4 ms·

How come these problems with land prices are only in the UK? It's not like in Canada, Australia, or even India where land prices will go down and become more af

How come these problems with land prices are only in the UK? It's not like in Canada, Australia, or even India where land prices will go down and become more affordable or increase proportionately to income? There's a very well known land price problem in Melbourne, Vancouver, Sydney. I think the newspapers in the UK have done a great job of exploiting everyone's grievances with house prices. Some countries actually dream of having house price increases, I might want to point that out. It is a way to create wealth and increase standards of living very effectively. >Print money This phrase seems to imply they literally print money and everyone seems to pile on. Surely you know at the end of QE they will be removing the money from the system in the same way they added it in. QE ended in the UK ages ago.

branchless 11y ago
Australia has a huge amount of young people who are very pissed off with prices. As does Vancouver. Your last point amazes me. QE won't be unwound. Secondly when banks loan on land they create the money and this increases M4. 2/3rds of bank lending in the UK is against property.
- akhatri_aus 11y ago
  QE in the UK has already ended they stopped rolling over gilts over a year ago. So all that 'printed' money is being destroyed as the gilts term to maturity (with interest added to it). If they cancelled them instead it would be printing but they don't do that. Of course, I can't attest to where the banks lend their money if a large proportion of customers take mortgages it speaks for itself. I merely point out this is not an issue that is exclusively a UK problem.
  - branchless 11y ago
    UK is one of the worst. They stopped the housing bubble bursting and since then they've had numerous schemes culminating in the UK govt directly loaning part of mortgages to underwrite risk as banks stay away from insane leverage. The UK is one of the worst offenders. Without house prices more than trebling in nominal terms since 1997 much of UK "growth" would not be there. Right now Cameron is post-queen's speech fluffing up right2buy which is basically an attempt to get more mortgages to get more cash as the UK stalls once again.
    - akhatri_aus 11y ago
      I think it depends. If you got a mortgage in at the lows you would be rather happy getting a large bit of the house 'free'. It's not always a bad thing when stuff gets expensive. Try getting a mortgage where property prices tend not to keep their value. I've lived in a place where they struggle to get land prices going up and it's awful. It's way better to have the problem the UK has than to have it going down. Even the support infrastructure (police, etc) deteriorates to the point you get disgusted with crime. My car's side mirror gets stolen and even the police wouldn't care about it even If I have to buy it back from them. In the UK its mostly surrounding London, there are parts of the UK where land is affordable. I'm quite familiar with the UK's schemes including right-to-buy. Probably not a good idea since its just guaranteeing a portion of the deposit. Makes people buy what they can't afford.. (subprime?) I might want to point out the UK is doing quite well alongside a great number of western nations (even though they're cutting their budget). I'm not politically inclined to Tories but this fact can't be distorted.
      - branchless 11y ago
        You are looking at this from a fixed point in time. Places like Detroit had a problem because they pumped land prices then let them collapse. The answer is not to pump land prices by stopping the banks ramping them. The UK is not doing well. If you look at flawed indicators like GDP, 10% of which is made up of imputed rent, then yes you will be fooled. "Facts" can be distorted, in particular GDP. The parts of the UK that are affordable are not affordable as the wages there are far lower. The loan to value in many places is bad and only tenable due to ultra-low rates which the UK is now boxed into. Really I disagree with every single line.

branchless 11y ago

Australia has a huge amount of young people who are very pissed off with prices. As does Vancouver. Your last point amazes me. QE won't be unwound. Secondly when banks loan on land they create the money and this increases M4. 2/3rds of bank lending in the UK is against property.

akhatri_aus 11y ago
QE in the UK has already ended they stopped rolling over gilts over a year ago. So all that 'printed' money is being destroyed as the gilts term to maturity (with interest added to it). If they cancelled them instead it would be printing but they don't do that. Of course, I can't attest to where the banks lend their money if a large proportion of customers take mortgages it speaks for itself. I merely point out this is not an issue that is exclusively a UK problem.
- branchless 11y ago
  UK is one of the worst. They stopped the housing bubble bursting and since then they've had numerous schemes culminating in the UK govt directly loaning part of mortgages to underwrite risk as banks stay away from insane leverage. The UK is one of the worst offenders. Without house prices more than trebling in nominal terms since 1997 much of UK "growth" would not be there. Right now Cameron is post-queen's speech fluffing up right2buy which is basically an attempt to get more mortgages to get more cash as the UK stalls once again.
  - akhatri_aus 11y ago
    I think it depends. If you got a mortgage in at the lows you would be rather happy getting a large bit of the house 'free'. It's not always a bad thing when stuff gets expensive. Try getting a mortgage where property prices tend not to keep their value. I've lived in a place where they struggle to get land prices going up and it's awful. It's way better to have the problem the UK has than to have it going down. Even the support infrastructure (police, etc) deteriorates to the point you get disgusted with crime. My car's side mirror gets stolen and even the police wouldn't care about it even If I have to buy it back from them. In the UK its mostly surrounding London, there are parts of the UK where land is affordable. I'm quite familiar with the UK's schemes including right-to-buy. Probably not a good idea since its just guaranteeing a portion of the deposit. Makes people buy what they can't afford.. (subprime?) I might want to point out the UK is doing quite well alongside a great number of western nations (even though they're cutting their budget). I'm not politically inclined to Tories but this fact can't be distorted.
    - branchless 11y ago
      You are looking at this from a fixed point in time. Places like Detroit had a problem because they pumped land prices then let them collapse. The answer is not to pump land prices by stopping the banks ramping them. The UK is not doing well. If you look at flawed indicators like GDP, 10% of which is made up of imputed rent, then yes you will be fooled. "Facts" can be distorted, in particular GDP. The parts of the UK that are affordable are not affordable as the wages there are far lower. The loan to value in many places is bad and only tenable due to ultra-low rates which the UK is now boxed into. Really I disagree with every single line.