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Prices To Go Up 25% - My Email To The Nhf

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My Email to David Orr of the NHF in response to their ridiculous report last week. I don't really know why I bothered, but what the hey....

Name: Paddles

Email address: xxxxx@xxxx.com

Phone number: No Response

Your query: Dear Mr. Orr,

I nearly choked on my cup of tea this when I heard the headline based on your report on the Today Programme this morning. I was so surprised that I logged on and read the report that predicts a 25% increase in house prices starting at the end of 2009. That WAS the reaction you wanted, wasn't it?

Sadly, the report simply told me what I already knew; there is a lack of social housing in England and has been ever since Local Authorities were instructed to sell off their housing stock.

What the report didn't tell me was how the link between lending and house prices will be broken in the next two years, which is frankly the only way house prices could increase by anywhere near the percentage you suggest. My understanding of house prices is, and remains, that they are directly proportional to the ability of banks to lend money to prospective purchasers. Put crudely, if banks are happy to lend multiples of 15 times the average salary, houses will cost 15 times the average salary; conversely, if they only lend 1.5 times average salary, that's how much houses will cost.

Your report, well meaning as it is, is tainted and weakend by such a poor (or deliberately poor?) grasp of the very simple concept that house prices are a function of borrowing.



And their standard reply;

Thank you for your interest in our recently released Home Truths 2008 report.

I am sure that you appreciate that we received a significant amount of correspondence following it’s release and we are unable to respond to individual emails. If you have a press query please phone 020 7067 1010.

Our forecasts show that the chronic under supply of housing throughout the country will be a significant contributor to a medium to long term increase in house process. Historically high levels of unaffordability in the housing market has not been significantly reduced by the recent falls in house prices, and many households still find themselves priced out of the market. Our forecasts suggest these housing market fundamentals will combine with strong economic growth post 2010, driven especially by increasing export demand for professional services, to produce upwards pressure on house prices from 2011 through to 2013, the end of this forecast period.

For many households the only alternative is renting – either privately or in the social sector – and years of underinvestment in the social sector are only now being addressed through the Government’s ambitious programme to deliver over 200,000 new social homes by 2011.

We review our publications and their content each year, and will consider preparing a technical note that interested parties can ask for.

The regional versions with local authority level data are now being prepared and will be published at regular intervals to the end of the year. They will all be available from http://www.housing.org.uk/defaultaspx?tabid=596.

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What is the "chronic under supply"? Where are all the cash-rich homeless people sleeping in shop doorways because they can't find any houses to buy?

And if we need 200,000 new homes by 2012, why are Barratts, Persimmon, Taylor-Wimpey etc. sitting twiddling their thumbs with nothing to do? :lol:

Edited by blankster

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