Carney states we "do need to be vigilant on house prices"

JohnRo

Savings and pension annuities are not investments in the way you're awkwardly trying to imply.

Just sit smug and enjoy the mortgage welfare, an effect of attempts to bail out insolvent banks. Don't kid yourself that the benefits being handed out, while they last, aren't being paid for at the expense of savers and pensioners.

MFW_ASAP

Thrugelmir wrote: »

Problem is how does the BOE influence a fragmented market. Where one size doesn't fit all.

Was thinking of this when I saw Carney's speech.I've always maintained that using interest rates was a very blunt tool. That holds more than ever before. We do however have other tools in the shed.

One of the things that could be used is stamp duty. This has already been used to help regenerate certain areas where they were excluded from stamp duty. This could be extended so that as well as helping in regeneration in unpopular areas with zero duty, they could raise stamp duty in popular areas, such as large parts of London and the SE.

JohnRo

Loughton_Monkey wrote: »

Leaving aside the fact that we don't vote for the Bank of England MPC, the concept of "thieving" from savers is interesting. Being a net saver, I am 'suffering' more than most, but if you perceive it as thieving, there must come a time - when base rates increase - at which point they would in fact be 'giving' us something. At what rate is this achieved? 3%, 5%, 7%.....?

Like the man with his boot on your throat who "gives" by releasing the pressure.

grizzly1911

IveSeenTheLight wrote: »

I don't recall any guaranteed minimum expected investment returns from any savings accounts that would warrant the comment that they are being stolen from.

As with any investment, the returns and sometimes the capital is at risk.

You are of course right if matters weren't being artificially manipulated.

Pensioners that have had to start relying on annuities recently and for the foreseeable future have got the the s**tty end of the stick. They have prepared for their retirement of many years with expectations of something better for their later years which are now blighted.

IveSeenTheLight

grizzly1911 wrote: »

You are of course right if matters weren't being artificially manipulated.

Pensioners that have had to start relying on annuities recently and for the foreseeable future have got the the s**tty end of the stick. They have prepared for their retirement of many years with expectations of something better for their later years which are now blighted.

There's nothing artificial about it.

The government have introduces a number of measures to help sustain / grow the economy.

I take it your preference for a democratically empowered government is to do nothing to support the country or the economy.

MFW_ASAP

grizzly1911 wrote: »

You are of course right if matters weren't being artificially manipulated.

Pensioners that have had to start relying on annuities recently and for the foreseeable future have got the the s**tty end of the stick. They have prepared for their retirement of many years with expectations of something better for their later years which are now blighted.

Annuities, just like endowments before them, are outdated products that are not fit for purpose anymore. Other options have been available since well before the recession, people need to start taking more of an interest in their own investments and own money. The days of sticking it in a bank and sitting back while it gains interest are gone.

Endowments failed because they were designed for the high inflation, high interest rate environments of the 70s and 80s, they stopped being a viable product in the 90s but people never checked if they were still fit for purpose. It's the same with pension, people think they can put a few bob a month away in a zombie fund and expect to live like a Lord for 30 years on it.

I've been planning my retirement for the past 15 years, each time the environment changes, my plan adapts.

Loughton_Monkey

MFW_ASAP wrote: »

Annuities, just like endowments before them, are outdated products that are not fit for purpose anymore......

I tend to agree. The real 'killer' is the fact that (in large part) your lifetime annuity is fixed by the interest rate at the time. Which today is peanuts.

The key solution, drawdown, comes, however, with further problems. Joe Pensioner is generally ignorant of the complexities of fund investment and would not be able to manage drawdowns efficiently.

MFW_ASAP

Loughton_Monkey wrote: »

I tend to agree. The real 'killer' is the fact that (in large part) your lifetime annuity is fixed by the interest rate at the time. Which today is peanuts.

The key solution, drawdown, comes, however, with further problems. Joe Pensioner is generally ignorant of the complexities of fund investment and would not be able to manage drawdowns efficiently.

It's time to learn. If I can do it, anyone can.

martinsurrey

anyone who read that speach and thought it would help first time buyers or hard up people are either, miss informed, or idiots, or both.

restrict mortgages (through capital control at banks) and the people who will struggle to get a mortgage are the people who can least afford them, IE FTB's or hard up people.

increase interest rates, and yes, house prices fall, but mortage rates rise, so the monthly cash cost of a house, will be at a similar level, if not higher (due to the market grinding to a halt)!

the only people who wont suffer in either case, are cash buyers, so BTL investors with deep pockets will be the real winners.

Turnbull2000

I remember all the house price 'fears' and 'vigilance' back in 2002-2006. Just like last time (and the 88-92 'bubble' too), this is all words and empty rhetoric. No action will be taken. It never is.

Call me cynic, but it seems a great way of creating positive price sentiment and panic buying. As for the media, 5% HPI is hardly 'surging', but it helps stimulate the positive feedback needed to help create a real surge.