FTB's "Missing Deal Of A Lifetime"

DervProf · 10 August 2010 at 8:34PM

Linton wrote: »

It seems to me you still dont understand supply and demand.

It seems to me that you don`t realise that I do understand supply and demand.

Yes, there is a limited supply of property in the UK. Of course there is demand for some of that property (most of it, if you like). I know that a certain part of the price paid for a property will be based on the ratio of supply vs demand.

The point I was trying to make was that Hamish was taking pleasure in the misfortune of a small number of property bears due to mortgage rationing, which is almost certainly causing a lot of problems for those who wish to buy their first home, or move home.

"If there are 1000 people wanting to buy a house and 100 houses on the market, prices would rise so that only the 100 richest people could afford to buy."

What if those 100 houses were found to be sitting on top of a volcano, due to errupt at any time. Would prices rise ? What about if those houses were in very poor condition ?

It`s too simple to say that prices are based on supply and demand, supply being short in the UK, so that`s why we`ve had high HPI, and will continue to do so. It`s a nice, convenient excuse for property bulls to justify, or promote high house prices, but I think there`s something much more subtle about all of this (see my thread "What causes HPI"). Oh, you already have.