House Prices Up 25% to £274,700 by 2013...

Generali

Generali's simple guide to supply and demand.

Demand = the number of people willing and able to buy at any given price
Supply = the number of people willing and able to sell at any given price

So if the amount of money people have to buy something falls, demand falls. If demand remains at a lower level, sellers who actually wish to sell will be forced to meet the new lower price or wait to see if demand recovers.

Demand for housing has fallen because mortgage availability has fallen so the ability to pay has dropped. If you want to have a guess at what will happen to prices, ask yourself whether or not banks are likely to turn the lending taps back on quickly enough for sellers to be prepared to wait for demand to rise.

I'd be very surprised if mortgage lending recovers quickly. I may be wrong but I doubt it given that the credit crunch is a year old this month and shows no real signs of going away.

mstar

i agree mortgage lending in the short-term probably will not change lenders are demanding higher deposits and rates are very high, that seems to have a effect on demand, the question is for how long will mortgage availability remain? but house prices in the long term will rise (assuming mortageg availability doesn't get drastically worse)

mstar

chrisandanne wrote: »

mstar wrote: »

-its a basic requirement of life to own your own place.

No it isn't, it's a basic requirement to have somewhere to live. A x

you can live in a cardboard box :money: if we go by your statement :j i meant its everyones desire to have there own accomadation everyone desires it and aspires to it.

Generali

mstar wrote: »

i agree mortgage lending in the short-term probably will not change lenders are demanding higher deposits and rates are very high, that seems to have a effect on demand, the question is for how long will mortgage availability remain? but house prices in the long term will rise (assuming mortageg availability doesn't get drastically worse)

Long and short term pricing is all about supply and demand as there is nothing else.

For prices to rise either demand must rise or supply must fall. Frankly, I see demand falling a lot further over the next few years.

mstar

yer ur probably right demand will probably fall (well is at the mo) but in the long term people will return back to the market, and in 5-10 years time we will see house prices increase again. We have to remember we do have a shortage of housing and the population is growing at a record rate (not to mention the migrant workers etc)

m00m00

that will be same migrant workers who are currently leaving the country in large numbers.

Generali

mstar wrote: »

yer ur probably right demand will probably fall (well is at the mo) but in the long term people will return back to the market, and in 5-10 years time we will see house prices increase again. We have to remember we do have a shortage of housing and the population is growing at a record rate (not to mention the migrant workers etc)

Where is this shortage of housing? The only people I see sleeping on the streets are the usual sorry group of the mentally ill and heavy drug/alcohol users.

I don't see programs on the TV about how 5 people are sleeping to a room or whatever nor have I met anyone living like that.

mstar

genrali, you know what i mean i gather ur being sarcy?, it was one of the govt key policys to stop the boom and bust cycles due to the supply problem. This had a factor in the house prices increased so much as the shortage (particularly in london areas).

A 8-10% increase or 2.5m extra homes are needed to push the UK housing stock to the average levels in Germany, France and Italy and we have not met anywhere these targets since 2001 when house building fell to its lowest level since 1924.

u have to remember that the population is getting larger and something has to give, when demand returns to modest (normaish???) levels we will have a supply problem in areas like london and steady increase in prices in the long term.

Generali

mstar wrote: »

genrali, you know what i mean i gather ur being sarcy?, it was one of the govt key policys to stop the boom and bust cycles due to the supply problem. This had a factor in the house prices increased so much as the shortage (particularly in london areas).

A 10% increase or 2.5m extra homes are needed to push the UK housing stock to the average levels in Germany, France and Italy and we have not met anywhere these targets since 2001 when house building fell to its lowest level since 1924.

u have to remember that the population is getting larger and something has to give, when demand returns to modest (normaish???) levels we will have a supply problem in areas like london

I'm not being sarcastic, not deliberately anyway! If there's a real shortage of property then you'd expect to see that manifest itself in some way other than just price rises. People having to share property perhaps or sleep in their car or a caravan on a friend's land.

I can't speak for Italy and Germany but certainly France has a lot of empty properties in the countryside.

I think there is a supply problem of family homes in the South East of England and also in the countryside but in the urban parts of the rest of the UK there isn't really any supply constraint that I can see.

beingjdc

mstar wrote: »

chrisandanne wrote: »

you can live in a cardboard box :money: if we go by your statement :j i meant its everyones desire to have there own accomadation everyone desires it and aspires to it.

I aspire to owning a boat, a pet tiger, and a maid. It doesn't make it a basic requirement of life.