Thursday, May 10, 2007

More property ramping

Property shortage to sustain house prices

House prices look set to continue rising according to the latest data from Halifax. The ongoing shortage of property, particularly in London and the South East, means that pricing power continues to favour sellers over buyers. "There is accumulating evidence of a slight easing of conditions in the housing market with further signs of moderation in both demand and activity in the past month," said Martin Ellis, Halifax's chief economist. "Demand remains healthy which, together with tight supply, continues to push up prices."

Posted by little professor @ 10:41 AM (569 views)
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9 thoughts on “More property ramping

  • Shortage ???? Red Herring ??? Puzzled expression – Look at historical examples for evidence of this being a highly spurious excuse! Do Halifax shareholders feature in Mr Ellis’s comments ??? I wonder.

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  • I am glad for the good news on property, that will seal the IR rise today (hopefully 0.5%)
    I think acceleration of inflation now will mean sharper decline later.

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  • Remind me again why there is a property shortage in the UK.

    Lack of land?: The empty fields around all UK cities are unusable because?

    Family breakup and smaller households?: So that each parent can have homes with their own pool and snooker room?

    Immigration?: So that every 25-year old Polish plumber can have his own house here, bring his wife and kids over and not have to share accommodation with his Polish builder mates? – After all, they don’t even have a rat race in Poland, and they don’t speak English, so who could possibly want to live there?

    I DON’T THINK SO!

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  • waitingfor hpc says:

    yeah and blah blah …. please believe us ! Don’t stop buying houses… please

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  • Immigration? No. House prices are not going down in Poland and Romania (where the immigrants are leaving from). And immigrants tend to rent, and rents are going up at inflation
    Lack of land? perhaps lack of suitable land, since permits are difficult to obtain
    Smaller households? a complete red herring, the high house prices are forcing young generation to share accomodation

    You can run two demand / supply balances here:

    – residential demand and supply: not really unbalanced as indicated by the normal rents inflation. All demographics and macroeconomic trends apply only to the residential demand. The market for residences (i.e. places to live) is cleared by the tenants, so rents are the actual market prices.

    – demand for house ownership (which is the sum of residential demand and BTL demand) vs supply…. this is unbalanced for the unprecedented growth of the BTL: from nearly zero to 800k in 3 years, which means 250+k transactions per year or close to 10% of house sale volumes. That s a lot!)

    Call it “investment” (but I call it speculative demand), BTLers are setting prices, and the moment they just stop buying (not even start dumping their properties) the market crashes.

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  • 200,000 new flats built in London over the last year.
    70% of those flats bought by BTL’s.

    You do the math.

    And with regards to immigration, it is having a huge effect on the welfare state, it is fueling the BTL market (600,000 poles have t fit in somewhere). Visit the migrant watch website for a factual overview of the effect of unchecked and uncontrolled immigration.

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  • This property shortage myth can be disproved by the lack of rise in rents and by the fall in the asking price for new homes over the last year. Anything will do, rather than admit that it’s speculative.

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  • Hurry Up And Wait says:

    I understand what you are saying but BTLers make up less than 15% of the market and will only have local affects to which they are concentrated.

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