Amazingly Niave Theory

ILW

Just as an idea, if prices had stayed at around 2000 levels (around half what they are now) wouldn't things been better overall for most people?

geneer

HAMISH_MCTAVISH wrote: »

Increasing house prices are neither good or bad. They are simply inevitable over the medium to long term so long as we build less houses than we need.

Funny how "house prices can only go up" has changed to "house prices can only go up...long term".

HAMISH_MCTAVISH

geneer wrote: »

Funny how "house prices can only go up" has changed to "house prices can only go up...long term".

I've never said "house prices can only go up".

So the only change you'll be seeing today is the one where the new shift of nurses come on at 6pm geneer....

StevieJ

ILW wrote: »

Just as an idea, if prices had stayed at around 2000 levels (around half what they are now) wouldn't things been better overall for most people?

But wouldn't there be more competition to buy them (increased effective demand) thus pushing up the price?

des_cartes

julieq wrote: »

They can rise because everyone has to live somewhere, and the imbalance between household creation and housebuilding increases demand against restricted supply. The choice is not whether you want to live somewhere, but essentially how you want to structure financially the way you live there, whether via rental, leasehold (in my view the next big thing will be an expansion in leasehold tenure), or freehold.

You'll also see acceleration in prices in desirable places against slower increases in less desirable places, because nice houses will be cherry picked by the better off. This is currently very visible if you look at the gentrification over the past 30 years of rural locations. And probably an increased density in urban living, which is also becoming visible.

The only way to increase owner occupation long term are to increase supply relative to demand (build more, or create less households). What we seem to be doing now is throttling demand by rationing mortgages to reduce owner occupation rates. That may stabilise prices but the cost is a lower owner occupation rate, and since repossessions are low and inherited houses will be used in most cases to pass on owner occupation one way or another, the only thing that can possibly happen is that first time buyers will be excluded from the market. And since they do have to live somewhere, they provide a ready income stream for property owners via rental or lease.

And that ready income stream will keep rising despite forthcoming year on year benefit cuts and rising unemployment amongst former would be ftb's? Thats where your theory hits the rocks, less money available for housing costs either through purchase or rental is incompatable with rising prices.

chucky

des_cartes wrote: »

And that ready income stream will keep rising despite forthcoming year on year benefit cuts and rising unemployment amongst former would be ftb's? Thats where your theory hits the rocks, less money available for housing costs either through purchase or rental is incompatable with rising prices.

when you assume that you need 100% of people to get pay rises and/or 100% of people to be able to afford property; your post crashes and burns unfortunately......

Linton

des_cartes wrote: »

And that ready income stream will keep rising despite forthcoming year on year benefit cuts and rising unemployment amongst former would be ftb's? Thats where your theory hits the rocks, less money available for housing costs either through purchase or rental is incompatable with rising prices.

The % unemployed is pretty low - something like 95% of people arent unemployed and I would be amazed if this drops to below 90%. Similar story applies to benefit cuts - I dont think its a major change except perhaps in the more expensive parts of London.

des_cartes

chucky wrote: »

when you assume that you need 100% of people to get pay rises and/or 100% of people to be able to afford property; your post crashes and burns unfortunately......

Market forces will determine the future path of house prices. We have had 6 months of market forces doing their stuff and guess what has happened to house prices.

chucky

des_cartes wrote: »

Market forces will determine the future path of house prices. We have had 6 months of market forces doing their stuff and guess what has happened to house prices.

yes because taking a 6 month trend in house prices tells us what's going to happen over the next 10 years for house prices... oh dear...

FATBALLZ

StevieJ wrote: »

Do you actually believe that crap?

Certainly more than I believe that the property market is akin to a lovely happy ferris wheel where everyone gets equal opportunity and enjoyment. Unless Hamish ommitted to mention the ferris wheel is lubricated with oil created by grinding down the bodies of the post-1980 generation.