Chat Forum
It is currently Fri Nov 22, 2019 2:29 pm

All times are UTC [ DST ]




Post new topic Reply to topic  [ 34 posts ] 
Author Message
 Post subject: Global renting crisis
PostPosted: Tue Nov 20, 2018 12:15 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17737
With home ownership now an investment as opposed to a necessity, credit suffering very strong restrictions which is forcing more people to rent for longer and a lack of units being brought to market the world has a renting crisis.


However not in Romania - 96% home ownership.

Millennials: Rent at your own risk
Despite declining global homeownership rates for millennials, and the rise of a permanent rental market that is “a thing that feels quite natural in other countries”, according to Iancu, renting is seen only as a temporary phase in Romania.

“There is no well-defined legal frame, no law to regulate the rights and obligations for renting in Romania,” says Dragos Nichifor. “That’s the main reason people want to become homeowners.”

Developers do not view rental units as a viable business model in new apartment buildings. Rental prices are too low, which means that they won’t make back their money for years. Most landlords in Romania own anywhere from one to three apartments, which Nichifor says are often shabby and have low-quality furniture.

Along with Romania’s lacklustre legal framework for renting properties, which protects property managers more than tenants, renting is rarely a viable option.
***
So would everything be solved if we made renting less attractive as an investment?
In most of the west they say strong demand in rental market helps the construction industry. Does it though? The number of people wanting to buy has for a very long time been higher than the actual number of people that can buy.... that argument doesn't appear to be working with apartments being snapped up by institutional investors ahead of regular people wanting to build up their own equity.

I would argue it's time to start taxing rental incomes more and start making investment in property less attractive to enable people to buy their own home and build up their own equity / buffer / retirement fund.

Opinions?


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 12:28 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 13002
Massive investment in social housing and public housing acts as an anchor on rents .

This helps keep cost of housing for rent or build down.
You could offer government securities to allow private investors invest in the social housing at a predictable rate of return.

The key is having rental rates on public sector housing which are fair but not too low and make sure that the money continues to be investwd in Public housing stock.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 12:38 pm 
Offline

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17969
as some may know, I have some family interests there in Prahova area (mostly commercial rather than residential)

as far as I know, there are several factors why Renting is so scarce there
1. its a big country, much easier to find a bit of land and build a place yourself (as most of the Rom builders working in London are doing, sending cash home to build a home of their design)
2. Romanians far less snobby than UK people about being in the 'right' postcode, so its much easier for them to move someplace cheap rather than be in their equivalent of Mayfair (trust me, Ploiesti doesn't really have an equivalent !)
3. sheer supply and demand - with many Romanians leaving to work in other countries, there are lots of properties empty, meaning its cheap to buy.

a 3-4 bed townhouse with a small garden & parking in central Ploiesti is about 60k EUR - a large detached 7 bed villa with an acre or two of land for vegtables etc a bit up the road in Campina is about 110k EUR. (my values here might be a year or two out of date I will admit)


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 1:32 pm 
Offline
User avatar

Joined: Thu Oct 25, 2018 4:15 am
Posts: 302
Quote:
credit suffering very strong restrictions which is forcing more people to rent for longer


/snip/

you cut credit to housing and prices cannot rise outside of speculators (who *may* have easier access to credit) buying and selling them to each other - which reminds me of bitcoins....


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 2:53 pm 
Offline
User avatar

Joined: Sun May 22, 2016 9:43 am
Posts: 22114
waguser wrote:
Massive investment in social housing and public housing acts as an anchor on rents .

This helps keep cost of housing for rent or build down.
You could offer government securities to allow private investors invest in the social housing at a predictable rate of return.

The key is having rental rates on public sector housing which are fair but not too low and make sure that the money continues to be investwd in Public housing stock.



And the reversal of 50 plus years of social housing best pratice


Last edited by Mullet 2 on Tue Nov 20, 2018 3:02 pm, edited 1 time in total.

Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 3:01 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17737
Fully agree that large social housing stocks provide stability to the housing market.... If run properly.

