High earners from elsewhere putting up house prices for locals

[Kuksoolgirl]

Moderator note: Split from https://www.railforums.co.uk/threads/scotrail-trainee-train-driver-kyle-of-lochalsh-22-07-21.220192/

For locals, in terms of getting on the property ladder, it is not fair that higher earners can sell their expensive homes and pick up a 'bargain' house or have a holiday home, which undisputedly pushes up house prices for locals.

It is a very selfish attitude, no one can deny, however unfortunately that is life.

People may have worked hard at school and work to achieve this but unfortunately, I think greed takes over some people, while locals who live there all their lives with the daily/seasonal pros and cons and have either chosen or possibly not chosen to stay there, have therefore reduced opportunity to buy a house in their local area.

Just my views.

 

[Simon11]

Living in London, I can argue the same. Young people from rural areas are moving over here for a better life, education and putting up our prices for us ‘locals’…

 

[Stigy]

I’ve been trying to find a home locally for months (to rent), often only to be pipped to the post by people from London offering above the advertised rental cost.

This irritates me. I think it’s far worse now since Covid has meant people can move further from London and work from home. Hopefully all their bosses will have a change of heart and it’ll make life “difficult” for them.

 

[talltim]

Gowing up in Harpenden in the 80s/90s, There was no way I'd have been able to buy my own place as I didn't become a stockbroker. Its not a new thing.

 

[WelshBluebird]

Its a tough one because at what point do you draw the line?

Sometimes it is obvious - someone from London comes along to Bristol with more money and offers more than what the locals can afford. But what about within a city? E.g. someone from say Easton, Bristol who has got priced out of their area but can afford more than what say the locals of St Pauls in Bristol can afford? Or maybe within London would be a better example due to distance (e.g. someone who has been priced out of Shoreditch then going on to price out locals in Brixton).

Even in the case of second homes - again sometimes it is obvious (e.g. someone in London buying a holiday home in Cornwall), but if you ban second homes full stop what about someone who may live in Cornwall most of the time but has a London flat used for work?

Though I very much do think something needs to be done. I spent 12 years living in Bath and have a fair few friends there who were born there and for a lot of them renting something in the city is hard enough, but buying something that is more than just a shoebox studio flat - good luck!

 

[Peter Mugridge]

Living in London, I can argue the same. Young people from rural areas are moving over here for a better life, education and putting up our prices for us ‘locals’…

I thought the London pricing boom was driven by millionaire overseas people buying a London "pad" and hardly ever using them?

 

[bb21]

I thought the London pricing boom was driven by millionaire overseas people buying a London "pad" and hardly ever using them?

The mansions bought by overseas investors were mostly unaffordable to ordinary Londoners to start with anyway. Either that or you have them building more high-rise luxury flats mostly to sell to overseas audiences.

Most of the properties us commoners are interested in hardly excite them.

 

[telstarbox]

I thought the London pricing boom was driven by millionaire overseas people buying a London "pad" and hardly ever using them?

Personally I blame the artists They take cheap space in dilapidated warehouses in Deptford and Hackney Wick. This makes the area become trendy and fancy bars and bakeries open up. Finally developers build £750k flats, bankers move in, the artists are priced out and the vibe disappears.

Obviously it's a bit more complicated than that. Councils selling their housing sites to "developer partners" and not replacing their social housing doesn't help either

I’ve been trying to find a home locally for months (to rent), often only to be pipped to the post by people from London offering above the advertised rental cost.

This irritates me. I think it’s far worse now since Covid has meant people can move further from London and work from home. Hopefully all their bosses will have a change of heart and it’ll make life “difficult” for them.

This is a perverse effect of living somewhere with a good railway service which your incomers will presumably be relying on.

 

[option]

Is this actually an issue for most employment moves though?

I know there's plenty of places impacted by London high earners, but they're only travelling/moving so far out, & their employment location hasn't moved.

But, in this example, a train driver moving from somewhere else to Kyle, is likely to still need a mortgage, already have a mortgage on their existing home etc. Are they going to making such a big profit on their existing property to be able to substantially outbid a local, & even if they have, why would they?
Also, they would be there year round, spending money locally.


Someone who can afford a holiday home probably is having an impact on housing prices, as it's likely that the types of properties they're looking at are the same as locals looking for a first home.

