Squeezed middle must wait another decade for rise in living standards

moneyinmypocket

BOE and gov know house prices are central to recovery and future of this country - protect at any cost.

Stop waiting for a hpc I won't happen

grizzly1911

moneyinmypocket wrote: »

BOE and gov know house prices are central to recovery and future of this country - protect at any cost.

Why do you say that?

Graham_Devon

Thrugelmir wrote: »

The reasons are outside the BOE's control.

We've "bad" inflation i.e. imported.

Not "good" i.e. pay increases boosting demand.

Why did they move to control them in 2006/7?

I'm not disagreeing, but they certainly moved interest rates up a few times in succession due to imported inflation (mainly fuel).

Thrugelmir

Graham_Devon wrote: »

Why did they move to control them in 2006/7?

I'm not disagreeing, but they certainly moved interest rates up a few times in succession due to imported inflation (mainly fuel).

More likely to control house prices.

Thu, 05 Jul 2007 5.7500
Thu, 10 May 2007 5.5000
Thu, 11 Jan 2007 5.2500
Thu, 09 Nov 2006 5.0000
Thu, 03 Aug 2006 4.7500
Thu, 04 Aug 2005 4.5000
Thu, 05 Aug 2004 4.7500
Thu, 10 Jun 2004 4.5000
Thu, 06 May 2004 4.2500
Thu, 05 Feb 2004 4.0000
Thu, 06 Nov 2003 3.7500


Mirrors the lending boom and expansion of mortgage debt.

kabayiri

grizzly1911 wrote: »

Why do you say that?

Yeah, I wonder why too?

The old model of leveraging assets to create the illusion of wealth isn't going to deliver is it?

We will always see those with money gain, and B2L is one of the methods they will use.

But across the board, the value of the pounds in their pockets are going to diminish for many.

Don't we need to step back and examine our consumer model a bit more critically?

I've often argued that a product which is more expensive initially, but offers more longevity, if maintained locally through service and repair - such a product returns more money to the local community.

Disposable dvd players; laptops; televisions lasting just a few short years. That can't be a sustainable future surely?

Thrugelmir

kabayiri wrote: »

The old model of leveraging assets to create the illusion of wealth isn't going to deliver is it?

In reverse deleveraging can be painful. As vultures pick off assets at fire sale prices. (My cash is waiting .)

moneyinmypocket

You're kidding yourselves if you think prices will crash, people have been waiting for 6 years or so - all the time spending money on rent - add that money up - it's no small change.

If it gets you through the day to think prices are going to crash so be it.

Thrugelmir

moneyinmypocket wrote: »

You're kidding yourselves if you think prices will crash, people have been waiting for 6 years or so - all the time spending money on rent - add that money up - it's no small change.

If it gets you through the day to think prices are going to crash so be it.

This isn't HPC. More to life than worrying about stagnant house prices.

ILW

Marine_life wrote: »

Selective / lazy reporting is really irritating.

What the papers forget is that:

a. Interest rates have fallen significantly in the last 5 years, cushioning the impact of stagnation in salaries.

b. the UK economy is fundamentally uncompetitive so a "rebalancing of wages" is in any event necessary.



My view? Get used to it - a weakening pound will likely drive inflation higher - interest rates up etc. etc.

So those with largish mortgages are being cushioned. Everyone else is being hammered.

Thrugelmir

ILW wrote: »

So those with largish mortgages are being cushioned. Everyone else is being hammered.

Don't forget many of those mortgages are interest only.

So devaluing the £ helps the banks.