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TheCountOfNowhere

Ons House Prices Up 7.7 % Yoy ( Up Form 7% In Oct ).

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"PricedOut@pricedoutuk 13m

1f61e.png The average price paid by a first-time buyer is now £221,000 according to the latest official data."

The average house price in the UK has rocketed over the past 5 years http://www.housebuildingnews.co.uk/past.html #ukhousing

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I really am lost for words.

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The average house price in the UK has rocketed over the past 5 years http://www.housebuildingnews.co.uk/past.html #ukhousing

I bought 5 years ago (to within a few days). Zoopla says +£115K tax-free for me since then.

My mortgage, tax, NI bill over that time was very similar at £111K. It's like someone else is paying for my housing and taxes.

It is so far beyond crazy, my brain hurts. This can only work if the next generation have no debts and super incomes.....err... what could possibly go wrong?????

If I was in my 20's again, I would live with parents, save up for a field and one of these. Screw the system, planning permission is overrated.

caravans-and-motorhomes-motorhomes-S1647

Edited by VeryMeanReversion

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Except for Aberdeen where it's dipping in double digits, like -15% in asking prices and -20% for rents at current, with a long way to go from here.

Well if Scotland is only 0.4% on RK's link above, you may have a point.

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It's all part of Osborne and Carney's grand design for a house price crash. :rolleyes:

Its now nearly 7 years since the nominal lows in April 2009.

and were not even 1/2 way through this credit cycle (based on haldanes credit cycle = 2x biz cycles)

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It's all part of Osborne and Carney's grand design for a house price crash. :rolleyes:

Oh, I dare say they expect to push prices up to 2007 peak levels across the country where the banks balance sheets look solvent and try and maintain that insane levels....like they managed from 2008 to 2011.

What could possibly go wrong...Oh year, asking prices are now double what they were in 2007 anywhere south of Birmingham. I can only imagine it's desperate sellers trying to achieve a price so they can afford to climb the pyramid.

I can scarcely believe what I am seeing.

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Its now nearly 7 years since the nominal lows in April 2009.

and were not even 1/2 way through this credit cycle (based on haldanes credit cycle = 2x biz cycles)

Yes PCL is collapsing. How very odd.

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That is so depressing.

No, it was depressing last year when there was no end in site.

It's so obviously ****ed, now it's just funny.

Do you even know anyone who is seriously looking to buy a house, never mind a FTB.

Edited by TheCountOfNowhere

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Seriously guys, even if there is a HPC, big deal. Even with a 40% or 50% crash, prices are still expensive, and Britain's turning into an economic craphole anyway. I don't ever see Britain being TRULY prosperous no matter what they try to do. We've become an Eastern European nation of cheap / zero hour workers. We all shop at Aldi now FFS - what the hell?

Edited by canbuywontbuy

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Oh, I dare say they expect to push prices up to 2007 peak levels across the country where the banks balance sheets look solvent and try and maintain that insane levels....like they managed from 2008 to 2011.

What could possibly go wrong...Oh year, asking prices are now double what they were in 2007 anywhere south of Birmingham. I can only imagine it's desperate sellers trying to achieve a price so they can afford to climb the pyramid.

I can scarcely believe what I am seeing.

Nobody can. By comparison the Brown years now look like a golden era of fiscal rectitude and sobriety.

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Do you even know anyone who is seriously looking to buy a house, never mind a FTB.

Only boomers of my parents generation moving sideways. I know a few FTB acquaintances who bought in the last few years because they didn't know any better, but not recently.

It's showing some small signs of a possibly imminent death spiral, but I won't believe it till I see it. I fear this sucker could have a long way to run yet....

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Only boomers of my parents generation moving sideways. I know a few FTB acquaintances who bought in the last few years because they didn't know any better, but not recently.

It's showing some small signs of a possibly imminent death spiral, but I won't believe it till I see it. I fear this sucker could have a long way to run yet....

The one factor that I was pointing out to the foxton share price website posters 18 months ago is now relevant to the rest of the country.

That being....

THE INSANE F**KING PRICE

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Seriously guys, even if there is a HPC, big deal. Even with a 40% or 50% crash, prices are still exensive, and Britain's turning into an economic craphole anyway. I don't ever see Britain being TRULY prosperous no matter what they try to do. We've become an Eastern European nation of cheap / zero hour workers. We all shop at Aldi now FFS - what the hell?

This. There's precious little light at the end of the tunnel, from where I'm standing. I'm just not sure where else would justify a big 'up sticks' for the family - the whole world is too unpredictable at the moment, it's difficult to see where attractive green shoots of a decent sustainable society will emerge, if anywhere.

