House Price Crash

westernpromise

CB1979 wrote:

there are so many factors that are causing demand to outstrip supply.

1) immigrants
2) mutli home owners
3) BTL's
4) marriage breakups/single parent families.

now what can WE do about it?
1) not alot with the EU laws and their "human rights"

That's a bit of a counsel of despair! We could do a bit, actually.

Immigration could be stopped. It just requires political will. Multi-home owners, well, that I suggest is a consequence rather than a cause - the appreciation has to happen first before you can extract your equity and buy up Cornwall. BTLs, well, those came into vogue because returns on conventional investments like cash and equities have been so poor over the last 10 years or so. Equity returns have been poor because the UK stock market has underperformed, not least because £50 billion has been taxed out of pension funds' investments and spent by the government - which is £50 billion those funds don't have to invest in stocks and support their prices.

So there is quite a lot that could be done, IMHO, it's just that the powers that be choose not to do any of it.

RHemmings

CB1979 wrote:

well i don't know all these if & buts reasons for prices keep rising, blah blah blah.

the genereal public cannot do anything about it, except for agreeing that no one buys above a set price, which just isn't going to happen.

there are so many factors that are causing demand to outstrip supply.

1) immigrants
2) mutli home owners
3) BTL's
4) marriage breakups/single parent families.

now what can WE do about it?
1) not alot with the EU laws and their "human rights" we're gonna be seeing more people coming over to the great island that is britain and needing homes (however many per room/house are living there)

Actually I think all we need to do is wait. Even those parts of the country where there is no increase in population have had massive house price inflation. It isn't a rise in price due to real demand, it's a rise in price due to speculative demand.

2) they've earnt their money (does it really matter how?) and now want a holiday home or whatever, good on them.

3) Landlords again, good on them, they are supplying what is needed and some of them even do it as a Full Time job, say to them they're not allowed and then you're taking away their income.

4) unfortunately this doesn't look like it's going to change any time soon either, so most (not all) single parents need DSS housing/private lettings. divorced mum's usually get given the house and the dad has to go get one for himself, again either buying/renting/DSS.

now they're just very basic examples that seem to be fundamentals at the moment, and unless the govt decide to think f*ck it, we'll build on all the green belt, there just simply isn't going to be enough houses.

add to this as i keep saying companies/banks offering longer term mortgages/higher multiples/shared ownership then FTB probably don't really see a problem with it, alot of these people also predict their salaries to increase vastly as well, they don't see themselves still earning £18k in 10 years time!

yes we'd all like to see cheaper houses, all these people moaning that prices are too high, is this just simply because you can't get on the ladder? what when prices fall and you do get on the ladder, I'm sure most will be wanting the prices to rise again pretty sharply.

wow that was quite long for me!

Again just my humble opinion.

RHemmings

westernpromise wrote:

It doesn't really need to, though, does it? If you have 1,000 people in 500 couples living in one house each, you need 500 houses. If the incomes of those 1,000 people double then so, roughly, will the price of those houses. If you build house #501, nobody would buy it because nobody needs it. You couldn't buy it cheap, as the house no one needs, because to do so you'd need to sell your own house first - and then that would become the house nobody needs. So nobody would gain.

The increase is not in the absolute number of houses required, but in what people are prepared to pay for them.

Of course this is all in an unrealistic economic vacuum, but sometimes it can be a helpful thought experiment to think about stuff in that way.

Your point is good though - and being a bit cynical I must ask why this has developed. I often find myself wondering also why social mobility, the rich-poor gap, and racial crime always get worse under Labour. Probably it is because Labour draws its votes from people living awful poverty-stricken lives, beset by racist thugs, in grim estates they cannot earn their way out of because they're so badly educated.

That being so, it is electorally in the Government's interest to keep the poverty, racism, and inequality coming, and to import it from Bangladesh if necessary if it should show signs of clearing up. Otherwise, they'd get prosperous and stop voting Labour for 20 years or so, like we saw from 1975 to 1995.

But then I would think that, because I'm just a cynical old Thatcherite.

I think that both here and in the USA, poor people have been suckered into voting for political parties that work for the benefit of the rich. In the USA it has happened due to BS about "security" and "strength". Over here it is because the labour party has been taken over by people with conservative views. Both groups are likely to be severely taken advantage of unless political changes occur that give poorer people a say in government.

MORPH3US

To me (and i'm sure i'll get shot down for this) it seems that the only people moaning about high house prices and hoping for a crash are the people who can't afford to buy a house or could but want a six bed detatched for £10,000 rather than a realisitic price. Then they have the cheek to moan on about people being greedy and wanting a free ride.

I went to University, I worked hard to get a good job, I saved hard and am frugal with my money so that I can afford the house that I want.

People who can't afford a house should take a look at themselves and think about why they can't afford one (without blaming other people or factors) rather than sitting on their !!!!s moaning and waiting for a crash, like the proverbial scrounger sitting on his !!!! moaning that no one will give him a job and waiting for one (or a lottery win) to fall in his lap!

God I love being controversial!

*retreats to the deepest darkest bunker with periscope up for a view of the fall-out*

M

martyn4764

MORPH3US wrote:

it seems that the only people moaning about high house prices and hoping for a crash are the people who can't afford to buy a house

Conversely, I wonder how many of those spouting about what a great investment property is, values never go down, yada yada... have very recently saddled themselves with large mortgages and are now &^*%$ing themselves...

