FT - UK house (asking) prices reach record high as Rightmove surges 1% in May

FTBFun

shortchanged wrote: »

So how do you think people would have paid the prices back then if the banks were lending at current levels?

I have absolutely no idea. What's done is done.

There has to be a point where cost and financing have to meet, otherwise something is simply unaffordable whichever way you look at it. The banks had the option to control house prices by keeping a strict control on lending but as per usual they got greedy and carried away.

"Controlling" house prices is nothing to do with the banks - it appears they were lending within regulatory limits (i'm talking UK lending here rather than missold US subprime debt which is another story).

Something is going to happen one way or the other regarding UK housing, but you can bet that it doesn't mean suddenly the crashers are going to be able to snap up a property easily on the cheap.

paulmapp8306

shortchanged wrote: »

So how do you think people would have paid the prices back then if the banks were lending at current levels?

There has to be a point where cost and financing have to meet, otherwise something is simply unaffordable whichever way you look at it. The banks had the option to control house prices by keeping a strict control on lending but as per usual they got greedy and carried away.

But why do banks want to control the cost of housing? They make a proffit from lending - so the more they can lend the better (defaults aside obviously) - therefore the higher house prices the better from a pure banking perspective.

The cost of housing - or the HIGH cost of housing - only has one cause. Thats the people buying them being prepared to pay what was asked.

MacMickster

shortchanged wrote: »

So how do you think people would have paid the prices back then if the banks were lending at current levels?

There has to be a point where cost and financing have to meet, otherwise something is simply unaffordable whichever way you look at it. The banks had the option to control house prices by keeping a strict control on lending but as per usual they got greedy and carried away.

This is a point that I have made many times before.

If lenders would only let people borrow 3x salary then, even with the shortage of supply, in boom times you could only bid up to 3 times salary plus your deposit - and so could anyone bidding against you.

Once lenders began to increase income multiples to 3.5X, 4X, 5X 6X etc then the same person would win any bidding war, but at a much higher price.

Graham_Devon

Mr._Pricklepants wrote: »

No problem.
Firstly, I see properties coming on the market and going STC within days. Initial asking price can easily be found online and selling price a few months later also.
But more importantly, you TALK to people. No, I don't know the finances of every household in my area, but I talk to people who move out and move in. Don't you ever have those conversations with your neighbours? "Oh hello mister neighbour, I noticed you're selling and it has gone 'sold' already. Yes, Mr. Pricklepants, and I was amazed at the interest. It was sold within days and I had several buyers competing and I achieved more than I thought I'd get for it"
Don't you ever have those conversations? Probably not as you spend your life on here.

Can't say I have those conversations, no.

shortchanged_2

paulmapp8306 wrote: »

On a similar - but to my mind much more relevant - subject, why doesnt the government build housing - thereby cutting the HB burden and lowering demand for privately owned housing at the same time? Thats much more realistic, but its not going to happen anytime soon.

Too many VI's in government unfortunately have too much at stake invested in property one way or another.

http://www.dailymail.co.uk/news/election/article-1280554/The-coalition-millionaires-23-29-member-new-cabinet-worth-1m--Lib-Dems-just-wealthy-Tories.html

moneyinmypocket

Prices going up good news all round

shortchanged_2

MacMickster wrote: »

This is a point that I have made many times before.

If lenders would only let people borrow 3x salary then, even with the shortage of supply, in boom times you could only bid up to 3 times salary plus your deposit - and so could anyone bidding against you.

Once lenders began to increase income multiples to 3.5X, 4X, 5X 6X etc then the same person would win any bidding war, but at a much higher price.

This is exactly the point MacMickster.

All that has ended up happening is that people have paid more money for exactly the same thing! But who are the ones that ended up with the biggest bum deal? As per usual the ones at the bottom of the pyramid scheme.

mystic_trev

homelessskilledworker wrote: »

This is so Prickpants and MrRees

We know they're the same. I really can't understand why someone needs two Identities unless they're a Schizophrenic? If that's the case they've got serious mental health issues and need help!

Mr._Pricklepants

Graham_Devon wrote: »

Can't say I have those conversations, no.

Not surprised.

Pimperne1

homelessskilledworker wrote: »

Prices are not going up!

Where did you get that from?

I didn't say they were (but you look as though you are doing just what I described the HPCers doing).