Hekp to buy HAS pushed up house prices

Graham_Devon

wotsthat wrote: »

Did the price of cars increase by more than the money the government put in the scheme?

I've got absolutely no idea. But possibly.

Depends on the cars people were buying.

For the 3k added to the Insignia model, yes, the price of the car increased over and above the government subsidy.

For a Citreon C1, I very much doubt it.

On average? It's quite possible that over all sales, the price increased by more than the subsidy.

Discounts offered for trading-in older cars have been more than wiped out by artificial increases in the list price of many new vehicles.

The evidence suggests that the scheme, designed to boost British manufacturing and protect jobs, actually fed the coffers of foreign-owned car producers.

Researchers say that retail prices have risen by an average 9% in 12 months, and some firms have gone much further.

US-owned Ford hit buyers of its Fiesta 1.25 60 Studio with a 'staggering hike' of 32.6% - up by £2,414 to £11,536. The same firm has two other models in a league table of the five biggest price rises.

Ford put through four separate rises last year and was named as the motor manufacturer with the biggest average increase across its range - 14.7%.

The increases have in many cases wiped out the £2,000 discount given to buyers trading in ten-year-old vehicles under the terms of £400m scrappage scheme set up by Business Secretary Lord Mandelson.

That came from WhatCar, not Shelter.

And heres some examples.

Graham_Devon

Oh, and parkers conclude buyers paid more even with the 2k "free cash".

According to Parkers, a leading authority on car prices, several companies are charging more to borrow cash to buy a vehicle under the Government's scrappage scheme than those who do not.

Even with the £2,000 discount, the high cost of car loans means that drivers can find themselves paying more than the list price for a new model.

http://www.telegraph.co.uk/motoring/5506540/Scrappage-customers-paying-more-for-car-finance.html

A fresh round of new car price rises is threatening to wipe out savings offered by the scrappage scheme.


Latest research from Parkers shows that seven major car makers increased prices from 1 July, in some cases just months after similar increases. Even on the smallest and cheapest models this has added several hundred - if not thousands - of pounds to prices. Ford has now raised its prices three times in 2009 and the latest 3.75 per cent rise means that an average of 12.5 per cent has been put onto the cost of its models since the start of the year. Citroen and Peugeot have also increased prices for a third time - though the rises have been smaller - while many other car maker have increased prices twice, as reported by Parker's in April.

So, point proven?

HAMISH_MCTAVISH

Graham_Devon wrote: »

The point of this thread is that you, and many others suggested this WOULDN'T increase prices,

I don't think anyone suggested that.

What we did note is that you can't cure a housing shortage by rationing mortgages, and if you prevent a million people from buying houses through restricting their access to lending, then the housing shortage will inevitably worsen.

And that's exactly what happened.

Building fell off a cliff, rents and house prices rose to new highs anyway, and the shortage worsened.

as more houses would be built as a result..

And they were.

New starts have increased by a third.

Which is nowhere near enough, but it's a big step in the right direction, given how limited and small the increased lending programme was.

HTB, FFL, and all the other interventions are only a small step towards restoring functionality to a still dysfunctional lending market after the credit crunch.

A long way to go yet with increased lending before we can build enough houses.

lisyloo

Turn on the irony meter and try reading what I actually wrote

Geez - this is hard.
Buying two for MORE than the price of two, is pretty much the same as what you wrote and yes it IS successful.

wotsthat

Graham_Devon wrote: »

I've got absolutely no idea. But possibly.

Depends on the cars people were buying.

For the 3k added to the Insignia model, yes, the price of the car increased over and above the government subsidy.

For a Citreon C1, I very much doubt it.

On average? It's quite possible that over all sales, the price increased by more than the subsidy.

That came from WhatCar, not Shelter.

And heres some examples.

You're doing the same thing here as with houses.

Saying something has increased in price by x which is more than y does not mean x was caused by y. Someone saying house prices increased by more than the HTB subsidy doesn't prove that HTB caused such an increase - they may just be related by being in the same sentence!

