Tuesday, Oct 23, 2007
How can a house price crash happen under these condition? It can't.
BBC: UK population 'to hit 65m total'
The population of the UK is set to increase by 4.4 million to 65 million by 2016, according to new projections.
Posted by david20040_0 @ 05:29 PM (2232 views) Add Comment
63 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. This comment has been removed as it was found to be in breach of our Blog Policies.
2. voiceofreason said...
I don't remember any manifestos that said "And we promise to add another city the size of Birmingham to this already crowded (well, planning-deficient actually) overpriced country".
Maybe I should read manifestos more thoroughly next time I vote...
3. This comment has been removed as it was found to be in breach of our Blog Policies.
4. This comment has been removed as it was found to be in breach of our Blog Policies.
5. Angel said...
Media sensationalism as usual these hugely ambitious figures simply won't come to pass.
The vast majority of Eastern and Western Europeans in this country have no plans to stick around any longer than they need to, once their home countries provide them with a decent standard of living they will be gone.
Additionally the number of Brits leaving the UK is at a histoic high.. there are simply better places to be nowadays.
Wishful thinking.
6. dohousescrashinthewoods said...
It won't happen. As soon as the UK economic mirage disappears, everyone will be of to a real country
7. Bigyin said...
Why do you bother posting on this site? Why not do us all a favour and go and buy a house? Then stop moaning. The latter is more preferable than the former.
8. david20040_0 said...
I just don't understand how house prices will crash if this massive increase in population occurs.
9. Delboypass said...
more people, less jobs, more support for people unemployed...
so basically
either more taxes for the working
or less pay for the jobs
either way...less money in circulation plus rampant inflation boosting prices and interest rates....
ill let you think about it
10. pecker said...
Close this site down now! David20040_0 has proved via a spurious piece of forcasting that the crash cannot happen! I bet guys who set this site up feel pretty darn stupid now!! If only they'd consulted David first! Oh well, live and learn! Im off to buy a one bed flat in my area for £180k now safe in the knowledge that the crash "cant" happen! Thanks David for bringing this to my attention! Imagine how stupid i'd have looked saving over the next 18mnths waiting for something that "cant" happen!
11. robh said...
Come to Britain, where the streets are paved with mattresses
12. Bigyin said...
Are you perchance a Labour MP? You certainly seem to have their grasp of the overall picture. Forget immigration for now; think impending massive credit crunch, banks taking out emergency loans with the Fed (Barclays & RBoS), personal debt £1.5 TRILLION pounds and rising every day, an economy based on credit (what manufacturing base?), thousands of empty new build flats in Liverpool, Manchester & Leeds, real inflation of food - the government is too scared to tell us the real figure and 107,000 people becoming insolvent in 2006, an annual rise of 59%. Got all that? Now either buy a house or stop coming on here and moaning. Thank you.
13. Robh said...
Isn't it the Office for National Statistics who compile the inflation figures?
They couldn't project a public information film, let alone the population in 9 years time
14. Another Alan said...
Wow 2016!
Let's base our behaviour on this!
15. confused76 said...
sure, sure David
there is plenty of space to have 65m on this island.
just think of the fact one third of the UK population live in Greater London, i.e. in less than 10% of the country surface area
so please stop thinking like an EA (i.e. with your @rse)
16. Bigyin said...
David, why do you bother with this site?
17. david20040_0 said...
Maybe there is the space to house 65 million in the UK.
There may be the physical space, but who eaxactly is building enough houses to house all these people. Last time I checked house building was at a very slow rate.
So even though we may have the physical space we are not utilising it to build houses.
If an eatra 5 million come in by 2016 and we don't bother to increase our house building rate then house prices will be underpinned by this massive increase in population.
How exactly can any sort of vast price reduction occur when we are short of housing, immigration increases massively and we are not building enough houses? Any sensible answers or are you guys just going to have another random go at me?
18. Onyerhike said...
There aren't enough houses for everyone in India either, David - but they don't have soar away housing inflation. Someone who has just arrived here from Poland to pull pints will probably be living with 10 others in a one bedroomed flat.
19. New User 2007 said...
The argument for the need for greater infractructure is clear. But even if based on these population assumptions, which can be changed easily, even if the population did reach that level, I am not sure why there is a panic other than the man-made one (as opposed to geographical limitations), we have not yet built on 20% of England yet..something that seems to have gone unnoticed even during the last decade, never mind the future).
