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The Masked Tulip

What's Driving The Rise In House Prices

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House prices in my area have been going up - and probably in yours too. Now I know why.

I've just been talking to a friend in the property auction business. He's noticed a lot of silver-haired investors buying investment property. Now why would they be doing that? Two simple reasons.

Firstly, fear of stock markets, which have been yo-yoing violently for the last few years. And secondly, terrible annuity rates – that is the return retirees receive when they convert their pension into a regular income stream. Many are deciding to put their retirement savings into buy-to-let instead.

Full article here:

http://www.moneyweek.com/investments/property/house-prices-in-my-area-02003.aspx

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The only game left in the UK is to hoard all the land and property, and rent it back to the government at extionate rates.

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Have you read some of the comments on that article

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1. Alex

(17 May 2010, 02:11PM) Complain about this comment

Can you explain to me exactly how I'd go about getting someone else to buy £200,000 of shares for me over the next 20 years? If you can I'd be very interested to hear how.

The reason by to let is so attractive isn't just the end yield, it's than you can put down a deposit of say £20,000, let the rent cover the cost of the repayment mortgage and 20 years later you end up with mortgage paid off and a nice steady rental yield.

It's a bit mercenary but in essense BTL is a modern form of partial slavery where you get a young couple to go out to work in order to pay a rental that you can use as a pension.

It's more intuitive and straight forward than managing a portfolio of stocks.

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2. Alex

(17 May 2010, 02:55PM) Complain about this comment

Just to add, when you look at the fate of some of the nice dull dividend payers people have in the past tucked away into a pension portfolio......

Lloyds TSB - 90% loss no dividends anymore

GEC Marconi - 100% loss

Premier Foods - 95% loss no dividends anymore

BT - 70% loss .....huge pension hole threatens dividend

...I could go on...but do you see why people might be happier buying a house in a central part of a largish city where young people will always be starting out in their first job and needing to rent somwhere to live, and taking the £1,000 a month rent as an income.

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3. Bob Roberts

(17 May 2010, 08:34PM) Complain about this comment

Have to say it, see this article as another sign of Moneyweek being badly wrong UK house prices.

The ruddy things are going up in many parts of the UK and going up substantially.

I could have bought a house in 2007 cheaper about 40K to 50K less than buying it now if I had not listened to Moneyweek's articles of an impending doom in house prices.

What the hell are we preparing for future generations. We should be ashamed of ourselves.

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The only game left in the UK is to hoard all the land and property, and rent it back to the government at extionate rates.

...until the government stops paying.

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Sadly just more fuel to the fire that the HPC will kill the UK. House prices are now the dam wall holding back the catastrophic torrent that will wipe out millions. The crack that appeared in 2008 has been concreted over and a couple of Polish blokes with hi viz jackets are sat in a little shed with a cup of tea reassuring everyone that the repairs are being monitored while they are in reality reading a porn mag and discussing what to do when they go back home.

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Do they really think that there are enough cash rich grandads to prop up the entire UK housing market? I doubt it.

And if the new government allow you to buy a BTL with your pension as opposed to forcing the purchase of an annuity?

http://www.mrscohen.com/adviser/-/news/pensions/content.aspx?ID=343945

Here in France the government gives massive tax breaks to BTL to encourage the further "privatisation" of "social housing", much as the Thatcher sell off did in the UK.

Allowing people to buy a rental with their pension pot would prop up the housing market at a cut price rate. The share market is screwed and buying an annuity now gives one a very poor return in comparison to the figures of 10 or 20 years ago. In addition this would provide much needed stimulus to get people saving via pension schemes - something that has fallen out of favour in recent times.

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We will know come the Budget - they could well do something that not just props up the housing market but which drives it higher.

I think they want to get people back into buying shares as buying shares is what funds companies and allows the City to exist.

Frankly, if there is the slightest hint of them propping up the housing market at the expense of shares then you know that they know the country is fecked long-term and the thing to do will be to get out ASAP.

