A "full-scale property boom will begin in 2014"

grizzly1911

HAMISH_MCTAVISH wrote: »

Wrong again Brit.

As this excellent article points out.....



The overall quality of UK residential mortgage lending had the square root of naff-all to do with the banks needing bailouts.

http://www.bbc.co.uk/news/business-17398014

I take it the Northern Rock type model would have been wholly sustainable then.

I find it surprising why no one has restarted it.

wotsthat

Graham_Devon wrote: »

It's not about what trumps what.

The market will find it's own level. If stimulus helps the market, obviously a different level will be found to the level that would have been without said stimulus.

I really fail to see why I am having to explain this.

It's a fact that stimulus is out there. It's therefore a fact that it is distorting the natural market.

It is really. Have a think about the time you've devoted to one of your least favourite 'props' - SMI. Of course it affects the market level but how much when compared to decades of government policy that have led to a housing restriction or the British desire to own rather than rent?

Would you consider that stamp duty, search requirements, gas safety regs, etc. etc. are distorting the natural market or do you have an approved list of what is acceptable?

There's no such thing as a 'natural' market - only one where supply and demand are affected by many different factors.

Graham_Devon

Gas safety regs!? What are you on about?

We've had a load of new stimulus in the market since 2008/9. That is what I am talking about. They have obviously created a new market level, which, without said stimulus, would, in all probability, be a lot lower.

I don't know why you are going on about what you are going on about regarding gas regulations.

Unless you disgaree with what I said in my second paragraph in this post, I fail to understand why you keep going on and on about it and what trumps what.

OffGridLiving

grizzly1911 wrote: »

I agree but I think it it needs a much bigger dose of supply to actually hold or reduce prices in any meaningful way that will be of benefit.

It'd be nice to believe that the government was introducing the stimulus to help builders keep their head above water so that when the economy picks up we can have a large scale house building program. I don't think governments are that forward thinking unfortunately.

The reality is that a large house building program usually results in them losing NIMBY votes. To be honest, the solution is to reduce the population, but that's impossible with the way the economy is currently set up.

wotsthat

Graham_Devon wrote: »

We've had a load of new stimulus in the market since 2008/9. That is what I am talking about. They have obviously created a new market level, which, without said stimulus, would, in all probability, be a lot lower.

How much has the market level been distorted - £250, £2500 or £25,000 - the significance matters.

Then you need to weigh up whether it was worth it. Would any more houses have been built? Would the credit crunch have been worse? Would builders have gone bust and investors scared off for a generation?

Still can't help thinking that the main reason prices have held up during a recession is due to a shortage of housing.

Graham_Devon

wotsthat wrote: »

How much has the market level been distorted - £250, £2500 or £25,000 - the significance matters.

Well, have a stab at the impossible question yourself.

wotsthat

Graham_Devon wrote: »

Well, have a stab at the impossible question yourself.

If you take Nationwide they've been showing an inflation adjusted increase of 2.9% per year trend since 1975. We're currently somewhat below that trend line so it could be argued that any stimulus has been negative.

Is that how you'd work it out or would you ignore the market distorting effects of the global financial crisis and just include SMI and help to buy?

Graham_Devon

I'd just state it's bleedin obvious that stimulus (by that, I mean all the stimulus put together feeding off one another) has helped the market reach a level it otherwise wouldn't be at.

You don't appear to agree, and are asking me to provide impossible calculations.

OffGridLiving

Graham_Devon wrote: »

I'd just state it's bleedin obvious that stimulus (by that, I mean all the stimulus put together feeding off one another) has helped the market reach a level it otherwise wouldn't be at.

You don't appear to agree, and are asking me to provide impossible calculations.

Can you not make that same leap in logic and agree that the credit crunch has helped the market reach a level it otherwise wouldn't be at?

wotsthat

Graham_Devon wrote: »

I'd just state it's bleedin obvious that stimulus (by that, I mean all the stimulus put together feeding off one another) has helped the market reach a level it otherwise wouldn't be at.

You don't appear to agree, and are asking me to provide impossible calculations.

Well I don't agree because your stimulus was introduced in part as a reaction to a financial crisis and I don't see how you think it's valid to consider the effects of one without the other. If there had been no crisis and no stimulus I think prices would have trended upwards above inflation. Prices would probably be higher than now (especially ex. London).

If the Nationwide long term inflation adjusted trend had continued the average price would be about £180k.