does come up it goes to those in the 'greatest need', but what really pisses me off is that those in the greatest need are frequently people who have deliberately been irresponsible and the people who suffer are those who act reasonably manner. By irresponsible I mean people who choose to have child after child, while expected the state i.e. me to pick up the bill for their upbringing and accommodation. While others who are on a relatively low income, but choose not to breed until they are in a position to afford to do so are stuck on council house waiting lists. A little while ago Margaret Hodge was vilified, I think quite unfairly, for suggesting that established British families should have their long term residence in this country taken into account when social housing is being allocated, in my view failure to do this just gives oxygen to far right groups like the BNP, who can prey on peoples feelings of unfairness.

Not sure of the answers to all of these questions, but I do know they need to be answered.

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At 5:18 pm, Anonymous Anonymous said...

I am all for house prices rising, it means I can get more disposable cash out against the house for one thing and when i do sell it will more than likely be to move out of London where property is cheaper. I still think that Plumstead is ridiculously cheap though. For its proximity to Blackheath, Greenwich and Canary Wharf as well as the DLR and Cross Rail coming to Woolwich I was suprised when I bought here last year that the house was so affordable for the size of it. I paid £240k for a 3 bed house and compared to other areas near us that we looked at still think this was a bargain...

At 9:56 am, Anonymous The ReV said...

Horrible people but wonderful language.
The two syllables 'mort' and 'gage' translate as 'death' and 'pledge'...
Here endeth the lesson.

If it's of any interest I bought The Place Of ReV 10 years ago on probate for £45k (3 beds), after ALOT of work and 10 years just had it valued at £190 (prob get £185).
Within 15 mins walk to Erith station and town centre.

Not sure if thats a good or bad thing...

At 6:54 pm, Blogger Hugh said...

As with Ian, I bought my place for £31.5K in 1996 and it is now worth something in the region of £165K. Madness. I wanted somewhere to live, not an investment opportunity, but that is what happened.


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