My parents bought in 1989 for £90k. Last valuation in 2010 was £450k. So even if you say £375K, that's not a bad return. I am sure most pension pots couldn't rival that.

 

Doesn't mean that the next 22 years will return the same rate.

 

To be honest, I bet it does.

 

Its absolutley inevitable
because

1.population is set rise considerably over the next 20 years

2. the planning system is in melt down and still without any proper direction from government (apart from the plan to bring back nimbyism on a grand scale!!!)

3. There are no new sites being available as a result of 2. and ever tighter restrictions on "green belt"

4.the supply of any new council housing has all but practically ceased

5. Mortgages are being heavily restricted by the need for 20 % deposits


Many developers who have land with consent have either stopped building or are hanging on to it for grim death as they paid through the nose for it pre 2009 and as a result would be building at a loss.

there is potentially a huge bottle neck building which could go with a big bang as soon as the economy starts moving and inflation begins to gather its head of steam

 

The housing crisis in a nutshell.

http://www.adamsmith.org/blog/tax-an...-bubble-burst/

 

Yes it is a good article; the market is very much being corrupted by the Gov to benefit the property owning special interest group...everything is basically being done to keep prices pumped up.

 

Brilliant article. One of the only ones I've seen to try and get across the message that rising house prices do not make 'everyone wealthier'. Quite the contrary.

 

That much is obvious; it's a zero sum game.

 

Exactly. But people are too stupid to realise it.

 

what does make everyone wealthier

you would certainly have to stop all forms of speculation

 

What makes everyone wealthier? Falling prices. And the concept of speculation has very little to do with anything.

 

Wealth is goods and services you can consume.

 

if prices are falling - why buy anything now

doesn't falling prices stall economic activity

 

that does not make sense - pls expand

 

That's deflation, not the same as prices falling in real terms.

 

maybe -- but does it still stall economic activity

 

What does make sense then?

What else can wealth be except the product of economic activity?

Residential housing can never increase the wealth available in an economy weather you value it at £1 or £100. Think about it! A house does not mow your lawn or make you a car.

Trading houses...having a house 'boom' etc is just an illusion of wealth creation as the monetary value of the houses goes up.

What's really happening is just a wealth transfer to the property owning class.

Money and wealth are different things though.

 

yes I can see that -- but houses don't exist in an economic vacuum, their is a market

and surely wealth transfers in any market

and I agree -- what does make sense? exactly

 

Why buy anything now? Well do you want to eat? Do you want any particular consumer good? If everyone is prepared to wait, then when will there ever be a time they want to buy? And if that's the case, then the goods aren't required at all, and there is no need for any economic activity.

 

Yes but trading any asset from one person to another is not wealth creation just a transfer in ownership!

 

I obviously meant to exclude the essentials -- but thought that I did not need to state the obvious

we may as well go to a barter system then

 

yes I agree to a point, so how do you create wealth?

What else can wealth be except the product of economic activity? -- is that a statement or a question from you

 

It's a rhetorical question.

 

But what is essential? You're taking a lot for granted here, Hodgy. Naturally, anything in demand is required by the market and is essential in a sense. What's the point in economic activity if no one wants whatever results from it? If people want something, they will buy it.

Look at all electronic goods. It's taken as a given that they naturally get better and cheaper as time goes on; it's a virtual certainty, yet everyone still has a house full of up-to-date technology and the latest gadgets. Why don't they just wait for a year? Then when that year comes, wait another ten? Maybe get someone to stick the plasma screen they've always wanted in their coffin when they pop off? Or maybe then it'll still not be cheap enough.

 

okay GK and TDW i will bow out as i am out of my depth now

but the above will apply to houses as to any economic transaction

so why is it so different

 

Not really. It states the obvious that it will always be in the government's best interest to prop up house prices but his point on planning seems a little flawed.

I see quite the opposite ie new build flats springing(or they were in the boom) up everywhere. If anything planning wasn't stringent enough to restrict these to ensure local facilities ie schools, hospitals could cope with the increased population.

 

I see quite the opposite ie new build flats springing(or they were in the boom) up everywhere. If anything planning wasn't stringent enough to restrict these to ensure local facilities ie schools, hospitals could cope with the increased population.[/QUOTE]

These were crammed on to so called "brownfield sites" ie previously developed sites. Planning actively promoted these sites or should i say mr Prescott as there was a desperation to use up every spare inch of suburbia rather than allow one square millimetre of green space to be reclassified.
Mr Prescott also sanctioned the reclassification of back gardens as brownfield there by creating the so called garden grab bonanza.
Even as a developer myself some of these massively overdeveloped sites made me cringe with embarassment.

I can't really overstate how NO site gets developed without consent of the local planning department and even if the site is perfectly acceptable and locals dont object (highly unlikley as there is a constant stream of pointless irrelevant objections sometimes from people so far away they would need a set of angled prisms and a high powered telescope to catch so much as a glimpse of the site ) if planning officer take a dislike to it they can make your life sheer hell asking for irrelevant surveys and constant modifications to plans and force you to go all the way to appeal.

Most if not all those new build flats were positively promoted and and sanctioned by the DOE there are plenty of cases where planners insisted on higher densities as conditions for consent when the developer was perfectly happy with a lower density.

 

So you don't see a boom? And if not they can be no bust. So everything is rosey?

 

An old sand quarry near me has just been given the go-ahead to have 250 houses built on it .The developers have had permission for years ,but have now decided it is the right time to get cracking .!!

 

I'm not sure what you mean FM.