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House Price Crash Forum


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Everything posted by FallingAwake

  1. You have already made clear that "the housing crisis" is not down to one single issue, i.e. when you said, "The fun then begins, you know, going through what happened in Ireland and Spain, debt expansion and money supply, speculative tulip fever, public vs private housing stats, comparing with relatively sane Europoean models and so on..." ...of which I completely agree. I understand all that. So what exactly are we disagreeing about here? I am not and never have claimed "its obviously down to X" as you implied in post #106. So does it boil down to this: you think immigration is irrelevant in terms of house prices, and I don't? Is that it? If so, there is really no reason to misrepresent what I'm saying. I said it's a significant factor, but not the deciding or major factor. Oh, and thank you for being the Arbiter on what is, and isn't, "mostly irrelevant views on the housing crisis". I will make a note that we should all defer to your Opinion as The Final Word On The Housing Crisis, from now on. Since that's the case, I'd like to see what specific weightings you give to all of the factors involved, i.e. what specific weighting you give to "debt expansion and the money supply", "what happened in Ireland and Spain", the speculative component, public vs private housing stats, and any aspects you consider relevant. On my desk by Monday morning, please. And if you don't know... and I know that you don't know because nobody actually knows the specific weightings... then please come down off that high horse.
  2. On your first question, maybe the answer is for the same reason ours don't - politicians not living in quite the same world as the average man on the street, not having to compete with immigrants for jobs, having done quite well out of it, perhaps gerrymandering the vote etc etc. On your second point, yes immigration is high in Australia right now; but given their system is a lot stricter, that sounds like a political choice... in other words, the government has chosen to allow such immigration. http://en.wikipedia.org/wiki/Demographics_of_Australia Our government claims they can't do much about immigration, because of the EU, LibDems etc. But if they refuse to listen to the will of the people, and only take notice once they actually start losing seats, then they only have themselves to blame for UKIP's increase.
  3. Here's the difference: Reckless - FORMER Tory mp Carswell - FORMER Tory mp It takes a certain amount of bravery to switch from a mainstream party like the Conservatives, to a party which has been labelled as "fruitcakes and racists", and of which there is no actual guarantee of being re-elected in your constituency. Besides which, you only have to watch Farage on youtube to see that he is clearly not pro-establishment. I watched one earlier today in which he tore into Tony Blair... in 1995! Blair's comeback involved his usual cheshire cat grin.
  4. Great, so we have an ever larger population competing for ever fewer jobs. That's a recipe for success, no wonder we're a thriving economic powerhouse.
  5. So you're waiting for the perfect HPC party? Good luck with that. I'm a pragmatist and I realize there are some things a politician cannot say, without causing electoral suicide. "House prices need to fall" is, sadly, one of them.
  6. My apologies for evoking Godwin, but if you really don't care about "says", maybe we should have let Hitler win WW2, then we'd have a Federalized Europe with no say, pleasing both you and campervanman perhaps. OK, maybe over the top, but my point is, what you're advocating IS essentially that you don't really care who rules you as long as you can buy a cheap house. That sounds even more selfish than NIMBYs who at least only want to protect their precious views of the countryside. I absolutely agree that the current political situation re housing is mucked up. So let's change it. Personally, I think there is actually more chance of ULIP becoming more HPI friendly as they become more mainstream and less dominated by nimbys. Maybe more HPC'ers should actually join up and put their case forward. The NIMBY argument is pretty easy to defeat.
  7. Let me put that into more easily understandable terms. We are stuffing hundreds of thousands of immigrants into the country, and they are not. Perhaps we need to look at those differences, to identify what factors go into rising or falling house prices. Japan's population is likely to fall long term, while England is growing faster than just about any other European country, and nearly three times as fast as Scotland or Wales!
  8. Why? It only just works for the USA, even though they had a civil war, but for the most part the differing States have a common language and culture. What makes you think a federal Europe would work? I mean, we barely held the UK together this past month or so!
