Tuesday, Sep 22, 2015

The number of homeowners putting homes up for sale was at a record low

Guardian: House prices UK house prices reach new high

the already “property rich” stood to gain most from increased confidence on the housing market, with the highest-priced counties seeing the biggest increases and the cost of family homes rising while first-time buyer properties fell.

Posted by debtserf @ 02:03 PM (7923 views)
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51 Comments

1. debtserf said...

People talk eendlessly about how their houses are earning more than they do, never asking where all this free money was coming from.

The truth is that it is being stolen from the next generation. Houses price increases dont produce wealth, they merely transfer it from the young to the old - from the coming generation of families who have to burden themselves with colossal debts if they want to own, to the baby boomers who are about to retire and live on the cash they make when they downsize - and to the flippers and speculators.

Tuesday, September 22, 2015 01:09PM Report Comment
 

2. pete green said...

Spot on Debt surf - it's theft by the old from the young, by the rich from the poor & those that play the game of speculation....

Tuesday, September 22, 2015 02:50PM Report Comment
 

3. i remember the 90`s said...

The older generation didn't buy a house to make money its somewhere to lay your head I`m not old but you young guys should be blowing off at useless governments over the last 20 years that have let everything got out of control .

Tuesday, September 22, 2015 03:58PM Report Comment
 

4. pete green said...

Pointing out that one of the effects of Land bubbles is robbing from the young by the old is just pointing out a fact. It in no way implies responsibility except for voting preferences and all parties are culpable in some way. Politicians are only one section that needs blame. Most politicians think they are pretty powerless and influence by powerful vested interests of all sorts - so may be we should blame those vested interests.

Any way the solution as always is a Land Value Tax

Tuesday, September 22, 2015 04:08PM Report Comment
 

5. jack c said...

@ pete green - does Mark Wadsworth have a line into Mr Corbyn ? - time the LVT matter was really raised to the fore.

Tuesday, September 22, 2015 05:31PM Report Comment
 

6. reticent said...

@5

I'm all for LVT but I think JC will have enough problems getting elected as it is!

For LVT to happen, it will have to happen very gradually. The first step will be the govt. taking a census of land, then probably rejig CT and SDLT so that they're basically a very low LVT, then later successive governments could gradually cut income tax and raise LVT over such a long period of time that it doesn't hammer house prices. If the endgame of the reforms ever makes it to expectations (and you would expect it to even under the scenario I describe) there will be an almighty crash, caused by a very unpopular govt.

I also liked the idea of only taxing the land value as it is now, but even that would involve HPs in London plummeting initially so it will never happen.

Tuesday, September 22, 2015 05:40PM Report Comment
 

7. pete green said...

JC @5

MW is a bit Libertarian for Labour. Corbyn has a small LVT for undeveloped land in his manifesto but the new shadow Chancellor, John McDonnell, is a full on LVT Supporter & Member of the Labour Land Campaign. Andy Burnham supports LVT also . Also noted LVT campaigner (and ex London Transport Commissioner) Dave Wertzel is a friend of Corbyn. So he has the advice. A Corbyn Government has a high probability of getting in some form of LVT. But will he resist the inefficient forms of socialism and get the chance? [url]http://www.labourland.org/[/url] http://www.labourland.org/

Tuesday, September 22, 2015 09:42PM Report Comment
 

8. reticent said...

Sounds quite promising, to be fair. That's surprising about Andy Burnham.

But I see him more as a credible opposition (in as much as he offers a genuine alternate narrative) than a credible PM. I suspect that the stuff he (and John McDonnell) has said about the IRA is enough to put off 70% of voters.

Tuesday, September 22, 2015 10:34PM Report Comment
 

9. libertas said...

Less and less people putting homes for sale BECAUSE buy to let investors, and local authorities have been hoovering up properties that will only ever hit the market again when they die in the case of BTL and never, in the case of local authorities.

