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laurejon

Housing Crash ?.

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

LONDON (Reuters) - The number of households in England will jump by a fifth over the next 20 years, more than previously thought, new government projections show, in a sign hefty housing demand should keep underpinning property prices.

The Office of the Deputy Prime Minister predicted on Tuesday there would be 25.7 million households in 2026 compared with 20.9 million in 2003. Within that it projected a sharp 53 percent rise in the number of one person households.

Economists said such rapid growth would further stretch the supply of houses and should underpin house price inflation in Britain which has only recently slowed from double-digit increases.

"It's indicative of strong underlying demand for housing relative to supply and it's supportive of the view you will not get a major correction in house prices," said Dominic Bryant, economist at BNP Paribas.

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

LONDON (Reuters) - The number of households in England will jump by a fifth over the next 20 years, more than previously thought, new government projections show, in a sign hefty housing demand should keep underpinning property prices.

The Office of the Deputy Prime Minister predicted on Tuesday there would be 25.7 million households in 2026 compared with 20.9 million in 2003. Within that it projected a sharp 53 percent rise in the number of one person households.

Economists said such rapid growth would further stretch the supply of houses and should underpin house price inflation in Britain which has only recently slowed from double-digit increases.

"It's indicative of strong underlying demand for housing relative to supply and it's supportive of the view you will not get a major correction in house prices," said Dominic Bryant, economist at BNP Paribas.

Why do these arguments not apply to the parts of the UK where prices have gone down significantly? The appear to apply pretty well to the whole country, but why then aren't prices rising or stabilising in the country as a whole? Does northern Ireland or Scotland have higher wages, higher employment, or lower interest rates than the large parts of England where prices have fallen?

Billy Shears

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

So pensioners, single income divorcees with a heavy financial buden and immigrants starting a new life often with low wage jobs are going to snap up all the properties. Great in theory but I know many FTB's that are graduates in good careers, yet their combined income is too little to afford a home near their workplace ...

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

When it comes to house prices, affordability is the rub, not immigration or divorce rates. At the moment a basic house for the average person is not affordable without taking on a loan at around five times income. Affordability is stretched to the max NOW, at very low interest rates. Just a couple of interest rate rises will push it over the edge. (In the UK anyway)

Remember that the immigration predictions are based on the premise that those same immigrants will find that living in the UK is affordable enough for them and will stay.

Edited by Flash

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Why do these arguments not apply to the parts of the UK where prices have gone down significantly? The appear to apply pretty well to the whole country, but why then aren't prices rising or stabilising in the country as a whole? Does northern Ireland or Scotland have higher wages, higher employment, or lower interest rates than the large parts of England where prices have fallen?

An interesting argument, but equally possible to turn it on it’s head to check for rational consistency. So perhaps something like this: suppose theory X says that house prices will crash based on an appeal to ratios of price to earnings and so on, and applies equally to all parts of the country, yet we have evidence [this bit is made up ;) ] that a small group crofters’ cottages in the Outer Hebrides has increased by 7.5% over the last year at a time when the local ratio was higher than almost anywhere else in the country; hence we’ve found a counter-example and apparently “disproved” the theory.

I guess it's down to the arguments being (of necessity) simplified and ignoring lots of "hidden parameters", so we just have to accept lots of apparent randomness and unexplained variation in the system - all we can do is aggregate over lots of samples and cross our fingers.

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So pensioners, single income divorcees with a heavy financial buden and immigrants starting a new life often with low wage jobs are going to snap up all the properties. Great in theory but I know many FTB's that are graduates in good careers, yet their combined income is too little to afford a home near their workplace ...

Your views are based on the outdated view that home ownership is some kind of Birthright.

Remember, house ownership became a reality for many due to Thatcherism, now we are in Blairism.

What if peoples expectations are lowered (already happening) people in highly paid jobs living in house shares.

It is perfectly feasable that the nation will become a nation of renters, or 50/50 owners with the Government or Housing Assocaitions owning a share, maybe over time the lions share say 75%.

