UKIP seem to be saying they dont want too much countryside built on. That will keep prices high. It is Labour that wants to starting building all over the nation.
As long as there is a shortage, prices will probably stay pretty high I believe.
the country side isnt even the right place for alot of people, young people leave it in droves once they can afford it, building in the countryside, basically just means a long commute for the residents
… mainly because the UK economy would likely go into a major recession.
That's going to happen anyway.
The UK economies growth since the recession has been fuelled almost entirely by credit and the government pushing credit spending.
One thing for certain with credit is you have to pay it back, and in recent history, with horrific interest rates with some companies charging in the thousands of percent, those paying it back will most likely find themselves unable to spend further. Those that can't pay it back will increase costs and losses for banks and be refused further credit and so will stop spending.
One thing for certain in my opinion, is the mortgage crunch we saw in 2008 is on it's way full circle but with credit. No matter how much the government push it, the people have to be able to afford it, and that affordability will inevitably run out as the reality of repayment hits home.
The most stable economy in the world, Germany, has one stand out feature - they have very little credit. Most people have to save over lifetimes or generations for houses as they don't have much in the way of mortgages. In fact the majority never own homes but simply rent.
Same with personal credit, practically non existent. Some of this harks back to the war according to reports. However, it's become a policy that's endured and has proven extremely stable for the economy.
Because it's unaffected by lending or people's ability to pay interest rates. Growth is real growth fuelled by people spending physical money they actually earn. Not artificial demand created by credit spending that can dry up at any minute or interest rates that can become unaffordable.
All this is just my opinion, but in my opinion, whatever party you get in power, the UK economy is doomed until the government realise the best way to get growth is to shift money away from huge wages paid to the rich, (which would probably have to be capped to prevent them instead cutting jobs to maintain their wages), to using that saved money to fund better wages for the poor ie £20 ph + minimum wage.
UK tax receipts are at record lows just as wages are - maybe something should be ringing alarm bells here. One thing the government doesn't seemed to have learned is that when the PPI payouts happened, the economy grew 3% overnight simply from putting money in Joe Average's pocket. Put extra money in Joe Average's pocket permanently, and you have larger tax receipts because Joe Average doesn't avoid tax and you have increased growth because Joe Average tends to spend that extra money in shops and on services thereby boosting growth in a sustainable way.
The most stable economy in the world, Germany, has one stand out feature - they have very little credit. Most people have to save over lifetimes or generations for houses as they don't have much in the way of mortgages. In fact the majority never own homes but simply rent.
I suspect that Germany is at a disadvantage with such low home ownership rates.
Does anyone have a clue if there's anything statistically significant in the house ownership table mentioned above?
I can't make anything out of it at all. It doesn't seem to have any relationship to GDP or anything.
There doesn't seem to be any advantage or disadvantage from it.
Does anyone have a clue if there's anything statistically significant in the house ownership table mentioned above?
I can't make anything out of it at all. It doesn't seem to have any relationship to GDP or anything.
There doesn't seem to be any advantage or disadvantage from it.
I agree Dave.
Why are they at a disadvantage? What is so special about actually owning the home you live in. According to those figures only 1/2 the population in Germany own a home. What is so wrong with that? A long term rental is as good as ownership with non of the disadvantages ie. interest rate fluctuation, maintenance costs, insurance costs etc. People in this country are too hung up on owning. In any case, those who do own in Germany do so in a sustainable way. Families save up over generations to buy a house.
If anything, it proves an advantage. Germany wasn't affected at all by the Credit Crunch according to this and other reports:
I believe the only way Germany has been affected is on the export side to countries that have been affected.
That is why Germany is the strongest economy in Europe - because it's economy isn't based on credit or people spending money they don't have. It's based on earnings based spending and growth is based on true not artificial demand.
Why are they at a disadvantage? What is so special about actually owning the home you live in. According to those figures only 1/2 the population in Germany own a home. What is so wrong with that? A long term rental is as good as ownership with non of the disadvantages ie. interest rate fluctuation, maintenance costs, insurance costs etc. People in this country are too hung up on owning. In any case, those who do own in Germany do so in a sustainable way. Families save up over generations to buy a house.
