Can anyone explain....

Cleaver

HAMISH_MCTAVISH wrote: »

Not really.

You can accurately sum it up in a relatively short post:

Demand exceeded supply. The primary cause was an increase in demand due to population growth and household creation exceeding the insufficient supply of new housing. The enabler of increased demand was an expansion of credit. Areas of particularly high increases were where the highest levels of demand, (particularly around areas of high employment) met the lowest levels of housebuilding (particularly around densely populated areas).

Of course, the OP has no interest in accepting the truth, and will doubtless just regurgitate the same nauseatingly trite bear memes ad infinitum.

So that was the only reason Hamish, just supply and demand?

I fully agree that this was one of the main reasons, but it certainly wasn't the only reasons. Even you, with your lovely rose coloured glasses, couldn't have failed to notice the love in that the British public and financial institutions had with property over the past decade or so. There was (and still is, to come extent) a whole culture dedicated to making money out of property, bordering on an obsession in some places. You cannot tell me, with an internet straight face, that weird and wonderful lending, buy to let, the boom in our economy, propety as a pension, second homes, low interest rates, Location, Location, Location, property in the media, an aspirational culture etc. etc. didn't have some effect on rising house prices. Of course they all did.

The bear memes you speak of are exactly the same as the bull memes you spout. Both are 'true', to some extent, but most normal-minded people know that the real truth lies in the middle of the two extremes.

HAMISH_MCTAVISH

Cleaver wrote: »

So that was the only reason Hamish, just supply and demand?

There is nothing else.

weird and wonderful lending, buy to let, the boom in our economy, propety as a pension, second homes, low interest rates, Location, Location, Location, property in the media, an aspirational culture etc. etc.

All merely components of demand.

And all secondary to the fundamental issue.

Which is that we simply did not build enough houses to keep up with population growth and new household formation.

Or to put it another way, if anyone is mental enough to think supply and demand is not the reason for the UK's house prices being what they are, then answer this one simple question.....

If the magic house fairy came along and sprinkled some magic fairy dust and put twenty million new empty houses up for sale overnight....

Would house prices rise or fall?

The answer, by the way, is FALL. Not just fall, but plummet, tank, dive, crash, or any other word you care to think of for "the opposite of rise".

If you added 20 million houses in the UK, prices would crash, no matter how much credit was available.

For exactly the same reasons a 3 bed victorian terrace in the north of England can be had for 60K, whilst an almost identical 3 bed terrace in central London costs 600K. Despite the lending criteria in Manchester during 2007 being exactly the same as in Mayfair during 2007.

Supply and demand is THE ONLY driver of UK house prices.

If it was lending then prices would have risen equally everywhere.

the_flying_pig

HAMISH_MCTAVISH wrote: »

There is nothing else.



All merely components of demand.

And all secondary to the fundamental issue.

Which is that we simply did not build enough houses to keep up with population growth and new household formation.

Or to put it another way, if anyone is mental enough to think supply and demand is not the reason for the UK's house prices being what they are, then answer this one simple question.....

If the magic house fairy came along and sprinkled some magic fairy dust and put twenty million new empty houses up for sale overnight....

Would house prices rise or fall?

The answer, by the way, is FALL. Not just fall, but plummet, tank, dive, crash, or any other word you care to think of for "the opposite of rise".

If you added 20 million houses in the UK, prices would crash, no matter how much credit was available.

For exactly the same reasons a 3 bed victorian terrace in the north of England can be had for 60K, whilst an almost identical 3 bed terrace in central London costs 600K. Despite the lending criteria in Manchester during 2007 being exactly the same as in Mayfair during 2007.

Supply and demand is THE ONLY driver of UK house prices.

If it was lending then prices would have risen equally everywhere.

not one of your better efforts, that

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

If the magic house fairy came along and sprinkled some magic fairy dust and put twenty million new empty houses up for sale overnight....

Would house prices rise or fall?........

Except now consider that the fairy has been forced to charge an absolute minimum of the current market rate for the land, plus the market cost for building them.

Not quite so clear cut, then. Especially since they would not be near railways, nor 'good' schools, nor convenient villages/town centres.....

HAMISH_MCTAVISH

Loughton_Monkey wrote: »

Except now consider that the fairy has been forced to charge an absolute minimum of the current market rate for the land, plus the market cost for building them.

