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House Prices Set To Soar By 24% As Good Times Return

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Rising levels of growth alongside falling inflation and unemployment will combine to push the value of a typical home to £216,097 in five years.

In 2014, experts predict, the demand for family homes will outstrip supply. This coupled with the impact of the Government’s Help to Buy scheme is set to fuel a seven per cent surge in prices. The cost of an average three-bedroom semi will rise to £185,833 – a jump of £12,000 on today’s £174,329.

Along with a five per cent increase in 2015, four per cent in 2016 and three per cent in 2017 and 2018, that means values will soar by £41,768.

The bumper forecasts, amounting to 24 per cent in the next five years, came a day after Bank of England Governor Mark Carney said the economic recovery had finally taken hold in the UK, with growth rates among the strongest in the advanced world.

Estate agents Knight Frank also claimed unprecedented support from the Government has had a “dramatic effect” on the property market, enabling it to deliver its most optimistic outlook since the credit crisis began.

... etc etc etc.

Yay!

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I am seeing asking prices shoot up by this amount already - EAs out of control IMPO and stupid people panicking and making offers. Nuts.

Yep. I despair at how utterly stupid people are - not just normal people (and EAs!) but also our politicians and media in particular. Our economy was brought to its knees by easy lending and a housing bubble. So what do we do a few years later? Yeah, good idea, let's do it all over again but bigger! There will be no way out of a collapse next time - and they WILL steal people's money/pensions (overtly, not just through inflation, taxes and low interest rates). FFS, if we as a nation really are this stupid then we deserve everything that's coming to us.

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In 2014, experts predict, the demand for family homes will outstrip supply. This coupled with the impact of the Government’s Help to Buy scheme is set to fuel a seven per cent surge in prices. The cost of an average three-bedroom semi will rise to £185,833 – a jump of £12,000 on today’s £174,329.

The experts can't even add up.

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Yep. I despair at how utterly stupid people are - not just normal people (and EAs!) but also our politicians and media in particular. Our economy was brought to its knees by easy lending and a housing bubble. So what do we do a few years later? Yeah, good idea, let's do it all over again but bigger! There will be no way out of a collapse next time - and they WILL steal people's money/pensions (overtly, not just through inflation, taxes and low interest rates). FFS, if we as a nation really are this stupid then we deserve everything that's coming to us.

George Osbourne has decided that a house price bump will help the conservatives get re elected in 2015.

The collateral damage to the rest of the economy be dammed, of course. Indeed, the plan may well include a post-election-2015 collapse; if the conservatives are in power they'll use it as an excuse for more flogging off of the public sector, if not then it'll be a useful stick to beat Labour with.

Biggest problem he has is keeping it going until 2015 now. Expect IRs to stay where they are till then and all taps kept on full to keep house prices from recognizing gravity. The fact the that boomlet seems to be happening about 9 months too soon for the election is making things worse.

There are those who may say that deliberately goosing the economy purely for electoral advantage is a betrayal of the vert meaning of the word 'Conservative'.. about as intellectually coherent as Labour allowing half of poland to migrate into their core electorate areas.. but there you go.

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I am seeing asking prices shoot up by this amount already - EAs out of control IMPO and stupid people panicking and making offers. Nuts.

Two years ago I was desperate for a house, with 3 kids I could not even get someone to rent me one in the area where we wanted to be as they did not want the kids.

Vendors where very sticky on price but if it reduced a bit it sold, so there was no need to interfere.

I found a house 335,000 small 4 bed detached I offered 300 it was rejected and then the vendor pulled it from the market as was "not going to give it away".

Fast forward and to get my kids into school I bought 3 bed apartment with our deposit and the price of that 4 bed house type is now ...... 395-450 asking price and they seem to be selling.

FLS to me was the killer from no sale to adding 100k+ to the price, and this is without HTB.

The market is now very stretched a 3 bed 100m2 = £200,000 ish / 3/4 bed 130m2 = £300,000 and a good sized what we want 4 bed 150m2+ £350-450,00 (and these are terraces within 50m of each other).