The other issue is that in a lot of small places, there simply aren't the first/starting out jobs any longer.
Kyle used to have a signalbox & engine shed, & there would have been more staff at the station. All gone.

 

[Mcr Warrior]

For locals, in terms of getting on the property ladder, it is not fair that higher earners can sell their expensive homes and pick up a 'bargain' house or have a holiday home, which undisputedly pushes up house prices for locals.

It is a very selfish attitude, no one can deny, however unfortunately that is life.

Of course, higher earners from elsewhere might mean that a "local" benefits from a greater than expected selling price when disposing of a property.

But, as you suggest, more than likely not so good for anyone wanting to get on the property ladder for the first time, particularly in a popular area.

 

[C J Snarzell]

I believe this type of thing has been happening in Salford and parts of Manchester since the expanse of the Media City complex about a decade ago.

Alot of Londoners have set up second homes in Salford and the house prices have short up in what were (and still are) notorious areas for gang crime.

CJ

 

[HSTEd]

I'm not sure anything can really be done about this, and I'm not even sure it would be a good idea to try.

The most important thing is to ensure ample housing within reach of employment centres is available at all price ranges.

 

[LSWR Cavalier]

Having a second home far away (London/Kyle?) must create a lot of work, the house could deteriorate if unoccupied for long periods.

I think it is generally unfair that some people have two or more homes when others have none or very small ones.

Perhaps people who have two homes should realise they have made enough money, retire to the second home and vacate the first.

If I had a million I should get one modest house with lots of fruit trees, and a cycle track in the garden.
..
Does anyone have experience/stories of moving to somewhere like Kyle? I should not mind spending a few years of my retirement there, one could wait for suitable weather to climb Lhuinne Bheinn.

 

[Shimbleshanks]

Well, I suppose you could have something similar to the system they have in the Channel islands, where the housing market is split into the Local market for island residents with relatively reasonably priced properties and an Open market with much higher-priced properties. I believe that anyone with enough dosh can buy an Open market house and come and live there, so effectively it's an immigration policy operating through the property market, ensuring that any incomers are reasonably well-heeled, but without keeping out everyone.

 

[Busaholic]

I think at the very least second home earners should be liable to pay 100% Council Tax, unlike current arrangements.

 

[Dai Corner]

There's nothing to stop a property owner selling/renting to someone local at a price they can afford instead of a high earner from elsewhere, of course.

 

[GusB]

Perhaps people who have two homes should realise they have made enough money, retire to the second home and vacate the first.

People don't necessarily have to have two homes. It's possible to have a three-bed semi somewhere in the home counties*, sell up and buy a similar sized property elsewhere at a fraction of the price. I can't honestly blame anyone who is in such a position and has the opportunity to retire a bit early and live mortgage-free for the rest of their lives.

At the same time, where I live, the children of people who were born and brought up in the village are struggling to find homes to buy, and they're not necessarily on low incomes either.

* I use the home counties as an example, but it could equally apply to anywhere where there is a concentration of well-paid jobs and high property values.

 

[Meerkat]

At the same time, where I live, the children of people who were born and brought up in the village are struggling to find homes to buy, and they're not necessarily on low incomes either.

That’s no different from the situation the kids in the suburbs are in!

 

[LWB]

I think at the very least second home earners should be liable to pay 100% Council Tax, unlike current arrangements.

There is so much more to it than that. For instance, second homers don’t send their kids to local schools as local families would. A lower school roll means less central government funding for the schools and they struggle to be viable.

 

[Dai Corner]

There is so much more to it than that. For instance, second homers don’t send their kids to local schools as local families would. A lower school roll means less central government funding for the schools and they struggle to be viable.

On the other hand, there are fewer children to teach, fewer classrooms to provide and fewer school staff to pay, of course.

 

[LWB]

On the other hand, there are fewer children to teach, fewer classrooms to provide and fewer school staff to pay, of course.

So local children either get a poorer educational system or have to bus much further. I’d rather have local families contributing to ALL aspects of the community

 

[Meerkat]

There is so much more to it than that. For instance, second homers don’t send their kids to local schools as local families would. A lower school roll means less central government funding for the schools and they struggle to be viable.

Where have the local kids disappeared to?

