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Debate House Prices
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House sales at highest level since June 2010, says RICS
Comments
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How? I thought you'd written off all attempts to stimulate the housing market as failed.
IMO some of the stimulus measures will have had an effect but I'm starting to think that an improving economy is more likely.
http://www.bbc.co.uk/news/business-21753071
Still convinced about an improving economy wotsthat?0 -
How? I thought you'd written off all attempts to stimulate the housing market as failed.
IMO some of the stimulus measures will have had an effect but I'm starting to think that an improving economy is more likely.
How?
Well the simple question for me would be would the housing market be "improving" without all the stumulus thrown at it?
That's up for debate. I think I know where I stand and that's firmly in the camp that the housing market would have gone through a massive correction by now without the stimulus.
If you are suggesting the stimulus hasn't made that much difference and it's the general economy improving, then surely it's time to cut the stimulus?0 -
shortchanged wrote: »
Did I say I was convinced? Very careless of me - I'm usually more adept at sitting on the fence. I'm not convinced but, again, rising house prices, transactions and employment are positive signs. All recessions end - on balance I think it's more likely than not that we're due for some sustained growth.
We can swap links all day - it means nothing because whether the economy is tanking or booming there will always be some contrary indicators.0 -
Graham_Devon wrote: »How?
Well the simple question for me would be would the housing market be "improving" without all the stumulus thrown at it?
That's up for debate. I think I know where I stand and that's firmly in the camp that the housing market would have gone through a massive correction by now without the stimulus.
If you are suggesting the stimulus hasn't made that much difference and it's the general economy improving, then surely it's time to cut the stimulus?
Why do I need to consider ALL the stimulus thrown at the housing market?
I'm arguing that the economy is showing signs of making a fragile recovery. The only thing that needs to be compared is to look at the stimulus available before the improvement compared to now - is it sufficient to explain the rise in prices and transactions?
We can discount low mortgage rates, SMI, and all your other props because they've been around for long enough to drop out of a like for like comparison. There's more to it than your props - maybe people are just coming to a natural end of deposit saving or BOMAD is paying out more frequently because they are sick of their offspring not moving out. Maybe, just maybe, the economy is starting to improve.0 -
We can discount low mortgage rates, SMI, and all your other props because they've been around for long enough to drop out of a like for like comparison. There's more to it than your props - maybe people are just coming to a natural end of deposit saving or BOMAD is paying out more frequently because they are sick of their offspring not moving out. Maybe, just maybe, the economy is starting to improve.
I think you are right in your ideas that people are just getting to the point that they can't be bothered to wait any more. that doesn't mean to say the economy is improving though.
It does seem to suggest that the government aren't going to be able to remove the props that are in place. Not that I really believed they ever would ."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »I think you are right in your ideas that people are just getting to the point that they can't be bothered to wait any more. that doesn't mean to say the economy is improving though.
It does seem to suggest that the government aren't going to be able to remove the props that are in place. Not that I really believed they ever would .
When the economy improves I would guess that mortgage lending will become more competitive reducing both margins and deposit requirements so I'd hope that deposit guarantee schemes could be wound down.
An improving economy would at least allow the government to consider transferring risk away from the state to individuals. They could also work on trying to make house buying cheap and efficient by, say, cutting stamp duty, and putting an end to the English system of negotiation which seems to rely more on ambush and blackmail more than it really should in a civilised society.0 -
Can't help thinking that increasing numbers of people being willing to pay a higher price for a house is another indicator of an improving economy.
You could be right, but I disagree.
I think rising sales is mainly due to mortgage lending increasing, probably due to the BoE funding for lending scheme.
I think that many people are "feeling the pinch" or are finding work hard to find. Those people would probably not be looking to buy or move at the moment anyway.
The increase in sales is probably due to those that aren't experiencing the economic downturn having saved the deposit and being able to now borrow.
In my opinion, we now have an opportunity to get a better balance in our economy, especially in the property market. The brakes have been applied and the heat has been removed from the market. The dubious lending practices of pre - '07 have largely been removed. Some would have us believe that simply lending more will solve the problems that we now have. I think it will simply lead us back to where we were a few years ago - high levels of HPI and banks doing whatever thay can to meet the requirement for ever higher levels of borrowing. It's too easy to fall into the trap of thinking that HPI is "good news for homeowners" and maybe just "good news". Someone needs to get a real grip and look at the other side of HPI, and why it happens.
As Hamish points out, lending more will get builders building more. I actually agree with him on that. However, Hamish will be rejoicing if lenders lend more and a few extra houses get built. I'd like to see lenders lending more if enough houses get built to prevent rapid and high levels of HPI. I doubt Hamish would be complaing if that doesn't happen.
We need to get away from thinking that HPI = good, end of. The real economy and real incomes need to match, or come close to matching HPI. I think that would be healthy for our economy.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0 -
When the economy improves I would guess that mortgage lending will become more competitive reducing both margins and deposit requirements so I'd hope that deposit guarantee schemes could be wound down.
An improving economy would at least allow the government to consider transferring risk away from the state to individuals. They could also work on trying to make house buying cheap and efficient by, say, cutting stamp duty, and putting an end to the English system of negotiation which seems to rely more on ambush and blackmail more than it really should in a civilised society.
Competition may soften on LTVS a little. I don't think margins will move much. I think things like FFl will be withdrawn but things like QE won't.
I am not so sure about Stamp Duty, it has only gone one way in my life time apart form some brief moratoriums. I do think it should work like income tax in that you only pay the higher rates on the applicable banding. It would allow easier movement across thresholds.
If you think ambush and blackmail is bad now it has been worse with wholesale gazumping."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
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Thrugelmir wrote: »For those in well paid jobs, who have managed their money well. The recession will have hardly touched them.
Indeed.
And as I stated, some of these people may have found it a little difficult to get a mortgage until recently. Banks are probably a little more "generous" with their lending since the FFL scheme was introduced, so that explains the increase in house sales, rather than it being an indicator of an improving economy. Although some may argue that an improving property is an improving economy.30 Year Challenge : To be 30 years older. Equity : Don't know, don't care much. Savings : That's asking for ridicule.0
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