There are loads of ways that the market could adapt to become more creative in terms of finance, and the makeup of the buyers.

It is no longer a birthright to own a house, that went with Conservatism. Socialsist do not own houses, only the masters!!!.

Edited by laurejon

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It is perfectly feasable that the nation will become a nation of renters, or 50/50 owners with the Government or Housing Assocaitions owning a share, maybe over time the lions share say 75%.

Could you please explain how the numbers will add up?

If we become a nation of renters then how will people who cannot afford the mortgage afford the rent if the property is to give a worthwhile yield. Landlords will accept meagre yields if they believe that capital appreciation of the house will supply the balance of what they need. But can capital appreciation like that go on forever.

If we become a nationa of 50/50 owners, then how is the government going to be able to afford to build so many houses that a sizeable proportion of the populace will live in them. The money for the government's side has to come from the taxpayer, unless the part owner is paying enough rent to make it financially self-supporting. And if that's the case then wouldn't they be able to afford the initial purchase price? And, if people over time can only ever own part of their first property, then how is the property ladder going to work?

Numbers please, not arm-waving.

Billy Shears

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Your views are based on the outdated view that home ownership is some kind of Birthright.

Remember, house ownership became a reality for many due to Thatcherism, now we are in Blairism.

What if peoples expectations are lowered (already happening) people in highly paid jobs living in house shares.

It is perfectly feasable that the nation will become a nation of renters, or 50/50 owners with the Government or Housing Assocaitions owning a share, maybe over time the lions share say 75%.

There are loads of ways that the market could adapt to become more creative in terms of finance, and the makeup of the buyers.

It is no longer a birthright to own a house, that went with Conservatism. Socialsist do not own houses, only the masters!!!.

Aha!! someone who is awake!!

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

LONDON (Reuters) - The number of households in England will jump by a fifth over the next 20 years, more than previously thought, new government projections show, in a sign hefty housing demand should keep underpinning property prices.

The Office of the Deputy Prime Minister predicted on Tuesday there would be 25.7 million households in 2026 compared with 20.9 million in 2003. Within that it projected a sharp 53 percent rise in the number of one person households.

Economists said such rapid growth would further stretch the supply of houses and should underpin house price inflation in Britain which has only recently slowed from double-digit increases.

"It's indicative of strong underlying demand for housing relative to supply and it's supportive of the view you will not get a major correction in house prices," said Dominic Bryant, economist at BNP Paribas.

I'm afraid the IMF and various other economic bodies think otherwise.

As do many people in this forum.

Maybe what the ODPM really mean to say is "not if we can help it, not until gordon gets to sit in the big chair" :)

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Has the government factored in the desirability issue? Who will want to live here with the highest house prices on earth, the worst employment levels, highest taxes (to pay for all that social housing and older generation needing more medical care), and no more cheap North Sea Oil to rely on?

I am beginning to think it may be time to emigrate again!

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Your views are based on the outdated view that home ownership is some kind of Birthright.

Remember, house ownership became a reality for many due to Thatcherism, now we are in Blairism.

What if peoples expectations are lowered (already happening) people in highly paid jobs living in house shares.

It is perfectly feasable that the nation will become a nation of renters, or 50/50 owners with the Government or Housing Assocaitions owning a share, maybe over time the lions share say 75%.

There are loads of ways that the market could adapt to become more creative in terms of finance, and the makeup of the buyers.

It is no longer a birthright to own a house, that went with Conservatism. Socialsist do not own houses, only the masters!!!.

Is that the best you can come up with? It's different this time as it's Blairism and we are all going to be renting houses off the uber-elite BTL class. Jesus I thought a lot of the bears on this forum were deluded but this takes fantasy to new heights.

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Could you please explain how the numbers will add up?

If we become a nation of renters then how will people who cannot afford the mortgage afford the rent if the property is to give a worthwhile yield. Landlords will accept meagre yields if they believe that capital appreciation of the house will supply the balance of what they need. But can capital appreciation like that go on forever.

