Blackholeshine Posted November 4, 2006 Share Posted November 4, 2006 http://www.ft.com/cms/s/faf88346-6b36-11db...00779e2340.html Quote Link to comment Share on other sites More sharing options...
Eeyore Posted November 4, 2006 Share Posted November 4, 2006 http://www.ft.com/cms/s/faf88346-6b36-11db...00779e2340.html 'Inexhaustible' confidence in the housing market. A very different climate to the last HPC? I remember something about high prices being maintained in London and the South East in the 1980s due to demand anticipated from the Chunnel. I also read today that Haloween spending has increased by a factor of 10 in five years. All quite bizzare. I forgot to add the other article from the same FT section. FT Oh dear! Quote Link to comment Share on other sites More sharing options...
Fancypants Posted November 4, 2006 Share Posted November 4, 2006 I see they wheeled out the "experts" again Quote Link to comment Share on other sites More sharing options...
DabHand Posted November 4, 2006 Share Posted November 4, 2006 Thats all ********. Supply vs demand is ultimately a slave to the availability of cheap credit. If there was no credit then only a small % of the population would be able to buy property and for the most part houses would be next to worthless. Lets put it a different way, imagine a tramp on the street with only enough cash to buy his next can of special brew and zero access to credit. Would you imagine having to compete with him for a house no matter how much demand outstrips supply? The answer is no. Now imagine that self same tramp given access to a 100% IO BTL mortgage on self cert, hey now his a real man and look he's suddenly trying to buy the same houses you're trying to buy! Quick get in there before they're all gone. If you give a lot of people access to a lot of credit that can only be spent in one type of commodity, then that commodity will go up in price as the same amount of demand is universally turbo charged with easy credit. Effectively people are only competing on who can get the biggest loan. Quote Link to comment Share on other sites More sharing options...
FedupTeddiBear Posted November 4, 2006 Share Posted November 4, 2006 Quote 1 from "expert" in abovementioned article: ...more people are getting divorced and living separately... Quote 2 from National Statistics online The provisional divorce rate in England and Wales fell by 8 per cent to 13.0 divorcing people per 1,000 married population in 2005. Ahem... Someone's making up ta-a-a-all stories! :angry: Quote Link to comment Share on other sites More sharing options...
FedupTeddiBear Posted November 4, 2006 Share Posted November 4, 2006 (edited) On a roll now... Quote 3 from "expert" in abovementioned article: people are living longer OK there is truth in this... Quote 4 from National statistics online Between 1981 and 2002, life expectancy at age 50 increased by four and a half years for men and three years for women. But this will not last!!!! Quote 5 from BPA ]- More than half the adult population is obese or overweight- Obesity among 6-15 year olds has trebled from 5 per cent in 1990 to 16 per cent in 2001 and this will soon reduce life expectancy by about 7 years. Edited November 4, 2006 by FedupTeddiBear Quote Link to comment Share on other sites More sharing options...
Jason Posted November 5, 2006 Share Posted November 5, 2006 The size of mortgages to buy houses has increased by 11-12% in the year to August. Quite simply all this immigration, population, single occupancy rubbish is bubble logic. It is simply the availablility of more credit that is pushing up house prices. Those other factors are very small in comparison... Quote Link to comment Share on other sites More sharing options...
PropertyGuru Posted November 5, 2006 Share Posted November 5, 2006 FT says - "It's different this time" Quote Link to comment Share on other sites More sharing options...
