Wednesday, Dec 30, 2020

As long as house prices rise

BBC: UK house prices see highest growth in six years in 2020

Highest rates of virus, most country in lock down but house prices are up.
Just don't get it.

Posted by deepak @ 06:45 PM (1043 views)
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4 Comments

1. landofconfusion said...

I can think of a few reasons:

1. Nationwide statistics. Actually is 'statistics' the right word when talking about them?
2. Transaction levels.
3. People with money not spent on holidays, new cars & general 'up-the-wall' stuff.
4. Boost from not having to pay stamp duty.
5. Realisation that you don't have to work in the office. Or necessarily anywhere near the office, so why not push up prices elsewhere with your money?
6. Lack of redundancies in the types of jobs which could support a mortgage in today's market.
7. Surge in unexpected inheritances?
8. No pressure from upwards movement of IRs.
9. And of course there's the ever present hand of the government. I hear they now want people to be able to 'buy' a property with only 10% snared equity. What a deal.

Wednesday, January 6, 2021 01:23PM Report Comment
 

2. magnifico said...

A very good analysis. Whilst I applaud the decision by Rishi Sunak to support workers with furlough, thus avoiding repossession and a possible ugly crash, I really can't see why he had to extend the stamp duty removal to all. Really doesn't make sense as this would be a tax paid by those who can afford it. Moving house cannot be seen as indispensable in the present short term situation, except for FTBs.

Thursday, January 7, 2021 12:44PM Report Comment
 

3. landofconfusion said...

@ 2. magnifico

There was a breakdown posted a while back which showed which parts of the economy added how much to overall GDP and I think pretty much everyone here was shocked by just how much housing and related activities adds.

It also explains why successive governments have been bending over backwards to keep the gravy train going. Even a relatively mild slowdown would have a significant effect on GDP, even though no real value is being added in most cases.

Saturday, January 9, 2021 05:17PM Report Comment
 

4. magnifico said...

Landofconfusion of course you are right and unfortunately this has been to the detriment of other sectors of the economy. 50 years or so ago if you had a little stack you would look at investing it in a shop, factory, or other. Nowadays the only option is to buy property. It's not as stressful and the government is making sure your return always beat inflation and economic crisises. It's the lazy option and the one that pays the most. No wonder productivity in other sectors is so rubbish.

Sunday, January 10, 2021 06:26PM Report Comment
 

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