If we become a nationa of 50/50 owners, then how is the government going to be able to afford to build so many houses that a sizeable proportion of the populace will live in them. The money for the government's side has to come from the taxpayer, unless the part owner is paying enough rent to make it financially self-supporting. And if that's the case then wouldn't they be able to afford the initial purchase price? And, if people over time can only ever own part of their first property, then how is the property ladder going to work?

Numbers please, not arm-waving.

Simply by people lowering their expectations. Already earning are lowered by immigration, and therefore a tradesman now accepts he is in competition and lowers his rate or has no job.

Apply that to housing, it is well documented that 8 students, or 8 or more immigrants are quite happy to rough it to live in a shared house.

So in effect people in proffessional jobs already live in house shares, and I should know I used to own a couple. Banking, Accountancy, Insurance, it suprised me but they rented in order that they could be flexible for their careers. Teenagers today no longer have the "I must get married" mindset. They want to live a little, the average age of a FTB is now 38 and this reflects that mindset.

The property ladder will work simply by the fact that the only people who can afford to buy property are those who already own it. They can leverage finance on future earnings secured on current assets.

Is simple maths, property is going up, so if you have some you can borrow against it. If you dont then you are left behind as with any other commodity.

It is feasable that Landlords will be buying up the properties, and letting them. And it is feasable that houseshares charging 150 quid a week for a room will be the norm.

As I say, people lowering their expectations with regard to housing.

Imagine Gold was but a few pence a Kilo, it all gets bought up, and everyone wants some because it has double to 4p per Kilo, people would have to settle for less gold or none at all as it goes up. And those that already have it, can afford to buy more and more as they are making a killing.

In the end, the Gold will remain in the hands of a few individuals who charge a fortune for it, and if you want it you will have to pay for it.

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Simply by people lowering their expectations. Already earning are lowered by immigration, and therefore a tradesman now accepts he is in competition and lowers his rate or has no job.

Apply that to housing, it is well documented that 8 students, or 8 or more immigrants are quite happy to rough it to live in a shared house.

So in effect people in proffessional jobs already live in house shares, and I should know I used to own a couple. Banking, Accountancy, Insurance, it suprised me but they rented in order that they could be flexible for their careers. Teenagers today no longer have the "I must get married" mindset. They want to live a little, the average age of a FTB is now 38 and this reflects that mindset.

The property ladder will work simply by the fact that the only people who can afford to buy property are those who already own it. They can leverage finance on future earnings secured on current assets.

Is simple maths, property is going up, so if you have some you can borrow against it. If you dont then you are left behind as with any other commodity.

It is feasable that Landlords will be buying up the properties, and letting them. And it is feasable that houseshares charging 150 quid a week for a room will be the norm.

As I say, people lowering their expectations with regard to housing.

Imagine Gold was but a few pence a Kilo, it all gets bought up, and everyone wants some because it has double to 4p per Kilo, people would have to settle for less gold or none at all as it goes up. And those that already have it, can afford to buy more and more as they are making a killing.

In the end, the Gold will remain in the hands of a few individuals who charge a fortune for it, and if you want it you will have to pay for it.

So in short deny empirical facts, ignore economic history and base all arguments on a hyperthetical scenario.

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

This is a very simplistic view. Whatever the demand, people can only afford to pay so much and their ability to pay depends on the state of the economy. If prices have reached a level where people cannot afford to get on or move up the ladder, the market will subside. If interest rates or unemployment rise, the market will crash as it did in the late 80s.

Aha!! someone who is awake!!

If people's expectations are lowered and the desire to buy property drops as a result then so will property prices.

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Has the government factored in the desirability issue? Who will want to live here with the highest house prices on earth, the worst employment levels, highest taxes (to pay for all that social housing and older generation needing more medical care), and no more cheap North Sea Oil to rely on?

I am beginning to think it may be time to emigrate again!