brainclamp Posted November 5, 2006 Share Posted November 5, 2006 (edited) LOL! It's all the 'availabilty of credit' thats at fault.... Lets get this right. Interest rates are set according to the inflation level. The IR's set the availibility of credit (which is so at fault...) We can see - according to the BOE - the inflation level depends on the ability of workers to bargain for higher wages - higher than the real prices rises in council taxes, utiliies and bills last year. What causes this inability for workers to bargain even when they can see rising prices - could it be that under huge, mindboggling, mass immigration and total abandonment of any barriers or borders would have an effect?? So could the availiblity of credit thanks to low inflation - and the low interest rates and low wages - the central idea of Browns economy - all be dependant on mass immigration from anywhere in the world undercutting your income below real price rises forever? Watch as rents and property rise further, and you are owned and prodded under the population register and ID cards - reporting yourself every time you move or facing massive fines. (In just 16 or so months time folks!) Who has been right about mass immigration, housing prices, and the end of your freedoms for years - me or you lot? Edited November 5, 2006 by brainclamp Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted November 5, 2006 Share Posted November 5, 2006 We can see - according to the BOE - the inflation level depends on the ability of workers to bargain for higher wages - higher than the real prices rises in council taxes, utiliies and bills last year. What causes this inability for workers to bargain even when they can see rising prices - could it be that under huge, mindboggling, mass immigration and total abandonment of any barriers or borders would have an effect?? It's more than just immigration that is responsible for the loss of wage bargaining power. How about pathetically weak unions and almost non-existant employment rights, even for full-time permanent workers in their first 2 years with an employer? If you consider the fact that most people are spending less and less time in each job, they only have a small amount of time they would feel comfortable 'putting their foot down' about pay and conditions. All very worrying for the long-term housing market as it means people will not 'inflate-away' mortgages as they could in the 70s. They will be lumbered with large and real debts for a much longer period than their parents... Quote Link to comment Share on other sites More sharing options...
DabHand Posted November 5, 2006 Share Posted November 5, 2006 It's more than just immigration that is responsible for the loss of wage bargaining power. How about pathetically weak unions and almost non-existant employment rights, even for full-time permanent workers in their first 2 years with an employer? If you consider the fact that most people are spending less and less time in each job, they only have a small amount of time they would feel comfortable 'putting their foot down' about pay and conditions. All very worrying for the long-term housing market as it means people will not 'inflate-away' mortgages as they could in the 70s. They will be lumbered with large and real debts for a much longer period than their parents... Which would point more to a Japan like period of continual HP decline stretched over a decade plus. Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted November 5, 2006 Share Posted November 5, 2006 (edited) Which would point more to a Japan like period of continual HP decline stretched over a decade plus. Yes, quite. And a 'lost generation' of 30/40yr olds who literally become wage slaves servicing massive mortgages and other debts, then the knock on effect of lower consumer spending kicks in and the cycle gets extended. Edited November 5, 2006 by redalert Quote Link to comment Share on other sites More sharing options...
Selling up Posted November 5, 2006 Share Posted November 5, 2006 LOL! It's all the 'availabilty of credit' thats at fault.... Lets get this right. Interest rates are set according to the inflation level. The IR's set the availibility of credit (which is so at fault...) Brainclamp goes on to point out that immigration is likely to be keeping wage inflation down, thus contributing to HPI. Fine as far as it goes, but also remember that IR's are set according to near-fictional indicators of inflation, excluding anything such as house prices that might actually have been becoming more expensive. So the link between inflation and IRs is not robust. My understanding is that governments can still lead the BoE to set IRs at whatever level the government likes, simply by directing which indicator they would like the BoE to use. So the government can effectively control IRs, regardless of inflation. Am I wrong? Quote Link to comment Share on other sites More sharing options...
HAL Posted November 5, 2006 Share Posted November 5, 2006 Brainclamp goes on to point out that immigration is likely to be keeping wage inflation down, thus contributing to HPI. Fine as far as it goes, but also remember that IR's are set according to near-fictional indicators of inflation, excluding anything such as house prices that might actually have been becoming more expensive. So the link between inflation and IRs is not robust. My understanding is that governments can still lead the BoE to set IRs at whatever level the government likes, simply by directing which indicator they would like the BoE to use. So the government can effectively control IRs, regardless of inflation. Am I wrong? You are not wrong - however at some point we will reach a debt ceiling and then no fluffing around with IR's will have the slightest effect. When is that? - well I did think that this point would be reached some time ago - looks like the masses are eager to be debt slaves - or more like they are no 'bovvered' by IVA's. HAL Quote Link to comment Share on other sites More sharing options...
Europa Posted November 5, 2006 Share Posted November 5, 2006 It's more than just immigration that is responsible for the loss of wage bargaining power. How about pathetically weak unions and almost non-existant employment rights, even for full-time permanent workers in their first 2 years with an employer? If you consider the fact that most people are spending less and less time in each job, they only have a small amount of time they would feel comfortable 'putting their foot down' about pay and conditions. All very worrying for the long-term housing market as it means people will not 'inflate-away' mortgages as they could in the 70s. They will be lumbered with large and real debts for a much longer period than their parents... Huh? Have you tried to fire someone recently? Damn near impossible - and the paperwork involved is mind boggling. Quote Link to comment Share on other sites More sharing options...