What not try some research that carries a bit more weight than Shelter, What Car, Parkers and the Daily Mail?

http://europa.eu/rapid/press-release_IP-10-913_en.htm?locale=en

Real car prices for consumers expressed in the respective currencies fell in 24 out of 27 Member States in 2009 (Table 1). In the Netherlands they were stable whereas they increased in the UK (+7.7%) and Sweden (+2.7%). However, it should be recalled that car buyers in the latter two countries benefited from an extraordinary fall in prices (of ‑9.7% and -5.0% respectively) in 2008, so overall they are still better off today compared to the beginning of 2008. In the UK, the movement in prices also reflects the end of the temporary decrease in VAT, in January 2010.

Let's ignore the VAT change and let's ignore the fact that prices were lower than when your article were than two years previous but assume the 7.7% increase is purely down to opportunism.

What was the average price of a car purchased on the scrappage scheme? Say it's £15000 and 7.7% of that was because buyers were bunced by the manufacturers - that's £1155 - way short of £2000 and that's ignoring VAT, ignoring he fact that the UK was a car price inflation outlier in 2009 and 2010 and, assuming the 7.7% was pure bunce.

Prices fell in Germany whilst there scrappage scheme ran so maybe we also need to assume Ford, Fiat and Citroen specifically chose the UK for this special treatment.

I don't have a problem by the way with agreeing that subsidies can increase prices (although the early evidence with HTB indicated HPI was lower in areas with higher take up) but suggesting they go up by more than the subsidy doesn't stack up. If it was true then we'd just subsidise everything and get ever richer.

King_Nothing

Correlation isn't causation.

wotsthat

lisyloo wrote: »

Geez - this is hard.
Buying two for MORE than the price of two, is pretty much the same as what you wrote and yes it IS successful.

If one is £1 would you buy two for £2.20?

Buy three pay for two generally increase volumes but buy two pay for three (which is what I wrote) don't.

It was sarcasm/ irony - I'll ask MSE towers to introduce a special sarcasm smilie or, a better option, I'll just stop using it on the internet where it doesn't belong.

wotsthat

King_Nothing wrote: »

Correlation isn't causation.

I wish I'd said that about an hour ago and walked away.

Graham_Devon

wotsthat wrote: »

Saying something has increased in price by x which is more than y does not mean x was caused by y. Someone saying house prices increased by more than the HTB subsidy doesn't prove that HTB caused such an increase - they may just be related by being in the same sentence!

The comment related to one specific place. Leicestershire.

It did not relate to the entire country. It didn't imply it did.

You are arguing with me over a comment someone else made. It's got to the stage of ankle biting again.

I don't have the evidence. It was a comment from an FT subscriber, so I'd assume they are not some raving loon.

If you cannot accept that this may not happen in one single area of the country, I'd suggest you sign up to the FT and direct your question at him!

In my view, dependant on the makeup of houses and prices, demand and intensity of HTB in the area, the subsidy could quite possibly push prices higher than the total sub.

It's quite clearly happened in other areas where subsidies and stimulus have been put into action. I don't see any reason why it should not apply to houses, especially at a local level with all the variables localities bring.

wotsthat

Graham_Devon wrote: »

The comment related to one specific place. Leicestershire.

It did not relate to the entire country.

You are arguing with me over a comment someone else made. It's got to the stage of ankle biting again.

I don't have the evidence. It was a comment from an FT subscriber, so I'd assume they are not some raving loon.

If you cannot accept that this may not happen in one single area of the country, I'd suggest you sign up to the FT and direct your question at him!

I'm not asking for evidence of prices in Ashby-de-la-zouch. You used this comment to support your case so thought you might at least have an idea how the logic worked.

Graham_Devon wrote: »

In my view, dependant on the makeup of houses and prices, demand and intensity of HTB in the area, the subsidy could quite possibly push prices higher than the total sub.

It's quite clearly happened in other areas where subsidies and stimulus have been put into action. I don't see any reason why it should not apply to houses, especially at a local level with all the variables localities bring.

That's nothing more than imagining such a circumstance and then imagining it's caused by something else that is front of mind.

If a subsidy returns more than the subsidy itself that's a good thing. We should get building and increase subsidies for buyers - we'll never be poor or humble again.