UK House prices: News & Views

[Carlton]

What's the crop?

They look like fruit trees. That's an expensive way to grow some fruit

I don't know what the crop is, but there are many options. Some people love vertical farms.

 

Imagine a cluster of 30-story towers on Governors Island or in Hudson Yards producing fruit, vegetables, and grains while also generating clean energy and purifying wastewater. Roughly 150 such buildings, Despommier estimates, could feed the entire city of New York for a year. Using current green building systems, a vertical farm could be self-sustaining and even produce a net output of clean water and energy.

 

Despommier began developing the vertical-farming concept six years ago (his research can be found at verticalfarm .com), and he has been contacted by scientists and venture capitalists from the Netherlands to Dubai who are interested in establishing a Center for Urban Sustainable Agriculture, either independently or within Columbia. He estimates it could take a working group of agricultural economists, architects, engineers, agronomists, and urban planners five to ten years to figure out how to marry high-tech agricultural practices with the latest sustainable building technology.

 

What does this have to do with climate change? The professor believes that only by allowing significant portions of the Earth’s farmland to return to forest do we have a real chance of stabilizing climate and weather patterns. Merely reducing energy consumption—the centerpiece of the proposal Al Gore recently presented to Congress—will at best slow global warming. Allowing forests to regrow where crops are now cultivated, he believes, would reduce carbon dioxide in the atmosphere as least as much as more-efficient energy consumption.

 

There is another reason to develop indoor farming: exploding population growth. By 2050, demographers estimate there will be an additional 3 billion people (a global total of 9.2 billion). If current farming practices are maintained, extra landmass as large as Brazil would have to be cultivated to feed them. Yet nearly all the land that can produce food is already being farmed—even without accounting for the possibility of losing more to rising sea levels and climate change (which could turn arable land into dust bowls).

 

Depending on the crops being grown, a single vertical farm could allow thousands of farmland acres to be permanently reforested. For the moment, these calculations remain highly speculative, but a real-life example offers a clue: After a strawberry farm in Florida was wiped out by Hurricane Andrew, the owners built a hydroponic farm. By growing strawberries indoors and stacking layers on top of each other, they now produce on one acre of land what used to require 30 acres.

 

Why build vertical farms in cities? Growing crops in a controlled environment has benefits: no animals to transfer disease through untreated waste; no massive crop failures as a result of weather-related disasters; less likelihood of genetically modified “rogue” strains entering the “natural” plant world. All food could be grown organically, without herbicides, pesticides, or fertilizers, eliminating agricultural runoff. And 80 percent of the world’s population will be living in urban areas by 2050. Cities already have the density and infrastructure needed to support vertical farms, and super-green skyscrapers could supply not just food but energy, creating a truly self-sustaining environment.

 

1. The Solar Panel

Most of the vertical farm’s energy is supplied by the pellet power system (see over). This solar panel rotates to follow the sun and would drive the interior cooling system, which is used most when the sun’s heat is greatest.

 

2. The Wind Spire

An alternative (or a complement) to solar power, conceived by an engineering professor at Cleveland State University. Conventional windmills are too large for cities; the wind spire uses small blades to turn air upward, like a screw.

 

3. The Glass Panels

A clear coating of titanium oxide collects pollutants and prevents rain from beading; the rain slides down the glass, maximizing light and cleaning the pollutants. Troughs collect runoff for filtration.

 

4. The Control Room

The vertical-farm environment is regulated from here, allowing for year-round, 24-hour crop cultivation.

 

5. The Architecture

Inspired by the Capitol Records building in Hollywood. Circular design uses space most efficiently and allows maximum light into the center. Modular floors stack like poker chips for flexibility.

 

6. The Crops

The vertical farm could grow fruits, vegetables, grains, and even fish, poultry, and pigs. Enough, Despommier estimates, to feed 50,000 people annually.

 

continues: http://nymag.com/news/features/30020/

[drbubb]

So according to that, if you are a UK tax payer, then it actually makes sense to put your money into property

WE just came off a year which included a "bounce" in prices, so it does not look so bad.

In fact, I good "selling opportunity" was provided to those quick enough to catch it.

But we are likely to be headed into something far more negative

[John Doe]

WE just came off a year which included a "bounce" in prices, so it does not look so bad.

In fact, I good "selling opportunity" was provided to those quick enough to catch it.