PropertyGuru Posted November 5, 2006 Share Posted November 5, 2006 Huh? Have you tried to fire someone recently? Damn near impossible - and the paperwork involved is mind boggling. ...if your mind is so small as to be easily boggled Quote Link to comment Share on other sites More sharing options...
Gone baby gone Posted November 5, 2006 Share Posted November 5, 2006 (edited) Huh? Have you tried to fire someone recently? Damn near impossible - and the paperwork involved is mind boggling. If you are having problems getting rid of someone who has been working at your company for less than 2 years and are having problems, it makes me wonder how you managed to type those 2 sentences in... Edited November 5, 2006 by redalert Quote Link to comment Share on other sites More sharing options...
Europa Posted November 5, 2006 Share Posted November 5, 2006 If you are having problems getting rid of someone who has been working at your company for less than 2 years and are having problems, it makes me wonder how you managed to type those 2 sentences in... Evidently, you are not a manager Employment laws are there to protect the incompetent and the unproductive. Firing someone involves a long-process of setting "performance goals", periodic reviews of performance, and an endless paper trail. You have to prove that you moved heaven and earth to help the person in question. The slightest slip-up means an expensive payout at the tribunal. The idea that I (or any other employer) am able to fire someone on a whim is laughable. Quote Link to comment Share on other sites More sharing options...
polarbear Posted November 5, 2006 Share Posted November 5, 2006 http://www.ft.com/cms/s/faf88346-6b36-11db...00779e2340.html The FT is normally more analytical than this , but it seems their weekend supplements are staffed by lazy journalists who quote building society economists as gospel. I am sending them a letter along the folowing lines: Your piece on the demographics of the housing market outlined the familiar arguments that have been put forward for several years to justify the excessive rise in house prices. I think on further examination the economic arguments are fundamentally flawed. 1. An increase in the number of households due to people marrying later and divorce does not add one pound to aggregate demand for housing. It merely changes the demand to more, smaller units with the same amount of income available to pay for them. The net effect in theory should be a reduction in the average price paid for a unit. 2.High house prices will discourage new household formation, yet the government figures figures haven't changed for ten years. If 200,000 new households were forming when prices £60,000 on average, there must be fewer now at an average price of £180,000. Indeed it is quite possible that the real number of new households is actually below that of new houses being built. 3. Immigration is approx. 1500 people per week and emigration about 1000. But these immigrants have historically lived at higher densities because of their low income. Emigrants are also more likely to be owner occupiers than immigrants. The net effect of 500 immigrants is therefore not necessarily as positive for housing demand as it would first appear. 4. The steep rise in house prices has dramatically reduced demand for homes from first time buyers to a record low of 11.3% of the market. In the topsy-turvy world of your commentators this is described as "pent-up demand due to lack of affordability". The demand is no more "pent-up" than that of a Ford driver for a Ferrari - he may want it but he can't afford it. I am sure we all hope that first time buyers can once again come into the market by a rapid rise in average wages to meet high house prices; the alternative is of course a fall in prices in line with affordability. The demographics cannot explain the recent rise in house prices above historical norms. In fact the housing market actually consists of a very small number of new entrants, with 88.7% of transactions being existing participants trading amongst themselves- a classic sign of a bubble market. The popular belief that there is a shortage of housing is confused with the reality that there is a shortage of affordable housing. The crucial difference being that the former might lead to a rise in prices , whilst the latter might presage a fall. Quote Link to comment Share on other sites More sharing options...
Europa Posted November 5, 2006 Share Posted November 5, 2006 The FT is normally more analytical than this , but it seems their weekend supplements are staffed by lazy journalists who quote building society economists as gospel. I am sending them a letter along the folowing lines: It isn't a jouranlist's job to provide analysis. Indeed opinion and fact should be kept as far apart as church and state. "Comment is cheap but facts are sacred" (to paraphrase CP Scott). Quote Link to comment Share on other sites More sharing options...
