Another couple of questions for crash trolls

thor

movilogo wrote: »

Crash like 30% won't happen. At most it will be like ~10%. That is enough to send an earthquake shockwave to many.

Banks lend on the assumption that if borrower defaults they can take over the house and recoup their cost by selling the house. It is fine in a rising market but won't work in a falling market.

So if such a crash really happens, banks may not lend in a falling market. They will probably still lend, but with more deposits requirement or a non favourable (to buyer) interest rate.

I agree there will be no crash. There are simply too many in the corridors of power with property portfolios built from their hard earned wages and expenses(both this government and the last) for a crash to be allowed to happen. Record low borrowing rates and schemes such as 'funding for lending' shows MPs know that if you left housing to market forces there would have been a huge collapse in prices. As it stands Gideon knows that house owners can feel good about their financial situation due to artificially sustained property prices.

ess0two

thor wrote: »

I agree there will be no crash. There are simply too many in the corridors of power with property portfolios built from their hard earned wages and expenses(both this government and the last) for a crash to be allowed to happen. Record low borrowing rates and schemes such as 'funding for lending' shows MPs know that if you left housing to market forces there would have been a huge collapse in prices. As it stands Gideon knows that house owners can feel good about their financial situation due to artificially sustained property prices.

Why should they allow it to crash? it will benefit a few,but affect far many more.

westernpromise

thor wrote: »

I agree there will be no crash. There are simply too many in the corridors of power with property portfolios built from their hard earned wages and expenses(both this government and the last) for a crash to be allowed to happen. Record low borrowing rates and schemes such as 'funding for lending' shows MPs know that if you left housing to market forces there would have been a huge collapse in prices. As it stands Gideon knows that house owners can feel good about their financial situation due to artificially sustained property prices.

Again with the conspiracy theories. Sorry, but it doesn't wash.

House prices are high because supply has barely changed but demand has risen. One can argue till the cows come home about why demand has risen, but the population's rapid increase has likely a bit to do with it.

Meanwhile our planning system is predicated on an unstated assumption that the population is static, which means it is not set up for the rapid of approval of huge new developments.

Likewise, although it's clear that more housing stock is needed, nobody wants it near themselves because it will overcrowd their locale and its amenities. This is usually sneered at as nimbyism, but it is no different to people voting for higher taxes on everyone but themselves. People agree more houses are needed - somewhere else.

Consequently, it is quite hard to see any real bear factors for property over the next few years, and certainly none that makes property a worse place to be than everywhere else.