This is a myth on a number of fronts I'd like to dismiss, firstly the uk population is stagnant except for economic migrants, as a recession is coming they will go elsewhere, there is no natural expansion of the uk population only immigration increases the uk population ... There are currently an estimates 1million unoccupied properties throughout the uk, if supply and demand where so high wouldn't this be a much smaller number?
I can't verify your 1 million figure but seeing as folks are desperate for housing I can only presume they are in less than livable condition both from the private sector and for Government perspective. Or in areas with no jobs and therefore no ability to pay the mortgage and so forth. Can you show me the data on this, I was unable to Google anything quickly. I find it hard to believe that there are 1 million perfectly suitable houses all sat empty and nobody is interested in buying them even on the cheap.
If the house to population quota is not an issue why is there such an outcry that the projected house building won't come close to dealing with the requirements over the next 10 years?
The UK does not seem to have a stagnant population, where do you get that from, please provide dat to support this . I agree we are not increasing massively in terms of everybody having 10 kids but calling it stangnant is misleading, it is going up, that is not stagnant, however you want to swing it, increase in births, migration, decrease in deaths, natural growth and so forth. see:
http://www.statistics.gov.uk/cci/nugget.asp?ID=6
8% since 71, growth Increasing year on year. With over 50% of that having no relation to migrant workers.
That migrants will go elsewhere in a "recession" is purely a guess, shouldn't be stated as fact, a recession in the UK is liable to still be more appealing than £1 an hour or less elsewhere and that's if we do indeed enter a full recession. Infact some argue that if things really do hit the fan, cheap workers will be in even more demand.
The population is growing older and older, people need houses for much longer, there is an increase in birth a decrease in deaths, it is responsible for at least 50% of the total UK population growth.
According to this site which may well have a bias but comes up 3rd in Google for population growth we are far from stagnant.
http://www.optimumpopulation.org/opt.more.ukpoptable.html
Interest rates haven't had anything to do with it since the credit crunch hit, the bank of England can't set interest rates that effect loans or mortgages anymore as LIBOR the rate banks charge each other is higher and that why when BOE interest rates went down the price of many mortgages miraculously went up. You also assume that banks won't just profiteer. Plenty of people won't sell, plenty of people will be in so much debt they have no option, but this is the way with bubbles.
I didn't say interest rates did have anything to do with it since the crunch ? I said they are unlikely to go up to any degree which was one of the major issues that surrounded our last crisis. I didnt' assume anything about profiteering, your making the assumptions on that point, not I.
As above interest rates are not set by BOE so its potentially worse as something oversees could sent a shock pushing them up, regardless inflation of stuff like food and fuel is as great an effect as interest rates were on mortgages last time. Unemployment has started and we have a few million on incapacity benefit ... unemployment by another name?
Something ? Unemployment has always been with us, so has benefits, the point I was making was it is nothing like the bad old days, which created a situation ripe for a real recession. While the BOE does not set the rate , to suggest it has no impact is pushing it. If the BOE set the rate at 1% tommorow, banks would not put their prices up to 10% ... Agreed, the control mechanism isn't what it was but it does have the ability to guide the rates. The reason many banks didn't take into account the recent small shift downwards is they were all covering their backs and the fact their low borrowing rates had dried up from other banks.
This might sound like the harbinger of doom, but unless we somehow see the return of cheap credit or a nullifying of personal debt things are going to get rough. I'd recommend fixing the price of your utilities if you can for starters and maybe take out insurance on your mortgage/loans if you have a risky job, if it's affordable.
I've listened for the almost the last 10 years to people constantly stating how the housing market is going to crash, how the price increases are not sustainable , how it can't go on, etc etc and yet it did.
I'll buy into the issue that certainly things are looking bleaker now, but I don't think it's anything like as bad as you make out, of course we won't know until it either does hit us or it doesn't but right now whichever side of the fence you sit on it's nothing but considered opinion and shouldn't be stated as direct fact IMO.