And if the fairy did that, then they would not constitute an effective part of supply so long as market prices remained below that point.

A house that cannot be bought for a 20% discount, is useless to someone wanting to buy at a 20% discount. A point that frequently seems to be lost on some around here.

Especially since they would not be near railways, nor 'good' schools, nor convenient villages/town centres.....

And yet everyone must live somewhere.... So more people must live together in the houses near those amenities, driving up household income and thus yield/price, or some must live further away, in cheaper houses....

Did you set out to prove my point for me, or was it accidental?

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

Did you set out to prove my point for me, or was it accidental?

I am not setting out to prove, or disprove, your point.

Your point, I believe is that house prices are governed by supply and demand.

Agreed!

You went on to say that if the fairy magiced up 20 million new houses then prices would "plummet, tank, dive, crash". Well maybe, but I was making the point that if they were in less desirable areas, and had to be sold at 'cost' then that fixes the price. If, despite that, they matched 'demand' then yes, prices would fall.

If, on the other hand, their price was way above other (existing) available housing stock, then you'd end up with 20 million extra photographs of unsold houses in the EA windows.

How many builders have actually left their developments at the footings stage [lots around here]? It's for the simple fact that they recognise that after paying to build them, they could not sell thm - except at a loss. Hence they are keeping thier hard-earned in the bank until such time as they are confident of selling them at a profit. And that's not yet.

Suppy and demand basically!

Shupufski

HAMISH_MCTAVISH wrote: »

There is nothing else.



All merely components of demand.

And all secondary to the fundamental issue.

Which is that we simply did not build enough houses to keep up with population growth and new household formation.

Or to put it another way, if anyone is mental enough to think supply and demand is not the reason for the UK's house prices being what they are, then answer this one simple question.....

If the magic house fairy came along and sprinkled some magic fairy dust and put twenty million new empty houses up for sale overnight....

Would house prices rise or fall?

The answer, by the way, is FALL. Not just fall, but plummet, tank, dive, crash, or any other word you care to think of for "the opposite of rise".

If you added 20 million houses in the UK, prices would crash, no matter how much credit was available.

For exactly the same reasons a 3 bed victorian terrace in the north of England can be had for 60K, whilst an almost identical 3 bed terrace in central London costs 600K. Despite the lending criteria in Manchester during 2007 being exactly the same as in Mayfair during 2007.

Supply and demand is THE ONLY driver of UK house prices.

If it was lending then prices would have risen equally everywhere.

I see that ignorance remains your forte.

Is there no room for nuance in your life?

pqrdef

HAMISH_MCTAVISH wrote: »

If the magic house fairy came along and sprinkled some magic fairy dust and put twenty million new empty houses up for sale overnight....

Would house prices rise or fall?

But prices would fall if the fairy announced the new houses, without actually building them. Prices would fall because people would expect them to fall, and would try to get out first. Same as share prices fall, without anybody issuing new shares. Prices respond to expected price movements. Positive feedback.

Economics 101

How cabbage markets work.

Farmers grow cabbages and cut them and take them to market next day to sell them, Cabbage-eaters go to market to buy the cabbages they want to take home to eat the next day. If supply is high and demand is low, prices are low. If supply is low and demand is high, prices are high.

Economics 102

How cabbage markets really work.

People study the cabbage market. They look at how many cabbages are in the fields and whether its good cabbage-cutting weather. They look at how hungry the cabbage-eaters are and what Delia's next recipe is. If they decide the price of cabbages is likely to go up, they buy cabbages and store them to sell later. If they think the price is going down, they offload what they've got in storage. Soon, this dominates the market, so the price today has no relation to how many cabbages were cut yesterday or how many will be eaten tomorrow.

Prices are fixed by market supply and demand, not by underlying supply and demand.

HAMISH_MCTAVISH

pqrdef wrote: »

Prices are fixed by market supply and demand, not by underlying supply and demand.

Economics 103.

The influencing factors on supply and demand within the housing market are very different to those of the cabbage market.

Graham_Devon

HAMISH_MCTAVISH wrote: »

There is nothing else.

Then please.

Do shutup about mortgage famines, mortgage rationing etc etc etc