If anything, it proves an advantage. Germany wasn't affected at all by the Credit Crunch according to this and other reports:
I believe the only way Germany has been affected is on the export side to countries that have been affected.
That is why Germany is the strongest economy in Europe - because it's economy isn't based on credit or people spending money they don't have. It's based on earnings based spending and growth is based on true not artificial demand.
It’s time to wake up and smell the coffee.....
Germans develop a thirst to own their homes
Low mortgage rates and rising rents have prompted a nation wedded to the rental market to switch strategy.
Does anyone have a clue if there's anything statistically significant in the house ownership table mentioned above?
I can't make anything out of it at all. It doesn't seem to have any relationship to GDP or anything.
There doesn't seem to be any advantage or disadvantage from it.
It’s all rather simple really....
When we take out a mortgage to buy a home of our own we are protected against inflation and the cost is determined by the interest charged on the outstanding loan.
If all goes according to plan and we repay the capital through time our housing costs will diminish until we own our home outright.
In the UK currently 50% of home owners own their homes outright.
When we take out a mortgage to buy a home of our own we are protected against inflation and the cost is determined by the interest charged on the outstanding loan.
If all goes according to plan and we repay the capital through time our housing costs will diminish until we own our home outright.
In the UK currently 50% of home owners own their homes outright.
..and there is the fundamental flaw.
You're not protected against inflation because if inflation goes up so do interest rates.
If interest rates go up, then many people find themselves no longer able to repay their mortgage and default and lose their homes in any event.
If people default, then it costs the banks money and they increase rates for other borrowers plus restrict credit...and house prices fall which then results in negative equity ie you're losing money as the house is worth less than the mortgage, so far from being protected against inflation you're actually suffering from inflation.
Then you have a credit crunch and a stagnant housing market in which people can't afford to buy.
It was notable on Question Times a few months ago that there was a guy on there moaning at the politicians that if interest rates go up by 1% as predicted then he was going to lose his house!!!.....and it was their fault!!!!
It seems some people have short memories. In the 1980's interest rates were touching 15%. Some might say that was exceptional, but look back through history and 9-10% isn't uncommon.
A mortgage is for 25 years or more and so during that period it's almost inevitable that interest rates will at some point touch at least 10%. Anyone who takes a mortgage that they cannot repay at 10% is therefore foolish to say the least.
One final point, on the protected from inflation point - have you ever stopped to work out what you're paying back on your mortgage with interest?
A £150,000 mortgage will typically cost you £225,000 at 3% !!!!
Just click on the 1st part of the link - it will work despite only being part highlighted:
So where's the inflation protection? Unless your £150,00 house increases in value to more than £225,000 then you've lost money on your purchase and that's without even taking into account the interest that the same money would have made had it been in a bank account for the same period of time - if you could get 3% in a savings account with the same savings payments, then it's safe to assume you'd have made £75,000 in the same period in interest, so your £150,000 house has to be worth £300,000 at the end of it just for you to break even (£225,000 it's cost you + the £75,000 in lost interest on the money you paid on the mortgage but could otherwise have saved).
Just like immigration will go down to tens of thousands if you vote conservative.
Cant the conservatives sell their policies to the people rather than sink to new lows like this! Embarrassing !
House prices will go down if we have Ed has PM. They already have at even the risk of a Labour led government - principle reason being the Terraced House tax - which is going to hit house prices.
It’s all rather simple really....
When we take out a mortgage to buy a home of our own we are protected against inflation and the cost is determined by the interest charged on the outstanding loan.
only just seen this.
What I was asking was 'can we draw conclusions as to whether home ownership is of benefit or not from the linked table showing national home ownership figures?'
The table seems to show no relation to GDP, population, economic success or anything.
Nothing to do with the benefit or otherwise to individuals in buying a house.
This comment alone is a good indication that there is a failure to understand the fundamentals.
Interest rates are not determined by inflation.
