AgencyInsider – Is He A Real Estate Agent or An Impostor?

by Readers Question

21:52 PM, 3rd June 2018
About 5 months ago

AgencyInsider – Is He A Real Estate Agent or An Impostor?

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AgencyInsider – Is He A Real Estate Agent or An Impostor?

By “Home Provider”

Is “AgencyInsider” an estate agent who doesn’t remember the past and makes sweeping assertions without evidence or is he an impostor who doesn’t know the past and makes sweeping assertions without evidence?  Please vote Agent or Impostor below.

Last week Property Industry Eye published an article about the dramatic reduction in BTL lending since the credit crunch, and particularly since the imposition of an extra 3% on Stamp Duty – LINK

There was a comment disparaging BTL from someone using the name AgencyInsider, and claiming 35 years experience in the estate agency business.  He wrote that he had “bought to let (not borrowed)” – but that just made him look like an elitist hypocrite.

“It sucked property out of the sales market, caused house price inflation, and made life all the harder for first time buyers. As a scheme to ruin the stability of the sales market it was a belter.  I for one will not be sorry to see Buy to Let consigned to the dustbin of history.”

Barry20 rebutted the three claims in that first sentence and asked AgencyInsider “AI”for the latter’s sources.

Minutes later came a reply, free of evidence but including emotive terminology.  He claimed to be old enough to remember a price-stable property market when “we didn’t nationally encourage people to hoover up cheap properties and then cover their borrowings from income derived from those who were less able to take advantage of the rotten scheme.”

I accused AI of double standards and illogicality:  I told him “we let to people who are unwilling or unable to buy a property in the area in which they have chosen to live.  They are in fact benefiting from BTL – because they are living where they want to be.”

I asked “Did you increase the supply by restoring a derelict house, converting a commercial property, turning a large property into an HMO, or financing the construction of a new-build off-plan – like thousands of us who borrowed?”

I added “If landlords had not borrowed to let there would now be fewer habitable properties, so prices would be higher than they are.  And the proportion of rental properties would be much lower, so rents would be much higher, and the mobility of labour greatly reduced.”

Again, an evidence-free comment came within minutes. It can’t be described as a reply because it didn’t address any of the questions asked or points made.  It was intended to read like a patronising trip down Memory Lane, but was in fact a bluffer’s guide to the past.  “You miss the fact that I go back to waaaaay before BTL was ever thought of. When the property market was far better balanced and where people could, generally aspire to, and achieve, home ownership in their 20s and 30s. I am saying that BTL skewed and disrupted the market and contributed to the ills that afflict the market today – where home ownership is unattainable for a significant proportion of young people.”

I had not in fact missed the 35 years claim, I just wasn’t impressed by it because I remember what really happened to house prices over those 35 years – and even before them.  So I spent a bit of time researching, and this was my reply:

“You have not said you increased the supply of dwellings so I will assume you didn’t.

You claim the market was “better balanced” before BTL.  In 1996, when BTL was introduced,  owner-occupiers comprised 68.5% of households in England.  In 2006 they comprised 70.1%. Their share started to decline in 2007 due to the lending crisis.  It continued to decline because it became more difficult for them to get mortgages, not because of BTL.  Prices fell between 2008 and 2012.

Price stability?  Your memory is as faulty as your analysis.  The Nationwide’s records show that after you started in 1983, house price inflation was in double digits nearly every year.  In 1988 it hit 29% – but in 1990 it was minus 11%. Prices continued to fall until 1995, apart from a slight pick-up in 1994.  They then rose every year (hitting 25% in 2002) until 2008 when they fell by 15% following the lending crisis revealed by the run on Northern Rock in 2007.

I go even further back than you.  House price inflation was 21% in 1971, 42% in 1972, and 24% in 1973.  This was when mortgages were rationed and you had to have been a regular saver with a building society before they would even give you an application form for a loan.

In 1973 came the oil crisis, then the 3-day week, and recession.  But house price inflation continued in single figures until 1977.  In 1978 it was 28% and in 1979 it was 31%.

So much for price stability.

It is a myth that every tenant is willing and able to buy a property, and that if it wasn’t for BTL he or she would have been an owner-occupier.  If BTL had not increased the supply of dwellings, tenants would be paying a lot more in rent, or would have to live with their parents.