It is a total tragedy, that can only be resolved by FORCING cash buyers to take at least 28 days to complete on transactions, so as to eliminate any marginal benefit they have over first time buyers and families who have to use mortgages and can often pay more cash, but are hamstrung by the legal process.

Also, as said, ban estate agents from letting out properties they have sold for two years, to eliminate the reverse incentive to manipulate sales to buy to let investors.

But you can see what is happening here. Sales are still 50% below 2008 levels in volume, and so prices are set to go totally through the roof, whilst the population has soared, demonstrating that it is likely that sales volume will peak out this cycle at probably close to 200,000 sales a month, with potentially that level causing some buy to let investors to liquidate holdings and take profit. The market needs a price level that will release sufficient lettings portfolios before prices can fall again.

Wednesday, September 23, 2015 10:11AM Report Comment
 

10. sibley's b'stard child said...

Repos are also at their lowest level since 2006. If prices are set at the margins, the lack of forced sales is contributing to this imbalance.

Wednesday, September 23, 2015 10:53AM Report Comment
 

11. libertas said...

@10, if that is the case, there would have to be a significant increase in Repo's before prices would start falling. Repo's could fall close to zero if rates turn negative. Furthermore, reduction in inheritance taxes means that more houses remain within families with less forced sales to fund death duty.

Wednesday, September 23, 2015 11:21AM Report Comment
 

12. taffee said...

Reminds me of the oil price bubble..think Goldman said prices would hit $200..venezuela said $300...pearl oil was used to justify the prices.....of course it was,all a load of spin and rubbish....now the problem with oil is where to store it all and
Goldman think it could fall to $20!

Same here on property...it's a speculative bubble which like all bubbles will burst...this is also a bubble with massive hmg
Props so it's a big one

Wednesday, September 23, 2015 12:19PM Report Comment
 

13. taffee said...

Should read PEAK oil

Wednesday, September 23, 2015 12:20PM Report Comment
 

14. libertas said...

taffee, WE ARE NOT JAPAN. Our demographics demonstrate a population surge that does not abate, and a housing industry taxed so heavily that it cannot satisfy demand (Average of circa 20k community infrastructure levy per house, plus all the normal corporate taxes). And so this is not a bubble except if the population surge is a bubble. Will all these people flee to France, where there are less opportunities? I don't think so.

What pops this bubble is if the Eurozone sorts itself out and sucks the population out of England. Language barriers limit the chances of that.

Furthermore, whilst this will occur at some point, I do not see the Eurozone sorting its structural issues for at least another couple of decades, with it being a struggle to see that there is a more than 50% chance of the present union being sustained that long. Can France even maintain its position until after 2025 with Le Pen's surge in popularity and the fact that the country voted against the Lisbon Treaty?

Wednesday, September 23, 2015 12:40PM Report Comment
 

15. libertas said...

With transaction levels 50% of the last peak, and population significantly higher, we could be in the early stages of a bull market that I predict will rage until after 2025, at which point I expect the credit cycle to turn down, rates to start going up and repossessions to begin a rise again.

Wednesday, September 23, 2015 12:42PM Report Comment
 

16. libertas said...

With transaction levels 50% of the last peak, and population significantly higher, we could be in the early stages of a bull market that I predict will rage until after 2025, at which point I expect the credit cycle to turn down, rates to start going up and repossessions to begin a rise again.

Wednesday, September 23, 2015 12:42PM Report Comment
 

17. mark said...

local economy is very very very quiet - things are looking like its about to go over the edge

Wednesday, September 23, 2015 01:20PM Report Comment
 

18. pete green said...

The fake rentier economy is soaring while the real one slumbers, the calm is before the storm is a wonderful phrase but there are some interesting computer models that predict that is exactly how it is.

I have no idea what will happen but real people are suffering with massive housing costs, and poor quality of employment and living standards. The tide will turn whether by the power of the new renter class agitating for change our an economic collapse. The tide is turning and a crotchety old man with a beard may herald it on....

