The Express wonders if the rise in the cost of living is going to bring house prices down. So do a lot of other papers, but to a man, the estate agents are pooh-poohing it and waffling on about "supply shortages" and "high demand". Even though the Express leads with Jonathan Rolande, from the National Association of Property Buyers (WTF are they?) saying
“However, 2022 isn’t shaping up as many had hoped and instead of a potential four percent to six percent rise this year, we will likely see much reduced growth, nationally of around two percent to three percent. This is lower in fact than general inflation will be, so in real terms, this a reduction."
it's soon business as usual with a link to Thinking of selling? Why now is the ‘best ever’ time to sell your property
Now, if people have less to spend and food and fuel cost more, then it is a logical deduction that they will be spending less on housing and that prices will start to fall in absolute terms, as well as in real terms, despite what the agents say. Indeed, there is anecdotal evidence that prices are high, but interest is low, which is a sign that the market has peaked.
Have the Tories finally committed the unforgiveable political sin?
About That Closet
8 hours ago
10 comments:
Two estate agents near me have closed, and the remaining one has had the same properties in the window for months, so turnover is low I think.
Nope. We are at the last gasp of the boom where land prices just defy gravity - Covid lockdowns? High inflation? War in Ukraine? Below inflation wage increases? Massive tax hikes? Make no difference. Bust will happen 2025-26. And the Tories might squeeze in a quick GE before then.
I take your point about all the negative indicators for property, but isn't the real inflation adjusted cost of a mortgage at an all time +ive high? RPI is at 8.2% and I borrow at under 2%. I am being paid to borrow money. If I sold my house and banked the equity, it would lose 8.2% in value per year for certain. So, fill your boots with debt and free money and buy assets?
OTOH, yup, exactly.
MW, the question I was asking myself is whether there might be a hiccup, with prices dropping briefly and then roaring ahead for the next three to four years and would that be enough for the Conservatives to lose the next GE? My gut feeling is no, they will scrape through with a reduced majority simply because Starmer is such a Tory and so useless.
Of course it could all be part of a deep-laid plot with Labour trying not to win the next GE so as not to be at the helm when the crash comes, but I doubt it.
B, a hiccough? We'll see. But the good ship HMS House Prices has weathered all the recent storms and is sailing on into oblivion... in 2025-26.
Next GE no later than 2024 AFAIAA, so that's nice timing for the Tories. They might even do a Major and have ridden out the crash by 2029.
If Labour have finally sussed this out, then well done them, but it's no good to them this time round.
It will be interesting if both the major parties are trying not to win the next GE.
B, ah right, I assumed Tories would try and win. If they were both trying to lose, that would be interesting.
People have short memories and house prices have usually bounced back up three years later, so whoever wins in 2024 is still in with a shout in 2029.
Labour were fucked in 2007-08 because the next GE was due 2010 latest and prices had only just bottomed out by then.
Maybe the whole economy is now in the 'crack up boom' stage? There's a distinct possibility that it is.
I am also not so sure any longer that, other than those with a direct vested interest - estate agents, developers, mortgage banksters etc - that the wider public is so concerned about absolute house prices. As long as they can pay the mortgage they don't seem over-worried.
Thing is that house buying creates its own money, so the lack of money won't stop prices rising. The money it creates is all credit money (aka bank money or horizontal money) which has to be paid back according to a fixed timetable, stoking up economic trouble for the future, likely the near future, 2025 or '26 as Mark mentioned. However the rising prices also help to increase current inflation because you need to borrow more money to buy the same house. Which means that the credit pounds created by the borrowing are worth less than they were last time the house was bought. So the current inflation isn't just down to supply issues, although they do play a big part.
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