Reply to: Tory DOOM™: Property

[jamesbrown]

Far simpler for the gammons to blame immigrants.

Very little to do with immigration. Immigrants create real demand, and recent inflation has been synthetic demand. Also very little to do with housing starts/completions, for the same reason. Analysis of the housing market in this country is almost as broken as the market itself.

[northernladyuk]

Yes, and this is all part of the same thing. Asset prices became highly correlated - house prices were inflated in many countries simultaneously - because multiple central banks were engaged in similar policies whose aim was explicitly to inflate asset prices. The same is true in reverse.

Far simpler for the gammons to blame immigrants.

[jamesbrown]

Foreign funny money is presumably a factor too.

Yes, and this is all part of the same thing. Asset prices became highly correlated - house prices were inflated in many countries simultaneously - because multiple central banks were engaged in similar policies whose aim was explicitly to inflate asset prices. The same is true in reverse.

[jamesbrown]

Not a subscriber... assuming this is about cheap money driving up prices. Agreed. Foreign funny money is presumably a factor too.

It's worth a read. There are a lot of articles about this, but this one's quite nicely written. You should be able to access individual FT articles via a search engine (searching for the title).

There are some interesting stats in there from BoE analysis. For example, they estimate that house prices would've been 22% lower by 2014 if it weren't for QE. This component of price inflation will inevitably unwind over time. Of course, it was compounded by gov't policy and other factors.

[northernladyuk]

It's really quite straightforward. As is the unwinding:

https://www.ft.com/content/8e131f28-...a-295c97e6fd0b

Not a subscriber: "Payback time for QE looms — and it will be expensive."

The unwinding may happen slowly, but markets tend to bring forward their reaction.

Not a subscriber... assuming this is about cheap money driving up prices. Agreed. Foreign funny money is presumably a factor too.

[jamesbrown]

House prices appear to be driven up by investment demand, not excessive 'real' demand for housing.

It's really quite straightforward. As is the unwinding:

https://www.ft.com/content/8e131f28-...a-295c97e6fd0b

Not a subscriber: "Payback time for QE looms — and it will be expensive."

The unwinding may happen slowly, but markets tend to bring forward their reaction.

[Hobosapien]

When she is leasing a Corsa she will have something to complain about.

That was my point, using the freaky eyes, which I tend to relate to 'WTF is this person on'.

House prices appear to be driven up by investment demand, not excessive 'real' demand for housing. ...

It's a vicious cycle of cheap credit allowing people to enter the house prices always rising race (they wouldn't be able to afford an average house price on an average wage if interest rates were nearer to historical average of 5%) causing the government to bail out the banks (funding for lending at lower rates than they pay traditional savers) and builders (Help to Buy gives builders a nice 20% bonus on new build prices) so it all doesn't come crashing down.

No more boom and bust. It's magic, helped by foreign investment (driving London prices, many places not even rented out) and devaluation of sterling (making assets appear to be worth more when really it's your wage that's worth less), and 'emergency' BOE interest rates to keep it from crashing. They're doing a fine job.

[northernladyuk]

Not really. If there was a major nuclear war, it would affect temperate latitudes on the whole far more than tropical areas, so literally hundreds of millions of immigrants would soon start pouring into Europe and the UK from Africa.

At least they could benefit from the Brexit dividend.

[OwlHoot]

Or a nuclear war - similar effect...

Not really. If there was a major nuclear war, it would affect temperate latitudes on the whole far more than tropical areas, so literally hundreds of millions of immigrants would soon start pouring into Europe and the UK from Africa.

[SueEllen]

Yep, online alternatives (PurpleBricks etc) for sales, and OpenRent for private landlords to DIY the letting process.

It's been a long time coming.

The plan to reduce letting fees will also have an impact as that is one area they've been able to raise income when the sales side is in a lull, though I expect the cost will be passed on to the tenant one way or another just hopefully not to the same level of cost. Last time I rented somewhere (close to a client to avoid b&b/hotels week in week out) the letting agent tried to defend the extortionate fees (over £200) by saying she was only leasing a BMW and not a Range Rover like some of her peers.

When she is leasing a Corsa she will have something to complain about.

[northernladyuk]

we need 250,000 homes built every year to accomodate the new bodies appearing. We are lucky if we build 100,000 no chance of any real drop unless we have a decent recession.

House prices appear to be driven up by investment demand, not excessive 'real' demand for housing. Have a look at:



If it was 'real' demand, it would look more like th Dublin figures:
e

[Hobosapien]

Estate agents shops are closing down as more people are looking online.

Yep, online alternatives (PurpleBricks etc) for sales, and OpenRent for private landlords to DIY the letting process.

It's been a long time coming.

The plan to reduce letting fees will also have an impact as that is one area they've been able to raise income when the sales side is in a lull, though I expect the cost will be passed on to the tenant one way or another just hopefully not to the same level of cost. Last time I rented somewhere (close to a client to avoid b&b/hotels week in week out) the letting agent tried to defend the extortionate fees (over £200) by saying she was only leasing a BMW and not a Range Rover like some of her peers.

[SueEllen]

If you think Estate Agents will suffer, you're living in some sort of parallel universe.

Estate agents shops are closing down as more people are looking online.

[Mordac]

we need 250,000 homes built every year to accomodate the new bodies appearing. We are lucky if we build 100,000 no chance of any real drop unless we have a decent recession.

Or a nuclear war - similar effect...

[vetran]

we need 250,000 homes built every year to accomodate the new bodies appearing. We are lucky if we build 100,000 no chance of any real drop unless we have a decent recession.