rents on an upward trajectory

the.ciscokid

HAMISH_MCTAVISH wrote: »

That entirely depends on the supply of funds.

Wut?

As demand for the limited bank lending increases, which it naturally will with record low numbers of transactions, the debt will get more expensive... one way or another.

HAMISH_MCTAVISH wrote: »

Speculation without foundation.

If stuff you need gets more expensive, other stuff becomes less affordable. I don't think this is a particularly ground breaking concept that needs much justification.

HAMISH_MCTAVISH wrote: »

Plenty of periods with rising rates and rising house prices in UK housing market history.

Can you list a couple of those? I would like to check if the economy was utterly destroyed, with record debts, significant cuts in public services, and lots of job losses at the same time as these increasing rates and prices. In fact, I assume these fabled increases in rates of which you speak was probably due to increase demand for the debt, no?

HAMISH_MCTAVISH wrote: »

Umm, yes they are. On every index, from every source.

Not only that, but void periods are reducing. Supply simply can't keep up with demand.

Rents are soaring alright, and will keep on doing so until supply increases or demand reduces. Neither of which are likely in the medium term.

So demand causes increase in prices now?

Maybe the large search areas I look at around the south east don't suffer with this excess demand. My rent hasn't increased, in 2 years.

HAMISH_MCTAVISH

the.ciscokid wrote: »

Wut?

As demand for the limited bank lending increases, which it naturally will with record low numbers of transactions, the debt will get more expensive... one way or another.

I see.....

And the increased demand for lending that led owner occupation to reach record levels between 1990 and 2007 led to more expensive lending, did it?

Funny.... As I recall, it did exactly the opposite.

The key of course is supply. When the supply of funds available to lend increases, competition will drive down bank margins and therefore borrowing costs will fall.

If stuff you need gets more expensive, other stuff becomes less affordable. I don't think this is a particularly ground breaking concept that needs much justification.

Actually, stretching that concept to state with 100% certainty that when interest rates rise the price of houses automatically falls IS a groundbreaking concept, because it's just blatantly wrong.

Plenty of occasions in the past when that has not been the case.

Can you list a couple of those? I would like to check if the economy was utterly destroyed, with record debts, significant cuts in public services, and lots of job losses at the same time as these increasing rates and prices.

Sure.

Try researching the 1970's and 1980's.... And as I recall, the economy was in pretty terrible shape then too.

In fact, I assume these fabled increases in rates of which you speak was probably due to increase demand for the debt, no?

No.

Due to inflation, and/or political meddling to control exchange rates of the currency.

Maybe the large search areas I look at around the south east don't suffer with this excess demand. My rent hasn't increased, in 2 years.

Ah yes..... Anecdotal stories, far more convincing than national rent indices. :rotfl:

the.ciscokid

HAMISH_MCTAVISH wrote: »

I see.....

And the increased demand for lending that led owner occupation to reach record levels between 1990 and 2007 led to more expensive lending, did it?

Funny.... As I recall, it did exactly the opposite.

The key of course is supply. When the supply of funds available to lend increases, competition will drive down bank margins and therefore borrowing costs wil[l fall

Yes, with liquidity (and a generous helping of stupidity) there, the assets increased in price. Ergo the opposite is true?

HAMISH_MCTAVISH wrote: »

Actually, stretching that concept to state with 100% certainty that when interest rates rise the price of houses automatically falls IS a groundbreaking concept, because it's just blatantly wrong.

Plenty of occasions in the past when that has not been the case.

So, you do agree with a figure of less than 100% certainty, so how certain are you the opposite is true?

Do you agree as prices go up, people can afford less of it? If not, why not, and why is debt different from other things people want?

HAMISH_MCTAVISH wrote: »

Sure.

Try researching the 1970's and 1980's.... And as I recall, the economy was in pretty terrible shape then too.

Are you saying the entire 2 decade period, or just at certain points in time, shortly after interest rates increased rapidly, we still saw a few things sell at the old price level? Care to narrow it down a bit?

HAMISH_MCTAVISH wrote: »

No.

Due to inflation, and/or political meddling to control exchange rates of the currency.