But we are likely to be headed into something far more negative

 

I was being a little tongue in cheek, and as i have said before, I actually agree that the next 6 (possibly 12 months) will be grim. But I think inflation might just drop off a cliff next year (unless QE3 is much bigger than expected).

 

My old deflationist tendencies are starting to re-emerge. Perhaps due to the re=emergence of RH?

[Van]

WE just came off a year which included a "bounce" in prices, so it does not look so bad.

In fact, I good "selling opportunity" was provided to those quick enough to catch it.

But we are likely to be headed into something far more negative

 

Negative, yes... eventually. "Far more" negative - I dispute. YoY figures are just about to turn back YoY positive as the largish drops around Q3 last year fall out of the index. The economy is weak, yes, and the public sector job cuts will keep unemployment high too. But on the supportive side it is clear the the BoE will maintain ZIRP almost for as long as it wants, which could easily be another 2-3 years now, and it is clear that commodity price inflation has peaked, and this will eventually lead to a fall in RPI. What's left of this bubble needs very slow deflating over at least another 5 years. Too much too soon will nothing except crash the economy - everyone knows it. That won't be good for anyone. No good houses being cheaper if you don't have a job.

[John Doe]

And, while the number of new homes being built keeps falling, the number of people in the country continues to rise, at an alarming rate.

 

Net migration rose by 21% last year, with 239,000 more people arriving in the UK than those leaving

 

http://www.bbc.co.uk/news/uk-14663354

[Meralti]

And, while the number of new homes being built keeps falling, the number of people in the country continues to rise, at an alarming rate.

 

 

 

http://www.bbc.co.uk/news/uk-14663354

 

Showing your credentials as an ex-EA by misintepreting statistic again JD. The rise in NET immigration is almost entirely attributable to a fall in emmigration, i.e, fewer people are leaving - this number is normally subtracted from the number arriving to give a net figure. Due to other economies battening down the hatches and refusing to take disaffected Brits. All the more fuel for the next set of riots.

[Van]

Showing your credentials as an ex-EA by misintepreting statistic again JD. The rise in NET immigration is almost entirely attributable to a fall in emmigration, i.e, fewer people are leaving - this number is normally subtracted from the number arriving to give a net figure. Due to other economies battening down the hatches and refusing to take disaffected Brits. All the more fuel for the next set of riots.

 

I don't see how JD is misrepresenting anything. Net migration has risen, that means a larger population and more greater housing needs, whichever way you cut it.

This is helping to support rents. Buying is now cheaper than renting in most cases and can continue to be so even with a few IR hikes - which the property bears seem to have conveniently forgotten.

[John Doe]

Showing your credentials as an ex-EA by misintepreting statistic again JD. The rise in NET immigration is almost entirely attributable to a fall in emmigration, i.e, fewer people are leaving - this number is normally subtracted from the number arriving to give a net figure. Due to other economies battening down the hatches and refusing to take disaffected Brits. All the more fuel for the next set of riots.

 

Er no, that actually means more people in the UK.

 

Just because you don't like the facts, it does not make them go away.

 

And what's with the ex EA c**p again? I am not, nor have ever been, an EA.

 

I suggest you get your facts right before throwing around slanderous accusations .

 

http://www.greenenergyinvestors.com/index.php?showtopic=4058&view=findpost&p=224700

[tallim]

... Buying is now cheaper than renting in most cases and can continue to be so even with a few IR hikes - which the property bears seem to have conveniently forgotten.

 

I can't find a family home in an area you'd want to live in long term that's cheaper to buy than rent. They must be appearing soon, but I can't find them.

 

My assumptions, please feel free to alter them if you disagree:

 

Funding mix cost 4%

90% of asking on purchase

95% of asking on rental

1% of purchase price per year in ownership responsibilities

 

The best I ever find on the open market is that the costs are roughly equal and the places at auction are never family homes in reasonable areas. So for zero cash benefit you're becoming illiquid and taking on risk with few signs of an imminent upside.

 

If you wish to make it mean more to me then somewhere in one of the following places: Lymm, Altrincham, Weybridge, Reading, Bath, Wetherby, Yarm or S10/S11 in Sheffield. Otherwise I'll trust your judgement on areas you know well.

[tallim]

And, while the number of new homes being built keeps falling, the number of people in the country continues to rise, at an alarming rate.

