House price rises

abaxas

tomstickland wrote:

Why will house prices continue to rise whilst salaries don't?

Please pick your answer from the following.

1) It's different this time
2) House prices only go up
3) House prices double every 7 years
4) I forgot about the 90's crash so assume the last 15 years is the norm
5) I present a property !!!!!! program on C4
6) I am right therefor you are a plonker.

Gorgeous_George

It is highly unlikely (without close to 0% interest rates) that prices will continue to rise at a rate greater than wage inflation.

The only question, in my opinion, is whether they fall or level off. Any fall could suffer a snowball effect and turn rapidly into a crash.



GG

barnaby-bear

tomstickland wrote:

Why will house prices continue to rise whilst salaries don't?

I think some of it is to do with a change in the way accommodation is used, it's not one salary buying a family home now it's somewhere between one and two and it seems to be pushing more towards two.
Also my previous landlord was renting a 2-bed place to us as a couple (rent lower than mortgage) however property now more valuable as rent greater than mortgage as he has two Lithuanian couples living there.
I think it's a big mess but certainly the ratio of property to single salary has changed but how many salaries being used to rent/buy accommodation has changed.

ukbondraider

Rick62 wrote:

Well thats cleared up that question. Lets all pile into property because its going to keep rising 10%/year forever.

Where do you get your arrogance?

Are you stupid aswell. I didnt say I expect prices to continue to rise every year. I am saying I do not expect a crash like people keep on referring to. Let me go on record and say that I in fact would love a fall in house prices for personal benefit but I am being realistic and believe there will not be one.

I am not arrogant. I just get impatient with people who take a dig at others because they cant comprehend the english language.

ukbondraider

talksalot81 wrote:

But why should someone earning this much be excluded?

Furthermore, why should timing be such a critical factor. 3 years ago an older friend was able to access the lower run of the ladder with a 13k salary. Today he owns the same house worth £180k, a house I could not begin to afford despite having a phd and 26k of salary. Is this something that should worsen? In another 3 years will it then be impossible for someone not earning 50k to afford this house?

It has got to stop somewhere...

I agree it will stop and I wouldnt be surprised if prices stayed relatively stagnent for the next 10 yrs including interest rates. What I dont believe is that a 50% fall is imminent because people on £15K cant currently buy.

ukbondraider

As for the other argument with affordability, there are alot more people who can afford than you realise. Like I have pointed out, the reason why they dont think they can afford is because they want to live in the "nice" neighbourhood and the "nice" house. Grimsby has been mentioned alot in this thread. You tell me how many of the population couldnt afford a place in Grimsby.

There are plenty of affordable areas. The problem is that shop assistant number 1 wants to live with Ryan Giggs in the suburbs of manchester and shop assistant number 2 wants to live near Robbie Williams.

(OK a slight exaggeration here but I am just trying to get across a point)

lisyloo

Please pick your answer from the following.

1) It's different this time
2) House prices only go up
3) House prices double every 7 years
4) I forgot about the 90's crash so assume the last 15 years is the norm
5) I present a property !!!!!! program on C4
6) I am right therefor you are a plonker.

And now for some more sensible answers :-)

1) Supply and demand (500 people coming into this country every DAY)
2) People diverting more of their income into property e.g. money that would previously have gone into pensions.
3) People increasingly investing because they are speculating on the market continuing to rise (you can call these people BTL muppets if you like).
4) People buying are "haves" e.g. older couples with equity and not "have nots" e.g. first time buyers.
5) Property renovation, BTL and second homes becoming more popular.

BTW - I am not saying that all these people are right to invest (in fact I wouldn't). I am jsut saying that they are.

ukbondraider

lisyloo wrote:

(you can call these people BTL muppets if you like).
QUOTE]

Yes very sensible answers indeed . You sound like someone with a chip on your shoulder. Whether you are referring to new or old BTL folks, just because you dont agree doesnt mean they are muppets.

lisyloo

I apologise. I would like withdraw that "joke".
I am not very good at jokes.

On the fool board these people are described as "BTL muppets".
Some people (who invested at the right time) have made millions and don't have to work anymore so they are anything but "muppets".
It's kind of ironic that they are called that.

I'm sorry that joke fell flat.
I don't have a chip on my shoulder.
If people have taken a risk and made money from their own hard work then they have my full respect.

Please can we ignore my stupid joke as I think the other points were all valid.

BobProperty

cwcw wrote:

I don't think anyone believes property can continue its current growth, but I don't see why there has to be a crash just because there has been in the past. The situation is "different this time"........

Just like it was with Tulip bulbs, the south sea company, shares in 1929, property in 1989, dot com companies.......