House Waiting Lists between 10 and 33 YEARS

Emy1501

HAMISH_MCTAVISH wrote: »

There are three factors at play here.

1. Demand
2. Desire
3. Need

It is entirely possible to have a need for more houses, and for there to be plenty of desire, but for there not to be a demand matching the desire or need because of artificial funding constraints. Like today.

There are plenty of good potential FTB's out there, who could happily afford to pay a mortgage at 5%, who are paying that much rent today, but who cannot raise the 25% deposit needed to translate need and desire into effective demand.

As for the straw man argument of.... "Well there are plenty of houses for sale or rent today".

Yes... There are. But not enough to keep prices stable.

Prices have risen, as a national average, by 10% in 10 months. So we know for a fact that todays levels of available stock are low enough to generate HPI.

Remember, prices simply cannot rise if there is no competition for supply, and greater supply than demand. It is an economic impossibility.

QE. A member of the the MPC admitted a consquence of QE and low interest rates were asset bubbles. What we are seeing now is this. The best properties in the best areas are selling but for every one property that does sell there are probably 3 or more just sitting there.

We will see what happens next year.

the_ash_and_the_oak

HAMISH_MCTAVISH wrote: »

No, I am saying there is a massive need and desire for property, but effective demand is being limited by price and mortgage availability.

But imagine for a second prices did come down, and FTB's could get mortgages. What do you think would happen then, given the current shortage of housing to fulfill the need and desire? (which is why they are currently rationed by price)

If you are not going to ration by price, as many on here advocate,, then you must ration by waiting lists.

Which was the point of the OP.

not really advocating rationing by anything other than price imo.

if prices come down fewer people will buy not more because demand will have been reduced because fewer people will be able to either afford or gain access to the money to buy houses with imo - so just the same as today both houses and credit will be rationed by price. seeing no problem with this afaics

HAMISH_MCTAVISH

Emy1501 wrote: »

QE. A member of the the MPC admitted a consquence of QE and low interest rates were asset bubbles. What we are seeing now is this. The best properties in the best areas are selling but for every one property that does sell there are probably 3 or more just sitting there.

We will see what happens next year.

Good grief this is hard work.

Prices cannot rise where there is no competition for supply. It is an economic impossibility. QE, or credit, or magic pixie dust cannot change that.

If there was a surplus of housing, prices could and would not rise, no matter how much credit was available.

Increasing credit does cause price rises, but it can only do so where an existing supply shortage exists.

the_ash_and_the_oak

a shortage of houses to buy, rather than a shortage of houses to live in though imo

HAMISH_MCTAVISH

the_ash_and_the_oak wrote: »

a shortage of houses to buy, rather than a shortage of houses to live in though imo

A healthy market requires some level of empty stock.

Houses are empty for refurbishment, during probate, between lets, whilst up for sale, etc etc etc.....

This level of empty stock is being squeezed as population grows, and house building does not keep up.

And the situation is getting worse every day.

the_ash_and_the_oak

I'm pretty ok w the situation

bernard_shaw

HAMISH_MCTAVISH wrote: »

No, I am saying there is a massive need and desire for property, but effective demand is being limited by price and mortgage availability.

There is not a "massive need"; I see no legions of homeless, nor media reports of a homelessness crisis. There are no Hoovervilles or flophouses. There are no workhouses or mass poverty-driven emigration.

But you're right to say that there is a "massive desire" (I think it's residual). And I note that you are beginning to grasp the concept of 'effective demand' and well done for noting that it's affected by liquidity! But you are quite wrong to say that it's affected by price. Conversely, it is the market-clearing price which may be affected by effective demand, amongst a wide variety of other, non-market-fundamental factors - see if you can work out what they are and what effect they have...

HAMISH_MCTAVISH wrote: »

But imagine for a second prices did come down, and FTB's could get mortgages. What do you think would happen then, given the current shortage of housing to fulfill the need and desire? (which is why they are currently rationed by price)

If FTB's could get mortgages, it is unlikely that prices would come down, as it is the ready supply of liquidity which it seems has the greatest effect upon house prices. Your statement is therefore doubly meaningless.

What shortage? What 'rationing by price'? You are making the mistake of assuming that the housing market is a 'free' market - an efficient market and one which has the characteristics of perfect information and perfect competition. Think again.

HAMISH_MCTAVISH wrote: »

If you are not going to ration by price, as many on here advocate,, then you must ration by waiting lists.

Which was the point of the OP.

Who is this "you"? Do you mean the free-market's supposed 'invisible hand'?

In any case, waiting lists and stringent criteria for mortgages is the historical norm. It is the recent excess of liquidity which has been unusual.

It is not houses which are rationed, it is the liquidity which governs effective demand which is rationed.

bernard_shaw

HAMISH_MCTAVISH wrote: »

Good grief this is hard work.

Prices cannot rise where there is no competition for supply.

Yes they can.

Emy1501

HAMISH_MCTAVISH wrote: »

Good grief this is hard work.

Prices cannot rise where there is no competition for supply. It is an economic impossibility. QE, or credit, or magic pixie dust cannot change that.

If there was a surplus of housing, prices could and would not rise, no matter how much credit was available.

Increasing credit does cause price rises, but it can only do so where an existing supply shortage exists.

We will have to agree to disagree on QE and interest rates. The next 12-18 months will show who was right.

As for your other point regarding capping mortgages. As I have said before with now normal lending practises etc I believe fewer speculators/investors will buy into the market meaning properties prices becoming more reasonable and in line with earnings. My parents flats have been owned for at least 10 years plus whilst mosts FTB properties would change hands every 5 years.

For me the average house in the average town will fall back to about about 4 times average UK wage over the next 10 years or so. We may not see any falls it may be due to below inflation HPI Therefore there will be no need to cap mortgages etc

I simply to not see the supply and demand issues you see now banks are being sensible with credit and once QE stops and interest rates go bak to normal house prices will fall back in line as I say over the next 10 years or so in my opinion.

ruggedtoast

HAMISH_MCTAVISH wrote: »

Good grief this is hard work.

Prices cannot rise where there is no competition for supply. It is an economic impossibility. QE, or credit, or magic pixie dust cannot change that.

If there was a surplus of housing, prices could and would not rise, no matter how much credit was available.

Increasing credit does cause price rises, but it can only do so where an existing supply shortage exists.

I think it would help you if you didnt think of houses as a single homogeneous commodity, the price of which goes up and down under the infallible cyclops gaze of the Nationwide index.

There is a limited amount of 'supply' in popular areas like Greenwich, for example and a steady demand from professionals to support prices.

This isnt however, especially helping sales in nearby Deptford or further afield in Woolwich. The sale of more expensive properties in sought after areas like Greenwich can skew the fact that there are a lot of unsold places, which are becoming cheaper, or remaining static in priice, nearby.

Nationwide certainly arent about to go pointing this out to anyone. So sometimes you have to read between the lines and draw your own conclusions rather than blindly believing what they say.

There is a shortage of supply in some areas for some properties, which obviously pushes up prices, but its disingenuous to assume this will apply to all properties in the entire UK market.

You didnt buy an Inside Track property did you?

Ouch.