'HPI should be capped at 5%' - RICS

chucky

N1AK wrote: »

This may seem odd given that one of our few points of agreement is that a house price bubble would be bad but: I could, and will.

If house prices are rising by 8% pa and the only step being taken to slow it is restricting lending then it will be people who don't own yet, on low incomes, with little savings etc who will lose the ability to borrow.

There's no point in limiting house price growth if doing so negatively affects the very people we want to limit it to help.

Exactly the point my friend, another good post from you.

There are bigger issues in the UK to deal with than exclusively affecting house prices. Getting the fundamentals right before looking at this would be a start...

wymondham

I've probably missed a bit here, but when we bought it was capped at 3.5 joint salary. This worked quite well?

Out,_Vile_Jelly

It's clearly an utterly unworkable idea, but to me the real issue is that it's even being mentioned. This was the lead story on Radio 2 and Talksport news bulletins this morning. There just seems to be more general talk of rampant HPI possibly not being A Jolly Good Thing- a notion that would formerly have been heresy. It will obviously take a long time for a nation so obsessed with property prices to calm down about them.

I'm in the process of buying a house and talk of booming prices makes me very nervous that a) I may get gazumped and b) I'm buying something laughably overpriced (modest house in a not great part of London). I just want to enjoy living there and not make a loss when I eventually sell.

wotsthat

Graham_Devon wrote: »

How can anyone suggest that's a bad thing!?

Well it's the stupidest idea I've heard today.

Say house prices increase by 6% so credit controls are introduced. This means the wealthier, those with help from BOMAD, and BTL's (with higher deposits) will make up a bigger proportion of buyers.

FTB's will reduce in number. Builders will build less. Sellers will sit tight. There's a transfer of wealth from the less well off to the better off.

Lower house prices doesn't mean more people will be able to buy.

Where have you been for the last few years?

carslet

I think trying to cap 5% per year for HPI is an excellent idea. for everyone

CLAPTON

wotsthat wrote: »

Well it's the stupidest idea I've heard today.

Say house prices increase by 6% so credit controls are introduced. This means the wealthier, those with help from BOMAD, and BTL's (with higher deposits) will make up a bigger proportion of buyers.

FTB's will reduce in number. Builders will build less. Sellers will sit tight. There's a transfer of wealth from the less well off to the better off.

Lower house prices doesn't mean more people will be able to buy.

Where have you been for the last few years?

surely the wealthier benefit now from BOMAD, larger deposits etc so why will that change?

Carl31

Out,_Vile_Jelly wrote: »

It's clearly an utterly unworkable idea, but to me the real issue is that it's even being mentioned. This was the lead story on Radio 2 and Talksport news bulletins this morning. There just seems to be more general talk of rampant HPI possibly not being A Jolly Good Thing- a notion that would formerly have been heresy. It will obviously take a long time for a nation so obsessed with property prices to calm down about them.

I'm in the process of buying a house and talk of booming prices makes me very nervous that a) I may get gazumped and b) I'm buying something laughably overpriced (modest house in a not great part of London). I just want to enjoy living there and not make a loss when I eventually sell.

Where HPI could be a vote winner for the next election, it could well become the downfall, if another party were to promise controls to stabilise it

The media focus on it at present is whats interesting

Loughton_Monkey

Spot the [STRIKE]Difference[/STRIKE] Similarity:

The Bank's governor, Mark Carney, told MPs on Thursday that the Bank was vigilant on house prices but that parts of the country had not seen any recovery in the housing market.

In previous speeches, he has said that he has a toolkit in place to keep a lid on any potentially damaging boom.

This includes asking, but not telling, banks to limit how much they can lend to individuals and making them set aside more capital if they want to carry on providing mortgages.

And then, Friday...

The Bank of England should use its powers to limit house price increases to 5% a year to "take the froth out" of price booms, a surveyors' group says.

The Royal Institution of Chartered Surveyors (Rics) said that a 5% annual rise should trigger caps on how much people could borrow relative to their incomes or the value of the property.

To me, this looks very much like Thursday sees the boy Carney telling the house "I've got it under control. Here's how..." and then the very next day, the publicity-seeking RICS spit out "Carney should get it under control. Here's how....."

Another classic case of VI. The RICS want a 'healthy' market, but most of all they want a stable market. All this lot ever do is (a) try to spot a bit of woodworm to justify their high fees, and (b) google how much the house next door sold for, and churn the same figure out as a so-called 'Valuation', after deducting a few % to cover their backsides.

They don't want half their members scratching their backsides when things are slow. Nor do they want to recruit more woodworm-spotters when it's red-hot, only to lay them off.

Basically it's all froth...

[PS. Warning. Whilst the above opinion is offered in good faith, I did not take up the floorboards at the BOE, nor did I get up a ladder to inspect the official minutes of Thursday'a Treasury Committee Meeting. Nor did I test the above statements for compliance with current legislation regarding gas, electricity, plumbing, heating, or drainage installations.......]

ILW

There does seem to be a change in "mood".
It seems that it is only recently that anybody (in the mainstream) has actually questioned whether high HPI is anything but a good thing.

wotsthat

CLAPTON wrote: »

surely the wealthier benefit now from BOMAD, larger deposits etc so why will that change?

They'll benefit even more as credit controls will effectively remove potential buyers from the market.

We've been watching this exact scenario play out for the last few years.