MSE News: House prices continue to rise, says Halifax

DRP

m0t wrote: »

Exactly. I am confused though - why has supply suddenly fallen off a cliff edge?

I agree that supply is low. Here in Bristol there's hardly anythign on the market as compared to the last 2 summers - and consequently (cause or effect?) houses are reaching and exceeding asking prices.

Road_Hog

m0t wrote: »

Exactly. I am confused though - why has supply suddenly fallen off a cliff edge?

I don't think it has. I think that there are more buyers out there now, but the property supply has remained constant, i.e. very low.

dotdash79

People are waiting for the new year with the new government scheme.

I've noticed most houses near us that have gone up for sale have had sold signs up within a couple of weeks (one across the road was sold in 4 days).

plumber2009

Availability of new housing stock has deliberately been kept low. This is because house prices are to high so flooding the market with new affordable housing will crash the market.

Is it no wonder why the government have set up the funding for lending scheme which guarantees unto 20% of the deposit. The government are doing everything they can to keep prices high.

HAMISH_MCTAVISH

m0t wrote: »

- why has supply suddenly fallen off a cliff edge?

It hasn't.

Demand has increased though, so the end result is the same.

The already crisis-level shortage of houses in the UK has been made worse by 5 years of mortgage rationing causing house building to fall to 100 year lows.

As the mortgage market is finally starting to take very small steps towards normalising (although the number of mortgages issued needs to double or triple from here if housing need is to be met), demand is increasing, and prices are rising.

Rising prices will eventually cause more supply to feed through into the market though, so this is a good thing, but if I needed a house I'd be looking to buy sooner rather than later.

HAMISH_MCTAVISH

brit1234 wrote: »

with interest rates are 0.5%.

Where can I get one of these mortgages at 0.5%?

And there you go Brit, an updated signature for you....

gazter

plumber2009 wrote: »

Availability of new housing stock has deliberately been kept low. This is because house prices are to high so flooding the market with new affordable housing will crash the market.

Is it no wonder why the government have set up the funding for lending scheme which guarantees unto 20% of the deposit. The government are doing everything they can to keep prices high.

So which shadowy government department is, with unusual cunning and efficiency carrying out this master conspiracy? Or there isnt, and you are incorrect.
Councils are entirely free to set their own planning policies in regards for new demand, and they are massively incentivised to bring forward land for development and approve new affordable homes and regular homes, through the "new home bonus", a pretty big carrot dangled at councils.

HAMISH_MCTAVISH

gazter wrote: »

Councils are entirely free to set their own planning policies in regards for new demand, and they are massively incentivised to bring forward land for development

Indeed.

There's a 4 year supply of plots with planning permission.

But builders won't build what they can't sell so 5 years of endemic mortgage rationing has resulted in house building falling to the lowest level in a century.

brit1234

Turnbull2000 wrote: »

Prices are based on ability to borrow. And you can now borrow cheaper than ever before. Hence prices will adjust upwards. It's just common sense.

Cheap money isn't sustainable and isn't the solution. From the dot com crash, 911 to the credit crunch the solution has to keep lowering interest rates. Its got to the point interest rates have gone negative in Japan.

This doesn't solve the problems it just pushes them down the road to explode later, usually enough time for another election to come along. Market forces will force a correction be that a bond crises or rampant inflation.

HAMISH_MCTAVISH

'Rampant Inflation' requires the money supply to be increasing to create a situation where too much money is chasing too few goods.

Which clearly isn't the case in the UK, despite all the QE and stimulus.