Tuesday, October 12, 2010

Land shortage propaganda….

House prices heading for a fall, surveyors warn

Land shortage: The availability of land is a key factor in changes to house prices, separate work by researchers at the London School of Economics has found. "The research illustrates how constraints on the supply of land can have major implications for household welfare through their effect on house prices and individual home ownership," said Dr Alex Michaelides, who led the research. The report suggested that relaxing borrowing restraints added to ownership levels, but had little impact on house prices. Meanwhile 60 million people were distracted by sparkly, shiny things on the TV

Posted by powerofnow @ 07:58 AM (1771 views)
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7 thoughts on “Land shortage propaganda….

  • The LSE’s findings are about as startling as the toilet arrangements of bears…

    Best quote from this piece though is this:

    “a genuine fear that house prices may well fall further is stifling the market”

    As I’ve always maintained – once prices are seen to be falling, with no obvious end in sight, FTB’s will become even rarer, while the BTL brigade will become ever more desperate to offload – thereby fuelling the decline..

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  • sibley's b'stard child says:

    @ UT

    “…while the BTL brigade will become ever more desperate to offload…”

    I viewed a ‘flat’ yesterday in Romford. Essentially, a once semi-detached divided into top-and-bottom and then let out (presumably to increase rental yields). Managed to find out from the EA that one person owned both upstairs and downstairs and was using this opportunity (tenant moving out of the downstairs flat) to sell both at once. Guide price for the downstairs ‘flat’ was 145-165k. Bought in 2006 (courtesy of LR) for 165k. Either way, this guy is going to take a hit (presumably on both properties). I can only assume this is a listing bourne out of fear….

    As for the article, nothing new there. Although at least it recognises how land availability artificially skews prices (although no solution is offered, I see).

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  • The shortage of land isn’t a physical one. I can look out of my window and see acres of fallow fields, sat their doing nothing, except
    paying generous subsidies to the landed gentry whose ancestors killed and stole for, before putting in place a legal
    system that meant the people (masses) could not use it. Oh well, looking forward to next weeks rigged loser in XFarter.

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  • But but but,

    They go onto say that relaxing borrowing constraints increases home ownership but has little effect on house prices!!!!

    WTF have they been asleep for the last few years.

    How can they put that in a report and be taken seriously by anyone.

    In fact I’ll suggest that the times in the last 40 years where house prices have got ahead of inflation are when borrowing HAS been relaxed in some way. The obvious ones are :-
    Increase in lending multiples
    Counting 2 household incomes
    Reducing deposit size requirements
    Allowing interest only
    Lending to btl.

    All of which are forms of relaxing lending still further culminating in the icing on the cake :-

    Self cert, interest only.

    Which is the biggest relaxation available – I personally can’t think of a way of lending more against a property.

    So in my opinion this article is absolutely discredited by the last paragraph.

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  • str 2007 – WTF indeed. Assets are worth what banks will lend against them. What correlates with property prices – the supply of land or the supply of credit?

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  • mark wadsworth says:

    I was going to pick up on this: “The report suggested that relaxing borrowing restraints added to ownership levels, but had little impact on house prices.”

    But STR2007 beat me to it. Have they learned nothing? Right at the end it states that the ESRC are funded by the government, so this is pure propaganda, the Blue Wing of the Home-Owner-Ist Party has nimbly taken the baton from the Red Wing…

    Also what Doomwatch says, although to be fair, those large ag landowners could make far more money from getting planning and flogging off an acre (about £500,000 one-off windfall gain) than they can from ag subsidies (£40 to £80 an acre per year). So this is a battle, or maybe even just a skirmish, between urban landowners and rural landowners. It’s the banks who are driving this as much as anybody.

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  • Mark W, from article below this one

    ”MW are you able to find out mr shappes’s own position in the property Market ?”

    I just wondered if you could add any credibility to his musings or whether indeed they are just hot air ?

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