House prices climb closer to boom time peak

This is just telling us what most smart people have known all along. Get a property in a good area and sit tight . All this bluster about another drop30% is from the frustrated renters who shout doom and gloom year on year missing all the boats sail by. keep that up as it is good for business.SUPPLY AND DEMAND simple.

Fatcat: 'SUPPLY AND DEMAND simple'

The problem with this argument is that supply and demand are always linked to price - I'd like a Ferrari, but unless they come down to £20K I won't be able to demand one!

Supply and demand will only push prices up until equilibrium is reached, i.e. the point at which the number of people who can afford a house equals the number on the market. Right now the supply of homes on the market is increasing dramatically (this isn't reflected in the latest Nationwide figures, which pre-date the HIP abolition and CGT increase), and mortgage lending is not increasing at all. Therefore the equilibrium point is approaching.....

Personally I don't care which way prices go - I own one house and will always need one house to live in - but it does annoy me to read economically illiterate rubbish from worried buy-to-letters!

not where i live, still dropping in middle class warwickshire. this headline is all about london. 'Fatcat' go back to sleep you dopey old fool, we're having you put down in the morning x

Fatcat is fundamentally wrong whereas Realistic is fundamentally right.

The price of housing is driven by capital and its availability. If there is too much capital in the market the price of housing will rise. If the capital is not there prices will have to fall if owners wish to sell.

The market is now following classic bubble signs. There is a steady price rise to wholly unsustainable levels as the bubble grows. There is some shock and the market takes a dip after which there is "recovery" and prices rise again. Thereafter the real shock comes and the market collapses and will probably over correct. With the current economic conditions we are very close to the real shock.

Interest rates are set to rise whether the BOE likes it or not as is unemployment and the scarcity of capital as the banks take ever greater losses on account of their reckless lending.

The UK is in a dreadful economic mess and it has to be corrected and there is no easy way out of this. Austerity and hard times lies ahead.

Of course Supply and Demand and Interest Ratesare important, but why is the Earnings/ Price ratio always ignored.

Historically, when this ratio hits about 4 prices will come down. The present ratio is well above that level, so we still have the remains of the bubble, and prices will fall.

Realist is correct in understanding that the property market like most markets is controlled by supply and demand.

Unfortunately what Realist doesn't understand is the balance between them. Looking at the amount of properties coming on to the market in the last few months is dramatically short sighted. The truth is in England there is not enough property in the UK to meet demand, the population is increasing (government statistics) and we are not nearly building enough homes (independent government report).

Do we really think the abolishment of a few hundred pound HIPS report is going to flood the market with properties!

Property is and never has been about the quick buck, if you buy and hold for the long term you will always do well. House prices since records began validate this.

I have reached the point where I don't believe a single word uttered by the professionals. None of the statistics make sense in terms of my observations and hands on research.

The facts are that a couple of rungs were knocked out of the bottom of the ladder in 2007. More stringent lending criteria, rising unemployment, and potential vendors already heavily mortgaged, has meant that very few transactions have taken place.

If you own a house which is freehold without a mortgage, in a desirable area, which has been tastefully and professionally modernised, sure you can sell it tomorrow, but 90% of properties on offer do not meet that specification. Also househunters looking to buy for cash without having to sell a property first are as rare as hen's teeth.

There must be millions of people sitting in houses with a for sale board outside, thinking, "If only I could sell this house for more money than I paid for it I get a bigger mortgage and be able to keep up with the Jones's. Dream on suckers, it aint going to happen anytime soon.

I have owned a 360 fF! Spyder and several other top marques including my new Bentley sitting outside. You have demonstrated you are not illiterate just plain dumb. Far from being a worried buy to letter I have never lost on any of my well located London houses or flats in twenty five years- worried? bring it on!

I just love all the doomsayers- bit of green eye maybe?Medz-middle class Warwickshire?.HaHa

Realist is right, the overinflated market of the last 10 years has nothing to do with supply and demand. If it were true then you'd see a similar rise in rental values, but you don't because your rent cannot be financed and has to be covered out of taxed income. The boom was pumped up by cheap and easy credit which is no longer available, but the pscychology of the boom still prevails among most people like fat cat, who have very short memories. Mid 1990's property was cheap, but no one wanted it, it was perceived as a bad investment. This tme will come again soon.

How can anybody take someone with a name like fatcat seriously? Smart people don't gloat maliciously over their gains, ill-gotten or otherwise. Smart people remember talking about the acquisition of wealth as being vulgar.

There's a more serious debate on to be had here, folks: http://www.citywire.co.uk/personal/-/comment/property-and-mortgages/content.aspx?ID=403727&re=9654&ea=255507

"The important thing to come out of this debate is the growing acceptance that the ethics of property-ownership aren’t as simple as they once were, and that it’s right to ask how far ‘a fiscally responsible government’ has the right to go, to separate homeownership and property speculation."

Fatcat you are awfully impressive.

These arguments are as old as the property market. House prices go up, sometimes come down but in the sought after areas they rocket. Well almost. The state of the economy has very little to do with the top end of the market. But of course as always its a different story geographically.

however look at the blogs on this article-

If the Government were to atach CGT to one's principal property if sold within he first ten years of ownership, (similar to France) there would be a slow down in the number of speculative property purchases. This in turn would leave more capacity for the genuine home owner.

The other long term investment opportunity is to remove the principal household from an estate for IHT purposes.

Third issue is to remove the right of non-nationals to own property, as in Switzerland. None of these suggestions are far fetched or extreme but they may be too radical for the present Coalition.