  9. Instead of faceless he bEUROcrats thousands of miles away issuing directives on what you can and cannot do. At least locally it's reasonably possible to change something if we care enough, as demonstrated by the recent by-elections. Good luck changing Brussels.
  10. Don't forget that net immigration is only part of the story. The UK grew by about 400,000 in the last year or so (link), so not only do we need to house new immigrants, but also the natural increase in the population. Also interesting is that the increase is much more pronounced in England: "The estimated population increased in England by 0.7% to 53.9 million, in Scotland by 0.27% to 5.3 million, in Wales by 0.27% to 3.1 million, and in Northern Ireland by 0.33% to 1.8 million." No wonder our Scottish friends are baffled by this constant banging on about immigration! Either we English are breeding like rabbits, or... England is the main focus of immigration. (Or perhaps both.)
  11. Wow. I imagine if that happened, campervanman would suffer a nervous breakdown.
  12. Yes, because prior to 1997 we lived in an authoritarian hellhole.
  13. Except for those not yet on the "property ponzi". If they become a majority, the political cycle changes. NIMBYs and those whose "property is their pension" become less powerful. Ultimately, democracy is a kind of mob rule. It just depends on the biggest mob at the time.
  14. Demolishing the NIMBYs own homes because they have "concreted over the countryside" already? Priceless.
  15. Umm... I think you missed the bit where I said "credit played the major part". I also said, "I believe immigration is a significant contributing factor to why house prices keep increasing." Like sugar is a significant ingredient in a cake, but certainly not the only ingredient, or even the key ingredient. So those MPs are not taking the same approach to me at all.
  16. But it's kind of a Catch 22. They may have been sitting empty because nobody could afford them. Thus, there is a physical shortage of genuinely affordable homes, at least in the areas people want to live the most. Immigration, in my opinion, exacerbates the problem, even though it's not the prime HPI culprit. That said, interest rates returning to "normal" would really shake the tree and perhaps give us a true picture of whether we have too much or too little real physical supply for the population... but I'm not sure we'll be seeing that normality for quite a while yet... at least, not voluntarily. We need an armada of black swans.
  17. Well, if that's the case, I wouldn't even call them "affordable homes"... more like "debt traps". If that Greenwich lady is "happy" to own 25% of a flat for 77K, then, to go all Venger for a moment... quite frankly, she gets what she deserves when it starts to crash. She should be fuming... or better yet, have refused to buy. Then again, that's assuming she's a real person and not some grinning model being paid to smile for the ad agency; or an estate agent.
  18. I agree, expectations and also BTL mortgage costs do play a part in rent. But landlords have to compete, and can't just raise rents at will. I might "expect" a 10% increase in my rent, but sooner or later I'm going to notice if 3 blocks down, the rent is £200 cheaper! However, if there is, say, lots of immigration in a particular area (i.e. London) and therefore lots of demand for rented accommodation, this gives the landlord a lot more leverage. So your Poundbury example is an example of supply and demand... "half a mile into the town centre, though, and you'll find rents have stagnated or reduced"... that's because of lower demand in that area. My argument is, high immigration raises demand for rental accommodation more than would be the case without it, thus allowing landlords to raise prices and/or reduce dwelling sizes via chopping up properties etc... in the areas of high immigration. i.e. where before the landlord might have rented out a 4 bedroom house for £500 p/month to a family, they can now rent it out to 4 immigrants at £300 p/month per room, taking the BTL's revenue from £500 to £1200 p/month! This increases BTL revenue, which in turn feeds into higher house prices as these BTL'ers now have more buying power. Meanwhile, that is 1 less 4-bedroom house available for a local family, unless they're willing to pay more than the BTL'er. In fact, they might even find it harder to find ANY property to rent for £500 p/m, since landlords know their potential is £1200p/m... thus forcing rental prices upwards for everybody else, too. In short, I think immigration indirectly feeds into house prices, via increasing the revenue of BTL'ers who in turn feed house prices. Yes, it's mitigated somewhat by new house builds, but since the average immigrant isn't initially going to be buying that shiny new £240k Barratt home, he or she is inevitably going to find him/herself stuffed into an already crowded city, fueling somebody's growing BTL empire, and competing with a new wave of immigrants every year.