RHemmings

MORPH3US wrote:

To me (and i'm sure i'll get shot down for this) it seems that the only people moaning about high house prices and hoping for a crash are the people who can't afford to buy a house or could but want a six bed detatched for £10,000 rather than a realisitic price. Then they have the cheek to moan on about people being greedy and wanting a free ride.

If you don't want to get shot down for your posts, you could try making them more accurate. I certainly hope for a price crash. I have substantial savings. I went to university, and I have a good job. I can also afford to buy a house, but I don't want my hard earned money disappearing in a house price crash.

House prices have got so far out of kilter that even those who have worked hard and saved frugally find it difficult to buy. Remember Martin's comments that people needed £50,000 a year or £80,000 combined income to buy an average house? Are you saying that everyone who earns less than that has only themselves to blame? There aren't enough high paying jobs to go around, so somebody has to lose out.

Why don't you read some of the posts on here where people discuss the kinds of properties they wish to buy. I haven't been here very long, and it's clear that FTBs are trying to buy small properties in modest areas, and still they're priced out. Your trivialising of their problems as them wanting to buy a six bed detached for £10,000 is in my opinion insulting. I think you'll find that there are lots of people who would just want to be able to buy a three bed semi for £80,000 in a safe neighborhood near their work. And if house prices were a reasonable multiple of salary, they would be able to.

I went to University, I worked hard to get a good job, I saved hard and am frugal with my money so that I can afford the house that I want.

I did and am doing all those things. And I can afford the house I want. That doesn't make me want to say "I'm alright Jack" to those who can't. Would you want a world where there were no nurses, or teachers, because everyone had to become a day trader to be able to afford expensive housing?

People who can't afford a house should take a look at themselves and think about why they can't afford one (without blaming other people or factors) rather than sitting on their !!!!s moaning and waiting for a crash, like the proverbial scrounger sitting on his !!!! moaning that no one will give him a job and waiting for one (or a lottery win) to fall in his lap!

Wanting a house for free would be scrounging. Wanting a house for a reasonable cost is not unreasonable. There are two ways that this problem can be solved. Either house prices crash, or everyone gets a 3x wage/salary increase so that houses are affordable again. Effectively a devaluation of the currency. As someone with a sizeable deposit, the latter would disadvantage me compared to the former. But I'd still prefer the latter as it would cause less social disruption.

God I love being controversial!

*retreats to the deepest darkest bunker with periscope up for a view of the fall-out*

M

It's more impressive being controversial if you have a stronger argument. If I say that gravity doesn't exist and challenge people to prove it, it's not exactly going to take much for people to refute me.

aderbyshirelad

RHemmings wrote:

If you don't want to get shot down for your posts, you could try making them more accurate. I certainly hope for a price crash. I have substantial savings. I went to university, and I have a good job. I can also afford to buy a house, but I don't want my hard earned money disappearing in a house price crash.

Having read your posts today, you make some very interesting points. However, surely your hard-earned money won't disappear if house prices crash unless you sell up. You would only sell up if you'd overstretched yourself and that doesn't sound like something you would ever do.


Quote
Wanting a house for free would be scrounging. Wanting a house for a reasonable cost is not unreasonable. There are two ways that this problem can be solved. Either house prices crash, or everyone gets a 3x wage/salary increase so that houses are affordable again. Effectively a devaluation of the currency. As someone with a sizeable deposit, the latter would disadvantage me compared to the former. But I'd still prefer the latter as it would cause less social disruption.

Surely, if we experienced a 3x wage/salary increase, the price of most things would, ineveitably increase by x3, or even more?

MORPH3US

RHemmings wrote:

Remember Martin's comments that people needed £50,000 a year or £80,000 combined income to buy an average house? Are you saying that everyone who earns less than that has only themselves to blame?

Who on earth starts off in an "average house"? Thats the problem, single people living on their own want 2 - 3 bedrooms, couples want 3 - 4 bedrooms. And they all want it with a tiny mortgage. Our parents had it tough when they started out and as things go on it gets easier!

RHemmings wrote:

I think you'll find that there are lots of people who would just want to be able to buy a three bed semi for £80,000 in a safe neighborhood near their work. And if house prices were a reasonable multiple of salary, they would be able to.

£80,000 would require two salaries of £16,000, hardly big money is it. Oh sorry, I forgot, a couple each earning £16,000 could never afford a 40-inch HD Plasma tv, a brand new car each, exotic holidays, designer ikea kitchens, nights out getting wasted on Stella, sit on lawnmowers AND a mortgage, so lets all moan about house prices instead!!

And three bed semi? Thats what my parents are in now aged 50 (ish). Why should someone be able to jump straight into one now when they have worked hard their whole life to get where they are!

RHemmings wrote:

It's more impressive being controversial if you have a stronger argument. If I say that gravity doesn't exist and challenge people to prove it, it's not exactly going to take much for people to refute me.

Sorry, did you think I was trying to impress people, I wasn't! I was trying to give the wingers a few home truths - something else to moan about!

MORPH3US

aderbyshirelad wrote:

However, surely your hard-earned money won't disappear if house prices crash unless you sell up. You would only sell up if you'd overstretched yourself.....

Good shout!!

aderbyshirelad

"Loving on their own"???

Sorry, couldn't resist!!!!