BOE's David Miles: House Prices will "Rise for Years"

N1AK

Graham_Devon wrote: »

Let me get this straight Hamish.

You can't see any problem with banks lending based on a future prediction of HPI?

I'm inclined to think this is fine. Banks already work on predictions of future behaviour. When they offer loans they need to calculate risk of default, interest rates over loan period etc.

Obviously two base assumptions remain key:
1/ That the same banks can't influence decisions by government or the BOE to assure their profit at the cost of the nation.
2/ That banks that make the wrong calls don't have to be bailed out again.

N1AK

suburbanwifey wrote: »

I made a good judgment buying my first home when I was 19, I struggled like you wouldn't imagine back then, porridge for dinner etc and going out when down the pan. But, its always best to have that struggle initially, as one day its worth it. I wouldn't be mortgage free by mid-forties as I am now, if I had not taken that first step, lived with the hard times and struggled as I did.

Sorry SUW but you got lucky. Judgement had very little to do with it. If you'd been 19 in 2007 and bought then the property would be worth around 20% less (ignoring the considerable inflation during the last 5 years). You'd probably be locked in negative equity and wishing you hadn't.

I rented for 5 years after leaving uni (2006-2011). Bought a house in 2011 for the price flats were going at back in 2006, own 50% of the property and will have it paid off before I turn 31.

I also got lucky when it came to timing and I'd prefer a system where prices were more consistent so luck was less important.

N1AK

suburbanwifey wrote: »

I do adore you Sibley, that brought a giggle and a smile so eloquently put! hehe. I wish I had the nuts to say that! :rotfl:

You struggled to buy a house by your mid-40s even without having children and you found Sibley's comment about the 'poor' accepting their station in life adroit? I would of thought, given how obviously financially unsuccesful you've been you'd know your place and keep quite.

Oh, and I've been thinking about paying someone to do my ironing, sounds like you could probably do with a proper income, so I'll keep you in mind.

Hope the above made you chuckle. I know how much you enjoy it when people mock those less fortunate than they are.

Graham_Devon

Going back to the original topic...

Miles also suggested that companies will sit on land, rather than building on it, in order to manipulate and push existing house prices up.

He does not state this is wrong, but we all know building companies have large land banks.

Maybe it's just time to get them to build on it? Or tax it? Neither of which will happen I know, but it's a bit strange that everyone knows these things are going on but are perfectly happy to allow the manipulation of prices.

CRASH_BANG_WALLOP

suburbanwifey wrote: »

I've often wondered about this: you say it would take 3 or 4 years to save that deposit. In the meantime, during that 3 to 4 years they are saving, house prices keep going up. So, when the 4 years passes, they need to save still more? how does that work, do they ever catch up when they have to save for so many years now? (house prices keep going up in those years! surely better to get a 100% mortgage and be paying that mortgage off in that 4 years no?)

they are not going up everywhere! surely you are not that thick missy

fellwalker09

So, Hamish Mctavish thinks the economy is recovering -don't make me laugh. Anyone who thinks so is totally misreading the situation. I's got a long way to go yet and quite frankly, the signs are there that indicate it is not recovering at all!

wotsthat

Graham_Devon wrote: »

Maybe it's just time to get them to build on it? Or tax it? Neither of which will happen I know, but it's a bit strange that everyone knows these things are going on but are perfectly happy to allow the manipulation of prices.

If you or I invest in an asset we want the asset to rise in value. Why should some people or companies be required to invest but not look for a return on investment?

Nothing to stop individuals buying land and trying to get permission to build on it.

If we want more houses built it has to be profitable for housebuilders.

Graham_Devon

wotsthat wrote: »

If you or I invest in an asset we want the asset to rise in value. Why should some people or companies be required to invest but not look for a return on investment?

Nothing to stop individuals buying land and trying to get permission to build on it.

If we want more houses built it has to be profitable for housebuilders.

So you are happy with the return on investment to come from price manipulation?

So long as you benefit personally?

Nice.

RenovationMan

Graham_Devon wrote: »

So you are happy with the return on investment to come from price manipulation?

So long as you benefit personally?

Nice.

Some would ask if whether you're happy for house prices to fall and for thousands of FTBers to be stuck in the misery of NE just so long as you can benefit personally and climb up the housing ladder.

Graham_Devon

RenovationMan wrote: »

Some would ask if whether you're happy for house prices to fall and for thousands of FTBers to be stuck in the misery of NE just so long as you can benefit personally and climb up the housing ladder.

Some would ask if you are trying to hard.