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Smell the Fear

Why House Prices Have Not Fallen:

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Tonight's ES has an interesting article in the business section. I can't find it online, so here is a brief summary:

- CEBR Report released this week, but didn't get much attention

- Explains a confusing issue in UK economics

- Why is economic growth stronger than economists expect given massive consumer debt and IR rises?

- Why have house prices held up when they were expected to fall?

- Answer is that population is actually 1.4m higher than government states

- National output is a function of number in work, which is of course high at the moment, but even higher if all immigrants, legal and illegal are accounted for

- Extra workers have prevented recession

- They have also increased housing demand (mostly rented) hence propping up house prices

- Their low wages have maintained corporate profitability

- This shows the benefits of immigration [to whom exactly????]

- Given that immigration will undoubtedly cause problems, it is important to acknowledge these "benefits"

Population estimates out by 1.5m? Truly staggering, but easily believable by anyone living in the SE.

This government really are the most scheming bunch of lying, deceitful, statistic-twisting f*ckers to ever walk on this earth.

Just to clarify - I have no problem with immigration within reasonable limits (indeed, I don't think we have had excessive immigration).

I DO have a problem with a government that fails to manage the situation properly, fails to be honest about it's motives, and fails to improve the infrastructure of the country to meet the demands placed on it by an increasing population.

Edited by Smell the Fear

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The government have sacrificed political stability and the country´s future just to satisfy their own selfish and short-term ends.

There should be a parliamentary inquiry into the deceitful machinations of this gang of tricksters.

The nation needs to tackle some major sturctural imbalances and socio-economic problems right now - rather than postponing the mess for others to pick up the pieces.

These NuLabour shysters are increasingly clutching at straws in order to keep their smoke and mirrors charlatanism going.

The status quo is quite simply unsustainable.

:ph34r:

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This government really are the most scheming bunch of lying, deceitful, statistic-twisting f*ckers to ever walk on this earth.

You put that much more politely than I ever could. :angry:

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I'd be surprised if 1.5m wasnt an underestimation.

Not only does the increased demand help boost house prices and rents, it also helps keep interest rates down (thus preventing prices falling), and helping keep wage rises down, making property even less affordable. Still, as long as the fat cats are lining their pockets we shouldn't complain.

Edited by simon99

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I'd be surprised if 1.5m wasnt an underestimation.

Not only does the increased demand help boost house prices and rents, it also helps keep interest rates down (thus preventing prices falling), and helping keep wage rises down, making property even less affordable. Still, as long as the fat cats are lining their pockets we shouldn't complain.

We are basically being told that fat cats making huge profits is good for us....why would anyone believe that? And why do the media not question it more?

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We are basically being told that fat cats making huge profits is good for us....why would anyone believe that? And why do the media not question it more?

Because its not politically correct. Its racist to talk about numbers of people.

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this is the first time that its has occured to me that there may be more than interest rates, demographics and greed supporting the outrageous price of Uk houses. Does anyone have accurate census data that shows the resident population? If you are correct and there is a huge influx from other EU countries then forget any notion of a crash since demand wil outpace supply under the current regime.

Remember what's good for the young is often bad for the older. The sad fact is that UK government policies lead to mothers and fathers stealing from their sons and daughters. While they dont realise this is happening they are more than happy to accept the advantage handed to them by their comrades in the House. If you think my views are too extreme then just look at a recent article in the Economist. It states what I've argued here for two years, i.e. that escalating house prices is nothing more than wealth transfer. If the people in power were not motivated by self interest and greed then we would see far more house building.

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I still don't get this notion that there is a housing shortage.

There was, apparently, a housing shortage just before the last crash.

If there is such an acute shortage of property, why is it that the number of pages of property for sale at Rightmove are substantially higher now than they were two years ago, and why does property round here take on average between two and four years to sell?

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this is the first time that its has occured to me that there may be more than interest rates, demographics and greed supporting the outrageous price of Uk houses. Does anyone have accurate census data that shows the resident population? If you are correct and there is a huge influx from other EU countries then forget any notion of a crash since demand wil outpace supply under the current regime.

What supply? This country doesn't even see the need to provide housing for the native population, the few houses that are built (by migrants) are in the wrong form and location. In a few years a family home will be as sought after as that vicarage in the country, the 'lucky' few who are able to buy will be left with a life of interest only payments and a mortgage that will be passed on to their children (if they can afford them), this all suits the fat cats just fine.

Things really are different this time, the days of picking up a decent detached home for £100k are over, they will never be back. Housing is now the vector of choice for injecting liqudity into the economy and there is no limit to the money that can be printed, central banks will go full throttle in an attempt to clear the canyon, it's too late to hit the brakes! They have issued a massive put option under the entire economy, there are too many fools with too much borrowed money and they will have to be bailed out for the greater good. If you take the factors of modern monetary policy, BTL, international migration, lack of housing supply due to unquestioned eco-mentalism and a failing government running scared, well, you have one hell of a soup that firmly distinguishes it from the 80's bubble and 90's crash. The scale of this modern bubble makes the dotcom bust look like minor ordeal, silly people were pouring money into dotcom shares but most of the public were not out there buying pets.com shares on 100% margins.

