The Housing Shortage Timebomb

HAMISH_MCTAVISH

bernard_shaw wrote: »

I think it's great that hamish is pedaling this 'shortage crisis' line.

The more the perception of 'shortage' in the minds of policymakers in their ivory towers; and the more the perception of 'shortage' in the minds of housebuilders with their large land-banks, the greater the likelyhood of an eventual misallocation of capital leading to oversupply and glut.
:money:

An "eventual" oversupply of housing is inevitable.

"Eventually" housebuilding will catch up with population.

"Eventually" there will be a glut.

Cheapo houses here we come!

"Eventually", probably so, but it's far more likely to be in our grandchildren's lifetime than in ours...;)

HAMISH_MCTAVISH

Sir_Humphrey wrote: »

If there was simply not enough housing to go round, then rents would have increased which has not happened.

Untrue.

The average rent has increased. Just not as much as house prices.

It is entirely possible to have a misallocation of assets within housing, ie, the balance between rented and O/O, which supresses rents and raises prices, but all within a total shortage.

The BTL boom doubled the supply of rental housing. A 100% increase. Obviously rents will suffer, although they still rose on average. But it only decreased the supply of O/O housing by around 7%.

blue_monkey_2

HAMISH_MCTAVISH wrote: »

The simplest way to think of it is as follows......

Supply and demand ALWAYS match perfectly..... Only the price changes.

And if there is no demand because families are choosing to live together for longer......? What happens to prices then?

People WILL find a way around the 'housing shortage' you seem to keep on talking about - they already are - there is a generation of would-be buyers not bothering right now. They are all flatsharing or living at home with MUm & Dad - and then it'll make no difference how much you want to sell your house for if there is no-one who wants to pay that price there is only one way for the price to go. Else you are stuck with it!!

My mother wanted a quick sale on her house, she had it up for £285k and it needed remodernising. In 1991 it was valued at £61k. She sold it for £215 because it was all people were prepared to offer. For months she said no because Mr EA told me I can get £285. Only 4 months later she caved in and realised she would never get shot of it if she did not bring the price down.

So in regard to what someone said about house prices not quarupling - in 1991 it was valued at £68k. In 1998 pipes burst and she was uninsured so the house had to be gutted. In that state it was worth £125. In 2008 it was valued at £285, in 2009 she caved in and accepted £215k. And this was on an estate that was once rife with families and kids - not any more, just middle aged people and families in what was remaining of the HA homes.

Welcome to the Home Counties!!

There are houses my friends bought in 1998 for 52k now valued at £170k. Another friend bought on the same estate for £82k in 2004, now valued at £170k. These are terraced houses with a postage stamp garden. Another friend bought in 1990 for 53k and she sold that in 2002 as a fast cash sale (it was wrecked by then and needed gutting and starting again) for £125k. Houses in the road now selling at 180k also.

At 53k we could have bought and afforded a house, at 180k there is no way, not even if I was able to return to work full time we culd not afford that.

We 'missed the boat' but have no complaints as we are happy where we are right now.

HAMISH_MCTAVISH

blue_monkey wrote: »

And if there is no demand because families are choosing to live together for longer......? What happens to prices then?

Thats already happening. Yet prices have risen by 10% in 10 months.

That does not reduce demand. It only delays it, til people save up the difference.

People WILL find a way around the 'housing shortage' you seem to keep on talking about - they already are - there is a generation of would-be buyers not bothering right now. They are all flatsharing or living at home with MUm & Dad - and then it'll make no difference how much you want to sell your house for if there is no-one who wants to pay that price there is only one way for the price to go. Else you are stuck with it!!

Sorry, but it doesn't work that way.

People always "want" to pay less for housing than they have to. It has never, in the history of mankind, stopped prices from rising anyway.

At the moment 70% of people live in owner occupied housing. But as we are only building a third of the housing needed, then only the top earning 33% of households need to be able to afford it in the future.

My mother wanted a quick sale on her house, she had it up for £285k and it needed remodernising. In 1991 it was valued at £61k. She sold it for £215 because it was all people were prepared to offer. For months she said no because Mr EA told me I can get £285. Only 4 months later she caved in and realised she would never get shot of it if she did not bring the price down.

