What was the main driver of the 300%+ house price rise from the mid 80s to mid 00s

edgex

increased availability of credit

IveSeenTheLight wrote: »

Where is the facts for this?
Certainly when looking at the facts it seems that net migration is still positive.

http://www.statistics.gov.uk/CCI/nugget.asp?id=260

but are all of them combined enough to affect the 'demand' for housing to the extent that has been seen?

i dont think so at all



how many students can get a mortgage?
how many new migrants can get a mortgage?




it is the massively increased availability of cheap credit to a much wider range of people, at a time when many people either had no mortgage left to pay, or very little, that has pushed up the prices within the most recent bubble.


someones already got a quote thats about the 70's, & the same was happening then

The Government’s Budget (The Barber Boom) and the freeing up of the consumer credit industry contributed to the sudden rise in inflation and high wage demands. December 1973 saw the introduction of the 3 Day working week. House Price Inflation rose sharply and peaked in 1973 at over 36% per annum, a level never before seen in the UK (nor indeed seen since).

"the freeing up of the consumer credit industry"

IveSeenTheLight

edgex wrote: »

but are all of them combined enough to affect the 'demand' for housing to the extent that has been seen?

i dont think so at all

Certainly the demand for housing is affected, whether that be as a homeowner or as a renter

edgex wrote: »

how many students can get a mortgage?
how many new migrants can get a mortgage?

Certainly believe there is and increase in accomodation that was bought by the parents of students.

As for migrants, who knows the percentage.
I know some who have bought and others who have rented.
Still the demand for hosing increased either by themselves os owners or as renters

edgex

increased availability of credit

IveSeenTheLight wrote: »

Certainly the demand for housing is affected, whether that be as a homeowner or as a renter


Certainly believe there is and increase in accomodation that was bought by the parents of students.

As for migrants, who knows the percentage.
I know some who have bought and others who have rented.
Still the demand for hosing increased either by themselves os owners or as renters

but demand is just that, demand

there has to be some mechanism to translate that demand into action, ie the purchase of a property

that mechanism was the increased availability of credit




i can demand to go & see Pluto all i want, but if theres no mechanism to get me there, i cant get there

IveSeenTheLight

edgex wrote: »

but demand is just that, demand

there has to be some mechanism to translate that demand into action, ie the purchase of a property

that mechanism was the increased availability of credit


i can demand to go & see Pluto all i want, but if theres no mechanism to get me there, i cant get there

I've never doubter that availability of credit helped to facilitate the demand.

My definition of demand in terms of house purchase is desire and ability to purchase.
It would seem that your definition of demand from your pluto example is simply desire.

In context of our discussion I extended to demand for housing into accomodating those who become renters and while it is true that some people may choose to stay at home with their parents, I don't understand how you don't envisage an increase in population as an increase in requirement for property to either own or rent.

Eric_Pisch

increased availability of credit

biggest factor easier credit but also the liberation of women into the work place and adding there salary into the pot, this potentially doubles what you can buy so potentially doubles every house price

inheriting houses from dead family can also factor in, if everyone inherits 100k from there parents now substantially more valuable house, they can all drive up prices. A work college inherited his family home in an area of London that was about to explode, at there death it was worth 280k 5 years later he sold it for 680k .....

Eric_Pisch

increased availability of credit

HAMISH_MCTAVISH wrote: »

There are roughly 25 million houses in the UK.

If the population of the UK was reduced from 60 million people, to 25 million people, or if the number of houses was increased from 25 million, to 60 million, what do you think would happen to house prices?

Credit was a factor, but it doesn't matter how much credit you have, if there are more houses than people to live in them,, prices will fall.

Whereas if there are not enough houses, rationing of the limited supply must be achieved somehow. If not by price, then by waiting lists or other means.

its also suspected that the uk population is now 68 mill maybe higher with the migration influx, if everyone registered

edgex

increased availability of credit

IveSeenTheLight wrote: »

I've never doubter that availability of credit helped to facilitate the demand.

My definition of demand in terms of house purchase is desire and ability to purchase.
It would seem that your definition of demand from your pluto example is simply desire.

In context of our discussion I extended to demand for housing into accomodating those who become renters and while it is true that some people may choose to stay at home with their parents, I don't understand how you don't envisage an increase in population as an increase in requirement for property to either own or rent.

I didnt say that an increase in population dosnt mean an increase in requirements for property

what i did say
the increase in population dosnt lead to the same increase in demand for property

it isnt a 1to1 correlation
eg. a 10% increase in population over 10 years dosnt lead to a 10% increase in the requirement for housing in that same period
it dosnt even mean a 10% increase in the requirement for housing in the following 10 year period

CLAPTON

edgex wrote: »

I didnt say that an increase in population dosnt mean an increase in requirements for property

what i did say
the increase in population dosnt lead to the same increase in demand for property

it isnt a 1to1 correlation
eg. a 10% increase in population over 10 years dosnt lead to a 10% increase in the requirement for housing in that same period
it dosnt even mean a 10% increase in the requirement for housing in the following 10 year period

indeed true

all the experience of the last 50 years has been that a 10% increase in population will lead to more than 10% increase in the wish for and the demand for property

Sapphire

NumeroDeux wrote: »

I'm interested as to what people on this board think.

I have my own view, but I'll reveal later.

Isn't it a lot to do with speculation and greed, and of the public being brainwashed into viewing housing as a 'market' rather than a roof over your head? A bit like the 'contemporary art' 'market' and all the shenanigans that involved...:eek:

That should have been another box to tick on this poll.

Emy1501

increased availability of credit

There are 296 properties for sale in my postcode with rightmove. According to LR figures 12 properties completed in September this year. This compares to 27 in Sept 2008 70 in 2007 and 74 in 2006.

Now I do not know how many properties were available on rightmove for the previous years but the this years figures do not suggest there is a real supply and demand issue. It suggests to me part of the problem is a value and speculators issue. I'm see properties in my area which have been on the market for well over year. I suspect these people are not selling because they are speculating on the fact that their property will be worth more in the long run and they only want to sell at a price which suits them.

Now there are always going to be places in the UK like Central London, Parts of the south coast where people with deep pockets will always inflate the price due to supply and demand. What about the average town where in reality people with deep pockets do not want to live. It seems we have reached our credit limit for many of these towns and once the speculators realise this will they be happy with maybe growth of 1%-2% a year? Will at sometime our fascination for property and belief like the Wilsons that property doubles in value every 7 years disappear? If it does what happens then?

I wonder just how much effect if any speculation has had on house prices especially since 2000