Still Passionate and Confused

"Nothing else works that way"

How much was a Jaguar E-type when it was new? Just over £2,000 ... how much would one cost now, in running order ... somewhere between £25,000 and £85,000 (more for a good one or a rare one)

And Jan is priceless ;-) and just gets more valuable every year ...

Antiques work like that. Rare books work like that. Rare records work like that. Art works like that ...

... basically anything that people want, that has a strictly limited production run, and there are more people than items, then the price goes up.

Because of longer lives, more people living by themselves or in smaller families, plus immigration ... we need more houses than we've got ... and we need more houses close to jobs/transport/schools/London than we can possibly have, so some people will borrow more to get the house they want (people like me) ... the house I had in Feltham had had a couple and three "children" in it who grew up ... when I bought it, that was five people who all wanted their own places ... the house I've bought in Cambridge is a four bed house with just me (and a weekday lodger who has a house in Bristol) but had a family in there (a couple and three sons again) ... so "good" houses are scarce, and people compete for them with money ... while houses in run down estates in manufacturing towns where the factories have closed, are trapped as they can't sell them for anything like the money that is owed on them.

It is ridiculous, but until we develop cheap transporter pads to let people travel from wherever they want to live to where the job is, it's likely to continue.

See you this weekend! I may even be able to get a lift part of the way with my lodger, so will need to co-ordinate with you about either collecting me from Westbury station, or from somewhere nearer the M4 ...

Edited Date: 2012-10-09 06:47 pm (UTC)

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Show me an e-type Jag that's still worth two thousand when someone has slept, washed, fried bacon and eggs and kept cats in it for thirty years, or a priceless painting that's still priceless with a home-made bookshelf hanging off it, and I'll agree with you. Things that appreciate in value that way tend to be lovingly preserved, kept in glass cases, only touched or driven or whatever under very special circumstances and with especial care. And I'd be willing to argue that the escalation in the prices of those things is equally unrealistic and absurd.

All that you say in paragraph three is true, but obviously not the most effective, ethical or compassionate way to run a housing market. Which, of course, is because it's not actually being run (i.e. regulated) by anyone.

This will be good!

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http://www.ebay.co.uk/itm/Jaguar-e-type-1966-fhc-Matching-numbers-great-project-/280984471383?pt=Automobiles_UK&hash=item416bfac757
http://www.ebay.co.uk/itm/Jaguar-e-type-1962-fhc-Matching-numbers-rare-rare-great-price-/280987351844?pt=Automobiles_UK&hash=item416c26bb24

I know someone who sold a rusty old, worn out, restoration e-type, totally undriveable, for £20k

Why would anyone run a housing market? And why should it be compassionate? (serious answers welcome!)

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The "compassionate" housing market is called "council houses".

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That is indeed about as close as we get.

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Then the buyer was cheated, or cheated themselves.

My serious answer to "why should the housing market be run in, among othert things, a compassionate manner?" is "how can anyone even ask that question?"

But I know that there is a belief that markets should be completely unregulated, so that people are free to cheat and be cheated, to exploit and be exploited, to enslave and be enslaved and to dispossess and be dispossessed, all these being shining pillars of the temple of our liberties. When someone makes a fortune by buying up dilapidated houses cheaply, giving them a cosmetic refurbishment and driving the price up beyond the range of those who need homes, that's called bold enterpreneurial brilliance, and when the people who were living in the houses are forced out of them, that serves them right for not having made better provision for themselves, or something. I can quite see how someone holding such a belief would not see any need for compassion, or for any kind of regulatory oversight on the workings of such a market.

For myself, I do not believe that there is any kind of human interaction whatsoever that is not, or would not be, vastly improved by an element of compassion; and where that is self-evidently not present, I think that it would be a considerable benefit to everyone involved were some regulatory body to be set up to apply standards of compassion, among other equally important ones, to the processes of such interaction. When asking "is this transaction fair?' there is, as there should be, room to move beyond the glib answer "well, other transactions of the same kind have taken place, and if they were fair then so must this be," (which I think summarises your answer to my initial comment).

We paid (are paying) x pounds for our house. Over the years we've spent y pounds on improvements to it, and it has suffered z pounds worth of wear and tear. In a fair and balanced market I would expect its value to be somewhere in the region of (x plus y minus z), which, whatever it might be, is nowhere near 3x. The fact that in order to be able to buy something comparable in today's climate we would have to ask for something like 3.5x does not make that a "fair" price.

Whether you agree with it or not, and I expect you don't, I hope that answer is serious enough for you. Took me most of the night...

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"Then the buyer was cheated, or cheated themselves" - why do you say that? If what they wanted was what was offered, and that was a price they were willing to pay for it, then no problem. It's only cheating if they were told what they were getting was better than was in fact the case.

