House prices to rise for years, says BoE's David Miles House prices to rise for years, says BoE's David Miles
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    Default House prices to rise for years, says BoE's David Miles

    David Miles, one of the Bank’s nine rate-setters, said in an official paper that the desire for space caused by the UK’s rising population would reinforce planning restrictions and make it more difficult for housebuilders to keep up with demand. As a result, he said: “We should anticipate a rising trajectory for real house prices over the longer term.

    “This is particularly likely in a country like the UK where population density looks set to rise relatively fast. The model also suggests that the upwards trajectory in house values may ultimately become steeper than the rise in real incomes.”

    However, a housing boom would be out of reach for first time buyers, he added, because credit will remain in short supply. Before the financial crisis, buyers did not need a deposit to secure a mortgage. Since the recession, though, large deposits have become essential.

    “It should not be seen as a sign of a damaged market,” Mr Miles said. “It probably never made sense for there to be 100pc mortgages. There may be no price at which it makes commercial sense for such a loan to be available.”

    He added: “New homeowners in the future may need to have more equity than was normal in the years leading up to the financial crisis. This will have an impact, probably permanently, on the pattern of home‐ownership.

    Source: House prices to rise for years, says BoE's David Miles - Telegraph


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    There are just too many people in this country.

    IT'S TIME TO SEAL OUR BORDERS

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    Quote Originally Posted by pacharan View Post
    There are just too many people in this country.

    IT'S TOO LATE TO SEAL OUR BORDERS
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    Quote Originally Posted by AtW View Post
    David Miles, one of the Bank’s nine rate-setters, said in an official paper that the desire for space caused by the UK’s rising population would reinforce planning restrictions and make it more difficult for housebuilders to keep up with demand. As a result, he said: “We should anticipate a rising trajectory for real house prices over the longer term.

    “This is particularly likely in a country like the UK where population density looks set to rise relatively fast. The model also suggests that the upwards trajectory in house values may ultimately become steeper than the rise in real incomes.”

    However, a housing boom would be out of reach for first time buyers, he added, because credit will remain in short supply. Before the financial crisis, buyers did not need a deposit to secure a mortgage. Since the recession, though, large deposits have become essential.

    “It should not be seen as a sign of a damaged market,” Mr Miles said. “It probably never made sense for there to be 100pc mortgages. There may be no price at which it makes commercial sense for such a loan to be available.”

    He added: “New homeowners in the future may need to have more equity than was normal in the years leading up to the financial crisis. This will have an impact, probably permanently, on the pattern of home‐ownership.

    Source: House prices to rise for years, says BoE's David Miles - Telegraph

    What rise in real incomes and what money do people use to buy houses on his home planet?

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    Well. Like. Duh.
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    Quote Originally Posted by AtW View Post
    David Miles, one of the Bank’s nine rate-setters, said in an official paper that the desire for space caused by the UK’s rising population would reinforce planning restrictions and make it more difficult for housebuilders to keep up with demand. As a result, he said: “We should anticipate a rising trajectory for real house prices over the longer term.

    “This is particularly likely in a country like the UK where population density looks set to rise relatively fast. The model also suggests that the upwards trajectory in house values may ultimately become steeper than the rise in real incomes.”

    However, a housing boom would be out of reach for first time buyers, he added, because credit will remain in short supply. Before the financial crisis, buyers did not need a deposit to secure a mortgage. Since the recession, though, large deposits have become essential.

    “It should not be seen as a sign of a damaged market,” Mr Miles said. “It probably never made sense for there to be 100pc mortgages. There may be no price at which it makes commercial sense for such a loan to be available.”

    He added: “New homeowners in the future may need to have more equity than was normal in the years leading up to the financial crisis. This will have an impact, probably permanently, on the pattern of home‐ownership.

    Source: House prices to rise for years, says BoE's David Miles - Telegraph

    So this is the final call for the top of the market in London. Note that outside London (and some posh parts of the SE) prices have dropped between 10-50% since 2007.
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    Quote Originally Posted by eek View Post
    So this is the final call for the top of the market in London. Note that outside London (and some posh parts of the SE) prices have dropped between 10-50% since 2007.
    The Dim one posted a link to house price statistics recently that showed house prices were dropping about 6% annually in some parts of the UK, and accelerating downwards. Except London and I think Scotland. Beats me how house prices can stay at stupid levels with real incomes nose-diving, unemployment booming, layoffs, record austerity and the day of reckoning to come, one day soon. And 0.5% base rates and QE can't last forever, and building societies are raising their interest rates anyway. How can house prices stay at record highs in the face of all that is to come.

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    Everyone knows that house prices always go up.

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    Anyone going into BTL expecting capital appreciation needs their head examined. It's all about yield.
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    Quote Originally Posted by Optimus Prime View Post
    Everyone knows that house prices always go up.
    Over the long term yes. But buying a house in early nineties was bad in the UK except for central/western London.

    I still think house prices will be flat for next 3-5 years.
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