Thursday, Oct 11, 2007
Demand from property investors was blamed by 16.1 per cent of those questioned,
AboutProperty.co.uk: Public misunderstand causes of high house prices
"Ten years of low interest rates have brought about Britain’s high house prices, but this is poorly understood by most people,"
Posted by soldinjune @ 03:32 PM (1130 views) Add Comment
16 Comments
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1. Davros said...
Who's to say what's ultimately responsible for high house prices?
Slightly arrogant?
2. Mightytharg said...
A rubbish article. We need government inaction to solve the problem not government action. i.e. stop restricting building so much, stop all these part-ownership schemes for government workers, stop the grants for homeowners, stop the tax-breaks for buy-to-let people.
Stop councils building council housing near jobs and giving it to the jobless. It's stupid and bad for the environment if the workers have to commute further.
3. Seanb303 said...
complete with redrow popup
i seem to see a lot of developers advertising at the moment
no hpc ya right
4. Yorkshireman said...
Let me try to start the ball rolling on this one. Demand from property investors has driven up prices. It is absurd to argue that an increase in the income multiples has contributed, in my view. This is a consequence of the high cost of housing. There is a simple choice; buy, rent or be homeless. If you decide you wish to buy, you need to borrow to cover the cost. If the government increased supply by whatever means, would it have a real effect on pricing. I don't think so. There are a whole load of empty houses already which are too expensive. There is an obesession with house prices, but I fail to see how family breakdown influences the situation. I have fortunately, never been in that position.
Mr Bright's remarks on low interest rates, show, I believe that he has a poor understanding. Even when rates were low, we had a problem. Immigrants are not the problem, nor should they be made scapegoats.
Does Mr Bright, or anyone else believe that local authorities or government can have an influence on the situation by building or offering incentives. I know that a great deal of lip service is given to this idea, but it runs counter to the great sacred cow, the market. I run a small business and there are of course, simple rules and laws which govern it. A fundamental one Mr Bright is that when the price of your product exceeds what your potential customer can pay, they cannot and will not buy. Then, you go out of business.
The cause of high house prices is people with vested interests, driving them up to impossible levels to satisfy their own greed. All your arguments will go out of the window in the short to mid term, because HOUSE PRICES ARE FALLING.
5. dugmug said...
"Immigrants and property investors make high profile scapegoats but are simply too small in number to be responsible."
Of course the immigrants earning minimum wage to work in Costa Coffee can't take much blame, but isn't it currently estimated that 1 in 10 properties with a mortgage in this country are now BTL? In which case that sounds like a big enough number to me!?
6. soldinjune said...
"Ten years of low interest rates have brought about Britain’s high house prices"
I think they forgot to mention the lenders who have been striving to grow their asset base (quite how a sub-prime loan can be classed as an asset is beyond me!)..
7. paul said...
Did anyone think of blaming the Monetary Policy Committee and the Bank of England who purposefully engineered the house price boom to stave off recession in 2001?
Hmmm. Puts the current Governor of the Bank of England in a whole new light.
8. eyeoftheweasel said...
Yes, I agree in part with the article that over the last 10 years a ridiculous underpricing of money caused in no small part by a woefully inadequate method of measuring inflation (consumer prices) probably had a lot to do with homes becoming as overpriced as they have done. That's what I consider a more accurate way of describing Gordon Brown's golden era of low interest and low inflation.
Maybe BTL is the result and not the cause? I'm sure the UK media soaring house price frenzy didn't help either.
9. Nmarks said...
While most of the factors identified have not been solely responsible for house price inflation they have all played a part. While lax lending is a signifcant factor, the interviewee is being disingenuine.
On a slightly different topic - the other day I heard a TV car show presenter state that the suspension on the car was testing was revolutionary in that it pushed the tyres down on to the ground. All car suspensions since the day suspension was invented have done that - that's the point of suspension.
My point? Be wary of 'experts' spouting b*llsh*t; dressing up mundane facts as starting discoveries they have unique knowledge of.
While most visitors to this website know that already, tens of millions of others have been duped having been spaciously deceived into buying superbly appointed polished turds for uber-fortunes. Doh!
10. Jonb said...
Dugmug,
I suppose you could argue that the lenders who give out £500,000 mortgages to immigrants earning minimum wage at Costa Coffee are to blame.
11. nacho99 said...
I don’t think it matters who you blame as if you look at the chart on the home page of this site you can see we get house price bubbles and house price crashes on a regular bases. The main thing is that you don’t end up buying at the top if possible and that people can be educated so that the bubbles are not as big as this one has been in the future.
12. alan said...
The problem isn't so much the high prices, but the debt which has been taken on to acquire them. It seems everyone wants to be a high geared investor using everyone else's money to make some. Not a problem provided you don't lose your job, go sick etc.
It will be interesting to see Rightmove's statistics this month and also Nationwide's.
Early next month the reposession stats come out for Q3 - they will be worth a read too.
13. paul said...
I'm not sure that it doesn't matter who you blame. To point to a parallel, crimes happen all the time but the perpetrators shouldn't remain blameless.
Okay maybe that's stretching the metaphor, but its no good ignoring the lessons of history. Every credit-led expansion in history has ended in financial catastrophe - there have been no exceptions to date. A credit-led expansion is an inevitable consequence of screwing down the cost of credit (ie. the interest rate) to such an unsustainably low value that it distorts people's rational buying decisions.
The socioeconomic consequences of unaffordable housing will be felt decades into the future, while the principle benefactors (those making money as intermediaries in the process - including everyone from the government to estate agents) are already feeling the warm glow from their huge con trick on the people.
Mervyn King, Eddie George and the rest of the extremely well paid goons at the bank of England should have worked that out much much sooner than Northern Rock had to force them to. Or at least they should have resat GCSE economics earlier - whichever would have been quicker.
14. trough2010 said...
PR rubbish again
15. Jackdaw said...
Makes sense to me - easy money terms allowed demand - now tough money terms are having the opposite effect.
16. eyeoftheweasel said...
Paul, I don't think they had GCSEs in Mervyn's or Eddie's school days. Maybe that explains why the UK economy is in such a mess now?