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You should be sleeping some of the night, it is much better for your health (physical and mental), I speak from personal experience!

Then the buyer was cheated, or cheated themselves.
I disagree. No one has to buy a rusty old car for renovation, no one has to buy a crumbling castle and pour millions of their own money into restoring it. No one *has* to keep paying to keep their old rust bucket on the road, even when the cost of repairs are higher than the resale value of the car.
What people choose to do with their own money is up to them, and if I put a postage stamp that cost 1d up on eBay, and someone is willing to pay £25 for it, then we are each happy, they get what they wanted, and I get what I wanted.

there is a belief that markets should be completely unregulated, so that people are free to cheat and be cheated ...
That is certainly not *my* view. The point of a free market, is that if someone pushes up the price of something, other people should come along and sell it for less. If you want a product with a guarantee, then maybe it will cost more. If you want a product with electrical safety testing, maybe that costs more ... but even in the US, there are still basic rules about safety, suitability for purpose etc. so there is no completely unregulated market, that any of us can access (except maybe car boot sales! And even there Trading Standards are looking for fake products and dangerous medications and such)

driving the price up beyond the range of those who need homes
In the UK 69% of people own their homes, it's 42% in Germany ... if people can't afford to buy or rent the overpriced houses, they will remain empty and the person who has paid the money and put in the "cosmetic" repairs, will be left with an asset that isn't worth much at all, and hopefully on which they will be paying tax (Boris Johnson removed most or all of the discount on council tax on empty properties in London, so they are paying full council tax even if the house/flat sits empty)

We paid x pounds for our house...
http://specials.ft.com/nicocolchester/FT3WNIFSEIC.html
Inflation and the standard of living have been rising over those 30 years.
This calculator reckons that £10,000 in 1982 (thirty years ago) is the equivalent of £30,200 now.
http://www.thisismoney.co.uk/money/bills/article-1633409/Historic-inflation-calculator-value-money-changed-1900.html

So in general, and for example, beans would have cost 20p in 1982 and just over 60p for the identical can now.

Unleaded petrol has gone up 3.85x since 1988.

So petrol has gone up faster than your house in a shorter time.

In the same period as your house, US comics have gone from 60cents an issue to $3.99, that's 6.65x the price.

"well, other transactions of the same kind have taken place, and if they were fair then so must this be," (which I think summarises your answer to my initial comment).
Strangely, I disagree entirely with your reading of my response. You are saying I said it was "fair", and my actual words are "It is ridiculous" which I think you'll agree is not the same thing at all.

Fairness comes in when there is something that is necessary, that a person, company or goverment rations to only those that have more money ... fairness then dictates that there should be support for those that don't have the money for the necessities.

(continued)

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The big arguments then are:
1) what is "necesssary"?
2) how does it get provided? (who pays for it? who *should* pay for it?)

There's a current arguement about, say, an elderly mother who is still living in the family home after the children have left (and the husband has left or passed on), so she's got a three or four bedroom house (which she may or may not be able to keep clean), while there are a lot of low paid and unemployed people looking for accommodation. Is it "fair" to force her to rent out rooms, or to move to a one bedroom flat so that the family house is available for families that need it?

Do two adults in a house "need" more than two bedrooms? Housing in Cambridge is expensive, maybe they should be forcing me out of my house into a small one-bed flat, so that a family, or four low paid nurses/teachers/firemen can live there instead?

2) in the past, these sorts of subsidised dwellings were either, as has been stated, council houses (which again were almost all rental rather than owned by the occupiers) or things like the various "trust" housing (http://en.wikipedia.org/wiki/Samuel_Lewis_%28financier%29 and http://en.wikipedia.org/wiki/Guinness_Trust) which were set up by wealthy individuals to provide housing for the poor.

And of course there's been the housing for the poor, elderly and sick, provided by the church, the freemasons, and other charitable groups.

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You and

janewilliams20 both seem to me (and I admit I'm very tired) to be equating "value" with "what someone can be persuaded to pay for something." This is not an equation that I find valid, because I know how easily people can be persuaded.

Yes, inflation has been rising over the past thirty years, driven in large part by property prices, which in turn have been driven up by rampant speculation and the systematic selling off of council houses by...now who was that again? Tip of my tongue...

I don't know who's been talking about forcing anyone into smaller properties. I just mentioned that I think house prices are absurdly inflated. I still do.

