Why interest rate increases will fuel house price rises.

dougk_2

dips,
Theres not enough houses! I don't think that many people on this board would disagree - if there was an over supply of houses then prices WOULD be falling as there would be little demand.

There is an increasing population and smaller family groups. There are plenty of people living on the street and plenty crammed into smaller houses. There are also plenty of people living in B&B's!

House prices are controlled by a number of factors and there is not one simple answer to it!

Angela_D_3

There is a massive over supply of flats which are stood empty and the prices are falling.
The big difference this time will be the IVA's they are delaying people who should alreay have been reposessed loosing their homes but statisically people who run up credit cards then get bailed out by remortgaging or IVA's get into difficulties again within a very short period of time and the banks won't bail them out twice. The chickens will come home to roost it's just going to take longer this time and I must say i'm bored of waiting already.

whambamboo

dougk wrote:

dips,
Theres not enough houses! I don't think that many people on this board would disagree - if there was an over supply of houses then prices WOULD be falling as there would be little demand.

There is an increasing population and smaller family groups. There are plenty of people living on the street and plenty crammed into smaller houses. There are also plenty of people living in B&B's!

This is a myth about lack of supply

http://www.housepricecrash.co.uk/forum/index.php?s=&showtopic=36401&view=findpost&p=463922

F_T_Buyer

There's so much !!!! & bull on this site about house prices, it's a joke. Apart from the obvious bears, everyone else is clinging to their bubble logic.

dips_3

dougk wrote:

dips,
Theres not enough houses! I don't think that many people on this board would disagree - if there was an over supply of houses then prices WOULD be falling as there would be little demand.

There is an increasing population and smaller family groups. There are plenty of people living on the street and plenty crammed into smaller houses. There are also plenty of people living in B&B's!

House prices are controlled by a number of factors and there is not one simple answer to it!

If there are not enough houses why are there so many round my way stood empty or that have been up for sale for over a year? A quick search on right move finds over 60 3 bed semi detached houses within 1/2 a mile of my house - that is not inlcuding all the flats and two bed houses.

I have seen houses standing empty for months at a time.

A local development near me is now offering people £1000 a month subsidised mortgage payments because they can't shift the houses. Brand new houses - you know - the ones that we need building urgently to house this growing population of ours.

I have seen one house (renovated house) near me that stood empty for nearly 2 years. Another one has been standing empty for nearly a year.

Don't even get me started on the city centre flats that are stood empty

As a result prices are starting to fall. I looked at a house the other day that was sold in 2004 for £178K it is now on the market for £169K. Another one I viewed was up for sale at £199K reduced the following week to £195K. Another -up for sale at £180K - sold for £135K. Another up for sale at £190K - sold for £155K

I could go on but I won't

There is no shortage of houses - just a shortage of houses that people can afford to buy.

roswell

A builder in the vilage my mom lives in has packed up and moved out leaving 50 shells of NEW houses .... but im sure theres no oversupply like the fact that the 20 he build before these only 6 have sold in 8 months since they were completed.

mi-key

I think a point missed is that the higher interest rates go, the higher mortgage rates go and the less FTB's you will get.

And who are the majority of new builds aimed at ??? exactly ! take out the FTB's and the property ladder grinds to a halt.

wibble68_2

Tycoon wrote:

House prices are mainly controlled by supply and demand so less houses available means higher prices in the future.

I would be interested to know who is going to buy these very expensive houses in the future?

noyk

There is no space/land shortage in this country either, it is a myth propogated in large part by large land owners - Read the executive summary - http://www.policyexchange.org.uk/images/libimages/143.pdf

The planning system is largely at fault, we live on far less of the land than you may think (8%).

PoorDave

Angela_D wrote:

There is a massive over supply of flats which are stood empty and the prices are falling.
The big difference this time will be the IVA's they are delaying people who should alreay have been reposessed loosing their homes but statisically people who run up credit cards then get bailed out by remortgaging or IVA's get into difficulties again within a very short period of time and the banks won't bail them out twice. The chickens will come home to roost it's just going to take longer this time and I must say i'm bored of waiting already.

Your first sentence is only true in some areas (near you?).

As with a lot of things, you make it sound like it's a universal thing nationwide, when it's not.