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A very very very bad day for the housing market
Comments
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What do you mean "we know it's pretty much a dead cert that IRs will rise in the next couple of months, but will that have an affect on the House Prices?"
The strong correlation between the two is undeniable.
What you said is like saying, 'we know it's pretty much a dead cert that temperatures will rise in the next couple of months, but will that have an affect on the thermometer?
Of course, everyone knows that a rise in temperature will cause a rise in the reading on a thermometer, but for some reason the strong correlation between interest rates and house prices is not so obvious.
The correlation between the two is why the MPC discuss House Price Inflation when making a decision about interest rate rises isn't it? Or maybe, its just because they want to share decorating tips.
Oops! Thanked you by mistake! Makes up for a previous time I didn't thank you when I should've.
You're analagy is compelling but false. Interest rates are the price of money so have an effect on the supply of and demand for money. This, in turn has an effect on the price of houses (and all other assets) but it is indirect.0 -
I wonder just how many prophets of doom over the past few years have been equally keen to rush on here to own up to not seeing in their crystal ball the stunning 'HPR' we've had...0
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Oops! Thanked you by mistake! Makes up for a previous time I didn't thank you when I should've.
You're analagy is compelling but false. Interest rates are the price of money so have an effect on the supply of and demand for money. This, in turn has an effect on the price of houses (and all other assets) but it is indirect.
Aye, I realise that.
But I also realised that I'd spent too long trying to think of an analogy that fitted perfectly!! The overall point still stands.I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0 -
YEP
I'm not talking about the amount of divorces per year, I'm talking about in total, so for every ONE additional divorce, means (generally) that there needs to be ONE new home found.
so in what you say is correct that divorce numbers have decreased per year, but yet there still seems to be over 1 million new divorces since 1995 (assuming an average of 100,000 divorces per year)
obviously apologies if I'm reading that graph & stats wrong.0 -
Aye, I realise that.
But I also realised that I'd spent too long trying to think of an analogy that fitted perfectly!! The overall point still stands.
Done it again!
Interest rate rises are not necessary to cool the house market. A change in sentiment will do it. I think too much importance is put on them. Of course they are a part of the mix that affects sentiment, but only a part. For as long as people think they can make 10-20% a year, risk free from BTL or flipping, house prices will rise.0 -
YEP
I'm not talking about the amount of divorces per year, I'm talking about in total, so for every ONE additional divorce, means (generally) that there needs to be ONE new home found.
so in what you say is correct that divorce numbers have decreased per year, but yet there still seems to be over 1 million new divorces since 1995 (assuming an average of 100,000 divorces per year)
obviously apologies if I'm reading that graph & stats wrong.
How many of those divorcees remarry? How many people die and therefore 'vacate' their property? How many empty properties are there in the UK?There is no shortage of property, only a shortage of affordable property.Illegitimi non carborundum.0 -
Trust me, if we all knew what was going to happen we wouldn't be reading this forum now would we.
Wheres Nostradamus when you need him?0 -
Done it again!
Interest rate rises are not necessary to cool the house market. A change in sentiment will do it. I think too much importance is put on them. Of course they are a part of the mix that affects sentiment, but only a part. For as long as people think they can make 10-20% a year, risk free from BTL or flipping, house prices will rise.
Indeed. Those of us who remember the last Crash (fumbles for stick and false teeth!) also remember that the largest falls in Property prices happened when Interest rates were going down. Once the initial drop in house prices started, sentiment changed and then had a snowball effect on Property values.0 -
Done it again!
Interest rate rises are not necessary to cool the house market. A change in sentiment will do it. I think too much importance is put on them. Of course they are a part of the mix that affects sentiment, but only a part. For as long as people think they can make 10-20% a year, risk free from BTL or flipping, house prices will rise.
Totally. I think sentiment is a huge factor.
I think that 'part' that you refer to though has a bigger impact than you maybe give credit for. Maybe too much importance is put on interest rates cooling the market, but if importance is being put on them by the public, then with interest rates rising will come a change of sentiment. Whether its justified or not. Does that make sense?
We better hope that interest rates have more of an affect than you give them credit, since its the only tool that the BoE have!!!I can take no responsibility for the use of any free comments given, any actions taken are the sole decision of the individual in question after consideration of my free comments.
That also means I cannot share in any profits from any decisions made!;)0
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