A "full-scale property boom will begin in 2014"

Graham_Devon

wotsthat wrote: »

The main 'props' are a shortage of housing and the willingness of buyers and sellers to agree prices you disapprove of.

I'm afraid that's called the market, rather than a prop.

You and I both know that without the stimulus there would be fewer buyers and sellers.

Why do I feel discussion is made pointlessly difficult?

OffGridLiving

Graham_Devon wrote: »

Right, so funding for lending, lend a hand, new buy, mortgage guarantees, are NOT aimed at housing?

Clearly QE and interest rates are not aimed directly at the housing market - but also, quite clearly, the other schemes are what I was talking about, hence listing them.

Glad to see someone from your 'camp' admitting that interest rates are low to fix the economy not to prop up house prices. Let's hope you remember that for future discussions.

As to your other points, New Buy is only applicable to new builds rather than all houses and is therefore obviously an incentive to encourage the construction industry to build new homes. One of the 'props' to high house prices is the shortage of homes, so increasing supply should reduce house prices. The reason the construction industry needs this stimulus because the banks are still refusing to lend money, despite the best efforts of the government to encourage them to do so. I therefore have no problem with stimulus that supports a major UK industry.

As to Lend a Hand, this is required again because the banks are refusing to lend money. I bought my first house in 1993 with a 95% mortgage, this clearly wasn't in the days of loose lending. If the banks are refusing to allow FTBers access to the same type of mortgage that I had available, then I don't have a problem with the government stepping in with a scheme to try and fix this.

Again, this stimulus isn't to prop up house prices, it's in place because the banks refuse to lend money at a reasonable rate on 95% LTV.

Graham_Devon wrote: »

I was questioning you as I came across a post yesterday, from the time you were pretending to be someone else, which has you stating that the housing market should be left to it's own devices, and that its crazy policy to prop it up.

Was wondering where your change of heart came from?

I now understand what Mr Pricklepants was talking about on here:

Mr._Pricklepants wrote: »

Don't worry about it, OffGrid.
This devon-smallchanged tandem and their tactics are quite well known around these parts.
Anyone with dissenting views is considered a threat and needs to be discredited with claims of being a sockie. They're not interested in debate, they're just here to 'win' arguments. Their thanks count is their life's achievement.
For now, you are in their crosshairs. Pretty soon they'll move on to someone else.
I do hope you stick around.

HAMISH_MCTAVISH

HAMISH_MCTAVISH wrote: »

This isn't 'stimulus'.

This is emergency medical treatment, helping the still seriously ill mortgage markets to function.

And the course of treatment is still only a small fraction of the way through.

Eventually, the treatment course will be complete, and the patient will be healed and able to function normally without it.

We can then remove the medical treatment.

Doing so at this stage would be ill-advised and reckless to the health of both the mortgage market and wider economy.

HAMISH_MCTAVISH wrote: »

To continue the medical analogy....

The US mortgage market was like a crack cocaine addict that had a heart attack.

The UK mortgage market was the innocent victim standing on the side of the road that got hit by the bus the US market was driving at the time it had that heart attack. Mr UK Market might have sipped a bit of red bull that morning, but it wasn't that which caused him to be admitted into intensive care, nor would it have been had he not been hit by a bus.

Completely different scenario.

ILW wrote: »

But the GFC went way beyond just mortgage lending. The US sub prime thing just turned the lights onto where the whole system was already falling down.

But we're not talking about all the various issues elsewhere in the world, and there were lots of them.

We're here talking about the UK lending market, which was quite healthy on the whole, and got hit by a bus.

Hence the need for medical treatment.

OffGridLiving

Graham_Devon wrote: »

This is why discussion is so utterly pointless.

Heres Hamish to redefine the definition of stimulus....

Exactly, which is why I posted:

OffGridLiving wrote: »

The trouble we have in discussions is that we're always going to be at cross purposes. I maintain that interest rates were lowered because of a banking crisis. You guys maintain that interest rates were lowered to 0.5% to stop a housing crash, Whenever I ask whether you guys think interest rates are low across the whole developed world in order to prop up UK house prices, you guys vanish from the discussion.

It's an impasse that prevents any sort of sensible discussion of this nature.

Which I note didn't stop you from continuing the discussion. At least now you understand the point I was trying to make above.

wotsthat

Graham_Devon wrote: »

Right, so funding for lending, lend a hand, new buy, mortgage guarantees, are NOT aimed at housing?

Clearly QE and interest rates are not aimed directly at the housing market - but also, quite clearly, the other schemes are what I was talking about, hence listing them.

Aren't you supportive of measures to increase supply?

Graham_Devon

You see, OffGrid, all I'm wondering is what's made you change your tune so much?

This is your previous stance on house prices and stimulus..

This is true and a real shame. The UK would do well to decouple the economy from its huge reliance on the housing market. Rather than having people feel 'richer' because of rising prices and starting to spend in the economy, they could actually feel more secure in their jobs and have more disposible income and start spending in the economy (i.e. actually be richer).

Sustainability isn't just about resources, it's about economies. A model that relies on ever increasing asset prices is flawed. We should look at following the German model and actually get rich from working hard and exporting, not by investing all our wealth in properties and sitting idle as they rise.

http://forums.moneysavingexpert.com/showpost.php?p=61142619&postcount=52

I'm just wondering what has made you change your tune so much? The above was in response to stimulus pushing prices up. Simple question really. Theres a lot of your older posts which don't seem to tally with what you state now just a month later?

wotsthat

Graham_Devon wrote: »

I'm afraid that's called the market, rather than a prop.

The market sets the price I'm afraid.

Graham_Devon wrote: »

Why do I feel discussion is made pointlessly difficult?

Probably because you accuse people of ignoring the issues unless they agree that we're going to hell in a handcart.

brit1234

HAMISH_MCTAVISH wrote: »

We're here talking about the UK lending market, which was quite healthy on the whole, and got hit by a bus.

Sorry but that is utterly untrue. If that was the case then why did we bail out the banks, continue to do so and nationalise some as well if lending was healthy.

The simple fact was their was a cheap credit explosion partly caused by too low interest rates and all manor of new created investment vehicles. British banks lapped it up trying to expand as fast as possible, selling off debt and trying to be the biggest mortgage providers. These banks continued to loosen their lending criteria till dodgy practices became widespread.

ukcarper

brit1234 wrote: »

Sorry but that is utterly untrue. If that was the case then why did we bail out the banks, continue to do so and nationalise some as well if lending was healthy.

The simple fact was their was a cheap credit explosion partly caused by too low interest rates and all manor of new created investment vehicles. British banks lapped it up trying to expand as fast as possible, selling off debt and trying to be the biggest mortgage providers. These banks continued to loosen their lending criteria till dodgy practices became widespread.

Is there a reason you haven't updated your sig.

Graham_Devon

wotsthat wrote: »

The market sets the price I'm afraid.

And theres nothing more to it than that, eh?

Really is pointless arguing this when you are going to such lengths to be so utterly obtuse.