Social housing residents however seldom (I think) would want to or be in a position to buy. Im talking about the type of person that wants to get ahead and wants to work hard to pay their mortgage. While larger social housing stock is definitely a tool to fight increasing rent does it solve the lack of ability to move from renter to owner?


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 3:02 pm 
Offline
User avatar

Joined: Thu Jun 11, 2015 12:51 pm
Posts: 16409
Build houses/dwellings. There's a growing view that gentrification is bad but really its basic maths. If there's x amoutn fo hosues in an area and a family has 4 kids then there's no where for them kids to live locally unless you build more dwellings.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 3:08 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17737
What's stopping these newly built units from being purchased by investors? .... Which is what currently happens.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 3:25 pm 
Offline
User avatar

Joined: Sun May 22, 2016 9:43 am
Posts: 22114
nardol wrote:
What's stopping these newly built units from being purchased by investors? .... Which is what currently happens.



Eh nothing

This isn't North Korea.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 4:49 pm 
Offline
User avatar

Joined: Thu Jun 11, 2015 12:51 pm
Posts: 16409
nardol wrote:
What's stopping these newly built units from being purchased by investors? .... Which is what currently happens.

If you increase supply...........


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 5:24 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17737
Supply has not been able to meet demand for a long time ... As long as that's the case cash investors can kill the home buyer.... I would argue. It keeps renters in a death spiral constantly chasing ever increasing home prices while their ability to save decreasing with increasing rents.

This rental income is going to people who already own property so are automatically part of the wealthier half of the country. This is in essence a wealth transfer from the poor to the rich and increases inequality. If it keeps going like this and as more and more of the middle class is forced out of having aspirations you are going to get the likes of the IRA in govt. Now that's the biggest risk to this country, bigger than Brexit.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 5:31 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 26014
Location: Chickenrunning...
Tax the property investors more. Encourage them to invest in other parts of the economy instead.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 5:36 pm 
Offline
User avatar

Joined: Sun May 22, 2016 9:43 am
Posts: 22114
nardol wrote:
Supply has not been able to meet demand for a long time ... As long as that's the case cash investors can kill the home buyer.... I would argue. It keeps renters in a death spiral constantly chasing ever increasing home prices while their ability to save decreasing with increasing rents.

This rental income is going to people who already own property so are automatically part of the wealthier half of the country. This is in essence a wealth transfer from the poor to the rich and increases inequality. If it keeps going like this and as more and more of the middle class is forced out of having aspirations you are going to get the likes of the IRA in govt. Now that's the biggest risk to this country, bigger than Brexit.



cough
ghost estates 7 years ago
cough


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 6:14 pm 
Offline

Joined: Fri Feb 03, 2012 4:32 pm
Posts: 950
What's the primary reason for encouraging ownership?

If it's to encourage saving, there are plenty of other assets to invest in besides housing.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 6:16 pm 
Offline

Joined: Tue Jan 31, 2012 11:05 am
Posts: 55790
crapbackrow wrote:
What's the primary reason for encouraging ownership?

If it's to encourage saving, there are plenty of other assets to invest in besides housing.



I'm struggling to think of anything as secure and inflation proofed.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 6:26 pm 
Offline

Joined: Fri Feb 03, 2012 4:32 pm
Posts: 950
bimboman wrote:
crapbackrow wrote:
What's the primary reason for encouraging ownership?

If it's to encourage saving, there are plenty of other assets to invest in besides housing.



I'm struggling to think of anything as secure and inflation proofed.

Can you think of any reasons why it's a bad idea to promote investment in residential property over other forms of saving given the supply and demand fundamentals


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 6:28 pm 
Offline
User avatar

Joined: Thu Jun 11, 2015 12:51 pm
Posts: 16409
nardol wrote:
Supply has not been able to meet demand for a long time ... As long as that's the case cash investors can kill the home buyer.... I would argue. It keeps renters in a death spiral constantly chasing ever increasing home prices while their ability to save decreasing with increasing rents.

