rollover Posted February 4, 2017 Share Posted February 4, 2017 Quote UK house prices are set to soar over the next 50 years while the average income won't keep pace, putting home ownership out of reach of millions. Professor David Miles, a former member of the Bank of England's monetary policy committee, says the shortage of housing and a restriction on the availability of land in the UK will mean house prices keep spiralling upwards for decades to come. House prices have risen from an average of £9,767 in 1973 to £205,936 today. This means that on average people needed 4.5 times their salary in the late 1970s to buy a home while today, they need 7.3 times. Worse, he warned that median salaries in the UK were unlikely to keep pace with rocketing house prices, putting home ownership even further out of reach for aspiring buyers. He said: 'UK house prices have not just gone up relative to the price of things we buy but also relative to incomes. Whichever way you cut it, it's been an extraordinary period of rising house prices. And he added: 'It's very difficult to work out whether rising house prices relative to incomes are just a bubble that has to reverse itself or is it simply a continuation of the equilibrium path that we are on which is almost inevitable if population and average incomes continue to rise?' thisismoney It's imply high migration to continue. Quote Link to comment Share on other sites More sharing options...
ChewingGrass Posted February 4, 2017 Share Posted February 4, 2017 False new alert. Some serious cherry picking of numbers, statistics and years going on here. Uses 1973 for the average price comparison, then the late 1970s for the income multiple to quoting a 7.3x income multiple on a £203000 house. The 4.5x Salary multiple for the late 1970s infers a joint application as a single applicant could only get 3x at the time. So the £203000 average price house should now be also a joint application thus infering 7.3x a joint gross of £27K. The Professor is either being misquoted or as is typical of BofE committee members disingenuous. Quote Link to comment Share on other sites More sharing options...
billybong Posted February 4, 2017 Share Posted February 4, 2017 ^ Quote Professor David Miles, a former member of the Bank of England's monetary policy committee, says the shortage of housing and a restriction on the availability of land in the UK will mean house prices keep spiralling upwards for decades to come. That seems to imply some inside knowledge of policies of massively increasing levels of credit as well as a lack of new home building plus increasing population levels likely through immigration. Crazy self serving policies. Quote Link to comment Share on other sites More sharing options...
Venger Posted February 4, 2017 Share Posted February 4, 2017 (edited) Wasn't it his message in 2012 as well. You're aware he's just come out against Section 24, thinking it will be bad for renters / would-be buyers? Lol. Branding S24 as 'terrible'. There are actual BTLers singing HPI forever as they now look to sell, as well now, in this market. I don't know what David Miles angle is... homeowner? / BTL? We make our market choices. Edited February 4, 2017 by Venger Quote Link to comment Share on other sites More sharing options...
Venger Posted February 4, 2017 Share Posted February 4, 2017 11 minutes ago, billybong said: ^ That seems to imply some inside knowledge of policies of massively increasing levels of credit as well as a lack of new home building plus increasing population levels likely through immigration. Crazy self serving policies. Different market views in a market? Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 4, 2017 Share Posted February 4, 2017 As CG says, this is the same old a from Andy Haldane, Rachel Reeves. Etc. I believe the boe is an echo chamber, and also rationalisation must be necessary to assuage the guilt that would come from such damaging and arrogant policies. Or to put it another way, the professor's view is self selecting for the job in the boe. Quote Link to comment Share on other sites More sharing options...
billybong Posted February 4, 2017 Share Posted February 4, 2017 18 minutes ago, Venger said: Different market views in a market? It's possible - but for a person in his position the way the quote is worded makes it sound like it's all set in stone. Worded as if he knows the inside story. At the very least his ramping predictions on house prices should be subject to some caveats such as his opinion is not investment advice and so on. Quote Link to comment Share on other sites More sharing options...
Venger Posted February 4, 2017 Share Posted February 4, 2017 What is his current employment position? His view about S24 it totally different to mine - and he thinks it terrible. Quote Link to comment Share on other sites More sharing options...
Venger Posted February 4, 2017 Share Posted February 4, 2017 Professor of Financial Economics at Imperial College Business School. Just a professor... oh it appears something else too. I have just downloaded his CV. Quote Current Post: Professor of Financial Economics, Imperial College, London Economic Advisor to the Bank of England and to the UK Debt Management Office Regardless - he's not happy about Section24, whereas I am delighted about it. It's up to each of us to take our own market bearings, including our incomes, savings, spending commitments (family) and so on. I doubt this guy is going to offer personal bailouts if values fall. Prices have fallen in some areas it seems to me. Top end London softening? Quote Link to comment Share on other sites More sharing options...
