Sunday, Aug 30, 2015

The UK Housing Market and Out of Control Immigration

Market Oracle: UK Immigration Crisis Hits New Record, Trending Towards Becoming a Catastrophe

Nothing illustrates the consequences of continuing out of control immigration more than its impact on the UK housing market, where Conservative election promises to build 200,000 homes per year will prove totally worthless in wake of the immigration Tsunami against which housing building cannot even keep pace with existing demand let alone deal with new demand, especially when one considers that the UK population is already growing naturally by about 300,000 per year which means that even if the promised 200,000 homes were built, then it will not be enough to keep pace with population increasing by 600,000 per year, let alone that far fewer homes will probably be built at the rate of approx 140,000 per year. 1.25 million properties may be required to just to stand still.

Posted by libertas @ 05:21 AM (6469 views)
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22 Comments

1. libertas said...

In the wake of this, those not yet on the property ladder in London are fighting a losing battle.

Right now, this largely affects those within the M25. Real political fireworks begin when this crisis spreads to the Counties, when most first time buyers lacking significant parental support will be priced out and completely out-gunned by the army of cash buyers hoovering up properties.

The crisis is worsened by the fact that most investors will not sell properties until their estates are liquidated upon death, so as to maintain the asset as a pension and avoid capital gains tax. Buyers are also against Local Authorities, presently hoovering up properties that will only ever be sold through right to buy, and so these could also remain off the market for a generation or two. This explains the ever dwindling supply of houses on the market.

And so we return to Dickensian rent serf conditions. As Nadeem states in the prior article I posted, there will be a political backlash that could yet convince the electorate to vote for BREXIT.

Sunday, August 30, 2015 07:49AM Report Comment
 

2. cornishman said...

libby, as others have said before, I think your obsession is unhealthy.

You posted several times before at around half past four in the morning - and again at that time this morning (in the previous post). Then this one at 5:21 A.M.

Says to me that you probably can't sleep for fretting about the whole thing.

What does Mrs Libby think of you getting up in the middle of the night to post articles and comments here?

Sunday, August 30, 2015 09:38AM Report Comment
 

3. hpwatcher said...

@1 In the wake of this, those not yet on the property ladder in London are fighting a losing battle.

You are a foolish to cling to the words of one, albeit biased, UK property bull.
It's even more silly to hope that more and more migration - with regards to people who have literally have just the clothes on their back - will be able to take out big mortgages, so you personally can profit.

The comments are simply *not* reflected in the property alerts I am getting. UK housing is slowing down, and I'm seeing large reductions in asking prices. Deflation, you so often like to remind us, seems to be having an effect.

@2 Says to me that you probably can't sleep for fretting about the whole thing.

His unhealthy obsession has driven his friends and/or family away. All he cares about now is seeing some kind of return on the tiny shack he mistakenly bought.


The fact is that UK housing is topping out, and the future for both homes and the economy is now very, very uncertain. Unemployment is starting to increase; I am hearing of many friends and acquaintances who are now in real danger of losing their jobs. It's clear that the international economy is heading for a major slow down and depression.
Due to the fact that CB are largely in unwind mode, those loaded up with debt are clearly going to suffer a great deal.

Sunday, August 30, 2015 10:04AM Report Comment
 

4. libertas said...

hpwatcher, Nadeem is hardly a perma bull on housing. He called the 2008 housing crash at the time, well in advance, and called the new housing bull long before anybody else spotted it, rightly predicting that it would result in a Tory win.

Furthermore, your predictions are not facts. If anything, the recent situation in China will cause present interest rates and mortgage liquidity to persist if not expand alongside solid growth. As I've said, interest rate cuts are more likely if commodity price falls persist. We stand a real chance of obtaining China's fast growth here and the recent building boom in London seems to reflect that. Whereas the building boom in China was not market led and hardly reflected demand, creating ghost towns, construction in London is behind the curve with demand.

Tiny shack? I have a 3 bed house with a significantly sized garden. The value of which has risen at least 50k since I purchased it. I feel terrible for folk who are not on the ladder in London because the properties coming onto the market barely make a dent on domestic demand let alone the vast majority of immigrants who are primarily moving to London!!

Sunday, August 30, 2015 10:21AM Report Comment
 

5. hpwatcher said...

hpwatcher, Nadeem is hardly a perma bull on housing. He called the 2008 housing crash at the time, well in advance, and called the new housing bull long before anybody else spotted it, rightly predicting that it would result in a Tory win.

Nonsense. If you have been following Nadeem he has been a property bull for at least the past five years. Go and look at the articles he has posted. By the way, he didn't actually predict a tory win, he predicted a continuation of a coalition government.

