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Debate House Prices
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House prices 'see first double-digit fall'
Comments
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trulysaintly wrote: »You can split hairs over the size of a cycle, the truth is we are coming back out of a trough now....
Looks to me more like we are accelerating downwards into it....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
trulysaintly wrote: »The last time Standard Variable Rates were as high as 7% were around 5 years ago. Following this, we saw reduced interest rates, and the property boom of the last few years happened off the back of this.
I have never said every cycle is 5 years...
Since 1989, there are only 7 years in which the standard variable rate for new borrowers has been as low as 7%, for some or all of the year. They are 1999, and 2001 to 2006. During 1989 - 1998, 2000, and 2007, the rate never went below this. No obvious 5 year cycle there....much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0 -
...much enquiry having been made concerning a gentleman, who had quitted a company where Johnson was, and no information being obtained; at last Johnson observed, that 'he did not care to speak ill of any man behind his back, but he believed the gentleman was an attorney'.0
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trulysaintly wrote: »But during that 18 year cycle you mention, there were peaks and troughs - 2001 - 2005 springs to mind...ooh look almost a 5 year cycle before things calmed down.
You can split hairs over the size of a cycle, the truth is we are coming back out of a trough now....oh and for Paul's benefit it's not just Jon Varley that is talking about that, Schroders are as well....
Well done that's two. You forgot Stuart Law from Assetz. That's three. Besides, Varley was talking about the worst of the credit crunch being behind us, nothing about house prices.
So are you saying this 5 year cycle is a cycle of house prices or a cycle of mortgage rates?0 -
Well done that's two. You forgot Stuart Law from Assetz. That's three. Besides, Varley was talking about the worst of the credit crunch being behind us, nothing about house prices.
So are you saying this 5 year cycle is a cycle of house prices or a cycle of mortgage rates?
There are no such things as economic cycles that predictably come around every xx years. If they did then the knowledge of them would immediately end them.
It's just the desire of the rational person to see order in chaos.0 -
Well done that's two. You forgot Stuart Law from Assetz. That's three. Besides, Varley was talking about the worst of the credit crunch being behind us, nothing about house prices.
So are you saying this 5 year cycle is a cycle of house prices or a cycle of mortgage rates?
Well seeing as the credit crunch is continually being used as the reason why mortgage lenders aren't lending to each other, and therefore reducing the competitiveness and availability of mortgages, then it is an important point.
Never said that Varley was talking about house prices.
House prices have been increasing steadily since the early 90's however there has been a huge increase in the last 5 years or so, which we are now seeing reversed.
The areas of the country that suffer from the highest decreases (% not £) will firstly be those who have increased the most in the last 5 years - South Wales, North East to name a couple.
Mortgage Interest Rates and House Prices are not interlinked but they do tend to mirror each other - hence my point regarding the prediction of BoE being as low as 3.5% next year.
Regardless of what anyone thinks, if interest rates are low it encourages spending, and movement in the housing market.
Go on, pick this post apart, I know you're itching to....:A Born a Saint, always a Saint!I am a Mortgage Adviser
You should note that this site doesn't check my status as a Mortgage Adviser, so you need to take my word for it. This signature is here as I follow MSE's Mortgage Adviser Code of Conduct. Any posts on here are for information and discussion purposes only and shouldn't be seen as financial advice.0 -
There are no such things as economic cycles that predictably come around every xx years. If they did then the knowledge of them would immediately end them.
It's just the desire of the rational person to see order in chaos.
Was getting there Generali but was taking the long route.0 -
trulysaintly wrote: »Sorry the mortgages are out there for the average person who doesn't have a bad credit history, and a deposit of 5% or more.
People aren't bothering to look because they believe what they they are told in the press....
I agree that the press as always are making the problem worse, but are you saying that if all the FTB's (with deposits and good credit history) came back to the market the banks could produce the funds?
For what it is worth I think this house crash will be faily short lived because I believe it was caused by a dramatic shock to the system (credit crunch) which in turn is causing fairly dramatic falls in the housing market over a short period caused by:
(a) Lack of finance for cash strapped FTB's
(b) Market driven by distressed sales ( i.e. low transactions and housholders not bothering to move if they do have to).
In addition I think that the market was cut short of hitting a peak by the CC which should in turn limit the downside. These quotes of 20/30% current annual drops based on the last three months are a little strange as I would expect the annual drops to slow after this month as annual comparisons will be based on falling prices not increasing ones, with August being the peak.
I can also forsee a reduction in inflation in the next 12 months as contracting commodity prices have a negative inpact on inflation thus allowing the BOE to drop interest rates. This combined with the lack of houses being built could provide some support for house prices.
Touch paper lit, I will just stand back now.'Just think for a moment what a prospect that is. A single market without barriers visible or invisible giving you direct and unhindered access to the purchasing power of over 300 million of the worlds wealthiest and most prosperous people' Margaret Thatcher0 -
trulysaintly wrote: »Well seeing as the credit crunch is continually being used as the reason why mortgage lenders aren't lending to each other, and therefore reducing the competitiveness and availability of mortgages, then it is an important point.
Never said that Varley was talking about house prices.
House prices have been increasing steadily since the early 90's however there has been a huge increase in the last 5 years or so, which we are now seeing reversed.
The areas of the country that suffer from the highest decreases (% not £) will firstly be those who have increased the most in the last 5 years - South Wales, North East to name a couple.
Mortgage Interest Rates and House Prices are not interlinked but they do tend to mirror each other - hence my point regarding the prediction of BoE being as low as 3.5% next year.
Regardless of what anyone thinks, if interest rates are low it encourages spending, and movement in the housing market.
Go on, pick this post apart, I know you're itching to....
TrulySaintly, I'm simply picking flaws in your arguments because they don't hold up to scrutiny.
On Varley, he says the worst of the credit crunch is behind us (although that is at odds with the majority opinion with his peers in the banking sector), but he does not say the credit crunch has ended.
But I'm in agreement with you, the last 5 years of house price rises are looking at being reversed.0
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