Government must act on property market now
RICS Proposals for the Housing Market
Now don't get me wrong, some of the content makes a lot of sense, but I take real exception to the idea that it is down to the UK government to sort out the housing market mess that this country currently finds itself in. It's not like the government have caused this particular problem now is it?
The paper calls on the Government to adopt a ‘comprehensive set of measures which will both kick start the market now and significantly improve the consumer’s experience of buying, selling and occupying property in the future’.
What on earth role of government is being thought up here to support the view that the government should be playing a part in helping consumers of the property market - when the naked greed of many consumers (and sheer ignorance of others) and the greed of the suppliers of various products should really be the centre of attention as the housing market slows down and reverses itself. Just list what you know about poor value for money housing units - sorry apartments - higher and higher risk mortgages over longer and longer terms, highly geared buy to let loans based on over-valued new build stock, the hard sell of equity release schemes and financial planning that basically ignores the individual's ability to pay to see what I mean. These individuals and organisations and not the government are largely the ones to blame for the mess we are in right now..
So, here's Polko's take on how the consumer could have significantly improved their experience of property ownership in those very same three areas mentioned by RICS in recent years:
buying: for those buying to live in, think about what you are buying rather than getting caught up in some dream of how fast the value is going to change, and above all ignore the pitfalls of 5%/10% deposit paid by the developer deals - all that they have done is got a dodgy (and sometimes not so dodgy but certainly inexperienced) surveyor to over-value the property in the first place.
selling: stop being greedy, sell the house at its true worth rather than asking too much for too little. This also goes for investor sales at auction and sales triggered by house repossesions - just look at the % unsold at auctions in the last 2 years..
occupying: if you are buying a new build property realise that it is built to a profit (the developer's not yours!) and not a price or value, and that new housing units are essentially designed to be renewed/refurbished on a faster schedule than something built in the pre-War period - hence, if you pay too much for it you are going to have to borrow again to refurbish it later (this kettle of cod hasn't even set into the woes of the housing market yet - but for evidence look at all that grey concrete, glass and fancy cladding at an apartment block near you now - not weathering very well in the UK climate is it? Then inspect the insides of a new build property and see how generally poor quality the internal wall structures, plasterboarding and finishes are.. more expenditure coming to a town near you soon - and it's not the developer that's going to pay second time around but the owner).
If you are an occupier don't be tempted by all those juicy equity release schemes until you have truly evaluated what you are going to do if the value of your home goes down or stays the same rather than increases... and keep in mind it is never an attractive option to borrow on a 20+ year loan to go on holiday or buy a depreciating asset like a new car. Your neighbours might like the new car but you're going to pay dearly for it in the long run.
Rant over. Hope you agree (at least a little bit?).
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