House prices to SURGE beyond peak thanks to Help to Buy

HAMISH_MCTAVISH

grizzly1911 wrote: »

All of which does very little to actually help the countyry stay afloat in reality.

Most of the people benefiting are merely parasites whilst the host slowly dies.

What would be really good is if this country could actually develop, manufacture and sell to overseas buyers something that adds value to society.

Ramping a money go round based on debt isn't productive if their is no way of repaying it.

Houses are assets like any other.

Asset prices will tend to rise when there is a shortage of them.

We've now proved you can't fix a shortage by rationing credit, as all that happens is fewer houses get built, and rents soar instead.

Perhaps it's time to give the pessimism a rest and just accept the inevitable.

Graham_Devon

IveSeenTheLight wrote: »

I would say that house price rises benefit the: -

• Government (through stamp duty) (and sends outgoing costs upwards through SMI, housing benefits, admin costs etc - have a look at total stamp duty receipts and then look at housing benefit outgoings. Mismatch)
  
• Estate Agents (and subsequently it's employees)
• Solicitors (and subsequently it's employees) (well, maybe, though I don't think it's as much as you make out, the specialilised mortgages solicitors I'd agree with - solicitors make just as much money from other issues such as repo's, divorce, breakdown etc)
• Insurance Companies (and subsequently it's employees) (how?)
• Surveyors (and subsequently it's employees)
• Lenders (and subsequently it's employees) (well, this one could quite easily turn into a debate, ask all the employees suffering as a response to the previous boom and I'm not sure they agree. One word....cyprus)
• Home Owners (through decrease LTV product availability) (this is utterly negligible and hurts them at sale due to higher costs, which would probably wipe out any savings made on lower mortgage LTV's if they even take this up and indeed, you only look at indebted homeowners, not homeowners as a whole - I believe the majority own outright, so maybe you should have said mortgage owners)
• Downsizers (really doesn't make much difference, the house you downsize too will cost more)
• Property Investors (also those with shares / pensions with links to property)

I've edited your list and added bits in blue.

Graham_Devon

HAMISH_MCTAVISH wrote: »

We've now proved you can't fix a shortage by rationing credit, as all that happens is fewer houses get built, and rents soar instead.

House building is very little to do with the amount of mortgages given.

If it was, we wouldn't have seen a decline in house building in the boom and we wouldn't see a decline even when directed stimulus is given to house builders in terms of new mortgages.

grizzly1911

HAMISH_MCTAVISH wrote: »

Houses are assets like any other.

Asset prices will tend to rise when there is a shortage of them.

We've now proved you can't fix a shortage by rationing credit, as all that happens is fewer houses get built, and rents soar instead.

Perhaps it's time to give the pessimism a rest and just accept the inevitable.

When the inevitable happens I will be quids in, it doesn't bother me.

What does concern me is how this country can keep buying assets at ever increasing prices with dwindling income for the majority.

HAMISH_MCTAVISH

Graham_Devon wrote: »

I've edited your list and added bits in blue.

Downsizers (really doesn't make much difference, the house you downsize too will cost more)

:rotfl::rotfl::rotfl:

Very good.:T

Down size from a 300K house to a 150K house you have 150K.

Down size from a 200K house to a 100K house you have 100K.

You're 50K better off with HPI.

HAMISH_MCTAVISH

grizzly1911 wrote: »

What does concern me is how this country can keep buying assets at ever increasing prices with dwindling income for the majority.

Increasing asset prices will lead to increasing incomes for the majority, along with increasing employment and economic recovery.

So your point makes no sense.

Graham_Devon

HAMISH_MCTAVISH wrote: »

:rotfl::rotfl::rotfl:

Very good.:T

Down size from a 300K house to a 150K house you have 150K.

Down size from a 200K house to a 100K house you have 100K.

You're 50K better off with HPI.

And that's OK if that's how it works out. But it doesn't - not in reality. FTB's, BTLs and now those looking to downsize are all competing for bungalows at the moment. Especially down here. The 1960's types are absolutely prime for conversion into 4 bed homes by adding another storey. Almost always detached and almost always a driveway and large garden.

Downsizing has not worked out well here. Changing times.

Easy to pluck figures. Doesn't mean it works in reality.

HAMISH_MCTAVISH

Graham_Devon wrote: »

And that's OK if that's how it works out. But it doesn't - not in reality. FTB's, BTLs and now those looking to downsize are all competing for bungalows at the moment. Especially down here. The 1960's types are absolutely prime for conversion into 4 bed homes by adding another storey. Almost always detached and almost always a driveway and large garden.

Downsizing has not worked out well here. Changing times.

Easy to pluck figures. Doesn't mean it works in reality.

And you walked right into that one.....

Because we've seen the very same thing in reverse with upsizers.

Where in reality, the price of FTB houses fell far more than the price of 2TB houses in the crash, so the rungs widened rather than narrowed as prices fell.

Making it more expensive to trade up, despite prices being lower.

So, although I think your claims about downsizing are mostly nonsense when applied on a national basis, it's at least good to see you now accept all prices don't fall and rise by the same percentage amount in the real world.:cool:

padington

grizzly1911 wrote: »

When the inevitable happens I will be quids in, it doesn't bother me.

What does concern me is how this country can keep buying assets at ever increasing prices with dwindling income for the majority.

It's all a global dollar based Ponzi monopoly game that's going to go wrong in the end but until it does, the quick path to poverty will be deflation or failing to buy when you can at the right time. There is only one path to take until the global currency system changes onto a new paradigm and that won't be for a long while yet.

marathonic

It all boils down to inflation and assets. Already, we're seeing savings rates well below inflation.

Those who have their money in assets will come out best. Those who hold cash won't fare well at all with their real wealth being eroded over the years - and, moreso, when the expected inflation surge resulting from all the money printing transpires.

So if it stands to sense to have your money in assets, it stands to even more sense that putting that money into an asset where it's easy to leverage your position is the best option. That's where housing comes in.