What is inflation, does it have anything to do with demand (or lack of supply)?

HAMISH_MCTAVISH wrote: »

Ah yes..... Anecdotal stories, far more convincing than national rent indices. :rotfl:

I am intrigued that you find this fact amusing.

My evidence, and my experience are the only ones that are ones 100% guaranteed to be factually correct if we are comparing my evidence with these "infallible" indices. Something about lies, damn lies, and statistics? You could probably include surveys of vested interests in there, with lack of information about what methods they use, and how much of the market they cover.

drc

My rent has gone up a lot (in London) as there are few places and more people looking. I don't think this is good for anyone except landlords. It's certainly not good for the economy as obviously we have less to spend as we are paying it all to the landlord. I think there will also be a lot more people "defaulting" on their rent or having to take out loans/pay by cc. Not a good solution at all. The government needs to do some realistic long term thinking about rents/housing/the economy. If, as others have said, we are going to be switching to a rental culture, then tenancy law has to change so it is not so heavily stacked in favour of the landlord and more like Europe imo.

IveSeenTheLight

Graham_Devon wrote: »

Interest rates will be a pretty substantial catalist if you ask me.

Even estate agents won't embarass themselves any longer by denying rate rises will have a massive effect and prices have been held up by 0.5% base rates.

We'll see.
When this fails to materialise, what will be the next straw you cling to.
I've lost track of the previous straws (govt change, CGT change, BTL mass exodus, etc etc etc etc)

Graham_Devon

IveSeenTheLight wrote: »

We'll see.
When this fails to materialise, what will be the next straw you cling to.
I've lost track of the previous straws (govt change, CGT change, BTL mass exodus, etc etc etc etc)

You appear to be suggesting interest rate increase won't make any difference?

Do you actually believe this?

HAMISH_MCTAVISH

Graham_Devon wrote: »

You appear to be suggesting interest rate increase won't make any difference?

Do you actually believe this?

Interest rate rises up to about the 5% base rate mark will not create trouble or forced selling for the 97% of people who were working before the recession, who are still working after it. And who could afford those rates then, and still could today.

What even a small rate rise will do though is divert spending from other things into housing, which will destroy demand, weaken the economy, and ensure further rate rises are not needed for quite some time.

It's self regulating Graham..... The very fact we have so much debt in existence, is the very reason why rates will never be in double digits again in our lifetimes.

EVen the BOE admit the new neutrality level for base rates (ie the point at which rates above this level dampen the economy and rates below it stimulate the economy) is around 3% instead of the 5.5% of the last decade.

purch

I realise that this is slightly off subject, but.....

.....one of my casual sheep shag....oops sorry farm workers :eek: told me t'other day that his rent on his 3 bed HA (Magna WSom) house has just been increased from £93 to £100 per week.

(just over 7 1/2 % :eek:)

Graham_Devon

HAMISH_MCTAVISH wrote: »

Interest rate rises up to about the 5% base rate mark will not create trouble or forced selling for the 97% of people who were working before the recession, who are still working after it. And who could afford those rates then, and still could today.

What even a small rate rise will do though is divert spending from other things into housing, which will destroy demand, weaken the economy, and ensure further rate rises are not needed for quite some time.

It's self regulating Graham..... The very fact we have so much debt in existence, is the very reason why rates will never be in double digits again in our lifetimes.

EVen the BOE admit the new neutrality level for base rates (ie the point at which rates above this level dampen the economy and rates below it stimulate the economy) is around 3% instead of the 5.5% of the last decade.

Who is it you are trying to convince?

Sure can't be me, as we've been over and over it, with responses to this given to you, which you simply ignore....and then state the same in response on another thread.

Is it yourself, maybe? As one minute rate rises won't make any difference, but you will do all you can to argue as to why interest rates shouldn't rise.

the.ciscokid

HAMISH_MCTAVISH wrote: »

What even a small rate rise will do though is divert spending from other things into housing, which will destroy demand, weaken the economy, and ensure further rate rises are not needed for quite some time.

What if house prices fall as interest rates rise?

It's self regulating Hamish.