How far will house prices fall [volume 4]
Discussion
jonny70 said:
How does it help big business?
They provide the funding. Low IRs today, so house prices remain high. Lenders still get their margins and what would they rather, 2% on £70k lending or 2% on £140k of lending?jonny70 said:
If everyone in the country is funneling more of their wage packets into paying for the debt of over priced brick and mortar. Then how does it benefit big business? If so much of the economy and debt is tied up to housing then surely there will be less investment in the economy? You cant import or export houses so if the economy is effected by overpriced hosue prices , then how does this benefit business as it means there is less to export?
House prices remaining high means, IMO, people still have the comfort that they can continue consuming. With IRs where they are, housing debts is as cheap as it has ever been, pound for pound. People will continue to consume if they’re thinking “well, at least my house is worth £xxxxx more than I paid for it”jonny70 said:
Also if joe average is spending more than he should in servicing debt of overpriced bricks and mortar then he spends less on food/restaurants/clothing/cars/gadgets/shiney stuff etc (a lot of which is produced by big business ,so how does it help? as surely means them will sell less)
I agree. As above, its as cheap as its ever been right now. See example, below. While a house costs more to buy today, it costs less to service the debt….though funders are still getting 2% of the sum loaned.ps - I know its flawed as I've not included capital repayments or reducing balance, but for IO it should be indicative.
jonny70 said:
If accommodation costs are overpriced then it may means big business will have to pay workers more to employ them to work for tthat big business (ex im sure if the average house was 100k then peole in principle would accept earning a slightly lower wage than they do now as their man cost (housing will be cheaper, this is sort of retroactive speaking)
They will, eventually. They’re already charging more which is seen in inflation and felt in your and my pocket daily. My salary certainly hasn’t gone up as much as my overheads in the last few years and that will continue until wage inflation kicks in. In the meantime, inflation is hurting people (savers and pensioners) while high house prices is only really helping support business by ensuring people who are paying more for day to day living can say “but my house is worth £xxxx more than it was last year”.It’s a very short term view at the moment and I think when people expect us to get back to normal, we’ll have the bombshell of pensions and people having to work for 5-10 more years. Will that help people? Nope. Will it help business? Yes, that’s 10 years more pay for them to compete for.
I'm sure the relatively high inflation we've had will work it's way through to wages and house prices sooner or later, it always does in the end doesn't it. Medium term they'll continue to rise.
One way the government can induce more growth in the economy and house prices is to either boost the numbers of workers and consumers (immigration), or get those that are here to work and consume for longer, we seem to be seeing them push for more of this recently.
One way the government can induce more growth in the economy and house prices is to either boost the numbers of workers and consumers (immigration), or get those that are here to work and consume for longer, we seem to be seeing them push for more of this recently.
MycroftWard said:
I'm sure the relatively high inflation we've had will work it's way through to wages and house prices sooner or later, it always does in the end doesn't it. Medium term they'll continue to rise.
One way the government can induce more growth in the economy and house prices is to either boost the numbers of workers and consumers (immigration), or get those that are here to work and consume for longer, we seem to be seeing them push for more of this recently.
And this is what I don't get. There was a sutdy a few years back saying that gov't had forecasted a massive increase in immigration, necessary to keep spending levels where they were needed.One way the government can induce more growth in the economy and house prices is to either boost the numbers of workers and consumers (immigration), or get those that are here to work and consume for longer, we seem to be seeing them push for more of this recently.
What I really dont get is, if you're books don't balance now, how is having more poeple in the country going to help? So you're current spending habbits are too large for your current income....what do you do? Multiply it!!
I'm not against immigration and population growth, but I am against government turning the country in to an over populated place to live, just so they can say there is continued growth. Personally speaking, I'd like a country that still have plenty of green space and enough schools for the children we have. Allow immigration/population growth and we're only going to end up where we are now, but far more crowded.
Again, it wont benefit residents, but it will help the governent achieve growth and have more money to spend (mismanage?) and see the man on the streets quality of life deteriorate. Busier roads, busier schools, more work for the police/hospitals etc....it wont get better, it'll get worse, but at least their stats will show growth.
[/doomandgloom]
Perhaps the governemnt should be judged on 'well being' and not monetarily?
MycroftWard said:
I'm sure the relatively high inflation we've had will work it's way through to wages and house prices sooner or later, it always does in the end doesn't it. Medium term they'll continue to rise.
One way the government can induce more growth in the economy and house prices is to either boost the numbers of workers and consumers (immigration), or get those that are here to work and consume for longer, we seem to be seeing them push for more of this recently.
I dont think that is a important factor in determining house prices.The most important factor in determining house prices is the amount of credit in the system.One way the government can induce more growth in the economy and house prices is to either boost the numbers of workers and consumers (immigration), or get those that are here to work and consume for longer, we seem to be seeing them push for more of this recently.
Pork said:
And this is what I don't get. There was a sutdy a few years back saying that gov't had forecasted a massive increase in immigration, necessary to keep spending levels where they were needed.
