House price rises

BobProperty

roswell wrote:

Neither would be pretty,

Lets hope china doesnt go spending all those Dollars.

Unfortunately I don't think the Chinese will keep hold of Dollars at the same time as the US government keeps printing extra Dollars at the current rate (c 13%). They will want something more intrinsically valuable and will start to buy US stock and real estate with their Dollars. The comment about Americans needing to learn how to say please and thank you in Chinese and how to use a shoe-shine kit might have an element of truth to it. :eek:

tomstickland

ukbondraider wrote:

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)

This is a very convenient argument but I don't think it is correct.

Alan_M_2

lisyloo wrote:

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 just saying that they are.

Taking your answers in order.

1) I have yet to see ANY data that links immigration in any way shape or form with house price increase, I've not even seen a theory that holds any water to this effect either, I covered this point in a post on a thread last week.

I have seen data showing that immigration is halting wage inflation and increasing unemployment of naturalised citizens though.

Points 2,3 & 5 are all variations on BTL or property investment which accounts for 8% of the market as a whole, so how is the other 92% causing this growth?

Point 4) is really the only valid point, anyone with an existing property in which their equity has grown has a sizeable deposit for their next property, therefore making it easier to get a favourable mortgage on what is probably a sensible income multiple. 1 out of 5 doesn't go very far though does it......

lisyloo

So what do you think it is that has supported house prices rising over the last 5 years while salaries haven't matched the increased.

I may not have nailed it but something definitely has.

meanmachine_2

lisyloo wrote:

So what do you think it is that has supported house prices rising over the last 5 years while salaries haven't matched the increased.

I may not have nailed it but something definite has even if it is just speculation.

Joe Bloggs can borrow X amount more for the same wage from a high street lender.

Simple.

Gorgeous_George

Alan_M wrote:

1) I have yet to see ANY data that links immigration in any way shape or form with house price increase, I've not even seen a theory that holds any water to this effect either, I covered this point in a post on a thread last week.

I have seen data showing that immigration is halting wage inflation and increasing unemployment of naturalised citizens though.

So, 182,000 people a year do not need homes.

Do you watch Bid-up on Sky?

If there are 5 gizmos and 6 buyers the price goes up. It's not rocking horse science



GG

Gorgeous_George

meanmachine wrote:

Joe Bloggs can borrow X amount more for the same wage from a high street lender.

Simple.

...and that's because he can afford to repay it (at the moment at least).

It follows that if lenders didn't lend any money, houses would be virtually free.



GG

lisyloo

So, 182,000 people a year do not need homes.

I do agree to an extent with Alan M.
Many of these people come over and stay in caravan on fruit farms. The Polish fishermen actually sleep on the fishing boats 8 to a cabin.
I find it hard to believe that NONE of them have any proper accomodation but I certainly agree that some of them are not consumers.
Don't have any proper numbers either way I'm afriad.

Joe Bloggs can borrow X amount more for the same wage from a high street lender.

Following that logically then prices can only rise if lenders continue to loosen lending criteria or come up with increasingly outrageous schemes.

It follows that if lenders didn't lend any money, houses would be virtually free.

In a sense you are right George.
They would be passed down families as inheritance.
So free apart from inheritance tax.

meanmachine_2

lisyloo wrote:

Following that logically then prices can only rise if lenders continue to loosen lending criteria or come up with increasingly outrageous schemes.

Prices can only rise with wage inflation unless banks again loosen criteria.

But also other costs such as bills have to stop rising above inflation and IRs MUST remain benign.

lisyloo

But also other costs such as bills have to stop rising above inflation and IRs MUST remain benign

Personally I think IRs will rise next year.
I also predict that council tax bills will rise above inflation until there is a significant change in governement.

Fuel is probably fairly benign for now.