jimenato

Quite. That's what Cape didn't understand and why he thinks that this graph shows that there is an exceptional increase in house price inflation at that point. There isn't - it's just normal. It's coloured his whole view of Brexit.

amideislas

I live, work and play amongst "foreigners", and have for 30 years, and I can say with absolute confidence that nobody I know would ever remotely consider living that way (nor has any desire to live in England), and don't need to. All this nonsense is just sensationalist tabloid bubble gobbledygook. It's just another way to justify their fear of "foreigners", and reassure themselves of their exceptionalism. And laughably, nobody outside Britain really gives a flying dynamic fark if you're English, but they do know that you think you're special. But that's just part of the charm.

Watchpost

Just read this thread, numerous reasons have been stated in the last couple of days.

That's one analysis. Another analysis is that buy-to-let is a reaction to a) historically low interest rates and b) correspondingly historically low returns from other investments, such as shares, since investors can get a higher yield from an investment in rental property.

There are doubtless also other ways of analysing this situation. Your approach, though, is to analyse everything precisely so that the problem is shown to be caused ultimately by immigrants. Your arguments aren't entirely without merit, but they are totally one-sided.

Landlords are "providing" accommodation? Interestingly, yesterday you were arguing that, I quote: "The change of tenure makes no difference to the overall supply of or demand for accommodation." The houses were there, with or without BTL landlords, right? So why "providing"?

As we've already seen, between 1977 and 1987, a decade in which net inward migration was very low, UK house prices tripled. Yet in the 1990s, you assume that net inward migration was the primary driver of house price rises. Why? 1977-1987, it wasn't even a factor, so why is your assessment that it have been the biggest factor in the 1990s?

You have simply made up your mind that immigrants are the problem, and cherry-pick the available facts to support this assumption.

Watchpost

We've been saying this all along. But try explaining non-logarithmic scales to someone who thinks that "If your body temperature goes up from a normal 99F to say 105F it has only gone up around 6%".

As a colleague of mine used to say, "elephant ears by the cubic fortnight".

paulry

It's simple maths. Over the last 20 years or so the UK has had net immigration in the ballpark of a quarter of a million a year. That's 5 million extra people over that time. It has been said that England alone has a housing backlog of 4 million homes. Now imagine if the UK government had managed immigration so that the net figure was two and a half million instead of five. What do you think the effect would have been on housing purchase and rental prices?

Cape Blue

rate of increase - since 2000 it is five times was it was in the 70's and 80's - inelastic building cannot keep up.

Cape Blue

Valid point on rent control - thanks.

No sure gentrification has much to do with - localised and driven by population pressures in already gentrified areas.

Cape Blue

It's not my notion, it's a fundamental economic fact that increased demand for an inelastic good drives up prices.

Previous decades house price growth were driven by different things that either generated demand (reduced household sizes) or increased availability to finance.

EMR

Gentrification is a major factor as are the new transport links in many of our cities
Anyone with even a passing knowledge of what is happening in our major cities would know that,

Cape Blue

What do you think has caused the increase in house prices since the mid 1990's?

Cape Blue

Why is it normal?

The reasons for the 70's increase had changed and "normal" might have been a far lower increase in prices.

Cape Blue

Yeah, OK, keep taking the pills.

Red Eric

There is actually a Bank of England report from a year or two back which shows there is a very slight depressive effect on the wages of the lowest-paid unskilled workers.

I can't remember off the top of my head whether the Bank of England's in favour this week for radicalised Brexiters like Blukip on account of having said Brexit isn't in itself responsible for something, or out of favour for being "experts". However, either way, the solution to that one appears blindingly obvious.

Cape Blue

I was asking you, specifically about the graph, but clearly you're all ad-hom and don't have an opinion of your own.

Do you have any data on this higher yield?

Nope, I had considered most of the other possibilities and discounted them as either fixed and nothing the UK could do anything about (i.e. increased longevity) or insignificant in the scheme of things (i.e. empty houses) - persistent high net immigration was something that could be addressed and forms around 75% of the population increase. I am a believer in supply & demand economics.

They provide accommodation to those who want to rent. It's quite simple - you're fresh off the boat from Poland with only a few Zloty in your pocket, you're not going to be buying a house next week, you want a private rental - landlords provide that private rental accommodation. Their provision of this does not impact supply as its merely a change of tenure, but the demand by tthe several million migrants does impact demand.

Why not? Why do the drivers in the 70's have to be the same as the drivers in the past 20 years? In the 70's we had a mix of domestic population increase plus a significant reduction in the size of households - both providing demand-side expansion. Since the mid-90's household size has most stagnated and the demand-side expansion is around 75% immigration.

Nope, I've analysed the subject and come to the conclusion that rapid expansion of demand over an inelastic supply has been the primary driver. I have mentioned that reduced interest rates have been a solid support act.

Cape Blue

This is a logic free zone - adding several million more residents apparently does not impact prices at all.

In their desperate desire to be social justice warriors and "protect" immigrants, all basic economic logic must be thrown out the window. Yet these people also get a vote - shocking really, especially as the remainers were meant to be so much more educated.