Britain 'teetering on edge of dangerous housing bubble,' top Treasury official warns

Britain 'teetering on edge of dangerous housing bubble,' top Treasury official warns
The warning from Robert Chote, head of the Office for Budget Responsibility, comes after the average price of a UK home hit £254,000



Britain is teetering on the edge of a dangerous housing bubble, a top Treasury official warned yesterday.

Robert Chote, head of the Office for Budget Responsibility, said property prices are being inflated by speculators hoping the market will rise even further.

Mr Chote told MPs: "With very rapid house price increases in some parts of the country you might see bubbly activity where people are willing to buy stuff off plan or not intend to live in it."

The average price of a UK home hit £254,000 in January, with London, the South East and Wales showing the biggest rises.

Average London homes rose 13.2 per cent to £458,000, while homes in the South East went up 7.1 per cent to £316,000 and those in Wales soared 6.9 per cent to £166,000.

It comes as Prince Charles warned rising house prices will drive a generation of young people out of London.

The prince said yesterday: "The National Housing Federation estimates that in only six years' time the average London house price will have risen 40 per cent to £650,000.

"This isn't sustainable and risks driving away talented young individuals who are starting their careers in London and spending most of their income on rent.

"Home ownership for this generation is seemingly becoming further and further out of reach."

With a typical price tag of £458,000 in London, house prices in the capital are now nearly 23 per cent higher than their 2008 pre-financial crisis peak, according to figures released this week by the Office for National Statistics.

http://www.mirror.co.uk/news/uk-news/britain-teetering-edge-dangerous-housing-3290365#ixzz2x856EX5Y
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Bound to happen with the Government Cash for Houses plan and low interest rates.

My God, that's close enough to half a million U.S. dollars; that's horrifying. In my neck of the woods you can get a perfectly decent, roomy house for a quarter that price or even less.

It sounds to me like Britain needs to start building new houses.

   A neighbourhood house over the back from here sold for around $490,000 last year...   (The local median is probably closer to the low => mid-$300k range..).

Down around Sydney city itself, you're not likely to even get a look in for under $800k for houses and $600k for decent sized apartments (comparable to "condominiums" in the US..) ~ you have to move an hour or more out from their CBD before finding half-way "affordable" places in reasonable condition. And even they are generally grossly over-valued up to 50-60% over any realistic prices..

********************************************************

AS for the British Treasury in the O/P finally announcing that British real estate really is dangerously over-priced ~

METHINKS that, like their kindred and like-minded cohorts down here, those bureaucrats are only some 6-7 years late in making those announcements !     

Ben_Reilly wrote:My God, that's close enough to half a million U.S. dollars; that's horrifying. In my neck of the woods you can get a perfectly decent, roomy house for a quarter that price or even less.

It sounds to me like Britain needs to start building new houses.

They are. And I my area the very cheapest house you can buy is roughly £360,000

A new development has recently been built and the standard three-bed roomed house starts at £420.000

How many people have come and settled here in the past 15 years?

Anybody know?

When George Osborne brought in his Help to Buy scheme, that meant people were allowed to borrow up to £600,000 equity, even for 2nd homes, that he extended to the end of the decade in the Budget, he was told it would cause a housing bubble. Combined with the fact that inflation has been so low, it was a disaster waiting to happen, and now it's happened and happening. There will be absolutely zero chance of ordinary kids buying their own home, the people who will be buying will be investors and millionaires and the rest can rot.

How many people have come and settled here in the past 15 years?

Anybody know?

This has been caused by Osborne and immigration has had nothing to do with it.

Sassy wrote:This has been caused by Osborne and immigration has had nothing to do with it.  

You're wrong.

This is not a new problem here in UK.
Mass immigration and increase in buy to let mortgages have pushed up housing costs to eye watering levels.
Plus investors are using our housing market to profit from, distorting prices further.
Many new build properties are bought en masse by foreign investors before they have even been finished, only to be sold on at inflated rates to the people here who actually want to live in them.

At least 5 million came TO ENGLAND between 1997 and 2011.

And Sassy says that had "nothing to do with it".

Really Sassy?

