118er Getting Roasted on Mumsnet...

[dougless]

In the history of property bubbles and crashes, Japan is the model we all aspire to.  Just do some reading TryingToWin and you will see why it is mentioned here from time to time.  Despite having little inward migration, Japan has a much smaller amount of usable land as a proportion of its total land mass when compared to the UK and its population is far higher.

[TryingToWin]

4 minutes ago, dougless said:

In the history of property bubbles and crashes, Japan is the model we all aspire to.  Just do some reading TryingToWin and you will see why it is mentioned here from time to time.  Despite having little inward migration, Japan has a much smaller amount of usable land as a proportion of its total land mass when compared to the UK and its population is far higher.

I understand that but the landmass is fixed.

The defining factor in MORE or LESS price is going to be MORE or LESS population.

They aren't taking immigrants, there's no upward pressure on prices. We however, are taking immigrants, massive amounts in fact.

The reason we cannot be compared to Japan is because of immigration policy. Japanese immigration policy is essentially beyond UKIP, its BNP level stuff (99% JAPANESE) ,  its quite apparent now that your not going to get that in the UK.

The weird position this forum is in, is that its a choice between Tory or Labour.

Tory historically are going to protect home owners, but they are trying to get immigration down which helps supply/demand.

Labour historically are for the disenfranchised renters such as this forum, but they are massively pro-immigration.

Pick your poison.

[olde guto]

20 minutes ago, TryingToWin said:

Look at the house building against National Insurance numbers issued for the last 20 years.

Brexit has really helped reduce pressure. Not from an economic standpoint but from a supply / demand standpoint.

But STILL. More people are coming than houses being built. Until that trend reverses, rents aren't going down, I don't see how its possible. s24 will change the figures. But the correlation between population and price is not going to change, its basic supply and demand.

The overleveraged will be set back quite a bit, but the fundamentals are going to be the same. As long as the population of this small island keeps going up and the value of money keeps going down, long term prices are only going UP.

There is never ever EVER going to be a 25 year period where taking a mortgage generates a loss.

I cant see how its mathematically possible with populations outpacing building by such a large margin. Never mind inflation.

Sheesh ?

Since 2008 the best part of 1.5million houses have been built in England (so easily 1.5m if not more for the entire UK).  Assuming 2 people per house that's housing for at least 3 million people, add 1 child per house (lower than the average 1.8 or so children per family) that's housing for 4.5 million people (more realistic I suspect).  No idea if this figure includes new HMOs (where immigrants are more likely to live), bedsit / flat conversions or the BTR student flats springing up over the UK.

Since 2008 the population of the UK is estimated to have gone from 61.57m to 65.81m an increase of 4.24 million.

House building has pretty much kept pace with population growth which strongly suggests that the main cause of high house prices isn't supply and isn't population growth.  Stop lax lending, stop government meddling and increase interest rates and prices can and will crash

 

[mrtickle]

21 minutes ago, olde guto said:

Sheesh ?

Since 2008 the best part of 1.5million houses have been built in England (so easily 1.5m if not more for the entire UK).  Assuming 2 people per house that's housing for at least 3 million people, add 1 child per house (lower than the average 1.8 or so children per family) that's housing for 4.5 million people (more realistic I suspect).  No idea if this figure includes new HMOs (where immigrants are more likely to live), bedsit / flat conversions or the BTR student flats springing up over the UK.

Since 2008 the population of the UK is estimated to have gone from 61.57m to 65.81m an increase of 4.24 million.

House building has pretty much kept pace with population growth which strongly suggests that the main cause of high house prices isn't supply and isn't population growth.  Stop lax lending, stop government meddling and increase interest rates and prices can and will crash

 

Absolutely right. House prices are a function of the amount of money lent. There was not a massive crash in population in 2008 when prices went down, but there was a reduction in the amount of money being lent. It's pretty simple.

 

[mrtickle]

1 hour ago, TryingToWin said:

I cant see how its mathematically possible with populations outpacing building by such a large margin. Never mind inflation.

Just because you can't see something, doesn't mean it won't happen. 

 

[PropertyMania]

6 hours ago, olde guto said:

Since 2008 the population of the UK is estimated to have gone from 61.57m to 65.81m an increase of 4.24 million.

 

About a 7% increase over ten years - really not that high by historical standards. 

[Locke]

Quote

Poor tenants will be replaced by the more affluent to pay the tax.

[iamnumerate]

21 hours ago, mrtickle said:

Absolutely right. House prices are a function of the amount of money lent. There was not a massive crash in population in 2008 when prices went down, but there was a reduction in the amount of money being lent. It's pretty simple.

 

But prices in 2008 did not go down that much.  They were more expensive than in 2000 despite credit being a lot tighter, now this is partly because prices are sticky on the way down - but IMHO it is not unreasonable that population changes had an effect.