Even the short term outlook starting from 2000 seems odd..land banks have reached record levels at a time of record house prices, even including problems with gaining planning permission, this seems to be inconsistent with the idea that a shortage of land is a major problem—it is a no-brainer that the margins of developers are protected by restricting supply, so I suspect that they use planning permission as a cover.
THE MOST IMPORTANT PART...
The only X factor in the model here is whether the current rush of immigrants is permanent or economic (I think it is the latter). The Britons who have gone abroad, on the other hand, are less likely to come home as they have greater purchasing power overseas than here, and have largely left permanently. Change the assumption to one that newcomers are economic and we have an entirely different picture of what the population size will be i.e. if our economy goes under, not only will additional people stop coming here, the ones already here for work will go back. At the same time, the outward trend of Britons to cheaper locations abroad I just mentioned will continue.
It was a worst case population scenario given. Even if it did grow like this it does not mean house prices will go up. Planning permission will have to become easier for survival and we will build higher. If it did reach such levels, I can think of a dozen places that I would rather live in in a few decades if this was not my home. The mad rush of people from Hong Kong that was blocked after it went back to China in 1997 used similar arrogance about the attraction of the UK...people from Hong Kong wanted an emergency place if China played up, but history has shown they all preferred moving to Australia and Canada. Europe is liberalising and will be far more attractive (and more debt free) than us in a decade i.e. a better place to live?
20. Vicma64 said...
Hey David - did you ever ask yourself the question where they'll get the money from to buy the houses in the first place ! Duh
They ain't so sub-prime friendly no more...
No money = HPC no matter if the population doubles in the next 5 years!
21. Jonb said...
Because of course Polish food processing workers earning minimum wage will have absolutely no problems paying £250k for a one bed flat.
22. New User 2007 said...
UK UK
Year Population
1990 57.27m
1995 57.96m
2000 58.87m
2005 60.24m
Source: United Nations.
Japan Japan
Year Population
1980 116.81m
1985 120.84m
1990 123.54m
1995 125.47m
2000 127.03m
2005 127.90m
Source: United Nations.
Japan's population density is double hours and they have less buildable land. The population added 4m between 1990 and 2000, but owing to the liquidity driven house price rise in the 1980s prices went onto fall from 1990 to 2005.
23. Bubbles. . . . said...
4.4million divided by 25 people that live in a house (immigrants no offence meant) = ONLY NEED 176,000 properties hey they can live in all the flats on New developments that havent been SOLD. Affordability david is the thing. Are you saying we have to house all these people putting a higher TAX burden on an already struggling middle class? No wonder people ar leaving these shores...
24. Angel R Louzan said...
The mayority of immigants today specially those from Eastern europe have no plans to stay here for the long term, additionally thousands of Brits leave this country every year, now that there are better places to be out there.
It is arrogant to assume millions are queing up to make the UK home, with the eception of a few lemmings.
25. Mystic Meg said...
You a taking an estimate and treating has a fact. If indeed an extra 4.4 landed on our shores there might be a problem but then you are again assuming that all other factors remain constant.
We could speculate forever and endlessly but the current facts are that houses are less affordable than ever, credit is more difficult obtain, rental yields are negative, interest rates are up, there are job cuts predicted in the city and the economy is predicted to slow.
I have no idea if the house prices are going to fall but the facts are not in favour of further gains.
Oh and did New Zealand reach the rugby world cup final? They were supposed to win weren’t they??
26. confused76 said...
David,
we love you!!
Seriously, supply and demand arguments have been misused in the context of house prices. Run any regression of house prices agains population per square mile and you get just a "cloud", i.e. no correlation. Is UK overcrowded?? Well not sure, think of Lagos, Nigeria, or Mexico City or Indonesia. Should house prices be greater there (more dense population AND much higher population growth. But I give you a hint, there is no cheap credit bubble :)))
But what is "crowded"? I cannot even define that.
But let us stay within the UK. Is Chelsea crowded? Sure not. More townhouses with large gardens in Chelsea than in Brixton. Does it mean houseprices in Brixton are higher? Brixton is more crowded?
OK, I throw you another bone here. Share prices. Do you think share prices are set by "supply and demand"? Or perhaps by the expectation of future dividends and price gains? since houses have become primarily an investment vehicle in the uk, expected future gains are driving today's prices
another bone for you. Rentals. Supply and demand do apply to rentals. And rentals have been pretty static since 2000.