You've ignored quite a few of the fundamentals. Perhaps not always determined, but they are closely linked Inflation and interest rates are linked, and frequently referenced in macroeconomics. Inflation refers to the rate at which prices for goods and services rises. In general, as interest rates are lowered, more people are able to borrow more money. The result is that consumers have more money to spend, causing the economy to grow and inflation to increase. The opposite holds true for rising interest rates. As interest rates are increased, consumers tend to have less money to spend. With less spending, the economy slows and inflation decreases. http://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp
and in some cases are determined by inflation http://econ.economicshelp.org/2009/04/link-between-inflation-and-interest.html
House prices going down would be an incredibly good thing for the country, anyone that loses out well serves them right for paying vastly overinflated prices for a house in the first place, unfortunately though that one good thing isn't anywhere near enough to make up for the millions of awful things the ukip nutjobs would do
This comment alone is a good indication that there is a failure to understand the fundamentals.
Interest rates are not determined by inflation.
Yep they are because if inflation rises too quickly, then it's a sign that spending is rising too quickly and may become unsustainable as the economy becomes over heated so the banks increase interest rates to slow growth.
You've ignored quite a few of the fundamentals. Perhaps not always determined, but they are closely linked Inflation and interest rates are linked, and frequently referenced in macroeconomics. Inflation refers to the rate at which prices for goods and services rises. In general, as interest rates are lowered, more people are able to borrow more money. The result is that consumers have more money to spend, causing the economy to grow and inflation to increase. The opposite holds true for rising interest rates. As interest rates are increased, consumers tend to have less money to spend. With less spending, the economy slows and inflation decreases. http://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp
and in some cases are determined by inflation http://econ.economicshelp.org/2009/04/link-between-inflation-and-interest.html
Thanks Dave. Exactly the point I was trying to make.
Yep they are because if inflation rises too quickly, then it's a sign that spending is rising too quickly and may become unsustainable as the economy becomes over heated so the banks increase interest rates to slow growth.
Thanks Dave. Exactly the point I was trying to make.
We I must confess I find it difficult to establish a link between inflation and interest rates when I find that the first house I bought has increase in value by over 6,000% whilst interest rates have averaged about 6%. during the same period.
We I must confess I find it difficult to establish a link between inflation and interest rates when I find that the first house I bought has increase in value by over 6,000% whilst interest rates have averaged about 6%. during the same period.
Maybe you've forgotten what happened to the housing market when interest rates touched 15%? Took about a decade for prices to recover.
We I must confess I find it difficult to establish a link between inflation and interest rates when I find that the first house I bought has increase in value by over 6,000% whilst interest rates have averaged about 6%. during the same period.
You're trying to compare things that don't match.
The Retail Price Index (RPI), which measures inflation, is based on the cost of goods and services we normally buy - food, petrol etc etc.
Most people don't buy houses regularly. They pay mortgages.
So the RPI looks monthly at the difference in the mortgage interest rate, not on the cost of houses.
Try this for a simple explanation of how inflation is calculated http://www.bbc.co.uk/news/business-12196322
You're trying to compare things that don't match.
The Retail Price Index (RPI), which measures inflation, is based on the cost of goods and services we normally buy - food, petrol etc etc.
Most people don't buy houses regularly. They pay mortgages.
So the RPI looks monthly at the difference in the mortgage interest rate, not on the cost of houses. Try this for a simple explanation of how inflation is calculated http://www.bbc.co.uk/news/business-12196322
Well there you go, that just proves what I have been saying.
There is no link between house price inflation and interest rates.
Comments
Im sure they have housing pressure, school bulge classes,
And a big budget for translators. I do wish people looked out their own little bubble.
That's going to happen anyway.
The UK economies growth since the recession has been fuelled almost entirely by credit and the government pushing credit spending.
One thing for certain with credit is you have to pay it back, and in recent history, with horrific interest rates with some companies charging in the thousands of percent, those paying it back will most likely find themselves unable to spend further. Those that can't pay it back will increase costs and losses for banks and be refused further credit and so will stop spending.
