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HPI Warnings Everywhere!!!!!
Comments
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restricting borrowing does not increase the number of people who can buy.
Indeed.
You can't fix a housing shortage by stopping millions of people from buying houses.
This is just such an obvious point that I'm staggered the usual suspects still don't 'get it'.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
This is all both true and reasonable. Despite what one or two posters on here might try and say, There can be little doubt that people starting their careers now till have less favourable outcomes than those who started their careers 30 years ealier, simply because they are born 30 years later.
The only comment I would make, is on the issue of "rough areas". Being a Londoner, I perhaps have a very "region specific" take on this, but the area issue is (here in the capital at least) perhaps more nuanced than you mention. What tends to happen here, is that as more relatively affluent people are "forced" by high house prices into "less desirable" areas, those areas change. The make up of people moves up the economic scale, local businesses spring up to cater for them, and the area becomes less "rough". Not ideal while you (in the general sense rather than you personally) wait for the area that you bought in because it was all that you could afford to improve I grant you, but London is full of places that were once considered no go areas, but are now highly desirable.
I do not know enough about London to comment, but what you say is very plausible. I suspect it is also true of many areas of the South East on a smaller scale. Urban areas once considered "working class" and undesirable have increasingly become more fashionable locally after modern housing developments on large brownfield sites (ex-military, former hospitals) have shifted the balance in those areas making them more desirable particularly when they have good rail connectivity.Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
The supply / demand imbalance imho is not enough to sustain recent historic price increases forever, as at some point, the lack of people who can afford prices simply has to come into play. That said, people trying to call that point have tended to look rather silly in the past, so we may be a way off that point yet.
As long as letting property remains an attractive option to many. Then there'll remain upward pressure.
Though as long as Governments maintain downward pressure by limiting expenditure on housing benefit for example. We may finally reach a turning point. In terms of a levelling out.0 -
Indeed, and this is the crux of the problem.
Those of us who hadn't entered the world of work and established careers at this point will have to borrow more, earn more and ultimately achieve much more to afford the same house at 2.5x the price.
It also places a floor at the bottom of the housing market which means that even with established careers and reasonable jobs, if you have any intention of starting a family (and allowing for reduced earnings and/or child care) you end up living in a rough area. I have no expectation to own a 3/4 bed semi with a driveway and garage, a 2 bed terrace would be fine. All I want is to live in an area where people show each other respect and consideration, bring their children up properly, and ultimately have a good work ethic.
The affordability issue is largely the failure to build sufficient houses of the right kind in areas people want to live. What disturbs me is the way we seem to allow market forces to determine how cities and towns evolve. Modern technology enables many businesses to be located anywhere. I fail to understand why we (as a society) cannot incentivise and deter commercial organisations to locate in areas other than the SE and London. Such measures would make housing costs more equal.
Your personal aspirations seem to be very balanced and realistic. My impression is that a some of those in their 20s/30s would not do this. Their first reaction is to cajole their elders to subsidise the more expensive option.Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
The affordability issue is largely the failure to build sufficient houses of the right kind in areas people want to live. What disturbs me is the way we seem to allow market forces to determine how cities and towns evolve. Modern technology enables many businesses to be located anywhere. I fail to understand why we (as a society) cannot incentivise and deter commercial organisations to locate in areas other than the SE and London. Such measures would make housing costs more equal.
Your personal aspirations seem to be very balanced and realistic. My impression is that a some of those in their 20s/30s would not do this. Their first reaction is to cajole their elders to subsidise the more expensive option.
Perhaps you should watch the recent programme Mind the Gap.
There are a lot of areas in the UK that have tax incentives but unless you set up your business where the talent is then it is likely to fail. This has happened many times in the UK. Close proximity to other businesses and people gives you far more market access than relying on technology.0 -
Perhaps you should watch the recent programme Mind the Gap.