This rental income is going to people who already own property so are automatically part of the wealthier half of the country. This is in essence a wealth transfer from the poor to the rich and increases inequality. If it keeps going like this and as more and more of the middle class is forced out of having aspirations you are going to get the likes of the IRA in govt. Now that's the biggest risk to this country, bigger than Brexit.

So if you increase supply by building more houses that doesn't count because reasons? I'd wager it's easier to build more private residences than public housing.

Big part of the problem is NIMBYism


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 6:29 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17737
With home ownership there is less likelihood of the state having to jump in and look after people in retirement. Its also an asset that can be leveraged for nursing home care.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 6:32 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17737
paddyor wrote:
nardol wrote:
Supply has not been able to meet demand for a long time ... As long as that's the case cash investors can kill the home buyer.... I would argue. It keeps renters in a death spiral constantly chasing ever increasing home prices while their ability to save decreasing with increasing rents.

This rental income is going to people who already own property so are automatically part of the wealthier half of the country. This is in essence a wealth transfer from the poor to the rich and increases inequality. If it keeps going like this and as more and more of the middle class is forced out of having aspirations you are going to get the likes of the IRA in govt. Now that's the biggest risk to this country, bigger than Brexit.

So if you increase supply by building more houses that doesn't count because reasons? I'd wager it's easier to build more private residences than public housing.

Big part of the problem is NIMBYism


I'm saying it's impossible to meet demand with supply for various reasons - not enough people to do the building - planning process - land ownership etc etc. As long as supply is constrained the meager supply coming on to the market is being pounced on by investors.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 6:35 pm 
Offline

Joined: Tue Jan 31, 2012 11:05 am
Posts: 55790
crapbackrow wrote:
bimboman wrote:
crapbackrow wrote:
What's the primary reason for encouraging ownership?

If it's to encourage saving, there are plenty of other assets to invest in besides housing.



I'm struggling to think of anything as secure and inflation proofed.

Can you think of any reasons why it's a bad idea to promote investment in residential property over other forms of saving given the supply and demand fundamentals



You know people live in investment property. Currently that investment increases supply.


Top
 Profile  
 
PostPosted: Tue Nov 20, 2018 7:11 pm 
Offline
User avatar

Joined: Thu Jun 11, 2015 12:51 pm
Posts: 16409
nardol wrote:
paddyor wrote:
nardol wrote:
Supply has not been able to meet demand for a long time ... As long as that's the case cash investors can kill the home buyer.... I would argue. It keeps renters in a death spiral constantly chasing ever increasing home prices while their ability to save decreasing with increasing rents.

This rental income is going to people who already own property so are automatically part of the wealthier half of the country. This is in essence a wealth transfer from the poor to the rich and increases inequality. If it keeps going like this and as more and more of the middle class is forced out of having aspirations you are going to get the likes of the IRA in govt. Now that's the biggest risk to this country, bigger than Brexit.

So if you increase supply by building more houses that doesn't count because reasons? I'd wager it's easier to build more private residences than public housing.

Big part of the problem is NIMBYism


I'm saying it's impossible to meet demand with supply for various reasons - not enough people to do the building - planning process - land ownership etc etc. As long as supply is constrained the meager supply coming on to the market is being pounced on by investors.

No, the capacity is there, the land is there. It’s nimbyism, happening right across the developed world.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 9:39 am 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 13002
Mullet 2 wrote:
waguser wrote:
Massive investment in social housing and public housing acts as an anchor on rents .

This helps keep cost of housing for rent or build down.
You could offer government securities to allow private investors invest in the social housing at a predictable rate of return.

The key is having rental rates on public sector housing which are fair but not too low and make sure that the money continues to be investwd in Public housing stock.



And the reversal of 50 plus years of social housing best pratice


You are thinking of the AAA model.

That is not what I mean.

Publ8c housing which is accessible by anyone. Pay based on income capped. Also public housing at fixed price.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 9:40 am 
Offline
User avatar

Joined: Sun May 22, 2016 9:43 am
Posts: 22114
Built by the State?

So rampantly inefficient.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 10:52 am 
Offline

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17969
Sandstorm wrote:
Tax the property investors more. Encourage them to invest in other parts of the economy instead.