 

 

 

http://www.bbc.co.uk/news/uk-14663354

 

Doesn't that roughly even things out, 239,000 extra people

 

Average household size 2.29 people per household.

http://www.greenenergyinvestors.com/index.php?showtopic=11696

(Interestingly, google UK result 8 for search term "uk average household size")

 

Number of houses required for new households = 239,000 / 2.29 = 104,367

 

Housing completions in 12 months to March 2011 = 105,930

http://www.communities.gov.uk/publications/corporate/statistics/housebuildingq12011

 

Total fertility rate in the UK is less than required to replace existing population, so the net pressure on household size is coming from increasing lifespan minus the fertility rate loss? I can't find info to estimate what this would be?

 

Edit - Also do we have a housing loss rate to offset the housing completions?

[Meralti]

Er no, that actually means more people in the UK.

 

Just because you don't like the facts, it does not make them go away.

 

And what's with the ex EA c**p again? I am not, nor have ever been, an EA.

 

I suggest you get your facts right before throwing around slanderous accusations .

 

http://www.greenenergyinvestors.com/index.php?showtopic=4058&view=findpost&p=224700

 

 

The number of new-comers is not much changed, less people are leaving. Many of the non-eu people entering are students. The number of returning Brits has increased.

 

So, less houses on the market for both sale and rent, as less people leave. Returning Brits who rented their properties whilst abroad will reduce the number of family houses for rent.

 

Not sure it makes much difference at the end of the day. The key market driver for residential housing is availability of credit. Total mortgage lending is reduced and the trend is downwards.

[John Doe]

Doesn't that roughly even things out, 239,000 extra people

 

Average household size 2.29 people per household.

http://www.greenenergyinvestors.com/index.php?showtopic=11696

(Interestingly, google UK result 8 for search term "uk average household size")

 

Number of houses required for new households = 239,000 / 2.29 = 104,367

 

Housing completions in 12 months to March 2011 = 105,930

http://www.communities.gov.uk/publications/corporate/statistics/housebuildingq12011

 

Total fertility rate in the UK is less than required to replace existing population, so the net pressure on household size is coming from increasing lifespan minus the fertility rate loss? I can't find info to estimate what this would be?

 

And immigration and more divorces and people choosing to live on their own and old people where one partner has dies etc etc.

 

Edit - Also do we have a housing loss rate to offset the housing completions?

 

That's the thing, the new houses figures are not net. The figures don't include the number of houses that are demolished, no longer fit for habitation etc. Apparently, it takes ~100,000 new homes per year just to stand still, and ~ 100,000 more to keep up with projected population growth. (The figures were actually more, but I'm being conservative).

 

I have posted links about this before, but here are some others.

 

while 100,000 new UK homes are expected to be built in 2010, the number of new households each year for at least the next 11 years is expected to be more than double that

 

http://www.bbc.co.uk/news/magazine-11002344

 

A more recent one is here.

 

http://www.bbc.co.uk/news/business-14572051

 

I have also posted about the shrinking number of people per household.

 

Whichever way it is put, the figures always say the same. More people, less houses.

 

The number of new-comers is not much changed, less people are leaving. Many of the non-eu people entering are students. The number of returning Brits has increased.

 

So, less houses on the market for both sale and rent, as less people leave. Returning Brits who rented their properties whilst abroad will reduce the number of family houses for rent.

 

More students from abroad = more BTL opportunities

 

Again, either way you look at it, more people, less houses.

 

Not sure it makes much difference at the end of the day. The key market driver for residential housing is availability of credit. Total mortgage lending is reduced and the trend is downwards.

 

Of course, that's not so important at the moment, as credit is in short supply, but it is putting some support under (falling) prices and, more importantly, storing up trouble for the future.

 

Watch out when those taps are turned on again.

[LauraB]

 

Watch out when those taps are turned on again.

 

Providing lashings of both Hot Wealth & Cold Wealth?

 

I can hardly wait JD

[tallim]

And immigration and more divorces and people choosing to live on their own and old people where one partner has dies etc etc.

 

 

 

That's the thing, the new houses figures are not net. The figures don't include the number of houses that are demolished, no longer fit for habitation etc. Apparently, it takes ~100,000 new homes per year just to stand still, and ~ 100,000 more to keep up with projected population growth. (The figures were actually more, but I'm being conservative).

...