There are a lot of areas in the UK that have tax incentives but unless you set up your business where the talent is then it is likely to fail. This has happened many times in the UK. Close proximity to other businesses and people gives you far more market access than relying on technology.
I will do so, but I was thinking about the long term strategy. Its useful for initiatives of that kind but these tend to be short term.
We now have a situation where so many firms see the London SE as the place to locate themselves for sound business reasons including the availability of skilled employees, albeit those that can mostly only afford to rent. Unless we can break this cycle the SE will keep growing and the regions decline. We need to be more radical than initiatives that last only a few years.Few people are capable of expressing with equanimity opinions which differ from the prejudices of their social environment. Most people are incapable of forming such opinions.0 -
We now have a situation where so many firms see the London SE as the place to locate themselves for sound business reasons including the availability of skilled employees, albeit those that can mostly only afford to rent. Unless we can break this cycle the SE will keep growing and the regions decline. We need to be more radical than initiatives that last only a few years.
Manchester being a good example. Though requires a major corporation to relocate. For the wider economy to benefit.0 -
Over on hpc.co.uk they are furious about this. They are voting UKIP for radical change. They seem to think Nigel Farage will be the friend of the renter.0
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HAMISH_MCTAVISH wrote: »The crux of the problem is we are short a million houses.
And the shortage is worsening by 150K houses a year.
Everything else is just noise, and a BS distraction from the fundamental cause of high prices in the UK.
If you want cheaper houses, build another 3 million in the next decade.
If that doesn't happen, expect HPI to continue at a monumental pace.:cool:
As for me, I don't think this country has a snowballs chance in hell of building enough houses, thanks mainly to the mistakes of rationing credit for the last 7 years and worsening the housing shortage to now epic proportions.
So I've positioned myself accordingly.
And when prices boom to new record high levels, you can blame the idiots who thought it was a good idea to restrict credit and cause the lowest build rate in a century.
Generally we agree but some of what you state is clearly wrong.
Credit rationing as you call it is not a big factor in build rates. It is certainly A factor but nowhere near the main one. As evidence I would cite France in 2011 at the height if the crunch....built 421k homes which was in fact HIGHER than her two decide average of almost spot on 400k a year. IMO stamp allocation is the main factor
The shortage which we agree on is much worse than the million homes you have suggested. Its closer to 3 million too few right now (if we had 3 million more today we would have an occupancy level almost the same as France). Worse yet the build rate needs to be the same as france plus more to work through this 3 million shortage. So the uk should be building 500-600k a year certainly not the 130k currently built.
I will also add that there was a period of 4 years in the 1970s where the population of the uk actually fell slightly. During those 4 years 1.2 mullion additional homes were built. Most people simply cant imagine that. They think that more homes are needed to meet the needs of a growing population. They don't understand that more homes are needed to allow for a lower occupancy rate. The uk needs to build bith for an increasing population but also to meet the needs of lower future occupancy rates.
Overall I too think its very unlikely the uk will get to the 500k a year homes needed to meet demand and limit HPI to 2-4% a year. Instead we will continue at 130k and maybe rise towards 200k but it will not be enough.
But of course no shortage can last forever. It will work itself right at some point but that could well be half a century away0 -
I will do so, but I was thinking about the long term strategy. Its useful for initiatives of that kind but these tend to be short term.
We now have a situation where so many firms see the London SE as the place to locate themselves for sound business reasons including the availability of skilled employees, albeit those that can mostly only afford to rent. Unless we can break this cycle the SE will keep growing and the regions decline. We need to be more radical than initiatives that last only a few years.
Businesses want to ve as close to as many customers as possible which in the uk means London. If Liverpool was a city of 15 million you could bet your bottom dollar that this problem you talk of would be everyone investing there or close by instead of in the south or acotland or Wales. ...
if yoy want more even investment you are going to need yo create a city or urban area equal to or larger than london and that isn't lilely considering the second buggesy city in the uk is Birmingham at just nirth if 1.0 million0
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