Do you want house price to rise or fall?

alpharex

House price inflation will be subject to the conflating of interest rates and average incomes relative to morgage gearing.

System

Not bothered either way. A period of time after buying it doesn't really matter a great deal imo.

triathlon

chucknorris wrote: »

Graham has already raised the points that I would have responded with, mainly the one about most FTB will not have access to large inheritances, although the BOMAD is more prevalent these days. I have helped a few of my friends in the past with their deposits (not gifts, just interest free loans).

I try to be as generous these days given my amazing good fortune, not luck. There is only so much money you can make that you need, and giving is such a wonderful feeling, it's made me an even better person than I already was, and that's saying something.

At Christmas you will find me strolling down the Strand towards Trafalgar square with a rucksack filled with £10 notes handing them out to the tramps, I usually take a minder with me as well in case one or two of them goes for the full lottery, more than once we have had to move along quickly and left behind a tramp with a few missing teeth. I have heard on the grapevine I am going to be up for an award for doing this, but I don't do this for thanks, I am just a great guy doing his bit.

I am thinking about maybe helping out a few more people with their home deposits, a few of them have confessed to me that they held onto the HPC mantra for so long and are now angry and many have admitted to me that I was right all along. I don't hold onto grudges, I just want to see these people as happy as me, one I have already helped out who a few months ago informed me he had named his first born after me, money just cannot buy that kind of honour and good feeling.

phillw

GreatApe wrote: »

So no stupid model of a single man buying a 3 bedroom house for 3x his lonesome income.

Right. The thing that most people forget to include in their "but it's not fair" arguments.

Money is the only arbiter we have. If everyone could easily afford a nice house in a nice area, then who would choose to buy the !!!!!! ones?

It works for holidays during the summer school break as well, not everyone can go on holiday at the same time as it's financially unachievable to ramp up capacity for six weeks of the year & so money becomes the arbiter.

An inconvenient truth is that money also plays it's part in mate selection. So if you're a man with not much money, you're less likely to become part of a couple so that you can afford a nicer house. If you then turn to alcohol, gambling etc as a way to block out the pain then it's more money that could have gone towards a house.

Education helps lift people to they can earn more money, but by doing so you're depriving someone else. It's life.

GreatApe wrote: »

Someone who was going to buy in 2006 or earlier but put it off did not benefit but lost

I did buy in 2006 after putting it off, if I'd bought 10 years earlier then I reckon I'd be £100k better off now. I was dumb to put it off. I'd love to correct that mistake, there are only two options.

1. invent a time machine.
2. ten years of house prices wiped off by a financial disaster that somehow still leaves me with the ability to buy a house

option 1 sounds more likely.

GreatApe

phillw wrote: »

Right. The thing that most people forget to include in their "but it's not fair" arguments.

Money is the only arbiter we have. If everyone could easily afford a nice house in a nice area, then who would choose to buy the !!!!!! ones?

It works for holidays during the summer school break as well, not everyone can go on holiday at the same time as it's financially unachievable to ramp up capacity for six weeks of the year & so money becomes the arbiter.

An inconvenient truth is that money also plays it's part in mate selection. So if you're a man with not much money, you're less likely to become part of a couple so that you can afford a nicer house. If you then turn to alcohol, gambling etc as a way to block out the pain then it's more money that could have gone towards a house.

Education helps lift people to they can earn more money, but by doing so you're depriving someone else. It's life.



I did buy in 2006 after putting it off, if I'd bought 10 years earlier then I reckon I'd be £100k better off now. I was dumb to put it off. I'd love to correct that mistake, there are only two options.

1. invent a time machine.
2. ten years of house prices wiped off by a financial disaster that somehow still leaves me with the ability to buy a house

option 1 sounds more likely.

exactly

Homes are a stock of capital, a house price crash does not make homes more affordable and a house price boom does not make them less affordable. That sounds wrong but it is true.

The only impact is when we have big recessions, what then happens is people with capital wealth get poorer (say your £1m shares holdings is now worth £300k) while people with just income wealth do not get poorer (assuming they have not lost their job in the recession and most dont). So during recessions there are brief periods of time when who can afford changes a little. In 2008-2009 prices went down as capital wealth was not as wealthy anymore thanks to a recession so income wealth had more of a shot

In a boom the opposite is also true, if capital wealth booms then they can afford the bigger and better homes so prices go up. If the stock market adds £5 trillion then there is a lot more capital and the people with capital wealth can and do bid more for homes and people with only income lose out.

but as I have always said, if you want more wealth in life look at earning or making more dont hope that your housing costs fall 30% and that will solve all your problems. Even if we had a 30% HPC most the crash cheerleaders would be virtually no better off. At the end of the month they might have a couple of hundred quid more to spend thanks to the perfectly timed HPC (which 99% will fail at). Well whats a couple hundred quid more a month thats nothing its not going to change your life. Better work on getting a better job or income or hell even finding a richer partner and joining forces for an easier life.

buglawton

phillw wrote: »

...Education helps lift people to they can earn more money, but by doing so you're depriving someone else. It's life...

I’d agree with the rest of your post but not the above excerpt. The right kind of education and training plus capital investment is what raises productivity. And that’s the only way to lift earnings without depriving others (in fact, likely benefit others ).

It’s only those countries with higher productivity that better living space and a better health service can be afforded for all. Allbeit countries with little land/person living space has to be high rise.

The productivity issue is what our politicians have been bleating on, but doing little about, ever since the end of the industrial revolution.

vivatifosi

I'm late getting to this thread, but I'd vote for significantly more house/flat building, so that the market can find the correct level. We all know that it's a market skewed by under supply. A drop in demand from the EU is not going to stop this. Oh and tax second homes that are never lived in.

GreatApe

vivatifosi wrote: »

I'm late getting to this thread, but I'd vote for significantly more house/flat building, so that the market can find the correct level. We all know that it's a market skewed by under supply. A drop in demand from the EU is not going to stop this. Oh and tax second homes that are never lived in.

The problem seems to be that overall housing costs do not fall almost irrespective of what you do

If you look at the German market they have many more homes and much more space per capita. The result is not that the Germans pay less housing cost the result is that the Germans just consume more housing.

They have a crazy number of single person households. Sure their rents are lower but their overall housing cost which is rents + utilities + upkeep all divided by the number sharing the cost is no lower.

Their house prices are also often compatible or higher than UK house prices despite having a lot more houisng per capita. Birmingham cheaper than Berlin, doncaster cheaper than Dusseldorf etc

Vet

Fall - I'm a first time buyer (hopefully soon). So a bit of a drop would so me wonders for getting a mortgage for a decent house...

westernpromise

Vet wrote: »

Fall - I'm a first time buyer (hopefully soon). So a bit of a drop would so me wonders for getting a mortgage for a decent house...

Unless of course the reason for the drop was a recession in which you also lost your job. You'd then have less chance of buying. As you also would if mortgage lenders reduced loan multiples and required larger deposits from FTBs. They don't want to lend more than a place is worth, so instead of 10% deposit and 3.5x earnings it might become 50% and 2x.
Generally, if you want to know who'll own property after a correction, look at who owned it before.