House prices to rise 25% in next five years

Graham_Devon

According to RICS anyway.

The Royal Institution of Chartered Surveyors (Rics) warns of an "acute shortage of supply" as Britain's ageing population of home owners moves less frequently and focuses instead on helping their children on to the housing ladder.

I really don't get the above quote. It suggests that if older people move around a bit more regularly, more houses will become available? How does this work? If they move from house A to B they still occupy a home. If they don't move, they still occupy a home.

RICS go on to say that with demand still rising, thanks in part to policies such as HTB, prices should resume a sharp upwards trajectory.

Again, not sure on this. HTB hasn't stopped. So why would we see a sudden sharp trajectory?

Apparently it's all to do with the election, they say. Now that it's over, demand will increase. However, in the paragraph before this it's admitted that post election, things have slowed.

Bit of a weird article really. One paragraph seems to disagree with the next, but the overarching point is YAY, house prices up 25%.

http://www.telegraph.co.uk/finance/property/house-prices/11666634/Housing-market-grinds-to-a-halt-as-sales-hit-lowest-level-since-1978.html

ruggedtoast

You're on fire at the moment Graham.

Prices are going up. They are going down.

I can't keep up!

wotsthat

Graham_Devon wrote: »

I really don't get the above quote. It suggests that if older people move around a bit more regularly, more houses will become available? How does this work? If they move from house A to B they still occupy a home. If they don't move, they still occupy a home.

If older people move less then they're more likely to be in the same houses they brought up families in.

If they move more then they're more likely to downsize to a more appropriately sized house and release a family sized house to be used.

No more houses but a more efficient use of housing.

NorthFin

You are right Graham, it makes no sense.

You could have said "The Royal Institution of Chartered Surveyors (Rics) warns of an "acute OVER supply" as Britain's ageing population of home owners moves less frequently and focuses instead on helping their children on to the housing ladder."

Its looking like an oversupply in London soon if the supply of homes keeps expanding at the current rate and benefit cuts mean all those relying on housing benefit have to move out of London. I can see lots of empty properties sitting vacant for long times, the LL will be fed up of paying the high empty property council tax and be forced to lower rents enough for low income families to be able to afford out of their own pocket.

The trouble is will they still be able to afford the mortgage payments when interest rates go back up to normal?

Landofwood

A 4.6% compounded yearly increase over 5 years doesn't represent a sharp increase.

MARTYM8`

I do find these house price growth prediction forecasts absolutely ridiculous – and rather pointless. Just made up numbers – Mystic Meg could do as good a job.

And why such a round figure of 25% - and is this 25% exactly everywhere or presumably the sums will vary depending on where you live? Will every house or flat in the country rise by exactly 25% - clearly nonsense!

No one has any idea how much house prices will go up or down in the next five years – as it depends on lots of economic, financial and social factors no one can predict. Does anyone bother to check any of these predictions after the event?

Presumably surveyors have an interest in getting people buying and building houses – as they make their living from it…..

caronoel

Landofwood wrote: »

A 4.6% compounded yearly increase over 5 years doesn't represent a sharp increase.

Quite a useful uptick when you can borrow at 3% fixed for the next five years.

Consider this: you get someone else to pay your mortgage for five years, and then pocket a 25% increase on the original purchase price at the end of the period.

What's not to like?

ess0two

NorthFin wrote: »

You are right Graham, it makes no sense.

You could have said "The Royal Institution of Chartered Surveyors (Rics) warns of an "acute OVER supply" as Britain's ageing population of home owners moves less frequently and focuses instead on helping their children on to the housing ladder."

Its looking like an oversupply in London soon if the supply of homes keeps expanding at the current rate and benefit cuts mean all those relying on housing benefit have to move out of London. I can see lots of empty properties sitting vacant for long times, the LL will be fed up of paying the high empty property council tax and be forced to lower rents enough for low income families to be able to afford out of their own pocket.

The trouble is will they still be able to afford the mortgage payments when interest rates go back up to normal?

When interests go back up??? get used to it this is the new norm.

carslet

caronoel wrote: »

Quite a useful uptick when you can borrow at 3% fixed for the next five years.

Consider this: you get someone else to pay your mortgage for five years, and then pocket a 25% increase on the original purchase price at the end of the period.

What's not to like?

I am almost finishing year 3 of someone else paying one of my mortgages, everything to like for me.

floridaman

I hope they do rise 25% in next 5 years will be absolutely awesome

Landofwood

floridaman wrote: »

I hope they do rise 25% in next 5 years will be absolutely awesome

Not exactly big gains. You'd be better to living with Mummy and putting your money in savings.