Lack of supply pushing up prices

Really2

A lack of supply is still underpinning the house price recovery says RICS September housing market survey.

Significantly, the headline RICS house price balance recorded the highest figure since the onset of the credit crunch.

The net balance of Chartered Surveyors reporting rises rather than falls in house prices reached a positive reading of 22 in September, up from 10 percent in August - this is the highest result since May 2007 when the net balance was 25 percent.

The South of England is leading the upturn in prices with the net balance of surveyors reporting rises rather than falls for London and the South East climbing to 79 percent and 52 percent respectively. Elsewhere, the picture is less rosy with Wales and Yorkshire and Humberside registering negative net balances of 15 and 18 percent.

When will the drought of available houses stop?

mbga9pgf

The day the government stop support for mortgages for those that cant be @rsed to pay (14 months and counting), at around the same time the civil service is being pared to the bone, vat hits 20%, QE is stopped, public sector pay freeze and we realise we are in it for the long haul.

lemonjelly

Thing is, in the drought sellers/builders are going to be getting top dollar for the ones they've built/are selling.
So there's no real incentive for them to flood the market with over supply is there? May as well trickle the supply in & keep getting well above cost price to maximis profits.

Works in so many ways too - less building = less staff to employ = keeps costs down = bigger turnover.

HAMISH_MCTAVISH

Really2 wrote: »

When will the drought of available houses stop?

Anybody with a house is staying put, unless they really have to move. And most people just don't have to move.

Even when prices recover to peak or beyond, unless mortgage deals revert to 2007 levels, people won't move. The currently available LTV's and bank margins above base rate are FAR worse for most people than their existing deal.

What this has done is show the genuine shortage that exists.

If people don't speculatively put their house on the market every few years, and instead choose to live there for decades and treat it like a home, not a moneymaker, we see the genuine state of the market.

And that state is a severe shortage of housing.

tek-monkey

There are very few houses round here I'd want to buy, and only 61 showing on my rightmove saved search (down from 79 in July). I looked at a fair few, only one got an offer.

People still want 2007 prices, telling them otherwise seems to upset them.

the_ash_and_the_oak

Definitely a shortage of houses for sale right now imo (Tho not a shortage of houses to live in thankfully)

How long will this go on for? Interesting question. This isn't really a good time to sell imo (or buy) - and if there is no reason to do so then people won't. Is everyone happy with what they've got? Hopefully! For those that have got themselves a long term stay-here-forever type house it really doesn't matter.

For those in 1-bed or 2-beds or rung-on-the-ladder type properties - of course they don't have to move and can certainly hang on, its just more of a issue if they would like to trade up, move in w someone else, start a family. But this kind of 'need to move' is less of an immediate need (and perhaps one that can be solved temporarily by renting it out)

the_ash_and_the_oak

tek-monkey wrote: »

There are very few houses round here I'd want to buy, and only 61 showing on my rightmove saved search (down from 79 in July). I looked at a fair few, only one got an offer.

People still want 2007 prices, telling them otherwise seems to upset them.

tbf in many places don't think 07 asking prices have ever really changed. Also part of the supply-shortage mightn't just be holding on for better prices, but also symptomatic of wider concerns of uncertainty in general

IveSeenTheLight

tek-monkey wrote: »

There are very few houses round here I'd want to buy, and only 61 showing on my rightmove saved search (down from 79 in July). I looked at a fair few, only one got an offer.

People still want 2007 prices, telling them otherwise seems to upset them.

You've hit the nail on the head in that there are few properties available and even fewer of the available properties are of sufficient quality that you would be interested in.

Why should people lower their prices if there is a lack of supply of quality properties?

Sir_Humphrey

IveSeenTheLight wrote: »

You've hit the nail on the head in that there are few properties available and even fewer of the available properties are of sufficient quality that you would be interested in.

Why should people lower their prices if there is a lack of supply of quality properties?

What in effect is happening is there is a de facto cartel keeping prices high at the moment.

It must give way at some point. Yorkshire (where I grew up) is still falling, yet London varies from increases to stable depending on area. If this continues for a few years, you will find a lot of people (myself included) upping sticks.

Why should I struggle to buy a small flat in London when a smaller wage could buy a family house up north? It is no contest. There will be no young middle class people on normal professional wages left in London at this rate.

the_ash_and_the_oak

IveSeenTheLight wrote: »

You've hit the nail on the head in that there are few properties available and even fewer of the available properties are of sufficient quality that you would be interested in.

Why should people lower their prices if there is a lack of supply of quality properties?

So they can sell their house? I mean - I'm presuming people selling their house want to actually move?

(tho often price itself isnt the problem - as my parents have found out - loads of offers - at asking price! but eac time its..."just as soon as we sell ours"

chucky

Sir_Humphrey wrote: »

Why should I struggle to buy a small flat in London when a smaller wage could buy a family house up north? It is no contest. There will be no young middle class people on normal professional wages left in London at this rate.

that is total rubbish - get yourself out of the public sector, get youself a decently paid job instead of hanging out for your 'golden pension' and you'll be earning enough to buy.

get yourself away from blaming everyone from your job not paying you enough and accept your career choice as the main obstacle from you being able to afford to buy.

there are plenty of people earning a salary that allows them to buy in London.
middle class or whatever class they like to massage their ego with