Dorkins Posted February 4, 2017 Share Posted February 4, 2017 5 minutes ago, Venger said: I have just downloaded his CV. Yet another Oxford PPE graduate. These guys are really good at running the country (for the benefit of people like them). Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 4, 2017 Share Posted February 4, 2017 42 minutes ago, Venger said: Wasn't it his message in 2012 as well. You're aware he's just come out against Section 24, thinking it will be bad for renters / would-be buyers? Lol. Branding S24 as 'terrible'. There are actual BTLers singing HPI forever as they now look to sell, as well now, in this market. I don't know what David Miles angle is... homeowner? / BTL? We make our market choices. I guess he's a fully paid up member of the London dinner party social set, and as such, to keep up appearances, has adult children with massive bomad and leverage in London houses. Just a guess. Quote Link to comment Share on other sites More sharing options...
billybong Posted February 4, 2017 Share Posted February 4, 2017 (edited) It's not exactly the claimed great rebalancing of the economy is it. Edited February 4, 2017 by billybong Quote Link to comment Share on other sites More sharing options...
Venger Posted February 4, 2017 Share Posted February 4, 2017 Who claimed that? Into my 9th year on HPC for those worrying about buyers, and in my area, values 30% above 2007, and 40% above 2008..... Merv is happy for prices to come down, it seems. ... cuts out at the end though, which makes me wonder if taken out of context... but 'trying to achieve' (lower house prices) and now have 'a chance at getting there' ? And Miles is not happy with Section24 despite claiming just HPI+++++ ahead. Yet it's a Treasury matter not BoE. http://www.thisismoney.co.uk/money/buytolet/article-4187714/Buy-let-tax-crackdown-branded-terrible-tax-change.html Si1, similar thoughts went through my mind, but just guessing. Quote Link to comment Share on other sites More sharing options...
slawek Posted February 4, 2017 Share Posted February 4, 2017 London is already close to the extreme valuations (initial mortgage payments are 70% of average take home pay). Interest rates would have to go significantly below zero to.sustain HPI over next 50 years. Quote Link to comment Share on other sites More sharing options...
winkie Posted February 4, 2017 Share Posted February 4, 2017 House prices set to rise for the next 50 years and outstrip incomes even further In that case.....we will pay you to buy them. Quote Link to comment Share on other sites More sharing options...
thewig Posted February 4, 2017 Share Posted February 4, 2017 like much of our control system this is pure predictive programming theory, drum in a certain future and the obedient plebs will manifest it Quote Link to comment Share on other sites More sharing options...
GreenDevil Posted February 4, 2017 Share Posted February 4, 2017 Why doesn't the ***** do something about it then? Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted February 4, 2017 Share Posted February 4, 2017 Did this "Great Man" foresee the Financial Crash? Or does he limit his predictions to 50 years. Quote Link to comment Share on other sites More sharing options...
giggler000 Posted February 4, 2017 Share Posted February 4, 2017 16 minutes ago, Sajid the Taxmeister said: Did this "Great Man" foresee the Financial Crash? Or does he limit his predictions to 50 years. 50 years, wow, i'm pretty sure something else will come to take our minds off this between now and 2067, that or death Quote Link to comment Share on other sites More sharing options...
Noallegiance Posted February 4, 2017 Share Posted February 4, 2017 ".......while the average income won't keep pace......" 'Keep' pace? 'Keep' friggin' pace? And this numb-nut ****-wit c*** w***-stain mother****** is supposed to be educated? Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 4, 2017 Share Posted February 4, 2017 6 minutes ago, Noallegiance said: ".......while the average income won't keep pace......" 'Keep' pace? 'Keep' friggin' pace? And this numb-nut ****-wit c*** w***-stain mother****** is supposed to be educated? Dinner party language. Lazy. Quote Link to comment Share on other sites More sharing options...
Noallegiance Posted February 4, 2017 Share Posted February 4, 2017 1 hour ago, Si1 said: Dinner party language. Lazy. Swearing. It's there for a reason. Quote Link to comment Share on other sites More sharing options...
Si1 Posted February 5, 2017 Share Posted February 5, 2017 5 hours ago, Noallegiance said: Swearing. It's there for a reason. Ha! Quote Link to comment Share on other sites More sharing options...
billy budd Posted February 5, 2017 Share Posted February 5, 2017 On 2/4/2017 at 5:02 PM, GreenDevil said: Why doesn't the ***** do something about it then? What exactly is a former member of the Bank of England's monetary policy committee supposed to do about it? The only remedy I see is a massive expansion of social housing, to provide a low-cost alternative to renting privately, or indeed buying. Then if your landlord tells you your rent is going up from £700 to £750 a month you can tell them that you can always go and rent one of those council flats for £400/m - OK, maybe it's not as nice as this place, and the area is a bit grotty, but I'll be £250/m better off... That would cause house prices to fall though, and no government wants that on their watch, not whilst we still have a majority of voters - especially the older generation who are more likely to vote - as owner/occupiers. Quote Link to comment Share on other sites More sharing options...
Exiled Canadian Posted February 5, 2017 Share Posted February 5, 2017 "Houses to be so expensive that no one can afford to buy them" How exactly is that going to work then? Quote Link to comment Share on other sites More sharing options...
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