Furthermore, your predictions are not facts.

(You made me laugh - that really is priceless coming from you!) The fact is that the UK property market is stalling in the areas I have been watching. Many reductions, lots becoming ''unexpectedly available'' again. There is a big economic slowdown going on, unemployment is starting to increase - again facts.

If anything, the recent situation in China will cause present interest rates and mortgage liquidity to persist if not expand alongside solid growth

Um, do you actually know anything that is happening in the world outside of Enfield? The economic statistics are terrible. The shipping import/export data says it all. Liquidity is through the floor. I don't know what articles you have been reading, but I feel you have it all wrong.

Tiny shack? I have a 3 bed house with a significantly sized garden. The value of which has risen at least 50k since I purchased it.

You believe all that if you want to.

What is important is what happens next, and it isn't going to be pretty.

Sunday, August 30, 2015 10:43AM Report Comment
 

6. stillthinking said...

a

Sunday, August 30, 2015 03:35PM Report Comment
 

7. khards said...

I must remember to come back in 5 years time and read this post.

Note for future self: Hahahahahaha.

Sunday, August 30, 2015 04:01PM Report Comment
 

8. Striebs said...

The only way a Briton is likely to get a house is renounce their British Citizenship .

If the British working class had of shown more revolutionary potential and less aspiration , The Left would not have been forced to send out search parties for hotheads and losers .

You've got to love the brilliance of our political class : they don't like the electorate so they import a new one which is more to their taste .

The FPTP system should not stop an influx of UKIP members into the House of Lords where they could actually get this issue some coverage .

Sunday, August 30, 2015 07:40PM Report Comment
 

9. libertas said...

HPWatcher, yes Nadeem has been a bull all the time that UK housing has been in a bull market, but predicted a house price crash and depression from 2007 to 2012, before most others, and he got the end of it just right:

UK Housing Market Crash and Depression Forecast 2007 to 2012 - Jan 2009 - Nadeem_Walayat (Reads 368,932)
http://www.marketoracle.co.uk/Article8080.html

UK Housing Market Crash of 2007 - 2008 and Steps to Protect Your Wealth - Aug 2007 - Nadeem_Walayat (Reads 311,514)
http://www.marketoracle.co.uk/Article1893.html

Furthermore, he did state that the most likely outcome was a coalition, against the pundits consensus, but stated clearly that an outright victory for the Tories was very possible: http://www.marketoracle.co.uk/UserInfo-Nadeem_Walayat.html

So I don't hang on all his words. In particular, I disagree with him that rates are about to rise, and thus, I think he has under-estimated the coming continuation of the housing bull, that is likely to continue right up into the mid-2020's.

Sunday, August 30, 2015 08:27PM Report Comment
 

10. reticent said...

Even a relatively conservative 10% HPI over the next 10 years will result in 160% growth by 2025.

That would leave the average property price at half a million. Even assuming wages grow by 3%, that'll be 12x average salary.

You're predicting a housing boom 50% more out of hand than the one that preceded the greatest financial crisis in almost a century. That would be ridiculous even if rates didn't move in that time.

I'm not even going to bother doing the maths for London, which is infinitely more ridiculous because that's where all the growth has been since the recession.

Monday, August 31, 2015 08:29AM Report Comment
 

11. reticent said...

Here's a more plausible scenario that I keep coming back to:

Over the next two years the coinciding of two or more of...

-Sterling crisis
-Brexit threat
-Glut of luxury London apartment completions
-BTL tax changes
-A sudden need for cashflow abroad (eg China)

... will see a lot of people selling up in London at once. Years of too little being available to buy will end abruptly. The market won't know what hit it. The govt. won't be able to drop rates as they're already too low and sterling will be looking overvalued as it is.

That'll be the next 5 years of HPI in London written off, then.

I could be wrong of course. We might face off these headwinds one-by-one and foreign money may keep holding up London HPs uninterruptedly until 2025.

Seems like a $#!++y thing to hope for though, don't you think?

Monday, August 31, 2015 08:48AM Report Comment
 

12. taffee said...

The biggest surprisewill be the myth that there is a shortage of property.....whereas in fact there is simply a
SHORTAGE OF PROPERTY ON THE MARKET at any one time

as a direct result of current economic policy

Monday, August 31, 2015 09:07AM Report Comment
 

13. libertas said...

Reticent. UK property prices as a whole have barely risen beyond their 2008 peak. Hardly a bubble.

London prices are beyond their peak, but population has soared by over a million people and is rising exponentially, again, no bubble there.