Wednesday, September 23, 2015 01:38PM Report Comment
 

19. sneaker said...

Can tell me who the feck is doing all the buying?

When the apparently is still not growing and so many people are on zero-hours contracts?

Does anyone have access to figures for:


  • Proportion of onshore individuals or families buying in cash

  • Proportion of onshore individuals or families buying with a mortgage

  • Proportion of onshore corporate buyers

  • Proportion of offshore buyers

Wednesday, September 23, 2015 01:42PM Report Comment
 

20. Brickit said...

@3 Indeed

Blaming the old because they bought something and the price went up is truly sad.

Why stop at houses for the old ? Should you blame them for anything they own that has gone up in value????

Wednesday, September 23, 2015 01:47PM Report Comment
 

21. sibley's b'stard child said...

Price discovery has been prevented thus far. Didn't someone once say the market moves in 7 year cycles; surely we're due a correction soon?

Wednesday, September 23, 2015 03:07PM Report Comment
 

22. hpwatcher said...

UK house prices reflect Government support - and nothing else.

The UK economy is slowing RIGHT down. Hence the lack of supply, people can't afford to move....nor are they thinking about it.

Nothing really to do with immigration, although that is a factor.

I am hearing more and more talk about an immanent financial crisis - UK housing is going to suffer quite considerably.

Wednesday, September 23, 2015 03:43PM Report Comment
 

23. mister ed said...

Thats a great point Libby makes about the UK not being Japan. Apart, that is, from the awkward fact that the population of Tokyo is growing (and has been for many years) and yet property prices have plunged in both Tokyo and Japan in general.

So there really is no correlation between a rising population and rising house prices.

You can check the facts about Tokyos population on the web, and an excellent graph about global house prices is available here:

http://www.economist.com/blogs/dailychart/2011/11/global-house-prices

The stats for Japan and Germany are very interesting.

Of course, if the immigrants to the UK were bringing bucket loads of cash and pumping it into the housing market, that would almost certainly create upward pressure on prices.

But Im not sure that a yearly influx of 350,000 low-skilled eastern Europeans who end up working in Costa Coffee or Poundland will be bringing much capital into the UK. If anything, theyll add to the benefits bill by claiming tax credits and adding further pressure on our already stretched public services, which will need extra funding, something that will be difficult given that the UK is bankrupt.

Whatever happens to house prices, I cant see how, on its present course, the UK can become anything but a country with a low quality of life for most people and a low-wage, low-value service economy.

Then again, as Libby said on a previous post, interest rates will go negative, and then our huge debt will become an asset, and the UK will be rich.

I suppose its good to be sanguine about it and believe that the old rules of economic competence no longer apply. Its just that Im always reminded of the words of the multimillionaire investor Sir John Templeton: The four most dangerous words in investing are This time its different.

Wednesday, September 23, 2015 04:56PM Report Comment
 

24. hpwatcher said...

@22 Nice post Mister ed - the negative interest rate policy reflects perhaps the ''best'' case scenario. I don't see the UK being that lucky...the lenders are simply going to want to get (what remains of) their money back. Government defaults will be the inevitable outcome - unless they tighten fairly significantly....which they won't do until they absolutely have to.

This is getting well beyond the [central] planning capabilities of central banks, which forms the basis of libby's wettest dreams i.e. essentially that he can become a property millionaire by doing nothing. The reality is that he is far more likely to lose his job.

Wednesday, September 23, 2015 05:58PM Report Comment
 

25. pete green said...

Excellent post Mr Ed. Just goes to show land prices are mostly about the credit available.

Wednesday, September 23, 2015 07:40PM Report Comment
 

26. judgandury said...

"So there really is no correlation between a rising population and rising house prices"

Libertas is actually right. Just looked it up and Japan has 8 million surplus houses and a falling population. We don't have enough houses and an increasing population. Couldn't be more different. Here is the article I found

http://www.ft.com/cms/s/2/79297b7e-24c6-11e5-bd83-71cb60e8f08c.html

Thursday, September 24, 2015 07:35AM Report Comment
 

27. judgandury said...