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Seriously guys, even if there is a HPC, big deal. Even with a 40% or 50% crash, prices are still exensive, and Britain's turning into an economic craphole anyway. I don't ever see Britain being TRULY prosperous no matter what they try to do. We've become an Eastern European nation of cheap / zero hour workers. We all shop at Aldi now FFS - what the hell?

and with a higher percentage of home ownership generally in Eastern Europe.

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From the report:

Upward price pressures may be a result of a shortage of supply and strengthening demand in the housing market, a view supported by a number of house market indicators. There continues to be weak supply in the market, with the Bank of England’s Agents’ Summary of Business Conditions for October reporting a shortage of properties available for sale. This suggests the lack of homes available for sale increases competition and supports prices. In the new-build market, the ONS Output in the Construction Industry release indicates total housing output fell 1.6% in the year to October, although this was a smaller contraction than the three previous months. In the secondary market, the Bank of England’s Agents’ Summary of Business Conditions for Q3 reported that weak activity could be self-perpetuating, as potential vendors remain reluctant to put their homes on the market without suitable properties available for purchase. These two dynamics are reflected in the latest data from the Royal Institution of Chartered Surveyors, which noted new sales instructions decreased for the tenth month in succession.

While supply remains tight, demand for house purchases remains strong, – as highlighted in the Bank of England’s November Inflation Report. The volume of mortgage approvals - a leading indicator of housing purchases - grew by 20.8% in the year to November 2015, down from 22.0% in the year to October 2015 . The number of UK home sales also continued to grow in the three months to November (Sep-Nov): rising by 1.4% relative to the preceding three months (Jun-Aug), slightly lower than the equivalent rate in October. Data from the Royal Institution of Chartered Surveyors also suggests that growth in buyer demand eased in November 2015, falling to its most subdued growth rate since April 2015.
If new sales instructions had been falling for ten months, and home sales had been increasing at the same time, then there must have been a fair amount of slack in supply and demand, to start with. Yet during this time, although prices increased, the rate of increases had topped out and was falling whereas you'd expect it to be increasing if the upward price pressure was purely due to a weakening of supply versus a strengthening of demand.
While I agree with the BoE's suggestion that weak activity could be self-perpetuating, I don't agree that this would be driven by a lack of suitable properties for purchase. Or rather, my definition of suitable includes price to a large extent.
As the Count suggests, second-steppers who have been caught in the MMR mortgage trap are trying to achieve high asking prices so they can buy that next larger property while meeting the afforability criteria they would have failed if they had bought their current house post MMR.
Demand from FTB's has been too low to support these prices, but speculative investors have stepped up to the mark and filled the shortfall. But this is pushing prices up and stretching the budgets of second-steppers even further, increasing the reluctancy of existing owners to move up.
Prices have been suppressing supply, and suppressed supply has been increasing prices, a self-perpetuating feedback loop that would have seen both supply and activity in the secondary market continuing to fall, if the Government had not stepped in to quash speculative demand and nudge BTLers to exit the market.
In the new-build market, the ONS notes that construction output fell by 1.6%. As I mentioned in another thread yesterday, that's not what you expect to happen while prices are rising.
Help To Buy is an attempt to stimulate construction output by bringing demand from FTBs forward to try to address developing housing crisis, but take-up has been nowhere near enough to this. Again, speculative investors have made up some of the shortfall, but even so it is clearly not enough to increase construction output enough, and again rising prices have reduced FTB affordability and caused the lack of take up in HTB, thus causing construction to fall.
It's not surprising that transaction volumes are still a shadow of their former self in this environment.
If last years tax changes have the desired effect of reducing speculation, I would expect construction output to fall even further, and while the changes would relieve upwards price pressure, the fall in construction in line with reduced demand would support prices. I would then expect HTB to be expanded in an attempt to boost demand further, and more schemes like the Starter Homes Initiative to subsidise the builders in an attempt to increase output without loosing profit.
I believe the Government have been trying address the issues, while at the same time trying to prevent a collapse in prices, but the policies are having the opposite effect and are self-defeating to the point where they could become the cause of the collapse.
A large, accidental correction in prices is the only way of this mess because it is the only way houses can become affordable enough to both first time buyers and the current mortgage trapees to boost supply in the secondary market and boost demand in the new build market to any significant extent, which would allow us to start building in earnest, higher volume, lower profit.
Thankfully, it is on it's way.

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