Just taking stock

Graham_Devon

I have seen mortgage lending rising again today, rose 19% last month, 4% this month.

I'm begining to believe that we could now be approaching the bottom for house prices, for the forseeable future (1-3 years). Maybe another 10k to go from the 150k figure.

So I will be the first to admit, that at the moment, my prediction looks wrong. I'm just getting that in here, right now, to try and stop this thread degenerating.

So say this is the bottom and prices just stagnate and drop tiny fractions each month. My question is, honestly, bulls and bears, please put differences aside for one moment, what will happen once:

- QE stops.
- Interest rates rise.

I ask this question as one minute someone is saying QE is a success as more mortgages are going through, but the next minute other people are saying QE has been a failiure. While others say it's nothing to do with QE at all, it's people can now see value and are jumping in with their deposits and buying.

So, I'm looking at this, not from a prediction point of view, not a bull / bear point of view, but a look at where we are today, and where we are heading, not in terms of house prices, but in terms of fiscal stimulus.

QE cannot go on forever, interest rates this low cannot go on forever.

Are these "green shoots" thanks to QE, interest rate rises, people seeing value in the market, or a mixture of all of those, and which will hurt most the moment the plug is pulled? Or will we not even notice the interest rate rises, and not notice when the QE tap is turned off?

treliac

Don't think it could make sense that we've reached or near reached the bottom.

What about all those who've lost and are still to lose their jobs?

All those who are struggling to service their mortgages, especially those already in NE?

All those being made and yet to be made bankrupt?

Prices are still not low enough for FTbs to buy at sensible salary multiples.

The banks are not yet keen to lend money.

If interest rates start going up, what then - especially for those already on the edge of affordability?

Since we haven't yet reached the stage where the masses have accepted a more modest and affordable lifestyle let alone adapted to one, I can't help but feel that the necessary economic adjustment is still to happen and we have a lot further to go before we can say we are coming out of this.

As the saying goes, 'One swallow doesn't make a summer.'

dervish

treliac wrote: »

Don't think it could make sense that we've reached or near reached the bottom.

What about all those who've lost and are still to lose their jobs?

All those who are struggling to service their mortgages, especially those already in NE?

All those being made and yet to be made bankrupt?

Prices are still not low enough for FTbs to buy at sensible salary multiples.

The banks are not yet keen to lend money.

If interest rates start going up, what then - especially for those already on the edge of affordability?

Since we haven't yet reached the stage where the masses have accepted a more modest and affordable lifestyle let alone adapted to one, I can't help but feel that the necessary economic adjustment is still to happen and we have a lot further to go before we can say we are coming out of this.

As the saying goes, 'One swallow doesn't make a summer.'

excellent quick analysis and conclsuions.

Another senisble dose of realisn.

Graham_Devon

treliac wrote: »

Don't think it could make sense that we've reached or near reached the bottom.

What about all those who've lost and are still to lose their jobs? -

All those who are struggling to service their mortgages, especially those already in NE?

All those being made and yet to be made bankrupt?

Prices are still not low enough for FTbs to buy at sensible salary multiples.

The banks are not yet keen to lend money.

If interest rates start going up, what then - especially for those already on the edge of affordability?

Since we haven't yet reached the stage where the masses have accepted a more modest and affordable lifestyle let alone adapted to one, I can't help but feel that the necessary economic adjustment is still to happen and we have a lot further to go before we can say we are coming out of this.

As the saying goes, 'One swallow doesn't make a summer.'

I can't answer your questions, all I can do is agree.

I'm just looking at it from an out of the box perspective I think. All I can see at the moment, is yes, more bad news, but not as bad as it was.

Markets are up, houses are not falling as much (some argue they are actually rising). Mortgage approvals on the up 2 months in a row (forgetting how small the numbers are, they are still on the up).

Interest rates, well, this is one thing I have been saying for a long time, however, I do feel more and more as if Brown will force the BOE to keep tem at 0.5% until he's ejected, as theres no way he will want to have rising mortgage costs when it's election time. Thats why I talked about the bottom for the forseeable future, maybe 2-3 years.

Bankruptcy has been made even more easier either recently, or today. Heard it on the news this morning, so all those who have had lavish lifestyles who can't afford it, really do not have to worry.

I dunno, I'm seeing things slowing down, for the forseeable future anyway, and I hold my hands up, at this moment in time, it's certainly not as bad as I, and others on here were talking of before christmas. Remember all those chains collapsing, and many of us predicting carnage after crimbo. Well I was one of them, and that carnage doesnt seem to have happened.

