Are we already in a new major upswing?

Henry_P_Chester

Turnbull2000 wrote: »

Just like the economic fundamentals that drove the 2002-2007 upswing? Oh hang on...

The fundementals that caused the boom over the decade to 2007 was reckless lending. Allowing buyers to 'afford' more and more expensive houses. The difference now is this easy credit is no longer available. And credit restrictions will get tighter over te next couple of years as the governments special liquidity scheme ends and banks are forced to borrow money at higher rates on the open Market thus pushing up SVRs and reducing the banks ability to take on risk thereby restricting high LTV mortgages.

We have already seen evidence of this by both nationwide and lloyds raising SVRs and phasing out interest only mortgages. The rest will start to follow suit soon.

Jonbvn

Henry_P_Chester wrote: »

And credit restrictions will get tighter over te next couple of years as the governments special liquidity scheme ends and banks are forced to borrow money at higher rates on the open Market thus pushing up SVRs and reducing the banks ability to take on risk thereby restricting high LTV mortgages.

However, due to the possibility of deflation, QE is set to continue. Furthermore, even bearish commentators like Roger Bootle are saying that interest rates could remain low for many years.

Henry_P_Chester

Jonbvn wrote: »

However, due to the possibility of deflation, QE is set to continue. Furthermore, even bearish commentators like Roger Bootle are saying that interest rates could remain low for many years.

interest rates are irrelevent. It libor, which has been rising for about the last month, that's important.

I can't see how more QE can be justified when the country is in so much debt. Mervyn king has already said there will be no more QE.

Also in a deflationary environment house prices would be falling along with everything else.

System

brit1234 wrote: »

Cleary not. All the lattest data has shown a massive slow down, stabalisation and falls in price over the last couple of months.

Just in case anyone needs clarification, brit is talking about propertybee.

chucky

DaddyBear wrote: »

Latest land registry data suggests otherwise. A below inflation rise incase you missed it.

again a soundbite argument with holes all over it...

that inflation that you harp on about is making that deposit of yours less and less effective each and every month when it comes to be used for that house purchase...

i won't mention how inflation favours those with a mortgage... it's not what you wanted to hear...

System

The inflation thing is valid though, I can't remember if it was IveSeenTheLight or Really who said that the crash would more likely happen in real terms rather than nominal.

The only part where it falls down is it probably benefits people who already own more than those who don't.

chucky

Joeskeppi wrote: »

The inflation thing is valid though, I can't remember if it was IveSeenTheLight or Really who said that the crash would more likely happen in real terms rather than nominal.

The only part where it falls down is it probably benefits people who already own more than those who don't.

that's the point it doesn't help the crash rampers.

• their house deposits are eroded by inflation.
• the spending power is less due to inflation so less money to save for that deposit
• the nominal price of property is increasing by small amounts and making their future mortgage borrowing higher.

they don't really understand what they say sometimes - making a point about inflation in their favour is stupid.

doire_2

Turnbull2000 wrote: »

More and more regions and cities are hitting double digit inflation. I suggested last year that we're in another boom, and with London, South West and South East all since experiencing massive rises, it's certainly beginning to feel like it.

Yeah the UK is skint, unemployment is rising, FTB are priced out and at their lowest for 20 years, wages aren't rising, massive pain is just around the corner but house prices are soring everywhere

Blacklight

doire wrote: »

Yeah the UK is skint, unemployment is rising, FTB are priced out and at their lowest for 20 years, wages aren't rising, massive pain is just around the corner but house prices are soring everywhere

It does rather point to you being wrong in terms of the impact you think all your external factors have on market prices.

IveSeenTheLight

Davesnave wrote: »

In this kind of market, with much still not moving quickly, it's possible to take a view like yours, based on pure data, or take a view like Tom's. It doesn't mean either is 'better,' because people will do what they feel works for them and what they are comfortable with.

My point was to point out that when looking at facts, asking prices may be relatively irrelevant while actual sold prices are not