Are you middle class?

[Zero Liability]

Agreed. If property is to be an income generator it should be through renting it and not QE induced speculative manias that are unstable and destructive. I doubt the middle class will be destroyed if the political class and its reliance on borrowing and credit expansion are tamed or altogether bypassed. One can dream.

Personally I intend to defer house buying until I turn 30, hopefully when the prices are a bit more deflated and I'm a qualified accountant.

[doodab]

I understand that for families, but why do 20-30 year olds feel the need to own their one and two bed flats when they have no intention of being there more than 3 years. In my friends I see a lot of parental pressure to buy "to get on the ladder" and renting being "wasted money".

In a rising market getting on the ladder is one of the ways, if not the only one, to keep sufficiently in touch that you can afford a family house when the time comes. For most people saving the deposit on a family home out of disposable income is all but impossible when prices are this high and still rising, the target they are aiming for is moving faster than they can save toward it. Money invested in property will at least tend to grow at the same rate, plus the %age equity builds up over time if you have a repayment mortgage.

[d000hg]

I think we never had to dream of getting on the property ladder, we just kind of took it for granted that we would.

What a very middle class thing to say

[doodab]

Agreed. If property is to be an income generator it should be through renting it and not QE induced speculative manias that are unstable and destructive.

You have cause and effect the wrong way around. The historic price rises that have caused the bulk of the problem predate QE by a considerable margin. QE is part of the response, it's not the root cause.

[oscarose]

just a label.

it's always the right time to do the right thing.

[Zero Liability]

You have cause and effect the wrong way around. The historic price rises that have caused the bulk of the problem predate QE by a considerable margin. QE is part of the response, it's not the root cause.

It's a 'response' that actively contributes to the problem.

[doodab]

It's a 'response' that actively contributes to the problem.

Well, it's probably serving to keep the bubble inflated but that might be more desirable than a rapid deflation.

[tractor]

..

There is a lot if pressure and expectation to get on the ladder in the UK whereas in other parts if Western Europe it is quite the norm to rent for the majority of your life, admittedly those countries have greater controls to protect the tenant.

^This

I lived in Germany for a few years in the 70's and it was the same then, no one could understand why you would want to buy.

There was a piece in the Evening Standard the other day explaining that until corporates get in on the act and root out the amateur BTL owners the rental sector will carry on the way it is.

Cost for a mortgage is way lower than renting and will be for some good while, problem is that the hoops you have to jump through to get a mortgage are getting worse and the way the market has been for a while, it will be impossible for those that are not on the ladder to actually get on it.

[Zero Liability]

Well, it's probably serving to keep the bubble inflated but that might be more desirable than a rapid deflation.

Well that's the thing - how do the central banks propose to keep on top of this credit when it seeps through the economy? They can neutralise bank reserves, which is no doubt highly unpopular with the banks, or pay them to sit on the money, but even that can't go on forever. I agree that rapidly pulling the plug may cause a lot of harm to individuals whose wealth is tied up in housing, but it's a case of either the central banks gradually doing it or the market forcing their hand at a later stage.

[SpontaneousOrder]

I agree that rapidly pulling the plug may cause a lot of harm to individuals whose wealth is tied up in housing, but it's a case of either the central banks gradually doing it or the market forcing their hand at a later stage.

Which is besides the point anyway. House prices rose, but it's only government promises not to let those process fall that created any bubbles. The promise of QE-like policies is as good a initiating those policies. Prices will always rise and fall over time, and of course it's only when they are deemed "too high" that they'll begin to fall. That's just how prices work.
So not doing QE-like things is only pulling the plug on a bubble that QE-like things created in the first place. People's pre-2008 exposure to housing they couldn't afford was stoked by government pressure on banks to lend, and their overt even if tacit reassurances that people should have faith in 'bricks & mortar'.