Will there really be a crash?

GreatApe

ukcarper wrote: »

I consider it a problem when to people earning above averages earnings can't buy a 2 bed house and the only alternative is to rent a property with no long term security.

Lower prices do not lead to higher ownership rates.
1994-2004 higher and higher prices but also higher and higher ownership rates
2008-2010 falling ownership rates even though prices were crashing

And your anectodal evidence does not tide in with the fact that only about 5% of households are long term renters the other 95% end up buying or get given free council homes

And as I keep saying but you keep ignoring, if you want higher ownership rates the most effective way to do that is to sell off or gift the council homes.

GreatApe

ukcarper wrote: »

So where are people in social stock going to go.

I would gift the lot to the sitting tenants for free because I like poor people and think they deserve our help...

Another option is to sell them off as they become vacant

Either way if your aim is to increase ownership you have to shrink the council stock

GreatApe

ukcarper wrote: »

You would but that doesn't mean it is.

You can not use sofa surfing or B&Bs as a metric for housing need or pricing because as I am sure you will agree we will have sofa surfing and B&Bs irrespective of the number of homes we have. Do you think there is absolutely zero sofa surfing or B&Bs in Germany? They have many many millions more homes than we do even accounting for the population difference yet I am sure they also have sofa surfing and B&Bs

Care to retract your idea that the existence of B&Bs or sofas are a good indicator?

GreatApe

Anyway I am pro building more homes

What I am trying to explain is the perceived problem is much much lessor than commentators imagine in he same way unemployment is much much lessor than commentators imagine.

Unemployment is 4-5% but most economists would say we have full employment so whats going on? It is because economists understand this 1.5 million unemployed is just churn of the labor market and hence why they look at 6+ or 12+ month unemployment figures as a better indicator.

20% rent privately but this is mostly churn. Long term rentals are closer to 5% so 95% end up buying or get given a free council home. Most people do not realize this or understand it not even most politicians (both for housing and the unemployment figure)

There is no great housing problem and prices up or down do not impact overall affordability because homes are no eggs or milk homes are a stock and flow of capital so affordability is more or less the same at any price. This is a very difficult concept for most people but it is true that if house prices cost just 1% of what they did today sure the price is much lower but more people cant afford homes because the price does not change the quality of the stock of homes. We can also look at historic data to see there is no real correlation of prices vs ownership levels. 1994-2004 prices boomed each and every year and ownership also boomed each and every year. 2008-2010 prices fell and so did ownership. If anything you would need to conclude the opposite of what you might think, that prices going up lead to higher ownership and prices going down lead to lower ownership or rather the movement of ownership levels drives prices.

In short, its more complicated than higher prices = bad or lower affordability and lower prices = good or higher affordability

ukcarper

GreatApe wrote: »

I would gift the lot to the sitting tenants for free because I like poor people and think they deserve our help...

Another option is to sell them off as they become vacant

Either way if your aim is to increase ownership you have to shrink the council stock

My aim is not to increase ownership, although that would be the best solution as I believe home ownership reduces cost to state when people retire. But people need secure accommodation especially if they have children and that is not available now for more people than in the past.

ukcarper

GreatApe wrote: »

You can not use sofa surfing or B&Bs as a metric for housing need or pricing because as I am sure you will agree we will have sofa surfing and B&Bs irrespective of the number of homes we have. Do you think there is absolutely zero sofa surfing or B&Bs in Germany? They have many many millions more homes than we do even accounting for the population difference yet I am sure they also have sofa surfing and B&Bs

Care to retract your idea that the existence of B&Bs or sofas are a good indicator?

It's Not only numbers but length of time people have to do it.

ukcarper

GreatApe wrote: »

Anyway I am pro building more homes

What I am trying to explain is the perceived problem is much much lessor than commentators imagine in he same way unemployment is much much lessor than commentators imagine.

Unemployment is 4-5% but most economists would say we have full employment so whats going on? It is because economists understand this 1.5 million unemployed is just churn of the labor market and hence why they look at 6+ or 12+ month unemployment figures as a better indicator.

20% rent privately but this is mostly churn. Long term rentals are closer to 5% so 95% end up buying or get given a free council home. Most people do not realize this or understand it not even most politicians (both for housing and the unemployment figure)

There is no great housing problem and prices up or down do not impact overall affordability because homes are no eggs or milk homes are a stock and flow of capital so affordability is more or less the same at any price. This is a very difficult concept for most people but it is true that if house prices cost just 1% of what they did today sure the price is much lower but more people cant afford homes because the price does not change the quality of the stock of homes. We can also look at historic data to see there is no real correlation of prices vs ownership levels. 1994-2004 prices boomed each and every year and ownership also boomed each and every year. 2008-2010 prices fell and so did ownership. If anything you would need to conclude the opposite of what you might think, that prices going up lead to higher ownership and prices going down lead to lower ownership or rather the movement of ownership levels drives prices.

In short, its more complicated than higher prices = bad or lower affordability and lower prices = good or higher affordability

So you don't think house prices are basically determined by supply and demand, it's obvious that if prices were dramatically lower they would be more affordable but some other means would need to be found to allocate those homes.

Herzlos

GreatApe wrote: »

I would gift the lot to the sitting tenants for free because I like poor people and think they deserve our help...

Another option is to sell them off as they become vacant

Either way if your aim is to increase ownership you have to shrink the council stock

Why increase ownership though? What's wrong with not owning?


We need vastly more social stock, evidenced by the huge waiting lists to get any of it. At least they are building social housing up here but still at a pretty pathetic rate compared to the private new builds (maybe 1:5)

triathlon

lookstraightahead wrote: »

No I met him at school. You are funny triathlon. You just make it up as you go along. I hope you are just trolling, for your own sake.

Ditto!!!

You mentioned two men, both rich

GreatApe

ukcarper wrote: »

So you don't think house prices are basically determined by supply and demand, it's obvious that if prices were dramatically lower they would be more affordable but some other means would need to be found to allocate those homes.

Supply and demand argument is actually an argument to say why todays prices are the correct price and not overvalued like you think they are

I am trying to explain to you and the hpc cheerleaders how it is demand is so much higher than their models predict and one of the big ways is that most the hpc models completely ignore the existence of capital and just look at income. Add in the £200 billion a year in gifted and inherited capital and you can see where so much of the demand comes from.

So yes supply and demand but demand is not just a single man on below full time median wages being able to buy at 3.5x income like the cheerleaders proposes. Demand is wages savings and a tsunami of £200 billion a year in gifted/inherited capital