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I don't know who's been talking about forcing anyone into smaller properties.
http://www.bbc.co.uk/news/uk-15362474

http://www.telegraph.co.uk/property/8837027/Housing-report-the-bedroom-blockers-are-getting-on-so-should-they-be-getting-out.html

http://www.guardian.co.uk/commentisfree/2011/oct/23/housing-shortage-old-people-homes

http://www.mumsnet.com/Talk/am_i_being_unreasonable/a1346374-to-think-that-elderly-people-living-alone-in-3-4-bed-council-houses-should-not-have-a-choice-about-whether-they-want-to-stay-there

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That mumsnet link is frightening!

I have figured out that "yabu" is "you are being unreasonable", and "yanbu" is the same with a "not" in it, and adding "v" adds a "very" :-) at first i thought "yabu" was the name of a person commenting :-D

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The point being: not me.

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Indeed, and I never said you did, I said "There's a current arguement about ..."

But you were pointing out how house prices have become absurdly inflated, and that's because there aren't enough houses/bedrooms in the areas where people want to live.

This is one of the proposed solutions. I've even heard people suggest that retired people should move away from London to free up accommodation for nurses, teachers and other low-paid workers.

But have you any solutions to the problem you have identified, or are you just saying "it isn't fair" and leaving it at that? What could be done to make it fairer?

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One of our plans for when we retire does involve moving out of the current rather expensive area, which we're currently tied to because that's where the jobs are, and moving to somewhere more scenic and cheaper where the jobs aren't. No need to "force" anyone, or say "should", the market prices encourage us anyway.

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My elderly mother (80 next year) on the other hand, has outlived most of her contemporaries, and is comfortable living in her house in East London, within walking distance of the shops, with the local church where she cleans and acts as a Special Minister of the Eucharist.

At this stage the last thing she'd want to do is sell the house, have to clear up the clutter of many decades, and move to somewhere where she doesn't know anyone.

And she just wants the house to herself to potter around in and feel comfortable in, she doesn't want to let out bedrooms ... and the house has been paid off for many years, so it's just the utility bills, insurance, and repairs and such.

Market prices aren't enough to move her on ... and if she's happy, I wouldn't want her to move.

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And since she owns it, there's absolutely no reason why she should move. If her house is in high demand for bigger families, then someone (possibly the "charitable authority") can offer her a higher price for it, and she can choose to accept it, or not. It's a bit like us at the moment - the extra rooms are a luxury, but it's one we're paying for.

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Ok, I'm interested to hear a meaning of "value" that doesn't assign a price to something, a price someone will pay.

Putting a price on something that no-one will pay, is just a made-up number. "My pencil is worth $1million ... but no-one will give me that for it". "This painting by someone unknown is worth £10, this painting by Picasso is "worth" £10million".

So what do you mean by "value"?

Not "values" that's a different thing.

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Parts plus labour costs plus reasonable profit percentage based on time and effort put into manufacture plus something else you will doubtless remind me that I've forgotten...is one way of estimating value for a generic commodity, and by no means an unreasonable one. Obviously there are variables and bugger factors, but to me it seems clear that the punt is no longer grounded by the pole and the waterfall is getting nearer. The kite string is dangling uselessly as the kite soars into the stratosphere. The brakes are drained of fluid and that wall looks very solid. Insert your own metaphor here.

Were we to find a buyer for this dump at what seems to be a "reasonable" current valuation, we would be notionally profiting by some sixty or seventy thousand pounds, a sum we have in no wise earned and for which the only justification is that we would need considerably more than that to buy anything remotely comparable. There is literally nothing you can say that will make that make any sense to me.

And when I say "inflation has been rising," that does not mean I think it didn't exist before. I know I'm an incapable drivelling idiot, but what I said and what you responded to are two different dollops of drivel. That keeps happening.

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The "parts" of your house include the land it is built on. Something you haven't improved in any obvious way, but which is now more desireable than when you bought it.

They have built a tube station near my mum's house, this means the land the house on is now more valuable for people wanting to commute into the center of London. My mum didn't build the tube station, but people would rather pay more for a house near a tube station, than a house further away.

The rebuilding cost of your house has gone up far less than the "purchase/selling" price. But that's bricks and walls and roof and such. If they are falling down, then the house price will be reduced. But the land price has gone up, without *you* doing anything. You bought a commodity (land), which, like gold, diamonds or coffee beans, can go up or down in price depending on demand and some inherant properties (quality of gold, quality of coffee, location of land relative to other things).

Does that really make no sense to you?

