If single FTB could afford 2-3 bed houses would it cause HPI.

Really2

Simple question relating to the other poll.

If a single FTB could afford a 2-3 bed house would this cause HPI.

Personally I think it would lead to a situation where only the people with big deposits/incomes would be only able to afford.

For the sake of the discussion we will say on current new build levels (nearly 0)

System

If houses were that cheap, where would all the excess cash we earn go?

Really2

Yes

Joeskeppi wrote: »

If houses were that cheap, where would all the excess cash we earn go?

I am thinking of the problem of people with 1-2 children being forced to pay more due to the stock being constrained.
Like you say I think this would force cash in to the market.

Thrugelmir

Really2 wrote: »

Simple question relating to the other poll.

If a single FTB could afford a 2-3 bed house would this cause HPI.

Personally I think it would lead to a situation where only the people with big deposits/incomes would be only able to afford.

For the sake of the discussion we will say on current new build levels (nearly 0)

HPI is caused by what is paid for the property and what it is subsequently resold for.

If sufficent people do not have the income\deposits then prices will ultimately fall.

As property is a market. To buy you need a seller and sell you need a buyer. Builders with cheap land banks can afford to reduce prices.

Really2

Yes

Thrugelmir wrote: »

HPI is caused by what is paid for the property and what it is subsequently resold for.

If sufficent people do not have the income\deposits then prices will ultimately fall.

As property is a market. To buy you need a seller and sell you need a buyer. Builders with cheap land banks can afford to reduce prices.

I understand that but it is not the question as to buy they would have the funds.

Basically would an influx of Singel people purchasing the traditional family housing stock eventually cause HPI.

it is not a pro HPI question it is developing the supply and demand argument.

IveSeenTheLight

Yes

Joeskeppi wrote: »

If houses were that cheap, where would all the excess cash we earn go?

Well if I could turn the clock back to when I was a single FTBer and I could afford a 2-3 Bed house, I wouldn't potentially buy that as it is not what I needed at the time.

I would seriously consider buying 2 flats, living in one and renting the other.

I guess it would depend on whether there was a rental market at all, but if houses were that cheap then everyone could buy and probably not a need to rent.

skap7309

Yes

It would cause HPI but anything below that (ie. studio / 1 / 2 bed houses & flats) would dive to such a low level we could all become BTLers.

Really2

Yes

skap7309 wrote: »

It would cause HPI but anything below that (ie. studio / 1 / 2 bed houses & flats) would dive to such a low level we could all become BTLers.

Good point, so would that drive future FTB in to unsuitable accomodation.

Wookster

Joeskeppi wrote: »

If houses were that cheap, where would all the excess cash we earn go?

What excess cash?

The UK mortgage market has only boomed to the extent is has because of the availability of money on international money markets. Without access to them, credit would have been enormously more expensive and house prices would not have boomed to the extent they did.

Really2

Yes

Wookster wrote: »

What excess cash?

The UK mortgage market has only boomed to the extent is has because of the availability of money on international money markets. Without access to them, credit would have been enormously more expensive and house prices would not have boomed to the extent they did.

Hi Wooster.

I think the point of this is say houses were affordable and had bottomed (whatever level you think that may be)
Would the above cause future HPI problems?

Wookster

I'e become Wooster now? Wow all these different personalities to keep up with... !!!!!!, now Wooster... (though not sure I can do that posh English accent).

No I don't think buying a bigger house in itself causes HPI.