27. Alex W said...
When immigrants take all our jobs for lower wages, there will be even less chance of being able to get a mortgage. This demand for jobs will drive wages down and therefore make it even more impossible to buy property.
28. Bigyin said...
Just go and buy a house and have done with it. When the wave of immigrants come you can rent out your spare rooms.
29. david20040_0 said...
My point is I can't understand how we can see any major sort of crash if millions of people enter the UK very quickly.
Surely many more people will think hold on a minute if I get a few BTL I can rent them out to all the new migrants.
Shares are set by supply and demand to an extent, look at the shares of BP and Shell, when oil was low in the late 1990s their shares were low, look at their share price now with oil hitting $90.
30. Bigyin said...
Then buy a couple of BTLs at 16 times your salary and wait for the cash to roll in.
31. confused76 said...
No, no... shares are not set by supply and demand
Asset prices in general are a reflection of future expected cash flows. period.
commodities are set by supply and demand. and renting is a "commodity" (since I use the rental time "here and now").
house ownership used to be a "commodity" (so the cost parity between mortgage and rentals) but has now become asset speculation
if 100m immigrants want to crowd this island (why? food is lousy and the weather is s**t!!) i cannot ask 6000 pounds a month for a two bedroom in Clapham, because the take home pay of that migrant will be less than 6000 per month. It is so simple, rentals are capped and BTLers are outbidding themselves in a fool's game in the expectation of huge rental inflation (that is a pipedream). But fu@k them!
so I laugh at these cheap statistics (we will be 60 70 80 millions in 2020) because they are cr@p
More seriously, a couple of good links
http://www.citywire.co.uk/Blogs/Property/Entry.aspx?VersionID=97825
http://www.mortgagestrategy.co.uk/cgi-bin/item.cgi?id=152699&d=337&h=24&f=254
32. david20040_0 said...
It is not crap.
If 200k come in a year more than who leave we will hit 65 million very quickly.
33. yorkshireman said...
I fail to see how the population affects the house price situation. It is purely about affordability. If the price is too high, there will be no takers because there cannot be. Seems logical to me, but I am only a humble scientist. More interesting to think that every action has a consequence. When the populace can no longer afford to rent or buy, do not be surprised to see rioting in the streets.
34. Simonp said...
I know plenty of people who'd love a fast car and a boat, but I don't know many who can afford them
35. pecker said...
yorkshireman -
I fear your common sense approach to this will be somewhat wasted on David! He is either a VI or has the brain of a five year old chimp!
36. This comment has been removed as it was found to be in breach of our Blog Policies.
37. down wave said...
The more crowded and over poulated any situation becomes, regardless of the spieces, be they rats, lemings, locast or humans, the greater the opertunity for a pandemic disease insident. 40 to 60 million died in the spanish flue outbreak in following the 1914-18 war. The dark ages plague is thought to have killed (not sure here) half of the poulation. The more crowded, the higher the hypotension and hypotention, these provide the ideal conditions for a pandemic or epidemic.
38. Moneypit said...
65 million is a projection based on current differential economic conditions continuing into the future.
39. enuii said...
The UK economy is incapable of sustaining 65 million people of any flavour, what are we going to do, supply services to each other on the back of infinite mortgage borrowings financed by a sustained house price boom. I think not, that is what has propped the economy up for the last 10 years and it is now spent out, with its outgoings vastly outstripping its economic revenue.
40. alan said...
The statistics are just an extrapolation. It says so in the article.
If I grew 3 feet tall in the first 8 years of my life and another 3 feet in the second 8 years I would be 6 foot tall at 16. So, by the time I'm 24 how tall will I be..?..... and how tall at the age of 80?
41. su said...
I'm not sure David is either a VI or has the brain of a five year old. I think he has difficulty believing a crash will happen. It may well be easier to convince an atheist of the existence of God than to convince David that there will be a crash. The facts are out there, but sometimes its a big step to accept what is blaringly obvious to others.
42. pecker said...
Su, im afraid it really is one or the other!!
43. david20040_0 said...
Pecker stop insulting me
44. su said...
David, I thought you had started to realise that the property market had turned. What made you start doubting?
45. sold out said...