This is stupid - property investors will increase supply of places to rent, and make rents lower and choices better for tenants. Also, we investors are generally better and maintenance and developing plots, than the state.
Property investment boosts construction industry , accountants industry , Lettings industry , and provides a commodity that can be used by people working in a fluid job market who might only want to be in London for 2 years or whatever.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 12:41 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17737
backrow wrote:
Sandstorm wrote:
Tax the property investors more. Encourage them to invest in other parts of the economy instead.


This is stupid - property investors will increase supply of places to rent, and make rents lower and choices better for tenants. Also, we investors are generally better and maintenance and developing plots, than the state.
Property investment boosts construction industry , accountants industry , Lettings industry , and provides a commodity that can be used by people working in a fluid job market who might only want to be in London for 2 years or whatever.


Said like someone with a true vested interest.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 1:11 pm 
Offline

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17969
nardol wrote:
backrow wrote:
Sandstorm wrote:
Tax the property investors more. Encourage them to invest in other parts of the economy instead.


This is stupid - property investors will increase supply of places to rent, and make rents lower and choices better for tenants. Also, we investors are generally better and maintenance and developing plots, than the state.
Property investment boosts construction industry , accountants industry , Lettings industry , and provides a commodity that can be used by people working in a fluid job market who might only want to be in London for 2 years or whatever.


Said like someone with a true vested interest.


of course :smug:

but sandstorm is showing huge lack of economics there, or in fact taxes have risen dramatically for UK property investors in recent years.
driving away investors, and their money, would only limit supply and make it more expensive for people to rent (think RICS said that investors pulling out of the UK market due to these recent changes will cause rents to rise by 15% alone)


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 1:20 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 51457
Location: Oundle
A lot of this was caused by the Thatcher government pressing for home ownership.

A massive number of "council" houses were snapped up by eager wannabe home owners spurred on by very large discounts.

I ought to know; I was in the middle of it with the LASS (Local Authority Support Scheme).

This took massive numbers, countrywide, out of the rental sector here. I'm not sure of what happened abroad.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 1:41 pm 
Offline

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17969
globus wrote:
A lot of this was caused by the Thatcher government pressing for home ownership.

A massive number of "council" houses were snapped up by eager wannabe home owners spurred on by very large discounts.

I ought to know; I was in the middle of it with the LASS (Local Authority Support Scheme).

This took massive numbers, countrywide, out of the rental sector here. I'm not sure of what happened abroad.


nice terse, factual, relevant and presumably truthful post there Big Nev - keep it up as this post was worth temp taking you off ignore. :thumbup:

The good part of the Thatch home ownership drive, is as you say lots of discounted peeps got their foot on the ladder, and then became responsible for the upkeep, taking lots of hideously badly built social crap quality stuff off the Public books. It undoudbtedly helped aspirational people, and home ownership does have other beneifits like taking better care of their own homes, passing onto their children, can build extensions if they want etc.

The bad part (which in my opinion outweighed the good) , was that almost bugger all was done to replace the quantity of social housing stock available, and the naiive assumption that the private sector would move straight in and take up the slack with no other consequences.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 2:11 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 51457
Location: Oundle
I have to confess I got my wonderful Welsh scrum half a mortgage to buy a former police house under the scheme. None of his and his wife's family had ever owned a property. Took lots of persuasion.

They never looked back. I made sure their children were OK in similar ways.

The bit when he ordered a ton of concrete which was dumped on the road is a wonderful bit of history.

I turned up, took a look and wondered "where do we put all that?"

Got on the phone to the local rugby lads, who turned up in spades. With spades.

We built a driveway that would take a landing strip for a Jumbo.

More cement. I had to think quickly and we put in a path to the shed at the bottom of the garden and I rapidly went to the local wood store and got some to make a patio.

Phew!

When they sold that house, it made a tidy profit. His kids didn't do too badly either.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 2:17 pm 
Offline
User avatar

Joined: Sun Feb 05, 2012 3:15 pm
Posts: 33147
Location: Planet Rock
globus wrote:
I have to confess I got my wonderful Welsh scrum half a mortgage to buy a former police house under the scheme. None of his and his wife's family had ever owned a property. Took lots of persuasion.

