House prices

[sobrique]

According to Radio 4 this morning, this month is the first time in 9 years that house prices have increased less than salaries. Presumably they're referring to averages.

However, what this means is that for every other month for the last 9 years, houses have become less affordable to the 'average buyer'.

Now I new house prices were getting silly, but really. Is that what this government sees as 'good' for the economy? Oh I appreciate that the established buyers are now chuckling over their foresight in acquiring an asset that's become more valuable, but there's a limit.

And the limit is when you don't have new buyers entering a market, then it stagnates. That's not a good thing surely?

Comments

[mister-jack.livejournal.com]

Your statement about affordability is incorrect, the big drop in interest rates has meant that although the actual cost of houses has risen, the mortgage payment level wrt salaray hasn't.

The Government has been "concerned" about house prices for a long time. Trouble is, it has precious little it can really do about it. Big building projects are a) expensive and b) unpopular with environmentalists, raising interest rates could cause a price crash and that would tip the whole economy into recession (and besides they don't control them anymore) and big taxes on house sales or house price rises would be slightly less popular than the poll tax.

Personally I think one of the significant factors behind the rise was right-to-buy, and that over the next fifteen to twenty years we'll see a return to a similar level of rental vs. ownership we used to have but this time the landlords will be private not public.

Oh, and as a house owner, I'd like to see prices drop - what matters to me is not the value of my house, but the gap between it and the next house I want to buy.

[(Anonymous)]

"Oh, and as a house owner, I'd like to see prices drop - what matters to me is not the value of my house, but the gap between it and the next house I want to buy."

You're right on the money there. Increasing house prices only benefit people who are trading down to a smaller property. I wish those fool newspapers would cotton on that high house prices are bad. Even if it did rob us of humour at the Daily Mail's expense. It also drives up rental prices.

[crashbarrier.livejournal.com]

Yeah.. I notices in the bbc website yesturday this..

http://news.bbc.co.uk/1/hi/england/nottinghamshire/4599359.stm

which is sort of the same.. absent landlords buying houses, allowing them to fal into ruin so that they can sell at a high price to people who want to "do it up". this can't be doing the market any good. It forces new house sto be built and over inflates the market as people buying the house won't sell at less than they bought/invested in if they can help it.

[dj-rws.livejournal.com]

"And the limit is when you don't have new buyers entering a market, then it stagnates. That's not a good thing surely?"

No just that the only people who could afford a house in the first place have even more money to buy more houses and so on until the only people who can afford to have a house have several.