CT Wac Posted October 9, 2009 Share Posted October 9, 2009 Sorry to be a house price boar but i'm confused.Media makes constant reference to 'return to long term average', and 'income ratio's' isn't this all out of the window now that we are running out of space? Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/ Share on other sites More sharing options...
SeanMacGabhann Posted October 9, 2009 Share Posted October 9, 2009 How are we running out of space? Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256819 Share on other sites More sharing options...
???? Posted October 9, 2009 Share Posted October 9, 2009 Just 'cos everyone wants a Bentley doesn't mean the roads are full of them - people can't afford them at current prices and the banks have less money and appettite to lend. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256837 Share on other sites More sharing options...
Brendan Posted October 9, 2009 Share Posted October 9, 2009 I don't want a Bentley. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256841 Share on other sites More sharing options...
???? Posted October 9, 2009 Share Posted October 9, 2009 just 'cos everyone except Brendan wants a Bentley doesn't mean the roads are full of them Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256862 Share on other sites More sharing options...
mockney piers Posted October 9, 2009 Share Posted October 9, 2009 Yep, weirdly the prices of houses are dropping because the cost of houses is rising, put very simply. Generally prices rises have been fuelled by among other things demand outstripping supply. This is much more down to societal change (people staying single much longer and able to afford to buy on their own thanks to cheap credit) than anything to do with immigration which I inferred from your second point, but perhaps you were referring exactly to my point above. The only way to relive that pressure is to build more houses. We have plenty of space to do this, it's just nobody wants anew town on their doorstep, which having grown up by Stevenage I can't say as I blame them. The Lee valley is often molted which is a great plan for billions of pounds worth of flood damage, but hey. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256894 Share on other sites More sharing options...
Jeremy Posted October 9, 2009 Share Posted October 9, 2009 Even if we are running out of space, there are other factors at work here other than supply-and-demand... e.g. availability of mortgages, "liquidity" and confidence in the housing market, employment, and the state of the economy in general. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256911 Share on other sites More sharing options...
Peckhamgatecrasher Posted October 9, 2009 Share Posted October 9, 2009 May be the Lee Valley should be crossed with a poodle? That should solve the problem. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256929 Share on other sites More sharing options...
mockney piers Posted October 9, 2009 Share Posted October 9, 2009 That's not only Essexist, and perhaps speciesist, it's also terribly hurtful to all those with horizontall challenged thumbs. *sulks* Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-256965 Share on other sites More sharing options...
The Chair Posted October 9, 2009 Share Posted October 9, 2009 You two should know better! Please stay on topic! Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257045 Share on other sites More sharing options...
SteveT Posted October 9, 2009 Share Posted October 9, 2009 Mockney Piers wrote:- Yep, weirdly the prices of houses are dropping because the cost of houses is rising, put very simply. Which makes no logical sense.The cost of houses is directly related to how much anyone is willing to pay for them, put very accurately. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257111 Share on other sites More sharing options...
Brendan Posted October 9, 2009 Share Posted October 9, 2009 You would think so woldn't you but its not really what has just happened in the recent past. What?s happened is that prices have been directly related to how much banks are willing to lend people to buy them, which in turn leads to banks owning more dept and therefore thinking themselves richer for it and by making more and more money available unnaturally inflating the price of houses until it all predictably went bang. And that was one of the main reasons for Le Credit Crunch, put very simply. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257117 Share on other sites More sharing options...
SteveT Posted October 9, 2009 Share Posted October 9, 2009 Brendan wrote:-prices have been directly related to how much banks are willing to lend people to buy them.Which have only been taken up by people who can afford to repay the loan, and those who failed became bankruptcy statistics, or sub-prime mortgages. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257138 Share on other sites More sharing options...
mockney piers Posted October 9, 2009 Share Posted October 9, 2009 The price of a house isn't necessarily the main factor in the cost, because very very few people are cash buyers. Most of us obviously have to get the bank to buy it in a hire purchase type arrangement. The cost then becomes a reflection on how much you have to stump up initially, fees and of course interest rates. At the moment despite rock bottom BoE rates the cost is relatively high compared to the mortgage bonanza of recent times if you're looking to buy or remortgage.In fact I think banks are currently taking the largest margins on mortgage lending in modern history.So you might be willing to pay ?1000 a month, but not willing to pay ?50k deposit. Hence the cost is too high, demand drops and prices go down. At this point it's much less relevant whether someone is willing to pay ?350k or ?400k face value. Put very very simply of course, as Jeremy said there are a larger number of factors, of which confidence is also a very very key one. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257145 Share on other sites More sharing options...
mockney piers Posted October 9, 2009 Share Posted October 9, 2009 And that's of course if the bank is even wiling to lend to you in the first place, which isn't necessarily the case at the moment. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257148 Share on other sites More sharing options...