[Sour Mash]

25 minutes ago, iamnumerate said:

But prices in 2008 did not go down that much.  They were more expensive than in 2000 despite credit being a lot tighter, now this is partly because prices are sticky on the way down - but IMHO it is not unreasonable that population changes had an effect.

Prices dropped by 20% on average and looked to be going a lot further but then all the various "Free money" schemes and market props kicked in and stopped the crash.

 

[iamnumerate]

3 minutes ago, Sour Mash said:

Prices dropped by 20% on average and looked to be going a lot further but then all the various "Free money" schemes and market props kicked in and stopped the crash.

 

A 20% drop meant that they were still a lot more expensive than in 2000 sadly.

I agree with you that the props had a big effect, but other countries such as Spain also had drops in interest rates and prices crashed.

[iamnumerate]

3 minutes ago, Sour Mash said:

Prices dropped by 20% on average and looked to be going a lot further but then all the various "Free money" schemes and market props kicked in and stopped the crash.

 

A 20% drop meant that they were still a lot more expensive than in 2000 sadly.

I agree with you that the props had a big effect, but other countries such as Spain also had drops in interest rates and prices crashed.

[Houdini]

5 minutes ago, iamnumerate said:

A 20% drop meant that they were still a lot more expensive than in 2000 sadly.

I agree with you that the props had a big effect, but other countries such as Spain also had drops in interest rates and prices crashed.

2000 to 2008 isn't actually that great a comparison. During the 1990's mortgages changed from 3x primary earners income to 3x joint income. That change wasn't fully reflected in 2000 but was by 2008 - hence when prices fell they usually stopped at 2004 levels - which is where they have stayed if you are (un)lucky enough to live up north.

 

[Maynardgravy]

40 minutes ago, iamnumerate said:

But prices in 2008 did not go down that much.  They were more expensive than in 2000 despite credit being a lot tighter, now this is partly because prices are sticky on the way down - but IMHO it is not unreasonable that population changes had an effect.

They do to a point, no doubt. But most immigrants tend to be poorer, doing lower paid jobs. They rely on top-ups and most importantly HB. Something most other European countries don't have as much. In effect the magic money tree supplied by tax payers and borrowing.

Take HB away, it doesn't matter how many immigrants there are - rents collapse.

Even so, there's a limit to how far this stretches, unless LLs partition their HMO's to cram as many immigrants in a humanly possible (we see this in the SE). Then again there are (supposed to be) legal limitations to this.

[iamnumerate]

3 minutes ago, Houdini said:

2000 to 2008 isn't actually that great a comparison. During the 1990's mortgages changed from 3x primary earners income to 3x joint income. That change wasn't fully reflected in 2000 but was by 2008 - hence when prices fell they usually stopped at 2004 levels - which is where they have stayed if you are (un)lucky enough to live up north.

 

True, I don't think that immigration is the only cause of HPI.  I think it has an effect though.  Certainly all BTL cheerleaders quote immigration as being a good reason to invest.

 

If I were in charge of the UK, I wouldn't control immigration to make houses cheaper.  I would do the following

1) Get rid of HTB

2) No HB for immigrants until they have worked full time in the UK for at least 5 years

3) No HB in the South East for anyone unless you have worked there for at least 5 years

4) Get rid of tax relief for BTl

5) No citizenship for illegals

6) No pay rises for HA bosses if they do not build more homes.

 

[iamnumerate]

11 minutes ago, Maynardgravy said:

They do to a point, no doubt. But most immigrants tend to be poorer, doing lower paid jobs. They rely on top-ups and most importantly HB. Something most other European countries don't have as much. In effect the magic money tree supplied by tax payers and borrowing.

Take HB away, it doesn't matter how many immigrants there are - rents collapse.

Even so, there's a limit to how far this stretches, unless LLs partition their HMO's to cram as many immigrants in a humanly possible (we see this in the SE). Then again there are (supposed to be) legal limitations to this.

Good points, also no HB less immigration.

[Riedquat]

16 hours ago, PropertyMania said:

About a 7% increase over ten years - really not that high by historical standards. 

Depends what you define as "historical". Over the last 100 years or so no, over most of history it's massive (and it's on top of much larger figures to begin with - a same figure percentage growth is exponential growth). Definitely something that's a big problem the country really needs to get a grip of.

[Locke]

18 minutes ago, Riedquat said:

Depends what you define as "historical". Over the last 100 years or so no, over most of history it's massive (and it's on top of much larger figures to begin with - a same figure percentage growth is exponential growth). Definitely something that's a big problem the country really needs to get a grip of.

It's entirely a problem of benefits. Firstly, welfare is stealing money from people who create wealth and giving it to those who do not, which is a huge incentive for people to come here and not work. Without that system, this kind of immigrant simply does not exist.

Secondly, without welfare, the kind of immigrant which comes here is the one which generates wealth- this is the kind of immigrant we as a country want and need and is the one shitlibs are constantly harping on about when they manipulate debate. Welfare discourages this kind of immigrant, because they will simply be taxed to pay for the parasitical type mentioned above.

