Government repressing house prices.

Turnbull2000

Graham_Devon wrote: »

It will have to happen if the world economy dictates it.

So what do you believe will happen? That they'll rise enough to damage the property market and cause distressed sales?

HAMISH_MCTAVISH

shortchanged wrote: »

So if the economy starts to do very well in the next few years we'll still have interest rates at 0.5% will we?

So if the economy does well, we'll have falling unemployment, increasing consumer confidence, improved lending and mortgage availability, and rising wages.

And you think those conditions are conducive to falling house prices, do you?

homelessskilledworker

HAMISH_MCTAVISH wrote: »

So if the economy does well, we'll have falling unemployment, increasing consumer confidence, improved lending and mortgage availability, and rising wages.

And you think those conditions are conducive to falling house prices, do you?

I was about to reply with the obvious, but then I thought why bother:)
Whatever scenario or strong possibilty is put to you your answer is always predicatable in that it will always be one that assures property nirvana.

But will you give me the honour of answering this one question honestly....

Do you think the Banking collapse of 2007/08 and the ripples that came off that and caused widespread pain has now been repaired?

shortchanged_2

HAMISH_MCTAVISH wrote: »

So if the economy does well, we'll have falling unemployment, increasing consumer confidence, improved lending and mortgage availability, and rising wages.

And you think those conditions are conducive to falling house prices, do you?

Well it depends what you view as improved lending.

Because if you mean very few IO mortgages, reasonable income multiples, not this 4x plus stuff and interest rates at around 5-6% then yes that is conducive to house price falls from the current levels.

grizzly1911

homelessskilledworker wrote: »

Of course!!

Have you not heard "the Government won't allow it":rotfl:

It seems like so many of the posters on here have no experience or even understanding of the concept of events taking control as opposed the government.

Is the government in control or are they mere puppets waiting to be tweaked?

Harry_Boyle

shortchanged wrote: »

Well you would think that Renoman.

Does this mean you can't respond to my points?

Fair enough, my post was pretty well constructed and difficult to oppose, but I had hoped you would at least try, especially given the strengths of your beliefs.

shortchanged_2

Harry_Boyle wrote: »

Does this mean you can't respond to my points?

Fair enough, my post was pretty well constructed and difficult to oppose, but I had hoped you would at least try, especially given the strengths of your beliefs.

Why would I want to converse with you renoman?

You do nothing but disrupt these boards and turn every discussion into a slang fest.

Harry_Boyle

shortchanged wrote: »

Why would I want to converse with you renoman?

You do nothing but disrupt these boards and turn every discussion into a slang fest.

Seems like you're the one trying to do that. I've made some valid points, but if you can't address them and don't want to continue the discussion that's fine.

Jegersmart

The problem with this thread is that most of the people in it have a vested interest - i.e. they are a home owner already or wanting to buy - and are completely unable to be objective. This is also called "talking one's own book".

I am not going to talk too much about the details that you are almost all getting lost in.

There are 2 main drivers of price in the housing market - one is supply/demand, the other is the expansion/availability of credit. In addition the housing market is an opaque market so that price discovery is challenging, which makes it more difficult to confirm price movement accurately.

As with any market, if the price is falling there are more sellers than buyers - but the reasons for this could be numerous. It could be fewer FTB's due to lower population growth at the relevant period of time, lack of available credit or higher levels of unemployment and so on. The difficulty is that most of these factors are also rather opaque and therefore become harder to judge in terms of their relevancy.

House price increase has historically happened due to the expansion of money supply through loans (debt) which has devalued our currency massively. We have all seen that $1 would require $21 in 2007 or whatever, and the £ is not materially different. Due to excessive debt levels in all parts of the monetary system at this point, I for one seriously doubt that this will or can continue in the long term.

What are the implications of this in terms of future house prices? Well, that is where it becomes complex and I don't pretend to have all the answers. Certainly raising capital requirements (whether in banks or individuals in terms of deposit) as is the case now will normally cause growth to slow or stall which could mean increased unemployment in some scenarios.

My own view is that the economy as a whole is not healthy. Whilst interest rates are so low on a central bank basis but the spread in terms of mortgage rates that are (generally) available are so wide it would seem to me that the reasons for that could include reduced liquidity at bank level (capital requirements? banks sitting on potential losses? etc etc) or that future inflationary concerns are being hedged. IF (or when) interest rates go up considerably this could have massive potential impact in terms of repossessions and defaults.

All this and many other factors that are too numerous to discuss at length in one post are not conducive to house price gains in my view. I don't expect a housing price crash necessarily, rather a drifting lower until the number of buyers equal and surpass the number of sellers. How devaluation of "money" through money printing will affect this is impossible to say. What I do feel is though that people that are saying that 100% or similar mortgages are "prudent" do not comprehend "risk". It is simply dangerous to have and/or share such views and these people should be ignored immediately.

J

Graham_Devon

As per my post earlier, the Halifax figures posted today state....

Halifax's housing economist Martin Ellis said that the Bank of England's Funding for Lending scheme was likely to have been a factor in a pick-up of sales and prices.

Therefore, stimulus directly pushing up prices. As stated.