 

[Dai Corner]

So local children either get a poorer educational system or have to bus much further. I’d rather have local families contributing to ALL aspects of the community

Maybe be they get smaller classes and better education?

Have you got any data on spending per pupil or achievement in the relevant schools?

 

[dgl]

What also has to be remembered is that most of these "rich folk" still require somewhere to buy there food, someone to maintain any vehicles and property they have, people to collect their rubbish, cut their hair Etc. and they are pushing those people out, noting that these are the people most likely to be struggling financially and can ill afford outsiders pricing them out of the housing market, it's just plain selfish.

Maybe the solution is to add a second home/out of area tax in certain problematic places that is applied when you buy the property, not only would it make the housing market fairer for the locals teh tax collected could be used to provide housing for local people.

 

[tbtc]

There's nothing to stop a property owner selling/renting to someone local at a price they can afford instead of a high earner from elsewhere, of course.

Agreed

Whilst I think that the idea of the OP is laudable, how would you feel if you owned a house in a remote/rural place and were forced to accept the money that a local could afford rather than selling it to a richer "outsider"?

I don't know what the wages would be like in somewhere like Wick but if house prices are limited to three times annual salary to be affordable then I guess you may struggle to sell it for anything over £100,000, whereas someone living in Hackney Wick might consider moving to Caithness and be able to use the relatively high price of London property to pay well over what a local could

How would you stop the "sharp elbowed middle classes" (to use that ghastly David Cameron quote) from gaming the system/ bribing someone suitably "local" to buy it for them? e.g. it seems common for people in their sixties/ seventies to try to sell their house, give away assets to their children to try to get under the threshold for "free" Nursing Home care... I heard of a bloke approaching 65 who registered his address at a property in Calton (east end of Glasgow) to try and take advantage of the annuity rates (since that neck of the woods has the lowest life expectancy in the UK, so any annuity quote may only expect him to live half as long in retirement as the "average"... but similarly, do you compensate people currently living in "hotspots" for the fact that they'd have to take a significantly reduced offer now that they have to limit any sale to a small pool of "local" people? Especially as a lot of the UK seem to now function on "twenty somethings can't afford to buy a house until their grandparents move into a Nursing Home/ die"... so limiting the amount of money that the pensioners can sell their house for will limit the amount of money that the twenty somethings would inherit...

....it's a mess, and no easy answers. I do agree with the idea of removing the Council Tax "discount" - it seems daft to have one - but then I'd reform Council Tax further (we are effectively all being taxed now on what our houses were worth in 1991, because no politician dares reform it, since they'd be seen as penalising some people who've done very well out of the crazy "market" we've had over the past thirty years

 

[Meerkat]

One thing I would do is ban (or otherwise end) the existence of second homes and holiday rentals in town and village centres. It absolutely kills the places out of season and takes locals out of the community.
The second homes can go out on the fringes and out in the sticks - the owners will be driving anyway.

 

[Dr Day]

Presumably some of the downsides of holiday rental properties are off set in local communities by providing employment (if only seasonal) and the provision of local shops etc which wouldn't otherwise be there if the tourists didn't have anywhere to stay?

 

[AlterEgo]

Presumably some of the downsides of holiday rental properties are off set in local communities by providing employment (if only seasonal) and the provision of local shops etc which wouldn't otherwise be there if the tourists didn't have anywhere to stay?

There is that, but our most beautiful places shouldn't become theme parks for the middle class. Some balance is needed.

 

[Busaholic]

There is so much more to it than that. For instance, second homers don’t send their kids to local schools as local families would. A lower school roll means less central government funding for the schools and they struggle to be viable.

I think you make my point for me! Full council tax on second homes might put off a certain proportion of buyers and make more properties available for people who need to live in the area for work or other purposes: less demand would lead to lower house prices too.

 

[RuralRambler]

Presumably some of the downsides of holiday rental properties are off set in local communities by providing employment (if only seasonal) and the provision of local shops etc which wouldn't otherwise be there if the tourists didn't have anywhere to stay?

Trouble is local shops can't survive on being busy just a few weeks/months of the year during peak holiday periods. They need trade all year round. There is also the new trend of holidaymakers pre-ordering a Tesco delivery for their arrival day, so the local shops aren't getting the trade.