London is over-crowded, and yes, most individuals cannot afford a one bed flat unless they look in some of the worst parts of the capital, but most couples on average wages, so long as they have an average deposit, can afford a one bed flat if they look in outer zones, or a house if they commute from outside London. Again, no bubble there.

This bull will likely continue until around 2026. Expect another secular turndown around that point, and yet London will be just about to open Crossrail 2 and HS2, and so optimism will abound, as it did after 2008. Furthermore, it looks likely given Labour's disarray, that we will have a Tory government until 20205, meaning that the national debt should be lower than any other European country and consequently, Sterling WILL NOT be in crisis.

I was not in London after 2008 and I felt the recession in the shires, but when I came back I found the city transformed and modernised, previously no go areas gentrified, with most folk asking "what recession?" when I enquired.

Monday, August 31, 2015 09:14AM Report Comment
 

14. hpwatcher said...

Wow libby, have you been annoying people on the HPC forums too?

http://www.housepricecrash.co.uk/forum/index.php?/topic/206219-libertas-upsets-one-person-too-many/

Monday, August 31, 2015 10:21AM Report Comment
 

15. mister ed said...

@13

If this had been an incident involving Libby, I don't think they would have sent an armed response unit.

It would have been this guy:

https://www.youtube.com/watch?v=P9O6pCYyelA

Monday, August 31, 2015 10:48AM Report Comment
 

16. libertas said...

Never been on the forums.

People just hate how right I've been about there not being a house price crash and about there being opportunities within the housing market.

Tuesday, September 1, 2015 06:31AM Report Comment
 

17. hpwatcher said...

Never been on the forums.

Are you sure about that?

A poster with a very similar name has been espousing the same views.

Tuesday, September 1, 2015 10:02AM Report Comment
 

18. Rob Mk said...

Government takes a long time to respond and then usually falls short.
Sudden population growth such as immigration can not be planned for, you must control it at source. As ramping up house, school and hospital building takes years, that's even if they want to or have the money to.

We are blinded by our cheaper and cheaper luxury goods and are not paying attention to our quality of life or society.

Look, there are a relatively small number of people making an absolute killing with the current housing situation.
Normal people be damned, we are being metaphorically eaten alive.
Over dramatic, every one seems pizzed off to me, even when there in a lovely comfy Benz?

Tuesday, September 1, 2015 12:29PM Report Comment
 

19. reticent said...

@12

So, to summarise your argument...

1. Fact I stated in my last sentence ("all the growth has been in London since the recession") leading to unsubstantiated conclusion.
2. Fact universally acknowledged that goes no way towards establishing your conclusion.
3. Acknowledgement that people on average salaries with the average amount of money it takes to buy a house can only afford to buy a 1-bed on the outskirts of London if they are in a couple (who presumably expect to get significantly above-average pay rises before having kids), leading to spurious conclusion that this is not indicative of a bubble.
4. Repetition of the ridiculously implausible prediction you've conjured out of nowhere as if it is now established, when you haven't addressed my refutation whatsoever.
5. Further baseless predictions founded on your own political prejudices and narrow understanding of political parties' tendency towards austerity.
6. Demonstration of ignorance about what causes currency crises.
7. Irrelevant anecdote.

Pretty conclusive.

I never said we were in a bubble. I made a pretty reasonable case that you were predicting a boom of a scale and duration that dwarfed the last boom, which was itself the most unprecedentedly exuberant and protracted boom in recorded history.

If what you are suggesting will come to pass, there will be riots in the streets long before 2025.

Tuesday, September 1, 2015 01:29PM Report Comment
 

20. libertas said...

Hpwatcher, it must be horrible for you to find somebody else with a similar point of view to mine.

Reticent. If we are not in a bubble, how is a crash around the corner?

Regarding riots, these actually tend to occur not during booms, but during and in the aftermath of economic declines (obviously), with rioting actually more correlated with hot summer weather than economics. Tottenham has not been in flames since people got jobs in the recovery despite all the locals being priced out by it. If this is illogical, understand, we are talking about human beings here.

Tuesday, September 1, 2015 04:19PM Report Comment
 

21. mister ed said...

@18

"It must be horrible for you to find somebody else with a similar point of view to mine."

Libby, there is no-one in the world with a point of view even remotely like yours.

"Markets do not rise when everyone is buying."

:-)

Tuesday, September 1, 2015 06:52PM Report Comment
 

22. hpwatcher said...

Hpwatcher, it must be horrible for you to find somebody else with a similar point of view to mine.

Quite right, I stand corrected.

Not similar, but identical views to your.

Thursday, September 3, 2015 03:05PM Report Comment
 

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