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MSE News: Risky mortgages to face new crackdown, George Osborne says

edited 30 November -1 at 12:00AM in Debate House Prices & the Economy
69 replies 664 views
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  • HAMISH_MCTAVISHHAMISH_MCTAVISH Forumite
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    J_i_m wrote: »
    Above all else I want to be able to buy.

    As do most people.

    Yet the usual suspects on here want you to believe that not being able to buy thanks to mortgage rationing is actually for your own good.
    Quite frankly, given the choice between paying 'MORE' and being excluded from buying, I'd choose paying more.

    It's the only rational choice.

    Even if house prices doubled from here, it would still be cheaper than a lifetime of rent. Not to mention all the intangible benefits of owning.

    It is frankly bonkers that some people on here believe the answer to a housing shortage is to prevent large number of people from buying houses.

    Rather than just building more of them...
    “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”
  • HAMISH_MCTAVISHHAMISH_MCTAVISH Forumite
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    CLAPTON wrote: »
    why bother to post nonsense

    I could ask you the same thing.

    'Removing demand' is not a solution to a housing shortage.

    Removing people is not going to happen. Which really only leaves removing people's ability to buy.

    And preventing people from buying thanks to artificial restrictions on lending does not remove demand, it displaces demand into rented, causing rents to rise and fewer houses to be built, which as we've seen from the last 7 years causes house building to fall to 100 year lows and the housing crisis to worsen.

    Only an idiot would think that's a good idea.....
    “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”
  • edited 14 June 2014 at 9:39AM
    AndyGuilAndyGuil Forumite
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    edited 14 June 2014 at 9:39AM
    mobfant wrote: »
    If they do fall, it may be for reasons that mean many more people will be able to buy, so good.

    And there's a difference between saying that demand is greater than supply and so prices must rise, and the explanation for prices having risen at the rate that they have. So prices could fall significantly despite the high level of demand.

    If more people are in a position to buy then the price rises unless there is a huge amount of supply but the supply is managed as profit margins aren't that high for house builders.

    Falling prices tends to reduce supply and sieze the market up. They really can't fall.
  • HAMISH_MCTAVISHHAMISH_MCTAVISH Forumite
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    mobfant wrote: »
    If they do fall, it may be for reasons that mean many more people will be able to buy.

    Eh?

    Prices are set by supply and demand.

    The only conceivable way that both prices will fall AND more people will be able to buy at those lower prices is because we built more houses.
    AndyGuil wrote: »
    If more people are in a position to buy then the price rises

    Exactly.
    “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”
  • mobfantmobfant Forumite
    279 posts
    Eh?

    Prices are set by supply and demand.

    The only conceivable way that both prices will fall AND more people will be able to buy at those lower prices is because we built more houses.

    Exactly.

    No. If you remove the speculative element of the prices rises, then they could fall. Take a £100,000 house. It could rise in value to £105,000 because that is what someone who is looking to buy to own thinks it is worth and they can afford without stretching themselves or resorting to bank of mum and dad etc.

    However, instead someone who thinks prices are indefinitely going to rise, outbids them and so pays £110,000.

    Then sentiment changes and forecasts are no longer for inevitable huge price rises, so owning the property is less attractive to the investor. So the property is sold for £105,000.

    As a result prices fall from where they are now, but are nonetheless up on where they were initially, because of the shortage of supply.
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  • mobfantmobfant Forumite
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    Some evidence of this (and I'm aware there is a lot of competing info out there right now), which interests me partly because I'm looking to buy in Lambeth and Hackney...


    A survey released today said prices fell in 12 of London’s 33 boroughs in April. Figures by estate agency group LSL Property Services showed that across London prices rose by 0.2 per cent, the slowest rate for 10 months, although they are still 13.3 per cent higher year on year. The steepest drop was in Westminster, where the average price fell 2.9 per cent to £1.19 million, and in Kensington & Chelsea, where it dropped 2.7 per cent to £1.91 million.

    Falls were also recorded in Hammersmith & Fulham, Islington, Lambeth, Barnet, Hackney, Ealing, Kingston, Brent, Tower Hamlets and Redbridge.

    http://www.standard.co.uk/news/uk/house-price-boom-falters-and-city-bets-on-rate-rise-9534858.html
  • HAMISH_MCTAVISHHAMISH_MCTAVISH Forumite
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    mobfant wrote: »
    As a result prices fall from where they are now

    I don't think you quite understand how this whole supply and demand thing works....

    We've prevented well over a million people from buying their own house in the last 7 years and forced them to buy a house for their landlords instead.

    The only way to reverse that situation is to increase lending, allowing those people to buy, and causing more houses to be built.
    “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”
  • mobfantmobfant Forumite
    279 posts
    I don't think you quite understand how this whole supply and demand thing works....

    We've prevented well over a million people from buying their own house in the last 7 years and forced them to buy a house for their landlords instead.

    The only way to reverse that situation is to increase lending, allowing those people to buy, and causing more houses to be built.

    I don't think you quite understand it either. Demand is more complex a phenomenon than you realise. As is supply. The shortage of houses being built is about far more than just price, such as planning restrictions on green belt areas.

    I'm not disagreeing, by the way, that we need far more houses to be built. We definitely do.
  • CLAPTONCLAPTON Forumite
    41.9K posts
    I could ask you the same thing.

    'Removing demand' is not a solution to a housing shortage.

    Removing people is not going to happen. Which really only leaves removing people's ability to buy.

    And preventing people from buying thanks to artificial restrictions on lending does not remove demand, it displaces demand into rented, causing rents to rise and fewer houses to be built, which as we've seen from the last 7 years causes house building to fall to 100 year lows and the housing crisis to worsen.

    Only an idiot would think that's a good idea.....


    price is determined by supply and demand is a (approx) market economy

    change either supply or demand affect price


    reducing the 500,000 people that come migrate to the UK will reduce demand and reduce price

    now I know your vision for scotland is 2-3 million new immigrant and will welcome the increase in the price of houses but that you and not me.

    the economics is the same
  • HAMISH_MCTAVISHHAMISH_MCTAVISH Forumite
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    mobfant wrote: »
    Some evidence of this

    How many Russian Oligarchs buying in Kensington and Chelsea will be affected by mortgage restrictions do you think?

    And meantime back in the real world outside of prime central London, ordinary people are competing with each other and landlords to buy houses in short supply.

    So restricting high LTV or LTI mortgages prevents young FTB-s from buying houses for themselves but keeps them paying rent and therefore buying houses for their landlords.

    And it therefore allows property wealth to consolidate in the hands of fewer, richer people, as we've seen from the last 7 years.

    Honestly, some people never learn....
    “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”
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