This truly is the 'end of history', the end game of unhinged capitalism that would make Francis Fukuyama blush.

Edited by BuyingBear

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Loads of quesions that need to be answered before saying there is a definate link though:

1/ Why has the whole country experienced price rises wales, scotland, (where the population is not rising) and dodgy towns like burnley, huddersfield etc have all experienced massive rises.

2/ FTB's have collapsed some surveys suggest from 45% to 7%. Although this slack has been taken up by BTL's by definition these houses are going to have more people per property. If you can't afford a mortgage for a house then the rent has to be lower for you to be able to afford it i.e. mutuple occupancy. Also potential FTB's that are not buying will live at home or also in shared houses. Surely the number of people per dwelling will rise.

3/ Wages being supressed will have a negative effect on house prices apart from btl where people can share.

4/ How many of the 'influx' have actually bought are there any stats.

5/ Why haven't rents risen by 300%?

6/ Honestly how many people that have bought in the last 3-4 years would be comfortable at rates of 6-7%?

Personally I don't wan't unlimited immigration because I care for the environment, journey times to my work, wages for my work, crime levels etc but the housing market is still a bubble caused by low interest rates and immigration while having an impact on housing is certainly not the reason house prices have gone up 300%.

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Loads of quesions that need to be answered before saying there is a definate link though:

1/ Why has the whole country experienced price rises wales, scotland, (where the population is not rising) and dodgy towns like burnley, huddersfield etc have all experienced massive rises.

Rural Scotland and Wales have been bought up by MEWing SE dwellers seeking a country pad - shooting and fishing types. Although Scotland's official population may have declined, who knows what the true figures are? Dodgy towns have been BTL heaven. Burnley etc. must surely have a huge number of illegal immigrants.

2/ FTB's have collapsed some surveys suggest from 45% to 7%. Although this slack has been taken up by BTL's by definition these houses are going to have more people per property. If you can't afford a mortgage for a house then the rent has to be lower for you to be able to afford it i.e. mutuple occupancy. Also potential FTB's that are not buying will live at home or also in shared houses. Surely the number of people per dwelling will rise.

This again points to a larger than acknowledged population. BTL also reduces the utilisation of property, as voids do occur (when houses are owner occupied, voids are rare - most people move from one place to the next in one day).

3/ Wages being supressed will have a negative effect on house prices apart from btl where people can share.

Again, this points to a larger population living in greater numbers per house - they each pay less, but the overall return is enough for the landlord.

4/ How many of the 'influx' have actually bought are there any stats.

I would imagine very few have bought - but BTLers have made the purchases for them effectively.

5/ Why haven't rents risen by 300%?

Because IR have been low - the rent need only cover the mortgage (plus a little profit hopefully).

6/ Honestly how many people that have bought in the last 3-4 years would be comfortable at rates of 6-7%?

I doubt many would be comfortable with that. BTLers would be f*cked with those rates, unless rents rise which seems unlikely without wage inflation, or alternatively, continued massive immigration so that the number of people sharing each house increases.

Personally I don't wan't unlimited immigration because I care for the environment, journey times to my work, wages for my work, crime levels etc but the housing market is still a bubble caused by low interest rates and immigration while having an impact on housing is certainly not the reason house prices have gone up 300%.

I don't think this report is claiming that immigration is responsible for 300% rises. But maybe it is responsible for preventing the widely expected crash? Most economists thought prices would correct anywhere between 5 and 40% a few years ago. Gordon pulled a stunning trick out of the bag by clandestinely swelling the population on the fly, so much so that practically nobody noticed. But the pressure is on now to limit immigration, where can he turn to next? Will he let inflation rip?

With M4 increasing at 13%+ this surely looks like a distinct possibility.

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I still don't get this notion that there is a housing shortage.

There was, apparently, a housing shortage just before the last crash.

If there is such an acute shortage of property, why is it that the number of pages of property for sale at Rightmove are substantially higher now than they were two years ago, and why does property round here take on average between two and four years to sell?

In a nutshell; there is a housing shortage in so much as there are many more people wanting a house than there are houses for sale... But there are loads of properties sitting unsold because they are priced well beyond the means of those who want a house.

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BUT ...... all these 1.5 million will bugger off as soon as the economy/employment dries up !!

Once they are here for two years they can claim the full suite of benefits, that's also known as "going native".

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this is the first time that its has occured to me that there may be more than interest rates, demographics and greed supporting the outrageous price of Uk houses. Does anyone have accurate census data that shows the resident population?

If you are correct and there is a huge influx from other EU countries then forget any notion of a crash since demand wil outpace supply under the current regime.

This government lies about levels of unemployment, lies about the level of immigration and lies about the level of inflation. I highly doubt that accurate cencsus data is available if Labour have had anything to do with it.

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This government lies about levels of unemployment, lies about the level of immigration and lies about the level of inflation. I highly doubt that accurate cencsus data is available if Labour have had anything to do with it.

Channel 4 News reported tonight that there are around 30-40 thousand homeless Poles in London the moment. Apparently Westminster council have paid for over 250 of them to go home so far, but of course they are free to return. Homeless shelters etc are being overwhelmed by the numbers.

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  • 301 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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