One thing for certain in my opinion, is the mortgage crunch we saw in 2008 is on it's way full circle but with credit. No matter how much the government push it, the people have to be able to afford it, and that affordability will inevitably run out as the reality of repayment hits home.
The most stable economy in the world, Germany, has one stand out feature - they have very little credit. Most people have to save over lifetimes or generations for houses as they don't have much in the way of mortgages. In fact the majority never own homes but simply rent.
Same with personal credit, practically non existent. Some of this harks back to the war according to reports. However, it's become a policy that's endured and has proven extremely stable for the economy.
http://qz.com/167887/germany-has-one-of-the-worlds-lowest-homeownership-rates/
Why then is Germany's economy so strong?
Because it's unaffected by lending or people's ability to pay interest rates. Growth is real growth fuelled by people spending physical money they actually earn. Not artificial demand created by credit spending that can dry up at any minute or interest rates that can become unaffordable.
All this is just my opinion, but in my opinion, whatever party you get in power, the UK economy is doomed until the government realise the best way to get growth is to shift money away from huge wages paid to the rich, (which would probably have to be capped to prevent them instead cutting jobs to maintain their wages), to using that saved money to fund better wages for the poor ie £20 ph + minimum wage.
UK tax receipts are at record lows just as wages are - maybe something should be ringing alarm bells here. One thing the government doesn't seemed to have learned is that when the PPI payouts happened, the economy grew 3% overnight simply from putting money in Joe Average's pocket. Put extra money in Joe Average's pocket permanently, and you have larger tax receipts because Joe Average doesn't avoid tax and you have increased growth because Joe Average tends to spend that extra money in shops and on services thereby boosting growth in a sustainable way.
Affordable housing, yah ?
I suspect that Germany is at a disadvantage with such low home ownership rates.
http://en.wikipedia.org/wiki/List_of_countries_by_home_ownership_rate
I can't make anything out of it at all. It doesn't seem to have any relationship to GDP or anything.
There doesn't seem to be any advantage or disadvantage from it.
I agree Dave.
Why are they at a disadvantage? What is so special about actually owning the home you live in. According to those figures only 1/2 the population in Germany own a home. What is so wrong with that? A long term rental is as good as ownership with non of the disadvantages ie. interest rate fluctuation, maintenance costs, insurance costs etc. People in this country are too hung up on owning. In any case, those who do own in Germany do so in a sustainable way. Families save up over generations to buy a house.
If anything, it proves an advantage. Germany wasn't affected at all by the Credit Crunch according to this and other reports:
http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2144778
I believe the only way Germany has been affected is on the export side to countries that have been affected.
That is why Germany is the strongest economy in Europe - because it's economy isn't based on credit or people spending money they don't have. It's based on earnings based spending and growth is based on true not artificial demand.
It’s time to wake up and smell the coffee.....
http://www.telegraph.co.uk/finance/newsbysector/constructionandproperty/9967397/Germans-develop-a-thirst-to-own-their-homes.html
It’s all rather simple really....
When we take out a mortgage to buy a home of our own we are protected against inflation and the cost is determined by the interest charged on the outstanding loan.
If all goes according to plan and we repay the capital through time our housing costs will diminish until we own our home outright.
In the UK currently 50% of home owners own their homes outright.
..and there is the fundamental flaw.
You're not protected against inflation because if inflation goes up so do interest rates.
If interest rates go up, then many people find themselves no longer able to repay their mortgage and default and lose their homes in any event.
If people default, then it costs the banks money and they increase rates for other borrowers plus restrict credit...and house prices fall which then results in negative equity ie you're losing money as the house is worth less than the mortgage, so far from being protected against inflation you're actually suffering from inflation.
Then you have a credit crunch and a stagnant housing market in which people can't afford to buy.
It was notable on Question Times a few months ago that there was a guy on there moaning at the politicians that if interest rates go up by 1% as predicted then he was going to lose his house!!!.....and it was their fault!!!!
It seems some people have short memories. In the 1980's interest rates were touching 15%. Some might say that was exceptional, but look back through history and 9-10% isn't uncommon.
