Today the building society Far and Wide announced fall in house prices to year end July 3.9%. Estate agents Quite Frankly Useless followed the announcement a few minutes later saying they had fallen 5% in the same period.
Is anyone surprised against rising interest rates after a 12year freebie off the 400 year lows?. Is anyone surprised as costs of everything from peaches to petrol, eggs to energy have risen. Shortages on the shelves. , supply problems and inflation around 10% is adding to the mathematical mess.
Building costs have risen , plaster board which cover a multitude of sins has risen 60% as we all get plastered. If building costs rise then land values fall. Against that housing on the demand side is ferociously high and buying a home for many is no longer a dream but a nightmare. The young and many others are having to rent but rents are rising faster than a Yorkshire pudding. Add to that toe rag landlords who seek to let rodent infested properties are getting mankind an even worse name.
The fact is that we will never see affordable house prices because they were never affordable and if they were growing on trees they would have been picked. Rising house prices rarely do anything for anyone unless you want to sell up and live under a tree. Houses should be for living in not investing in. Whether they go up or down the sad fact for Britain is that our economic model is centred around house prices and ownership had become an obligatory obsession. If we are going to solve the problem we desperately need a new model and there is hope for some of the ideas to create one are being birthed by the mother of necessity.
If the country fails to do so then no one will be as safe as houses and there will be trouble ahead. Safe as houses from the investment perspective is no longer so true if you add real falls 3.9.% / 5% to the 10% inflation. The knife is falling and will fall more, who will catch it ?
qbitblogger 