'We've reached a tipping point' Signs of house price weakness

wotsthat

Blooloo wrote: »

Repeating ad nauseam that there is only one choice...buying...is more revealing about the thought processes and agenda of the poster than any arguments they may, or may not, present.

If someone wants to buy but, for whatever reason, can't then it's clearly silly telling them they should have bought - but no-one is telling them that.

It's relevant for Crashy because he says he could have bought in 1998 but thought prices were too high. Personally I think Crashy couldn't have bought in 1998 and still can't so to an extent he had to rent anyway.

It's relevant for HPC_Troll because, I think, he sold to rent (in the South-East) in 2012. HPC_Troll hasn't shared his experience but what do you reckon he's invested in so far - he already had a house but tried to be too clever. He's arguing that now is the tipping point using the same arguments he made in 2012 just before he threw what?, £50k down the drain?

Buying is the only choice if you want to buy - which is what I've done and everyone on HPC wants to do (apart from Bruce Banner who's making an apparent fortune renting). The argument is about the best way to end up as a homeowner - if people want to kid themselves the best way is to buy and sell houses like shares in BT (even though, sniff, homes are for living in rather than for speculating with) and pay rent waiting for falls good luck to them.

HAMISH_MCTAVISH

As always when the crashaholics invade, you can't get any rational debate out of them, because they ignore reality.....

Many millions of adults are now living with parents, or lodging, or in HMO's, or flatshares, or what have you.

If prices were to halve, where would the millions of houses suddenly appear from for these people to go and live in?

They don't exist.... Which is why prices are expensive.

The market is rationing goods in scarce supply through price, exactly as it should.

Millions of people are forced to share, through high prices and high rents, that would otherwise want to have a place of their own, if they could only afford it.

But if they could afford it...... if you could wave a magic wand and drop prices and rents far enough so that these millions of people could now afford their own place..... it would make no difference at all.

Because there simply aren't enough spare houses.

They would still have to live at home, to share, to live in HMO's, etc.

Only now we'd have to find some other way of rationing the limited properties.

Perhaps waiting lists, or lotteries.....

Blooloo

wotsthat wrote: »

If someone wants to buy but, for whatever reason, can't then it's clearly silly telling them they should have bought - but no-one is telling them that.

It's relevant for Crashy because he says he could have bought in 1998 but thought prices were too high. Personally I think Crashy couldn't have bought in 1998 and still can't so to an extent he had to rent anyway.

It's relevant for HPC_Troll because, I think, he sold to rent (in the South-East) in 2012. HPC_Troll hasn't shared his experience but what do you reckon he's invested in so far - he already had a house but tried to be too clever. He's arguing that now is the tipping point using the same arguments he made in 2012 just before he threw what?, £50k down the drain?

Buying is the only choice if you want to buy - which is what I've done and everyone on HPC wants to do (apart from Bruce Banner who's making an apparent fortune renting). The argument is about the best way to end up as a homeowner - if people want to kid themselves the best way is to buy and sell houses like shares in BT (even though, sniff, homes are for living in rather than for speculating with) and pay rent waiting for falls good luck to them.

I dont know about Bruce, but renting can be a great way to save money.

I couldnt afford my lifestyle buying a place today...one of the reasons that the choice is removed from my calculations.

HAMISH_MCTAVISH

Blooloo wrote: »

renting can be a great way to save money.

Buying is cheaper than renting in most of the UK.

Blooloo

HAMISH_MCTAVISH wrote: »

As always when the crashaholics invade, you can't get any rational debate out of them, because they ignore reality.....

Many millions of adults are now living with parents, or lodging, or in HMO's, or flatshares, or what have you.

If prices were to halve, where would the millions of houses suddenly appear from for these people to go and live in?

They don't exist.... Which is why prices are expensive.

The market is rationing goods in scarce supply through price, exactly as it should.

Millions of people are forced to share, through high prices and high rents, that would otherwise want to have a place of their own, if they could only afford it.

But if they could afford it...... if you could wave a magic wand and drop prices and rents far enough so that these millions of people could now afford their own place..... it would make no difference at all.

Because there simply aren't enough spare houses.

They would still have to live at home, to share, to live in HMO's, etc.

Only now we'd have to find some other way of rationing the limited properties.

Perhaps waiting lists, or lotteries.....

but, but, it was lack of mortgages up thread?????

S+D is a part of the equation for supply...it is a small part of the equation for the current level of gross price.

HAMISH_MCTAVISH

Blooloo wrote: »

S+D is a part of the equation for supply...it is a small part of the equation for the current level of gross price.

Your lot were convinced it was all about the liar loans, 10 x income I/O mortgages, self cert, etc, pumping up lending to unsustainably high numbers of mortgages being issued every month. Which was of course complete tosh.

So here we are with mortgage rationing remaining endemic, approvals at little more than half the long term average, I/O gone for owner occupiers, self cert abolished, LTI caps in place, new lending stress tested to 7%, and nationally prices have risen to a new peak anyway.

