We’d like to remind Forumites to please avoid political debate on the Forum.
This is to keep it a safe and useful space for MoneySaving discussions. Threads that are – or become – political in nature may be removed in line with the Forum’s rules. Thank you for your understanding.
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Recession finally hits the white hot property market of Aberdeen
Comments
-
Funny because ICM did a poll for the BBC in 2008 and only 22% of the people polled wanted prices to rise.
The reality is only downsizers, those in negative equity or investors want properties to rise. FTB do not, neither to upsizers and also many older people who are mortgage free don't because they see that homeownership is becoming harder and harder for their children.
The poll actually found that 46% wanted them to stay the same and 28% wanted them to fall.
I wanted to thank this post twice.
Just as hopeful FTB shouldn't be arrogantly dismissed as envious wannabees, it is equally insulting to portray home owners as selfish MEWers happy to run the country into the ground for the sake of a few quid.Retail is the only therapy that works0 -
In the past property prices rose at a steady level but what we have just come out of was a bubble Hamish. And bubbles are not good.
Actually, prices did not rise at a steady level in the past.
As for bubbles, well they do seem to be an inherent part of the housing cycle over the long term....And not just this one. But just as the peaks are above long term trend, so the troughs are below it....
But prices today are right on the long term mean trend line.
If your argument is that society would be better if bubbles did not happen and prices only rose by the long term trend, inflation plus 2.9% per annum, I would not disagree with you.
What so many people on here fail to realise though, is that house prices prior to the latest boom were not normal, they were abnormally cheap.
Here is a graph showing the house price history of a basket of major countries, the UK's house prices were far below the average throughout much of the last trough, and did not climb as far as others during the boom either.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
ThrowingStonesAtYou wrote: »If they are looking to upsize they will have a higher price gap to jump, so high prices are bad for them. Many people are not looking to move or sell, so the price change is neutral. Only those selling up to move somewhere smaller or for alternative living arrangements (eg nursing homes) will see any benefit.
I'm willing to listen to any arguments to justify that HPI is good in the medium-long term for majority of the population, .
Rising house prices are good for......
The millions of people who are in, or approaching, retirement who either plan to, or may unexpectedly need to, downsize.
The millions more people who are in their final property now, but will find themselves in the position above at some point.
The millions of people who bought within the last 5 years, who may be in negative equity already, or would be if prices fell further.
The owners of the 2 million investment properties.
The millions of people who may need to re-mortgage as and when rates climb, and want the best possible LTV ratio to get the best rates.
House builders, construction industry, suppliers, investors, pension funds holding mortgage securities, banks, and all housing related industries, all of their shareholders and employees, whether they own a house or not.
The family members of anyone who will leave an inheritance, or release equity to help their kids onto the ladder when downsizing, etc.
Rising prices are bad for......
A few hundred thousand potential FTB's...... But only until they get on the ladder, and become one of the groups above.
And as for upsizers...... It used to be commonly believed that falling prices were better for them. However this crash has proved that to be wrong, in most cases, because the price of their FTB property has fallen far more than the price of the 2TB properties. So the gap has widened, not narrowed. (and I'll admit to being surprised with this one myself, as I actually did think upsizers would benefit)
Plus the increased margin on new mortgages versus existing ones, and the reluctance of the banks to allow porting in most cases, means a further loss for most people wanting to upsize.
So this crash has, in most cases, been bad for upsizers, not good for them. At best, we can say it's been neutral overall. But the promised gains, have in most cases, either through price gaps or mortgage costs, failed to materialise.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Actually, prices did not rise at a steady level in the past.
Seriously, who the hell drew the line in this graph? Usually if people use crap statistics they at least make it so you have to go away and look up the full set of figures before you realise they are crap. This just shows prices hovering in and around the 80k mark for 25 years and then a massive bubble...:wall: just because somebody drew a red line through it in a certain driection means nothing, could eaily have drawn a horizontal line through 80k to prove 2000 onwards is a credit inspired bubble.0 -
ThrowingStonesAtYou wrote: »Seriously, who the hell drew the line in this graph? Usually if people use crap statistics they at least make it so you have to go away and look up the full set of figures before you realise they are crap. This just shows prices howevering in and around the 80k mark for 25 years and then a massive bubble...:wall: just because somebody drew a red line through it in a certain driection means nothing, could eaily have drawn a horizontal line through 80k to prove 2000 onwards is a credit inspired bubble.
*sigh*
The red line is the long term mean trend..... It is simply 2.9% per annum in real terms (ie, after inflation)
When you see that lifecycle of a bubble graph, the bit where it says "return to mean".... Thats the red line on this graph.;)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »*sigh*
The red line is the long term mean trend..... It is simply 2.9% per annum in real terms (ie, after inflation)
When you see that lifecycle of a bubble graph, the bit where it says "return to mean".... Thats the red line on this graph.;)
The problem with the line is that mean is AVERAGE.