Eeyore Posted November 5, 2006 Share Posted November 5, 2006 The FT is normally more analytical than this , but it seems their weekend supplements are staffed by lazy journalists who quote building society economists as gospel. I am sending them a letter along the folowing lines: Your piece on the demographics of the housing market outlined the familiar arguments that have been put forward for several years to justify the excessive rise in house prices. I think on further examination the economic arguments are fundamentally flawed. 1. An increase in the number of households due to people marrying later and divorce does not add one pound to aggregate demand for housing. It merely changes the demand to more, smaller units with the same amount of income available to pay for them. The net effect in theory should be a reduction in the average price paid for a unit. 2.High house prices will discourage new household formation, yet the government figures figures haven't changed for ten years. If 200,000 new households were forming when prices £60,000 on average, there must be fewer now at an average price of £180,000. Indeed it is quite possible that the real number of new households is actually below that of new houses being built. 3. Immigration is approx. 1500 people per week and emigration about 1000. But these immigrants have historically lived at higher densities because of their low income. Emigrants are also more likely to be owner occupiers than immigrants. The net effect of 500 immigrants is therefore not necessarily as positive for housing demand as it would first appear. 4. The steep rise in house prices has dramatically reduced demand for homes from first time buyers to a record low of 11.3% of the market. In the topsy-turvy world of your commentators this is described as "pent-up demand due to lack of affordability". The demand is no more "pent-up" than that of a Ford driver for a Ferrari - he may want it but he can't afford it. I am sure we all hope that first time buyers can once again come into the market by a rapid rise in average wages to meet high house prices; the alternative is of course a fall in prices in line with affordability. The demographics cannot explain the recent rise in house prices above historical norms. In fact the housing market actually consists of a very small number of new entrants, with 88.7% of transactions being existing participants trading amongst themselves- a classic sign of a bubble market. The popular belief that there is a shortage of housing is confused with the reality that there is a shortage of affordable housing. The crucial difference being that the former might lead to a rise in prices , whilst the latter might presage a fall. Good stuff. Interesting to see any response. Evidently, you are not a manager Employment laws are there to protect the incompetent and the unproductive. Firing someone involves a long-process of setting "performance goals", periodic reviews of performance, and an endless paper trail. You have to prove that you moved heaven and earth to help the person in question. The slightest slip-up means an expensive payout at the tribunal. The idea that I (or any other employer) am able to fire someone on a whim is laughable. Evidently you are, therefore an employee. If you can't get rid of them ask the boss. Quote Link to comment Share on other sites More sharing options...
KingCash Posted November 5, 2006 Share Posted November 5, 2006 Your piece on the demographics of the housing market outlined the familiar arguments that have been put forward for several years to justify the excessive rise in house prices. I think on further examination the economic arguments are fundamentally flawed. On the one hand there are more single person households, and on the other we are told that couples are buying together to raise more money. Maybe, just maybe, the 'experts' are making it up as they go along. Quote Link to comment Share on other sites More sharing options...
nhyujm6 Posted November 5, 2006 Share Posted November 5, 2006 This article is nuts. "Earley says: “If prices do begin to fall, then these other supportive factors would come into force. If properties become more affordable then there would be plenty of demand to mop up any excess supply, which would in turn drive prices again.” - so people will keep "buying on dips", which just happens to be the first symptom of of bursting bubble. Quote Link to comment Share on other sites More sharing options...
landlord Posted November 5, 2006 Share Posted November 5, 2006 http://www.ft.com/cms/s/faf88346-6b36-11db...00779e2340.html WELL SAID FT - SPOT ON! ANOTHER 12 MONTHS AND WE WILL BE ROCKING & ROLLING ONCE AGAIN. ALL THOSE WHO BAILLED OUT WILL BE SORRY. PROPERTY IS KING. Quote Link to comment Share on other sites More sharing options...
Eeyore Posted November 5, 2006 Share Posted November 5, 2006 WELL SAID FT - SPOT ON! ANOTHER 12 MONTHS AND WE WILL BE ROCKING & ROLLING ONCE AGAIN. ALL THOSE WHO BAILLED OUT WILL BE SORRY. PROPERTY IS KING. Do you have to shout on a Sunday. Quote Link to comment Share on other sites More sharing options...
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