"Of course, if the immigrants to the UK were bringing bucket loads of cash and pumping it into the housing market, that would almost certainly create upward pressure on prices".


Sorry got to point out something again. These immigrants increase the demand for rental properties. You read article after article about them cramming into rentals. Landlords then realise that they can make a buck from these immigrants so they buy up properties to rent to them. So it goes like this - immigrants pump their money into the landlords who pump their money into rental properties. That is why the buy to let market has been booming. Only read the other day that buy to let properties are now worth 1 trillion pounds

Thursday, September 24, 2015 08:42AM Report Comment
 

28. reticent said...

You appear to have broken character.

Judgandjury wouldn't be able to think all that through and he wouldn't have a subscription to the FT. Just a few days ago, he used the term "economics mumbo jumbo" and he's been wilfully ignoring references to things like means-testing as if he doesn't understand them. Suddenly, he can think through the interaction of supply and demand in the rental and retail markets, something most economic commentators and journalists don't seem to manage.

He's also suddenly become very polite.

Thankfully, despite not being very good at "tec (sic)", he has confirmed that he can copy and paste links and I've talked him through checking the browser history of his iPad.

But weirdly, he can't post links to the multiple hpc threads he supposedly read 2 nights ago, in which everyone accuses me of being Flashman. Which is weird, because it would involve proving me wrong, something J&J has relished claiming to have done in our previous "discussions". It's also weird because, until he does so, the most logical explanation for why he would have knowledge of these old hpc threads, which, as far as I can tell, have been deleted, is that he is not in fact somebody who happened upon the site a few weeks ago, but is in fact someone who's been coming here for a long time and has almost certainly been posting under a different name.

Thursday, September 24, 2015 09:31AM Report Comment
 

29. mister ed said...

@25 + 26
An interesting article.

However, the fall in house prices happened well before the population began to decline. House price falls began in the 1980s, but its only in the past fifteen years that the population has begun to fall in any real measure.

Also compare the percentage fall in population with the percentage fall in house prices. What you find is a small fall in population and a total collapse in house prices.

Of course, the population fall must have some effect on house prices. When I lived in Japan, some rural areas were giving houses and land away for free in an effort to repopulate the places.

But the fall in house prices has been mostly due to a collapse in inflated asset prices, something largely caused by cross-shareholdings among Japanese companies. The collapse of Japans bubble makes interesting reading.

There is also the fact that the population of Tokyo has risen over the past twenty years (as more people move from the countryside), and yet house prices have fallen there too, by a huge amount.

And, as I pointed out, poor immigrants to the UK don't buy expensive houses, so the effect on house prices is likely to be minimal.

The other point I made is that no matter what happens to house prices, the UK is becoming a place with a very low quality of life for many people (largely due to high house prices), which is why 150,000 skilled professionals leave the UK each year. In the long term, high house prices benefit no-one.

But thank you for posting the link to the article. It is worth reading.

Good point about the rental market in your later post. The picture there is fuzzy. Property prices are now so high in many areas that the ROI for a landlord makes it not worthwhile. Theres also the point that when landlords cram immigrants into rental properties, it usually causes a fall in the quality of life for everyone else living in the area. Most people would rather have cheaper house prices and settled communities than high house prices and shanty towns.

It all depends on the kind of society you prefer.

Thank you for your posts.

Thursday, September 24, 2015 09:47AM Report Comment
 

30. judgandury said...

But the surplus of housing has been there for a long time. 8 million empty houses didn't just suddenly happen. You can't ignore that side of the bargain.

