MSE News: Homeowners 'to profit from property'

The_Earl_of_Streatham

"Nonsense" and "More Nonsense" are very compact responses to my arguments. You're going to have to unpack them a bit if I'm going to stand a chance of challenging them. Or do they perhaps represent articles of faith that can't withstand challenge and must therefore be couched in terms that don't invite it?

But, let's have a go anyway. Population growth has been less than one percent annually since 1997, house prices have risen how much? Populations don't buy houses, money does. A rise in population is not necessarily a rise in population with the wherewithal to buy a house.

[link I'm not allowed to post confirming this. Google population data]

Wages have not risen in line with house prices in that time, so the money must have come from somewhere else. Household indebtedness was at around 105% 0f annual income in 1997 and rose to a tad over 170% in 1997 at the peak of the property boom. People have been paying it down a bit since then its presently at about 155%. Huge by any historical standards.

[link I'm not allowed to post confirming this, CBI paper Rebalancing the Economy]

How do these figures not confirm the notion that property prices are a function of the easy availability of credit leading to an asset bubble?

"Nonsense" will not be considered an adequate answer.

It's a shame I can't post links yet because I hate making unsupported statements, especially when I'm trying to refute unsupported statements.

Pincher

For the accountants here, UK has a lot of intangible assets, aka Goodwill. In a world full of earthquakes, droughts, dictators and ethnic tension, there is a bolthole that is forever England.

I would get G4S to set up a deal with the Russians, and transport all illegal immigrants to Siberia, whilst awaiting processing. G4S, being the enterprising company that it is, can then act as job agents. Pay them £2 an hour, but charge the Russians £5 an hour. They can work in the mines, grow food in greenhouses, etc. Obviously, G4S will deduct fees for food, accommodation, and legal representation from their wages.

The company that will issue a certificate to anybody who will work for minimum wage with a couple hours to watch a training video will have no problems selling foreigners who don't speak Russian to the Russians.

We will have a contract with G4S, which requires G4S to respect their human rights. Obviously, if we can't prevent child abuse, death by dehydration in care homes, how can we possibly safeguard illegal immigrants from being exploited by G4S? Hopefully, a few years down the line, G4S executives will be tried in The Hague for crimes against humanity, and the horror of Camp Ktahenskaya leaks out, it will deter more economic migrants from attempting to come to England.

Thus relieving some of the pressure on the housing supply.

ruggedtoast

HAMISH_MCTAVISH wrote: »

Nonsense.



More nonsense.

Falling house prices are terrible for the economy and consumer confidence.

And the UK of course never had a credit driven asset price bubble. We removed 65% of credit, yet prices remain just 10% below peak. All we had was a good old fashioned supply shortage.

And what's happened to transaction volumes in the meantime?

MobileSaver

The_Earl_of_Streatham wrote: »

Population growth has been less than one percent annually since 1997, house prices have risen how much?

Exactly how many of those people born since 1997 will have bought a house and thus significantly affected house prices?!?!? :rotfl:

The biggest factor is not population growth per se but a fundamental change in lifestyle: more people than ever are choosing to live in a one person household.

That is what is driving demand and that is why it is inevitable house prices will increase. As much as the HPC lot would love to refute this, it really is a very simple case of demand outstripping supply.

MobileSaver

brit1234 wrote: »

PS growth in prices of 2% is equal to BOE inflation targets so is not good for investors looking for capital appreciation as there is none.

Did you actually read the article? It's "growth in real terms" so 2% above inflation.

However funnily enough most people buy a house as a home to live in for the security of tenure it gives them and not as an investment. You should stop deluding yourself that house prices will crash by 50% and try it one day.

50Twuncle

How will the END OF THE WORLD affect property prices ?
I have it on good authority (a Mayan told me) that it will end some time between December 21st and 23rd 2012 - a little over 4 months away !!

Is it worth spending hard earned money on home improvements, prior to the big event or not ?

I can think of other more worthy causes to spend it on - if it is all going to end..........

Advice please.

marathonic

I wouldn't exactly call this a 'depressing' prediction.

Inflation is likely to run around 2-3% giving a prediction of 4-5% annual nominal price rises.

That means that an FTB currently buying with a 10% deposit on a 2-year mortgage deal should be able to secure an 80% LTV mortgage when their discounted period ends.

In my area, the cost of rent is more than a mortgage and council tax so it's a worthwhile investment in my eyes - exactly why I'm in the process of buying. I definately wouldn't be able to save that additional 10% to get me to the 80% LTV otherwise.

(just as a note, I'm not at 90% LTV - just using it to explain my thought process)

Pincher

21Twinkle wrote: »

How will the END OF THE WORLD affect property prices ?

The movie industry made lots of movies for 1999, and Roland Emmerich did a good one for 2012.

I would check out Residensea, which is pretty close to an Ark.

DervProf

HAMISH_MCTAVISH wrote: »

And the UK of course never had a credit driven asset price bubble. We removed 65% of credit, yet prices remain just 10% below peak.

And the removal of ~4% from the base rate, the bailing out of Northern Rock, Bradford and Bingley, Halifax, Nat West etc has nothing to do with the suprisingly small fall in prices ?

Yes Hamish, house prices are where they are, simply because of a shortage, to the exclusion of any other factors.

geoffky

Reminds me of 2007 again when everyone including hamish was in denial...when the world stopped for a few weeks he was one panicky man...He admitted it had frightened him...It will again.