The next boom.....

michaels

HAMISH_MCTAVISH wrote: »

You are a naughty Monkey sometimes....:D



Hmmm, interesting.

I may have a bash at that in between large G&T's this evening.;)

Surely there is no point pricing anything except in terms of physical silver. I have been living inside a silver house (a little small and rather warm in the summer and I fear cold in the winter), wearing silver clothes (they chaff) and eating silver (not improving my teeth) for the last years since a poster on here opened my eyes to reality.

ILW

HAMISH_MCTAVISH wrote: »

What spare cash?

If I buy something from you for 100K exactly the same amount of money is in the economy as would be if I buy it for 50K and keep 50K myself.

The total amount of money in the economy doesn't change.

The distribution of it may change.

But ultimately, all wealth in housing gets redistributed to younger generations, and always will unless we find a way to abolish death.

Money tied up in property is pretty "frozen" though. Cash would tend to be more liquid and make more things happen.

Loughton_Monkey

ILW wrote: »

Can't help but think that life would be a whole lot better for the vast majority of people if you could still buy a decent house for £60k or so.

Just think what could be done with all that spare cash in the economy.

HAMISH_MCTAVISH wrote: »

What spare cash?

If I buy something from you for 100K exactly the same amount of money is in the economy as would be if I buy it for 50K and keep 50K myself.

The total amount of money in the economy doesn't change.

The distribution of it may change.

That's life!

But actually, there would be a way that we 'could' all have a decent house for £60K. The scenario would be somthing like this:

1. In a highly radical move, the government 'nationalises' every acre of land in UK that is not built on. Planning rights are centralised, and planning enquiries abolished.

2. Once someone becomes over 18, and can demonstrate marriage, or other reason for 'needing' their own house, the government makes a 'gift' of a small parcel of land to them. Assume it might cost around £60K to get a builder to put up a 'decent' house, and still make a small profit.

3. Those who already own a house on their own plot of land would have that land 'gifted' back to them.

So what would be the implications?

A. A massive drop in house prices generally, as the value of the 'plot' diminishes.

B. Over time, there would be hundreds of thousands of youngsters all owning land, but not yet with the means to build on it. A huge proportion of them would consider (say) £10K in their hand to be a far better proposition and would therefore sell his land to the more savvy person who does want to build a house, but would prefer a bigger plot...

C. In only a short time, the value of such a spare plot would go from £10K, to £15K.... and so on until it reaches its 'market value'. Supply. Demand. Ability to pay.....

How long, then, before we were back where we started? 5 years?

Percy1983

HAMISH_MCTAVISH wrote: »

It's been so widely reported over the last 6 years that you'd have had to be living under a rock not to realise what's going on.

[/B]http://www.bbc.co.uk/news/business-16425582

http://www.telegraph.co.uk/finance/personalfinance/borrowing/mortgages/6200760/Mortgage-rationing-likely-to-continue.html

http://www.thisismoney.co.uk/money/mortgageshome/article-1650804/Mortgage-rationing-leaves-borrowers-stuck.html#ixzz2duT0IBji

But if you apply at 19:23:36 on a thurday as the moons of jupitor align you will have no problem will you hamish?

Conrad

HAMISH_MCTAVISH wrote: »

Leading to the likeliest outcome by far being a near doubling in house prices in real terms over the next cycle....

A doubling is probably likely, but I suspect that will be the very least we can expect.

Out of interest do you have a feel for how rents will increase over the next 15 years? My mortgages balances will remain the same but 15 or even 25 years from now the rental income will have increased, which is why I find B2L so interesting.

Thrugelmir

wotsthat wrote: »

2.9% is nationwide's average since 1975 so a continuation of trend.

What trend?

The banks commenced leveraging up in 1971. We are still 6 years away from phase 1 of leveraging back down.

CLAPTON

Loughton_Monkey wrote: »

That's life!

But actually, there would be a way that we 'could' all have a decent house for £60K. The scenario would be somthing like this:

1. In a highly radical move, the government 'nationalises' every acre of land in UK that is not built on. Planning rights are centralised, and planning enquiries abolished.

2. Once someone becomes over 18, and can demonstrate marriage, or other reason for 'needing' their own house, the government makes a 'gift' of a small parcel of land to them. Assume it might cost around £60K to get a builder to put up a 'decent' house, and still make a small profit.

3. Those who already own a house on their own plot of land would have that land 'gifted' back to them.

So what would be the implications?

A. A massive drop in house prices generally, as the value of the 'plot' diminishes.

B. Over time, there would be hundreds of thousands of youngsters all owning land, but not yet with the means to build on it. A huge proportion of them would consider (say) £10K in their hand to be a far better proposition and would therefore sell his land to the more savvy person who does want to build a house, but would prefer a bigger plot...

C. In only a short time, the value of such a spare plot would go from £10K, to £15K.... and so on until it reaches its 'market value'. Supply. Demand. Ability to pay.....

How long, then, before we were back where we started? 5 years?

no, because the supply would have been massively increased

wotsthat

Thrugelmir wrote: »

What trend?

The banks commenced leveraging up in 1971. We are still 6 years away from phase 1 of leveraging back down.

Nationwide's long term real house price trend - since 1975.

http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

Percy1983

wotsthat wrote: »

Nationwide's long term real house price trend - since 1975.

http://www.housepricecrash.co.uk/indices-nationwide-national-inflation.php

The one thing is just because the trened points upwards it doesn't mean its best to continue on said trend, likewise if later figues where lower and earlier figures where higher the trend line wouldn't be the same.

wotsthat

Percy1983 wrote: »

The one thing is just because the trened points upwards it doesn't mean its best to continue on said trend, likewise if later figues where lower and earlier figures where higher the trend line wouldn't be the same.

Thanks Percy:)

There's no reason to assume that the trend should or will continue. However, the OP extrapolated the 38 year trend out for another 22 years and gave some reasoning as to why this might be valid based on demographics and repair of lending markets.

You could have mentioned your revelation earlier direct to the OP but chose to make your (now aging) 'joke' about applying for a mortgage on a wet Wednesday at 17:22 so assume that you're not really that bothered about whether the extrapolation is valid.