BOE warns on house price correction

wymondham

What about if it came to law you could only sell your house for what you paid for it - that would be interesting (and a little crazy!)

chucky

Joeskeppi wrote: »

To be fair brit organised a house buyers strike.

Do we know how that went?

System

chucky wrote: »

Do we know how that went?

100% of the members didn't buy a house, I'd say that's pretty successful as strikes go.

Jason74

wotsthat wrote: »

That's the point - they won't.

There's a simple reason. Despite your perception that the public mood is changing and rising prices are now seen as bad no-one really gives a s**t.

Even you don't care beyond posting stuff about help to buy, bubbles and the like on a closed forum plus, no doubt, the odd chunter in the office.

You passionately believe house price are too high and, as far as I can see, you do absolutely nothing about it. If you can't be bothered why should anyone else?

To be fair, I don't think it's a case of "nobody gives a !!!!". I think it's more a case of people understanding that the "rules of the game" are what they are, and people have no real choice but to play. I'll use my own situation as a practical example.

I'm own a pleasant but unexceptional maisonette in one of South London's more interesting suburbs. I paid £92k for it in 2002, and am fortunate enough to own it outright. It's now valued at somewhere in the region of £250-£275k, which is frankly crazy. I see no benefit in the paper "wealth" I've generated from it's increase in value, instead seeing the fact that first time buyers are needing to pay those kind of prices as a major social problem.

But on a practical level, I'm essentially stuck with those market realities. If I wanted to make the logical move "up the property ladder" to a 3 bed house in my local area, said house would cost £400k+ . Given that the only reason I might want to do that would be to have children (meaning that a mortgage would need to be affordable on one salary), I need to extract the "value" from my current home if I want to afford another one. If I don't do that, my current home doesn't get sold at all (as I will of course need it to live in it), and the whole thing becomes moot anyway.

It's not a case of "not giving a !!!!". It's a case of the realities of the market being what they are, and needing to work with them. I'd support any political party that looks to address the situation (and while I'm unconvinced by Milliband generally, his plans for the rental market are a good start). I also financially support organisations that are actively working to bring about change, and choose to work for an organisation that makes a constructive contribution to addressing housing issues (at a significantly lower salary than I could earn elsewhere).

So I don't think I can be accused of "not actually giving a !!!!". But when it comes to my own transactions in the housing market, I don't really have many viable options. If I do come to sell at some point, I will try and ensure that the property goes to an owner occupier rather than a BTL, but that's really about it.

The strength of the market is just much bigger than my power to act. And that's true of any individual acting in the market, which is why it's not realistic to expect people to sell their homes for less than their "value" in order to bring about change. Things need to happen at a much higher level than that.

Jason74

chucky wrote: »

The very large majority try to maximise their selling prices. That will include the hypocrites who complain about house prices being too high.

Nothing to do with "hypocrisy", simply about realities. See my post above

Jason74

wotsthat wrote: »

Not asking you to do anything - I fully expect you to continue doing nothing.

Whenever I see photos of NIMBY gatherings wouldn't it be refreshing to see someone who cared enough to turn up with placards saying 'WE NEED NEW HOUSES HERE!' or 'THE NEWTS WERE A PLANT'?

This to be fair is an excellent point. We know that there is a need for new development, but the minority who oppose this are extremely vocal and organised in their approach. There is perhaps a great deal of benefit to be gained from their being an equally vocal "pro homes" lobby.

chucky

Jason74 wrote: »

Nothing to do with "hypocrisy", simply about realities. See my post above

Maybe for people who don't have values or principles. They rant about one thing but when making a decision they make a different decision to their usual rant.

It's a bit like people who claim they aren't racist but discriminate against people of a different skin colour. You either believe and act in one way or you have double standards and are a hypocrite.

Jason74

chucky wrote: »

Maybe for people who don't have values or principles. Don't rant about one thing but when you're making a decision make a differ t decision to your rant.

It's a bit like people who claim they aren't racist but discriminate against people of a different skin colour. You either believe and act in one way or you have double standards and are a hypocrite.

Not really. Lets take this through on a purely practical basis. Again, I'll use my own (currently hypothetical, as I'm happy in my current home for now) situation as an example.

Purchase price in 2002 £92k
Current "value" £250 - £275k
Cash savings £55k (approx)
Price of possible next home £400-£450k

As discussed above, if I was buying the home mentioned above, it would be on the basis of only a single salary (in the £35 - £40k range) and a young child to care for. With a take home of around £1,900 a Month, and about £1,200 per Month after housing costs needed as a minimum for a comfortable living standard with a young child to look after, a sensible mortgage payment is around £700 per Month.

At a 5% interest rate, that £700 per Month "buys" approx £120k of Mortgage.£250k + £55k + £120k takes you to a total of £425k, the midpoint of the range of possible new home values. So if I want to move, I need to raise the funds from my home at current valuations to do so. I also need to be broadly in my current area for family and work commitments, so moving to a meaningfully cheaper area isn't an option, and I simply wont get access to a house that makes moving worthwhile within my local area for less than the figures above.

So essentially, I only have two choices. I sell my home at its current valuation, or I stay where I am (my current choice, which renders the discussion moot beyond as an illustration). The option of selling for less than current valuation simply doesn't exist in the real world. As it doesn't for most people who wish to move up the housing ladder. And in many ways, I'm in a more fortunate position than many people moving up, given that I have both substantial savings and no mortgage.

And that is why the idea that people unhappy with the current situation should respond by selling for less than market value is absurd, and the comparison with racism frankly offensive. A shame, as you post a lot of good stuff much of the time.

chucky

Jason74 wrote: »

A shame, as you post a lot of good stuff much of the time.

No one questions the math. The system is the system, you either go with or don't. I go with the system and it sounds like you do too.

The question is about people who complain and rant on forums about house prices being too high but will still look to maximise their selling price when they go to sell. They're critical of others but don't look at themselves. That is blatant double standards.

wotsthat

Jason74 wrote: »

This to be fair is an excellent point. We know that there is a need for new development, but the minority who oppose this are extremely vocal and organised in their approach. There is perhaps a great deal of benefit to be gained from their being an equally vocal "pro homes" lobby.

The builders will be lobbying hard but they end up paying bribes to councils because councils think there's no public support for new building so use them as a cash cow. Strong local support would help planning through and probably at a lower cost. You know the problem though - most people are supportive of more building as long as it's in someone else's backyard.

Whenever I've suggested that our resident pro homes crew should get involved locally they generally can't be bothered. They prefer to point out that others are imperfect moral specimens whilst living their lives in exactly the same way.