Su, i agree with pecker.Everytime David posts a piece on the newsblog its the same old thing.He is a VI without question.Thats fine by me he can believe what he likes and i welcome his contributions to this site.If anything all he does is reinforces the arguments for a HPC because everything he posts is always so flimsy and lacking in substance and is normally dismissed very quickly by the likes of enuii,confused and others on this site.Keep posting David you always make me smile.
46. pecker said...
David20040_0
Dont leave yourself open to be insulted then! If Im honest I neither know nor care whether you are a VI or a chimp-brained fool! One could argue they are one and the same thing anyway! I do find myself wondering how someone with your total lack of logical thinking performs even the simplest of tasks in their everyday life!? In conclusion, shut up you cretin!!
47. Cokieman said...
can we please not forget how the middleclass british invest their moneywe believe in bricks and mortar, they will be investing their money in proprty regardless of the future predictions.
i tried to buy the premises where i trade from, this year , rather than leasing.
it was valued £275k i put an offer for £280 and it was sold for £350. people who bought it, own half the street now , its like the monopoly , the race: who will put more houses on the mayfair ?
Kind regards
48. wiltshire said...
As I said recently David is a brilliant barometer of the unfolding HPC (because it must be happening as we speak). If he isn't posting here then it's because all the news is bear news. When he does post it's the odd bit of flimsy nonsense about things like population increases (which may or may not happen depending on whether anyone still wants to be in the UK in 5 years time). The fact he hasn't been here for ages and turns up with this steaming pile of pony pretty much means the HPC is set to full steam ahead.
49. wiltshire said...
"Are you perchance a Labour MP? You certainly seem to have their grasp of the overall picture. Forget immigration for now; think impending massive credit crunch, banks taking out emergency loans with the Fed (Barclays & RBoS), personal debt £1.5 TRILLION pounds and rising every day, an economy based on credit (what manufacturing base?), thousands of empty new build flats in Liverpool, Manchester & Leeds, real inflation of food - the government is too scared to tell us the real figure and 107,000 people becoming insolvent in 2006, an annual rise of 59%. Got all that? Now either buy a house or stop coming on here and moaning. Thank you."
I agree with you Bigyin but these and many other such points have been made endlessly to David and he still comes back with tired old stories about population etc. I give up.
Cokleman - keep your powder dry, that premises will be going for about £220k in about 18-24 months.
50. Frogger said...
Oi!
Stop badgering David_90210.
It just isn't nice.
51. Quiet Guy said...
David,
Welcome back! Whatever the others say, I enjoy the reaction you provoke on this blog (is it mischievous or done on principle?)
Personally, I agree that population growth can be a factor in house prices but the main factor behind growth in recent years has been driven by reckless lending and speculative greed. I also know what it's like to listen to colleagues at work tell me how much 'their house made' this year and so on.
Aside from some rich foreigners buying a mansion in Chelsea, I'd expect the majority of immigrants to be relatively poor when entering the country. Naturally, these people will have to compromise e.g. sharing with many in rented accomodation to make financial ends meet. Perhaps a better question is what will high immigration do to the low end of the rented market in areas with high numbers of immigrants? I can see the potential for a lot of social tension in this respect.
Don't let greed and fear be your master David. Some sort of slump/crash/call-it-what-you-like will appear slowly but with the crushing power of a vice.
52. Deadspider said...
As this post is from David and as David usually is the first poster in his posts "to make his point" , I wonder what he said in the first post to get it cut by the moderator .
53. Sinner_the_saint said...
Wiltshire, i'm afraid i cannot agree with your valuation. Cokieman said it was valued at £275k (It may have gone at £350k for unknown reasons to us, may be speculation or desperation .. or even that for the new owner the value is bigger due to his/her other properties in the area). The average fall prediction within the next 4 years is 40% (this is not even in minority anymore and i'm too lazy to go get the references at this time of the night, so i completely understand if some of you feels like a pinch of salt on the tongue). Therefore the advice to Cokieman should really be £165k in approximately 4 years.
Pecker, while I completely understand the annoyance, I don't think it's worth 'insulting' David. You are on the winning argument and are finally getting vindicated, I think you could use this position to 'educate' David rather than insult him.
David, if you are here for the education then I think you are not making much of an effort. If you are here trying to educate the rest, then I don't think you are making much of an effort either.
One last thing. There is much more to Barclays' situation than you currently know of. If you think Northern Rock's situation was bad .. then add corruption to that (think Enron) .. the future is bleak. You heard it from me first!! I don't think a lot of people will be immigrating here in the next 10 years after this happens.
