How far will house prices rise?
Discussion
Prices may have risen a bit (with small volumes) but I would suggest that interest rates won't stay at 0.5% for the medium term and that the BOE will at some point stop printing money.
This past year the authorities have been desperately trying to pump air into the deflating bubble. But it will continue to deflate once they stop.
This past year the authorities have been desperately trying to pump air into the deflating bubble. But it will continue to deflate once they stop.
JagLover said:
Prices may have risen a bit (with small volumes) but I would suggest that interest rates won't stay at 0.5% for the medium term and that the BOE will at some point stop printing money.
So you don't think we are following the Japanese example? There interest rates have been virtually 0 for almost a decade.Fittster said:
JagLover said:
Prices may have risen a bit (with small volumes) but I would suggest that interest rates won't stay at 0.5% for the medium term and that the BOE will at some point stop printing money.
So you don't think we are following the Japanese example? There interest rates have been virtually 0 for almost a decade.In any event to say that house prices will now start to rise again when they are still at the same level in respect to earnings as the PEAK of the early nineties boom and we are in the midst of the biggest recession since the great depression, seems to me to be somewhat foolhardy.
Before the crash, i spotted the huge anomaly before rental values and property values, and this was my 'gut feeling' that we were in a bubble despite many people (including those experts working in finance) telling me it was a structural shift due to household incomes and desires. Now, i'm seeing localised trends - some areas are rocketing (albeit on low volumes) whilst the others are in a slump (or have returned to 2002 prices) - where will it all end? - it doesn't seem like the last property crash as there are many more global factors involved, but i'm more inclined to think we'll see inflation as the value of the pound declines (and thus buoying property prices in nominal terms). And, i can't see lending or employment improving, so unless there's an influx in foreign investment (in property) what else could cause prices to rise?
Insane levels and beyond.
Look at all the factors that increase house price:
land scarcity
green pressure groups
immigration
life expectancy
family breakdown
late marriage
regulations
Are any of these going in a direction that will reduce restrictions on supply or to reduce demand? No.
The only variable that will change is the interest rate / lending criteria / estate agent fees bit.
But don't fool yourself. If the estate agent window price was 1 quid and the interest rate was zero do you honestly think that the agents fees and government taxes wouldn't add up to something like the average house price we see today? At the moment we have cheaper houses and low base rates but the combined effect of high street bank lending criteria and the economy is that it is probably harder than ever to actualy buy your first home.
In the future, due to the things I mention above, it will just get worse.
House prices can get higher. Do not be fooled by what you now consider an acceptable income multiple. There is no fundamental rule that says you can't have, for example, a fifty year mortgage.
Look at all the factors that increase house price:
land scarcity
green pressure groups
immigration
life expectancy
family breakdown
late marriage
regulations
Are any of these going in a direction that will reduce restrictions on supply or to reduce demand? No.
The only variable that will change is the interest rate / lending criteria / estate agent fees bit.
But don't fool yourself. If the estate agent window price was 1 quid and the interest rate was zero do you honestly think that the agents fees and government taxes wouldn't add up to something like the average house price we see today? At the moment we have cheaper houses and low base rates but the combined effect of high street bank lending criteria and the economy is that it is probably harder than ever to actualy buy your first home.
In the future, due to the things I mention above, it will just get worse.
House prices can get higher. Do not be fooled by what you now consider an acceptable income multiple. There is no fundamental rule that says you can't have, for example, a fifty year mortgage.
cymtriks said:
Insane levels and beyond.
Look at all the factors that increase house price:
land scarcity
green pressure groups
immigration
life expectancy
family breakdown
late marriage
regulations
Are any of these going in a direction that will reduce restrictions on supply or to reduce demand? No.
The only variable that will change is the interest rate / lending criteria / estate agent fees bit.
But don't fool yourself. If the estate agent window price was 1 quid and the interest rate was zero do you honestly think that the agents fees and government taxes wouldn't add up to something like the average house price we see today? At the moment we have cheaper houses and low base rates but the combined effect of high street bank lending criteria and the economy is that it is probably harder than ever to actualy buy your first home.
In the future, due to the things I mention above, it will just get worse.
House prices can get higher. Do not be fooled by what you now consider an acceptable income multiple. There is no fundamental rule that says you can't have, for example, a fifty year mortgage.
