Do you want house price to rise or fall?

ukcarper

GreatApe wrote: »

Sure see my post above

The housing market would be better modeled as follows

Those with just income buying the bottom 1/3rd of properties, typically FTBs

Those with income + a couple of decades of joint savings buying the middle 1/3rd of properties (typically second time buyers who have cleared the mortgage and are stepping up to a bigger/better house using the equity on the house plus another mortgage)

Those with income + inheritance/gifted/business/other wealth buying the top 1/3rd of properties. Typically people like you or people who have income + couple of decades of joint savings + gifts/inheritances

If you look at the market that way you see FTB affordability is good. Look at the cheaper half of regions and the cheaper half of properties in those regions and can FTBs with income only buy there? Yes. Something like 350,000 FTBs bought last year (or more like 700,000 if you assume most were couples) that is a large number.

The problem was never that house prices were or are too expensive.
The problem is the ridiculous models the crash cheerleaders use. An average man all by his lonesome earning the median wage of £26k which includes children and part time workers should be entitled to buy the average home in any and ever region.

Doesn't compare very favourably to the 500,000 or more for most of 1980s and late 90s/00s

GreatApe

chucknorris wrote: »

Where do you see London property prices going in the next 10 years? I'm not sure that they can go up much more in real terms (about inflation), and if I was planning to stay in the (letting) market that long (I'm not), I would be concerned about what a Labour Gov might try to do. They are already talking about limiting damage deposits to 3 weeks,
which is ridiculous.

There are too many variables especially taxation and regulations and what happens with near AI over the next decade so the standard deviation in my guess is huge

But given a normal trajectory I would make the argument that house prices will go up so long as the savings rate is positive and it almost certainly will be positive as people have not and maybe never will get the message that they should stop saving so much and spend more

Housing is a game of musical chairs.
If I save most my money and you save most your money then come next year me and you will battle for the same homes with more money in our pockets and since we seem to value housing more than any other marginal spending we will just try and outbid each other and up prices go

In the short term I do agree about London I think it over run a bit so I see a continuation of the last 18 months with a flat ish London and the rest of the country growing in price.

Having said that I do think London is much more geared to global savings rates (especially of the top 10% globally) than the rUK. And with the global savings rate much higher than UK savings rate that might put positive pressure on London in the longer term.

GreatApe

ukcarper wrote: »

Doesn't compare very favourably to the 500,000 or more for most of 1980s and late 90s/00s

Thats because there was a much larger stock of uk born brits who had never owned in the 1980s than today and also a large conversion of social stock to owner stock. Much much less of that today

If you want that to return I would support going back to selling down the social stock by 100,000 units a year that would boost FTB numbers a good amount....

ukcarper

GreatApe wrote: »

Thats because there was a much larger stock of uk born brits who had never owned in the 1980s than today and also a large conversion of social stock to owner stock. Much much less of that today

If you want that to return I would support going back to selling down the social stock by 100,000 units a year that would boost FTB numbers a good amount....

That's your weakest argument yet.

GreatApe

ukcarper wrote: »

That's your weakest argument yet.

How so?

Annual right to buy sales were running around 100,000 a year in the 1980s
More recently the figures have been closer to 10-20k a year

That alone explains 80k per year fewer FTB sales

ukcarper

GreatApe wrote: »

How so?

Annual right to buy sales were running around 100,000 a year in the 1980s
More recently the figures have been closer to 10-20k a year

That alone explains 80k per year fewer FTB sales

What about 90/00s

Graham_Devon

GreatApe wrote: »

Of the £200 billion annually that is inherted/gifted how much do you think flows into property? None?

Young or old, the persons I know that get gifted wealth seem to just buy a bigger or better house or extend their current ones

Of the £600 billion annually gained by non working income (eg dividends and business income) how much flows into property? none? Again a lot of business owners I know have nice big homes its flowing into property

Not what I'm saying, and you know it's not.

sugarbabe84

As a new home owner I want them to rise, so that I can upgrade up north in a few years time, but I have a feeling they will be on a downward spiral.

GreatApe

Graham_Devon wrote: »

Not what I'm saying, and you know it's not.

I dont think you even know what you are saying.

The reality is homes are affordable, by definition the clearing price is affordable.

The bit that confuses you is you have no idea who or how people are affording homes at these prices. In fact you had no idea who or how people were affording homes at prices 5-10 years ago but not only was it affordable the market drove prices even higher.

I tried to explain to you who and how prices are affordable but you want none of it. You will stick to your broken model of a single man on the median wage (which includes part timers and kids) being able to easily afford a three bedroom semi is what is the norm. If you keep to that model you will wait another 5-10 years and be disillusioned by it all as prices dont crash to your models predictions.

So let me try once more to save you and any other cheerleader brave enough to let go of the confirmation bias pits

UK housing market is at least 12 very distinct markets. So for a start talk about regional house prices not UK prices. And the first easy one is that in most the regions house prices are either affordable or cheap so there is no national problem.

If you want a model for housing affordability its better to split the housing market into 3 bands of homes. Roughly speaking the cheapest 1/3rd the middle 1/3rd and the top 1/3rd. First time buyers get the bottom 1/3rd. Second time buyers (with possibly some help like inherited or gifted wealth) get the middle 1/3rd and the top 1/3rd go to the rich most people who buy with inherited wealth or gifted wealth or business wealth or other.

So no stupid model of a single man buying a 3 bedroom house for 3x his lonesome income.
The median first time buyer (as a couple ie two incomes) should be able to buy the median of the bottom 1/3rd of properties national. And can they? sure its easy. Hence why so many do each and every year and why ownership is still very close to peak levels for UKborn nationals despite a recession and harder mortgage regulations.

There is no affordability problem or housing problem.
The market is sane and logical and allocating homes how they should be allocated.
You might not like it but thats the way it is.

alpharex

Rise. More equity.