Media Is Now Predicting A Massive 40% Property Price Crash

Mortgagefreeman

Media Is Now Predicting A Massive 40% Property Price Crash

They're getting pretty close to that,already,in Aberdeen.:rotfl:

GreatApe

HAMISH_MCTAVISH wrote: »

Indeed.

Lets say prices temporarily fell due to external factors such as high unemployment, recession, etc, and all of a sudden the several million young people in HMO's, living with parents, etc, could afford to buy.

There aren't several million houses available for them to buy - so prices would simply shoot back up again - and most would still not have bought.

Yep.

A brutal recession and soaring unemployment would lower prices - temporarily - but fewer people could buy in such an environment than can today.

Reducing the number of mortgages being issued would also lower prices, as by definition fewer people could buy so demand falls, but again that still leaves us with fewer people being able to buy which is the opposite of an actual solution to the problem.

The only solution to a housing shortage is to build more houses.

It really is that simple.

The French have more homes and have more renters
The Germans have even more homes than the French and have even more renters

I do not think its as simple as more homes = more owners

I used to think the UK had a shortage of homes, but now I think we have sufficient homes in the UK with maybe zone 1/2 London with an under supply and building additional homes in z1/2 London is not cheap.

antrobus

GreatApe wrote: »

The French have more homes and have more renters...

For 2015, 64.1% of French homes were owner occupied, for the UK it was 63.5%. So the French have fewer renters.

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_lvho02&lang=en

Life has moved on over the past few years. The UK rental market has expanded, whilst the French rental market has declined.

GreatApe

HAMISH_MCTAVISH wrote: »

I see you're confusing a shortage of bedrooms (which we don't yet have) with a shortage of housing of the types people need and in the places people need them, which we most certainly have...

From the latest government white paper on this topic..

There is no housing problem

Prices are cheap in Wales Scotland N-Ireland and are cheap in most of England like the North-East North-West Y&H W-Midlands E-Midlands. Rents are also cheap in those areas in fact the post tax rent for a landlord is comparable or even lower than local social rents.

Maybe you can argue that inner London has a shortage of housing and maybe we could build a lot more homes in inner London but it wont be cheap homes redeveloping zone 1/2 London is expensive.

The reason ownership is lower now than a decade ago is that a decade ago it was at its peak and since then lots of migrants have come to the uk and something like 75% of recent arrival migrants rent. The British born with British born parents ownership levels are still quite high.

Also building more homes does not necessarily mean renting will fall. France has more homes than the UK, Germany has even more homes than France yet neither have higher ownership rates. Germany has far more renters and France also has more.

Rents being expensive is also an interesting case. It is true rents in France are cheaper and Germany is cheaper still. However Germany has a lot of single person household renters. Multiple times the UK. So while it might cost less to rent a house in Germany the Germans still seem to spend about the same amount of their income on housing. A couple sharing a flat in the south East might pay £600 pm including bills per person. In Germany its more likely a single person rents a flat to themselves and including bills doesn't pay much less. It must also play a part in the much lower fertility rate in Germany. So many Germans live alone and dont share while young and renting that it must play a part in them not meeting or settling with any partners

GreatApe

antrobus wrote: »

For 2015, 64.1% of French homes were owner occupied, for the UK it was 63.5%. So the French have fewer renters.

http://appsso.eurostat.ec.europa.eu/nui/show.do?dataset=ilc_lvho02&lang=en

Life has moved on over the past few years. The UK rental market has expanded, whilst the French rental market has declined.

Yes the two are now close. But France has more homes so the actual number of renters is higher. In Germany where homes are plentiful and prices and rents are cheap over 20 million homes are rented. In the UK its closer to about 5 million rented privately

If ownership was just about price why do so many Germans not buy?


Also I think its important to look at ownership among just the UK born because the migrants have greatly distorted the figures. Only about 15% of brits rent privately, but about 75% of recent migrants rent privately dragging up the average and painting a not so clear picture.

GreatApe

Renting is a temporary tenure in the UK

I rented form age 18 to age almost 27 so that is 9 years.
If I live to age 80 that means I would have rented for 9 years of my 62 year adult life.

9 / 62 = 14.5% as a renter

I think my situation was not that bad I think it was certainly acceptable, so we need at least a 14.5% rental stock to allow people to rent while at university and while moving around their first 1-2 jobs.

The UK is about 20% private renters so higher than my personal need of 14.5% as rentals but this makes sense as I am uk born and there are other groups who will rent much longer in much higher portions like recent migrants who overwhelmingly rent privately

Overall I think the UK housing market is fine we do not have a housing shortage nor a renting (not owning) problem. Maybe we could do with more homes in Z1/2 London but that is not going to be quick or easy or cheap to deliver

bobbymotors

france and germany have space. we don't.

hence higher rents.

antrobus

GreatApe wrote: »

Yes the two are now close. But France has more homes so the actual number of renters is higher.

There are even more homes in China, and thus even more renters.

padington

HAMISH_MCTAVISH wrote: »

We've done it before - we can do it again.

https://www.theguardian.com/business/2016/nov/20/britains-housing-crisis-must-be-tackled-now

The housing stock was unusually bomb damaged and rent controls were so stifling that in those days being a landlord was considered a mugs game.

GreatApe

antrobus wrote: »

There are even more homes in China, and thus even more renters.

The UK and France are very similar in population Germany is a little larger.

Adjusted for population differences if Germany was the same population as the UK it would have about 16 million rented properties, the uk has about 5 million privately rented and 5 million social rented.