Remove welfare and these problems go away- rents crash, house prices crash, wages rise and essential goods fall in price.

[iamnumerate]

2 minutes ago, Locke said:

It's entirely a problem of benefits. Firstly, welfare is stealing money from people who create wealth and giving it to those who do not, which is a huge incentive for people to come here and not work. Without that system, this kind of immigrant simply does not exist.

Secondly, without welfare, the kind of immigrant which comes here is the one which generates wealth- this is the kind of immigrant we as a country want and need and is the one shitlibs are constantly harping on about when they manipulate debate. Welfare discourages this kind of immigrant, because they will simply be taxed to pay for the parasitical type mentioned above.

Remove welfare and these problems go away- rents crash, house prices crash, wages rise and essential goods fall in price.

Sadly no politician wants to do this. 

[Locke]

1 minute ago, iamnumerate said:

Sadly no politician wants to do this. 

It's a feature, not a bug. They will not voluntarily stop.

The choice which faces us is: stop this crap now and endure a few short years of pain; or keep walking down this road until the money completely runs out and we have death, disease, poverty and war (pick 3)

[BorrowToLeech]

49 minutes ago, Locke said:

It's entirely a problem of benefits. Firstly, welfare is stealing money from people who create wealth and giving it to those who do not, which is a huge incentive for people to come here and not work. Without that system, this kind of immigrant simply does not exist.

Secondly, without welfare, the kind of immigrant which comes here is the one which generates wealth- this is the kind of immigrant we as a country want and need and is the one shitlibs are constantly harping on about when they manipulate debate. Welfare discourages this kind of immigrant, because they will simply be taxed to pay for the parasitical type mentioned above.

Remove welfare and these problems go away- rents crash, house prices crash, wages rise and essential goods fall in price.

If wages rise, rents rise, and as rents rise so do house prices.

Rents are the problem. State benefits are a kind of rent, but they are not the only kind. 

Edited May 8, 2018 by BuyToLeech

[PopGun]

1 hour ago, Locke said:

It's entirely a problem of benefits. Firstly, welfare is stealing money from people who create wealth and giving it to those who do not, which is a huge incentive for people to come here and not work. Without that system, this kind of immigrant simply does not exist.

Secondly, without welfare, the kind of immigrant which comes here is the one which generates wealth- this is the kind of immigrant we as a country want and need and is the one shitlibs are constantly harping on about when they manipulate debate. Welfare discourages this kind of immigrant, because they will simply be taxed to pay for the parasitical type mentioned above.

Remove welfare and these problems go away- rents crash, house prices crash, wages rise and essential goods fall in price.

What about those who come here to work for next to nothing? Your logic seems to fly in the face of this article on the other thread:

https://www.theguardian.com/world/2018/may/08/slaves-working-in-uk-construction-and-car-washes-report-finds

Welcome to Galtistan.

[Locke]

50 minutes ago, BuyToLeech said:

If wages rise, rents rise, and as rents rise so do house prices.

Rents are the problem. State benefits are a kind of rent, but they are not the only kind. 

House prices are currently dislocated from rents, because loose credit affects asset prices more than service costs. I believe rents are more a function of real demand and therefore immigration than are house prices.

Rents are a function of wages and demand. If immigration falls, wages increase, but demand also falls, so the price may decrease in the face of rising wages.

In truth, anyone claiming to know the outcome is lying. The fact is, welfare is stealing money from people who are working and handing it to people who are not and that is fundamentally wrong.

[SOLZHENITSYN]

34 minutes ago, PopGun said:

What about those who come here to work for next to nothing? Your logic seems to fly in the face of this article on the other thread:

https://www.theguardian.com/world/2018/may/08/slaves-working-in-uk-construction-and-car-washes-report-finds

Welcome to Galtistan.

Define next to nothing? How does their hourly rate compare to their home country? How much benefits do they receive?

even if no benefits, so long as they can earn materially more than at home, they will come. Perhaps not to stay for good, but maybe a 5 year stint to send money home to support family/buy a home. Then they leave, to be replaced by the next wave.

[iamnumerate]

1 hour ago, BuyToLeech said:

If wages rise, rents rise, and as rents rise so do house prices.

Rents are the problem. State benefits are a kind of rent, but they are not the only kind. 

That is not always true is it?  If for example all pensioners were to die tomorrow and the government were to spend the money they were spending on pensions on something else, wages should stay the same on average - but house prices would crash.

[Ah-so]

18 hours ago, PropertyMania said:

About a 7% increase over ten years - really not that high by historical standards. 

In absolute terms an increase of over 4m in the space of a decade is massive and I think that it is unique by historical standards so I think that it is disingenuous to play it down. 

Relative increases are not really meaningful in this context. We live in a country with finite space and resources.