We'd like to remind Forumites to please avoid political debate on the Forum... Read More »
Debate House Prices
In order to help keep the Forum a useful, safe and friendly place for our users, discussions around non MoneySaving matters are no longer permitted. This includes wider debates about general house prices, the economy and politics. As a result, we have taken the decision to keep this board permanently closed, but it remains viewable for users who may find some useful information in it. Thank you for your understanding.
📨 Have you signed up to the Forum's new Email Digest yet? Get a selection of trending threads sent straight to your inbox daily, weekly or monthly!
Hekp to buy HAS pushed up house prices
Graham_Devon
Posts: 58,560 Forumite
The research is based on the National Housing and Planning Advice Unit (??). KPMG have also commented stating "its not surprising that HTB has pushed prices up".Total mortgage lending is 8.4 per cent higher than it would have been without the scheme, Shelter found, and Help to Buy has added £8,250 to the average house price — an increase of 3 per cent on the average cost of a UK home.
Help to Buy’s impact has varied greatly by area, with the biggest effect in regions with lower-priced housing. The north-east has the highest proportion of Help to Buy sales; 6.7 per cent of all transactions since the scheme launched have been government-backed.
At a local level, north-west Leicestershire is the area where prices have been boosted the most by Help to Buy. Average house prices there have been pushed up by over £19,000, according to Shelter’s estimates. The price of properties in South Tyneside has been driven up by more than £13,000.
Campbell Robb, Shelter’s chief executive, said the figures were “proof that Help to Buy hasn’t helped many people at all, instead it’s pushed a home of their own even further out of reach”.
The DCLG maintain that there is no evidence that HTB has pushed up prices. Only evidence that it's allowed more people to buy.
As someone in the comments on the article states, in Leicestershire prices have been pushed higher than the entire amount of assistance on offer from HTB.
http://www.ft.com/cms/s/0/fdbb8a00-5dfe-11e5-9846-de406ccb37f2.html#axzz3mS5GErso
0
Comments
-
And just for balance, the article also says....
http://www.ft.com/cms/s/0/fdbb8a00-5dfe-11e5-9846-de406ccb37f2.html#axzz3mS5GErsoA DCLG spokesman said the department had “no evidence” that Help to Buy was pushing up house prices. The scheme is putting more households on to the housing ladder and increasing housebuilding, he said; with private housebuilding starts increasing by a third since its launch.
Now, whether or not you agree with the premise that HTB has increased prices, both sides in the article agree on one thing.
HTB has most certainly increased the number of people actually buying a house and also the number of houses being built.
Most rational people would view that as a positive outcome....
“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Graham_Devon wrote: »As someone in the comments on the article states, in Leicestershire prices have been pushed higher than the entire amount of assistance on offer from HTB.
How does that work? The government puts £1 in the housing market and prices rise by £1.20?
Sounds unlikely.0 -
How does that work? The government puts £1 in the housing market and prices rise by £1.20?
Sounds unlikely.
Read the comments and open your mind to what they are saying
This isn't the readership from the daily mail or express. It's FT subscribers commenting. Though I'd avoid the essay type comments!
Amongst them there appears to be little, if any support for the scheme.
Heres one comment...Did we really need a study to tell us that adding money to the demand side would push up prices? This is basic economics.
Well apparently, according to this forum, we do.0 -
Graham_Devon wrote: »Well apparently, according to this forum, we do.
Private house building starts have risen by a third since the scheme started.
Many tens of thousands of people now own a house that otherwise they would not have been able to get a mortgage to buy.
And the worst thing you can say about that is it might have pushed up prices by a whopping 3% in total since the scheme was launched a few years ago.
Most people would call that a stunning success overall.:beer:“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Graham_Devon wrote: »Read the comments and open your mind to what they are saying
This isn't the readership from the daily mail or express. It's FT subscribers commenting. Though I'd avoid the essay type comments!
Amongst them there appears to be little, if any support for the scheme.
Heres one comment...
Well apparently, according to this forum, we do.
I can understand that a demand side stimulus may increase prices to an extent especially in an inelastic market but what I don't see, and you side stepped the question, is how prices might rise by more than the stimulus.
Say the government give some buyers £1 towards buying a house why would I bid up a house by £1 let alone £1.20?
Doesn't it sound unlikely?0 -
I can understand that a demand side stimulus may increase prices to an extent especially in an inelastic market but what I don't see, and you side stepped the question, is how prices might rise by more than the stimulus.
Say the government give some buyers £1 towards buying a house why would I bid up a house by £1 let alone £1.20?
Doesn't it sound unlikely?
You are not the only buyer.
You are competing with others.
Plus, a lot of these houses will be newbuild, where when taking HTB, the prices are always absolute top dollar. No negotiations are on offer.0 -
Graham_Devon wrote: »Read the comments and open your mind to what they are saying
This isn't the readership from the daily mail or express. It's FT subscribers commenting. Though I'd avoid the essay type comments!
Amongst them there appears to be little, if any support for the scheme.
Heres one comment...
Well apparently, according to this forum, we do.
Help to buy appears to be (another) demand side policy designed to solve a supply side problem.0 -
I can understand that a demand side stimulus may increase prices to an extent especially in an inelastic market but what I don't see, and you side stepped the question, is how prices might rise by more than the stimulus.
Say the government give some buyers £1 towards buying a house why would I bid up a house by £1 let alone £1.20?
Doesn't it sound unlikely?
Stop confusing him...:D
The research that Shelter base their claims on suggests for every 1% increase in the volume of mortgage lending, house prices can increase by 0.36%.
So a 10% increase in the number of people issued with a mortgage and so buying a house results in a 3.6% increase in house prices.
We already know Graham supports mortgage rationing, he spent the last few years cheering it on, as for some strange reason he seems to think it's better to prevent hundreds of thousands of people from buying houses than to allow house prices to rise.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Graham_Devon wrote: »You are not the only buyer.
You are competing with others.
Plus, a lot of these houses will be newbuild, where when taking HTB, the prices are always absolute top dollar. No negotiations are on offer.
I'm not the only buyer but I'm in the minority when it comes to being in receipt of £1 towards buying a house.
If I had a £1000 government gift to buy a BMW I wouldn't immediately offer £23k (or more) for a car that was £22k yesterday. Would you?
It's therefore unlikely that a £1 gift from the government will translate into anything like £1 on a house price. If prices have risen by more than this it's probably reflective of a housing shortage rather than a function of HTB itself.
Unless the government have discovered a money tree which miraculously turns £1 into £1.20 in short order.0 -
I'm not the only buyer but I'm in the minority when it comes to being in receipt of £1 towards buying a house.
If I had a £1000 government gift to buy a BMW I wouldn't immediately offer £23k (or more) for a car that was £22k yesterday. Would you?
It's therefore unlikely that a £1 gift from the government will translate into anything like £1 on a house price. If prices have risen by more than this it's probably reflective of a housing shortage rather than a function of HTB itself.
Unless the government have discovered a money tree which miraculously turns £1 into £1.20 in short order.
presumably that's the same principle as £10 of £100 product never leads to people spending £900
This discussion has been closed.
Confirm your email address to Create Threads and Reply
Categories
- All Categories
- 351.3K Banking & Borrowing
- 253.2K Reduce Debt & Boost Income
- 453.7K Spending & Discounts
- 244.3K Work, Benefits & Business
- 599.5K Mortgages, Homes & Bills
- 177.1K Life & Family
- 257.8K Travel & Transport
- 1.5M Hobbies & Leisure
- 16.2K Discuss & Feedback
- 37.6K Read-Only Boards