House prices
 

If the news programs didn't blurt the monthly, records show that the 12 months to today show another huge price rise

Then maybe mugs wouldn't pay the asking prices. :wonder:

You just get the feeling it's all bbc plc propaganda machine

Doesn't bother me the slightest. My BTL property is doing brilliantly and requires no effort on my part either :thumb:.

I'm a bit confused what you mean by this?

A 12 month average is always going to lag recent changes in the market.

What ,.your saying they'll be dropping away in the year to August ?

What are you saying?

What I'm saying is that we are bombarded with monthly reports on how "well" the housing market is doing ( who knows whether it's actually true), and this probably drives prices up more and more!

The data is not up to date


It becomes a self fulfilling prophecy

Is I think what the op is getting at

From speaking to people at various stages in the house-buying or selling process, anecdotally I'd have to say the market is doing pretty ***** well.

In this area at least (Surrey/Hants), stuff is selling within a few weeks, or often mere days of being put on the market. There's only so much that media hype alone could do to sustain that sort of trend.

It's the simple economics of supply and demand. Bricks and mortar have consistently been the best financial investment and also have the benefit of putting a roof over your head, which is something we all need.

Anyone with an ounce of common sense can figure out that it's better to pay a mortgage in ones own name and have some sort of return than it is to pay one for a third party.

The numbers may well be out of date but they are the numbers that we have and as such get reported, lets face it everyone likes to know that they are a little better off than last year, regardless of the fact that it actually makes no real world difference. It does however inject consumer confidence which is good for the economy in general, whether or not this is ultimately a good thing is a matter of opinion. It's the system we have and it's cyclical.

So the only way to deal with it is like surfing, paddle out there set your self up, pick your wave, ride it to the beach, get out and baton down the hatches before the storm comes.;)

Then wait for the next sunny day.:cool:

The propaganda machine has been in full flow for the last few months..

A BOE base rate rise is long overdue,so the populus are lead to believe that the property they live in is worth more than it is... So when the rate rise finally comes,they wont complain "too much"..

House prices will always move in line with the full cost of building one, simples.

As the cost of living rises along with wages, so will the cost of building a house, all of this is basic economics, propaganda aside the past has shown us that as time goes on it becomes more expensive to be a part of this world and that is reflected in house prices.

Those that don't own property will always think that they are being hard done by and those that do will always want prices to rise with the blinkered belief that they are somehow better off, the reality being that we are all just feeding the machine and dancing to the music of the pied pipers, make sure your close to a stool when the music stops.

I now own a house outright but when i see the ludicrous difference between wages and asking prices it just doesn't sit right

Average price v average salary down my way means houses cost 19x your wage. We're very lucky that we own ours outright due to sensible relatives squirralling away money prior to passing over/away. We'd be stuck in the rental game or forced to live elsewhere and commute otherwise.

Common sense isn't always right, in this case it has been right though but for the wrong reasons. Unless you buy a house for cash you borrow money which you pay interest (rent) on, so either way you are paying rent to someone. The thing is that 'cos house prices have been rising in general it has been better to buy. Also interest rates are abnormally low right now and have been for a few years.

Yeah that's the thing with crowd behavior.

It's a bit like if you declare that a bank is about to go bust and do it convincingly, it would create a run on the bank and the bank would fold. Such an utterance would be performative and there is definitely an element of that with the media ramping of the property market, although undeniably the very low costs of borrowing and the structure of the market (restrictions on supply) are drivers too.

Now that the FA / Mortgage providers have to apply the feasibility tests, expect it to grind to a halt in expensive areas

Lol, simple economics dictate that no matter what the interest rates landlords will increase rents accordingly, after all you don't expect them to subsidise their tenants do you.;)

I work for Persimmon Homes and they are making more money now than before the recession and are selling a lot more houses than before the recession.

What are you talking about? If landlords can just charge what they like then why aren't they increasing prices now?

Landlords charge whatever the market rate is, ie what people are willing to pay. When interest rates rises, you can bet landlords will pass on the rate increase to their tenants. :thumb:

If they can raise prices why aren't they doing so now?

Why would anyone renting be willing to pay more to cover their landlords interest payments?

You should be able to answer that question yourself since you are the one already paying to cover your landlords interest payment, and probably more than the previous tenant.

C'mon jonc, I thought you were a financial expert? You are telling me that renters will pay more, but for some reason landlords are being nice and not maximising their profits. Makes no sense.

No financial expertise is required, just common sense. It has nothing to do with whether a landlord is being nice or not. Like I said earlier, rent is dictated by the market rate. If a landlord sets rent more than the market rate, then that landlord won't get any tenants and therefore no profit. If there is common external factor affecting all landlords that increases their costs, ie interest rate rise, all landlords will take measures to maintain their profit by increasing rent in accordance to the terms of the tenancy agreement. The tenancy agreement sets out how and when rent will be reviewed.

As property prices continue to rise, tenants will find it increasingly difficult to get on the property ladder and will therefore have no choice but to continue to rent at whatever the market rate dictates. Does this not describe your situation?

But the landlords are all compelled to maximise profit at the moment which dictates the 'market rate' in conjunction with tenants willingness to pay. If they can raise rents tomorrow then they are not maximising profits today, why is this?

If costs can always be passed on then BTL is the only business investment which can't ever lose.

You've just answered your own question. :rolleyes: What point are you trying to make?

Which is why BTL is so popular as a long term investment.

:lol1: Thanks jonc, I think he's been out in the sun a little too long.:lol1:

What? Why would I be willing to pay more rent because my landlords costs have increased? You are making no sense at all.


It is but because the value of property keeps rising, not because landlords can always pass costs on. By your logic the interest rate is entirely irrelevant to the BTL market 'cos the landlord can always pass the cost on, indeed it makes no sense to even talk of yields since the landlord can just make the property yield what they want.

Because if you don't pay more you'll be out on your ear.;)

I think you'll also find that the rent is set at a level that more than covers the interest payments by several percentage points, which is also the profit margin, as and when the tenancy agreement comes to renewal time the rent goes up accordingly.;)

I doubt many people have had their rent go down come renewal time.

Do you really need this explaining, I thought you were supposed to be intelligent, :wonder: it's why I keep saying, the education system in this country needs reviewing to include some common sense, as opposed to regurgitation because the end result isn't intelligent people, it's intellectuals that struggle to grasp simple concepts like costs and profit margins.

Then the is no market only landlords unilaterally charging whatever rent they feel like. I have to laugh at your post.

Yes it's true that landlords can charge what they want on the tendency agreement but it doesn't mean that they will get anyone to sign it. Contary to what you may think not all rental properties are BTL so the BTL landlords have to compare with non-BTL landlords for 'customers'.

You still haven't explained why BTL landlords are not charging more now. According to you they can just charge what they like.