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cells

Graph Of House Prices Vs Total Mortgage Debt

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proofvw3.th.jpg

Proves to me that what was said here years ago was and is true, the price of property is dictated by the amount of credit pumped into the system. Everything else is negligible

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proofvw3.th.jpg

Proves to me that what was said here years ago was and is true, the price of property is dictated by the amount of credit pumped into the system. Everything else is negligible

Nice Graph... It is a weaker hypothesis than mine, however, that you've demonstrated.

I'd argue that the price of house prices is dependent upon the *additional* credit issued in each year - i.e. that the majority of purchases depend upon credit and not savings... be that the buyers' mortgage - or the mortgage of the buyer one-further-on in the chain.

( Oh, actually, that *is* almost exactly what your graph shows, isn't it?)

Edited by A.steve

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Amount of MEW

Look at it take off from 2001 onwards.

Most of that way Probably one way or another funneled into property.

Can we sustain £150B more debt YOY?

mewoa1.th.jpg

Edited by cells

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I am afraid that those lines will not run parrallel for much longer - the debt levels will stay where they are, the house price levels will be shooting down.

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proofvw3.th.jpg

Proves to me that what was said here years ago was and is true, the price of property is dictated by the amount of credit pumped into the system. Everything else is negligible

Thats not what it proves to me.

Its Economics 101 - supply and demand. Too many people chasing too few houses.

Add in the fact that this governement destroyed pensions as a form of security, forced tens of thousands to buy property to secure a pension in their old age. Also approx 5 million east europeans have flooded in over the last few years pushing demand to new highs.

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Sorry, OP. I don't buy that at all.

The amount of debt in the system will follow house prices. Bound to.

Now, instead of cheating, rebase those axes. Put zero at the bottom on both sides. Then scale it so that the 1997 pink and blue blobs start at the same point.

Then lets have a look at it.

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Now, instead of cheating, rebase those axes. Put zero at the bottom on both sides. Then scale it so that the 1997 pink and blue blobs start at the same point.

Then lets have a look at it.

i take it they didn’t teach you statistics at school

the graph is valid and there is no "cheating". Neither of the graphs need to start at zero nor do they need to have the same scaling.

Plot me a graph of temperate of water at room temp going to 100 degrees centigrade time both in Fahrenheit and centigrade.

You will need to start them both at different points and the scale will have to be different to get the same line.

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What's changed most in the the last ten years (relative to housing demand) - supply of houses or supply of credit?

You'd better be fvcking joking!

I guess gazumping is a term only applicable in a parallel universe where you live.

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Given how sharply prices are falling, you won't find any gazumping going on these days.

I believe gazundering is the word you're looking for :lol:

http://en.wikipedia.org/wiki/Gazundering

Falling where??

HPI is still +ve on a YoY basis on all indices that measure HPI.

The reason why we have lagged the U.S in the HPC is simply that they have a oversupply of housing, wheras in the UK we have a lack of supply which is holding prices up.

Look anywhere in London, you dont see rows of empty houses, quite the contrary, they are cramming in new housing anywhere they find a spare bit of land.

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HPI is still +ve on a YoY basis on all indices that measure HPI.

how long til YOY is negative.

2 months, 3 at tops

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i take it they didn’t teach you statistics at school

the graph is valid and there is no "cheating". Neither of the graphs need to start at zero nor do they need to have the same scaling.

Plot me a graph of temperate of water at room temp going to 100 degrees centigrade time both in Fahrenheit and centigrade.

You will need to start them both at different points and the scale will have to be different to get the same line.

Cells - Totally 100% agree.

Telometer - perhaps you'd like to pick apart my signature graph showing the growth of every £1,000 in wages and house prices since 1971. No doubt you'll argue that things are different this time. I'll argue that at some point in the future the two lines will snap back into line with each other. Now that means either house prices have to drop 50%, wages have to rise to catch up or a combination of both!

And if there is such a lack of supply, why has the number of properties in my area increased astronomically in the last 2 weeks. And 'For Sale' signs springing up everywhere. These used to turn into 'Sold' signs very quickly, but not anymore. I've got a nice STR fund and a huge number of nice houses to choose from but there is no way I'm paying over the odds.

OP - great graph.

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But the prices got there first. Take the prices away and you have no debt...

No.

Take the debt away, and you have no value (reflected in price).

This house price boom has nothing to do with supply and demand for purchasing a house. It's all about the credit available to buy. Increase in population may have had a negligible impact on the rental market, but not on the market to buy housing.

The lack of supply argument DOESN'T explain the proliferation of BTL and investment purchases, (which by and large did NOT exist 10 years ago). If there was such a lack of supply of housing, why has it been so easy for so many to build huge portfolios?

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Falling where??

Everywhere. Not just everywhere in England, but pretty much everywhere in the western world.

HPI is still +ve on a YoY basis on all indices that measure HPI.

And why have you chosen to quote YoY figures? Because you KNOW all the indices have shown falling prices for several months now. Even if you use YoY figures then house have not kept pace with REAL inflation. Also, most of the 'official' indices track asking prices rather than selling prices and so dramatically understate the gravity of the housing slump.

Look at net monthly mortgage lending figures for a more current picture of what is happening. This is not even half what it was at the peak of the housing market.

The reason why we have lagged the U.S in the HPC is simply that they have a oversupply of housing, wheras in the UK we have a lack of supply which is holding prices up.

Prices are not being held up (which is why you choose to quote YoY figures) and there is no lack of supply (see below)

Look anywhere in London, you dont see rows of empty houses, quite the contrary, they are cramming in new housing anywhere they find a spare bit of land.

Look anywhere on Rightmove and you do see pages and pages of house for sale, the are cramming in new housing anywhere they find a spare megebit :P . There are now more then ONE MILLION properties for sale on Rightmove. Some fvcking 'shortage' :lol:

And why do you describe yourself as a bear exactly?

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Falling where??

HPI is still +ve on a YoY basis on all indices that measure HPI.

Very true, and if I jump from an aeroplane without a parachute, I can't be falling because I am higher than I was before the plane took off. :blink:

The reason why we have lagged the U.S in the HPC is simply that they have a oversupply of housing, wheras in the UK we have a lack of supply which is holding prices up.

Britain has always been at a different place on the supply/demand curve than the US. The Yanks have much more space so they can buy bigger houses for less. However, this issue has been around since, oh, the mid-atlantic ridge started spreading, and doesn't explain why UK house prices have tripled in the last 10 years or so. Both countries' HPCs are down to the banks reverting to more normal/historical lending patterns after the insane levels of credit expansion over the past few years.

Look anywhere in London, you dont see rows of empty houses, quite the contrary, they are cramming in new housing anywhere they find a spare bit of land.

Like the previous poster said, look at the number of houses on the market. Also look at the number of mortgage approvals (the Bank of England publish the stats every month).

Where I live I see asking prices coming down every day, repossessed city centre flats selling at auction for half the new purchase price and new developments stalling due to lack of demand.

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  • 297 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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