  19. Well, that's a step in the right direction, although I wish they'd specify precisely what they mean by "affordable", i.e. are they going to be in the... say, 3.5 x single income range? Or is it the Boris Johnson, 10 x investment banker income range? As for the BTL landlord, do they need to factor that in if their potential loss from the building of 165,000 homes can be replaced by the rent from another 600,000+ new immigrants over the next 3 years, not to mention the natural population growth? I guess that my point is, in order for those new homes to put a downward pressure on house prices, all other things being equal, there needs to be more new homes being built than actual demand from people or BTL'ers who might end up buying these and renting them out.
  20. Absolutely, yes. But then, ultimately, why are any of us on this site in the first place? Isn't it because we want house prices to crash so that, at some point, we can buy a house? The difference is simply that, we here recognize that houses (particularly in the South) currently don't represent VALUE for money. A house that sold for £60k in 1999 hasn't suddenly sprouted 3 extra bedrooms, a pool and a small forest at the back in order to become worth £200k. It simply sat there, as a pile of bricks, gaining magical equity. That extra £140k is not really value for money. Anyway, my point was, If house prices get too far out of reach of an entire generation, it invites political trouble... or rather, a major political opportunity... and thus the pendulum inevitably swings back. So even the political cycle implies that eventually there will be value for money again, even if (sigh) it takes a generation. I am reminded of the "markets" and "solvency" quote.
  21. As an addition to my last post... Since rent is more affected by supply / demand / income than property prices, I think it would be interesting to know... what could a typical Londoner get in the rental market for, say, £800 a month today vs the equivalent amount of money 30 years ago? I know "dances with sheeple" will probably point out that in Edinburgh, rent has barely moved since the Act of Union ... but what about in London? If you can barely get a room in some parts of London for £800 a month, while 30 years ago you could rent a family home in that same area, then I'd suggest either building hasn't kept up, or immigration has had a major effect on rents, or both.
  22. Thanks for sharing that. Looking at the figures, it raises a couple of interesting issues: (1) I notice that in the 1970's, we were building houses at a rate of about 300,000 a year, while immigration was a few tens of thousands at best. That building rate slowed down in the 80's and 90's to perhaps about 200,000 a year, but again, immigration was quite low until 1997. From 2008 onwards, building seems to have dropped to about 120-140,000 a year, but we still have much higher immigration than before 1997. So obviously the credit crunch / financial crisis had a big impact, but we're definitely still not building as many houses as before, while immigration is still "high" compared with the last 100 years. (2) You said: "Local authority building has been ticking up each and every year since 2008 and has grown 700% since then". Yes, from a recent low of 340(!) in 1998-99, to 3,130 in 2010-11. That's still not very many, and you're assuming the growth rate will compound. (It's obviously not going to, as your "housing 1/2 of Europe" idea shows.) This is compared with a rate of 175,550 in 1969-70, or even 67,450 in 1979-80 and the beginning of the Fatcher era. So I accept the point that new home building mitigates some of the effects of immigration, but there has been a vast change from, say, the 1960's to today, which affects the private property market.... - hardly any new local authority building (I think ~3,000 still qualifies as "hardly any") means housing benefit is going in the pocket of private landlords. Immigrants not working are recipients of housing benefit, thus subsidising landlords; and more working immigrants also compete for non-immigrants for housing, thus helping landlords to either increase rent or reduce the size of the dwelling (i.e. chopping up houses). - overall, we're bulding far fewer homes than in the 60's (which had much lower immigration), and while I don't have the stats, I'd think more people are living on their own today than in the 60's. Hmm... I'm not sure what my point is. I think it's that, immigration's biggest effect (in terms of housing) is on the rental market in the South of England. It props up BTL landlords in particular, since most immigrants are not just coming here and buying up £500k homes in Chelsea! And in turn, BTL landlords are creating an upward pressure on house prices, while reducing the supply of family homes as they chop up properties into 1-bed flatlets.
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