"Oversupply the cause of house price crashes"

chucky wrote: »

when you say high oil price, do you mean rising oil price or high oil price... i'll leave it with you...

Well seeing as both generally go hand in hand.

OK lets put it this way. I am confident enough to say if oil prices continue to rise then the UK will go back into recession.

What would be your take on my assumption chucky?

chucky wrote: »

no, a rising oil price and a high oil price are two very distinct things.

the supply and even the demand of oil being determined by political or consumption factors that affect the price don't automatically mean recessions are around the corner.

it's back to you understanding causation and correlation for you unfortunately...

OK I'll take your word for it.

Do you fancy a punt at answering my question on rising oil prices and the UK going back into recession then chucky?

julieq wrote: »

Agreed, but when household creation exceeds home building, as time goes on, month on month, there is more competition for housing.

Basic economic theory.
But you have elected not to distinguish between rented accomodation, and bought accomodation.
The difference is of course a critical one for those intending to buy.

julieq wrote: »

Where do you get this idea? What I said was that demand for housing - somewhere to live - is increasing. Unless you increase the housing supply relative to household creation, more people are competing for fewer places to live. If they can't buy, rent goes up, and yield increase for landlords. And this isn't an imaginary phenomenon, it's happening and it's been recorded.

I very clearly said that increased rents are only to be expected.
I also very clearly stated that there is a limit to that rental.
Aside from which, you've neglected to mention the last part of your argument. That increasing rents would increase BTL demand would increase houseprices. Cut out the twaddle in the middle and you've concluded that reduced demand from FTBs leads to increased prices.

Its not that simple I'm afraid.

julieq wrote: »

markets are always in some sort of equilibrium, but they're not static. And yes, there are limits to what people will pay in rent, but we haven't reached them. Proof? Rentals are increasing. As rents for nice places increases, lower paid people are excluded and competition takes place at higher average salary level. And those excluded have to settle for lower grade housing than they want. It was ever thus. That's why rent is higher in Knightsbridge than Toxteth.

Theres no evidence that rental increases are yet jumping the salary level gap. And its here and now thats important.

Some of the bulls are prone to extrapolating current market problems into the future and concluding that prices can only go up!
Supposition thats not worth talking about.
House builders can only make money by building and selling houses.
The equilibrium will be reached.

That equilibrium is of course set by the ability to pay.

Incidentally, if we are only talking about whats happening currently as you've suggested, its apparent that rents are increasing yet prices are falling.

Which does kind of negate your original argument.

julieq wrote: »

If you're seriously suggesting that a professional landlord won't go for maximum yield and will reduce rents below market levels at a time when there is increased demand for rented property, then you're a bigger fool than you appear.

And that is quite an achievement.

Who suggested they would deliberately reduce rents below market levels?

My primary point was of course that market levels are not simply wished into being by greedy landlords.

And that not all landlords are greedy.

shortchanged wrote: »

OK I'll take your word for it.

Do you fancy a punt at answering my question on rising oil prices and the UK going back into recession then chucky?

Still waiting for an answer chucky.