Carney: UK housing in widespread recovery

HAMISH_MCTAVISH

Bank of England governor Mark Carney says the UK housing market is generally recovering.

Mr Carney told the BBC's Andrew Marr programme that, looking at the UK as a whole, "we are now seeing house prices begin to recover, so it is a more generalised phenomenon".

Good. :beer:

As for London....

Looks like he's decided to ignore it.

He also said there was little the bank could do to cool the London market, where prices were rising far faster.

Prices in London are rising by about 10% a year, but Mr Carney said a change in interest rate policy - not on the cards in any case until the recovery is well established - would not cool the market as a significant number of properties were bought without a mortgage.

Asked if he was concerned about the very fast-spiralling London property market, Mr Carney said: "Much of what's driven in London, of course, is not mortgage-driven but is cash-driven.

"It's driven, in many cases, by foreign buyers. We, as a central bank, can't influence that.

"We change underwriting standards - it doesn't matter, there's not a mortgage.

We change interest rates - it doesn't matter, there's not a mortgage, etc.

"But we watch it and we watch the knock-on effect."

http://www.bbc.co.uk/news/business-26216141

mayonnaise

HAMISH_MCTAVISH wrote: »

Good. :beer: As for London....

You won't be clunking your beer glasses anymore when the Olympics are over.

brit1234 wrote: »

In East London I would wait a couple of months till after the Olympics. East London is likely to have the biggest falls in London, my reason for this is the pre Olympic London hype and property fury will die off and reality will settle in after the games.

the_flying_pig

HAMISH_MCTAVISH wrote: »

...Much of what's driven in London, of course, is not mortgage-driven but is cash-driven...

weird for someone in Carney's position to be drivelling out this kind of claptrap with so little recourse to actual facts.

e.g.

http://www.mortgagestrategy.co.uk/news-and-features/sectors/regulation/over-4-in-every-10-of-outstanding-mortgage-debt-in-london-and-south-east/2004466.article

http://www.theguardian.com/money/2013/dec/17/london-quarter-mortgage-loans

mayonnaise

the_flying_pig wrote: »

weird for someone in Carney's position to be drivelling out this kind of claptrap with so little recourse to actual facts.

e.g.

http://www.mortgagestrategy.co.uk/news-and-features/sectors/regulation/over-4-in-every-10-of-outstanding-mortgage-debt-in-london-and-south-east/2004466.article

http://www.theguardian.com/money/2013/dec/17/london-quarter-mortgage-loans

Your links say that London and the South East have a high proportion of the UK total mortgage debt.
Doesn't disprove in any way Mr Carney's statement of "Much of what's driven in London, of course, is not mortgage-driven but is cash-driven."

AndyGuil

the_flying_pig wrote: »

weird for someone in Carney's position to be drivelling out this kind of claptrap with so little recourse to actual facts.

e.g.

http://www.mortgagestrategy.co.uk/news-and-features/sectors/regulation/over-4-in-every-10-of-outstanding-mortgage-debt-in-london-and-south-east/2004466.article

http://www.theguardian.com/money/2013/dec/17/london-quarter-mortgage-loans

That is more of a current sum of mortgages that exist. Currently in more central areas of London cash buyers are in excess of 60% of the total buyers.

Bantex_2

What does Carney define as London though?

AndyGuil

Bantex wrote: »

What does Carney define as London though?

Generally the rises have affected all zones.

the_flying_pig

AndyGuil wrote: »

That is more of a current sum of mortgages that exist. Currently in more central areas of London cash buyers are in excess of 60% of the total buyers.

so what?

you're doing the same thing as carney, extrapolating from what's happening in a few tiny enclaves to paint a very misleading picture.

based on actual data that's only a few months old, for the UK as a whole, London has the smallest proportion of cash buyers at 24 per cent.

look at London prices - petty point scoring aside, how many people are realistically in a position to buy in cash? some of course but not enough to really drive anything.

London dominates the flow of new lending as much or more than it dominates the total stock of existing debt.

Bantex_2

AndyGuil wrote: »

Generally the rises have affected all zones.

True, but I doubt if the 30% going to foreign cash investors has.

AndyGuil

the_flying_pig wrote: »

so what?

you're doing the same thing as carney, extrapolating from what's happening in a few tiny enclaves to paint a very misleading picture.

based on actual data that's only a few months old, for the UK as a whole, London has the smallest proportion of cash buyers at 24 per cent.

look at London prices - petty point scoring aside, how many people are realistically in a position to buy in cash? some of course but not enough to really drive anything.

London dominates the flow of new lending as much or more than it dominates the total stock of existing debt.

Recent drivers of the market are somewhat different. It is often more a case of there being less mortgage buyers rather than more cash buyers.

AndyGuil

Bantex wrote: »

True, but I doubt if the 30% going to foreign cash investors has.

I think the shortage is more of a driver. That is something that isn't going to change for a long time if ever.