Reply to: oh no: UK house prices see 'strong' rise

[MarillionFan]

Only worth about 3k IMHO.

[_V_]

Ideal investment property. Just need a tin of paint and a dozen sleeping bags.

http://www.rightmove.co.uk/viewdetai...a_n=1&tr_t=buy

HTH

[Ardesco]

Wasn't it something to do with following tory spending plans for the first couple of years?

[The_Equalizer]

Not stable.

Has a tendency to hit the endstops at either end.

Hard.

We're doomed.

This is exactly the problem. No wonder old Mr G. Brown Esq. is busting to move next door. Can't have his wonderful economy popping on his watch. What I haven't understood is why GB was rather careful during the first three years in the job then went on a mad spending binge?

[_V_]

You can release the equity through shared ownership schemes. Ie parents sign contract that signs over say 40% of their home in exchange for lump sum to give to children to push house prices up further.

eg.

What is the Norwich Union Home Reversion Plan?
This plan quite simply allows a homeowner(s) to sell a percentage of their home to the reversion provider in exchange for a cash amount.

The customer can continue to live in the property rent free until death or leaving the property permanently, which may be when the need exists to go into long-term care. When this occurs, the property is sold by the reversion provider and, after deducting selling costs, the equivalent percentage of ownership is taken from proceeds of the sale. If anything less than 100% has been sold via the plan, the remaining percentage would be returned to the customer or their estate.


Easy peesy way to ensure the bubble never bursts.

[ratewhore]

To release equity to your children you either need to sell your house or remortgage (i.e. take on more debt). In this case, debt is fuelling debt which eventually will be unsustainable...

[meridian]

Sounds jolly like one of those pyramid things. Could it just be that the public think this is a sure fire winner and keep pilling huge chunks of cash into this upwardly spiraling merry-go-round? Rather an expensive game to play, but so long as they keep printing and lending the cash then all’s fine.

Pyramid schemes fail becuase they evenutally run out of people.

Luckily, we have NL and the EU to thank for supplying us with a ready stream of new Europeans to maintain the pyramid base.

[The_Equalizer]

A house is worth whatever people will pay. Now if each generation uses the "wealth" of the previous, then they can afford anything. If house prices double ever second, they are still affordable as the bulk of the money will come from releasing equity from the previous generation.

Infinity, here we come!

Sounds jolly like one of those pyramid things. Could it just be that the public think this is a sure fire winner and keep pilling huge chunks of cash into this upwardly spiraling merry-go-round? Rather an expensive game to play, but so long as they keep printing and lending the cash then all’s fine.

[DimPrawn]

Highest bidder wins.

[Jesus]

A house is worth whatever people will pay.

OK I will pay £1 for your house

[DimPrawn]

A house is worth whatever people will pay. Now if each generation uses the "wealth" of the previous, then they can afford anything. If house prices double ever second, they are still affordable as the bulk of the money will come from releasing equity from the previous generation.

Infinity, here we come!

[Jesus]

A house is worth whatever the bank will lend.

[AtW]

Can such a system be sustained?

It will fail when the avg price in pounds will exceed number of atoms in the universe. Remember - you heard it here first!

The Romanians & Bulgarians arrive next year in their millions. House prices will double again soon.

http://newsimg.bbc.co.uk/media/image...s_sep3_203.gif

It says that "young people" can afford the price rises because their parents have made so much money (equity) that they can release it to their children.

How does this work? It's like a closed loop positive feedback system. Generation 1 buys a house, it doubles in value, so they release the money and give it to Generation 2 who buys a house which doubles in value and they release that gain to Generation 3 etc.

Can such a system be sustained?

As Labour's policy is to favour those in Needy rather than the Deserving, expect more to be taken from you and given to someone else.

Already Council Housing policy favours immigrants because they are more in need than a young family living with parents. Expect this to be taken further still. If you own 2 houses, expect one to be given to a family of illegal immigrants.

[DimPrawn]

The Romanians & Bulgarians arrive next year in their millions. House prices will double again soon.

http://newsimg.bbc.co.uk/media/image...s_sep3_203.gif

It says that "young people" can afford the price rises because their parents have made so much money (equity) that they can release it to their children.

How does this work? It's like a closed loop positive feedback system. Generation 1 buys a house, it doubles in value, so they release the money and give it to Generation 2 who buys a house which doubles in value and they release that gain to Generation 3 etc.

Can such a system be sustained?