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Post EU Referendum

Post EU Referendum

Old Aug 16th 2018, 8:14 pm
  #38806  
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Default Re: Post EU Referendum

Originally Posted by Giantaxe View Post
Graphs like this are inherently misleading in that even with a constant rate of increase, the slope will become progressively steeper. For example, compare the 70's slope (when increases were in fact higher) with the 90's slope.
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.
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Old Aug 16th 2018, 8:16 pm
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Default Re: Post EU Referendum

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.

Last edited by amideislas; Aug 16th 2018 at 8:55 pm.
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Old Aug 16th 2018, 8:23 pm
  #38808  
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Default Re: Post EU Referendum

Originally Posted by Cape Blue View Post
Can you tell me what they [other factors driving rising house prices/housing undersupply] are and in particular their magnitude since the mid-90's that makes them similar to persistent high net immigration - especially the ones you feel are demonstrated by the graph.
Just read this thread, numerous reasons have been stated in the last couple of days.

Originally Posted by Cape Blue View Post
Buy-to-let is a reaction to demand exceeding supply
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.

Originally Posted by Cape Blue View Post
the demand for accommodation has increased beyond an inelastic supply and landlords have stepped-in to provide accommodation for millions of migrants who could not buy themselves nor get social housing.
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"?

Originally Posted by Cape Blue View Post
I've not ignored any other factors, I've assessed that persistent high net immigration is the primary driver over them.
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.
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Old Aug 16th 2018, 8:37 pm
  #38809  
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Default Re: Post EU Referendum

Originally Posted by Giantaxe View Post
Graphs like this are inherently misleading in that even with a constant rate of increase, the slope will become progressively steeper. For example, compare the 70's slope (when increases were in fact higher) with the 90's slope.
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".
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Old Aug 16th 2018, 8:42 pm
  #38810  
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Default Re: Post EU Referendum

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?
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Old Aug 16th 2018, 9:13 pm
  #38811  
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Default Re: Post EU Referendum

Originally Posted by macliam View Post
3+million migrants equates to less than 5% of the UK population. Amazing that 5% can cause so many problems....... unbelievable actually.
rate of increase - since 2000 it is five times was it was in the 70's and 80's - inelastic building cannot keep up.
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Old Aug 16th 2018, 9:15 pm
  #38812  
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Default Re: Post EU Referendum

Originally Posted by johnwoo View Post
Not mention the removal of rent control and it's effect on house prices? Gentrification of what were once the less desirable parts of London.
Valid point on rent control - thanks.

No sure gentrification has much to do with - localised and driven by population pressures in already gentrified areas.
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Old Aug 16th 2018, 9:20 pm
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Default Re: Post EU Referendum

Originally Posted by jimenato View Post
I don't know why anyone is trying to argue that the house price inflation from the mid '90s is or is not down to immigration when it hasn't even been demonstrated that it was even particularly significant compared to previous decades.

Cape's notion that immigration raises house prices is dead unless he can come up with something else.

We can probably write off immigration depressing wages as well - unless he can demonstrate that is the case.
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.
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Old Aug 16th 2018, 9:21 pm
  #38814  
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Default Re: Post EU Referendum

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,
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Old Aug 16th 2018, 9:23 pm
  #38815  
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Default Re: Post EU Referendum

Originally Posted by Giantaxe View Post
Graphs like this are inherently misleading in that even with a constant rate of increase, the slope will become progressively steeper. For example, compare the 70's slope (when increases were in fact higher) with the 90's slope.
What do you think has caused the increase in house prices since the mid 1990's?
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Old Aug 16th 2018, 9:24 pm
  #38816  
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Default Re: Post EU Referendum

Originally Posted by jimenato View Post
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.
Why is it normal?

The reasons for the 70's increase had changed and "normal" might have been a far lower increase in prices.
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Old Aug 16th 2018, 9:25 pm
  #38817  
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Default Re: Post EU Referendum

Originally Posted by amideislas View Post
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.
Yeah, OK, keep taking the pills.
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Old Aug 16th 2018, 9:28 pm
  #38818  
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Default Re: Post EU Referendum

Originally Posted by jimenato View Post
We can probably write off immigration depressing wages as well - unless he can demonstrate that is the case.
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.
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Old Aug 16th 2018, 9:37 pm
  #38819  
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Default Re: Post EU Referendum

Originally Posted by Watchpost View Post
Just read this thread, numerous reasons have been stated in the last couple of days.
I was asking you, specifically about the graph, but clearly you're all ad-hom and don't have an opinion of your own.

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.
Do you have any data on this higher yield?

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.
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.

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"?
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.

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?
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.

You have simply made up your mind that immigrants are the problem, and cherry-pick the available facts to support this assumption.
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.
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Old Aug 16th 2018, 9:40 pm
  #38820  
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Default Re: Post EU Referendum

Originally Posted by paulry View Post
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?
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.
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