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

Idiophreak

CLAPTON wrote: »

you have made up a complete load of nonsense about what fictional individuals will sell at: you can make up anything you like with imaginary people to illustrate anything at all but it has no bearing on the UK housing market.

to even suggest that monopoly and non monopoly makes no difference shows a woeful ignorance of how the market works.

Monopolies don't even come in to my example.

So, to clarify.

A) A bunch of people have X number of houses for sale.
A single person has X number of houses for sale.

You believe that houses in situation A will get a different price than houses in situation B. Why?

Also, seeing as my example was nonsense, please present a simple example that illustrates why a bunch of landlords selling up *wouldn't* reduce house prices.

CLAPTON

Idiophreak wrote: »

Monopolies don't even come in to my example.

So, to clarify.

A) A bunch of people have X number of houses for sale.
A single person has X number of houses for sale.

You believe that houses in situation A will get a different price than houses in situation B. Why?

Also, seeing as my example was nonsense, please present a simple example that illustrates why a bunch of landlords selling up *wouldn't* reduce house prices.

today there is a bunch of people selling houses
are prices rising or falling?

Idiophreak

CLAPTON wrote: »

today there is a bunch of people selling houses
are prices rising or falling?

*sigh*

I think we'll just have to agree that all of these idiotic economists have had it wrong all these years. Supply and demand works the other way round. Offer people more of something and they'll pay more for it. Clapton wills it so. All hail Clapton. etc. etc. etc.

CLAPTON

Idiophreak wrote: »

*sigh*

I think we'll just have to agree that all of these idiotic economists have had it wrong all these years. Supply and demand works the other way round. Offer people more of something and they'll pay more for it. Clapton wills it so. All hail Clapton. etc. etc. etc.

why not answer the question?

this day about several thousand houses changes hands

did prices rise or fall?

and supply and demand determines price in a market economy (i.e. not a monopoly economy)

as every economist will tell you

and it's ' in principle' and not 'in principal'

wotsthat

Idiophreak wrote: »

...Sally now lives in Fred's old house. He had an older flat in the suburbs before. It didn't suit his rock-n-roll life style, but is perfect for Sally's needs.

so there are 11 houses rather than 10 and everytime someone new arrives a new house arrives with them.

Idiophreak

wotsthat wrote: »

so there are 11 houses rather than 10 and everytime someone new arrives a new house arrives with them.

OMG...Right...I'll make it really simple for you.

BEFORE:
Renting:
Fred (Yeah, the footballer, really!)
Mark (the plumber)
!!!!!! (the local policeman)
Nancy (many suspect a lady of the night. She claims to deal in pottery)
David (quite a big lad)
Daisy and Dominic (nice young couple, but a lot of cats)
Gregory and Richard (the only gays in the village)
Betty (Nancy's birth mother...though they don't know it yet)

Owners:
Sally (salsa-dancing cruise-aholic)
Andy, Sandy and Family (considering purchasing a minivan)

AFTER:
Renting:
Sally (salsa-dancing cruise-aholic)
Mark (the plumber)
!!!!!! (the local policeman)
Nancy (many suspect a lady of the night. She claims to deal in pottery)
David (quite a big lad)
Daisy and Dominic (nice young couple, but a lot of cats)
Gregory and Richard (the only gays in the village)
Betty (Nancy's birth mother...though they don't know it yet)

Owners:
Fred (Yeah, the footballer, really!)
Andy, Sandy and Family (considering purchasing a minivan)

You see, Wotsthat...you don't need to worry...everyone still has a roof over their head, nobody's being left out to starve. I know it's confusing that people can move houses without having loads of houses sat around empty, but it is possible. In "the game", this would be called "a chain".

Now, let's consider the second scenario when I (or other landlords...afterall, this isn't a monopoly ) sell more houses...the after state may look like this:

Renting:
Mark (the plumber)
!!!!!! (the local policeman)
Nancy (many suspect a lady of the night. She claims to deal in pottery. People suspect Nancy will never move. She's unable to answer the lenders' questions about her income to their satisfaction.)
David (quite a big lad)
Daisy and Dominic (nice young couple, but a lot of cats)

Owners:
Fred (Yeah, the footballer, really!)
Andy, Sandy and Family (considering purchasing a minivan)
Sally (salsa-dancing cruise-aholic. As there was less competition for each house, Sally was able to find a house at an affordable price, so decided to keep to only 4 cruises per year and stay in an owned property.)
Gregory and Richard (the only gays in the village)
Betty (Nancy's birth mother...though they don't know it yet. Betty was originally refused a mortgage, but after a couple of hours in a locked room with her, the local bank manager changed his mind.)

