How can house prices be so high it's so unfair on the young stars

ukcarper

Idiophreak wrote: »

No, in houses *that they've bought*, in council rentals, or in houses people buy for market speculation.

The idea is that there's a bunch of people renting houses who want to buy houses, but can't afford it. Hence this discussion.

If you force a lot of the people renting their houses to sell, house prices would fall and the renters that live there would be able to afford to buy.

Do you really believe that what about the thousands if not millions on LHA.

CLAPTON

Idiophreak wrote: »

No, in houses *that they've bought*, in council rentals, or in houses people buy for market speculation.

The idea is that there's a bunch of people renting houses who want to buy houses, but can't afford it. Hence this discussion.

If you force a lot of the people renting their houses to sell, house prices would fall and the renters that live there would be able to afford to buy.

so people who already live in the houses will then buy them and stay in the same housing?

so how does that increase the quantity of housing?
and how does that stop the need to build more for the expanding population?

wotsthat

92203 wrote: »

Anyone who brought between 1993 and the early 00's would have been able to afford a nicer house than their equivalent counterpart buying during or after the boom leading up to the financial crisis.

That's when I bought. It's only with hindsight that prices look cheaper. At the time there was a recession, prices looked expensive, repossessions were high and nobody was buying.

There's always a reason for those dips and they'll coincide with low transaction levels.

The problem with that graph is that if its used to argue that prices now are unusually high you might have to accept that the nineties were unusually low - they weren't normal.

grizzly1911

wotsthat wrote: »

That's when I bought. It's only with hindsight that prices look cheaper. At the time there was a recession, prices looked expensive, repossessions were high and nobody was buying.

There's always a reason for those dips and they'll coincide with low transaction levels.

The problem with that graph is that if its used to argue that prices now are unusually high you might have to accept that the nineties were unusually low - they weren't normal.

We brought our first house in 87 prices were rising fast with gazumping common. We had to offer the fairly full asking price on house requiring full modernisation very quickly. There were higher offers made but our elderley sellers were honourable people.

Perhaps the prices were allowedl too high before the 90s slump and it was really only a blip. Not sure gazumping was normal.

Any idea what the trend data was over that period?

NB: Does gazumping still happen, presumably it does in some form? Does it have a new name?

wotsthat

grizzly1911 wrote: »

We brought our first house in 87 prices were rising fast with gazumping common. We had to offer the fairly full asking price on house requiring full modernisation very quickly. There were higher offers made but our elderley sellers were honourable people.

I bought 6 years later. Gazumping was a distant memory - people couldn't shift houses. I can see why young people might do it but finding the cheapest point in history to buy a house and thinking it's normal misses the point. I'm reasonably sure if this forum had existed in 1993 then we'd be seeing plenty saying that prices were 'simply' too high and yet, just 3 years earlier in 1989, they were just as expensive as now.

grizzly1911 wrote: »

NB: Does gazumping still happen, presumably it does in some form? Does it have a new name?

My BIL is just selling his house in the South-West. He bought in late 2006 and the offer price is breakeven at best. There's been quite an interest and it seems that they'll achieve above this - not from gazumping but purely because it's turning into an auction.

Idiophreak

CLAPTON wrote: »

so people who already live in the houses will then buy them and stay in the same housing?

so how does that increase the quantity of housing?
and how does that stop the need to build more for the expanding population?

I'm sorry, I thought this was a thread about reducing house prices, not increasing population.

I don't envisage people directly buying their rented home from the person selling, no...it's not that literally. There would just be more homes on the market, making all of them more affordable.

In reality, this wouldn't be a switch that's flicked, you'd stagger it over a number of years to control house price growth without shafting people who already own houses.

For instance, landlords could face staggered caps on yield - so it goes down from 10% to nothing over 10 or 11 years...So these houses would filter through gently into the market, not all get dropped in at once.

I reiterate, though, this is only a measure you'd take *If you want to bring house prices down* - personally, being a relatively young person that's bought a house, I'm not sure there's a need.

CLAPTON

Idiophreak wrote: »

I'm sorry, I thought this was a thread about reducing house prices, not increasing population.

I don't envisage people directly buying their rented home from the person selling, no...it's not that literally. There would just be more homes on the market, making all of them more affordable.

In reality, this wouldn't be a switch that's flicked, you'd stagger it over a number of years to control house price growth without shafting people who already own houses.

For instance, landlords could face staggered caps on yield - so it goes down from 10% to nothing over 10 or 11 years...So these houses would filter through gently into the market, not all get dropped in at once.

I reiterate, though, this is only a measure you'd take *If you want to bring house prices down* - personally, being a relatively young person that's bought a house, I'm not sure there's a need.

there would be no increase in supply as all you propose is converting houses currently rented to being available to purchase and no reduction in demand as you have converted people formally renting to people needing to pourchase

supply and demand being essentially unchanged one would expect little change in price


as population is continuing to grow, in practice without large housing building then prices will continue to rise

Idiophreak

CLAPTON wrote: »

there would be no increase in supply as all you propose is converting houses currently rented to being available to purchase and no reduction in demand as you have converted people formally renting to people needing to pourchase

supply and demand being essentially unchanged one would expect little change in price

The supply and demand of rental and purchase have to be considered separately.

Consider a simple example...there are 10 houses...I'm a landlord, I own 8 of them. Let's say half the people in the houses want to buy...so, we have 5 people fighting over 2 properties. More demand than supply. If I offer another 3 properties for sale, there's equal supply and demand - so the prices should reduce. No more houses, no fewer people, just a change of ownership.

And yes, we need more houses as the population grows, but that's off topic.

purch

How can house prices be so high it's so unfair on the young stars

Has anyone explained who these Young Stars are that are referred to in the thread title ?

Is it One Direction ? :eek:

Linton

Idiophreak wrote: »

The supply and demand of rental and purchase have to be considered separately.

Consider a simple example...there are 10 houses...I'm a landlord, I own 8 of them. Let's say half the people in the houses want to buy...so, we have 5 people fighting over 2 properties. More demand than supply. If I offer another 3 properties for sale, there's equal supply and demand - so the prices should reduce. No more houses, no fewer people, just a change of ownership.

And yes, we need more houses as the population grows, but that's off topic.

Seems very confused to me.

You say there are 10 houses. Are 2 of them empty? If they are, in your mini world there is no shortage of supply anyway as there are 8 people in 10 houses. If they arent, you have 2 sellers looking for somewhere to live.

In a more realistic world there would be 10 people in your 8 rentals as there would be some sharing plus the two people in the extra 2 houses. If 5 of "your" people including 2 half couples wanted to buy and you put 3 up for sale you could demand a very high price - prices would increase. And 2 people could have to move to another miniworld putting up prices there.