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Author Discussion

Pork

8,510 posts

119 months

[news] 
Friday 5th October 2012 quote quote all
rover 623gsi said:
price will not fall while there is more demand than supply
Well, I'm sure your right, but what drives demand? Avaialble credit, for the most part.

rover 623gsi

2,264 posts

46 months

[news] 
Friday 5th October 2012 quote quote all
the demand is driven by the fact that people need somewhere to live

Derek Chevalier

790 posts

58 months

[news] 
Friday 5th October 2012 quote quote all
Pork said:
rover 623gsi said:
price will not fall while there is more demand than supply
Well, I'm sure your right, but what drives demand? Avaialble credit, for the most part.
Most being >99%

Deva Link

26,934 posts

130 months

[news] 
Friday 5th October 2012 quote quote all
Derek Chevalier said:
Pork said:
rover 623gsi said:
price will not fall while there is more demand than supply
Well, I'm sure your right, but what drives demand? Avaialble credit, for the most part.
Most being >99%
I don't know - 40% of properties are owned outright, and 30% are owned by councils and housing associations etc. So credit is only an issue for part fo the market.

Pork

8,510 posts

119 months

[news] 
Friday 5th October 2012 quote quote all
rover 623gsi said:
the demand is driven by the fact that people need somewhere to live
No it isn't. You can rent somewhere to live. Prices are driven by the avaliablity of people to pay, which in house terms, is driven hugely by available credit.
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groak

3,254 posts

64 months

[news] 
Friday 5th October 2012 quote quote all
I agree with pork. Credit availability (largely, though not exclusively) fuels demand for property.

Ozzie Osmond

16,081 posts

131 months

[news] 
Friday 5th October 2012 quote quote all
groak said:
Credit availability (largely, though not exclusively) fuels demand for property.
Not so. POopulation growth drives the demand. All credit availability does is finesse the price of the plot. Bricks, wires and pipes cost whatever they cost.

Or to put it another way, people will always be willing to spend a large proportion of their income on food and housing.

groak

3,254 posts

64 months

[news] 
Friday 5th October 2012 quote quote all
Ozzie Osmond said:
groak said:
Credit availability (largely, though not exclusively) fuels demand for property.
Not so. Population growth drives the demand. All credit availability does is finesse the price of the plot. Bricks, wires and pipes cost whatever they cost.
Or to put it another way, people will always be willing to spend a large proportion of their income on food and housing.
See pork's post above. The essentiality of 'having a place to live' drives a demand for property which can be satisfied by rental which doesn't require credit availability. But the demand for property for sale is (almost) entirely driven by credit availability.

Put it this way, I would buy twice as many properties if I could get 50% funding. And I could sell TEN times as many if others could get credit.



rover 623gsi

2,264 posts

46 months

[news] 
Friday 5th October 2012 quote quote all
Pork said:
No it isn't. You can rent somewhere to live. Prices are driven by the avaliablity of people to pay, which in house terms, is driven hugely by available credit.
the latent demand exists even if people can't get credit

RYH64E

4,825 posts

129 months

[news] 
Friday 5th October 2012 quote quote all
rover 623gsi said:
the latent demand exists even if people can't get credit
There's a huge latent demand for Ferraris, but if most potential buyers can't afford the asking price the demand is meaningless and sales volumes low.

With houses, the price will largely depend on what people can pay, which is hugely affected by availability and cost of credit.

rover 623gsi

2,264 posts

46 months

[news] 
Friday 5th October 2012 quote quote all
but the demand for Ferraris is based on wants, whereas the demand for houses is based (largley) on needs

RYH64E

4,825 posts

129 months

[news] 
Friday 5th October 2012 quote quote all
rover 623gsi said:
but the demand for Ferraris is based on wants, whereas the demand for houses is based (largely) on needs
Unless you're part of the benefits brigade, if you can't afford it you can't have it no matter how much you think you need it. People don't 'need' a four bed detached in the countryside, they need somewhere to live.

Derek Chevalier

790 posts

58 months

[news] 
Saturday 6th October 2012 quote quote all
rover 623gsi said:
but the demand for Ferraris is based on wants, whereas the demand for houses is based (largley) on needs
Why did rents stay boradly in line with inflation during the bubble if there was such a need - surely they would've increased in line with prices?

Road Pest

3,110 posts

83 months

[news] 
Saturday 6th October 2012 quote quote all
Well finally got a firm offer on my flat and I believe the wait was largely due to credit not being available. Even at 105k I only got 2 offers, one that fell through and the other luckily was still there. So at 102k the flat is now under offer and in the process of selling. Fingers crossed for no hiccups on the way.

Derek Chevalier

790 posts

58 months

[news] 
Saturday 6th October 2012 quote quote all
Road Pest said:
I believe the wait was largely due to credit not being available.
Are you saying that not one person in the UK was able to get a mortgage last month?

Randy Winkman

2,939 posts

74 months

[news] 
Saturday 6th October 2012 quote quote all
rover 623gsi said:
but the demand for Ferraris is based on wants, whereas the demand for houses is based (largley) on needs
People don't need houses. People need a bed for the night. And there are spare bedrooms in the homes of most people I know.

Trommel

12,051 posts

144 months

[news] 
Saturday 6th October 2012 quote quote all
Derek Chevalier said:
Are you saying that not one person in the UK was able to get a mortgage last month?
It is the reason why the bottom end of the market has stalled - most people at that level can't find a 10-15% deposit overnight.

Derek Chevalier

790 posts

58 months

[news] 
Saturday 6th October 2012 quote quote all
Trommel said:
Derek Chevalier said:
Are you saying that not one person in the UK was able to get a mortgage last month?
It is the reason why the bottom end of the market has stalled - most people at that level can't find a 10-15% deposit overnight.
But the market has been like this for a couple of years?

Trommel

12,051 posts

144 months

[news] 
Saturday 6th October 2012 quote quote all
Derek Chevalier said:
But the market has been like this for a couple of years?
Not sure what your point is.

Derek Chevalier

790 posts

58 months

[news] 
Saturday 6th October 2012 quote quote all
Trommel said:
Derek Chevalier said:
But the market has been like this for a couple of years?
Not sure what your point is.
They have had a few years to save that 10p-15% deposit.
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