House Price Rises Caused By Lack Of Houses. Utter. Tosh.

[iamnumerate]

B0llocks.

The State told lenders: lend lend lend. When it hits the fan we'll see you alright.

The State has never been more involved, for the last 15-20 years.

If you think cakes are too expensive you can buy the ingredients yourself and make your own, trying that with housing. (I know it is more complicated but the principle is relevant).

[Simon Taylor]

If you think cakes are too expensive you can buy the ingredients yourself and make your own, trying that with housing. (I know it is more complicated but the principle is relevant).

It's extremely relevant.

Now imagine if, having restricted the supply of cakes (this analogy works better as food in general) the state said to the banks, people need these cakes so lend as much as you can against them. There will come a time when they won't be able to afford to pay you back but don't worry about that, we'll bail you out. We'd probably end up with smaller, lower quality cakes but they'd be much, much more expensive.

Restricted supply and stimulated demand are two cheeks of the same ****.

[PopGun]

State intervention doesn't start and stop with regulation. The explicit offer to people who borrow too much that their arses are covered by SMI and the implicit understanding that banks have that, no matter how stupid their lending gets, they are backed by the taxpayer if (when) it goes tits up. Foolish borrowers and lenders are protected from their halfwittery by the state. This is wrong.

HTB is even more grotesque as it's really all about looking after the volume housebuilders who , without it, would have had to ***GASPS*** drop their prices and take big writedowns on the price of their landbanks.

It's the destruction of capital prevented by this meddling that keeps markets honest.

I've got to the point where governments/banksters are sides of the same coin.

The market however isn't the answer, in fact it's part of the problem as the last 40 years has demonstrated

[R K]

B0llocks.

The State told lenders: lend lend lend. When it hits the fan we'll see you alright.

The State has never been more involved, for the last 15-20 years.

Its called "capture".

"Capture" wasnt by the "people" i.e. the State (which is what the "state" means - you & me). It was by the financial services industry.

Youve bought the banks spin hook line & sinker. You probably also believe "austerity" (transferring assets & services from the people to capital owners) is the only way to "balance the books"

Too funny.

[Simon Taylor]

I've got to the point where governments/banksters are sides of the same coin.

The market however isn't the answer, in fact it's part of the problem as the last 40 years has demonstrated

But how would we know? We haven't had anything approaching a free market in housing for the past 40 years.

[R K]

But how would we know? We haven't had anything approaching a free market in housing for the past 40 years.

In anything. Pretty much ever.

Slavery excluded obviously.

Its a pointless straw man argument. It has been done to death on here.

[zugzwang]

In anything. Pretty much ever.

Slavery excluded obviously.

Its a pointless straw man argument. It has been done to death on here.

Since there is no 'Invisible Hand' or Auctioneer at work to bring prices back to fair value, by their very nature free markets are inefficient, disorderly and prone to bubbles and crashes.

The shadow banking system is a free market in money creation. The offshore economy is a free market in tax evasion. Both are epic disasters, and the root cause of the current crisis.

[PopGun]

But how would we know? We haven't had anything approaching a free market in housing for the past 40 years.

Ah that chestnut

Because if we did it would be rigged within seconds and mutate into monopoly.

Ask yourself why (even in the US) no true free market philosophy has been adopted, anywhere, ever?!

The neo liberal experiment of the past 40 years is as close as you're going to get, and it's been disastrous for the vast majority of people.

It hasn't freed anyone, it's captured means of production, not liberalised it, ditto capital.

Want to go toe to toe with those stock brokers and their high frequency algorithms? Go ahead, and when you fall sort you can take comfort with the knowledge you just wasn't competitive enough...

Look at those farmers who are free to sell their milk to the highest bidder. Apart from they can't thanks to price fixing.

I know many on here take comfort in blaming the state for everything (and I'll be the first to admit they do have some uncanny knack with making things worse), but in my mind that's just a side show or distraction to what's really causing the damage. Blinkered ideology.

basically unicorn sight seeing is more viable than a Bonafide free market working medium to long term.

Edit what Zig said ^

Edited February 25, 2016 by PopGun

[iamnumerate]

For those who believe in official figures

http://www.breitbart.com/london/2016/02/25/650000-new-national-insurance-numbers-of-eu-migrants/

One of the big questions arising from today’s immigration statistics is how there can be 260,000 immigrants from the European Union (EU) over the past year yet around 650,000 National Insurance Numbers (NINos) handed to EU citizens.

It does seem rather strange.

