House price growth picks up as 2015 draws to a close.

Jason74

westernpromise wrote: »

Rising prices are generally good for

people who want to move, because the rise funds the move and makes it easier;
people who want to remortgage and who can access better deals with a lower LTV;
recent FTBs;
investors.

Rising prices are bad for

crashtrolls;
those who have speculatively shorted property, or who rent in Aberdeen;
aspiring FTBs who aren't prepared to compromise on space and / or location;

The first set is numerically larger than the second, I would think.

I'd have to disagree with this. I'd say broadly speaking that rising prices are very good for

Investors (by some way the least important people in the equation imho)
Downsisers

They're slightly neutral for people who have already made their last house move. After all, the value of their home is largely irrelevant if they "can't" sell it as they need it to live in, but some may benefit from lower mortgage payments.

For pretty much everyone else, they're just varying degrees of negative. For all potential FTBs (now, and more importantly in the future), rising prices by definition limits their choices. For all people moving up, rising prices mean that the gap between properties rises, meaning a higher cost to trade up (albeit that is partially offset for some by the creation of equity that helps them make a move).

And it's important to remember that even for those in the group who benefit from rising prices, there is a significant downside if they have children, as they will almost certainly find themseves needing to use some of that wealth to help their children onto the ladder in a way that simply wouldn't be needed if prices hadn't risen so much. That in turn of course creates a wider social problem, as where you end up in life becomes increasingly less about how successful you are in terms of work, and more about how much housing equity your parents had. That is an incredibly unhealthy situation.

The idea that something as fundamentally unhealthy as shelter becoming more and unaffordable is celebrated as a good thing is just bizarre imho.

Carl31

Jason74 wrote: »

The idea that something as fundamentally unhealthy as shelter becoming more and unaffordable is celebrated as a good thing is just bizarre imho.

Quite right

We are looking at buying probably this year and our mortgage will probably cost somewhere between 1100 and 1350 a month at current rates, as FTBs

Thats not for a particularly nice house or anything, if anything its for a pretty standard property in the area

others will probably be servicing a mortgage on similar class and type of property for a lot less

The problem here is that the requirement for current FTBs to service larger mortgages means that they can afford to pay less for other commodities, so the countries wealth starts to get ploughed into static investments, rather than being liquid in the economy

sebadee

As a homeowner, I really don't see much to celebrate. All this means that the slightly bigger house down the road has also gone up in value, while home ownership edges that much further from reach for FTB's.

The only people I can see with a valid case to celebrate here our BTL'ers, or those who have rode the gravy train and our about to downsize / migrate.

wymondham

sebadee wrote: »

As a homeowner, I really don't see much to celebrate. All this means that the slightly bigger house down the road has also gone up in value, while home ownership edges that much further from reach for FTB's.

The only people I can see with a valid case to celebrate here our BTL'ers.

Same here... not really loving the almost monthly posts telling me how well my house is doing. I'd much rather housing be at an affordable, reasonable level so youngsters can buy if they wish (without dodgy schemes to keep builders happy).

cells

generally high prices are good as they indicate a strong economy and lots of demand. Demand is fantastic as its the foundation of all economic activity (jobs)

to take two extreme views, is detroits situation where some homes trade for nearly nowt better than Londons situation with expensive homes?

Of course the problem with much of England is that we are quota driven not price driven so a lot of the benefits of higher prices (more building and more jobs and more taxes and thus better gov services or lower taxes for everyone) are mostly lost

Mistermeaner

Would be great if there was direct correlation between house price and healthy economy but dont think that's the case.

Building a sh it load more houses may drop prices and would IMO be far better for both the economy and society.

Fix planning

cells

Mistermeaner wrote: »

Would be great if there was direct correlation between house price and healthy economy but dont think that's the case.

Building a sh it load more houses may drop prices and would IMO be far better for both the economy and society.

Fix planning

I dont think that building a lot more homes will drop average prices it would instead keep prices flat. What it will do is improve the stock considerably. I dont think the builders can build 400,000 crap small homes and apartments its more likely to follow the French model where new builds are larger and in more expensive areas.

A side effect of this is that we would stop spending so much money on extremely inefficient extensions to make old homes bigger. They would be left alone and become the bottom of the stock and everyone else would move into the shiny new big builds.

Definitely falling prices is bad for most people as it would make finance cost a lot more and probably also crash transactions.

padington

cells wrote: »

I dont think that building a lot more homes will drop average prices it would instead keep prices flat. What it will do is improve the stock considerably. I dont think the builders can build 400,000 crap small homes and apartments its more likely to follow the French model where new builds are larger and in more expensive areas.

A side effect of this is that we would stop spending so much money on extremely inefficient extensions to make old homes bigger. They would be left alone and become the bottom of the stock and everyone else would move into the shiny new big builds.

Definitely falling prices is bad for most people as it would make finance cost a lot more and probably also crash transactions.

In London period homes with gardens will only become greater in demand. You can build up but you can't magic a garden from nowhere.

mayonnaise

Mistermeaner wrote: »

Would be great if there was direct correlation between house price and healthy economy but dont think that's the case.

No? You remember 2008-2009?
Falling house prices going hand in hand with mass redundancies and an economy down in the dumps. You think that was a coincidence?

Carl31

mayonnaise wrote: »

No? You remember 2008-2009?
Falling house prices going hand in hand with mass redundancies and an economy down in the dumps. You think that was a coincidence?

Does that mean the rising prices of 2006/7 are an indicator of an upcoming crash then?