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Why have house prices in England shot up since the 1990s?

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A good simple explanation worth passing to people who still think its "all due to immigration"

...or anything other than credit expansion/low interest rates for that matter :)

We (yourself included I'm sure) of course all know this on here - and we all seem to agree that the crash will come when real interest rates rise.  The only divide on the board seems to be between those that think that the bulk of the crash will occur in an environment of high nominal interest rates, and those that think it will occur in an environment of low nominal interest rates.

I liked this video - thank you. Should be essential viewing for the entire population.  BTL, Help to Buy etc are often cited as being primary factors that have led to this mess rather than being secondary ones.

Because of mal-incentives, stupidity, human nature, or whatever underlying causes, the constraint on house prices appears to be the population's ability to service the debt interest on its mortgage loans.  Each halving of rates seems to result in a doubling of the asset price, and yes, rates can keep halving ad infinitum, but surely, and I'm no mathmetician, but surely there must be a point where the process reverses?  Maybe it is when the ability to service the debt is finally eroded by factors other than the level of interest rates e.g. unemployment?  Maybe this is happening right now?  Maybe there is a bit more can kicking to be done?  But this doesn't mean the crash won't happen, nor that the people on this board won't have been right all along.  Nowadays there seems to be lots of home owners posting on here - but I for one will not be buying a house until real prices are back to their mid-1990s levels.  Anyone else out there still with me?!

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Not read / seen it yet but i'm going to guess it was the dropping of the strict income multiples that were applied up to even the late 90's, and the abuse of self cert with lax checking. When I first bought in 1996, you could borrow 3 x main + 1 x 2nd (lower) income or 2.5 x joint. that was your limit. Everyone had the same limits from highstreet lenders.

By 1999 i witnessed my girlfriends sister and partner get a bigger mortgage than us on lower incomes using self cert, which i thought was madness. But they got away with it.

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2 hours ago, Loving The Crash said:

We (yourself included I'm sure) of course all know this on here - and we all seem to agree that the crash will come when real interest rates rise.

Japan post-1990 had a house price crash without a rise in real interest rates. So did Northern Ireland post-2007.

A rise in real interest rates may be sufficient to cause a HPC but the evidence is that it is not necessary.

Edited by Dorkins
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Yet again the lying communist pissrag tries to insinuate that the housing crisis started in 2009.


Here is a labelled version of their graph from this site.



and theirs which clearly points at 2009



So there you have it folks, Housing crisis started because of interest rates cut in 2009.

And here are the actual prices xg1QQMQ.png



Blairite trotsky sh!trag.


wasn't always like this.






Both Guardian graphics you will note.

Edited by Oki
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