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Debate House Prices
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Housing Market to rescue UK economy...
Comments
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Yes but the upward pressure on prices is mostly down to a shortage of good housing on the market. A lot of poeple while IRs are low are staying put and not selling. They are doing this because of the underlying downward pressures you mentioned (unemployment, lack of mortgage funding, recession, etc).
But with interest rates set to stay low for years, this can continue for a very long time, certainly until the other issues, unemployment etc are improvingIn the short term there has been a mini recovery, but the actual causes of all this have not been dealt with yet. IMO we wont see a true (and full) recovery until "unemployment, lack of mortgage funding, recession, etc" is addressed.
Well technically, the cause of the crash was the sudden and savage withdrawal of almost all mortgage funding from the market.
This has been reversing for some time, and prices are rising accordingly.
The other things are influences, not the actual cause. And yes, they should slow down the recovery, but if the supply and demand imbalance remains, prices will rise anyway.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »But with interest rates set to stay low for years, this can continue for a very long time, certainly until the other issues, unemployment etc are improving....HAMISH_MCTAVISH wrote: »"The huge borrowing levels by the Government are bound to drive interest rates higher in the months to come and this should be factored into buyers mortgage affordability calculations..."
Your choice of article. If they are right about the positive stuff you highlighted, then presumably they know their stuff and are right about the negative future on Interest Rates...?
Make your mind up...0 -
so if this continues by definition of what your saying house prices will continue to increase.
if there are not many forced sellers there will be no drop in prices.
the forced sellers that are being forced onto the market are being diluted over a longer period of time which has little or no impact on house prices.
Well that is possible and it seems this is the case over the last 6-9 months. However i doubt BOE can keep the base rate down for much more than a year. Unless the underlying problems of a recession are remedied I dont see how there will be a full recovery of house prices. There is still a shortage of FTB for a start"For those who understand, no explanation is necessary. Those who don't understand, dont matter."0 -
Well that is possible and it seems this is the case over the last 6-9 months. However i doubt BOE can keep the base rate down for much more than a year. Unless the underlying problems of a recession are remedied I dont see how there will be a full recovery of house prices.
why not? unless inflation comes along which at the moment is extremely unlikely it won't happen.
if the BOE increases interest rates before any other major economy the price of sterling investment becomes more expensive. so what they are being forced to do is make a move on interest rates together, hence all the G20 meetings that are happening. base rates will not move upwards until they are done as a combined action to minimise the impact on each other..
look at what's happened to Israel and will happen to Australia where they've increased rates and have had to buy back currency to support it.There is still a shortage of FTB for a start
that's an issue which will need to be addressed. more increased rental activity looks like the only option.0 -
so if this continues by definition of what your saying house prices will continue to increase.
if there are not many forced sellers there will be no drop in prices.
the forced sellers that are being forced onto the market are being diluted over a longer period of time which has little or no impact on house prices.
Previous crashes were not just about Forced Sellers. Supply is not just affected by Forced Sellers.
Those unwilling to accept price drops through 2008/early 2009 may return to the market, after recent "positive" news, increasing supply?
Have spotted some recent anecdotals where sellers who had bought in 2007 think their house is now worth more than then - number-blindness allows them to notice 1 index going up a couple of %, but ignore market-wide double-digit drops...
...what they eventually sell for might be a disappointment.0 -
Cannon_Fodder wrote: »Previous crashes were not just about Forced Sellers. Supply is not just affected by Forced Sellers.
Those unwilling to accept price drops through 2008/early 2009 may return to the market, after recent "positive" news, increasing supply?
Have spotted some recent anecdotals where sellers who had bought in 2007 think their house is now worth more than then - number-blindness allows them to notice 1 index going up a couple of %, but ignore market-wide double-digit drops...
...what they eventually sell for might be a disappointment.
mortgage availability is the key and to me looks to be more important to drive supply.Cannon_Fodder wrote: »...Those unwilling to accept price drops through 2008/early 2009 may return to the market, after recent "positive" news, increasing supply?.
they will return. the number of them is anyones guess.Cannon_Fodder wrote: »...what they eventually sell for might be a disappointment.
they won't need to sell if they're not forced sellers?0 -
Cannon_Fodder wrote: »Your choice of article. If they are right about the positive stuff you highlighted, then presumably they know their stuff and are right about the negative future on Interest Rates...?
Make your mind up...
I presume you do understand that rates could be higher than they are today, and still be low for years.....
Those two things are not contradictory at all.
In fact, rates could be at 400% of todays levels, after 6 successive .25% rises by the MPC.....
And still only be at 2%.;)“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
why not? unless inflation comes along which at the moment is extremely unlikely it won't happen.
if the BOE increases interest rates before any other major economy the price of sterling investment becomes more expensive. so what they are being forced to do is make a move on interest rates together, hence all the G20 meetings that are happening. base rates will not move upwards until they are done as a combined action to minimise the impact on each other..
look at what's happened to Israel and will happen to Australia where they've increased rates and have had to buy back currency to support it.
I take your point. but....
Rising food prices, fuel prices, Utility bills. I wouldnt see inflation is out of the question within the next 12 months.
I personally feel that a full recovery is a long way off, and that there will be more pain before we're out of the woods.
House Prices got to their peak in 2007 via an orgy of easy credit, media hype, and pier pressure (many people felt they were missing out forever unless they bought then).
These variables are no longer present. Many people are in NE, have little job security (or limited employment options), Salary cuts, and generally more important things to worry about. Im sure you can argue there are people doing well in the current climate -but i think they're in the minority."For those who understand, no explanation is necessary. Those who don't understand, dont matter."0 -
There is still a shortage of FTB for a start
FTB's were 36% of the market last month.
Not sure that counts as a "shortage" by historical standards.....“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
HAMISH_MCTAVISH wrote: »FTB's were 36% of the market last month.
Not sure that counts as a "shortage" by historical standards.....
What about over the course of this year compared to recent years? 1 month's stat doesn't hold much weight on its own"For those who understand, no explanation is necessary. Those who don't understand, dont matter."0
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