Joy as West Midlands amongst price rise pacesetters

carolt

Turnbull2000 wrote: »

LGH Index is up 7.4%. FT Index is up 13.4%. Land Reg is up 7%. Nationwide is up 9%. London LGH Index is up 10.6%. London Land Reg is up 10.6%. London Nationwide is up 15.7%.

Double digit HPI has returned to London, and the UK indexes are edging closer (though one is already there).



How far forward do you define a "future" trend? It's certainly a current trend, and I see no reason for it not to continue in the short-term. Longer-term, nominal prices falls will likely be minimum as government efforts to restrict reposessions continues and a widespread reluctance to sell below peak prices remains. You have to remember that past crashes have been largely inflationary and hid the losses from sellers. That doesn't apply any more. Losses need to be nominal. And without a mass of forced sellers or another major economic shock, we're unlikely to see another major downturn in house prices until the next economic cycle in 10-15 years IMO.

As for interest rates, they won't be rising fast for a very long time. The political pressure it too great. The threat to the housing market it too great. And when they do, again, steps will be taken by the government to prevent mass forced selling and downward pressure on prices.

How do you see this happening? Or to put it more simply, where is the money going to come from?

I don't deny that all governments would, in an ideal world, like to continue supporting the ponzi scheme that is our housing market indefinitely. Both for the sake of their own personal property portfolios, and to win the home-owners' votes. But the reality is that they cannot afford to do so.

NB - your current trend = London. Hardly typical of the UK. Certainly not a general trend. Let alone a guaranteed future trend.

Cleaver

carolt wrote: »

I do not believe for one second that any intelligent individual seriously thinks prices are going to rise in the short to medium term. If you really believe that the falls in 2008 were it, then you must be dim.

What do you define as 'short to medium' term?

Emy1501

Turnbull2000 wrote: »

As for interest rates, they won't be rising fast for a very long time. The political pressure it too great. The threat to the housing market it too great. And when they do, again, steps will be taken by the government to prevent mass forced selling and downward pressure on prices.

As Michael Portillo said on the BBC the other day I suspect there will come a time when any government has no choice but to start paying off the debt regardless whether they want to or not and I suspect this will include putting up interest rates and if inflation continues as it is it will be sooner rather than later.

There is no doubt that no party wants to be responsible for crashing the market but the reality there has been little debate reagrding keeping house prices high and with Labour saying they are going to protect health education and the police there will be little money for housing in the future. The government were clear to point out their funding of the stamp duty cut for FTB's with regards to the stamp duty increase for properties over 1m. The SMI scheme is being funded by the failed banks and the government will only get involved if the home owners is still unemployed after 2 years. If there is a wind that knocks the recovery off track and its choice between health, education and keeping prices high the government will have difficulty justiftying throwing money at housing simply to keep prices high.

Cleaver

Emy1501 wrote: »

There is no doubt that no party wants to be responsible for crashing the market but the reality there has been little debate reagrding keeping house prices high and with Labour saying they are going to protect health education and the police there will be little money for housing in the future. The government were clear to point out their funding of the stamp duty cut for FTB's with regards to the stamp duty increase for properties over 1m. The SMI scheme is being funded by the failed banks and the government will only get involved if the home owners is still unemployed after 2 years. If there is a wind that knocks the recovery of track and its choice between health, education and keeping prices high the government will have difficulty justiftying throwing money at housing simply to keep prices high.

I know this comment will go down like a fart in a lift but just stepping away from all the economics for a second, doesn't the fact that British people don't seem to have lost one ounce of enthusiasm for throwing wads of cash at 'dream houses' have an impact here?

I keep saying this, but culturally nothing's changed. People seem to want to buy houses as they think it's a great thing, for whatever reason.

Someone will now tell me that the money isn't available for this, the bank of mum and dad won't last forever and the lending just isn't there. So I'll be quiet.

carolt

Cleaver wrote: »

What do you define as 'short to medium' term?

It's deliberately vague, because I don't have any more idea than you do how the economy is going to perform or even who is going to be in govt in a couple of months' time, both of which will determine that timescale. I think it covers anything up to about 10 years.

Beyond that, I wouldn't presume to even guess, given some of the weird stuff that's hit the fan over the last couple of years. Prior to that, I would have said that over the 25 year life of a typical mortgage, you'd come out (nominally at least) on top.

Now I couldn't really be sure. Who knows what more nasty economic nasties there are lurking, and things like peak oil that people are always going on about, and about which I feel entirely unqualified to comment?

So, yes, anything from 6 months to 10 years is my (rather approximate) definition of 'short to medium term'.

Does that clarify it sufficiently?

Emy1501

Cleaver wrote: »

I know this comment will go down like a fart in a lift but just stepping away from all the economics for a second, doesn't the fact that British people don't seem to have lost one ounce of enthusiasm for throwing wads of cash at 'dream houses' have an impact here?

I keep saying this, but culturally nothing's changed. People seem to want to buy houses as they think it's a great thing, for whatever reason.

Someone will now tell me that the money isn't available for this, the bank of mum and dad won't last forever and the lending just isn't there. So I'll be quiet.

As I have said before if Banks were to start offering 10x Mortgages with no deposits prices would go through the roof. Peoples love for property is not going to end soon but their ability to get credit is the problem. The fact that the government had to do a U-turn on Stamp duty for FTB's three months after the stamp duty holiday ended shows the struggle FTB's are under to get credit.

chucky

Turnbull2000 wrote: »

LGH Index is up 7.4%. FT Index is up 13.4%. Land Reg is up 7%. Nationwide is up 9%. London LGH Index is up 10.6%. London Land Reg is up 10.6%. London Nationwide is up 15.7%.

putting detail like this on here does bring out the worst from the HPC ghetto on here

don't you realise that unless you agree with them that house prices prices haven't increased you lack intelligence

chucky

Emy1501 wrote: »

As I have said before if Banks were to start offering 10x Mortgages with no deposits prices would go through the roof. Peoples love for property is not going to end soon but their ability to get credit is the problem. The fact that the government had to do a U-turn on Stamp duty for FTB's three months after the stamp duty holiday ended shows the struggle FTB's are under to get credit.

that had nothing to do with an upcoming election did it...

Emy1501

chucky wrote: »

that had nothing to do with an upcoming election did it...

Government knew in December election likely to be in May. They could have therefore said then that they were keeping Stamp duty for FTB's. Reading the Housing forum they have just !!!!ed off those who completed between 1st of Jan and march 24 and making those who have/will complete between march 24 and may 6th happy. We all know that Tories will make holiday permanent so I cant really see what they have gained doing it.

For me they did not see the impact the holiday had on the market and once they realised FTB approvals were low for Jan and Feb they panicked and did a u-turn.

chucky

Emy1501 wrote: »

Government knew in December election likely to be in May. They could have therefore said then that they were keeping Stamp duty for FTB's. Reading the Housing forum they have just !!!!ed off those who completed between 1st of Jan and march 24 and making those who have/will complete between march 24 and may 6th happy. We all know that Tories will make holiday permanent so I cant really see what they have gained doing it.

For me they did not see the impact the holiday had on the market and once they realised FTB approvals were low for Jan and Feb they panicked and did a u-turn.

FTB's have been low for 7 years - stamp duty holiday at £185k had and will have little effect on house purchases.

£250k will obviously appeal to a bigger proportion of buyers and be more popular.