A mortgage is for 25 years or more and so during that period it's almost inevitable that interest rates will at some point touch at least 10%. Anyone who takes a mortgage that they cannot repay at 10% is therefore foolish to say the least.
One final point, on the protected from inflation point - have you ever stopped to work out what you're paying back on your mortgage with interest?
A £150,000 mortgage will typically cost you £225,000 at 3% !!!!
Just click on the 1st part of the link - it will work despite only being part highlighted:
https://www.google.co.uk/compare/mortgage/qs?gclid=CNLcx6CCk8ICFUbMtAod6VkAKw#!tab=calculator&purpose=PURCHASE&totalMortgage=150000&profile=DEFAULT&profile=DEFAULT&repaymentsType=CAPITAL_AND_INTEREST&term=25&jointApplication=false&applyRoute=true&rates[]=DISCOUNTED&rates[]=FIXED&rates[]=OFFSET&rates[]=TRACKER&rates[]=VARIABLE&initialPeriod[]=ONE&initialPeriod[]=TWO&initialPeriod[]=THREE&initialPeriod[]=FOUR&initialPeriod[]=FIVE&initialPeriod[]=TEN&initialPeriod[]=NO_INITIAL_PERIOD&productFee
So where's the inflation protection? Unless your £150,00 house increases in value to more than £225,000 then you've lost money on your purchase and that's without even taking into account the interest that the same money would have made had it been in a bank account for the same period of time - if you could get 3% in a savings account with the same savings payments, then it's safe to assume you'd have made £75,000 in the same period in interest, so your £150,000 house has to be worth £300,000 at the end of it just for you to break even (£225,000 it's cost you + the £75,000 in lost interest on the money you paid on the mortgage but could otherwise have saved).
House prices will go down if we have Ed has PM. They already have at even the risk of a Labour led government - principle reason being the Terraced House tax - which is going to hit house prices.
This comment alone is a good indication that there is a failure to understand the fundamentals.
Interest rates are not determined by inflation.
Germany is very old fashioned in so many ways, credit cards are still rare.
What I was asking was 'can we draw conclusions as to whether home ownership is of benefit or not from the linked table showing national home ownership figures?'
The table seems to show no relation to GDP, population, economic success or anything.
Nothing to do with the benefit or otherwise to individuals in buying a house.
That’s unfortunate because when it comes to buying a home of our own a credit card is good for helping with the cash flow
Like the one under Labour in 2008?
Inflation and interest rates are linked, and frequently referenced in macroeconomics. Inflation refers to the rate at which prices for goods and services rises. In general, as interest rates are lowered, more people are able to borrow more money. The result is that consumers have more money to spend, causing the economy to grow and inflation to increase. The opposite holds true for rising interest rates. As interest rates are increased, consumers tend to have less money to spend. With less spending, the economy slows and inflation decreases.
http://www.investopedia.com/ask/answers/12/inflation-interest-rate-relationship.asp
and in some cases are determined by inflation
http://econ.economicshelp.org/2009/04/link-between-inflation-and-interest.html
>:(
Yep they are because if inflation rises too quickly, then it's a sign that spending is rising too quickly and may become unsustainable as the economy becomes over heated so the banks increase interest rates to slow growth.
Thanks Dave. Exactly the point I was trying to make.
We I must confess I find it difficult to establish a link between inflation and interest rates when I find that the first house I bought has increase in value by over 6,000% whilst interest rates have averaged about 6%. during the same period.
Maybe you've forgotten what happened to the housing market when interest rates touched 15%? Took about a decade for prices to recover.
The Retail Price Index (RPI), which measures inflation, is based on the cost of goods and services we normally buy - food, petrol etc etc.
Most people don't buy houses regularly. They pay mortgages.
So the RPI looks monthly at the difference in the mortgage interest rate, not on the cost of houses.
Try this for a simple explanation of how inflation is calculated
http://www.bbc.co.uk/news/business-12196322
Well there you go, that just proves what I have been saying.
There is no link between house price inflation and interest rates.