People will adjust their spending habits in order to afford their mortgage

Graham_Devon

OffGridLiving wrote: »

Out of interest, do you think the market will decide on a reasonable price if we still have a chronic housing shortage?

Moreover, do you believe we have a chronic housing shortage?

Yes.

You only have so many people with the means to buy. If house prices keep increasing the pool of buyers becomes ever fewer.

This has been evidenced. Banks would not lend the amounts people needed to buy.

Firstly the government chipped in with funding for lending, but still banks were not comfortable lending the amount of money required to buy. House prices kept falling.

They then introduced firstbuy. You bought a part of the house, you bought the rest of the house later (all based on newbuys). Hardly anyone signed up as it just wasnt a good scheme. House prices continued to fall.

Along came newbuy. You put up 90%, the banks put up 5% guanreteed by the taxpayer and the builders put up another 5%. This didn't work, house prices continued to fall.

You see, all of these didn't work because people couldn't afford the amounts of money involved. The banks wouldn't lend it either due to the risk.

So along comes newbuy. The builders risk is gone. The banks risk is gone. The buyer now only has to put up 80%, and the banks now WILL lend, afterall, 20% of the risk is removed. Prices increase as the amount of people who can now buy increases.

However, with Bovis, for instance putting their prices up by 15%, this 20% guarantee by the government soon won't be strong enough and we'll be back to square one. Another scheme will most likely follow....to work, the scheme will have to provide the potential buyer with a way to borrow. They could offer for example 30% and prices can then rise another 10% until the 30% guarantee is no longer enough.

We saw all of this in the lead up to 2007 with 100, 105, 110 and 125% mortgages alongside the explosion in interest only.

If you look at all the schemes, the only ones that have worked are those which give the ability for people to gain access to more money. If the schem didn't achieve that, house prices continued to fall, allbeit slowly.

This is the sole reason Hamish and others call for more schemes or forced lending. It increase prices. It's as simple as that.

So there you go, have a smoke of that.....you got anything constructive to come back with?

OffGridLiving

We've gone full circle.

We'll have to agree to disagree on this one, Graham.

OffGridLiving

Graham_Devon wrote: »

So there you go, have a smoke of that.....you got anything constructive to come back with?

Why did you add this to your post after you saw I posted:

OffGridLiving wrote: »

We've gone full circle.

We'll have to agree to disagree on this one, Graham.

?

Graham_Devon

OffGridLiving wrote: »

Why did you add this to your post after you saw I posted:



?

Well considering the timings of your post and my edit, it's pretty unlikely I had seen your response, isn't it.

I just knew you wouldn't tackle it...though I did expect you to say something along the lines of "wall of waffle, strawman" or something else.

Point stands though doesn't it. I put up a load of reasonings for you and you have decided to "agree to disagree".

ukcarper

Graham_Devon wrote: »

Yes.

You only have so many people with the means to buy. If house prices keep increasing the pool of buyers becomes ever fewer.

This has been evidenced. Banks would not lend the amounts people needed to buy.

Firstly the government chipped in with funding for lending, but still banks were not comfortable lending the amount of money required to buy. House prices kept falling.

They then introduced firstbuy. You bought a part of the house, you bought the rest of the house later (all based on newbuys). Hardly anyone signed up as it just wasnt a good scheme. House prices continued to fall.

Along came newbuy. You put up 90%, the banks put up 5% guanreteed by the taxpayer and the builders put up another 5%. This didn't work, house prices continued to fall.

You see, all of these didn't work because people couldn't afford the amounts of money involved. The banks wouldn't lend it either due to the risk.

So along comes newbuy. The builders risk is gone. The banks risk is gone. The buyer now only has to put up 80%, and the banks now WILL lend, afterall, 20% of the risk is removed. Prices increase as the amount of people who can now buy increases.

However, with Bovis, for instance putting their prices up by 15%, this 20% guarantee by the government soon won't be strong enough and we'll be back to square one. Another scheme will most likely follow....to work, the scheme will have to provide the potential buyer with a way to borrow. They could offer for example 30% and prices can then rise another 10% until the 30% guarantee is no longer enough.

We saw all of this in the lead up to 2007 with 100, 105, 110 and 125% mortgages alongside the explosion in interest only.

If you look at all the schemes, the only ones that have worked are those which give the ability for people to gain access to more money. If the schem didn't achieve that, house prices continued to fall, allbeit slowly.

This is the sole reason Hamish and others call for more schemes or forced lending. It increase prices. It's as simple as that.

So there you go, have a smoke of that.....you got anything constructive to come back with?

As I understand those apply to new build so can you explain why old house prices are now higher.

OffGridLiving

Graham_Devon wrote: »

Well considering the timings of your post and my edit, it's pretty unlikely I had seen your response, isn't it.

I just knew you wouldn't tackle it...though I did expect you to say something along the lines of "wall of waffle, strawman" or something else.

Point stands though doesn't it. I put up a load of reasonings for you and you have decided to "agree to disagree".

Yeah right. You didn't see it, yet miraculously knew what I'd put. Pull the other one Graham.

You're the first to moan about the discussions becoming personalised and abusive, yet you're just as quick to do it yourself.

As I said three pages ago, while people are at cross purposes, their discussion is at an impasse. There is nothing I can say that will budge you from your position and there is nothing you can say that will budge me from mine. What then is the point of continuing the discussion?

Well, unless you just want an argument, and given your response (and miraculous edit), that seems to be the case. Bit pathetic really Graham. Have a word with yourself, mate. :cool:

Graham_Devon

OffGridLiving wrote: »

Yeah right. You didn't see it, yet miraculously knew what I'd put. Pull the other one Graham.

You're the first to moan about the discussions becoming personalised and abusive, yet you're just as quick to do it yourself.

As I said three pages ago, while people are at cross purposes, their discussion is at an impasse. There is nothing I can say that will budge you from your position and there is nothing you can say that will budge me from mine. What then is the point of continuing the discussion?

Well, unless you just want an argument, and given your response (and miraculous edit), that seems to be the case. Bit pathetic really Graham. Have a word with yourself, mate. :cool:

I hadn't seen your response. Genuinely.

It would take quite a bit of skill to post my post, refresh the thread, scroll down to see you had posted, read your post, think up a quick line to "catch you out", go back in and edit my post and then click the post button all within possibly a few seconds.

I can't spell at the best of times, so bashing out a sentence at a million miles per hour would have resulted in spelling errors all over it.

But my point stands doesn't it. You haven't attempted to discuss anything in response to your question. That is why I wrote what I wrote, as I knew you wouldn't attempt to discuss it, and you haven't.

You've simply gone off on one again insisting that because you have said I have done soemthing, I have.

OffGridLiving

Deary me.

.....

wotsthat

Graham_Devon wrote: »

Yes.

You only have so many people with the means to buy. If house prices keep increasing the pool of buyers becomes ever fewer.

Maybe we should try and increase the number of people with the means to buy.

Wishing prices lower isn't working.

Graham_Devon

Good to have you back reno / harry / MFW / list of others I cant remember.

I can only assume what you will do, and write what you will do because it's so completely obvious. Not because I'm a genius who can view responses so quickly after posting mine, click through, scroll down, read, go back and edit posts and post the edit within a minute timeframe in order to make you look silly.

You do that yourself by being so predictable, pretending to be someone else to blend in etc etc.

Thing is, you can't change your style of writing. You'd be a genius if you could.