Brendan Posted October 9, 2009 Share Posted October 9, 2009 Yeah but that?s just my point Steve, in order to make sure the amount of money owed to them each year was growing exponential the banks, specifically in Britain and America, were not properly calculating how much would be an affordable amount to lend to people. This created the bubble. In many country where the banks are more closely regulated (hellfire and communism I know) there are very strict rules on how much you can lend and the interest you can charge. This controls the property market and doesn?t let prices go skyrocketing and then crash. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257171 Share on other sites More sharing options...
Maurice Posted October 9, 2009 Share Posted October 9, 2009 Indeed - responsibility. By the banks, and those taking out the loans. We're all got into this together. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257183 Share on other sites More sharing options...
???? Posted October 9, 2009 Share Posted October 9, 2009 Arrrr indeed 'in it together' Maurice, the wise words of David Cameron......although, of course, it is a bit easier to be in 'it together' with the odd ?1million plus fortune to hand - the shadow cabinet are certainly as a rule in 'that' together. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257200 Share on other sites More sharing options...
Brendan Posted October 9, 2009 Share Posted October 9, 2009 There?s a difference between ?responsibility? when you?re looking at getting a great big wodge of wonga from a deal and ?responsibility? when what you?re trying to do is put a roof over your family?s head. But then again that may require a smidgen of empathy which as I?ve noted, from my not uneducated observation of the British political landscape, is a trait not attainable by the type of person who generally gives active support to the conservative party. Christ I?m being some sort of irrational tory hating freak at the moment. I realise this, but unfortunately I?m having to deal, on a daily basis, with a bunch of highly unscrupulous individuals wnking over the conference in Manchester and its outcomes like a bunch of spoilt schoolboys who just found their first porno. It?s nauseating. Support for the labour party is delusional and stupid but support for the conservatives seems more and more to me like a financially sanctioned form of antisocial behaviour. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257258 Share on other sites More sharing options...
CT Wac Posted October 10, 2009 Author Share Posted October 10, 2009 I suppose what im thinking is that as demand exceeds supply (not just at the mo but for the last few years). Wont the goal posts just shift and lower income groups will just be excluded form the mortgage market, as higher earners become the first time buyers shifting up the 'long term average'. Obviously this will cause massive social problems, but i am really interested as unfortunately i want a bentley, a small one, possibly with a garden. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257301 Share on other sites More sharing options...
Huguenot Posted October 10, 2009 Share Posted October 10, 2009 I can't remember the actual figure, but I think the total number of 'domiciles' in the UK is around 25m, with a population of over 60m.Hence in that sense demand is already outstripping supply - the issue is the density of residents per domicile, the size, the quality and the location.These attractiveness of these various attributes are defined culturally rather than economically, ensuring that supply and demand has far lower influence on price than the amount people are willing to sacrifice to gain social status. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257336 Share on other sites More sharing options...
SteveT Posted October 10, 2009 Share Posted October 10, 2009 mockney piers wrote:- The price of a house isn't necessarily the main factor in the cost...........The costs of repayment are what determines the take up on purchases of houses, whether it be a cash buyer a mortgage or bank loan. It is directly related to what somone is willing to pay for it. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257349 Share on other sites More sharing options...
Huguenot Posted October 10, 2009 Share Posted October 10, 2009 Nobody suggests otherwise SteveT, I think what other posters are discussing is what actually influences the price someone 'is willing to pay for it'. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257353 Share on other sites More sharing options...
Jeremy Posted October 12, 2009 Share Posted October 12, 2009 CT Wac Wrote:-------------------------------------------------------> Wont the goal posts just shift> and lower income groups will just be excluded form> the mortgage marketBut this has already happened, hasn't it? Even to buy a modest one bed flat in Peckham, you're talking about something like 200k, so you'd need to be on a pretty reasonable salary.> Obviously this will cause massive social problems,> but i am really interested as unfortunately i want> a bentley, a small one, possibly with a garden.I'm not convinced it will cause massive social problems... or indeed any social problems. Owning a property isn't an essential requirement for a decent standard of living. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-257754 Share on other sites More sharing options...
scott33 Posted November 30, 2009 Share Posted November 30, 2009 There seems to be this myth constantly spouted that there is a lack of housing in the UK, there's not, at all. What there is a serious lack of is AFFORDABLE housing...when prices get too high (which they very much still are) it blocks off first-time buyers, therefore denying the market of that capital injection it is used to. Prices need to come down to oil the wheels of the very rusty housing market. Link to comment https://www.eastdulwichforum.co.uk/topic/8335-how-can-house-prices-go-down-when-population-is-going-up/#findComment-270388 Share on other sites More sharing options...
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