Rising Interest Rates

ivegotabig1

Generali wrote: »

Quite the reverse IMO. You are refering to Generali's long-term house price bear market theory (GLTHPBMT).

GLTHPBMT is simple really. There are a lot of people, especially in the South East of England, that will be retiring in about 20 years time that will not have a pot to wee in (because their pension's been shafted by the politicians). On the other hand they will be sitting in houses 'worth' hundreds of thousands of pounds. How many people will really want to live in a decaying house worth £500k that they can't afford to heat? Better to sell up and move up north or to a cheap bit of Europe.

At this point many will learn the truth of 2 City phrases:

1. Cash is truth, everything else is speculation (i.e. until you actually sell an asset and have fivers in your hand you can't say what it is worth, you're just guessing)

2. Nobody ever went broke taking a proft.

House prices then start on a long-term downward trend, exascerbated by the fact that lots of people that were hoping to do on of those long-term equity withdrawal schemes for old people find they can't as the financial institutions won't lend for an indeterminate length of time against an asset falling in value!

We'll be getting shafted by the taxman on one side (gotta pay for all those nice foreign nurses that have come over to look after our parents because we can't be bothered somehow) and GLTHPBMT on the other.

GLTHPBMT is deflationary as it reduces asset prices, thus the ability to borrow money secured and thus the ability of the banks to increase the money supply.

An Interesting perspective & quite probably a real scenario..The thing that irritates me is how cynically the housing market has been exploited/ manipulated by a combination of The BOE, this government (who have shafted their "traditional" voters more than anyone) & business...its like selling off the family silver, but one day, somehow there is going to be payback !!! but ofcourse Tony & Gordon & Merv will all be long gone from the scene by then !!

Generali

ivegotabig1 wrote: »

An Interesting perspective & quite probably a real scenario..The thing that irritates me is how cynically the housing market has been exploited/ manipulated by a combination of The BOE, this government (who have shafted their "traditional" voters more than anyone) & business...its like selling off the family silver, but one day, somehow there is going to be payback !!! but ofcourse Tony & Gordon & Merv will all be long gone from the scene by then !!

Personally I blame banks and, as with most sucessful cons, people's greed. You can only con someone (usually) if they're greedy.

I reckon the Govt are pretty clean on this one. They could improve planning law but that's about it. In a free market, caveat emptor has to apply and it does to BTL mortgages as much as to second hand cars.

Remember GLTHPBMT - you heard it here first!