Funny. Me too. Just been looking at jobs elsewhere. <_<

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Simply by people lowering their expectations. Already earning are lowered by immigration, and therefore a tradesman now accepts he is in competition and lowers his rate or has no job.

Apply that to housing, it is well documented that 8 students, or 8 or more immigrants are quite happy to rough it to live in a shared house.

It is feasable that Landlords will be buying up the properties, and letting them. And it is feasable that houseshares charging 150 quid a week for a room will be the norm.

150 quid a week would be 650 a month. Assume that a three bedroom house can have three people sharing, then that is 650 * 3 * 12 = 23400 pounds per year gross rent. To get a return of 7.5%, the three bedroom house has to cost no more than 312K. Many three bedroom houses cost that now, so your "future" high rent scenario is already required for many three bedroom houses in many areas, without an allowance for further HPI. So no chance of long-term capital gains here. But then how will people raise families in this rooms in shared accomodation? Are people going to just lower their expectations and not have families? Or, are they going to raise children in single rooms like they did 200 or more years ago? Do you really believe this is going to happen? That this is more likely than house prices crashing and prices returning to a more sensible level? Do you not think that if society develops to a point where the majority scrape by in woefully substandard accomodation with no hope of a better future, while paying through the nose for it, to support a small landlord class, that there might be a rise of a political movement (or an existing party) might take up the tenants' line and do something about it?

Billy Shears

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Do you really believe this is going to happen? That this is more likely than house prices crashing and prices returning to a more sensible level? Do you not think that if society develops to a point where the majority scrape by in woefully substandard accomodation with no hope of a better future, while paying through the nose for it, to support a small landlord class, that there might be a rise of a political movement (or an existing party) might take up the tenants' line and do something about it?

Billy Shears

Crime would skyrocket.

Donnie considers investing in a comapny fitting anti-burgular security.

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We are not even building enough new houses given even the most conservative immigration and birth rates.

I don't think building more houses is the answer to increasing the number of owner occupiers (which should be a government goal - it's very good for society). If you build more, they are likely to be snapped by BTL investors in this frenzy.

Also if you build lots now and a recession eventuates, some economic migrants will go home and some people will houseshare/live at home even more. In this situation the collapse of the housing market (house prices and rents) would be even more catastrophic than it would have been otherwise.

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This is a very simplistic view. Whatever the demand, people can only afford to pay so much and their ability to pay depends on the state of the economy. If prices have reached a level where people cannot afford to get on or move up the ladder, the market will subside. If interest rates or unemployment rise, the market will crash as it did in the late 80s.

If people's expectations are lowered and the desire to buy property drops as a result then so will property prices.

Whether people buy or people rent is not relevant the real issue is the number of people vs the number of houses available. Supply/demand will always result in high UK housing costs as those with existing wealth who can buy will.

Edited by nodumsunreader

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If there was a BASIC housing shortage then why are they only building LUXURY APARTMENTS that also come with EXPENSIVE Maintenance charges?

ANSWER: It's all b0llox and its fuelled by greed.

A builder could build thousands of smalled SUB £100K houses and still make a neat profit. They all have to be luxury and £150K+ with another £50+ p.c.m. for cleaning your windows!!! They are not building to supply the so-called over-population they are scaremongering and ripping people off!

NO FACTS OR FIGURES REQUIRED - IT'S AS PLAIN AS THE NOSE ON YOUR FACE!

TB

Edited by teddyboy

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Housing is in the hands of private enterprise, even council houses now!!!.

So I am afraid that market conditions prevail, and that applies to rents. Most Housing Associations plan to raise rents by a long margin this year.

Housing Associations are beginning to find that by charging higher rents, they get a better class of person who looks after the property and is a credit to the neighbourhood, thus increasing the value of the neighbourhood and the property within.

Of course years ago Councils had a responsibility to house whoever came to their door, this is now not the case and as the housing Associations are in fact private businesse's and in some cases now property developement companies they are charged with maximum revenue and thats where it ends.

