Uber-Bear Wakes Up and Smells Coffee, Prices Heading UP

HAMISH_MCTAVISH

Chris2685 wrote: »

It all really points to prices being too high I guess, people can't afford to buy at these prices, so builders are not building at these prices.

And if it was that simple, wouldn't builders just build at lower prices?

Or do you think there may possibly be a bit more to it.....:cool:

IveSeenTheLight

Chris2685 wrote: »

Looks like the number of new building projects starting is rising though, which is interesting. Still no where near previous levels though.

Yes it's rising, but still nowhere near the annual household property requirement increase.
unless it more than double from current levels, it's not going to help with the overcrowding situation which is starting to happen.

Interesting also that the projection is that

By 2031, 18 per cent of the total population of England is projected to live alone, compared with 13 per cent in 2006. One person households are projected to increase on average by 163,000 per year, accounting for two-thirds of the increase in households (

So new build is currently at 100,000, while population increases account for 247,000 (163K/0.66).

Doesn't this mean that there is a shortage of 150,000 properties per year?

Sounds a bit like the defecit effect on UK's debt.

ruggedtoast

How much of the population growth is due to immigration or the birth of people on low incomes?

And how many of these people can support rising house prices?

We've been reminded that average salaries cant buy an average house so are they all arriving / being born with suitcases full of money?

I'd genuinely like to know as I went to Calcutta once and while there seemed to be a lot of people there I didnt notice that property prices were especially high.

Most of the lower future lower middle classes Hamish is getting so excited about are going to born to Generation X's and Y's who cant get on the housing ladder themselves , and are going to graduate from university with the current equivalent of about £30,000 of debt.

(I know I'll have to qualify this a bit for Hamish, but Hamish its basically what can happen if you arent born of wealthy parents who fund things like house deposits for you so you can buy large detached properties in areas of your choice, and then spend half your 40s on the internet gloating about people being priced out of home ownership, due to not being as fortunate.)

In addition I think its going to become pretty apparent on the 20th of October that Gravy Train UK is about to run off the rails. Which should reduce inward migration.

Food for thought.

kabayiri

When people talk about housing affordability as a pressing issue, it's often biased to the situation in the South East.

Most of the wealth is in London and the Home Counties, and this fuels the house prices. Frankly, if I were a potential immigrant looking to the UK for my future, I would be looking at where the money is, namely London et al.

It's why I find the impact of population growth hard to predict. It's unlikely to be spread evenly across the UK.

In fact, if governments do cut back on public sector numbers, we could find a large number of migrants from the N.E looking for work in the capital. How would this affect house prices in the North East?

I've been an economic migrant before, and if needed, I would be one again. I'm sure I am not alone.

nearlynew

In McTittish's fantasy future, everyone will be basking in debt fuelled HPI heaven.

50 million of us will be living in £4 million houses and renting out our cheap £1 million flats to the other 50 million people.

Or summin like that.


Either way, house prices have to keep on rising.

HAMISH_MCTAVISH

ruggedtoast wrote: »

How much of the population growth is due to immigration or the birth of people on low incomes?

You are assuming that immigrants have less earning power than UK nationals, which is a fallacy.

The truth is that the percentage of immigrants in professional or skilled occupations is greater than the percentage of native born workers in the same occupations.

Migrant workers also raise the earnings of native workers by not insignificant amounts overall (a 1 per cent increase in the
ratio of immigrants to natives would lead to a 0.3 per cent to 0.4 per cent increase in average earnings for natives). Earnings growth is higher in the middle and upper part of the native earnings distribution, and lower at the very bottom, relative to the position in the absence of migration.

This suggests migrants may raise the productivity of those in the middle and upper part of the distribution and so raise GDP per head.
http://www.official-documents.gov.uk/document/cm72/7237/7237.pdf

And how many of these people can support rising house prices?

Goven that migrants, on average, earn more than UK born natives, on average, the answer is most of them.

We've been reminded that average salaries cant buy an average house so are they all arriving / being born with suitcases full of money?

The average salary of house buyers is significantly higher than the average salary of all people.

And when you only build 30% of the houses you need, then only the top earning 35% of people need to be able to afford them for prices to rise.

I went to Calcutta once and while there seemed to be a lot of people there I didnt notice that property prices were especially high.

In parts of China the average house prices is 88 times the income of the average person.

Think about that before making assumptions on third world comparisons.

Most of the future lower middle classes Hamish is getting so excited about are going to born to Generation X's and Y's who cant get on the housing ladder themselves

1) I am Generation X and almost all the people I know and grew up with are on the housing ladder.

2) Your assumption about immigrants all being lower middle class is incorrect, see first paragraph of response.

3) What exactly is it you expect to happen to the boomers houses when they die? Do you think a magic boomer fairy will make the houses vanish in a final act of revenge against those poor Generation Y whiners, or do you think they may in fact be inherited by the Generation X and Y you seem so concerned about?

I think its going to become pretty apparent on the 20th of October that Gravy Train UK is about to run off the rails. Which should reduce inward migration.

You should hope otherwise.....

Immigrants financially contribute far more to society than they take out. We, as society, make a significant profit on them on average as most immigrants are of working age so we pay nothing for their childhood medical care and education costs.

Food for thought.

Indeed.

IveSeenTheLight

ruggedtoast wrote: »

How much of the population growth is due to immigration or the birth of people on low incomes?

And how many of these people can support rising house prices?

The figure is easily retrieved from the ONS.
The latest relase showed that immigration was falling., however emmigration was falling further, meaning the nett migration increased.
The latest release also showed an increase in birth IIRC.

It's not about them supporting house prices, it's about how it will affect the demand for property both to buy or to rent.

