Adamski wrote:Not a Ponzi scheme, it is simply supply and demand.
Demand exceeds supply, so prices are going to continue to go up.
The population growth uk is 0.6%, or c. 400k per annum, vs. New houses bring built c. 200k per annum.
So they can't (and won't) build houses fast enough. The only way can be done is a massive social housing build under a labour govt, but can't see that happening unless very big political will behind it.
It's tough for young people, but it's what it is. Have to rely on bank of Mum and dad if lucky. What might see is a pause in prices during the predicted recession then go up again.
That old argument of “demand exceeds supply” does not work at interest rates of 6% and average house prices at 12x average earnings. If UK house prices were already 40% lower than they are now, then it may have helped to reduce the fall.
And what is this UK population growth? It seems to be mainly illegal immigration brought to the UK beaches by people traffickers. If this is what you are relying on to keep UK house prices at 12x average earnings, and when interest rates are at 6%, then it is wishful thinking.
UK house prices are clearly headed for falls of up to 40%-50% in real terms over the next 4 years. The housing crash has already started in the US and in Australia. UK will not be far behind them.