Are high house prices a good thing?

Emy1501

I am sure it would, but in the end the same number of houses would be occupied so no change in home ownership, just a lower cost for some

Does'nt support the supply and demand argument in respect of keeping prices high though.

nearlynew

The only people who want house peices to rise are debt junkies.

IveSeenTheLight

TDS wrote: »

Yes you have. What you've failed to do, however, is answer the OP's question.

I refer you to post 27 where I asked why an essential necessity in life should be valued as cheaply.

IveSeenTheLight wrote: »

A roof over your head is arguable one of the most important things required in life along with food and water.
Why shouldn't these be financially valued as such?

TDS wrote: »

I get the impression from you responses, that you are pleased that house prices are high?

There is no question from the OP as to whether one is pleased or not.
The question is simply "Are high house prices a good thing?"

As I have seen my final scheme been replaced by defined contributions, read many reports of other pension schemes that have failed their investors and had personal share investment losses, I have invested in property for my personal and families future.
Therefore, it is in my interest for house prices to rise and you can presume that I am pleased if it does so.

For anything that you own, is it better for that item to increase or decrease in value?

The question really should be "Are house prices currently high?"

If you do some research, you will find that the amount of mortgage payments as a percentage of income is historially below average.
Currently at 30.56% on average in the UK as opposed to the long term average of 37.29%
http://www.lloydsbankinggroup.com/media/excel/01_05_09Affordability.xls

This therefore indicates that property is more affordable now than it has been previously (on average) and albeit an understanding that this percentage will rise above the average be it from new purchases at higher prices or as a result of higher interest rates

The same HBOS link above would indicate that the the House Price - earnings ratio is 4.35 while the long term average is 4.02.
This indicates that hte prices are on average slightly higher than where they are on average, although some areas such as Greater London, South East and East Anglia are below the average and couls be higher.

Another indicator that they are slightly high on average is the monthly Nationwide Release where the long term real house price graph shows that currently prices are slightly higher than the long term trend
http://www.nationwide.co.uk/hpi/historical/nov_2009.pdf
This link however does not go into local area specifics as to whether the areas are higher or lower than their average.

IveSeenTheLight

nearlynew wrote: »

The only people who want house peices to rise are debt junkies.

Absolute bollox.

My grandmother-in-law bought her property outright and was not in debt.
As a result HPI, the property was able to be sold and provide a better level of care when she went into care.

Investors can own property outright (i.e. no debt) and HPI is seen as a bonus.

The couter argument to your statement would be: -
"The only people who want house [STRIKE]peices [/STRIKE] prices to fall are low income junkies who can't afford to buy" :rolleyes:

Emy1501

IveSeenTheLight wrote: »

I refer you to post 27 where I asked why an essential necessity in life should be valued as cheaply.





There is no question from the OP as to whether one is pleased or not.
The question is simply "Are high house prices a good thing?"

As I have seen my final scheme been replaced by defined contributions, read many reports of other pension schemes that have failed their investors and had personal share investment losses, I have invested in property for my personal and families future.
Therefore, it is in my interest for house prices to rise and you can presume that I am pleased if it does so.

For anything that you own, is it better for that item to increase or decrease in value?

The question really should be "Are house prices currently high?"

If you do some research, you will find that the amount of mortgage payments as a percentage of income is historially below average.
Currently at 30.56% on average in the UK as opposed to the long term average of 37.29%
http://www.lloydsbankinggroup.com/media/excel/01_05_09Affordability.xls

This therefore indicates that property is more affordable now than it has been previously (on average) and albeit an understanding that this percentage will rise above the average be it from new purchases at higher prices or as a result of higher interest rates

The same HBOS link above would indicate that the the House Price - earnings ratio is 4.35 while the long term average is 4.02.
This indicates that hte prices are on average slightly higher than where they are on average, although some areas such as Greater London, South East and East Anglia are below the average and couls be higher.

Another indicator that they are slightly high on average is the monthly Nationwide Release where the long term real house price graph shows that currently prices are slightly higher than the long term trend
http://www.nationwide.co.uk/hpi/historical/nov_2009.pdf
This link however does not go into local area specifics as to whether the areas are higher or lower than their average.

If house prices were affordable then they would not be needed to be propped up as they are at the moment? House prices can be as high as they like as long as they are being funded by the private sector.

chucky

Emy1501 wrote: »

If house prices were affordable then they would not be needed to be propped up as they are at the moment? House prices can be as high as they like as long as they are being funded by the private sector.

have you heard of the credit crunch and the lack of lending on the money markets?

do you think that may be a reason for that rather than affordability?

IveSeenTheLight

Emy1501 wrote: »

If house prices were affordable then they would not be needed to be propped up as they are at the moment? House prices can be as high as they like as long as they are being funded by the private sector.

How do I get some of this private sector funding?
As far as I understand, I obtain a loan and I pay the agreed interest for that loan

I recently looked to remortgage and found I am in a better position not remortgaging and staying on the SVR's

Certainly this "private sector funding" has not lowered the arrangement fees or managed to keep the margin's between the BR and the mortgage rate

Emy1501

IveSeenTheLight wrote: »

How do I get some of this private sector funding?
As far as I understand, I obtain a loan and I pay the agreed interest for that loan

I recently looked to remortgage and found I am in a better position not remortgaging and staying on the SVR's

Certainly this "private sector funding" has not lowered the arrangement fees or managed to keep the margin's between the BR and the mortgage rate

As has been said before the government(Mr Darling) has said that 240K people have been kept in their home as a result of government intervention. There are also government schemes to help FTB's etc/stop repossessions etc etc.

There is nothing wrong with high house prices as long as its all funded by the private sector and not propped up by the public sector when things go wrong.

The BOE said as far back as 2004 that they were concerned about house prices

ThrowingStonesAtYou

Emy1501 wrote: »

As has been said before the government(Mr Darling) has said that 240K people have been kept in their home as a result of government intervention. There are also government schemes to help FTB's etc/stop repossessions etc etc.

There is nothing wrong with high house prices as long as its all funded by the private sector and not propped up by the public sector when things go wrong.

The BOE said as far back as 2004 that they were concerned about house prices

Aren't these things mutually exclusive? How can you help FTBs while keeping those who can't afford their properties in them?

IveSeenTheLight

Emy1501 wrote: »

As has been said before the government(Mr Darling) has said that 240K people have been kept in their home as a result of government intervention. There are also government schemes to help FTB's etc/stop repossessions etc etc.

There is nothing wrong with high house prices as long as its all funded by the private sector and not propped up by the public sector when things go wrong.

The BOE said as far back as 2004 that they were concerned about house prices

Do you believe everything the politacl people tell you?
I've seen many a political pledge fail to materialise.

One of these was the governments targets of improving social housing.
Surely this has also increase house prices although failed to have the level of funding to achieve their targets.

You can rob from peter to pay paul but it does not necessarily alter the final situation i.e. house prices