Asking prices up 3% in a month according to June rightmove report ...

padington

chewmylegoff wrote: »

Harringey down 1% YOY. Second worst performing London Borough. Oh no.....

Nothing to do with my patch, everything to do with loads of 1.5 million houses around muswell hill and crouch end that took a tumble, I would imagine.

One asking price for a similar place to mine is now double what I paid just four years ago. That's what I call a decent trajectory and still powering ahead.

As I said, in the last few years, buy value property on the wrong side of the tracks.

.. and happily it seems I was right about the palace rising from the flames yet again

Graham_Devon

ruggedtoast wrote: »

So, if my house is worth £200,000 and the house I want to upgrade to is worth £300,000 I need to find £100,000.

Then if while I am saving up, house prices go up 10%, which means my house is now worth £220,000. And I go out and groin thrust and celebrate with the boomers, who incidentally probably own the house I want to buy. But then the house I want is now £330,000, meaning I need £110,000.

So In this scenario I am better off in what way?

Your house now has a higher imputed rent.

I forgot about that in my list.

Ignore the fact that you are not renting out your house. Ignore the fact that you do not plan to rent your house out.

Instead, enjoy the knowledge that your house is now has a higher imputed rent. You are richer. The best thing is, you can't even spend it, it's like a forced investment which you will never be able to tap into, so it just keeps on growing...you get richer and richer by the day.

Ok, so you don't want to rent....and I know, you don't want to rent your own house from yourself.

The fact remains, you sir, are better off.... you could rent your house out for more than last month. So go out, treat yourself, the sun is of course shining thanks to HPI. Have a blast. Thrust some groins.

Just remember, don't spend your pretend money - afterall, you need that roof above your head and spending pretend wealth will get you into all manner of trouble with those who know better than you.

So have a blast with your new found monopoly money. Just don't buy an iphone with it. And don't go on holiday. Oh, and most certainly don't celebrate with an alcoholic beverage. Before you know it, you'll find yourself in all manner of trouble for wasting your imputed rent gains.

As for the extra 10k for the new house, just ignore it. Don't drag yourself down with the ins and outs of it all. It's the only way. Just keep on saving the imputed rent. It's glorious.

padington

Graham_Devon wrote: »

Your house now has a higher imputed rent.

I forgot about that in my list.

Ignore the fact that you are not renting out your house. Ignore the fact that you do not plan to rent your house out.

Instead, enjoy the knowledge that your house is now has a higher imputed rent. You are richer. The best thing is, you can't even spend it, it's like a forced investment which you will never be able to tap into, so it just keeps on growing...you get richer and richer by the day.

Ok, so you don't want to rent....and I know, you don't want to rent your own house from yourself.

The fact remains, you sir, are better off.... you could rent your house out for more than last month. So go out, treat yourself, the sun is of course shining thanks to HPI. Have a blast. Thrust some groins.

Just remember, don't spend your pretend money - afterall, you need that roof above your head and spending pretend wealth will get you into all manner of trouble with those who know better than you.

So have a blast with your new found monopoly money. Just don't buy an iphone with it. And don't go on holiday. Oh, and most certainly don't celebrate with an alcoholic beverage. Before you know it, you'll find yourself in all manner of trouble for wasting your imputed rent gains.

As for the extra 10k for the new house, just ignore it. Don't drag yourself down with the ins and outs of it all. It's the only way. Just keep on saving the imputed rent. It's glorious.

... or get an investor mortgage with the equity, giving you an income plus even more capital appreciation.

Graham_Devon

padington wrote: »

... or get an investor mortgage with the equity, giving you an income plus even more capital appreciation.

Oh yes, I like it.

The new house costs 10k more. You get to keep your old house by running a business as a noose around your neck and drown yourself up to the eyeballs in credit.

Blimey - you may even become an accepted and honoured member of the public with that outlook.

HAMISH_MCTAVISH

mwpt wrote: »

I always try to tread carefully when discussing this stuff because it's so emotive to all of us. So if you disagree, please go easy

Sure...

I believe would be approximately what the same property that today costs £500k would cost had we not seen interest rates slashed.

The price and availability of credit are absolutely a component of demand and I don't think anyone on here will argue otherwise, they enable the conversion of housing need, to effective housing demand.

But credit in and of itself really does not play a big role in driving up prices in the absence of a supply shortage...

I'll give you two examples to think about...

1) There is no shortage of credit to buy a 10 year old Ford Focus, I can buy them all day long on a zero percent credit card as could millions of other people.

Yet the price of an old Ford Focus keeps dropping... Despite almost unlimited credit being available to buy them.

Why do you think that is?

(Clue: There is no shortage of supply of old bangers)

2) The number of mortgages being issued has fallen by half since 2007, and the average deposit percentage has almost doubled.

Yet house prices have risen to new record highs on average, despite far fewer people having access to the mortgage required to buy one.

Why do you think that is?

(Clue: Supply of both new builds and used houses has fallen to near record lows)

Graham_Devon

HAMISH_MCTAVISH wrote: »

1) There is no shortage of credit to buy a 10 year old Ford Focus, I can buy them all day long on a zero percent credit card as could millions of other people.