54. voiceofreason said...
David, I found a forum you could post things to, see
http://www.landlordzone.co.uk/forums/showthread.php?t=7744
Question from BTL newbie:
"You don't think yield is an important factor in determining value?"
Answer from forum :
"I have never even looked at it!
I am more interested in the capital growth, that is where the real money is.
As long as I can make a small profit on the monthly rent, then that is good enough. the percentage return is not important to me."
So, buy because it is going up .... will turn into sell because it is going down.
55. Simondo said...
I think is a real shame that Landlord disappeared. David and Landlord seem to have so much in common. They would have been able to back each other up in these lively debates. In fact I think landlord disappeared at almost exactly the same point that David appeared. Odd that isn't it . Well keep on posting Land-- ups sorry i meant David .
56. autopilotengage said...
Beware anyone who ever, ever uses the word "underpinned".
Except me of course, that was just an example.
57. Abandonship said...
When we emmigrated to Australia in 2006, Pickfords told us that they had never been so busy moving people out of the UK - and we are glad to be among them. Those entering the UK from Eastern Europe will move out when the UK economy finally fails. Population projections follow the current trend, but they fail to take into account trend changes. I suspect that the UK population projections may be way off.
58. Peter said...
David, do you really believe that there's a shortage of housing in the UK? If that was the case then rents would have increased in line with house prices but, instead, they have hardly moved since 2000.
The argument for 'housing shortage' is purely a myth. The real reason why house prices have been going up is speculation, speculation, speculation...
...'buy today, it will be more expensive tomorrow'. Firm belief that house prices can only go one way has been fuelling prices further up. Once people realise that prices can fall as well as rise, the market will change. And it's happening already in many areas. There are plenty of properties that have been on the market since last spring that remain unsold even when their prices have been reduced. If the market really was as strong as some people still claim, surely all those properties would have been sold and surely everything would sell within a matter of weeks, if not days!
59. Exiled said...
this report is total rubbish yeh im sure a polish worker can afford one of these luxury apartments going for a mere 400k
60. Steven said...
The timing of the release of this statistic is nearly perfect to have the highest population forecast from immigrants.
Why?
When the ten countries (including Poland) joined the EU on 01/05/04 most of the old EU countries exercised their right to block workers from the new EU countries coming to them, the three exceptions were England, Ireland and I think Sweden.
Next year Germany (with largest economy and population in the EU) is going to lift its ban on workers from the 10 new EU countries.
So between 2004 and 2007 is pretty much a perfect time to make an extrapolation for the highest increase in immigration in the UK, from 2004 when the 10 new EU counties joined and before 2008 when the largest old EU employer starts competing for workers.
If you are Polish worker who has to immigrate in order to find work, whose primary goal to earn money to send home to your family where would you rather work? Germany a neighboring country from which you could drive to your family for the weekend, which has a similar food and drink, and is a nice socialist country where rent prices are kept at affordable levels? Or England where………..
61. waitingfor hpc said...
Well what a load of rubbish!
Having queued for 2 hours to go from Chelmsford to Tonbridge last night - there is no way this country can cope with that number of people!! Our schools, hospitals, roads everything would collapse!
All the comments earlier are also right these people will only come for jobs....and then be gone.
62. Nmarks said...
It's important to realize there is an on-going campaign of bull-like spin coming from various vested interests in order to avert an all out avalanche style house price crash that no amount of spin could cover up.
Have you noticed how we don't seem to be getting any of those smug weekly reports saying how property prices have risen by such-and-such percent that week, like we used to? all gone very quiet, hasn't it?
Taking good news out of media reports is one thing, replacing it with bad news entirely another; hence articles like "British population to rise 100 trillion by the end of next week".
Smug price reports have been replaced by desperate speculation.
63. Nmarks said...
As Steven said "Next year Germany (with largest economy and population in the EU) is going to lift its ban on workers from the 10 new EU countries."
It will be interesting to see how many EU workers currently will leave the Uk to find work in Germany once the ban is lifted. I suspect it will be significant numbers for many reasons; better pay and conditions and being closer to home to name but two.
The exodus of EU workers from the UK will have an interesting effect on the demand for housing in the UK and its subsequent effect on prices.
Perhaps we should group together and place adverts in Polish in daily newspapers advertising the fact!!
Watch this space!!