Certainly a shortage of 150,000 households per year is going to increase competition for people to buy or to rent

ruggedtoast wrote: »

We've been reminded that average salaries cant buy an average house so are they all arriving / being born with suitcases full of money?

Very true, which sadly indicates that there are likely to be less owners as a percentage of the population than now.
While the average person may not be able to afford, the increase demand from renters would make the market very interesting for investors.
Indeed, we've already seen an increase in Private Rented Properties since the peak.

ruggedtoast

HAMISH_MCTAVISH wrote: »

You are assuming that immigrants have less earning power than UK nationals, which is a fallacy.

The truth is that the percentage of immigrants in professional or skilled occupations is greater than the percentage of native born workers in the same occupations.

Migrant workers also raise the earnings of native workers by not insignificant amounts overall (a 1 per cent increase in the
ratio of immigrants to natives would lead to a 0.3 per cent to 0.4 per cent increase in average earnings for natives). Earnings growth is higher in the middle and upper part of the native earnings distribution, and lower at the very bottom, relative to the position in the absence of migration.

This suggests migrants may raise the productivity of those in the middle and upper part of the distribution and so raise GDP per head.
http://www.official-documents.gov.uk/document/cm72/7237/7237.pdf



Goven that migrants, on average, earn more than UK born natives, on average, the answer is most of them.



The average salary of house buyers is significantly higher than the average salary of all people.

And when you only build 30% of the houses you need, then only the top earning 35% of people need to be able to afford them for prices to rise.



In parts of China the average house prices is 88 times the income of the average person.

Think about that before making assumptions on third world comparisons.



1) I am Generation X and almost all the people I know and grew up with are on the housing ladder.

2) Your assumption about immigrants all being lower middle class is incorrect, see first paragraph of response.

3) What exactly is it you expect to happen to the boomers houses when they die? Do you think a magic boomer fairy will make the houses vanish in a final act of revenge against those poor Generation Y whiners, or do you think they may in fact be inherited by the Generation X and Y you seem so concerned about?



You should hope otherwise.....

Immigrants financially contribute far more to society than they take out. We, as society, make a significant profit on them on average as most immigrants are of working age so we pay nothing for their childhood medical care and education costs.



Indeed.

I dont really want to get too far into the supply and demand argument with you, as I am aware that your understanding of this process is somewhat limited to the "I demand something so my mum supplies the money for it.", nevertheless there are a few points in your very long, and mostly unreferenced soliloquy that I feel it would be churlish not to address, lest anyone read it and mistakenly assess it as factual.

The truth is that the percentage of immigrants in professional or skilled occupations is greater than the percentage of native born workers in the same occupations.

What an extraordinary statement. Do you have some other evidence for this? Bearing in mind the commonly accepted definition of "professional" is anyone requiring a higher level qualification to practise, which as well as encompassing almost everyone in Finance, Medicine, Education, the vast majority of paper pushing clerical jobs paying £12k a year that require a "graduate", and most other office jobs where you use a computer; seems rather high.

Goven that migrants, on average, earn more than UK born natives, on average, the answer is most of them.

A London based banker from New York earning huge amounts in bonuses plonked amongst the Bengali population of tower Hamlets now running at 80% unemployment, rather skews this though dont they. I would be more interested in the median. If you have this data.

In parts of China the average house prices is 88 times the income of the average person.

Think about that before making assumptions on third world comparisons.

Yes, thank you. I know China very well. There are 1.4 billion Chinese people. The vast majority of these do not live in Shanghai, Hong Kong or Beijing. There are many other crowded unpleasant Chinese cities where property prices are not this high.

2) Your assumption about immigrants all being lower middle class is incorrect, see first paragraph of response.

Great, referencing your own unreferenced information. Well if you say it it must be true. Youve been right about everything else... oh wait no you havent.

3) What exactly is it you expect to happen to the boomers houses when they die? Do you think a magic boomer fairy will make the houses vanish in a final act of revenge against those poor Generation Y whiners, or do you think they may in fact be inherited by the Generation X and Y you seem so concerned about?

Thats a very good point and in reading this you may actually learn something for once rather than pedantically pulling apart replies in an attempt to make yourself appear more knowledgeable than you actually are.

Many, if not most, people in the UK arent as privileged as you. A great many of them are looking to use their houses to fund their retirement or pay for nursing home. Some people even, believe it or not, are so unsuccessful at reaching retirement that they only own one house.

Of these many of them have been so f3ckless as to have more than one child. Imagine that. Two, or even more, children, a retirement to fund, and only one house.

You just think about the implications of that.

Chris2685

IveSeenTheLight wrote: »

Yes it's rising, but still nowhere near the annual household property requirement increase.
unless it more than double from current levels, it's not going to help with the overcrowding situation which is starting to happen.

Interesting also that the projection is that


So new build is currently at 100,000, while population increases account for 247,000 (163K/0.66).

Doesn't this mean that there is a shortage of 150,000 properties per year?

Sounds a bit like the defecit effect on UK's debt.

Doesn't sound too bad. How many people will live in each property? I presume most of them won't be lived in by just 1 person.

IveSeenTheLight

Chris2685 wrote: »

Doesn't sound too bad. How many people will live in each property? I presume most of them won't be lived in by just 1 person.

They're talking households, not people

18% will live alone, compared with 13% in 2006
One person households are projected to increase on average by 163,000 per year accounting for 2/3's of the increase in households.

This is referring that there will be 163,000 increase in single person households per year
84,000 increase in properties per year of multiple person properties
Total increase in households per year is 247,000 per year

By 2031, 18 per cent of the total population of England is projected to live alone, compared with 13 per cent in 2006. One person households are projected to increase on average by 163,000 per year, accounting for two-thirds of the increase in households