"Housing Market Slumps"

BikingBud

GreatApe wrote: »

Primarily the local economy sets prices.

London is booming so prices boomed. The north is still in recession so prices have gone nowhere for 10-12 years

No the local demand sets the prices and the fear of missing out is the biggest driver for people to over commit, all so they can get "On the Property Ladder"

Very rarely is it about buying an affordable home.

Zxcv_Bnm

BikingBud wrote: »

No the local demand sets the prices and the fear of missing out is the biggest driver for people to over commit, all so they can get "On the Property Ladder"

Very rarely is it about buying an affordable home.

You sound like you're angry that other people are prepared to pay more than you are, and you need them to be stupid or irrational.

BikingBud

No i just find it bizarre that everybody was over the moon when they boasted about the "great" increases in their house prices. Yet we are now complaining that they are unaffordable.

The feeding frenzy was stupid and irrational it will affect the national economy for more than a generation.

ukcarper

BikingBud wrote: »

No i just find it bizarre that everybody was over the moon when they boasted about the "great" increases in their house prices. Yet we are now complaining that they are unaffordable.

The feeding frenzy was stupid and irrational it will affect the national economy for more than a generation.

No it's just about supply and demand if what you say is true why have prices outside London and the South East not increased so much.

BikingBud

Maybe because people outside the SE have a greater grip on reality?

ukcarper

BikingBud wrote: »

Maybe because people outside the SE have a greater grip on reality?

No real answer then.

BikingBud

Very difficult to get people to admit they paid way over the odds for something it is somewhat self denigrating and they are much happier saying the Emperor's clothes are immaculate and fine.

ukcarper

BikingBud wrote: »

Very difficult to get people to admit they paid way over the odds for something it is somewhat self denigrating and they are much happier saying the Emperor's clothes are immaculate and fine.

So why don't they do it outside London and the South East. People pay what they need to get a house and that is what a house is worth.

BikingBud

Is the value or worth of a house the same thing? Different people in different circumstances will set them differently. When buying a house you are likely to have to pay more than you value it at and very much more than you would value it for insurance replacement purposes.

When selling a house you would like to think it is worth more than the buyer would like to spend, the fact that fear has allowed the sellers to continue to exploit the situation has exacerbated the size of the National debt.

Windofchange

I think this one runs far deeper than supply and demand. Ok, you can argue that for London in that people want to be in London for a variety of reasons, but why are people able to create the demand? As I have said on a previous thread, there is not a shortage of housing in London. I could if I had the money go out tomorrow and have my choice of thousands of empty flats up and down the Thames. There is a shortage of affordable housing in London.

What is it that facilitates the demand? If you stripped away schemes such as help to buy, started penalising buy to letters (happening already) and put interest rates up then people wouldn't be able to borrow the sums of money they need to buy in London. I think this is what we are starting to see as areas of the country outside of London are starting to outstrip the capital for month on month growth. People are giving up or getting out whilst they are ahead. I know of people in their 20's who have 'brought' 550k flats in the capital with the help of BOMAD and the government. This is skewing demand as it is external factors facilitating the bubble, and it is most definitely a bubble. Why have BOMAD got a spare million? Because their house has gone up 2000% since they brought it.

It is being done for a reason. The bank of England and by extension the government know they are trapped. The minute interest rates start climbing the whole pack of cards will come tumbling down. It is a case of kicking the can far enough up the street that it doesn't happen on their watch and some other schmuck can take the fall. They had the chance to let it all correct in 2007 but chose to intervene, and we are now in my opinion in even more of a mess because of it.

So yes, you can say supply and demand, but what is it driving the demand? It is emergency interest rates for the best part of a decade and easy cheap credit which allows everyone from your cleaner to Tony Blair to build a property empire. Unsecured debt is going through the roof alongside all this. We truly are !!!!ed.