Trying to get people into BTL as pensions really would be an act of desperation and the final sign that the UK is a country built upon house prices, CDSs and lair loans.

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We will know come the Budget - they could well do something that not just props up the housing market but which drives it higher.

I think they want to get people back into buying shares as buying shares is what funds companies and allows the City to exist.

Frankly, if there is the slightest hint of them propping up the housing market at the expense of shares then you know that they know the country is fecked long-term and the thing to do will be to get out ASAP.

If you're going to try and hand break turn this oil tanker you're not going to do anything to help house prices in the next couple of years.

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And if the new government allow you to buy a BTL with your pension as opposed to forcing the purchase of an annuity?

Do you suppose they'll want to do that right now? Unlike their predecessors, they don't have political capital in high house prices.

If they do permit residential property in a SIPP, they're enabling us to buy houses from untaxed money. If they allow it but restrict it to a property you live in yourself, that suddenly gives the aspirant owner-occupier the upper hand over the BTL landlord.

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Do you suppose they'll want to do that right now? Unlike their predecessors, they don't have political capital in high house prices.

If they do permit residential property in a SIPP, they're enabling us to buy houses from untaxed money. If they allow it but restrict it to a property you live in yourself, that suddenly gives the aspirant owner-occupier the upper hand over the BTL landlord.

And really rogers the young/lower paid who can't afford pensions.

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Full article here:

this is indeed part of the pensions issue.

in turn this is related to demographics. I have read a number of papers in which the theory is the declining demographics and decreasing worker ratio drives up the price of non financial assets such as housing.

those ignoring demographics because its a long term issue versus the short term issue of HYPER{INFLATION,DEFLATION}, gasp, may get a nasty surprise.

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The moneyweek article makes the common mistake of comparing rental yield to equity P/E. I think rental yield is more comparable to dividends where 3% isn't bad.

With a house, you also get to keep the capital gains in the same way as rising share prices over the long term. (in theory anyway).

VMR.

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Do they really think that there are enough cash rich grandads to prop up the entire UK housing market? I doubt it.

The chart is a bit old, but it sheds a little light on wealth distribution in Britain. (From HMRC.)

( Edit to add: I've just started a new thread with this chart. I think it will be fun. :) )

ukdistributionofpropert.png

Edited by Tired of Waiting

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Have you read some of the comments on that article

#

1. Alex

(17 May 2010, 02:11PM) Complain about this comment

It's a bit mercenary but in essense BTL is a modern form of partial slavery where you get a young couple to go out to work in order to pay a rental that you can use as a pension.

2. Alex

(17 May 2010, 02:55PM) Complain about this comment

...I could go on...but do you see why people might be happier buying a house in a central part of a largish city where young people will always be starting out in their first job and needing to rent somwhere to live, and taking the £1,000 a month rent as an income.

What the hell are we preparing for future generations. We should be ashamed of ourselves.

Parasitic scum.

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Hooray, house prices have recovered - I think this is the headline in either the Wail or Excess. Buy now or you will miss the boat. VI's pumping the market - no different to the tulip bubble in many respects.

Or in one word; stupidity.

indeed, the CGN network are going on and on about the grab of pension funds....

If I may quote:

money money everywhere, but not a drop to loan ( The Ancient Banker)

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The chart is a bit old, but it sheds a little light on wealth distribution in Britain. (From HMRC.)

ukdistributionofpropert.png

What else do you expect in a country where the masses are ruled by a family of inbred parasites to whom they fawn over at every Royal wedding, Birthday or Funeral and where the masses are sold on celebrity culture pouring billions down the throats of talentless airheads through tv subscriptions,advertising and product endorsement?

Edited by campervanman

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What else do you expect in a country where the masses are ruled by a family of inbred parasites to whom they fawn over at every Royal wedding, Birthday or Funeral and where the masses are sold on celebrity culture pouring billions down the throats of talentless airheads through tv subscriptions and advertising?

lucky this is America.

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  • 259 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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