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

Really2

Yes

Wookster wrote: »

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.

Missed that. :rotfl:(genuine mistake)

I am sure you can give it a go.

I agree not in itslef, but I would think building would have to keep in line with family demand to stop HPI starting again in the future.

dopester

No

Really2 wrote: »

Missed that. :rotfl:(genuine mistake)

I am sure you can give it a go.

I agree not in itslef, but I would think building would have to keep in line with family demand to stop HPI starting again in the future.

The only way you could have HPI from the bottom of the market, is when the active buyers have the means to buy at higher prices from the active sellers.. month-after-month, quarter-after-quarter.

That lifts the value of all homes in an area, also for the people who already own (and those wanting to buy).. as the active market has told an owner home must be worth £x,xxx amount more if the house opposite, which is slightly not as good as yours... sold for £10,000 more than a similar house last year achieved. Active market prices, deciding approximately the values for everyone.

Asset prices rise not because of "buying" per se, because indeed for every buyer, there is a seller. They rise because those transacting agree that their prices should be higher. All that everyone else - including those who own some of that asset and those who do not - need do is nothing.

Really2

Yes

dopester wrote: »

The only way you could have HPI from the bottom of the market, is when the active buyers have the means to buy at higher prices from the active sellers.. month-after-month, quarter-after-quarter.

That lifts the value of all homes in an area, also for the people who already own (and those wanting to buy).. as the active market has told an owner home must be worth £x,xxx amount more if the house opposite, which is slightly not as good as yours... sold for £10,000 more than a similar house last year achieved. Active market prices, deciding approximately the values for everyone.

Do we think the bottom of the market will drop lower than other sectors. from what i here on here i think it will as it seems there seems to be a clear preference for houses etc.

I suppose I am talking of the middle of the market, just what pressure will be applied by falling prices.

i am sure we have all read of single people planing to buy a 4 bed etc, and wondered/presumed this would have an affect on future HPI is demand outstrips supply

Graham_Devon

No

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)

I don't think so no. As if single first time buyers could afford these properties, they would have to be on sensible price levels anyway...

Therefore, you can only assume if single buyers can afford them, then so can families.

I think the problem with this whole single buyer business that people don't seem to be looking past, is that just because it's a single buyer, it does NOT mean they will be living in that house all on their own.

I can certainly see the thought behind it though. I.e. 1 single women and 1 single bloke both having their own house, when they could have one home between them, means less houses for the population if people are actually living alone in 3 bed houses.

BUT, people need to open up to the fact that not everyone who buys as a single person, will live as a single person. It's just one person is buying the bricks. It just does not work that way.

Really2

Yes

Graham_Devon wrote: »

I don't think so no. As if single first time buyers could afford these properties, they would have to be on sensible price levels anyway...

But what about competition, demand, supply future growth.

It would be an easy no if housing was an unlimited supply but currently they are not.

Oil prices would be stationary if demand, supply etc had no bearing on it.

Do you think market forces do not affect house prices?

Thrugelmir

Really2 wrote: »

But what about competition, demand, supply future growth.

It would be an easy no if housing was an unlimited supply but currently they are not.

Oil prices would be stationary if demand, supply etc had no bearing on it.

Do you think market forces do not affect house prices?

Supply is a constrain on housing. But ultimately there is a market price whether it be rental or purchase.

Really2

Yes

Thrugelmir wrote: »

Supply is a constrain on housing. But ultimately there is a market price whether it be rental or purchase.

I agree that is why I have said you could say houses have droped 70% and bottomed. (I am not saying from this point just a point where we think a bottom as been reached, whatever you belive the bottom will be)

Just what effect would the OP have.

Also it would be nice of any of the No's and Yes's to give some reason why they think there answer would or would not happen.

Graham_Devon

No

Really2 wrote: »

But what about competition, demand, supply future growth.

It would be an easy no if housing was an unlimited supply but currently they are not.

Oil prices would be stationary if demand, supply etc had no bearing on it.

Do you think market forces do not affect house prices?

That's an entirely different question.

Really2

Yes

Graham you must have been drinking or to many hayfever tablets?

The OP is basically about supply and demand and how it would manifest or not as HPI.

Can I Add this is not a bear bull type question.

It is about how you see the market and if the scenario happened what would happen.

EG prices fall 90% and bottom out would it cause prices to spike for certain property etc.

mbga9pgf

No

No, because if an FTB could afford a house like that, it means we would have market controls in place limiting Loan to value and multiples. Which would kill the HPI monster dead.

I love it when bulls get all defensive trying to make out that multiples would be a retrograde step, that it would be bad for first time buyers... When actually, all they want is their (falling) equity protected.