Yet the price of an old Ford Focus keeps dropping... Despite almost unlimited credit being available to buy them.

Why do you think that is?

Blimey Hamish. You have excelled yourself there old chap.

HAMISH_MCTAVISH

Graham_Devon wrote: »

Blimey Hamish. You have excelled yourself there old chap.

Not that I expect a serious answer but perhaps you'd care to enlighten us as to why credit, almost uniquely, drives up the price of used houses while it does not drive up the price of items where there is no shortage of supply?

mwpt

HAMISH_MCTAVISH wrote: »

Sure...
The price and availability of credit are absolutely a component of demand and I don't think anyone on here will argue otherwise, they enable the conversion of housing need, to effective housing demand.

But the role of credit in driving up prices is greatly overstated by some in the matter of house prices, as it's really a shortage of supply that does that.... I'll give you two examples to think about...

1) There is no shortage of credit to buy a 10 year old Ford Focus, I can buy them all day long on a zero percent credit card as could millions of other people.

Yet the price of an old Ford Focus keeps dropping... Despite almost unlimited credit being available to buy them.

Why do you think that is?

Oh yes, well, obviously supply. I did say in the very first point in my post that supply/demand is a factor. I can stress that it's a huge factor if that helps? Also, a car is a depreciating asset. It ages and reduces to zero over time given maintenance costs etc. Land does not depreciate in the same way.

2) The number of mortgages being issued has fallen by half since 2007, and the average deposit percentage has almost doubled.

Yet house prices have risen to new record highs on average, despite far fewer people having access to the mortgage required to buy one.

Why do you think that is?

(Clue: Supply of both new builds and used houses has fallen to near record lows)

Again, I agree, supply is a factor. I'm addressing your statement that supply is the only factor and I think this is false. You seem to verge on admitting credit is a factor, but you stop and only say it is a factor of demand. Availability of credit can be a factor of demand, but after that, the cost the credit determines the price.

I'm not sure why this is controversial? If mortgage rates dropped to 0.5% house prices would increase accordingly. If mortgage rates tomorrow, went back up to 6%, house prices would drop, quite a lot, simply because people could not afford repayments at current asking prices. Not really rocket science and, just in my opinion, the only reason this is debated is because the whole subject is so emotive.

padington

HAMISH_MCTAVISH wrote: »

Sure...



The price and availability of credit are absolutely a component of demand and I don't think anyone on here will argue otherwise, they enable the conversion of housing need, to effective housing demand.

But the role of credit in driving up prices is greatly overstated by some in the matter of house prices, as it's really a shortage of supply that does that.... I'll give you two examples to think about...

1) There is no shortage of credit to buy a 10 year old Ford Focus, I can buy them all day long on a zero percent credit card as could millions of other people.

Yet the price of an old Ford Focus keeps dropping... Despite almost unlimited credit being available to buy them.

Why do you think that is?

(Clue: There is no shortage of supply of old bangers)

2) The number of mortgages being issued has fallen by half since 2007, and the average deposit percentage has almost doubled.

Yet house prices have risen to new record highs on average, despite far fewer people having access to the mortgage required to buy one.

Why do you think that is?

(Clue: Supply of both new builds and used houses has fallen to near record lows)

Lack of structural supply, caused partly due to speculative demand and partly due to not enough houses building.

Problem is you can build quite a lot of houses and the price won't decrease that much but you build houses as well as limit houses to 2 per person and you massively decrease the price overnight at which point lots of generation rent get to shake off the landlord from their back and the housing franchise becomes greatly increased, which in turn unify's society and has the added advantage for people concentrating on making real innovation rather than flipping houses.

It kills the golden goose for many but as long as more than 50% of voting public rent, with house prices going in the direction they are, it's going to be an increasingly attractive solution.

The people that really need a massive house building campaign, if you ask me, is the people who own lots of houses, because otherwise, not before long
(in ten years ) the Banker will redistribute half the board through the backdoor.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Not that I expect a serious answer but perhaps you'd care to enlighten us as to why credit, almost uniquely, drives up the price of used houses while it does not drive up the price of items where there is no shortage of supply?

You seem to infer that supply is the only reason that cars become cheaper.

Which is, of course, absolute nonsense.

Like others are stating....it's part of the reason. Not the sole reason. Supply and demand is not all there is.

Car's depriciate naturally as they become older, more untrustworthy, more problematic and need new replacement parts such.

No matter of tight supply can turn a £200 scrap metal value knacker of a car needing welding and a new engine etc into a £2k asset.

As for your houses, supply and demand is not all there is. That's why you have a housing shortage and at the same time, houses which people cannot get rid of - not even for a quid. They need so much money spent on them it's not worth it. This type of scenario are the other factors - the factors you are impying don't exist.

By your theory, those houses people are selling for a quid would be worth far more. Tight supply would see them bought up at ever increasing prices. The total opposite is happening.

Another example. Remove housing benefit from the market tonight. What's going to happen next month when thouse hundreds of thousands cannot pay the rent? Demand is still the same. Supply is still the same. However, prices would plummet.