[billybong]

For those who believe in official figures

http://www.breitbart.com/london/2016/02/25/650000-new-national-insurance-numbers-of-eu-migrants/

It does seem rather strange.

That's one of the reasons I usually say according to the official statistics when referring to the figures as some believe the figures to be massively underestimated per year and in total.

For example if one considers the general congestion on the roads and in the High Street malls now (malls which have increased in total numbers as well) and compares what it was like say 25 years ago or even just 10 years ago then it just doesn't tie in with the officially claimed percentage increase in population in total or even per year.

Edited February 25, 2016 by billybong

[Agentimmo]

For those who believe in official figures

http://www.breitbart.com/london/2016/02/25/650000-new-national-insurance-numbers-of-eu-migrants/

It does seem rather strange.

temps. students etc.

I've a friend in France. Both their kids spent about 3 months last summer in the UK. Student work/placements that paid poorly. They both had a NI no.issued. Both left soon after, headed back home. Not immigrants. I imagine this happens quite a lot within the EU.

[Simon Taylor]

Ah that chestnut

Because if we did it would be rigged within seconds and mutate into monopoly. Monopolies only ever survive with state protection. Eventually, someone, somewhere, eyes the big profits on offer and does it better, cheaper. Monopolies become complacent.

Ask yourself why (even in the US) no true free market philosophy has been adopted, anywhere, ever?! Usually because politicians (and their owners in the lobbying industry) can't resist interfering.

The neo liberal experiment of the past 40 years is as close as you're going to get, and it's been disastrous for the vast majority of people. On this last sentence we are in complete agreement.

It hasn't freed anyone, it's captured means of production, not liberalised it, ditto capital.

Want to go toe to toe with those stock brokers and their high frequency algorithms? Go ahead, and when you fall sort you can take comfort with the knowledge you just wasn't competitive enough... Well, consumers can choose whether or not to participate in that sort of market. If they choose not to, because it's a bit whiffy, then the market has worked. I offer no defence for HFT and what is, effectively, criminal cheating

Look at those farmers who are free to sell their milk to the highest bidder. Apart from they can't thanks to price fixing. But the same farmers are happy enough to fill their boots with the subsidies which the state has arranged for them, and the special tax treatment their business property enjoys almost exclusively. (this latter prevents land ending up in the hands of people who have the skills to farm it efficiently rather than merely own it for tax convenience). I don't think that farmers are prevented from selling milk to anyone, it's generally the case that the cost of production doesn't meet the current value for the product. That, unfortunately , is a market at work. Some better dairy farmers have become more efficient and have decided to add value by processing, rather than accepting the miserable rate that the supermarkets deign to pay them.

I know many on here take comfort in blaming the state for everything (and I'll be the first to admit they do have some uncanny knack with making things worse), but in my mind that's just a side show or distraction to what's really causing the damage. Blinkered ideology. I think the state has a role, and that is to punish behaviours which try and distort the market rather than encourage them.

basically unicorn sight seeing is more viable than a Bonafide free market working medium to long term. I still maintain that until we give it a chance, we'll never know.

Edit what Zig said

[PopGun]

Ah that chestnut

Because if we did it would be rigged within seconds and mutate into monopoly. Monopolies only ever survive with state protection. Eventually, someone, somewhere, eyes the big profits on offer and does it better, cheaper. Monopolies become complacent.

Ask yourself why (even in the US) no true free market philosophy has been adopted, anywhere, ever?! Usually because politicians (and their owners in the lobbying industry) can't resist interfering.

The neo liberal experiment of the past 40 years is as close as you're going to get, and it's been disastrous for the vast majority of people. On this last sentence we are in complete agreement.

It hasn't freed anyone, it's captured means of production, not liberalised it, ditto capital.

Want to go toe to toe with those stock brokers and their high frequency algorithms? Go ahead, and when you fall sort you can take comfort with the knowledge you just wasn't competitive enough... Well, consumers can choose whether or not to participate in that sort of market. If they choose not to, because it's a bit whiffy, then the market has worked. I offer no defence for HFT and what is, effectively, criminal cheating

Look at those farmers who are free to sell their milk to the highest bidder. Apart from they can't thanks to price fixing. But the same farmers are happy enough to fill their boots with the subsidies which the state has arranged for them, and the special tax treatment their business property enjoys almost exclusively. (this latter prevents land ending up in the hands of people who have the skills to farm it efficiently rather than merely own it for tax convenience). I don't think that farmers are prevented from selling milk to anyone, it's generally the case that the cost of production doesn't meet the current value for the product. That, unfortunately , is a market at work. Some better dairy farmers have become more efficient and have decided to add value by processing, rather than accepting the miserable rate that the supermarkets deign to pay them.