Its a free market, even open to the world on a global level now.

We have to go with it, supply and demand is now the king of our economy.

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

LONDON (Reuters) - The number of households in England will jump by a fifth over the next 20 years, more than previously thought, new government projections show, in a sign hefty housing demand should keep underpinning property prices.

The Office of the Deputy Prime Minister predicted on Tuesday there would be 25.7 million households in 2026 compared with 20.9 million in 2003. Within that it projected a sharp 53 percent rise in the number of one person households.

Economists said such rapid growth would further stretch the supply of houses and should underpin house price inflation in Britain which has only recently slowed from double-digit increases.

"It's indicative of strong underlying demand for housing relative to supply and it's supportive of the view you will not get a major correction in house prices," said Dominic Bryant, economist at BNP Paribas.

Look, there is no housing shortage..

It only appears that way whilst people are climbing over each other to buy investments..

If there was a housinjg shortage Estate Agents walls would be empty..

No house would languish.

and it takes moments on the ons website to see that we are building a new home for every 2.1 new person.

that at the start of the boom its was 2.76 homes per person and two years ago it was 2.6

We have never had so many homes per head of capita..

No housing boom has ever been about a shortage of housing..

Its the cycle.. when people stop buying and the affordability level comes back down it goes too low.. people buy, but then they see that demand is up and people are offering slightly more..

This gets carried away..

Just driven by sentiment..

and quite frankly the desire to invest a great deal of borrowed money on only what you read in the papers and not on what you would find in moments with any investigation leaves you where investors like you are lawys meant to be....

the last man holding..

Its differnt this time???

yes, we have been promissed no wage push inflation

what do you think that the controlling economists mean when they say these things....?

oh for gods sake..

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Is there going to be a crash?.

Not according to the ODPM, and various other organisations. They predict higher divorce rates, and people living longer as the reason. They have yet to factor in the 57,000 houses per year as a result of immigration, that alone will add another 50% to demand as we built 160,000 houses last year.

LONDON (Reuters) - The number of households in England will jump by a fifth over the next 20 years, more than previously thought, new government projections show, in a sign hefty housing demand should keep underpinning property prices.

The Office of the Deputy Prime Minister predicted on Tuesday there would be 25.7 million households in 2026 compared with 20.9 million in 2003. Within that it projected a sharp 53 percent rise in the number of one person households.

Economists said such rapid growth would further stretch the supply of houses and should underpin house price inflation in Britain which has only recently slowed from double-digit increases.

"It's indicative of strong underlying demand for housing relative to supply and it's supportive of the view you will not get a major correction in house prices," said Dominic Bryant, economist at BNP Paribas.

Your arguement falls flat on it's face when you look at Japan. Japan has seen massive house price deflation over the last 10 years despite the following:

- zero percent interest rates

- Japan has one of the most ageing populations on the planet Source: http://www.guardian.co.uk/population/Story...,531074,00.html

- Japan is far more densely populated than the UK

Economic factors can often override social factors.

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Housing is in the hands of private enterprise, even council houses now!!!.

So I am afraid that market conditions prevail, and that applies to rents. Most Housing Associations plan to raise rents by a long margin this year.

Housing Associations are beginning to find that by charging higher rents, they get a better class of person who looks after the property and is a credit to the neighbourhood, thus increasing the value of the neighbourhood and the property within.

Of course years ago Councils had a responsibility to house whoever came to their door, this is now not the case and as the housing Associations are in fact private businesse's and in some cases now property developement companies they are charged with maximum revenue and thats where it ends.

Its a free market, even open to the world on a global level now.

We have to go with it, supply and demand is now the king of our economy.

and there are too many houses..

Duh..... for gods sake..

sorry

I have friends who are investors..

Real ones.. not just "Last decade housing investors" real investors..

and the need idiots to sell their invetments to, for more then they paid..

Predicting the housing cycle does not make you a great investor..

Getting the timing right does..

Do you honestly believe that houses go up for ever..

????

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  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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