But there will be less competition if we are in a federal Europe and people will drift to areas of prosperity. Surely this is one of the reasons "they" who know best have signed us up for the federal superstate...Look at all the factors that increase house price:
land scarcity
green pressure groups
immigration
life expectancy
family breakdown
late marriage
regulations
Are any of these going in a direction that will reduce restrictions on supply or to reduce demand? No.
The only variable that will change is the interest rate / lending criteria / estate agent fees bit.
But don't fool yourself. If the estate agent window price was 1 quid and the interest rate was zero do you honestly think that the agents fees and government taxes wouldn't add up to something like the average house price we see today? At the moment we have cheaper houses and low base rates but the combined effect of high street bank lending criteria and the economy is that it is probably harder than ever to actualy buy your first home.
In the future, due to the things I mention above, it will just get worse.
House prices can get higher. Do not be fooled by what you now consider an acceptable income multiple. There is no fundamental rule that says you can't have, for example, a fifty year mortgage.
I think that the HPI will continue to show an upward trend overall, and maybe at a decent rate. However, last month HPI increased by 1.6%. Did the 'average' home ? Did it b@llocks.
I do like these threads as its brings out all sorts of idiots who must believe these figures, literally. The reality however is both more complex, and also far simpler. That being, a nice house in a nice area will perform better than the market 'average' 90% of the time, whereas a lesser house in a less desirable area will not.
People will always pay top dollar for something which ticks all the boxes, but no longer will for something not quite perfect.
I do like these threads as its brings out all sorts of idiots who must believe these figures, literally. The reality however is both more complex, and also far simpler. That being, a nice house in a nice area will perform better than the market 'average' 90% of the time, whereas a lesser house in a less desirable area will not.
People will always pay top dollar for something which ticks all the boxes, but no longer will for something not quite perfect.
cymtriks said:
House prices can get higher. Do not be fooled by what you now consider an acceptable income multiple. There is no fundamental rule that says you can't have, for example, a fifty year mortgage.
There will come a point where interest rates cannot go any lower to keep the bubble inflated.VX Foxy said:
thesilentpartner said:
a nice house in a nice area will perform better than the market 'average' 90% of the time
Interested to know where this stat came from?/spike
Had mine valued last week - it's back to where it was last year. At £250K.
The estate agent was perfectly straight and said there's two factors in play with this sudden return to form, in Hove at least; lack of houses in good/desirable areas on the market governing the low end, and stamp duty point governing the top-end.
His opinion was that it'll stay around £250k unless the supply side is improved, in which it'll drop, or unless the stamp duty point is removed at which point it'll be a return to the silly times and everybody will be asking £300k+ for a nice 30s three bed semi in suburban Sussex.
A bit of a false dawn was the phrase I think he used.
The estate agent was perfectly straight and said there's two factors in play with this sudden return to form, in Hove at least; lack of houses in good/desirable areas on the market governing the low end, and stamp duty point governing the top-end.
His opinion was that it'll stay around £250k unless the supply side is improved, in which it'll drop, or unless the stamp duty point is removed at which point it'll be a return to the silly times and everybody will be asking £300k+ for a nice 30s three bed semi in suburban Sussex.
A bit of a false dawn was the phrase I think he used.
Pugsey said:
VX Foxy said:
thesilentpartner said:
a nice house in a nice area will perform better than the market 'average' 90% of the time
Interested to know where this stat came from?/spike
SJobson said:
Mine's already gone up £50k since I bought it in mid-August. I've done some work to it; I installed an extractor fan in the bathroom and trimmed a hedge.
Good man.Just had all the exterior woodwork done last week.
The house definitely worth at least as much as I paid decorator more than it was last month.
I did sweep up all the leaves, but some more arrived in their place. If I could clear them then I reckon I could add another few grand.
Digga said:
SJobson said:
Mine's already gone up £50k since I bought it in mid-August. I've done some work to it; I installed an extractor fan in the bathroom and trimmed a hedge.
Good man.Just had all the exterior woodwork done last week.
The house definitely worth at least as much as I paid decorator more than it was last month.
I did sweep up all the leaves, but some more arrived in their place. If I could clear them then I reckon I could add another few grand.
SJobson said:
Digga said:
SJobson said:
Mine's already gone up £50k since I bought it in mid-August. I've done some work to it; I installed an extractor fan in the bathroom and trimmed a hedge.
Good man.Just had all the exterior woodwork done last week.
The house definitely worth at least as much as I paid decorator more than it was last month.
I did sweep up all the leaves, but some more arrived in their place. If I could clear them then I reckon I could add another few grand.
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