Hello, I have some interesting points to add to your observations. And will unravel the arguments of the most seasoned weekend economist like myself. One of the most striking comparisons is that of the UK and Japanese Housing markets.
One of the few comments why UK house prices will increase is due to a lack of supply, and continued high demand. But these people are forgetting that Japan has been involved in a 0% interest policy, has a population density greater than the UK with 337.4/km2 compared with the UK with 246/km2 but their house prices have been in negative territory for over 15 years... But only in single figures.
But in the short term we can argue that house prices will be sustained at least due to many social-economical reasons which are vague to isolate.
For example, the biggest we can refer to is the difference between the UK house market and the crashes seen in Spain and the US. If someone in the UK is in negative equity then the debt is still owed to the mortgage lender (unless you go bankrupt). However in the US, if you return the keys to the mortgage lender you can walk away debt free. This creates a case in the UK where banks are not financially motivated to price in the losses of their mortgage assets and risk 'upsetting the apple cart', especially if they can declare the 2007 assess prices on their balance sheets.... another false indication of profitability. UK banks will do all they can to avoid force repositions of the 90's. But in other countries the sooner Banks repossess they can avoid further losses. Also there is currently no incentive for UK Banks to act now if interest rates are so low....
I wont bore you with an essay of social-economical indicators But suffice to say that people will suffer severe interest rate shock when interest rates do rise, because the modern generation have never experienced interest rates of +8%. If interest rates are low, then I can borrow increasingly greater amounts with little impact on cost (currently an extra £60 a month to borrow another 10k, easy money!), until rates do rise. BUT the government know this and to the very end, will keep rates low. Until they are forced to increase interest rates due to outside factors such as rampant inflation, asset bubbles brought about from low interest rates, and a foreign capital investment strike, resulting in a sterling crises.
So without the argument for high demand as a factor and the 'kicking the can down the road' policy of the government what else gives you, your Bullish sentiment?