1.26 and falling
Oct 10th 2016, 7:57 am
#46
Account Closed
Joined: Feb 2011
Posts: 0
Re: 1.26 and falling
House prices will need to drop for the British society at large. The question is how and when.
It is clear that the current government will not want to get on the wrong side of the landlords, so they are not regulating enough (for example to build the number of houses that is needed or to really tax landlords). Perhaps the population and economy size post brexit will help.
In any case the market will inevitably correct when Toxic mortgages, due to fundamental un-affordability and lender greed, overflow. The question is, when will this happen?
It is clear that the current government will not want to get on the wrong side of the landlords, so they are not regulating enough (for example to build the number of houses that is needed or to really tax landlords). Perhaps the population and economy size post brexit will help.
In any case the market will inevitably correct when Toxic mortgages, due to fundamental un-affordability and lender greed, overflow. The question is, when will this happen?
And thank goodness! It is the equities markets that caused the majority of the damage. Over stretched institutions failed, tax money bailed some banks, leading to massive job losses and a nose dive in sentiment.
At least the housing market has a tangible value and serves an every day purpose. That's why it never plummeted.
In the next correction - the equities and such like are being tightly regulated so the damage will be spread towards housing. Who does that help?... the Bankers!
At least the housing market has a tangible value and serves an every day purpose. That's why it never plummeted.
In the next correction - the equities and such like are being tightly regulated so the damage will be spread towards housing. Who does that help?... the Bankers!
Lots of cities are 20% landlord owned in the UK now.
I would think that at the moment there needs to be a slow down in property prices but an increase in wage inflation (or any combination that brings property in the UK back towards a sensible multiplier of average salary).
Oct 10th 2016, 8:04 am
#48
Forum Regular
Joined: May 2016
Posts: 56
Re: 1.26 and falling
Toxic mortgages played their part in the 08 crash, not just equities, they made it many times worse with the bundling of awful mortgages but the root problem was overlending.
Lots of cities are 20% landlord owned in the UK now.
I would think that at the moment there needs to be a slow down in property prices but an increase in wage inflation (or any combination that brings property in the UK back towards a sensible multiplier of average salary).
Lots of cities are 20% landlord owned in the UK now.
I would think that at the moment there needs to be a slow down in property prices but an increase in wage inflation (or any combination that brings property in the UK back towards a sensible multiplier of average salary).
Ps. how do you quote multiple sources in one post?
Cheers.
Oct 10th 2016, 8:14 am
#52
Knee deep and rising
Joined: Sep 2011
Posts: 3,007
Re: 1.26 and falling
It's not even about leveraging after the fact, there are very few residential developments that have a linked relationship with the cost to build price. Just as share prices do not seem to have a relationship with actual earnings.
Oct 10th 2016, 8:26 am
#53
Forum Regular
Joined: May 2016
Posts: 56
Re: 1.26 and falling
In terms of the price of housing being so much more than the build cost, I agree this is too far removed. Where do those margins go??
It is about supply and demand of course. Government should more closely manage supply at this stage, given the relationship with actual earnings. But perhaps the Brit ideal of home ownership will adjust.
Oct 10th 2016, 8:29 am
#54
Lost in BE Cyberspace
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 15,887
Re: 1.26 and falling
What do you think the aim of the minimum wage is? If we can also create better internal demand that will help too.
Wages have hardly increased since 2007. House prices are over 20x average earnings in some places. A crash won't come soon though - no government will allow that.
Oct 10th 2016, 8:31 am
#55
Account Closed
Joined: Feb 2011
Posts: 0
Re: 1.26 and falling
The little square button next to the 'Quote' button on the bottom right of the post.
Where are you now then?
Where are you now then?
Oct 10th 2016, 8:31 am
#56
Lost in BE Cyberspace
Joined: Aug 2009
Location: Disneyland, Dubai
Posts: 15,887
Oct 10th 2016, 8:33 am
#57
Knee deep and rising
Joined: Sep 2011
Posts: 3,007
Re: 1.26 and falling
Well, I don't think there are any developments where a higher build cost home is priced below a lower build cost home.
In terms of the price of housing being so much more than the build cost, I agree this is too far removed. Where do those margins go??
It is about supply and demand of course. Government should more closely manage supply at this stage, given the relationship with actual earnings. But perhaps the Brit ideal of home ownership will adjust.
In terms of the price of housing being so much more than the build cost, I agree this is too far removed. Where do those margins go??
It is about supply and demand of course. Government should more closely manage supply at this stage, given the relationship with actual earnings. But perhaps the Brit ideal of home ownership will adjust.
Oct 10th 2016, 8:37 am
#58
Knee deep and rising
Joined: Sep 2011
Posts: 3,007
Re: 1.26 and falling
I've missed you.
What do you think the aim of the minimum wage is? If we can also create better internal demand that will help too.
Wages have hardly increased since 2007. House prices are over 20x average earnings in some places. A crash won't come soon though - no government will allow that.
What do you think the aim of the minimum wage is? If we can also create better internal demand that will help too.
Wages have hardly increased since 2007. House prices are over 20x average earnings in some places. A crash won't come soon though - no government will allow that.
Optimistically you may be right though it is hard to see how minimum wage increases could help anywhere around London though. A further smashing of the old pound may bring back in foreign investors in greater numbers again.
Oct 10th 2016, 8:41 am
#60
Forum Regular
Joined: May 2016
Posts: 56
Re: 1.26 and falling
I have no experience with house building, so perhaps the margins are much tighter than I think.