However, it's not true to say we were totally wrong, the government did start QE and a further round of bailouts to stop the carnage, so it may have happened if sticky plasters were not applied. It's true also to say however, before the "told you so" happens, that many people stating the carnage was just pessimim, were also stating QE would never happen as it wasn't that bad.

Fiscal stimulus certainly seems to be playing its part right now though and holding us up....just the feeling I get, and it is hard for me to swallow, but ultimately, think it's a pill that needs swallowing! Now, I'm wondering when the pill will start having side effects, if any at all.

Whats been applied is a pill for those with depression, cheers them up, but it's damn hard withrawing from that pill without falling back down.

treliac

Graham_Devon wrote: »

I can't answer your questions, all I can do is agree.

Sorry Graham, they were rhetorical!!

I do feel more and more as if Brown will force the BOE to keep tem at 0.5% until he's ejected, as theres no way he will want to have rising mortgage costs when it's election time.

I think you're right there. :rolleyes:

Bankruptcy has been made even more easier either recently, or today. Heard it on the news this morning, so all those who have had lavish lifestyles who can't afford it, really do not have to worry.

Crazy. Does this mean they'll get off the hook and be able to do the same again? If so, we may as well all live like that that. :mad:

Whats been applied is a pill for those with depression, cheers them up, but it's damn hard withrawing from that pill without falling back down.

Mmmm. So if it were to pay off enough for Brown to get elected (god forbid) and this lot to get another 4 years?? Could easily get the feeling that he's prepared to sacrifice the future of all of us just to win next year.

Let's hope that we're not that stupid. Are we? Please don't feel obliged to answer.

ad9898_3

It's Spring Graham, things were so bad in the winter that things had to improve in the Spring, not only is it traditionally the busiest time of the year, things had to get a little better, they couldn't really get any worse.

Lets have a look in 6 months time to see where we are.

inspector_monkfish

[QUOTE= interest rates this low cannot go on forever.

QUOTE]


been this low in Japan for years now

mrposhman

treliac wrote: »

Don't think it could make sense that we've reached or near reached the bottom.

What about all those who've lost and are still to lose their jobs? - Agreed to an extent, but why must people continually lose their jobs because you say so? How do you know that all jobs that are going to be lost have not been lost already?

All those who are struggling to service their mortgages, especially those already in NE?

What does NE have to do with it? That doesn't mean they can't service their mortgage. In fact, quite the contrary, most are finding it easier to service their mortgages due to lower interest rates. This point from you actually erodes most of the good points that you made in your post as it makes no sense.

All those being made and yet to be made bankrupt?

Similar to that of those being made unemployed. How do you know there will be more? It is all assumptions as they are future possibilities.

Prices are still not low enough for FTbs to buy at sensible salary multiples.

Agreed to an extent but this doesn't really matter. Average house prices are not average prices for FTB's. FTB's will generally buy houses lower than the average house price. I've never seen the logic in bringing average house prices into a statement about FTB's.

The banks are not yet keen to lend money.

They are continuing to increase the flow of money back into the economy. Do you not read?

If interest rates start going up, what then - especially for those already on the edge of affordability?

Who is on the edge of affordability? Most of those that have not lost their jobs are finding it easier to service their mortgages.

Since we haven't yet reached the stage where the masses have accepted a more modest and affordable lifestyle let alone adapted to one, I can't help but feel that the necessary economic adjustment is still to happen and we have a lot further to go before we can say we are coming out of this.

There is no guarantee that this will happen.

As the saying goes, 'One swallow doesn't make a summer.'

See the above points and realise that your post was not as balanced as some would have you believe. It is clear that you are on the side of "its still got way further to fall and I'll ignore any potential good signs because I don't want to recognise them".

Graham_Devon

mrposhman wrote: »

See the above points and realise that your post was not as balanced as some would have you believe. It is clear that you are on the side of "its still got way further to fall and I'll ignore any potential good signs because I don't want to recognise them".

I don't think it was at all.

Your points were just "how do you know". Nothing to give, just how do you know, to some pretty obvious statements.

Was definatelty balanced, they were just asking questions of what I wrote.

PasturesNew

Dunno but it's a bank holiday and I have nothing to do.

mrposhman

Graham_Devon wrote: »

I don't think it was at all.

Your points were just "how do you know". Nothing to give, just how do you know, to some pretty obvious statements.

Was definatelty balanced, they were just asking questions of what I wrote.

Er no. Stating yet to be made redundant and yet to be made bankrupt indicates that he knows exactly what will happen. No-one knows what is going to occur in the future as to whether or not any more jobs will be lost, or whether or not (and the volume) of bankruptcies that will or won't occur.

The post above has clearly been writtent with one view in hand and is therefore not balanced. I don't claim that my post is balanced either as I clearly have a more bullish view than some on here.