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Kyoto

'we Will Not Allow A House Price Boom': Minister Insists Young Buyers Must Get A Chance

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Does Grant Shapps actually get it?

'We will not allow a house price boom': Minister insists young buyers must get a chance

Britain cannot afford another boom in house prices – and the Coalition will act to prevent one, the housing minister declared last night.

There has been a flurry of warnings about the market, which the International Monetary Fund last week insisted remained ‘over-valued’.

And today, research reveals that the mortgage drought is leading to ‘a lost generation of homebuyers’ who may never own property.

http://www.dailymail.co.uk/news/article-1319711/We-allow-house-price-boom-Minister-insists-young-buyers-chance.html?ito=feeds-newsxml

Shame they are talking in terms of avoiding another boom and maintaining stability. What about unwinding the current ******ing mess?

Edited by Kyoto

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we Will Not Allow A House Price Boom'

Now where have I heard that before?

I wrote to schappsy earlier this year about the stupidity of high house prices. He just spouted the usual tired old arguments; more house building, support for FTBs, shared ownership etc. I think it was just the stock response to house price concerns. Very disappointing.

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Uh oh.

In his 1997 Budget speech, Gordon Brown said, “I will not allow house prices to get out of control and put at risk the sustainability of the future”. He went on to say that he did not want a return to ”instability, speculation and negative equity” of the 1980’s and 1990’s.

http://www.power-to-the-people.co.uk/2008/09/gordon-brown-house-price-inflation/

Now you've said it, you *******

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Now where have I heard that before?

And that was my very first thought too.

By "stable" I assume they mean "we'd rather prices didn't fall". Of course, some falls are inevitable and I'm not sure they can be stopped but they'll do their best to maintain this policy-created "plateau" for as long as they can.

Still, it'll be easier for future generations to buy if those goal posts actually manage to stay still for longer than a month (unlike the last 8 years). Assuming future FTBs have a job with which to save. I imagine they'll just live at home until they're 40 or live in one from mum and dad's BTL empire, which they'll eventually inherit anyway.

I'm not sure where that leaves the rest of us. Suck it up, stay put, stay in and save, save, save I suppose. Like I haven't been doing that for the best part of a decade already. 0.5% interest rates will help with that I'm sure.

Fuc.kers.

I'm increasingly feeling like a man who has nothing and nothing to lose.

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Does Grant Shapps actually get it?

http://www.dailymail...o=feeds-newsxml

Shame they are talking in terms of avoiding another boom and maintaining stability. What about unwinding the current ******ing mess?

Unwinding the current mess unfortunately involves a recession - maybe even a depression. Even in my wildest dreams of a house price correction, I don't want a recession.

Unwinding the current mess means, I am afraid, modest falls in house prices and stagnation for 20 years or more. In the meantime a priced out generation is going to have to wait for their parents to die.

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Unwinding the current mess unfortunately involves a recession - maybe even a depression. Even in my wildest dreams of a house price correction, I don't want a recession.

Unwinding the current mess means, I am afraid, modest falls in house prices and stagnation for 20 years or more. In the meantime a priced out generation is going to have to wait for their parents to die.

That is the Path I see as well. The Government want to maintain House prices at todays levels and shelter them from the inflationary pressure for the next 4 years. Of course there will be drops in less desirable areas, and those areas affected by high unemployment (think Govt employment towns). however it is not in the Governments best interest to see prices drop more than 10%, or we may see too much negative equity. The Low interest rates are helping underpin prices and I do not see them rising in large quantity for the period of this Parliament. Net effect is that we will have a small correction and then stagnation with the RPI increases not flowing through to the House price inflation. The effect of this over the period of parliament (presuming that Wages increase in RPI) will be over 16% real level decrease on top of the 10% correction. Net effect is that in 4 years House prices will cost 25% less! I am starting to think that It is not a House price Crash that we will see, but a house price affordability increase.

This policy also helps because over the next 4 years a large percentage of mortgages will get paid down, leaving more headroom to MEW in the second parliament and lead to whopping growth in the Economy and then House price Inflation.

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Net effect is that we will have a small correction and then stagnation with the RPI increases not flowing through to the House price inflation. The effect of this over the period of parliament (presuming that Wages increase in RPI) will be over 16% real level decrease on top of the 10% correction. Net effect is that in 4 years House prices will cost 25% less! I am starting to think that It is not a House price Crash that we will see, but a house price affordability increase.

Except that wages in general are not increasing at RPI, nor are they likely to. Add in the fact that a very large number of people who lose jobs are not getting another (older people) or are getting a new job either on a lower wage or part-time or both. And many young people are not even getting a first job.

House prices are going to have to crash in order for a large proportion of the population to be able to buy them.

Now whether that will happen is another matter.

Edited for clarity

Edited by Snugglybear

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There will be no house price boom not for a long time as interest rates wont be cut for a long time (they have to go up first and then back down again, and that wont be for many years).

I expect to see the Haliwide average drop to 130K, which would be a 33% drop in nominal prices from peak and stay there for years. This will mean drop of 50% on inflation adjusted basis.

The housing market drop will happen in the next 12 month, together with a stock market crash with FTSE going back down to below 4000 again.

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watching the interview with Shapps (other than thinking he looked very smug) I was reduced to shouting at him - answer the question about BTL and priced out generation - but he waffled about how unfair it was, but there was a need for private renting, and there would be no more boom - the underlying message I got was that house prices will be maintained at their insane level - steady as she goes etc. can't have hardworking families bailing out of their overpriced homes and having to rent :(

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The tone of the language is strangely similar, but as others have pointed out there is no mentioning of a bust.<br /><br />Perhaps we will ultimately end up with a boom - politicians are rarely right and this time with the bust hostage to fortune abscent may be the bust actually won't occur.<br /><br />In which case i am calling a crack up boom. No bust, just worthless currency.

Edited by Mikhail Liebenstein

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Unwinding the current mess means, I am afraid, modest falls in house prices and stagnation for 20 years or more. In the meantime a priced out generation is going to have to wait for their parents to die.

The lesser of two evils, which unfortunately would mean we've lost. However i can't see prices maintaining in this climate, (currency rigging and QE2 aside of course).

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the underlying message I got was that house prices will be maintained at their insane level - steady as she goes etc.

At the moment the only way they can possibly maintain house prices is for the BoE to start pumping money directly into the mortgage market. They already did £185bn of it with the Special Liquidity Scheme (due to expire in Jan 2012) but even that is proving insufficient. To be honest, I'm not sure even an infinite supply of mortgages at 0% interest would be enough at this stage. Houses at £180k are just so far beyond the reach of ordinary first time buyers, even if they only had to repay the principal. We may be approaching the point at which more credit cannot maintain house prices, and the government/BoE would have to start actually buying houses itself to keep the price high. Sounds crazy, but I wouldn't put this past them.

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"It is in everyone's interest to have
stable
lower house prices for
a long time
ever, because the only way we can make sure housing is more affordable for future generations is
not to have these crazy housing booms
to encourage a significant correction to occur."

Why can't they just accept that HPI is a disease that needs to be corrected and then eradicated. Because they are all in it together and are heavily invested in the market.

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  • 246 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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