REALLY?

Nothing to do with immigration????
It is completely to do with immigration!!!!
Basic economics rules on supply and demand explain the rise in cost.

Yes really, Osborne was warned exactly what would happen and didn't listen.

If affordable housing was being built, we wouldn't have this problem. And as I posted in another thread, we are 53rdin the league of most crowded nations. It's not the people, it's the will to deal with it properly.

Laughable Sassy.

Absolutely laughable.

Demand has risen massively due to open door immigration policy over last 15 years with millions of new arrivals needing somewhere to live.

Supply has not kept up to meet this massive demand.

Too much demand and not enough supply = rising cost

BigAndy9 wrote:Laughable Sassy.

Absolutely laughable.

No, other countries with higher populations to the square mile don't have the housing problems, because they have the political will to do something about it. You can rant and rave and put it all down to immigration, but the fact is, it's not. It's because Osborne deliberately set out to create a mini housing bubble, because that made the figures look like we were doing better than we are. He was warned it would turn into more than a 'mini' one, and it has. Now he has made it worse by extending the scheme, which was due to end. And the only people doing well out of it are his chums.

Rubbish!


As I said, this is not a new problem.


The help to buy scheme is trying to inject some life and confidence into ao already burst housing market.


The bottom dropped out of It all a few years ago after labours housing bubble burst in spectacular fashion.


This was undoubtedly caused by mass immigration, with a whopping 200.000-300,000 people arriving into the country every year but only 120,000-175,000 new homes being built!


Resulting rise in cost of housing, either direct mortgage or rents, pushing up overall cost of living, while wages ststagnated with all this new cheap labour.


20 years ago I could have bought a 1 bed flat for about 30-40k and a 3 bed semi with big garden for about 80k where I live. Now it's 150k and 300k respectively.


Sassy, if you think the problem started a couple of years ago then you are really stupid, or just completely partisan.

I recently checked how much our humble abode was worth and it is staggering, i feel sorry for anyone who is trying to get their first home..

Most definitely not rubbish Tommy, we are a lot less overcrowded that many countries and Osborne cause the housing bubble, he was warned and carried on anyway. FACT

Firstly Sassy did you seek permission from Hammer Horror films to use one of their pictures as your avatar?

Secondly helping people to buy is a good thing I would have thought. You complain when the govt does nothing and when it does it can't win.

Finally houses may be bubbling in the SE but up north things are far from recovered.

     

Well, as the housing bubble is now official, I think we know what twaddle you are talking Drinky.

Sassy wrote:     

Well, as the housing bubble is now official, I think we know what twaddle you are talking Drinky.

Has anyone added up the number of ID's, this RW scum moron has?

Is the housing bubble nationwide?

Is the idea of helping people getting their first leg on the ladder a bad idea?

Do you have permission to use a Hammer House of Horror picture?

You don't know much do you?   In December, when the yearly house prices rises where assessed, Newcastle properties actually gained more in percentage terms than London.

Average property price has risen £28 a day in 2013 with Newcastle, Barnsley and Cardiff among the unlikely boom areas

   Mix of northern and southern towns/cities are in the top gainers of the year


Read more: http://www.thisismoney.co.uk/money/mortgageshome/article-2522098/Average-property-price-risen-28-day-2013.html#ixzz2xCjH7lLn
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Properties in London are being bought up by rich investors and then being left to rot because they think they can then sell with a huge profit as the prices rise more.   Mortgages of up to 5.5 x salary are being offered again.   The madness has returned that caused so many problems, and Osborne has done it.

And you can make all the nasty cracks you like, I'm very happy with the way I look and really don't give a damn what you think.

answer....

revalue ALL housing at 1:10

so 500,000 becomes 50,000
and make the lenders take the hit

You do realise where the money comes from for that loan dont you...

It magically appears out of thin air when you sign the agreement...THE BANK CREATES IT. totally artificial and actually non existant ...UNTIL YOU pay it back.. You dont in reality owe anyone anything..IT DOES NOT COME from investors.... thats how the economy grows....Madness i tell you....utter madness.....

I agree Victor, complete madness.