There is no crisis. Buying your own home is a luxury, not a right

[BrilloPad]

Er, yes they do - at 2.5% a year (on average since record began).

Is that 2.5% absolute or relative to something?

Do you have a link for that? How much did prices rise in the time? How much did earnings rise?

[bobhope]

Not really. In many countries, including Britain until after WWII, you would expect to sell a house for pretty much what you paid for it. The housing market was stable.

Now it is unstable in the UK, and the instability is going completely unadressed because people like it. And describe uncontrolled inflation punctuated by ruinous busts as a "healthy" housing market!

The situation here is abnormal, not to say pathological. Yes one can gain by speculating on a single-commodity inflation, but is that good for the economy?

It is just a transfer of wealth from the young to the old; from those who work and earn, to those who own and do not earn. the young who have to pay more and more to "get on the housing ladder" smoke the same stuff and start to see the same visions.... but it's not really a ladder, it's a Ponzi pyramid.

I never really understood why people automatically think rising house prices are a good thing. You don't go "Oh my car now costs twice what it did 5 years ago.... fantastic"

[expat]

Er, yes they do - at 2.5% a year (on average since record began).

Better than that, on average in the UK. Especially if by "since records began" you mean since building societies started publishing "house price indexes", i.e. 1970s. But my point was that this is abnormal, if you look wider and older. It is therefore not as much a given as some seem to think. I am not disputing the house price increases that have happened, just the contention that it is "always" so.

[BrilloPad]

I never really understood why people automatically think rising house prices are a good thing. You don't go "Oh my car now costs twice what it did 5 years ago.... fantastic"

I think the idea is that they borrow more against the ever increasing worth of their house and fritter it away - thus making the economy look good.

Shame when the money has to be paid back - but can't people just go omn borrowing more and more forever? seems to have worked well over the last 30 years.

[Moscow Mule]

http://www.nationwide.co.uk/hpi/historical.htm

IIRC data is from 1952 onwards, you can choose if you want inflation adjusted or not.

[hyperD]

I never really understood why people automatically think rising house prices are a good thing. You don't go "Oh my car now costs twice what it did 5 years ago.... fantastic"

Indeed, but you couldn't realise the equity on your car.

This is the reason why everyone is "desperate to get on the housing ladder" - it means with the flood of cheap money, you can borrow and go on your two annual holidays to Costa del Sol when before you couldn't.

The silly thing is, you could have gone on benefits and saved up £7000 for a holiday in Goa...