Housing market: A bubble on a bubble

Graham_Devon

Experts have warned the UK housing market is a !!!8220;bubble on a bubble!!!8221; as new figures reveal that property prices could be overvalued as much as 12pc.

A housing bubble could burst in the next recession after being inflated by government and Bank of England policies, Soci!t! G!n!rale global strategist Albert Edwards told The Telegraph.

So far, so mundane. Prices could fall in a recession - who knew.

But what makes this thread interesting, for me at least as it agrees with my concerns is this...

Mr Edwards said that a decade of loose monetary policy on Threadneedle Street and the Help to Buy scheme have inflated prices beyond the reach of many buyers.

!!!8220;What you are doing is lending them more money backed by the taxpayer to push up house prices even more,!!!8221; he said. Mr Edwards explained that while US property prices corrected back to normal levels following the financial crisis, the UK market has become a !!!8220;bubble on top of the previous bubble!!!8221;.

He goes a little further, specifically on HTB, but the telegraph don't report it.

Who knew? Intervention in the market distorts things. Also read in the last couple of days that HTB can't now be stopped without causing massive damage to the market (can't find it now, but stands to reason). Interesting times.

https://www.telegraph.co.uk/business/2018/08/12/housing-market-bubble-bubble-experts-warn-pricescould-overvalued/

bobbymotors

Just buy a house, Graham, enjoy it as a home to live in that you own, sell it in 20 years for double what you paid for it, downsize, put the money in you pocket an have a life.

Instead of worrying all the time.

westernpromise

Stamp duty is a massively distortive intervention in the market, but envious Graham's almost certainly in favour of it: it makes houses more expensive, which means other people as well as Graham can't afford them.

People with nicer stuff than Graham should have it all taken off them. People with hair should have their heads shaved by the state so everyone's equally bald.

BikingBud

bobbymotors wrote: »

Just buy a house, Graham, enjoy it as a home to live in that you own, sell it in 20 years for double what you paid for it, downsize, put the money in you pocket an have a life.

Instead of worrying all the time.

So how do my kids buy a house and their kids?

We screwed the lot for generations ahead, all for short term greed.:(

PasturesNew

bobbymotors wrote: »

Just buy a house, Graham....

I thought he had one.... did I get that wrong?

Is he speaking "for himself", or "for others"?

If prices are likely to fall ... I'll wait to sell my house a bit longer, so it sells for less... because I want to spend a bit more on the next one and that'll be a bit less... so I might get a little more amenity than I'd expected. Of course, falling house prices reduces choice... so you end up with "dross for sale".

Crashy_Time

Falling house prices also kill HTB schemes, so you can all rest easy guys