Rightmove October +2.8%, London records biggest ever indice rise at 6.5%

Generali

IveSeenTheLight wrote: »

I do not concur that there is pent up supply, else we would likely have seen that supply come back on to the market in the last 6 months.

Unless that pent up supply you refer to is waiting for higher prices.

Economic theory is pretty clear about what happens to supply as prices fall.

The only argument really should be about whether or not supply can remain at current lows or if there are increasing numbers who need to sell who have been holding out for higher prices but can't find a buyer willing and able to pay (unlike LiR who as she says earlier is willing to pay more but can't as she can't get a big enough mortgage).

IveSeenTheLight

Generali wrote: »

Economic theory is pretty clear about what happens to supply as prices fall.

The only argument really should be about whether or not supply can remain at current lows or if there are increasing numbers who need to sell who have been holding out for higher prices but can't find a buyer willing and able to pay (unlike LiR who as she says earlier is willing to pay more but can't as she can't get a big enough mortgage).

Can agree with the above, just not certain that transactions need to rise to purvey a sense of normality.

Just as you raise the argument of if there will be increasing numbers of people who need to sell (pent up supply), there is the converse argument of increasing numbers of people who want to buy (pent up demand)

Generali

IveSeenTheLight wrote: »

Can agree with the above, just not certain that transactions need to rise to purvey a sense of normality.

Just as you raise the argument of if there will be increasing numbers of people who need to sell (pent up supply), there is the converse argument of increasing numbers of people who want to buy (pent up demand)

The difference is that you can need to sell, it is rare that someone needs to buy.

Cleaver

Generali wrote: »

The difference is that you can need to sell, it is rare that someone needs to buy.

True, but I think that some people's desire to buy can be just as strong as someone's need to sell.

mewbie_2

Cleaver wrote: »

True, but I think that some people's desire to buy can be just as strong as someone's need to sell.

I have some graphs somewhere showing that reticence has started to make a statistical difference.

IveSeenTheLight

Generali wrote: »

The difference is that you can need to sell, it is rare that someone needs to buy.

Very true, my point was showing that for every action there is an equal and opposite action.

In the current climate, the need to sell has been reduced and the overall effect is diluted with the desire to buy.
There have been so many reports of people who have been priced out and therefore are potential new buyers. With the reduction we have seen on average in the UK and a steady sign of rising prices, this demand is going to want to get the oppertunity they previously might not have had.

If your belief in the limited mortgage funds is true, I'm wondering if we are going to see a reduction in percentage of owner occupiers and an increase in rentals

Generali

IveSeenTheLight wrote: »

If your belief in the limited mortgage funds is true, I'm wondering if we are going to see a reduction in percentage of owner occupiers and an increase in rentals

It's possible. We've supposedly seen the rise of the accidental landlord. The trouble is, whether it's BTL or OO, if houses are going to be bought with debt then the loans need to be available for that to happen (I realise that's a tautology).

I think a lot of people are struggling to get their heads around the implications of a lack of credit and what it'll mean for the economy. If securitisation or some other way of extending available credit doesn't return then it won't be possible for Government, households and business to borrow what they want regardless of their ability to repay as the funds simply won't be there.

kennyboy66_2

Cleaver wrote: »

True, but I think that some people's desire to buy can be just as strong as someone's need to sell.

I've yet to see a bank forcing someone to buy a house.

the_ash_and_the_oak

Generali wrote: »

The difference is that you can need to sell, it is rare that someone needs to buy.

Away from the financial dimension I think that there is also the need to move . Unless we are already all in our dream homes that we'll stay in until death

Generali

kennyboy66 wrote: »

I've yet to see a bank forcing someone to buy a house.

That's my point summed up very nicely. There's also probate and perhaps people moving for work.