Is price fixing to blame for the housing crisis? Whatever the reason, it is very apparant that North East England truly has a housing crisis on their hands. I am writing this as I am apalled at the state of the housing industry.
Although this also affects those waiting for housing on the council housing list, I am addressing it separately as it affects everyone who is looking for a house or to sell or rent a house of their own.
The entire industry is PRICE FIXED and I have yet to find a case of price fixing that is successful in any regard. I am not an economist but I fail to see, no matter which angle I come from, what the reason is for price fixing property.
If any of you are knowledgeable on this, please take some time and inform me on the reason for this drastic measure and if possible, give me some scenario’s where it has actually worked.
Buying / Selling property
The price fixing is very evident here. I think the estate agents work on a bedroom basis, ie a one bedroom house or flat for sale is £60k if it is on a foreclosure list or in an unliveable state. A two bedroom house or flat is £80k and so on. This really only fluctuates when one moves into London where they have a different price structure, albeit a fixed structure too.
Even houses and flats which are repossessed and selling on auction are fixed at prices which are ridiculously too high to justify.
Very much the same scenario as selling and buying. Rentals are £450-500 for a one bed, £550-£700 for two and three. There is very little difference in the cost of a property in a ‘good’ area as there is of one in a run down area.
Landlords are now looking at share rental, i.e. renting rooms as the rental asked is not affordable and if they want their properties occupied, this is the only alternative. This is ideal for students sharing accommodation or for single people – but not an ideal long term living arrangement.
Private housing affects council housing
The price fixing has now affected the council housing in that more people are applying for council housing now as they simply cannot afford private homes. A quick example is that the very same 3 bed house being rented privately for £550 is available from council at less than £400.
The affect this has had is that people really poverty stricken and homeless are destitute as there are not enough council houses to house everyone.
The council, in desparation are now looking to private landlords (housing associations) to rent their properties to the people on the council housing lists. The cost is not adjusted to meet that of council, the costs are still the same as applied on the private market, therefore still making the private properties unaffordable.
The council have a project in place, a house swap project where people need bigger or smaller properties. This has worked to some degree, but many people living alone in a council home which they have lived in their entire lives. Having brought up their families in this home, makes many older people loathe to give it up for a smaller, more manageable home.
What I dont understand is why there are no incentives in place to make this a more inviting opportunity. Single people living in huge houses could be offered accommodation in single unit for a very nominal cost. A family could move into the larger premises at an affordable rent – which will still be higher than that which the single person is paying. Council could probably house the single person for nothing, arrange all of the moving and even chuck in a weekend away every year and still make money. So why is no one doing anything about this?
Given the housing crisis above I find it shocking, apalling, that within a square km of where I live, I can point out at least 10 unoccupied properties. Places that have been unoccupied for more that a year. I am also shocked at how many properties are up for sale – at prices which will probably mean there will never be a sale, or if there is it will be to someone lucky enough to get a higher mortgage and desparate enough to lower their expectations to meet the scenario the government and estate agencies have created.
The councils bidding process for council houses is also flawed in the most obvious ways. Every week a person who passed the grueling application phase can bid for three homes of a list of available homes. This has gradually decreased from 50 eligible properties a year ago to around 20 properties six months ago. The past two months have reflected less than 10 properties which are being bid on by more than 200 people waiting for homes.
This week, there were none!
Why I say this process is flawed is firstly based on the criteria used to ‘Band’ people – this is a priority list which is seriously not very effective. Similar to the disability criteria used by the council – very broad and objective. I agree, policies must be in place and a structure must be in place. At the same time though, I feel people waiting for over a year for a home need to have their band reassessed.
Take a look at the list of placements, people who have been approved for properties – very few. Many of the homes on these lists are not even given to bidders, but to others that council felt needed the home more – how did these people manage to get a priority and avoid the entire bidding fiasco?
Another thing which I question, and will still look into further is the houses that are not given to people on a waiting list (or not) – properties which were on the list of eligible properties and had bids which have suddenly vanished into thin air. Bids are deleted and no feedback is ever given as to what happened to that property. This is not a one off situation.
I am personally in a lucky position to have a private landlord who understands the predicament and has thus not increased the already under market value rent for a year. I am thankful for this It does not, however, remove the fact that I find it difficult to meet my rental demands and am therefore also on a council list awaiting a more affordable home. (for over a year now) Every single month I go over £100k further into debt in order just to put a roof over our heads.
Given the number of unoccupied and available homes which have held this status quo for over a year, I really feel this is unacceptable and its time to highlight some of this.
I would really love to hear other people’s take on this situation.