House Prices "Heavily Undervalued" says Times article

HAMISH_MCTAVISH

Graham_Devon wrote: »

That was regarding help to buy hamish, even says so in what you have quoted, of which this article is nothing to do with.

Eh?

You and your articles worry HTB will cause a bubble.

This article (and the one yesterday, and many more to come) dismiss that fear as nonsense.

I guess I'm muddling though.

You sure are.

chewmylegoff

Hamish - just wondering if you agree with everything that the insightful Mr Ward says (e.g. the bank should have raised interest rates in 2011 as fiscal policy was too loose - i can't imagine so as you appear to want fiscal policy to be looser than it is now) or only the stuff he says that is in line with your own opinion. If the latter, then he isn't really that great a source, is he?

Fella

Hmm, houses so undervalued that IRs have had to be kept at almost zero for years to prevent half the country being repossessed....

Sampong

I don't think many people will deny house prices will rise.

I can't see the full article, but if the author is basing his assumptions on yield; - surely rents are at some of their highest levels ever, and rental yields more than healthy from the landlord's perspective?

Up until recently, prices had been relatively flat. The help to buy scheme is providing a boost. However I am not sure I agree that this boost is the result of repairing a dysfunctional mortgage market - it could be more likely to be a case of buyers just seeing it as perhaps their one and only opportunity to escape the rental trap. A mix of desperation, excitement, and opportunism ("let's do it now while we still can"). In some cases it may be a kind of panic buying, similar to 2007, when people were panic buying just before the crash.

I'm not suggesting that there will be a crash, but undervalued by 13% is just a wild claim. Particularly when you consider our low level of interest rates - that would certainly put the breaks on a bit.......

Loughton_Monkey

HAMISH_MCTAVISH wrote: »

.......Anyway, with house prices "heavily undervalued", it's obvious that the wider HTB scheme to reduce mortgage rationing is very welcome and will enable many more people to buy at the undervalued levels of today.

Excellent news......

On balance, I agree with you that it's good news, but forgive my slight reticence. On the one hand, I would welcome a 13% real increase in the value of my property.

On the other hand, I fear that the rather thin argument here could be equally destroyed by lowering the rents. Maybe there's a rent bubble and they are about to crash?

My particular concern is that the house next door to me has recently been sold, and the builders are in refurbishing on behalf of the Dubai-based owners who are going to rent it out.

With rents at their current values, I can be confident that not many HB plebs will be along to pay £2K a month rent. But if rents plummet, then I fear that the house might be rented by people young enough to have noisy young kids and not enough money to buy the statutory BMW or Range Rover - a minimum requirement for the area.

When (like today) I am enjoying a large G&T in the pool (and Mrs LM is quaffing her third glass of Champagne) we do not wish to be disturbed by the screechings and rantings of children of 'renters'.

So if (as this guy seems to think) our house value is directly proportional to rental costs, then I have only one conclusion to draw..... let the rents go ballistically high.... problem solved...

... large gin & tonics all round....

the_flying_pig

I read the article and am highly suspicious

http://www.henderson.com/Sites/Henderson/Media_Centre/PostDetail.aspx?xpostid=6757&o_cc=247&o_rssr=Henderson+Global+Investors+Media+Releases

I just don't believe that rental yields are higher now than in (say) the late nineties. I don't believe it at all. Very heavy whiff of BS about it all, positively reeks of it.

What's this "imputed" calculation that the first asterix says has changes to push up recent yields?

And... Did the very old calculations by any chance include council tenants paying tuppence ha'penny in rent or something like that??

Also, google the author's name and "house prices" - lots of form as a ramper.

chucky

Joeskeppi wrote: »

T'was ever thus. I remember when you first spoke about a housing shortage, I thought the resident morons were going to run out of laugh emoticons.

Of course property is undervalued, it always will be as long as there are people to buy it.

The usual attacks to take away the topic of discussion on this thread by the usual suspects like chewmyfaceoffoff, Graham the professior of Devonian Economic Theory and his protege Shortlegs are nothing new. Shame they're not bright enough to engage in intelligent debate or even reasoned plausible debate.

Mallotum_X

chucky wrote: »

Of course property is undervalued, it always will be as long as there are people to buy it.

The usual attacks to take away the topic of discussion on this thread by the usual suspects like chewmyfaceoffoff, Graham the professior of Devonian Economic Theory and his protege Shortlegs are nothing new. Shame they're not bright enough to engage in intelligent debate or even reasoned plausible debate.

Whereas your attack adds much.....

chucky

Mallotum_X wrote: »

Whereas your attack adds much.....

Another one to add to the Ignore list who has nothing to say about the thread and only about another forum user.

Intelligent debate on his forum is seen less and less now.

Tancred

HAMISH_MCTAVISH wrote: »

http://www.thetimes.co.uk/tto/business/industries/construction-property/article3830936.ece

More media and economists dismissing the "bubble meme" Dev likes to propagate.

Yesterday he claimed it's "only one article".

Today it'll be "only two articles".

In 6 months he'll claim it's "only a few hundred articles".

Anyway, with house prices "heavily undervalued", it's obvious that the wider HTB scheme to reduce mortgage rationing is very welcome and will enable many more people to buy at the undervalued levels of today.

Excellent news.

:beer:

Heavily undervalued? It depends. Certainly not in London and the south-east - he must be referring to the midlands and the north.