"Inflation has been rising over the past thirty years"
But then you ignored what that means. That means that what cost £1 thirty years ago costs £3 now. The thing is, if you could buy five Mars bars for £1 thirty years ago, and you can buy five Mars bars for £3 now, then all it means is that inflation has made the value of the currency less ... you are still buying the same item, but you are handing over more of those money coupon things. The value hasn't changed, only the price.
And so it is with your house. You bought it 30 years ago and handed over money that was worth three times as much as current money. You've paid off some of it, and now the house is priced in 2012 funny money, you have a notional £60k "profit" (which would have been £20k in 1982 pounds ... how much have you paid in mortgage payments in that time? If it is more than £50/month, then you have not made *any* money in that time)

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A terraced house in Wiltshire is currently selling for an average price of £138k. In Stoke-on-Trent, £71k, in Hackney £566k and in Kensington and Chelsea it's over £3million.

Of course the actual accommodation in each of those cases may differ. Averages are hard to calculate. But basically it's the cost of the land (location) far more than it is the bricks and mortar.

http://news.bbc.co.uk/1/shared/spl/hi/in_depth/uk_house_prices/las/html/las.stm?t#table

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catalana.livejournal.com

I think it's pretty clear we value things that don't have prices, I just have to say. I value my autonomy, but it's not something I can put a price on. I value the last card my late father sent me, but it isn't something with a price.

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soren-nyrond.livejournal.com

It's for the same (and utterly irrational) reason that I won't replace our knackered answer-phone: its messages are the last place I can hear my father's voice.

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"Yes, inflation has been rising over the past thirty years, driven in large part by property prices, which in turn have been driven up by rampant speculation and the systematic selling off of council houses by...now who was that again? Tip of my tongue..."

Inflation has always been here
http://safalra.com/other/historical-uk-inflation-price-conversion/ ... scroll down for a list of inflation values back to 1751. Yes, there's a bunch of big high inflation years under Margaret Thatcher. But it existed before then.

My parents bought their house in 1962 for £1,650. By the time I was leaving college 25 years later, it was probably priced at around £45-£50k ...

... yes, house prices are absurdly inflated, but the real cause of that is banks lending too much too easily (I know, they loaned me more than I would have thought sensible!) so that when two or more families are competing for the one free house in a good school area near the train station, then whoever can bid higher, gets the house. What's the "fair" alternative? Flip a coin? Who can balance a ball on their nose the longest? Obstacle course?

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In the case of the elderly mother, you don't state whether that's her own home, or something provided out of charity by The Authorities. If the latter, then yes, they're only (ethically or otherwise) meant to supply her with the basics of somewhere to live. If she wants the luxury of more space, she should be paying for it. If she can't - well, it's a luxury, not a necessity.

"Force" is the wrong word in any case: the action shouldn't involve big lads with knuckledusters frogmarching people. The charity accomodation they are willing to offer her this year will be that small flat over there, ground floor and with a warden because it looks like she could use the help. The massive house has been reallocated. Please call this number to arrange when the removals van should arrive.

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That is indeed the proposal.

Note that I am not saying that I agree or disagree with it.

I do like the ideas espoused in at least one of the links above that there could be incentives to move to a smaller, modern, maintained property ... for council house tenants that could be a payment or reduced rent, to free up a bigger house that is desperately needed. For private owners, it was suggested they could avoid stamp duty and so get an extra percent or two (a few thousand pounds) on the house they are selling.

I know a lot of people who have two or more bedrooms that are not being used as bedrooms (including my mother, and me) ... but we both "own" our houses, so we have the choice (my bank has the deeds for mine!) ... most private renters have a limited term tenancy and unless it is renewed, they are expected to move on to another property, why should rented council accommodation be different?
If a person gets rented council accommodation, then gets a really well paying job, as far as I am aware, they can stay in council housing as long as they want ... but I haven't checked into this, is that true?

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Yes, we too have the luxury of an extra "bedroom" each to use as a hobby room/study. It's a luxury, and we pay for it.

If we decided to down-grade to something smaller, as private owners, I'd expect what I moved into to cost less than I got for this place (well, unless it came with advantages other than size, such as better location, all on one floor, etc.) That's how the market works, no need to add extra fiddles to it.

I don't know about council accomodation and continual means-testing. It should be checked, yes, (assuming they could get it right! but that's a question of implementation, not of intention). Once I got a job, I stopped getting my JSA money, and I see no reason why charity accomodation should be any different. It's there for those who need it, not those that don't.

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pickledginger.livejournal.com

It does look yummy!

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billroper

To quote from Barry Childs-Helton's Down at Hot Rod Blue's:

You can't create more real estate, boy, you can only change how much is whose.

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Very pretty, but I'm surprised you aren't looking for a bungalow?

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michael cule (from livejournal.com)

In the event that Zander can afford the house, he can afford stairlifts (or even real lifts if the house could take the alterations).

I'm lucky that the flat I'm in was adapted for wheelchair use for the previous tenant. When I become doddery (something I anticipate any day now) I shall be pre-prepared!

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