Hidden in plain sight at the bottom of the new housing starts release is a link to:

 

http://www.communities.gov.uk/publications/corporate/statistics/netsupplyhousing200910

 

Net UK housing supply data!!!

 

...Annual housing supply in England reached 128,680 net additional dwellings in 2009-10. This is a 23 per cent decrease on the 166,570 net additional homes supplied in the previous year, and the lowest annual level of net housing supply since 2000-01...

 

Annually released in October.

 

So, we have net housing supply, we have net immigration, we just need net population change from births / deaths. That's available here as the natural change series...

 

http://www.statistics.gov.uk/cci/nugget.asp?id=950

 

 

More detail

 

 

Is this natural change being driven by birth rates, extending lifespan or both?

 

UK total fertility rate is here

 

http://www.statistics.gov.uk/cci/nugget.asp?id=369

 

 

Still slightly below the number estimated to be required for a consistent population in the UK of 2.075 (to allow for deaths of women before childbearing). So although births are no longer massively negative, they are still negative, leaving extended lifespan as the only driver for the natural population increase.

 

So, go long bungalows unless you think we're about to see falling life expectancies.

[harold bishop]

You're starting to sound like an estate agent in disguise again, Mr Doe...or Cassius.

 

Even if, as you say, JD is sounding like and estate agent, so what ? Maybe he had very valid "alternative" views. And they should be heard and debated. They add value to this web site.

 

I cannot disagree with much of JD reasoning and comments. The HPC lot are facing an monumental struggle against the establishment and I think they will lose. Everything the establishment throws at maintaining house prices may fail, then ultimately devaluation of Sterling will succeed. It worked before. Joe Public don't care about house prices vs Gold, Oil etc - only "The Pound in Your Pocket".

 

To put my money where my mouth is, I'm about to exchange contracts on a UK house (Oxfordshire). Not at a knock down price but nothing is ! It'll see me out and I'll have no debt. Further, I'll have enough land to keep us in veg and honey and maybe trade a bit too.

 

Am I buying at the peak, middle or bottom ? I don't know. It depends on the Sterling rate. The good thing is i'll keep my PMs in tact and will probably add to them in this current down turn.

[John Doe]

Hidden in plain sight at the bottom of the new housing starts release is a link to:

 

http://www.communities.gov.uk/publications/corporate/statistics/netsupplyhousing200910

 

Net UK housing supply data!!!

 

 

 

Annually released in October.

 

So, we have net housing supply, we have net immigration, we just need net population change from births / deaths. That's available here as the natural change series...

 

http://www.statistics.gov.uk/cci/nugget.asp?id=950

 

 

More detail

 

 

Is this natural change being driven by birth rates, extending lifespan or both?

 

UK total fertility rate is here

 

http://www.statistics.gov.uk/cci/nugget.asp?id=369

 

 

Still slightly below the number estimated to be required for a consistent population in the UK of 2.075 (to allow for deaths of women before childbearing). So although births are no longer massively negative, they are still negative, leaving extended lifespan as the only driver for the natural population increase.

 

So, go long bungalows unless you think we're about to see falling life expectancies.

 

Good finds that man, so the 120,000 new homes IS net.

 

The growth in population of 470,000 is ALSO net.

 

So I make that ~ 470,000-120,000 = 350,000 and at ~2.3 av per house = shortage of ~30,000 houses per year.

 

So, why all the reports of an extra 150,000 needed per year? (perhaps a backlog, or maybe it's all in Scotland ?)

[John Doe]

Even if, as you say, JD is sounding like and estate agent, so what ? Maybe he had very valid "alternative" views. And they should be heard and debated. They add value to this web site.

 

Thanks, (I think )

 

I really am not an EA and am just trying to put balance to the argument. In fact I'm considered a bear by people I know (Dr Doom was my nickname for quite a while (pre 2007 ))

 

I actually think (and have said many times) we are in for a very grim winter and expect another 5 to 10% nominal falls.

[drbubb]

Good finds that man, so the 120,000 new homes IS net.

The growth in population of 470,000 is ALSO net.

So I make that ~ 470,000-120,000 = 350,000 and at ~2.3 av per house = shortage of ~30,000 houses per year.

So, why all the reports of an extra 150,000 needed per year? (perhaps a backlog, or maybe it's all in Scotland ?)