Thursday, September 24, 2015 10:07AM Report Comment
 

31. judgandury said...

reticent, broken record mate. What are you on about subscriptions for? All you have to do is Google Japan housing shortage and it is the second on the list. All free as a bird. You keep getting everything wrong don't you. And what do you mean 'think all that through'. If you think that Googling Japan housing and repeating two sentences from the second article is tough then it says something. You are honestly coming across as having some sort of breakdown. Calm down

Thursday, September 24, 2015 10:13AM Report Comment
 

32. judgandury said...

"He's also suddenly become very polite".

Pointed out to mr ed that ganging up on libertas was not really on and he responded like a gentleman and cut it out. Shows thoughtfulness and decency. You on the other hand stepped up your bullying and added old people bashing to the mix. Horses for courses.

Thursday, September 24, 2015 10:20AM Report Comment
 

33. reticent said...

I assure you I am very calm.

Thursday, September 24, 2015 11:04AM Report Comment
 

34. judgandury said...

Good to know

Thursday, September 24, 2015 11:05AM Report Comment
 

35. Rob Mk said...

People are sitting tight and waiting, people can feel things are not good, even average joe is not that blind or numb to what is happening to global wealth.

I'm very much concerned with two main things:
1) The cost to the nations coffers in propping up a housing market, which if it fails will likely ruin us all.
2) The social cost, if we do end up with a worsening degrading quality of living then why bother to work hard for a crappy existence? Go on the social and burden the Government.

Its the feeling that no one seems to have even the slightest idea or compulsion to try to correct things that scares.
Most of us want and deserve a good society, the current trend is get them first, defend yourself or it will cost you money. That leads to a very bad society. Moderation and moderate growth is the key and that requires control....who's in control?

Thursday, September 24, 2015 12:23PM Report Comment
 

36. reticent said...

The silence here is deafening.

Do you think no one is posting because they're:

a) confused as to what's going on?
b) waiting to see what you do next?
c) finding the whole thing rather off-putting?

Thursday, September 24, 2015 12:46PM Report Comment
 

37. judgandury said...

Bet you won't gang up on libertas again. Job done. Bye

Thursday, September 24, 2015 01:32PM Report Comment
 

38. Jezzer said...

Is it just me or do others feel like judgandury and libertas as the same person?

Thursday, September 24, 2015 01:53PM Report Comment
 

39. pete green said...

Pointing out his many loony ideas and telling him off for his many offensive remarks is not bullying. But I do try to reach out to Libby when finding common ground.

Learning from each others perspectives is a worthy objective for us all including yourself

You may wish to ponder this for a while....

Thursday, September 24, 2015 02:18PM Report Comment
 

40. mister ed said...

@29
Oh yes, population decline is part of the equation, but a very, very small part. The collapse in property prices has been much larger than the decline in population, and happened before population decline began. The population was growing until 2008, and the falls are less than one percent. But the asset bubble collapsed in the early 1990s, and real Japanese house prices have fallen 50% since then.

As for the empty homes, its probable that most of these are in rural areas. Japan has been undergoing rural depopulation now for many years as the cities have grown. You probably wont find millions of empty homes in Tokyo or Osaka.

@31

Yes, Libertas. People have been a little hard on him. Its just that he does bring it on himself in many ways. Consider the way me and you are having this debate about Japan. A discussion based on facts, analysis, and logic. And a desire to analyse the facts deeply rather than pulling out a single fact and accepting it wholesale without looking at the wider picture.

Ive tried the same approach with Libertas, and have asked him politely to explain which facts hes using to come to the conclusions he does, or to explain his logic. I do this because I work on the belief that just because something doesnt seem to make sense, it doesnt mean it is an idea unworthy of exploration.

But he never once has given facts or explained his logic, and when the lack of facts and inconsistency of argument is pointed out, he then resorts to calling people morons, fools, idiots, Marxists, and sometimes fascists for good measure

This is the common stance of the ideologue, who is never interested in practicalities, and what works best. Ideologues are interested in pushing ideas down peoples throats.