The shortage of housing was and remains the primary cause of high prices.

And rationing lending only caused new building to fall to 100 year lows, while rents soared to record highs, and a generation were forced to buy houses for their landlords instead of themselves.

Philuk

HAMISH_MCTAVISH wrote: »

However that still doesn't address the following.....

Many millions of adults are now living with parents, or lodging, or in HMO's, or flatshares, or what have you.

But the point we are trying to make, is that if prices were to halve, where would the millions of houses suddenly appear from for these people to go and live in?

They don't exist.... Which is why prices are expensive.

The market is rationing goods in scarce supply through price, exactly as it should.

Millions of people are forced to share, through high prices and high rents, that would otherwise want to have a place of their own, if they could only afford it.

But if they could afford it...... if you could wave a magic wand and drop prices and rents far enough so that these millions of people could now afford their own place..... it would make no difference at all.

Because there simply aren't enough spare houses.

They would still have to live at home, to share, to live in HMO's, etc.

Only now we'd have to find some other way of rationing the limited properties.

Perhaps waiting lists, or lotteries.....

Once again, you are ignoring the fact that many properties are left vacant or underused. I work in mayfair, and by the look of windows at night, no many home owners are using their luxurious property, that is the same in Notting Hill and even more obvious in Kensington area.

Another consideration is the misallocation of space, many babyboomers with large properties bought in the 70's and now retired haven't downsized yet has their capital is better valued owning their home through capital increased than buying a gilt yielding 1.5% before tax. If price were to go down and interest rate to go up, it is perfectly plausible that a transfer would operate between young adults/families living in a 1 bed and retired parents in search of a smaller space now their capital yields 5-6+%.

House market is not purely quantitative but also qualitative.

wotsthat

Blooloo wrote: »

I dont know about Bruce, but renting can be a great way to save money.

You don't know about Bruce? He sold at peak, his frightened landlord rents to him dirt cheap and, where he lives in the South-East prices are falling every year. He's been expecting 20-30% falls every year for a decade and currently predicts 60 - 70%. You lot seem to !!!!! foot around him for reasons unknown - why doesn't anyone even question this BS?

In the short term renting might be 'cheaper' but generally that's because when saving people will live in houseshares, small flats and places they wouldn't consider buying. It's not a like for like comparison though

Blooloo wrote: »

I couldnt afford my lifestyle buying a place today...one of the reasons that the choice is removed from my calculations.

You do have a choice - you've decided that your present lifestyle is more important than buying somewhere.

HAMISH_MCTAVISH

Philuk wrote: »

Once again, you are ignoring the fact that many properties are left vacant or underused. I work in mayfair, and by the look of windows at night, no many home owners are using their luxurious property, that is the same in Notting Hill and even more obvious in Kensington area.

I'm not ignoring it at all.

But the fact remains that young couples looking for their first home are not going to be buying in Mayfair, Notting Hill, or Kensington, even if the handful of rich foreigners sold up to another handful of rich people.

These are a vanishingly small percentage of the market.

They may be disproportionately of concern to you, living and working there, but they are just of no relevance whatsoever when compared against the million house shortage we're looking at today....

A shortage that is worsening at the rate of another million houses every 7 years at current build rates.

Another consideration is the misallocation of space,

Only if you think it's likely that there will be a significant reallocation of that space.

Will all the older generations suddenly decide to downsize?

No. Of course not.

They obviously have no desire or need to do so, and no government will alienate voters on that scale.

So then ask yourself if it's likely, given the economic recovery, and the desire of politicians not to alienate this group, that enough of them will want to, or be forced to, to make a difference?

Any objective observer would have to conclude that's about as likely as Nigel Farage being crowned King of England.

House market is not purely quantitative but also qualitative.

Quite.

And we have millions of people today in shared accommodation that would prefer to have their own place....

They can't, because they are 'priced out'..... The market has priced them out because there aren't enough places to go around.

So just assume for a moment that prices fell and these millions could now buy..... Where are the houses for them all?

ukcarper

Philuk wrote: »

Once again, you are ignoring the fact that many properties are left vacant or underused. I work in mayfair, and by the look of windows at night, no many home owners are using their luxurious property, that is the same in Notting Hill and even more obvious in Kensington area.

Another consideration is the misallocation of space, many babyboomers with large properties bought in the 70's and now retired haven't downsized yet has their capital is better valued owning their home through capital increased than buying a gilt yielding 1.5% before tax. If price were to go down and interest rate to go up, it is perfectly plausible that a transfer would operate between young adults/families living in a 1 bed and retired parents in search of a smaller space now their capital yields 5-6+%.

House market is not purely quantitative but also qualitative.

Do you really think boomers don't downsize because of capital appreciation. If an older couple and a couple with family swapped places the number of houses would still be the same.