House Prices Up Up Up.....The Express.....

cells

Generali wrote: »

Well I've done the rough sums again.

Inflation is ~0% so we can take that out of the picture. An average house, according to the Express is £273,000 and according to these guys, UK GDP is about £1,732,914,000,000.

House prices are rising at 9.6% per the article, nominal GDP is rising by 1.7%.

So currently an 'average' house is worth 0.0062% of daily GDP. At current rates of growth by 2084, about the time my youngest is retiring, a house will cost a day's GDP. The entire output of the UK for a day will be required to buy a modest 3 bed terrace in Slough.

From this we can surmise that either:

1. Housing is the best investment ever
or
2. Something's gotta give

If you're interested a year's GDP would be required to buy our mythical average pad in 2163 and by 2069, 8 hours of GDP (i.e. everyone's working day) would be needed to buy our 3 bed terrace in Slough.

Ironically the thought probably gives some posters a semi.

http://www.rightmove.co.uk/property-for-sale/property-51459326.html

The long term trend can not be much higher than rent price inflation from this point on

However rent price inflation can match, and probably exceed wage growth inflation for a generation

I would suggest 7% average nominal HPI in London for the next 20 years is possible or that prices could go up 3.8x in nominal terms or 1.9x vs wages (assuming 3.5% annual wage inflation) over the next 20 years.


clearly that sounds too good to be true as most investments wont get anywhere near that. but when you consider that in twenty years time we will have somewhere around 31m homes for 75m people, while france will have around 38m homes for <75m people we see what a 7 million homes shortage is capable of

ruggedtoast

according to the Groaner mortgage deals are going hot hot hot and Britain's property market is set for a barmy Summer.

http://www.theguardian.com/business/2015/may/23/uk-mortgage-deals-jump-by-nearly-a-fifth-as-competition-heats-up

If you're a ftb this summer then hold on to your hat, you are in for a wild ride.

CLAPTON

ruggedtoast wrote: »

according to the Groaner mortgage deals are going hot hot hot and Britain's property market is set for a barmy Summer.

http://www.theguardian.com/business/2015/may/23/uk-mortgage-deals-jump-by-nearly-a-fifth-as-competition-heats-up

If you're a ftb this summer then hold on to your hat, you are in for a wild ride.

whilst I object to your racism, it is of course true that with over 600,000 new arrivals over the last 12 months, house prices are set to rise
no chance for FTBs

Digsby

Generali wrote: »

http://www.rightmove.co.uk/property-for-sale/property-51459326.html

If anybody pays more than £220k for that they need their effing head examined. Personally I wouldn't buy it for more than £110k (but only because I know *someone* would buy it straight back off me for £220k!)

ruggedtoast

CLAPTON wrote: »

whilst I object to your racism, it is of course true that with over 600,000 new arrivals over the last 12 months, house prices are set to rise
no chance for FTBs

You're accusing me of racism? What on earth are you talking about?