It is appalling that an estate agent would repeat the fallacious propaganda of the supporters of Section 24 which will make thousands of the poorest members of society homeless, just like a milder version did recently in Ireland.   In fact it has already started to do so here in the UK.”

AgencyInsider has not replied to date.

Property Industry Eye does not seem to allow the inclusion of links.  The sources are the .Gov.Uk website Live tables on household characteristics for owner occupier shares shares and Nationwide.co.uk House Price Index downloads for prices.

From this I have calculated the rates of house price inflation per decade.  At the end of 1969 the average house price was £4,312..  In the 1970s it increased by 409% to £21,966 and in the 1980s by 180% to £61,495.

In the 1990s the average house price increased by 21% to £74,638.  Between 2000 and 2009 it increased by 117% to £162,116 and in the next 7 years by 30% to £211,433.

The ONS has a table that changes basis in 1993 and stops at 2010, which can be obtained by googling its name: “Table 502-ONS”.  Its prices are higher than the Nationwide’s.  According to this, house price inflation was 329% in the 1970s, 175% in the 1980s, 76% in the 1990s and 102% between 2000 and 2009.

Assured Shorthold Tenancies were introduced in January 1989 and started to revive the PRS which had been in decline since rent control was introduced in 1915.  The PRS share fell from nine-tenths of the housing stock that year to one-tenth in 1991.

Although there is a marked difference between the two results for the 1990s, both sets of statistics show that house price inflation has been lower since ASTs and BTL were introduced than it was in the previous two decades, which AgencyInsider claims to be able to remember, .

In other words, house prices have been more stable since BTL started than they were before it.



Comments

Mark Alexander

22:29 PM, 3rd June 2018
About 5 months ago

I voted impostor.

In my opinion he’s probably one of the “three dozen morons” I wrote about last year - see link below

https://www.property118.com/three-dozen-morons-control-anti-landlord-media/

Michael Barnes

13:17 PM, 4th June 2018
About 5 months ago

House price inflation figures are meaningless without corresponding earnings figures. It is the relationship between the two that determine affordability.

I remember when I started work in the 70s we had pay reviews every 6 months because general inflation was so high.
Also buying a home on a mortgage is easier when inflation is high: live like a pauper for a couple of years until inflation has reduced the true cost of mortgage repayments, then you are OK.

PS: Impostor, otherwise would have provided reasoned arguments.

Glenn Ackroyd

9:50 AM, 9th June 2018
About 4 months ago

I love this analysis.

What's interesting for me in terms of myth-busting is that when you look at 1996, with the introduction of BTL mortgages and AST's, the split between owner-occupiers and renters was 2:1 - And it remains that way today.

But of the renters - about 32% of the population in 1996, the number living in social housing has dropped from 21.4% to 17.7%.

This reduction has been mopped up by the private rented section which has increased from 10.1% to 13.9%.

So all that has happened in 20+ years is that home ownership has remained broadly unchanged and the private rented sector has plugged the gap left by social housing and the right to buy sell-off.

If it wasn't for the private rented sector, the social housing crisis would be 20% worse.

https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/11816/141491.xls

Michael Barnes

15:12 PM, 10th June 2018
About 4 months ago

Reply to the comment left by Glenn Ackroyd at 09/06/2018 - 09:50
Note, however, that those figures are dwellings, not households (so HMO counts as 1, not many).

That link gives figures only to 2008; where did you get more-recent figures?

Appalled Landlord

12:40 PM, 15th June 2018
About 4 months ago

Reply to the comment left by Michael Barnes at 10/06/2018 - 15:12
Hi Michael

Apart from one year the percentages are for households, not dwellings. The top of of the table includes the word household three times..

The section below the table is for the footnotes.

Footnote 1 applies to the years 1918 to 1971

Footnote 3 applies to the years 1997 to 2008

Footnote 2 “Based on share of dwellings rather than households” only applies to the estimates for 1918.

That is the only reference to dwellings.

Michael Barnes

19:21 PM, 15th June 2018
About 4 months ago

Reply to the comment left by Appalled Landlord at 15/06/2018 - 12:40
yep


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