House prices to rise 25% in next five years

lisyloo

There were a few posts (like #17) that appeared to me to assume a guarantee of growth and I felt it needed pointing out for balance that this is a prediction and not a guarantee.
That doesn't make me a doomster or loser, but I do take account of downsides - for example I think the tories will risk some bad news early on in their term because they have the opportunity to recover before the next election and some policies may affect hpi.

I agree the doomsayers were completely wrong but it would be wrong to put us all into two categories - avid hpi fans or avid doomsters - I am neither.

buglawton

Wildcards:

EU referendum, we leave EU.
As a result, Scotland then goes indie and stays in EU.

Major change of govt policy on rent and tenancy control (happening already in Scotland, Wales next?) knocks back BTL market.

Sharp rises in interest rates due to to UK's low productivity meaning we don't export enough and have to protect the sliding £.

etc.

Landofwood

Unless anyone foresees a scenario where...

- A "meaningful" number of houses are built which has a significant impact on supply

OR

- There is a "meaningful" reduction in population which causes a significant reduction in demand.

...then I don't think anyone can reasonably predict a house price reduction in the next 5 years, despite the wildcards highlighted in the post above.

I think a 4.6% annual increase is very conservative.

Thrugelmir

buglawton wrote: »

Sharp rises in interest rates due to to UK's low productivity meaning we don't export enough and have to protect the sliding £.

Productivity has no correlation to exports. Even the average French workers output in 4 days is what someone in the UK does in 5 days.

The Euro is devaluing due to ECB intervention. With the wall of money being pumped in little that the UK can do.

padington

Thrugelmir wrote: »

Productivity has no correlation to exports. Even the average French workers output in 4 days is what someone in the UK does in 5 days.

That's interesting, why's that ?

buglawton

Is the question about the 1st or 2nd sentence?
I only agree that the 2nd is true.

OK, if a country is sitting on massive oilfields, productivity per capita can be 'technically' low while oil is just shipped abroad for cash. But for all those countries with more modest natural resources, I'd certainly expect high per capita productivity to result in high exports per capita (Germany, Switzerland, Korea).

What muddies France's waters is that it's small but productive workforce has to support a large number of unemployed who consume the GDP before it has a chance to be exported!

cells

Thrugelmir wrote: »

Productivity has no correlation to exports. Even the average French workers output in 4 days is what someone in the UK does in 5 days.

The French have a larger stock of real capital which probably boosts their gdp per head to give a somewhat unfair comparison*. A few things come to mind without searching for info

Aprox 6 million extra homes (imputed rent on 6 million homes must be in the region of 50B euro a year)

~250k homes extra built per year vs the UK (~50B euro per year gdp boost)

Nuclear over build resulting in some 200TWh annual excess production addig some 10B euro a year

Much more land so able to be a net food exporter while the uk is a net importer



overall I would count productivity as GDP of labor divided by the working population rather than gdp of labor plus capital devided by the number of hoirs worked

buglawton

Isn't it a feature of all high productivity that more investment was put in to achieve it?

Sibley

I really hope they rise 25%.
Can see it happening due to pension pots being raided.

I would sell my place for sure.

Blacklight

Average maybe, but London has already jumped up in recent years.

Rest of the UK will rise 25% in the next two years. London will drag the average down.