This is NR2 Norwich not London another 24% will take regular family sized houses in the south city over 500,000 and from the parents at the school I doubt many of them earn over 60,000 combined.

I know its going to end in tears but I hope it collapses soon as don't need the stress after another 5-10 years. I know it will definitely collapse the day after I finally capitulate and take out a massive mortgage.

Edited by Fromage Frais

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The recovery in the economy is tepid at best and very, very patchy. Retail sales are actually falling FFS!

Consequently any uptick in house prices will be very short lived.

But the other side of the coin is that interest rates aren't really going anywhere, maybe one or two tiny increases in 2015 or 2016, but we'll be looking at a base rate of 1% or less well out into the foreseeable future.

Consequently house prices aren't about to crash either.

The reality is that we're stuck in a grim, low growth equilibrium that will just grind on and on. What we see today is also what we'll be seeing many years from now.

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Consequently any uptick in house prices will be very short lived.

But the other side of the coin is that interest rates aren't really going anywhere, maybe one or two tiny increases in 2015 or 2016, but we'll be looking at a base rate of 1% or less well out into the foreseeable future.

Consequently house prices aren't about to crash either.

Also on the other hand earning are not going anywhere for the foreseeable future so were is the money going to come from to pay for this increase in debt.

Edited by awaytogo

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The reality is that we're stuck in a grim, low growth equilibrium that will just grind on and on. What we see today is also what we'll be seeing many years from now.

Assuming nothing unexpected happens. :)

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Also on the other hand earning are not going anywhere for the foreseeable future so were is the money going to come from to pay for this increase in debt.

It could come from taxpayers via ever increasing government support. Of course that will mean less money for public services but apparently public services are a waste of money and a breeding ground for communists so that is ok.

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Also on the other hand earning are not going anywhere for the foreseeable future so were is the money going to come from to pay for this increase in debt.

At the end of the day this is going to be the killer to any artificially manufactured housing boom. Even with rock bottom interest rates and HTB the earnings out there in the economy can not support sustained HPI for long unless the banks go back to dishing out 100% plus mortgages and Liar Loans. Moreover if the banks go under again there is not the tax base for another bail out. You just know that this is going to end badly.

Edited by stormymonday_2011

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At the end of the day this is going to be the killer to any artificially manufactured housing boom. Even with rock bottom interest rates and HTB the earnings out there in the economy can not support sustained HPI for long unless the banks go back to dishing out 100% plus mortgages and Liar Loans. Moreover if the banks go under again there is not the tax base for another bail out. You just know that this is going to end badly.

A few days ago I registered my surprise at the FT's front page headline regarding the UK housing market.

Now we have Tuesday's edition:

FT191113.gif

The article starts:

Graduate data reveal England’s lost and indebted generation

The earnings of recent English graduates have deteriorated so rapidly since the financial crisis that the latest class is earning 12 per cent less than their pre-crash counterparts at the same stage in their careers. They also owe about 60 per cent more in student debt.

And later:

These are the young people to whom the country will turn over the next 20 years to fund the retirement of the “baby boomer” generation. Britain’s ageing population is forecast to put the country’s public finances under increasing strain.

Are we witnessing a sea change of opinion here? Has the FT become cognisant of the fact that a good proportion of its current (and future) readership is likely being disadvantaged by current government policy?

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Sadly, the FT doesn't matter. Express, Mail are the problem. Most people probably have never glanced a headline in the FT whilst picking up their Express.

I'm not so sure TMT.

The Mail and Express are reflective of the policy that middle England wants.

The FT is more reflective of the policy that middle England is going to get.

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Also on the other hand earning are not going anywhere for the foreseeable future so were is the money going to come from to pay for this increase in debt.

It will come from government. It already is coming from government spending. Funding for Lending, Help to Buy 1 and 2, support for mortgage interest when the borrower can't afford repayments, housing benefits to support higher returns for landlords. Without these schemes market forces would cause a price correction. I sometimes wonder whether bank nationalisation was deliberately engineered as being the only way to sustain the housing boom. They've made the government investment in higher house prices the largest element of national policy. This is totally different to the 89-94 HPC in that HMG is directly on the hook as the creditor for bad debts that dwarf the rest of the economy. Their only option is to keep lending to prevent default.

