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Debate House Prices
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Funding for Lending on mortgages is ended
Comments
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I think (but might have misunderstood) that the banks have already met the capital requirements for next April, so the impetus to attract savers is not there at present.
Capital is a different matter to deposits to provide money to lend. On a banks balance sheet deposits are a liability not an asset.
Lenders are constantly having to renew funding lines. As borrow short and lend long on mortgages.
The breakdown of the monies drawn down under FLS are as follows.
Drawdown in total £17 billion.
Building Societies £5 billion ( net mortgage lending in period up £11 billion)
Banks £12 billion (net lending down £14 billion)
Appears banks have indeed been using FLS to provide cheap funds. While contracting their asset books.0 -
as interest rates increase, as stimulus and support for the housing market is with drawn the affect will be 2 fold
1. the cost of debt will increase
2. the amount of deposit will be required.
these 2 will ensure the house prices will fall certainly from the run away levels they are currently experiencing.
The bank of england has just started the tightening, next will be interest rate movements and then withdrawal of help to buy
You couldn't be more wrong.
As the economy improves, we will see a fall in unemployment, a rise in wages, an increase in consumer spending, an increase in business expansion and investment, and an increase in bank lending (which will be required for the economy to improve to begin with) will spur competition and reduce margins above base.
Yet somehow you seem to think increasing lending, falling unemployment, rising wages, and improved consumer confidence will cause house prices to fall?
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0 -
Economic recovery and growing economic activity are not the same thing. When the government can demonstrate growth in economic activity without printing money, borrowing at biblical levels and pillaging peoples savings (with base rates below inflation) I might believe that we are seeing economic growth.
Economic activity and Economic recovery may indeed not be the same thing, but they are certainly consistent. There would certainly be no recovery without activity. There will probably be recovery now that:- Biblical levels of debt are tailing off (albeit slowly).
- GDP is one of the healthiest in Europe.
- We would need to see 'miracles' of job growth to hit the unemployment levels which could trigger a rate rise - anytime soon.
- Jobs are consistently being created.
- Pay freezes, benefits caps, lower savings rates have 'hit' just about every segment of society, so we've all 'paid our dues' and it can't get any worse. The only way is up.
- Houses are starting to be built. This will boost growth massively, but still ensure a housing shortage for up to a decade.
Most of us are keeping calm and carrying on.0 -
thats not what I said you totally missed the pointHAMISH_MCTAVISH wrote: »You couldn't be more wrong.
As the economy improves, we will see a fall in unemployment, a rise in wages, an increase in consumer spending, an increase in business expansion and investment, and an increase in bank lending (which will be required for the economy to improve to begin with) will spur competition and reduce margins above base.
Yet somehow you seem to think increasing lending, falling unemployment, rising wages, and improved consumer confidence will cause house prices to fall?
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
as interest rates increase, as stimulus and support for the housing market is with drawn the affect will be 2 fold
1. the cost of debt will increase
2. the amount of deposit will be required.
these 2 will ensure the house prices will fall certainly from the run away levels they are currently experiencing.
The bank of england has just started the tightening, next will be interest rate movements and then withdrawal of help to buy
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:0 -
thats not what I said you totally missed the point
as interest rates increase, as stimulus and support for the housing market is with drawn the affect will be 2 fold
1. the cost of debt will increase
2. the amount of deposit will be required.
these 2 will ensure the house prices will fall certainly from the run away levels they are currently experiencing.
The bank of england has just started the tightening, next will be interest rate movements and then withdrawal of help to buy
:rotfl::rotfl::rotfl::rotfl::rotfl::rotfl:
Depends how you look at it. The media seem to be reporting that this step has been taken due to concerns about house price increases but if you look at the report from the BoE it's given less emphasis than you might assume given the media coverage.
It seems that the BoE think the market has sufficient functionality to maintain lending. They might be wrong but a glance about will quickly show that the mortgage market is at it's most competitive since the GFC.
