Are house price rampers and investors........

chucknorris

shortchanged wrote: »

Chill out chuck. I was just wondering if the heavily leveraged and those with large debts took delight in the recent announcement from the BoE chief.

I am perfectly chilled thanks. But it is something that genuinely amazes me, that some (not saying you) bears seem to think that they will be quid's in if house prices collapse. They don't seem to realise that there will be other financial consequences for most.

Thrugelmir

chucknorris wrote: »

I am not saying we are there yet, but on the other hand I don't think that we are too far away from the start of a gentle recovery.

Still no indication as to how and when the budget deficit will be resolved. Political parties are steering clear of the issue currently. However it will form a major topic of debate leading up to the 2015 election. As some difficult and potentially unpopular choices and policies will need to be made. As there's a black hole in the forecast which growth alone cannot fill.

Thrugelmir

wotsthat wrote: »

Not that it matters. Wealthy people don't rely on hope.

Wealthy people can still make costly mistakes.

Graham_Devon

HAMISH_MCTAVISH wrote: »

Don't be so daft.

Falling unemployment, a growing economy, increased confidence and improving consumer spending are all very positive things for Britain.

To suggest that rates rising as a result of those factors being in place would depress house prices is just silly to the point of absurdity.

You appear to be saying rates rising back to normal levels won't effect house prices.

Which is pretty much to the contrary of every economist, panelist or banker I have heard.

chucknorris

Graham_Devon wrote: »

You appear to be saying rates rising back to normal levels won't effect house prices.

Which is pretty much to the contrary of every economist, panelist or banker I have heard.

IMO they probably will not adversely affect house prices Graham, because in all likelihood the raising of interest rates (boe base rate) will coincide with the recovery of the economy. That recovery will also support house prices. Obviously there are other scenarios (particularly associated with inflation) but I reckon the above is more likely.

Graham_Devon

chucknorris wrote: »

IMO they probably will not adversely affect house prices Graham, because in all likelihood the raising of interest rates (boe base rate) will coincide with the recovery of the economy. That recovery will also support house prices. Obviously there are other scenarios (particularly associated with inflation) but I reckon the above is more likely.

What if the recovery is only based on stimulus and low rates?

Look at house prices. Massive stimulus has started pushing prices up. Before the stimulus they were flat at best. Before the reduction in interest rates they were falling at quite a pace.

I guess the question would be whether you see pumping stimulus into the economy a grounded recovery, or whether you see it as providing a boost.

I personally see a recovery as a recovery. I.e coming off the medication and recovering back to what was.

That certainly isn't what we have. What we have is huge amounts of QE, more QE in the guise of funding for lending and more recently a massive prop (going beyond anything seen in any other developed country at the moment) for house prices in terms of state backed mortgages. All of that on the back of the lowest bank rates in history.

We appear to be back to Gordon Brown pre boom days, all thinking we've abolioshed boom and bust again. Were doing everything that was done back then to cause the boom (which led to the bust), but this time on a massively larger scale, involving taxpayer risk levels so high they are unknown.

Typhoon2000

When the economy was doing great, when we had 'normal' interest rates, we had double digit HPI. So an improving economy is a good thing for house prices.
I hope all those with mortgages take the opportunity to pay off a majority or all of their mortgage in the 10 years of low interest rate we will have.

chewmylegoff

This is a silly thread. Was someone bored at work?

shortchanged_2

chewmylegoff wrote: »

This is a silly thread. Was someone bored at work?

Just asking those difficult questions many shy away from.

chucknorris

Typhoon2000 wrote: »

When the economy was doing great, when we had 'normal' interest rates, we had double digit HPI. So an improving economy is a good thing for house prices.
I hope all those with mortgages take the opportunity to pay off a majority or all of their mortgage in the 10 years of low interest rate we will have.

Thanks, you saved me the bother of having to say it.