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

HAMISH_MCTAVISH

the_flying_pig wrote: »

Hamish

A thing about quotation marks, it's usually good form to put an actual quote in them.

As it is you've paraphrased the Telegraph who in turn have paraphrased David Miles.

All that DM actually seemed to say was that HPI will, "over the longer term" [my emphasis added, i.e. possibly not right away] outpace inflation, hardly shocking stuff given that wages generally do this.

Actually Piggy, what he said in the paper was....

"The model developed above suggests that the trend of rising real incomes and the likelihood of rising population density mean we should anticipate a rising trajectory for real house prices over the longer term.

This is particularly likely in a country like the UK where population density looks set to rise relatively fast.

The model also suggests that the upwards trajectory in house values may ultimately become steeper than the rise in real incomes."

So prices rising by more than wages, over the long term.

michaels

Yep - the housing shortage means the cost of housing will increase until supply and demand are in balance. Whether that cost of housing is through high rents or high borrowing costs is for the banks to decide.

Sibley

I think we are on the verge of getting 100% mortgages back. Everything is looking perfect now.

the_flying_pig

HAMISH_MCTAVISH wrote: »

Actually Piggy, what he said in the paper was....

"The model developed above suggests that the trend of rising real incomes and the likelihood of rising population density mean we should anticipate a rising trajectory for real house prices over the longer term.

This is particularly likely in a country like the UK where population density looks set to rise relatively fast.

The model also suggests that the upwards trajectory in house values may ultimately become steeper than the rise in real incomes."

So prices rising by more than wages, over the long term.

Perhaps a slightly less misleading thread title would be something neutral such as 'd miles has been talking about a model that shows house prices may increase more quickly than wages over the long term' ?

HAMISH_MCTAVISH

the_flying_pig wrote: »

Perhaps a slightly less misleading thread title would be something neutral such as 'd miles has been talking about a model that shows house prices may increase more quickly than wages over the long term' ?

Wouldn't fit.

And since when have the majority of posters either here or on any other house price board gone for "neutral titles"...

IveSeenTheLight

michaels wrote: »

Yep - the housing shortage means the cost of housing will increase until supply and demand are in balance. Whether that cost of housing is through high rents or high borrowing costs is for the banks to decide.

Indicators are that both borrowing costs and rents could be squeeze higher.
There aren't sufficient properties to meet the demand which will mean that there is a drive on both prices and rents

Thrugelmir

IveSeenTheLight wrote: »

Indicators are that both borrowing costs and rents could be squeeze higher.

There's no could be for borrowing costs. They will go higher. Considerably higher.

So consumers have a double whammy. Getting over the austerity phase to find interest rates will raid their pockets instead.

IveSeenTheLight

Thrugelmir wrote: »

There's no could be for borrowing costs. They will go higher. Considerably higher.

So consumers have a double whammy. Getting over the austerity phase to find interest rates will raid their pockets instead.

Interest rates are an additional factor which will no doubt rise.
This was not mentioned in the article which was very clearly talking about the real purchase price

David Miles, one of the Bank’s nine rate-setters, said in an official paper that the desire for space caused by the UK’s rising population would reinforce planning restrictions and make it more difficult for housebuilders to keep up with demand. As a result, he said: “We should anticipate a rising trajectory for real house prices over the longer term

CRASH_BANG_WALLOP

HAMISH_MCTAVISH wrote: »

Well, to be fair, it's been a pretty terrible few months for them as the economy is clearly recovering and the housing market along with it.

This is just the icing on the cake.:D

:rotfl::rotfl:the dude cant decide if prices will rise or fall hamish is getting desperate
.

CRASH_BANG_WALLOP

Sibley wrote: »

I think we are on the verge of getting 100% mortgages back. Everything is looking perfect now.

:rotfl::rotfl::rotfl::rotfl:classic