If prices go up the long term mean also goes up.0 -
HAMISH_MCTAVISH wrote: »*sigh*
The red line is the long term mean trend..... It is simply 2.9% per annum in real terms (ie, after inflation)
When you see that lifecycle of a bubble graph, the bit where it says "return to mean".... Thats the red line on this graph.;)
Lol come on now... 'long term trend'.. what happens if you plot the graph back to 1930? Did they used to pay people to own a house? Because prices must have been negative musn't they?
It's clearly a specifically selected time frame (and starts at £47k on the y-axis.. hmmmmm :rotfl:) that conveniently fits an argument that a few people want to use against people who aren't bright enough to see through bad statistics.
And your last reply about who HPI benefits and doesn't seems more back of a fag-packet statistics than actual meaningful economic data.. if you have a source to back you up I'd be interested to see it but otherwise I'm fairly confident the majority of people do not benefit from HPI, but if I reeled off a list of numbers without any evidence you wouldn't believe me either:D0 -
The problem with the line is that mean is AVERAGE.
If prices go up the long term mean also goes up.
Of course.
You don't expect prices should have stagnated over the last 100 years do you? House building has always lagged population growth. This is not new.
Previous cycles also saw a steady underlying growth of around 2.9%, so it's not just the last peak driving up the average.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
ThrowingStonesAtYou wrote: »Lol come on now... 'long term trend'.. what happens if you plot the graph back to 1930? Did they used to pay people to own a house? Because prices must have been negative musn't they?
It's clearly a specifically selected time frame (and starts at £47k on the y-axis.. hmmmmm :rotfl:) that conveniently fits an argument that a few people want to use against people who aren't bright enough to see through bad statistics.
Oh dear....
First of all, it's the graph from hpc.co.uk's home page, so any "convenient" manipulation of data is theirs, not mine.
Second, it's not even that..... It's just that 1975, and 47K (in real terms), is as far back as the Nationwides dataset goes.
As for your little neagtive prices in the 30's comment, why don't you have a quick think about the answer before I have to explain it and humiliate you...:rolleyes:
(clue: Size and scale of graphs, and curvature of a compunding growth line)And your last reply about who HPI benefits and doesn't seems more back of a fag-packet statistics than actual meaningful economic data.. if you have a source to back you up I'd be interested to see it but otherwise I'm fairly confident the majority of people do not benefit from HPI, but if I reeled off a list of numbers without any evidence you wouldn't believe me either:D
I'll tell you what, you go to the trouble of googling the numbers of people in the above categories and prove me wrong.
I don't think anyone who has been following the debate can realisticallly claim there are not millions of people who own outright approaching or in retirement, millions more close to negative equity, millions more who will benefit from lower LTV's, etc.
As for upsizers, it's common knowledge that FTB properties have fallen more than 2TB properties in this crash. And that currrent mortgages are far worse deals than those in 2007 and before.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Rising house prices are good for......
The millions of people who are in, or approaching, retirement who either plan to, or may unexpectedly need to, downsize.
The millions more people who are in their final property now, but will find themselves in the position above at some point.
The millions of people who bought within the last 5 years, who may be in negative equity already, or would be if prices fell further.
The owners of the 2 million investment properties.
The millions of people who may need to re-mortgage as and when rates climb, and want the best possible LTV ratio to get the best rates.
House builders, construction industry, suppliers, investors, pension funds holding mortgage securities, banks, and all housing related industries, all of their shareholders and employees, whether they own a house or not.
The family members of anyone who will leave an inheritance, or release equity to help their kids onto the ladder when downsizing, etc.
Rising prices are bad for......
A few hundred thousand potential FTB's...... But only until they get on the ladder, and become one of the groups above.
And as for upsizers...... It used to be commonly believed that falling prices were better for them. However this crash has proved that to be wrong, in most cases, because the price of their FTB property has fallen far more than the price of the 2TB properties. So the gap has widened, not narrowed. (and I'll admit to being surprised with this one myself, as I actually did think upsizers would benefit)
Plus the increased margin on new mortgages versus existing ones, and the reluctance of the banks to allow porting in most cases, means a further loss for most people wanting to upsize.
So this crash has, in most cases, been bad for upsizers, not good for them. At best, we can say it's been neutral overall. But the promised gains, have in most cases, either through price gaps or mortgage costs, failed to materialise.
Can you provide the evidence to support all of the ? As I say the only poll I have seen suggests the majority do not want HPI. So can you provide us the evidence to support these millions of people who all want HPI0
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 352.2K Banking & Borrowing
- 253.6K Reduce Debt & Boost Income
- 454.3K Spending & Discounts
- 245.3K Work, Benefits & Business
- 601K Mortgages, Homes & Bills
- 177.5K Life & Family
- 259.1K Travel & Transport
- 1.5M Hobbies & Leisure
- 16K Discuss & Feedback
- 37.7K Read-Only Boards