She shouldn't have been in a rush to sell at the bottom of the market.

Prices up 10% since early 2009.

So in regard to what someone said about house prices not quarupling - in 1991 it was valued at £68k. In 1998 pipes burst and she was uninsured so the house had to be gutted. In that state it was worth £125. In 2008 it was valued at £285, in 2009 she caved in and accepted £215k. And this was on an estate that was once rife with families and kids - not any more, just middle aged people and families in what was remaining of the HA homes.

You should research the difference between real and nominal.

Real prices only rose by 80% between 1990 and 2007.

HAMISH_MCTAVISH

Mr.Knightley wrote: »

If House prices in the South East including london are more expensive than Aberdeen, and yet supply is far higher.
Does it mean less people want to live in Aberdeen?

I hear of people retiring to Spain, but never Aberdeen...

:rotfl:

London prices are still far more expensive than Aberdeen.

ukcarper

blue_monkey wrote: »

And if there is no demand because families are choosing to live together for longer......? What happens to prices then?

People WILL find a way around the 'housing shortage' you seem to keep on talking about - they already are - there is a generation of would-be buyers not bothering right now. They are all flatsharing or living at home with MUm & Dad - and then it'll make no difference how much you want to sell your house for if there is no-one who wants to pay that price there is only one way for the price to go. Else you are stuck with it!!

My mother wanted a quick sale on her house, she had it up for £285k and it needed remodernising. In 1991 it was valued at £61k. She sold it for £215 because it was all people were prepared to offer. For months she said no because Mr EA told me I can get £285. Only 4 months later she caved in and realised she would never get shot of it if she did not bring the price down.

So in regard to what someone said about house prices not quarupling - in 1991 it was valued at £68k. In 1998 pipes burst and she was uninsured so the house had to be gutted. In that state it was worth £125. In 2008 it was valued at £285, in 2009 she caved in and accepted £215k. And this was on an estate that was once rife with families and kids - not any more, just middle aged people and families in what was remaining of the HA homes.

Welcome to the Home Counties!!

There are houses my friends bought in 1998 for 52k now valued at £170k. Another friend bought on the same estate for £82k in 2004, now valued at £170k. These are terraced houses with a postage stamp garden. Another friend bought in 1990 for 53k and she sold that in 2002 as a fast cash sale (it was wrecked by then and needed gutting and starting again) for £125k. Houses in the road now selling at 180k also.

At 53k we could have bought and afforded a house, at 180k there is no way, not even if I was able to return to work full time we culd not afford that.

We 'missed the boat' but have no complaints as we are happy where we are right now.

Next door to me in Surrey sold May 1999 £140k sold again Aprill 2007 just before peak £275k Nice house in Nice road
Had a quick look on nethouseprices at houses around me and most have approximately double since 1999.

blue_monkey_2

HAMISH_MCTAVISH wrote: »

Thats already happening. Yet prices have risen by 10% in 10 months.

How many house sales is this based on? One? One desperate person needing somewhere to live?

You believe it all you like. It hasn't even started yet....!!

I know from experience what house prices were. Until 2008 I was bothered, now I am not as we have somewhere nice to live. I am however stunned at how fast prices are dropping in this area. Still, if you are saying they are rising then it must be true. [where has the sarcastic smiley gone?]

nearlynew

Mr.Knightley wrote: »

Does it mean less people want to live in Aberdeen?

I hear of people retiring to Spain, but never Aberdeen...

I hear that the red-light district of Aberdeen is very desirable.


House prices there have shot up,........ apparently.

HAMISH_MCTAVISH

blue_monkey wrote: »

How many house sales is this based on? One? One desperate person needing somewhere to live?

There were 100,000 house sales last month alone.

More than enough to be statistically significant.

You believe it all you like. It hasn't even started yet....!!

I know from experience what house prices were. Until 2008 I was bothered, now I am not as we have somewhere nice to live. I am however stunned at how fast prices are dropping in this area. Still, if you are saying they are rising then it must be true. [where has the sarcastic smiley gone?]

There are two out of 12 regions in the UK where house prices are not (yet) year on year positive.

But, you know, anecdotal stories beats hard statistical evidence every time.....

Not.

System

blue_monkey you're like a compilation of every bear meme going, except you're about 6 months late.