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House Price Crash Forum


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About Bull-Rider

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  1. Hardly [moderator: Really, so why do both dgl1001 and Bull-Rider post from the same IP address? Also Bull-Rider's email address is that of a building company that describes itself on it's website as "one of the leading property and construction organisations in the country". You VIs are desperate to troll this website aren't you. Don't bother to reply because you can't!]
  2. STF - i think your right to turn into a Bull. I found this from another part of the forum which may be of interest from another who thinks the same as you ----------------------------------------------------------------------------------------------------------------------------- Who is Kate Barker? To put this supply and demand issue into context i think its time to use an example. I have previously made reference to the Kate Barker Report - the report which took over 2 years to produce by a then member of the board which sets the UK's interest rates. Its fare to say that Kate knowns her economics because she had such an important role in the UK's economy at the time. and what did she say? In nut shell she said that there has been a massive under supply of housing and that we need to produce an extra (extra means in addition to what we are already producing) 70,000 houses a year to ease out demand but a further 120,000 homes if we are to do a proper job and balance out the housing market. You can find it at http://www.hm-treasury.gov.uk/consultation...arker_index.cfm if you don't believe me. So what does an extra 70,000 homes pa equate to Kate told us that we need to, at best, provide an additional 70,000 homes for families just to start balancing out the housing market and meet demand. This is just to meet demand, not to bring it back to normal which she says would be 120,000 households. The government now considers that, on average, 2.2 people form the typical household size. I should tell you that this 2.2 figure has been tested and accepted at a number of planning examinations and is well debated. This means the UK is creating an additional 70,000 households pa and going on the governments own figures of 2.2 people per household, equates to 154,000 people. Oxford A quick look on wikipedia tells me that 134,248 people live in Oxford, which is quite close to the 154,000 target. Therefore every year a population greater than Oxford needs to be housed - this is how much we need to provide if we are to meet demand. So, a city the size of Oxford needs to be build every year just to keep up with demand from household formation - and guess what - we haven't been providing it. Supply and Demand So what do all of these 154,000 people do? Well, they have no choice except to live in rented accomodation, stay at home with parents, go on Council waiting lists etc etc unfortunately the list goes on on. Its a sorry state of affair but this demand does not just go away. The simple law of supply and demand tells us that where supply is constrained, demand and prices will rise. Let me spelling it out for you..... every year a city larger than Oxford would have to built just to keep up with demand - and its been going on for years. With is in mind you may what to think 1) Is it possible for a HPC to occur when there is such a high level of demand 2) is it such a surprise that we have seen such a high level of HPI Oh - i forget to mention. The Barker Report did not to account for the change in EU policy which has brought a huge number of east europeans into the country - so the 154,000 figure is an under-estimation!!!!!!!! Best of luck. dgl1001
  3. So 43% of homeowners do not have a mortgage and 1 in 4 house purchasers do not need a mortgage. How then can the market crash through increased IR?
  4. i agree with what you are saying however, with only 3 out of every 4 purchasers needing a mortgage, perhaps IR rises will not have the impact which people may expect and clearly not bring the market 'crashing' down
  5. Your right - i should have been clearer. I meant household formation rather than people will sustain the market
  6. Im sorry - it was not the LR but DCLG The department of Communties and Local Government (DCLG) estimates that only 77% of all residential purchases require a mortgage, with the other 23% requiring no mortgage at all. The Council of Mortgage Lenders estimates that about 85% of buyers of homes valued at £200k or less require a mortgage but only 60% of those buying homes over £200k need to borrow
  7. I think your missing something. The immigrates won't sustain HPI because they are purchasers, rather they are restricting the supply of accommodation for people who can.
  8. 1) i haven't got the stat in front of me but i believe the LR have the figures 2) There's an assumpton that everyone needs a mortgage - its simply not true. My parents/ work colleuge are examples.
  9. I think it should read " the availability of credit influences the demand for housing" which is not strictly true as you can purchase property without the need of credit
  10. " Demand is a function of credit " ??????? Im sorry - this is wide of the mark. What happens if you don't need a mortgage? This makes up a larger part of house sales nowadays.
  11. Not these people in that house but they are still using accomodation which someone else can't use.
  12. It may be a limited factor for some but not all. These are the people who will prevent a crash from happening
  13. Yea - its not looking good for a HPC particularly with so much demand for housing
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