I think many people have realised that Libertas will contradict himself so much that rational debate is impossible and you simply cant take him seriously. And thats when they resort to the satire. A pity really, because Im sure Libby could add to the debate if he would explain his ideas and debate with reason and logic, and be willing to explore the ideas that other people put forward. But I just dont think thats going to happen.

Thursday, September 24, 2015 02:26PM Report Comment
 

41. Funkymunkey said...

@37 Ohh yes Bland, using all those big words and amazing massive debating skills. The simple fact is that I, and many others can't be bothered sitting here typing for hours on end to someone so aloof and well, just plain wrong. House prices are going up. Right move reductions are based on kite flying prices dropping back a little. You guys can sit here having threads about "Is this crashing?" "Is that crashing?" "Is Buy to let ending?" when the simple fact and answer is "No". I bet you thought house prices were too dear in 2004, does that feel more than a little foolish?

Thursday, September 24, 2015 03:00PM Report Comment
 

42. This comment has been removed as it was found to be in breach of our Blog Policies.

 

43. reticent said...

"Naughty of you doing all" what?

Thursday, September 24, 2015 03:09PM Report Comment
 

44. pete green said...

J&J I think you need to admit you are Flashman

I think it is you who needs to stop taking yourself too seriously

I may be of the 'Autistic Spectrum' which I freely admit to anyone and probably have mentioned it on this site a few times. But do you know what your psychological issues are? and are you ready to admit them to yourself..... I highly doubt you are ready for mindfulness...

Narcissistic Personality Disorder:
http://psychcentral.com/disorders/narcissistic-personality-disorder-symptoms/

Thursday, September 24, 2015 03:31PM Report Comment
 

45. pete green said...

@38

"As you were" ? recalling your days in the CCF or watching too many episodes of Dads Army?

"reticent. Don't take yourself or this website so seriously" Its good to give yourself advice from time to time - you never know FLashy I may take my own one of these days....

Thursday, September 24, 2015 05:31PM Report Comment
 

46. hpwatcher said...

38. judgandury

WELCOME BACK FLASHY!!!!

Friday, September 25, 2015 08:32AM Report Comment
 

47. hpwatcher said...

Pointed out to mr ed that ganging up on libertas was not really on and he responded like a gentleman and cut it out. Shows thoughtfulness and decency. You on the other hand stepped up your bullying and added old people bashing to the mix. Horses for courses.


HAHAHAHAHAHAHAAHAHAHAHAHAHAHAHAH

You can't hide behind a different name!

Friday, September 25, 2015 08:33AM Report Comment
 

48. hpwatcher said...

Apologies for the multiple posting, but flashys (judgandury) new approach is interesting.

He's gone from a perma-UK-recovery bull to embracing libbys low interest rate, inflationary stuff, which is indicative of depressionary mode, debt management economics.

So Flashy, don't you believe in the *fantastic* UK recovery anymore? No?

Friday, September 25, 2015 08:41AM Report Comment
 

49. reticent said...

http://www.housepricecrash.co.uk/newsblog/2014/12/blog-wonder-if-the-assets-include-inflated-uk-junk-mortgages-49486.php

"The blog world is no different to the real world. You have to be of some value to be taken seriously"

http://www.housepricecrash.co.uk/newsblog/2015/09/blog-shock-horror-elderly-asked-to-downsize-working-people-forced-to-move-every-months-or-year-136112.php

"I think the internet has given naughty children the idea that they can make anti social comments without being told to do one. The internet is now the real world and in the real world you are going to be taken for a nasty snide"


Actually, the blog world is different from the real world. In the real world, you can't troll people. You also can't pretend to be multiple people in a discussion. You can get away with that sort of thing on the internet, provided you're not so stupid as to get caught doing so by people you were stupid enough to give your mobile number to a year previously.

Friday, September 25, 2015 09:13AM Report Comment
 

50. This comment has been removed as it was found to be in breach of our Blog Policies.

 

51. This comment has been removed as it was found to be in breach of our Blog Policies.

 

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