If these schemes are withdrawn then it's because they are no longer needed (I still think there's a case for HTB2 to be pulled now) which can only be seen as good news. As the recovery continues maybe we can look forward to even less interference in the housing market and see stamp duty cuts, less fleecing of new home buyers to build 'affordable' housing and fewer bribes being paid to corrupt councils before sites can be started.0 -
Depends how you look at it. The media seem to be reporting that this step has been taken due to concerns about house price increases but if you look at the report from the BoE it's given less emphasis than you might assume given the media coverage.
As the recovery continues maybe we can look forward to even less interference in the housing market and see stamp duty cuts, less fleecing of new home buyers to build 'affordable' housing and fewer bribes being paid to corrupt councils before sites can be started.
Corrupt councils or councils following legislation?
If bankers had kept their mits clean and not got too greedy we wouldn't be here either.
Whatever share prices and dividends up hopefully.... Black cab replacement anyone."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »Corrupt councils or councils following legislation?
If bankers had kept their mits clean and not got too greedy we wouldn't be here either.
Whatever share prices and dividends up hopefully.... Black cab replacement anyone.
If a builder has to invest in 'community' projects to get planning then it's corruption. There is no free lunch - that cost is going to find its way onto the cost of the houses being sold.
Just another way to make new builds (which apparently we need more of) less attractive to buyers.
We could, I suppose, ignore anything that might improve the situation and just keep blaming bankers because that's so much more productive.0 -
If a builder has to invest in 'community' projects to get planning then it's corruption. There is no free lunch - that cost is going to find its way onto the cost of the houses being sold.
Just another way to make new builds (which apparently we need more of) less attractive to buyers.
We could, I suppose, ignore anything that might improve the situation and just keep blaming bankers because that's so much more productive.
I find it difficult it difficult calling following the law corruption.
If the cost of local development is significant it should be reflected in the price paid for the land. developers aren't stupid they know what liabilities are likely to be attached to a proposal. in the same way they ask for x properties on a development and settle for y less.
I am not sure bankers were blameless. You throw corruption around I am not sure that is productive either."If you act like an illiterate man, your learning will never stop... Being uneducated, you have no fear of the future.".....
"big business is parasitic, like a mosquito, whereas I prefer the lighter touch, like that of a butterfly. "A butterfly can suck honey from the flower without damaging it," "Arunachalam Muruganantham0 -
grizzly1911 wrote: »I find it difficult it difficult calling following the law corruption.
If the cost of local development is significant it should be reflected in the price paid for the land. developers aren't stupid they know what liabilities are likely to be attached to a proposal. in the same way they ask for x properties on a development and settle for y less.
I am not sure bankers were blameless. You throw corruption around I am not sure that is productive either.
To some extent it depends upon what one considers corrupt.
There is a clear difference between personal corruption (i.e. a payment to council officer or politician) and work done targeted at say a particular area favoured by the ruling party or work that would never occur except for the payment.
The current system of builder incentives payments is almost totally opaque.
As far as I know there is no central register of payments made and and no register of actual spending or in the current jargon 'outcomes'.
Certainly the hapless buyer is not told how much of the purchase price is on compulsory levies.
At least an total open system, properly audited could at least be discusses and debated in some democratic way.
Although I don't want to go off topic but I see a parallel with the 'green' levies/taxes on the utilities companies. Again a totally opaque system. It now seems that although the money is being collected in bills, the money collected is largely unspent on it's intended purpose and the actual outcomes are totally unaudited.0 -
you totally missed the point
Because you don't have one.
Rates rising back to normal levels, when the economy is also recovering, will not cause house prices to fall.
Simple as that really.“The great enemy of the truth is very often not the lie – deliberate, contrived, and dishonest – but the myth, persistent, persuasive, and unrealistic.
Belief in myths allows the comfort of opinion without the discomfort of thought.”
-- President John F. Kennedy”0
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