House price rises

mr.broderick

Alan_M wrote:

I've seen this statement bounded around from time to time but have yet to see any evidence to back it up.

I don't think immigration is a whole world different than it has been for years, although where these immigrants are coming from may well have changed.

Anyhow, how are these immigrants going to effect house prices? They are hardly likely to be earning enough to buy a property, and even if they were the won't get a mortgage as they'll have only just entered the country.

Ahh I hear you say, they will keep everything going via rentals and buy to let etc....well BTL accounts for approximately 5% of mortgages, the other 95% being owner occupier, of course I don't have a figure to add to this for cash buyer investors that are renting etc. but even if we doubled the 5% that's hardly enough to create boom and bust scenarios.

So I'd be very interested to know how you think immigrants are actually supporting house prices or even contributing towards the supply and demand that you suggest?

Do you have any corroborative evidence of the same or is it just a theory that you've arrived at yourself?

Alan i have been thinking about this for a while now, i just dont buy the immigration theory on hpi, in fact i am still not certain why its happening at such a dramatic rate but i do believe a lack of ftb property has had an effect, definitely here in lancashire.

Alan_M_2

There's certainly a lack of affordable FTB properties around (unless all the FTB's are obliged to move Grimsby of course:)).

I'm a bit baffled how we've ended up where we are, I live in Surrey in a village that is one of the pockets of extreme price rises, in a two bed semi that was built in the 90's as a starter home, it's now £300K, how on earth is that a starter home?

The only conclusion I've come to is that the lenders have torn up the rule book and caused a runaway inflation in prices. It will continue as long as there are companies willing to lend the sums of money required.

meanmachine_2

mr.broderick wrote:

Alan i have been thinking about this for a while now, i just dont buy the immigration theory on hpi, in fact i am still not certain why its happening at such a dramatic rate but i do believe a lack of ftb property has had an effect, definitely here in lancashire.

At last something we agree on.

The real effect daily reports of Poles "flooding" the nation has on homeowners is one of sentiment.

It's also another "fundamental" the lenders put in their monthly reports.

Really it's just used to scare the bejesus out of buyers and pursuade them to part with ever more money.

In my local area we have around 12 Poles. They live in a caravan in a layby.

Effect on housing stock? Zero.

talksalot81

cwcw wrote:

I know. I was responding to the specific statement by zkeithz: "I doubt very much if the average wage earner has experienced an increase of much more than 20% in 10 years". In fact, wage inflation has been around 30% or more in the last 10 years. House price inflation has been almost 300% in that period. Interest rates 10 years ago were about 6%, so houses were clearly underpriced at the time. I wish I was a buyer 10 years ago.

My apologies and ditto to your sentiment. In fact in Northern Ireland I would be happy to have been a buyer ONE year ago. The figures have shown an outright 30% increase but on the ground it seems to be worse than that. Many of the houses that were 140k sale at the end of 05 are on the market at ASKING of 180k. There is the 30%... but asking price is currently starting price (it is like ebay!) and most of last years 140k properties are now well over 200k... at least in the general belfast area.

Silly really, last year I was getting about 12k take home pay and obviously couldnt quite get on. This year I am engaged and we have a combined take home pay about 2.5 times higher and are actually no close to affording anything!

talksalot81

mr.broderick wrote:

Alan i have been thinking about this for a while now, i just dont buy the immigration theory on hpi, in fact i am still not certain why its happening at such a dramatic rate but i do believe a lack of ftb property has had an effect, definitely here in lancashire.

Ditto to you and the others. If an average earning skilled UK individual is having to pay 6.5x, it is totally daft to the that a pole with a low payed MacJob is going to be managing!

empfun

What would be the likely outcome of property prices should every single immigrant over the last decade leave the country. One must also consider the social and economic impact from immigration.

talksalot81

talksalot81 wrote:

Ditto to you and the others. If an average earning skilled UK individual is having to pay 6.5x, it is totally daft to the that a pole with a low payed MacJob is going to be managing!

It has elsewhere been suggested that it is not the buying but the renting which is the immigant effect. The presumption is that this drives the demand for rental properties and hence drives the BTL sector. All pretty logical really. Yet the explanation confuses me because many will claim BTL to be a relatively insignificant portion of the market...

roswell

Even if they are renting it cant be a big enough impact on the housing market, i would expect interest rate rises and Christmas to have more effrct on the housing market than a few more people renting houses that are already TO LET

Ad

I've been following this madness for several years now and I'm now convinced that the immigration and the so called housing shortage isn't the major issue. If immigration was such a major cause then why haven't rents increased? My rent hasn't changed for three years. How many immigrants are able to purchase property in the UK?

There is already plenty of evidence of investers holding onto property and not even renting them out just to cash in on the appreciation.

The housing market has got into this mess from one main factor 'speculation'. The blame is at the foot of this Labour government for allowing this to have happened. They have not only allowed it but they have propped up the market with ludicrous part buy schemes.

tomstickland

I also think that the immigraion argument doesn't add up. It's a nice "daily-mail friendly" angle to take though. It combines the "if you don't buy now you'll never afford a property" scare with "it's those evil immigrants" in a nice package of fear and nonsense.