I know many on here take comfort in blaming the state for everything (and I'll be the first to admit they do have some uncanny knack with making things worse), but in my mind that's just a side show or distraction to what's really causing the damage. Blinkered ideology. I think the state has a role, and that is to punish behaviours which try and distort the market rather than encourage them.

basically unicorn sight seeing is more viable than a Bonafide free market working medium to long term. I still maintain that until we give it a chance, we'll never know.

Edit what Zig said

As asked before who or what keeps the market free?!

[Riedquat]

Monopolies only ever survive with state protection. Eventually, someone, somewhere, eyes the big profits on offer and does it better, cheaper. Monopolies become complacent.

Without the restrictions that stop the market from being free the monopolies have enough size to be able to afford to take the hit to eliminate the upstart. The only ones capable of challenging them are other similarly-sized organisations. Rules and regulations make it very hard / impossible for the small startup to challenge, but so do the economies of scale in most cases.

[Simon Taylor]

As asked before who or what keeps the market free?!

.

As above - I think the state has a role, and that is to punish behaviours which try and distort the market rather than encourage them.

I'm not an anarchist. A legal system , for example, needs to be free of commercial vested interests (although ours isn't, the legal profession and The Bar have carved it up nicely) and this legal system should provide the checks and balances on any conduct which threatens the freedom of markets. And it needs to become less selective. For example, the regulators have punished banks for some of their duplicity - PPI, forex/LIBOR fixing etc - but no-one senior has faced criminal sanction and it's doubtful whether the fines dished out will be sufficient disincentive to prevent it happening again.

The state , smaller, cheaper and less intrusive, has a big role to play, but in policing the effectiveness of markets rather than granting favours and advantages to preferred market participants.

There's lots to do...

[porca misèria]

Now imagine if, having restricted the supply of cakes

Let them eat bread.

[iamnumerate]

temps. students etc.

I've a friend in France. Both their kids spent about 3 months last summer in the UK. Student work/placements that paid poorly. They both had a NI no.issued. Both left soon after, headed back home. Not immigrants. I imagine this happens quite a lot within the EU.

Do you think that is capable of such a large number?

[Digsby]

Yes HTB has a lot to do with int rates. Jeez!

Weak. I said it was crude because there are other factors. I also said in another post that the effect of variables changes according to others. State subsidy on borrowing is obviously one. You're actually claiming that the cost of borrowing has no bearing on the amount borrowed? Ridiculous.

[Eddie_George]

The argument isn't "what are the factors that affect house prices?", it's "what factors caused the housing bubble we are now in (2000-present)?". That's what everyone here is interested in, isn't it?

And the answer to that question is by far and away, loose credit.

[long time lurking]

temps. students etc.

I've a friend in France. Both their kids spent about 3 months last summer in the UK. Student work/placements that paid poorly. They both had a NI no.issued. Both left soon after, headed back home. Not immigrants. I imagine this happens quite a lot within the EU.

Would they not be captured in the net migration figures

[long time lurking]

For those who believe in official figures

http://www.breitbart.com/london/2016/02/25/650000-new-national-insurance-numbers-of-eu-migrants/

It does seem rather strange.

The figures were net immigration ,so 650k could have entered the UK but 320 k ish could have left

[Eddie_George]

"House Price Rises Caused By Lack Of Houses. Utter. Tosh."

Well, yes and no. Speculative investors or BTL landlords are part of the demand. They are competing with the demand from other buyers, so demand has been compounded and the reason for that is a global chase for yield coupled with a relatively risk free place to park cash. So if you want someone to blame, blame central banks and governments and borrowers and lenders and government sponsored entities and intermediaries and even home owners who choose to whom they sell and at what price. If you are a frustrated home buyer then be patient. It is unlikely that the current state of affaires is permanent. But remember, if you take advantage of a downturn or crash you will be engaging in speculation too.

IO = Interest Only = LEVERAGE = LOOSE LENDING

Remember, Fergus Wilson has amassed 1000 properties. A business venture that can only work if house prices continue to rise.

Edited February 26, 2016 by Eddie_George

[Venger]

"House Price Rises Caused By Lack Of Houses. Utter. Tosh."

