front page of Saturday's FT - re house prices

MFW_ASAP

Graham_Devon wrote: »

Which again, is all true.

However, you are looking at people who wanted to, and chose to move, so I doubt they would find it traumatic.

This isn't what I am describing. The people on the other thread don't want to leave London, but find they have no other option.

Two different sets of people.

Is that any different from other popular areas? There are plenty of young people forced out of areas they grew up in the Lake district, Peak district, Cheshire because house prices are too high for them to afford.

They end up moving a few miles away and while it would be nice to live with the Manchester United players in Prestbury, many have to make do with Congleton.

It's the same all over the place, desirable areas attract people and prices go up. If prices go up, then people who can't afford those prices move elsewhere. It's hardly rocket science.

Percy1983

MFW_ASAP wrote: »

Is that any different from other popular areas? There are plenty of young people forced out of areas they grew up in the Lake district, Peak district, Cheshire because house prices are too high for them to afford.

They end up moving a few miles away and while it would be nice to live with the Manchester United players in Prestbury, many have to make do with Congleton.

It's the same all over the place, desirable areas attract people and prices go up. If prices go up, then people who can't afford those prices move elsewhere. It's hardly rocket science.

I do find this amusing as I see it all the time locally in Oldham, people live up in Saddleworth have children, complain prices are too much for there children but then actively block all possible house building locally.

Of course all the children have to come down the hill and live with those of us who have never lived up in Saddleworth (also known as the riff raff).

Eventually parents die, they move back up there with children and the circle continues... jam scones all round :rotfl:

MFW_ASAP

Percy1983 wrote: »

I do find this amusing as I see it all the time locally in Oldham, people live up in Saddleworth have children, complain prices are too much for there children but then actively block all possible house building locally.

Of course all the children have to come down the hill and live with those of us who have never lived up in Saddleworth (also known as the riff raff).

Eventually parents die, they move back up there with children and the circle continues... jam scones all round :rotfl:

It's the circle of life, and it's probably been going since we moved out of caves.:)

Hence why I find it astonishing when I come across people (admittedly only on here) who are surprised that eares where people want to live are more expensive than areas where people don't.

Graham_Devon

MFW_ASAP wrote: »

Is that any different from other popular areas? There are plenty of young people forced out of areas they grew up in the Lake district, Peak district, Cheshire because house prices are too high for them to afford.

These are not young people forced out of their local area. You've changed tact on what I was stating, I guess purposely as it was quite clear what I was talking about.

These are people who already OWN accomodation in the local area. They now need to upgrade or move for whatever reason (mainly the arrival of children).

They find they can no longer afford to move in the same area, as although their house price has increased (as one poster said, by ridiculous amounts) the gap between what they have now and what the upgrade is now so large, they cannot afford to move.

So it's a story whereby even though their house has increased in value by vast amounts, the very same HPI has priced them out.

It's not something we often discuss on here. Instead we always focus on how increased HPI brings better LTV levels for the move. However, that increased HPI if increasing by too much can also have the effect of pricing them out or trapping them in what they have.

Conrad

Graham_Devon wrote: »

I've always assumed these stories of houses seeing their value increase massively in London should be taken with a piece of salt.


His apartment has increased in value by 40% in a year, according to the EA valuation.

I'm just wondering how it's all possible.

This is the sort of thing I've been seeing first hand. I have clients now just outside London that cannot get a 3 bed house as there is an army of waiting purchasers for each.


I'm seeing property up at least 25% in 12 months and this is outer London.


Speaking with my B2L head on, the gold rush is to do with the fear of being left behind and having to pay a lot more for further property by waiting and to make matters worse interest rates will be higher the longer one waits.




Now the other interesting thing I'm seeing is rents soaring even in outlying areas now. I am buying a grubby high rise 1 bed flat where rents were £650pm but I had a gut feel they would rise to £800pm and sure enough just in 2 months this is what has happened.

wotsthat

Graham_Devon wrote: »

It's not something we often discuss on here. Instead we always focus on how increased HPI brings better LTV levels for the move. However, that increased HPI if increasing by too much can also have the effect of pricing them out or trapping them in what they have.

Why can't they move somewhere that hasn't increased by so much? i.e. pretty much anywhere outside of the centre of London. There are still options - let's face it a 40% fall in house prices would hardly be conducive to a house move so it could be worse.

If my house in the East Mids went up by 40% and they were flat in Cornwall I'd be buying down there and commuting. It would be a tough few years but my retirement property would be sorted and I'd be looking at an early retirement.

Maybe some people are better at seeing the opportunities.

Graham_Devon

wotsthat wrote: »

Why can't they move somewhere that hasn't increased by so much? i.e. pretty much anywhere outside of the centre of London. There are still options - let's face it a 40% fall in house prices would hardly be conducive to a house move so it could be worse.

Dunno. Why not join in on the thread and ask them instead of asking me?

I'd guess a lot of their worries about their situation is kids in schools etc.

I never said their situation was impossible afterall, neither did they. I stated they may find it traumatic. I know I would find it traumatic to move out of an area I enjoyed living in, had roots in, took part in the community in, children went to school in, took part in activites in.... all because I was now, thanks to HPI, effectively trapped.

I was just looking at how HPI doens't always favour those who own accomodation. It can also be a hinderance. Put it up for discussion, but seemingly that was a waste of time. Were all aware that people can commute, move to other areas of the country etc, but that is of little relevance to my point.

wotsthat

Graham_Devon wrote: »

Dunno. Why not join in on the thread and ask them instead of asking me?

I would do if I could find someone to ask. I don't know anyone whose house has gone up in value by 40% and thinks it the worst thing that could have happened to them.

marlot

wotsthat wrote: »

Why can't they move somewhere that hasn't increased by so much? i.e. pretty much anywhere outside of the centre of London. ...

I agree. I'm amazed that even more people don't commute from where I live in Camberley/Farnborough. Approx 40 minutes to Waterloo.

Woking is even closer, but can be cheaper.

Most main train lines into London have similar areas which work well - depending where you work in London of course.

MFW_ASAP

Graham_Devon wrote: »

These are not young people forced out of their local area. You've changed tact on what I was stating, I guess purposely as it was quite clear what I was talking about.

These are people who already OWN accomodation in the local area. They now need to upgrade or move for whatever reason (mainly the arrival of children).

They find they can no longer afford to move in the same area, as although their house price has increased (as one poster said, by ridiculous amounts) the gap between what they have now and what the upgrade is now so large, they cannot afford to move.

So what is the difference between these people and young people just starting out? Neither can afford to live in the popular area and both will have to move to a less popular one. The only differences are that they can stay put in the popular area or cash in on the HPI gains in their current area, whereas young FTBers can't. Indeed, they could rent out their 'too small' house in a popular area and use the income to pay off the mortgage on a larger house in a less popular area.

As I said, it's the circle of life. Some people can afford to live in salubrious areas and some can't. Some people are priced out from the beginning (FTBers) and some people are priced out in the middle.