The assumption that I would question here is Average Household size

 

In a severe recession, I reckon it will RISE

[John Doe]

The assumption that I would question here is Average Household size

 

In a severe recession, I reckon it will RISE

 

Well, we've just had the biggest recession in three generations, and it fell.

 

We have also forgotten second homes (which I think should be taxed to the hilt by the way).

 

It's not just the mega rich that buy them.

 

Lots of the student flats near where I work have recently gone SOLD. (It's that time of year when the students are about to come back, and prices are down ~10-15% from peak).

 

More interesting is the amount of people looking for a nice bolthole in the highlands, something for the weekend etc. I have been told that the price of these fell quite significantly over the last 4-5 years, and a few people at work have started to look at these.

[John Doe]

I'm about to exchange contracts on a UK house (Oxfordshire). Not at a knock down price but nothing is ! It'll see me out and I'll have no debt. Further, I'll have enough land to keep us in veg and honey and maybe trade a bit too.

 

Am I buying at the peak, middle or bottom ? I don't know. It depends on the Sterling rate. The good thing is i'll keep my PMs in tact and will probably add to them in this current down turn.

 

Wow, good luck HB.

 

Sounds like you have done your sums and thought about the future (i.e. the land etc) and with no debt, that's a great situation to be in.

 

"Debt free is the way to be"

 

Of course, as you say you might have got it cheaper in the coming months (or years), but if you have found exactly what you want then, as I have said before, it doesn't really matter.

[Van]

Yes, very good find, tallim.

 

In recession I agree the average household size will increase as people try to rent out any spare household space. However the ageing population is likely to be a long term driver of decreasing household size - young 20-something are usually happy to houseshare with 3, 4, or 5 other people; but as you get older you want your own space.

[LauraB]

John Doe, on 25 August 2011 - 09:14 PM, said:

 

Watch out when those taps are turned on again.

Me:

Providing lashings of both Hot Wealth & Cold Wealth?

 

I can hardly wait JD

 

I was mostly being serious JD. Do you see Britain as some insular Trumpton-like land with a toytown currency tap that has nothing to do with wealth or value? Where the folk do not bother looking beyond 'their' (a naive notion, as ever) own shores because 'it's dangerous & foreign elsewhere'. So they prefer the quaint idea fostered over many years that it really is different here & that the majority will do everything to defend the system that has been screwing them for centuries?

If so, I think you are right. (I nearly typed 'right on the money' )

[Van]

The rate of increase in population is INCREASING (apart from 2008-9). That is very telling.

 

In 2002 the population increased by 0.345%

In 2010 the population increased by 0.755%

 

by a combination of an increase in the natural change and net migration.

 

You have to say that with these pressures on demographic, supply of housing is certainly an issue and unless we have a catch up in the housebuilding programme similar to the post-war era then Britain is likely to remain an expensive for housing costs.

[BoldAsBrass]

The thing with recessions is they don't affect everybody. And, after a year or two, the natural optimism of the UK human takes over.

 

Surely, now, one thing is obvious. People's time horizons are about a year - two at the most.

 

And, if they are greater, they simply extrapolate the current situation and assume it will carry on.

 

Nothing else can explain the fact that people are still taking on mortgages of hundreds of thousands of pounds to sustain the London/South East property market.

 

They really do think that interest rates will be at their current levels forever. This is a good example of the lack of 'realization' mentioned often in Eastern religions.

 

If you ask a successful chap about to move and take on a 400k mortgage (to buy that nice £1m house in Chiswick) whether he is worried about interest rates going up in the future he'll say 'Of course I know interest rates could go up in the future' but, somehow, he discounts this 'knowledge' because, although he 'knows' interest rates can/will go up in the future he doesn't 'realize' it. If he 'realized' it he would not take on such an insane mortgage because he would have recognized the threat as 'real' and not taken the risk.

 

All the property craziness of the last 14 years has proved to me that people are fundamentally optmistic ... in that they live in a state of denial about how the world really is.

[drbubb]

Yes, very good find, tallim.

 

In recession I agree the average household size will increase as people try to rent out any spare household space. However the ageing population is likely to be a long term driver of decreasing household size - young 20-something are usually happy to houseshare with 3, 4, or 5 other people; but as you get older you want your own space.

"as you get older you want your own space"

 

But only if you can afford it.

 

Events and public policy may conspire against Old Folks who want to sit in big spaces alone