They never looked back. I made sure their children were OK in similar ways.

The bit when he ordered a ton of concrete which was dumped on the road is a wonderful bit of history.

I turned up, took a look and wondered "where do we put all that?"

Got on the phone to the local rugby lads, who turned up in spades. With spades.

We built a driveway that would take a landing strip for a Jumbo.

More cement. I had to think quickly and we put in a path to the shed at the bottom of the garden and I rapidly went to the local wood store and got some to make a patio.

Phew!

When they sold that house, it made a tidy profit. His kids didn't do too badly either.

Didn't you write the screen play for David Lean in that gem of a war film.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 2:20 pm 
Offline

Joined: Tue Jan 31, 2012 11:05 am
Posts: 17969
lolz, seems a bit like the plot for Field of Dreams II: Patio & Driveway of Dreams "If we build it, he can Park"


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 2:27 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 51457
Location: Oundle
Certainly not! Ha! I can tell you the speed at which we had to shift the cement, before it hardened, was fierce.

But the lads turned up. I supplied the only wheelbarrow. Tamping down was courtesy of a beam I'd got.

Even now I wonder how we got an Everest of cement in the road around the house.

Anyway, we did and Scrummy's wife was delighted and produced a baby girl a few months later.

I'm God-dad.


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 4:36 pm 
Offline
User avatar

Joined: Tue Jan 31, 2012 11:05 am
Posts: 20844
Cement? On it's own??

Hmmmmm


Top
 Profile  
 
PostPosted: Thu Nov 22, 2018 5:09 pm 
Offline
User avatar

Joined: Sat May 10, 2014 4:23 pm
Posts: 1677
backrow wrote:
globus wrote:
A lot of this was caused by the Thatcher government pressing for home ownership.

A massive number of "council" houses were snapped up by eager wannabe home owners spurred on by very large discounts.

I ought to know; I was in the middle of it with the LASS (Local Authority Support Scheme).

This took massive numbers, countrywide, out of the rental sector here. I'm not sure of what happened abroad.


nice terse, factual, relevant and presumably truthful post there Big Nev - keep it up as this post was worth temp taking you off ignore. :thumbup:

The good part of the Thatch home ownership drive, is as you say lots of discounted peeps got their foot on the ladder, and then became responsible for the upkeep, taking lots of hideously badly built social crap quality stuff off the Public books. It undoudbtedly helped aspirational people, and home ownership does have other beneifits like taking better care of their own homes, passing onto their children, can build extensions if they want etc.

The bad part (which in my opinion outweighed the good) , was that almost bugger all was done to replace the quantity of social housing stock available, and the naiive assumption that the private sector would move straight in and take up the slack with no other consequences.



The original concept was to use the money generated from the sale of the council homes to reinvest in building more council housing, however this never materialised because most local councils subsequently sold the rest of their stock off to non profit making housing associations. A little like now with Cornwall Council (where I live) devolving a lot of services to town and parish councils. Housing association housing cannot of course be purchased by tenants.


Top
 Profile  
 
Display posts from previous:  Sort by  
Post new topic Reply to topic  [ 34 posts ] 

All times are UTC [ DST ]


Who is online

Users browsing this forum: A5D5E5, bessantj, Bing [Bot], Blackrock Bullet, eldanielfire, Fangle, Flyin Ryan, Google Adsense [Bot], Google [Bot], Jeff the Bear, Jensrsa, Lazy Couch potato, Liquid_Len, Lobby, MrBunhead, mr flaps, New guy, newportblue, Obelix, Pat the Ex Mat, penguin, P in VG, PornDog, Raggs, RichieRich89, saffer13, Salanya, Saturnine, sturginho, Sydvicious, Theflier, The Prophet Zarquon, toweliechaos and 1 guest


You cannot post new topics in this forum
You cannot reply to topics in this forum
You cannot edit your posts in this forum
You cannot delete your posts in this forum

Search for:
Jump to:  
Powered by phpBB® Forum Software © phpBB Group