House Market Quiet

Thrugelmir

michaels wrote: »

(Although one factor I think often ignored is the higher the income the smaller the proportion that needs to be spent on non-housing costs).

If inflation does reach 4% and making due allowance for the fact inflation does hit people in different ways. Disposable income may well be squeezed. Wouldn't be helped either if a rise in interest rates were to follow.

padington

Thrugelmir wrote: »

If inflation does reach 4% and making due allowance for the fact inflation does hit people in different ways. Disposable income may well be squeezed. Wouldn't be helped either if a rise in interest rates were to follow.

A significant rise in interest rates is not going to happen. It's going to be like this for a decade or more.

They will try to raise them but more they do, more they will realise they can't.

The system is now reliant on the banker putting more money on 'go'. Any current low interest country that doesn't back their own monopoly board with close to as much money as every other national banker, that country will start loosing the game.

New paradigm, it can only be changed with an formal or informal international treaty, which ain't happening.

The trend is more trump, brexit and protectionist, not less.

lisyloo

Thrugelmir wrote: »

If inflation does reach 4% and making due allowance for the fact inflation does hit people in different ways. Disposable income may well be squeezed. Wouldn't be helped either if a rise in interest rates were to follow.

I see the opposite.
Houses are being mostly bought by investors, foreigners, bomad and over 55's taking their pensions lump sum.
These are the people least likely to be affected by still pretty low inflation.

Agree with Paddington that interest rate rises are not imminent.
I did put my money where my mouth is on that one and took a fixed rate on savings. It's a gamble but the risk for me is low as it'll only reduce my stooze profits if it goes against me.
Only 1 anecdote but I always think there a little more interesting when people put money behind them.

GreatApe

michaels wrote: »

Nationwide yoy down to 4.6% from 5.3%.

Some interesting comments on affordability with mortgage costs as a share of income at historic norm and a la cells they are expensive in London and SE and historically low elsewhere. (Although one factor I think often ignored is the higher the income the smaller the proportion that needs to be spent on non-housing costs).

There are many variables its hard to just look at house prices in isolation relative to wages.

The biggest influence I think going forward is inherited wealth and capital (rather than income) flowing more and more into housing and specific locations. For instance there are towns in the UK which are 2-3x as expensive as the next town 5 miles away (eg Harpenden v Luton). What is the fundamental reason for this? It is surely 'supply and demand' but why and how is demand such that people are willing to pay twice as much for a 3 bed in Harpenden than a 4 bed in Luton?

It seems housing is now much more than just shelter. People want to live in Harpenden because its a rich area with fewer poor people. People are not just buying shelter in that town they are buying privilege and advantage. In many ways the story of London over the last 20 years has been a city of gentrification a city that has/is going from a Luton to a Harpenden.

With hindsight its almost obvious. Post WW2 the UK really started to enter the production and manufacturing age (people seem to think the production economy was the industrial revolution of the 1700-1900 period while it was really the 1940-1970 period) and we had the relative decline of London in both population and to some degree importance and power.
Of course automation of the 1980-2016 period (and to a much lessor degree globalization/free-trade) drastically improved productivity so that manufacturing declined and services boomed. That meant service heavy London boomed more so than the rest of the UK and that is borne out by the regional growth statistics.

Added to all of this is that London and a few other clusters (like Cambridge) become home to the new capital rich. Think of Arm holdings sale for $30 billion well a lot of that will go to employees of ARM in Cambridge but little to none of that will go to a northern city. Think of the new age rich. People like sports stars who are paid £10+ million a year while they were paid 1% of that in real terms 50 years ago. Or actors and musicians or world class surgeons or promoters or other sport starts or athletes or models or financiers...these people collect capital all around the world and buy homes not in the midlands or a welsh town but in central/inner London

westernpromise

why and how is demand such that people are willing to pay twice as much for a 3 bed in Harpenden than a 4 bed in Luton?

Best understood by visiting Harpenden, then Luton.

MobileSaver

westernpromise wrote: »

Best understood by visiting Harpenden, then Luton.

+1

One can only assume GreatApe has never been to Luton!

michaels

westernpromise wrote: »

Best understood by visiting Harpenden, then Luton.

Hmm - some would find Harpenden to be too far up itself to be comfortable and prefer the 'edginess' of Luton. It all comes down to whether you consider being mugged to be a educational immersive cultural experience or something best avoided.

Miss_$

Still quiet

sann420

I agree its quiet. I am trying to sell a flat in zone 2 and it has been quite difficult.

Masomnia

sann420 wrote: »

I agree its quiet. I am trying to sell a flat in zone 2 and it has been quite difficult.

I live in a flat in zone 2 and more and more am getting things through the letter box from local estate agents. 'We're valuing in your area on Thursday...' 'Corporate clients are interested in your flat...' 'We've just a sold a flat near to you for £700k, just six weeks on the market. Call us now!'

They're looking increasingly desperate.