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Debate House Prices
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How will the gridock be broken?
Comments
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HAMISH_MCTAVISH wrote: »https://forums.moneysavingexpert.com/discussion/2722919
https://forums.moneysavingexpert.com/discussion/2442901
https://forums.moneysavingexpert.com/discussion/2427991
We are currently in a demographic trough of FTB age individuals.
The next boom starts in 2013/14 and peaks a decade later.
http://www.statistics.gov.uk/populationestimates/flash_pyramid/EW-pyramid/pyramid6_30.html
The quicker you come to terms with the fact lenders are lending based on affordability rather than how much people want the quicker you will start to understand that it does not matter how many people want to buy a house a person can only afford what a bank will lend and comapred to 2007 thats not alot.
The only chance of a boom from 2013 is if there is another large crash over the next couple of years. RBS have admitted it will take till 2015 for them to sort themselves out and I doubt Lloyds are much better. The money is not there to lend0 -
Rainmaker_uk wrote: »I disagree. It is virtually 100% guarenteed that house prices in the UK will rise given a long enough period.
After every crash they have always risen upwards again. There is no reason that this will not happen again.
So you agree then...
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Graham_Devon wrote: »Indeed.
Of course, you ignore the fact that in 1990 - 1997, we actually had larger numbers of FTB age than the ones you spout above.
False. The numbers over the next decade are higher, this demographic bulge is bigger.What happened with prices 1990-1997 btw???
They fell for a couple of years, stagnated for 5 more, then skyrocketed for a decade.Ahh yes, they dropped, when more FTB's were around and there was a FTB "boom" as you have called it above.
False.Different this time though...right?
No Graham, it's not different. That's the point.
The boom of 1997 to 2007 was cause by a huge demographic bulge working it's way through the system without adequate housing being built.
An even bigger bulge is about to begin.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
No FTBs because they need to save a deposit, much easier said than done. This is all down to the credit crunch. The demand from FTBs should pick up in the next 2 years and the house prices should go up again. Over the next 2 years a 20% price drop is probable and following this they should go up.0
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HAMISH_MCTAVISH wrote: »False. The numbers over the next decade are higher, this demographic bulge is bigger.
They fell for a couple of years, stagnated for 5 more, then skyrocketed for a decade.
False.
No Graham, it's not different. That's the point.
The boom of 1997 to 2007 was cause by a huge demographic bulge working it's way through the system without adequate housing being built.
An even bigger bulge is about to begin.
And just where are these people going to get the money from to finance your fantasy house price growth? Most can't afford a deposit at 2010 prices so how are they going to afford a bigger deposit if by some wierd reverse law of economics what you suggest happens. Inflation?, Wage growth? I don't think so unless you think you can have inflation without consequences to the cost of borrowing and all those nice Indians and Chinese say put up your costs by giving your workers more, we'll stand aside and not bother competing with you.0 -
des_cartes wrote: »And just where are these people going to get the money from to finance your fantasy house price growth? Most can't afford a deposit at 2010 prices so how are they going to afford a bigger deposit if by some wierd reverse law of economics what you suggest happens. .
Bank lending froze up in 2007, and it became clear to everybody that saving was required to purchase a house..
As of today people have had 3 years to save deposits.
As of 2013 it will be 6 years.
As of 2016 9 years.
etc.....
Bank lending restrictions do not end HPI. They merely delay it.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
des_cartes wrote: »And just where are these people going to get the money from to finance your fantasy house price growth? Most can't afford a deposit at 2010 prices so how are they going to afford a bigger deposit if by some wierd reverse law of economics what you suggest happens. Inflation?, Wage growth? I don't think so unless you think you can have inflation without consequences to the cost of borrowing and all those nice Indians and Chinese say put up your costs by giving your workers more, we'll stand aside and not bother competing with you.
Concepts like stock and velocity of money, insolvent bank balance sheets, derivatives hiding the true leverage of the fractional reserve banking system via off balance sheet smoke and mirrors and global wage arbitrage are conveniently ignored. Don't waste your time, he focuses on micro rather than the macro, demographics alone are not the deciding factor in the equilibrium price.
Anyone with a rudimentary grasp of economics and some knowledge of OTC derivatives would know this, I suspect he does and just takes the !!!! because it's amusing.0 -
HAMISH_MCTAVISH wrote: »Bank lending froze up in 2007, and it became clear to everybody that saving was required to purchase a house..
As of today people have had 3 years to save deposits.
As of 2013 it will be 6 years.
As of 2016 9 years.
etc.....
Bank lending restrictions do not end HPI. They merely delay it.
Ridiculous logic. People will not even be able to save at the rates they have been saving at as inflation outstrips wage growth. If house prices do not fall I would expect a large number of potential ftb's to quit the UK and move to where houses can be bought by an average person. The only reason hpi existed over the past 10 years was because people could outbid each other because lenders didn't have any proper restrictions. If there had been the same lending restrictions before 2007 as we have now then house prices would have been much lower.0 -
des_cartes wrote: »Ridiculous logic. People will not even be able to save at the rates they have been saving at as inflation outstrips wage growth.
Wage growth of 2%. Consumer goods inflation of 4%.
How much has a persons disposable income declined?
(I should probably point out it is a trick question, to save you the bother of getting it wrong, and me the bother of explaining that it entirely depends on the percentage of income spent on inflation prone consumer goods.)If house prices do not fall I would expect a large number of potential ftb's to quit the UK and move to where houses can be bought by an average person.
Judging by the average intellect shown by housing bears here and elsewhere, it is unlikely they'll have the linguistic ability to move within the EU, and it's fairly certain no other English speaking country would want them.The only reason hpi existed over the past 10 years was because people could outbid each other because lenders didn't have any proper restrictions. If there had been the same lending restrictions before 2007 as we have now then house prices would have been much lower.
And yet house prices rose by nearly £20,000 over the last 18 months, with all the current lending restrictions in place.
Gosh, I wonder why....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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