What I really dont get is, if you're books don't balance now, how is having more poeple in the country going to help? So you're current spending habbits are too large for your current income....what do you do? Multiply it!!
I'm not against immigration and population growth, but I am against government turning the country in to an over populated place to live, just so they can say there is continued growth. Personally speaking, I'd like a country that still have plenty of green space and enough schools for the children we have. Allow immigration/population growth and we're only going to end up where we are now, but far more crowded.
Again, it wont benefit residents, but it will help the governent achieve growth and have more money to spend (mismanage?) and see the man on the streets quality of life deteriorate. Busier roads, busier schools, more work for the police/hospitals etc....it wont get better, it'll get worse, but at least their stats will show growth.
[/doomandgloom]
Perhaps the governemnt should be judged on 'well being' and not monetarily?
Yes, growth at all costs. The dream of the powers-that-be is that we and our partners work ever harder and longer to buy more and more shiny stuff we don't in fact really need. All the while living in progressively smaller properties in increasely crowded areas. This diminishing quality of life is called "progress" don't you know, meanwhile depression amongst the population soars.What I really dont get is, if you're books don't balance now, how is having more poeple in the country going to help? So you're current spending habbits are too large for your current income....what do you do? Multiply it!!
I'm not against immigration and population growth, but I am against government turning the country in to an over populated place to live, just so they can say there is continued growth. Personally speaking, I'd like a country that still have plenty of green space and enough schools for the children we have. Allow immigration/population growth and we're only going to end up where we are now, but far more crowded.
Again, it wont benefit residents, but it will help the governent achieve growth and have more money to spend (mismanage?) and see the man on the streets quality of life deteriorate. Busier roads, busier schools, more work for the police/hospitals etc....it wont get better, it'll get worse, but at least their stats will show growth.
[/doomandgloom]
Perhaps the governemnt should be judged on 'well being' and not monetarily?
MycroftWard said:
Yes, growth at all costs. The dream of the powers-that-be is that we and our partners work ever harder and longer to buy more and more shiny stuff we don't in fact really need. All the while living in progressively smaller properties in increasely crowded areas. This diminishing quality of life is called "progress" don't you know, meanwhile depression amongst the population soars.
In one of my more reflective moments this week, I was thinking about places I've been where people are often considered 'worse off' than us in the UK. I would say, overall, they were far, far happier than the average Brit. We're talking 3rd world too...no TVs, mobile phones, or even electricity. I don't want to come across as a tree hugger, but I do think society as a whole has gone a bit mad and lost focus on whats important.
Pork said:
far happier than the average Brit
I know exactly what you mean. Not too many years ago my host in a certain country asked me to advise when I was getting peckish and to mention any preference for something formerly flying, swimming or walking, as they wanted time to catch and cook it for me. Times have changed but their happiness hasn't changed noticeably...as yet. Apparently it increases up to ~£40k pa. On which basis they have lots more happiness potential Current house prices there are even lower than Hull or Burnley.turbobloke said:
Pork said:
far happier than the average Brit
I know exactly what you mean. Not too many years ago my host in a certain country asked me to advise when I was getting peckish and to mention any preference for something formerly flying, swimming or walking, as they wanted time to catch and cook it for me. Times have changed but their happiness hasn't changed noticeably...as yet. Apparently it increases up to ~£40k pa. On which basis they have lots more happiness potential Current house prices there are even lower than Hull or Burnley.IIRC, it was discussed at length in this book; http://www.amazon.co.uk/Thinking-Fast-Slow-Daniel-...
MycroftWard said:
I'm sure the relatively high inflation we've had will work it's way through to wages and house prices sooner or later, it always does in the end doesn't it. Medium term they'll continue to rise.
At some point base rates will have to go up - if this happens in the medium term, they'll continue to fallWow, still a 17% difference between now and the peak back then. Its a shame the examples don't go to higher values.
There's a house I'm keen on that sold New in 07 for £460k and they are expecting £450k for it now (on the market at 'offers over £475k'). I don't think they have done much to it, but obviously want to get most of what they paid back. It seems a little overpriced.
There's a house I'm keen on that sold New in 07 for £460k and they are expecting £450k for it now (on the market at 'offers over £475k'). I don't think they have done much to it, but obviously want to get most of what they paid back. It seems a little overpriced.
anonymous said:
[redacted]
I don't remember this one. Is it recycled? I see they're using an internet only agency. Often a sign that they either couldn't sell or didn't want to hear what the local agents were telling them. (Or they just know more abut the marketing of their own property than anyone else and certainly don't want to pay (an admittedly extortionate sum) for a photo on rightmove).Those monsters really were disliked by the market, weren't they? Compare them to Victorian/Edwardian/1930s styles that are still loved. Even brick built 1950s to an extent. It'll be interesting to see how the 1990s and 2000s McMansions fare.
£600m of Battersea flats sold in 4 days allegedly. Interesting location.
http://www.london24.com/news/watershed_moment_for_...
http://www.dailymail.co.uk/news/article-2262681/St...
http://www.london24.com/news/watershed_moment_for_...
http://www.dailymail.co.uk/news/article-2262681/St...
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