Most are finding life far worse, so what do we need, higher house prices!!

IveSeenTheLight

Graham_Devon wrote: »

It was hard work with my parents. They own outright, no mortgage, ONLY due to the boom. They were able to sell up and move and buy outright, due to near 600% increase on previous family home in 10 years. (53k bought, sold 293k)

It's only recently I have been able to tell them, if they want to move up a little bit (which they do) they want house prices to fall as much as possible.

Dad got it pretty much straight away, but mum was hard to convince. All she could see is if the house went up in value she now had 210k instead of 200k. 210k buys more than 200k, right?

Trying to tell her the next house was now 250k instead of 230k and she now needed 40k cold hard cash instead of 30k cold hard cash for the move was frustrating to say the least.

Took a long time for her to see she's actually worse off if house prices rise. Didn't even get round to stamp duty and higher legal fee's every time prices rise.

When I get to the point where my children move out into their own properties (sounds similar to your mum and dad's circumstances), I'll likely be looking to downsize rather than upsize.

Certainly HPI benefits downsizers in your scenario.

ILW

IveSeenTheLight wrote: »

What does that scenario do to demand?
Effectively 1 household now requiring three houses.
It increases demand.

Has supply matched that increase in demand over the years?
Could that contribute to sustaining house prices?

If you want prices to lower so that owner occupancy should increase to match lower average wages, you need a vast increase in supply

No arguments about that, the discussion was more about whether rising prices were of benefit to everyone that owned a house, rather than the causes of rising prices.

ILW

IveSeenTheLight wrote: »

I'm a homeowner, father and BTL LL to boot.
I do want my children to be able to afford decent housing.

That said, I can accept the criteria which drives the market as it does and try to position myself so that my family can benefit in the long run.

You should possibly consider the long term benefit than hope / moan / cpmlain about your short sighted vision of the future.

Inflation does tend to benefit those with a "spare" house and not many kids

Percy1983

IveSeenTheLight wrote: »

What does that scenario do to demand?
Effectively 1 household now requiring three houses.
It increases demand.

That doesn't quite work, as in I can use my family as an example,

If everybody has 2 children the number of houses needed remains, the only factor is how many gnerations are alive at any one point. (Yes I know the average is more than 2 children). So if one household becomes 3 this then means another 2 less households are made elsewhere as in both cases me and my bother are with women form other households. Not an exact science but more accurate than 1 becomes 3.

Graham_Devon

IveSeenTheLight wrote: »

Certainly HPI benefits downsizers in your scenario.

That cannot be argued in monerty terms.

But you don't know their personal circumstances. The interest only mortgage which they had no way of paying off, as the endowment wasn't even close to paying it off and would have provided a shortfall of around 60% at the end of the mortgage.

They didn't move because they WANTED to move. They moved because their interest only mortgage was forcing their hand.

Without HPI, yes, they would have been a little stuffed. But they loved that house. Sudden illness scuppering any plans, and an interest only mortgage and they had to go.

It was only a 3 bed house. Nothing spectacular. Downsizing from that is limited.

Now, they have a shedload of money in a house, are in retirement, but don't really have the means to go on holiday. All the money is in the house.

the_flying_pig

From the small area in my office where I sit here’s a reasonably wide, representative sample of the views on HPI of the four ‘homeowners’ nearest to me [ages rounded to nearest 5 yrs] - just as on this forum it's the old, the childless, the non-aspirational, & the debt-ridden who want HPI:

(1) Male, single, aged 45. Owns two flats, one to live in, one BTL [the latter being IO and with very low equity]. No plans to upscale to a bigger pwoperdee or have family. Very, very, eager indeed to see more HPI. Loves it. Unable to comprehend that anyone else might not feel the same way.

(2) Female, aged 55, children aged 25 [daughter] & 20 [son], owns a big/valuable house with minimal mortgage. Next move will be to downsize. Is basically pro HPI but attitude has very noticeably softened in the last couple of years from being a huge cheerleader of it circa 2006 [‘Krusty and Gordon are making us all squillionaires! They’re my heroes!’] to being much, much more circumspect [‘my daughter can’t afford to buy a flat on her own even though she has a good job. I’d like to see house prices in the areas that she’s looking at to fall/not rise… with, obviously, a return to HPI sharpish in the area where I live’ {slightly tongue in cheek on the latter point}].

(3) Male, aged 30, married with child aged 1, probably plans to have another. Owns a small house [with, say 25%, equity], wife a stay at home mum. Would be extremely upset to see HPI because it would put the next rung further out of reach.

(4) Male, aged 35, married with heavily pregnant wife. Owns a flat outright, actively looking to trade up. Would be extremely upset to see HPI.

Blacklight

Doesn't really matter what your view is, the fact is that inflation is inevitable. I'm still not sure why some people think there will be 80% deflation of house prices in the the forthcoming months... seems a bit 'we didn't land on the moon, Bush blew up the trade center and Freddie Star ate my hamster' to me.

the_flying_pig

Blacklight wrote: »

Doesn't really matter what your view is, the fact is that inflation is inevitable...

in the very long run it is, yes, absolutely. but it's very, very transparently nothing of the sort in the short run [open any newspaper of the last 3-4 years to understand why]. there could be significant benefits from waiting.

Blacklight wrote: »

...I'm still not sure why some people think there will be 80% deflation of house prices in the the forthcoming months...

i don't think that anyone sensible does believe in 80% falls.

you'd be talking about far bigger falls from peak than ireland, despite their bubble being far bigger/peak far higher & their having built far more houses.

but nice 10%+ falls are eminently plausible. a wait of 5-10 years for nominal increases from this point equally so.

DervProf

ILW wrote: »

Inflation does tend to benefit those with a "spare" house and not many kids

Anyone who fits that description, who is also greedy, would probably welcome every bit of HPI with a :beer:, no matter how much it makes life harder for those who don't own even 1 property.

Now, who does this remind me of ?

DervProf

the_flying_pig wrote: »

From the small area in my office where I sit here’s a reasonably wide, representative sample of the views on HPI of the four ‘homeowners’ nearest to me [ages rounded to nearest 5 yrs] - just as on this forum it's the old, the childless, the non-aspirational, & the debt-ridden who want HPI:

I`m so glad I dont work in an office. I`m sure a lot of such workplaces have characters like number 1 in your list.

How do you avoid telling him he's a completely selfish c**k every day ?