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Mapatasy

Zero house price inflation is to be welcomed not feared

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'The likeliest explanation  for the muted state of the market is that houses are simply too expensive for first time buyers, even with mortgage rates as low as they are.' 

No sh*t, Sherlock.  

I don't see him pointing out that moving up from first flat to modest family home is equally out of reach for many, if not more so. 

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I'd like a house with off street parking. However the jump in price is too much. Unless finances radically alter we won't be moving until we downsize probably in about 20 years.

Doing my bit for the UK property market.

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Nothing to fear from value of a home moving no more than normal cpi inflation rate, or rate received on a bank cash deposit account whatever is lower....Next house therefore will be cheaper to buy, encourage movement and turnover......As it stands people will be stuck living in the same home often not fit for purpose for longer, when two wages required to purchase nowadays and one salary disappears for whatever reason people will be totally priced out.....;)

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I heard this statement, "The likeliest explanation for the muted state of the property market is that houses are simply too expensive for first-time buyers, even with mortgage rates as low as they are." yesterday from Justin Urquhart-Stewart founder of Seven Investment Management. At last this simple fact is getting traction. It appears the old distraction of solving the crisis by 'building more new homes' has failed. The common theme emerging is the price of housing.

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^ guardian link

Quote


Even before the Bank of England cut interest rates to a record low of 0.25%, lenders were vying with each other to offer the most attractive home loan packages

 

It's a bit misleading to try to imply that people could get a mortgage at 0.25%.

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.

 ^ guardian link

Quote

Robust car sales suggest consumers are happy to buy big-ticket items, 

They aren't buying though - they're leasing.  They don't own (issues of only ever being the keeper aside).

Edited by billybong

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2 minutes ago, billybong said:

.

 ^ guardian link

They aren't buying though - they're leasing.  They don't own (issues of only ever being the keeper aside).

Just a thought, but isn't it weird how many people are happy to throw significant sums at a depreciating four wheeled asset that they will never own, but the thought of a house falling in value? Oh no no no!!!

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That nauseating stock photos with the billboard display 'own your home here for as little as £465 a month'.

iPhone £65 a month CHECK

Shiny Beemer £399 a month on lease CHECK

Part-ownership in a 1 bedder 999 lease £465 a month CHECK

****** 'em

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^ guardian link

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Britain could learn something from other countries, namely that you don’t need rising house prices or even high levels of owner occupation to be rich and successful. Germany has done just fine, even though it has a far bigger rented sector than Britain and has had much lower levels of house price inflation.

Pull the other one.  Heard it all before.  They used to punt that line in the 1980s when they were pushing the Enterprise Economy.  The general idea is true of course but don't expect them to truly act on it.  It was reasonably convincing in the 1980s but not at all now.

Emphasising zero house price increases seems to imply that you won't lose money buying now - forgetting about purchasing costs and maintenance etc.

The article has some useful points amidst all the misleading stuff - it fills a sheet..  

 

Edited by billybong

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10 minutes ago, billybong said:

.

 ^ guardian link

They aren't buying though - they're leasing.  They don't own (issues of only ever being the keeper aside).

Exactly !! Very few are actually going to pay off the car finance , it will be rolled onto next vehicle. Apart from that the article is pretty spot on

 

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43 minutes ago, btd1981 said:

Just a thought, but isn't it weird how many people are happy to throw significant sums at a depreciating four wheeled asset that they will never own, but the thought of a house falling in value? Oh no no no!!!

Indeed - that's why one might conclude that those individual buyers are filling a role benefiting those "running" things.  Those running things who who are extremely heavily invested in property and land.  Then there's the link to the growth stats etc - and so on,

Those running things might own a car or two or three ....but their financial interest there is far smaller. 

Edited by billybong

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^ guardian link

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the periods when the economy has rebalanced towards manufacturing and investment, such as the mid 1990s,

Again misleading.  There might have been small blips towards manufacturing and associated investment but in general UK manufacturing has been trending in steady decline at least since the end of World War 2.  

There has been no rebalancing although plenty of votes won on promises of rebalancing and pretending they're going to do it on a jam tomorrow basis.

White Heat of Technology, Enterprise Economy, Northern Powerhouse and just plain Rebalancing - there's a long list of pretence and jam tomorrow.

Edited by billybong

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^ guardian link

 

Quote

Research by Andrew Oswald and Danny Blanchflower shows rising home ownership leads to a subsequent increase in unemployment, because owner occupation affects labour mobility, increases congestion costs and encourages Nimby-style behaviour that means fewer new businesses.

Labour mobility for UK workers was supposed to be solved by BtL and it sounds like it might not have even achieved that.  Congestion costs increase mainly because of increased population.

The paper he refers to at the start of the paragraph quoted above suggests that rising home ownership results in increased unemployment,  Strange then that as home ownership has decreased in the UK real unemployment has increased,

Edited by billybong

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5 hours ago, Loving The Crash said:

"While the economy has certainly slowed since the turn of the year, it is not about to plummet into recession."

Ah...the "R-word".  We'll be seeing a lot more of that over the coming year...

I expect it will a recession that will bring about a hpc...if you still have a job you may be able to take advantage of the lower prices...but many wont be in any position to celebrate, hence the lower prices.

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3 hours ago, Wayward said:

I expect it will a recession that will bring about a hpc...if you still have a job you may be able to take advantage of the lower prices...but many wont be in any position to celebrate, hence the lower prices.

The author's arguments against a downturn are entirely spurious. Aggregate demand in the economy is highly correlated with the credit impulse. We know that the flow of private sector credit into the economy has fallen sharply over the past year, as evidenced by the zero hpi figure. At the same time, for purely political reasons, the govt appears to be making a renewed effort to close the primary deficit. Finally, the torrent of flight capital from China and Europe appears to have dropped off significantly since the referendum. Were it not for the £170bn that Carney conjured up last August I believe the UK would be in recession already.

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On ‎09‎/‎04‎/‎2017 at 3:40 PM, Mapatasy said:

https://www.theguardian.com/business/2017/apr/09/zero-house-price-inflation-is-to-be-welcomed-not-feared

"Home ownership has fallen sharply, since peaking in the early 2000s, and is now at its lowest level in 30 years, yet there is no surge of prospective buyers seeking to take advantage of attractive deals"

 

According to the Office for National Statistics, the average house price is 7.6 times the average annual salary, more than double the figure two decades ago. 

---------------------------------------------------------------------------------

Says it all, this is out of control and will stop one way or another, Are we at the limit.

Edited by awaytogo

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Well the math is easy to do from my point of view.

 I earn well my life, and estimates my affordability at £1750 a month. At 2% IR and 25years repayment I can borrow about £420k. In London you can't find anything descent within the circular road for that price.

Maths just don't add up. And I wonder for which FTB or even people already on the ladder it does. And with the HPI the steps on the "ladder" have widened that much.

So yes if someone can enlighten me who can shell out those crazy amounts above £1M commonly seen for a Zone2  2/3bed in London I would love to know. ( Aside of leveraged IO BTLers)

 

 

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ONS says prices up 5.8 % 

Saw it reported in London as ''only '' 3.8% ..Only  bloody Only . Meanwhile inflation getting to 2.3% is seen as bad news .Still the obsession that prices going up is a positive 

bewilders me .

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