ITN News At Ten, right now, house price rises immensely exciting

neilem

JencParker wrote: »

I would doubt it. Don't forget, we had rampant inflation during the 70's, availability of mortgages and demand increased generally, but particularly as the affordable options in the rental sector (LA and private) became less available and less advantageous for the tenant. We have high house prices because there is more demand than supply and supply will always be an issue, but if it wasn't for the demand, they would not be as high as they are now.

Would include record low interest rates as a factor too, because this only masks affordability levels. Especially now with Carney stating there will be no unexpected IR rises in the foreseeable future, this allows boundaries to be extended even further, coupled with the governments propping up schemes.

I really doubt house prices would be this high if interest rates were normal and the goverment did not meddle (even taking into account the issue of supply and demand).

ukcarper

Conrad wrote: »

Listening to LBC Radio earlier in the week, older people were phoning in to recount their housing journey. Typically they had paid a few thousand in the 1960's, early 70s, and now find their pad is worth 100 times more (London and surrounds).

Please don't post a graph denying this, as I know from many personal examples that the 100 times increase is very common. In my area I encounter examples of houses that were £3000 in 1970 are worth £700,000 now. I know this from client records including original solicitors papers etc.


Could a London house worth £300k now be worth 100 times that in 50 years?

The house I bought in 72 is now worth about 25x what I paid for it this is in the south east and looking around it looks pretty typical. But saying that 6 months earlier they were a lot cheaper and using that figure it would be about 40x and they were cheaper still a few years earlier. I can see the 100x in certain parts of London as some areas that were pretty bad in the 70s are now very desirable.

buglawton

Yes, by '72 prices had already inflated hugely from the early 60s so you only have a miserable 25x !

ukcarper

buglawton wrote: »

Yes, by '72 prices had already inflated hugely from the early 60s so you only have a miserable 25x !

I suppose earnings have stood still.

dktreesea

ukcarper wrote: »

I suppose earnings have stood still.

In nominal terms wages rose from the 60s to before the current recession, in some professions faster than the rise in housing prices. The problem now though is that wages have fallen - and are still falling - in real terms since the start of the recession. So they only demand propping up house prices, especially in the south east, must be the population increase.

That net increase of 153,000 people for the year ended Sept 2012 is not quite what it seems. In fact that was a excess emigration of British citizens (-75,000) offset by net long term immigration of non-British citizens of 228,000. [source: http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterly-report/may-2013/msqr-may13.html#tab-2--Who-is-migrating-to-and-from-the-UK-- ]

House prices aren't rising everywhere in Britain. Down 0.9% in Scotland over the year and 0.2% in Yorkshire and the Humber. Northern Ireland remains in the doldrums.

Historically, the house price to earnings ratio is around 4.1. Currently we are still looking at a ratio now of around 5.25. In real terms our wages are still falling. Inflation for basics like food and petrol is soaring. Even with the net migration how are we going to sustain these kinds of housing prices?

HAMISH_MCTAVISH

dktreesea wrote: »

Historically, the house price to earnings ratio is around 4.1.

And historically that was set when there was a realistic prospect of interest rates in double digits.

Those days are gone.

how are we going to sustain these kinds of housing prices?

See above.

ukcarper

dktreesea wrote: »

In nominal terms wages rose from the 60s to before the current recession, in some professions faster than the rise in housing prices. The problem now though is that wages have fallen - and are still falling - in real terms since the start of the recession. So they only demand propping up house prices, especially in the south east, must be the population increase.

That net increase of 153,000 people for the year ended Sept 2012 is not quite what it seems. In fact that was a excess emigration of British citizens (-75,000) offset by net long term immigration of non-British citizens of 228,000. [source: http://www.ons.gov.uk/ons/rel/migration1/migration-statistics-quarterly-report/may-2013/msqr-may13.html#tab-2--Who-is-migrating-to-and-from-the-UK-- ]

House prices aren't rising everywhere in Britain. Down 0.9% in Scotland over the year and 0.2% in Yorkshire and the Humber. Northern Ireland remains in the doldrums.

Historically, the house price to earnings ratio is around 4.1. Currently we are still looking at a ratio now of around 5.25. In real terms our wages are still falling. Inflation for basics like food and petrol is soaring. Even with the net migration how are we going to sustain these kinds of housing prices?

I was responding to someone making a sarcastic remark about my house prices increasing by 25x but at the time I bought earnings ratio was high so in relations to earnings it's increased by about 15% which perhaps is to much but no where near 25x.

dktreesea

Going back in time, say to before WW2, most working class people probably rented rather than bought their houses. I can remember whole streets of houses in one Yorkshire town being mainly rented, from private landlords. Yes, rent controlled, but still with ownership out of the reach of the working families in those streets.

Now we have rising house prices and falling (in real terms) wages. I fear a return to the bad old days, where working families simply can't afford to get on the housing ladder, and, even worse than before, are at the mercy of private landlords not subject to constraints like rent controls.

Maybe rising prices are good news for those who already own houses, but for local people I am not sure this is such a good thing. While this isn't the norm in most parts of the world, the "ideal" in Britain - not just for the traditional working class, but also the middle class - has been something along the lines of "Yes, Mr Owner of Capital, I will work for you, for a relatively modest wage, provided I can earn enough to afford to have a finger in the pie (own my own home; second pension/final salary pension, maybe even a summer cottage somewhere...)."

If that situation is over, and instead we are returning to the times of "work for a pittance, born with nothing, die the same way", then maybe we shouldn't be surprised or offended when some people choose to arrange their lives in such a way that it is more lucrative to be on benefits than to work.

It's not enough just to be paid to work. There has to be something else worthwhile in it, and in the last few post war decades that has been home ownership. If Cameron really believes that high housing prices - such that local people can't afford to buy them - is good for the economy, he's dreaming.

buglawton

Someone in the government does, as current policy bends over backwards to support rising house prices.

Remember however that the govt is equally unaware of schoolboy economics, that is static or even falling prices do not a house - or anything else - more affordable make. Supply does.

CLAPTON

dktreesea wrote: »

If that situation is over, and instead we are returning to the times of "work for a pittance, born with nothing, die the same way", then maybe we shouldn't be surprised or offended when some people choose to arrange their lives in such a way that it is more lucrative to be on benefits than to work.

what an absolute load of nonsense

the average ordinary person (even in Yorkshire) has the opportunities for a wonderful life:
better that virtually anyone in history and better than most of the current world.

excellent health care, good housing, wonderful food, sports, entertainment, holidays. world class education....

apart from some sad exceptions, if anyone has a miserable life it's their own fault