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A few days ago I registered my surprise at the FT's front page headline regarding the UK housing market.

Now we have Tuesday's edition:

FT191113.gif

The article starts:

And later:

Are we witnessing a sea change of opinion here? Has the FT become cognisant of the fact that a good proportion of its current (and future) readership is likely being disadvantaged by current government policy?

I'm not so sure. The £700 a month trader school was worrying and I don't think the "WHO THE ****** WILL BE ABLE TO BUY YOUR OVER PRICED HOUSES YOU OLD *****" sub-text is clear enough.

Otherwise I think the FT are reasonably on message, I'm following a few or their journos on twitter and some of them get it.

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At the end of the day this is going to be the killer to any artificially manufactured housing boom. Even with rock bottom interest rates and HTB the earnings out there in the economy can not support sustained HPI for long unless the banks go back to dishing out 100% plus mortgages and Liar Loans. Moreover if the banks go under again there is not the tax base for another bail out. You just know that this is going to end badly.

What is to stop any UK government using taxpayers money to further support house prices via printing and/or cuts to public services? They will use the house prices up = feel good factor and public services = a waste of money as justification and will be supported in this by the D Ex/D M/Sun prole brainwashing machine.

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What is to stop any UK government using taxpayers money to further support house prices via printing and/or cuts to public services? They will use the house prices up = feel good factor and public services = a waste of money as justification and will be supported in this by the D Ex/D M/Sun prole brainwashing machine.

Alternatively, it's just possible that the proles aren't brainwashed at all. Financial repression is something they have to endure every day, unlike George Osborne's criminal associates in the City of London. It's just possible the proles haven't forgotten who and what actually caused the national collapse.

Not so the Daily Telegraph. Here today, reflecting on the 'baffling' recovery of Teflon Labour and 'Red' Ed. :lol:

Being an optimist is tough, however, when the polls say otherwise. Collectively, they put Labour about eight points ahead. A gap that had been closing since the summer, presumably thanks to economic good news, has been widening again. The Opposition is back in the territory where, because of the in-built bias of the electoral system, it can count on being in power. Psephologists will insist that there is plenty of buried detail that contradicts the headline figures. A ComRes poll on Sunday, for example, gave Labour a six-point lead over the Tories (35 per cent to 29 per cent). But of those questioned, rather more than half – 53 per cent – could not imagine Mr Miliband as prime minister. Still, the bottom line remains inescapable. As one of Mr Cameron’s closest advisers put it to me: “If the election were held today, we’d be stuffed.”

http://blogs.telegraph.co.uk/news/benedictbrogan/100246529/the-baffling-recovery-of-teflon-labour-and-unpopular-ed/

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Alternatively, it's just possible that the proles aren't brainwashed at all. Financial repression is something they have to endure every day, unlike George Osborne's criminal associates in the City of London. It's just possible the proles haven't forgotten who and what actually caused the national collapse.

Not so the Daily Telegraph. Here today, reflecting on the 'baffling' recovery of Teflon Labour and 'Red' Ed. :lol:

It depends on how long the pre election engineered boom keeps going. If enough people see the value of their houses increase at a faster rate than their cost of living goes up then Osborne may well get away with it for now and after the election any falls in house prices can always be tackled in time for 2020 with H2B 3+.

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Like any market...people test the market to see what people can or are prepared to pay, they hike the price and sit and wait for a bite.....they do that in shops both clothing, food, perfume, face cream amongst other things.....only to drop the price when they realise it is sometimes better depending on the customer you are targeting to sell many items for less rather than a few for more........there will always be those who will pay any silly price for anything but that number is falling, people are growing wise to it all....and no just because something costs more it does not mean it is better, or will make you feel better, or will make you more money, better looking or desirable. ;)

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