Best to invest in Oxford say property gurus
Today’s Oxford Mail:
Oxford is the top place to invest in property outside London, according to TV experts.
Kirstie Allsopp and Phil Spencer, described the city as “investor heaven”, because of its winning combination of large numbers of students, young professionals and families. And they predict average house prices could soar by a staggering 42 per cent in the next four years, from £265,034 to £377,673.
[...]The programme, shown on Channel 4 on Tuesday, has already provoked a response among property agents. John Scrafton, manager of the Cowley branch of Andrews estate agents, which had a property featured in the show, said he had been taking inquiries yesterday from London-based individuals interested in investing in the city.
Thanks for that, Phil and Kirsty. Exactly what we need - more parasitical landlords leeching off people in Oxford, putting up rents willy-nilly and driving up property prices beyond the reach of people trying to buy. But then what would you expect from a couple of Tories? What we need is a windfall tax on profit from buy-to-let property investment, to plough back into affordable and social housing.
I completely agree with you, as the situation is becoming intolerable. There is a forgotten population of people who are left at the mercy of greed in the housing sector. I have to rent, because I cannot afford to buy after a relationship breakdown. We need affordable housing, provided by local authorities who are accountable to the people to give security of tenure to all who cannot currently afford to buy. I also like your tax idea.
Have we had the discussion about the right to buy being extended to private tenants yet? Oh, you’re being talked about on the internet today.
Couldn’t agree more with you - in fact I wrote a letter to the Oxford Mail about it (making similar points to yours) as soon as I saw the article. I recently experienced house prices in Oxford when buying a flat (well, 50% of a flat, mortgaged to the hilt) and realised I could probably have bought a castle in Wales for the same price….
Paul and Matt - exactly. Well done for finding somewhere you can afford, Matt, not easy in Oxford.
jdc - I saw it earlier and was determined not to respond. Thanks for replying to it! I think I’m probably (tentatively) in favour of a right to buy for private tenants. What do you think?
Oh well anyway you probably know I’m responding because I can’t resist an argument, though I probably just accidentally insulted a chum of ours…
I’m instinctively in favour but I don’t know how you manage a fall in property prices when so many people, and not necessarily rich ones, are so far in debt against the value - negative equity was damaging enough when the world economy caused it, I don’t know how the government would get away with causing it.
Tim Waters and Steve Moses understand the issues better than I do. I don’t want to sound like a social creditist, but rising property prices aren’t just bad because it makes housing harder to buy, they’re bad because they increase the amount of money which is going to people who already have capital, through mortgage interest. Negative redistribution…
As I say, I appreciate it. It was the careerist / “never done a proper job” bit that really gets me. I think my brother’s job is pretty worthless in the grand scheme of things - he moves money around for large corporations in the city. But is it the fact that his job is for profit that makes it “proper”? If so I’m proud that I do what I do is not “proper” or for profit, but to make life better for a disadvantaged group of people. Grr.
I share your fear of negative equity - some relations of mine were badly advised to buy their council house in the 80s, lost it, and are back where they started. After the election, I’ll pin Mr Waters down on this point.
I had this argument with Will M. who claimed my job was a drain on productvity. Dash it all he’s a headhunter. A tax on business and a tax on jobs! I conclusively established that he was a parasite, though he still won’t submit. I’m not even sure if he’s coming at it from a ‘works in the private sector’ point of view or some sort of IWCAism. As if working in Comet would have made me a better Councillor than working for Smithy. It just meant I had to deal with people who thought voting for me meant they were entitled to a discount.
I own a rather modest flat in the UK, in which I used to live. I’m currently working abroad, and so am letting my flat out. Are you seriously suggesting that my tenants should have the right to force me to sell them my flat? Would you like to create some kind of local valuation board to determine what they think a fair price for my flat is, and then force me to sell it for that price?
Warren Buffet would point out that rising house prices are only good for people who are net sellers of housing. That would be house builders, elderly people downsizing from the family home to a retirement flat, and other elderly people using equity release schemes to fund their retirement. For everybody else, including the young couple who have stretched themselves to buy a starter home, and are now chortling with glee at the fact that it has doubled in value in five minutes, it’s a bad thing, as our young couple will discover when they want to buy a bigger house.
In the case of negative equity, it’s not necessarily a problem to dip into negative equity, as long as your income and prospects remain good, you’ll be able to pay your way back into the positive in a couple of years, and you don’t need to sell your house. You have to consider your whole financial position to determine “negative” here - if you have a 100,000 mortgage on a house worth 80,000, but you also have 30,000 in savings, you don’t count as being in negative equity.
If you’re in negative equity and need to move (say for a new job) you’re in trouble, although you can often talk your lender into letting you move your mortgage to a new home and stay in negative equity. Here we’re back in to “if you can pay your way out in a couple of years it’s not much of a problem” territory.
If you’re in negative equity and then suffer a significant drop in income, you’re pretty much screwed.
Falling prices also do horrible things to the liquidity of the housing market - people tend to think “I’ll be losing money if I sell, so I’ll just hand on here and make do”.
What we need is a windfall tax on profit from buy-to-let property investment, to plough back into affordable and social housing.
No! It’d effectively be another property transaction tax and help cement the private rented sector as landlords would avoid selling and would concentrate on maximising incomes and care less about capital value increases.
Land Value Tax, on the other hand… If Oxford’s three main parties would agree together to be the next stage in the Oxfordshire LVT paper pilot and lobby to implement it for real as our local taxation model we’d crack this.
So why don’t the Labour govt do it?
In Stockport there was 12 years worth of development in one year (as to regional quotas). The Lib Dem council halted all development except for affordable housing etc. We have the sites - just waiting for the money.
One idea would be for the ALMO (that the Labour government foisted on the council tenants of Stockport) to be given money to build on a shared ownership basis perhaps with the proviso of making the housing as sustainable as possible.
Landlords are not always as awful as this blog would like to suggest — sometimes we have very good reasons for letting a property or using property as an investment. For example, we bought a very small house to let in Oxford so that our son, who is disabled, will someday be able to own this house. We bought it now because we are trying to plan our futures both as one-day elderly people, and people with a son who is an adult and disabled. We can afford it now, too, as we are working.
Oxford is a small city and we hope our son (who will not likely be able to drive) can live happily there. He seems to like visiting the city centre and knows “his” house. If, for whatever reasons, he prefers to live elsewhere he can always sell the house. Yes, we *could * invest in other things — like the stock market — but we are more interested in our son knowing where he might live, being famliar with his city and neighbourhood, and actually owning something that is his and cannot be taken away…unless perhaps by people who are suggesting that any attempt to be financially independent of the state is somehow morally wrong!
The taxes are so high in the UK already — I cannot see how anyone can think that the taxes we are paying now ought to be raised! Must the labour party work against people who are trying to be financially responsible both for themselves and their children?