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Debate House Prices
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House Price Rising Fast....2000 Pounds a Month
Comments
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HAMISH_MCTAVISH wrote: »
A genuine "bubble" requires purely speculative price rises completely unsupported by fundamental shortages of supply.
If those shortages of supply exist then it's not a bubble. It's the market rationing scarce goods through price exactly as it's supposed to.
The UK did not have a bubble... Thanks to a long term structural shortage of housing and rapidly increasing population.
Surely it must be possible for other factors to be involved in pushing prices beyond where normal supply and demand would realistically take them?
For example, enhanced demand created by help to buy.0 -
Surely it must be possible for other factors to be involved in pushing prices beyond where normal supply and demand would realistically take them?
Supply and demand set prices.
Nothing else.For example, enhanced demand created by help to buy.
Mortgage availability is a component of demand.
A dysfunctional mortgage market, like the one we've had for 5 years now with strict mortgage rationing and unsustainably low supply of lending, will artificially reduce demand for house purchase.
But also send house building plummeting to 100 year lows, worsening the shortage, while sending rents to all time record highs.
As we've seen...“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »Supply and demand set prices.
Nothing else.
Still spinning this drivel I see.0 -
HAMISH_MCTAVISH wrote: »Supply and demand set prices.
Nothing else.
Mortgage availability is a component of demand.
A dysfunctional mortgage market, like the one we've had for 5 years now with strict mortgage rationing and unsustainably low supply of lending, will artificially reduce demand for house purchase.
But also send house building plummeting to 100 year lows, worsening the shortage, while sending rents to all time record highs.
As we've seen...
That is my point though - help to buy is creating demand that otherwise not be there. Some have accused the scheme of purposefully manipulating the market.
This scheme lasts for 3 years does it not? Creating buoyancy in the housing market and wider economy just in time for the general election.
What will happen to demand when the scheme concludes - particularly if mortgage availability doesn't alter much?0 -
That is my point though - help to buy is creating demand that otherwise not be there.
You might as well say that the credit crunch is repressing demand that otherwise would be there.
The various government and BOE schemes are designed to repair the broken mortgage market and alleviate mortgage rationing.
It is precisely the role of government as market regulator and the BOE as lender of last resort to restore functionality to dysfunctional credit markets.
When lending recovers and the schemes are no longer required, they can and should be removed.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HPI cheerleaders must be gutted at this news...
House prices have "gone up" , yet they still can't borrow any more money.
What's the point?0 -
HPI cheerleaders must be gutted at this news...
I think you'll find it's the crashaholics who are gutted.
Prices up 10K in a year, and up 25K in 4 years, yet most of them still can't buy a house thanks to mortgage rationing.
Ah well....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
JencParker wrote: »Why is that good news?
Obvious really...
http://blogs.reuters.com/anatole-kaletsky/2013/07/05/who-will-get-credit-for-britains-economic-turnaround/......the economic figures have started to suggest that the British economy is pulling out of its longest and deepest recession on record.
One of the main reasons for this turnaround has been a sudden pickup in housing prices and mortgage lending, the traditional driving forces of the British economy.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »
Do you only use quotes you've read?
How is tying up more money out of people's budgets helping the economy? Money needs to be in circulation, not having ever increasing amounts tied up in bricks and mortar or sitting on a bank's balance sheet.
The property owning propaganda has really worked.0
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