Again, as if by magic, more people have moved *without* building any more houses. Ten houses...Ten sets of people...everyone in a house. As there's a greater supply of houses to buy, everyone pays less than they would have otherwise.

Really hope that's clearer for you....

Idiophreak

CLAPTON wrote: »

why not answer the question?

...Because it was a stupid question?

Yes, there are a bunch of properties on the market for sale, you're right. Gold star. (let's call that, oh, I don't know, the "supply")

...but there are *several* bunches of people wanting to buy (if only there was a name...oh well, let's try "demand").

In this instance, this thing we're calling "supply" is much smaller than the thing we're calling "demand". Hence, there's great competition for each house...and prices are driven up.

CLAPTON wrote: »

this day about several thousand houses changes hands

did prices rise or fall?

They went up. Go Clapton, Go Clapton! You're so smart!

Now, if several *million* houses changed hands today, you believe they'd have been sold for more? Please explain...

CLAPTON wrote: »

and supply and demand determines price in a market economy (i.e. not a monopoly economy)

as every economist will tell you

Right, in my example the "market economy" we're talking about is the house market. Here we have 2 properties for sale from 2 owners. Please explain where the monopoly is? If there happens to be a monopoly in the rental market, that's really neither here nor there.

CLAPTON wrote: »

and it's ' in principle' and not 'in principal'

Well at least one thing you said makes sense. Spotted a typo, good lad.

wotsthat

Idiophreak wrote: »

Again, as if by magic, more people have moved *without* building any more houses. Ten houses...Ten sets of people...everyone in a house. As there's a greater supply of houses to buy, everyone pays less than they would have otherwise.

Really hope that's clearer for you....

It really does sound like a monopoly. You've decided that our buyers pay less because you're in charge of the narrative. All that happened is 10 people live in houses before and after. The demand for rented and purchased has changed but everyone that wants a house still has one so there seems little imperative for a price change - just a shuffling of deckchairs.

Ask yourself. What is more important to price - the ratio of demand for rented / purchased or the number of houses. Consider a new kid on the block turns up and builds a new house. Does it make much difference if he's a seller or a landlord?

ukcarper

Idiophreak wrote: »

Monopolies don't even come in to my example.

So, to clarify.

A) A bunch of people have X number of houses for sale.
A single person has X number of houses for sale.

You believe that houses in situation A will get a different price than houses in situation B. Why?

Also, seeing as my example was nonsense, please present a simple example that illustrates why a bunch of landlords selling up *wouldn't* reduce house prices.

You seem to assume that nobody wants to rent and that those who want to buy have deposit or that others are not in receipt of LHA and would have no chance of buying even if prices fell.

Idiophreak

wotsthat wrote: »

It really does sound like a monopoly. You've decided that our buyers pay less because you're in charge of the narrative. All that happened is 10 people live in houses before and after. The demand for rented and purchased has changed but everyone that wants a house still has one so there seems little imperative for a price change - just a shuffling of deckchairs.

Ask yourself. What is more important to price - the ratio of demand for rented / purchased or the number of houses. Consider a new kid on the block turns up and builds a new house. Does it make much difference if he's a seller or a landlord?

Technically, the demand for rent and purchased hasn't changed...I said in the first post that half the people (ie 5) want to buy - that's the demand, and that doesn't change. The supply changes as and when more properties are released onto the market from rental, or indeed built and sold. And when this changes, prices fluctuate.

Your second paragraph hits the nail on the head...The ratio of demand for rented / purchased properties is much more significant than the number of new houses....unless you build *a lot* of new houses...just because there are so many existing rentals.

If Rodney the homoeopathic practitioner moved to my little universe and built a new house, whether it would matter if he sold or rented would largely depend on where he lived. If he decided to sell (at the same time as Sally et al), we'd have had 3 properties on the market instead of 2, but if he decided he wanted to buy somewhere else, we'd also have an extra buyer....if he decided to rent his place out, we'd still only have 2 properties for sale...and if Rodney wants to buy, we now have 6 people competing for the 2 flats...So by Rodney owning a second home, house prices will rise further...which was my point all along. If you build houses and they're all bought up by private landlords, it does nothing to help house prices at all.

In the real world of course, the numbers are much easier to see...There are 4m-ish privately rented homes. Putting all of those up for sale would have far more impact on house prices than building an extra couple of thousands home here or there...