Well, yes and no. Speculative investors or BTL landlords are part of the demand. They are competing with the demand from other buyers, so demand has been compounded and the reason for that is a global chase for yield coupled with a relatively risk free place to park cash. So if you want someone to blame, blame central banks and governments and borrowers and lenders and government sponsored entities and intermediaries and even home owners who choose to whom they sell and at what price. If you are a frustrated home buyer then be patient. It is unlikely that the current state of affaires is permanent. But remember, if you take advantage of a downturn or crash you will be engaging in speculation too.

No.

If you want something you take ownership of your decisions, price you pay and debt you take on.

You can't rock up and claim anyone who wants to buy a home is a dirty speculator.

No one forced any of those BTLers to lay claim to more homes in a supply and affordability crisis, so it's not only central banks fault. It's a market full of market decisions from individual market participants. Now they have C24 and higher stamp duty affecting what other BTLers will buy at, possibly weighing on values ahead.

I think you are wildly misinterpreting Venger there. It's very clear from his own post that his statement about market interventions is simply an assertion that people who have monopolised land and resources - and in so doing excluded others from land resources - via the exploitation of cheap credit and loose lending standards should be allowed to eat their losses:

I don't see that there is any magical thinking in that. I would personally have been very insulted had you levelled the same claim at me. Calling for no more interventions like QE in the market as it stands is not the same as saying that the underlying market structure is ideal or non-interventionist. Nor is there anything wrong with questioning what people mean when they talk about radically different scenarios. There are radical improvements that could be made on the current situation, but there are also radically worse scenarios which would be massively worse.

Allowing those who have behaved recklessly to reap the benefits of that indefinitely whilst forcing the responsible to bear the consequences of their actions - for instance by stopping all land related payments and thereby allowing the liar loan IO crowd to keep their spare rooms and large family homes whilst prudent renter-savers are stuck in the cramped and tiny flats that they've been putting up with whilst trying to save - is a deeply concerning idea, whether it's meant as a real call to action or not.

I'm not sure what's not to understand on the sentiment front. Action or inaction that is driven by sentiment is an expression of said sentiment. Sentiment which is not expressed through any means whatsoever cannot be discerned and therefore cannot be traded upon. Sentiment and the expression of sentiment are indistinguishable from an external standpoint. Policy changes are as much an expression of sentiment as price movements. There is no rational reason why policy can't front run price movements (there may be ideological arguments as to why it shouldn't, but these are just that - ideological - and in practice sentiment is not so easily overridden) or vice versa.

On homeownerism working homeowners are not net subsidised. It's specifically non-working homeowners and non-working landowners that are net subsidised. The net position is important because land rights require money to enforce, and surrounding value-adding infrastructure requires money to build, so where you have uncompensated for land rights you have to look at where the balance of taxation has been shifted instead because that compensation still needs to be paid and so somebody is paying it in lieu of the landowners. Currently workers and businesses are picking up the tab via taxes on labour and productivity. This means that many working homeowners and working prospective homeowners (for home the situation is significantly worse if they are renting) are already effectively compensating for their own land use and then paying additional tax on top of that to compensate for the land use of unproductive others.

Uncompensated land rights are bad for society, and that does cover all land ownership, but to say that even non-working homeownerism is just as bad as landlordism is wholly wrong. If there were no state enforced property laws then people would still have to live somewhere and so they would still have homes - they would just have to defend them rather than relying on the state to defend them.

Homeownerism is the natural state, the thing which we evolved to do - shelter ourselves and our families. There is absolutely nothing wrong with that impulses. Landlordism, on the other hand, causes insecurity of shelter and all of the associated social ills that go with that and effectively imposes a greater burden of taxation on renters than on any other sector of society as their taxes effectively compensate for land rights and yet they have no free access to land and must pay for a second time in order to shelter themselves.

Everyone should have the opportunity to have security of shelter and the best way to achieve that would be through compensated property rights, a removal of all taxes on income and productivity, and widespread homeownership. Maybe those first two are pipe dreams but they are worth arguing for, and in the meantime we can at least practically shoot for the last one: housepricecrash!

[Guest]

"House Price Rises Caused By Lack Of Houses. Utter. Tosh."

...if you take advantage of a downturn or crash you will be engaging in speculation too.

If I buy a house to make a profit, I would agree. However I'm just buying somewhere to live in with my family ... and somewhere to plant my Bay tree before it gets too big for the pot!

[Riedquat]

If I buy a house to make a profit, I would agree. However I'm just buying somewhere to live in with my family ...

That's not what houses are for. That's just something you may as well do with them while waiting for the price to rise.