FPC & Carney - Do....well, nothing

wymondham

Generali wrote: »

Bubbles are about borrowing more than price rises. Much (most?) of the increases in London house prices are apparently due to cash purchases. There's nothing that the BoE can do about that.

Granted, but there will be people who insist/like to buy in London who use a mortgage who will suffer when these rises reverse??

wotsthat

Graham_Devon wrote: »

Well, like the majority, I was at least expecting something on HTB.

So many economists, even those directly linked to the BOE etc have suggested reducing the limit to £300,000 it seemed almost a given. Infact, it's just been said on the news that "they" are stunned that given this opportunity nothing was done.

With all the talk Carney has done lately on "will not hesitate to use the tools" I thought, maybe naively, he would use them. Instead, they remain "vigilant".

Putting in place a mechanism to control the percentage of mortgages lent at greater than a certain multiple will mean that lenders can work on installing the internal control measures. Makes future tweaks much simpler to impose. In the same manner affordability criteria have been tightened - IMO this is the simplest method to limit the number of high multiple loans in London.

When limits on maximum loans for HTB come I very much doubt the first move will be to halve the limit for the same reasons. There's no need to run around like a headless chicken - halving the limits would like a panic measure when we're talking about a minuscule amount of lending.

Personally I think the BoE are spending a disproportionate amount of time looking at London house prices. It's a tiny part of their remit.

You've been thrown a bone - sorry you don't like the taste.

Graham_Devon wrote: »

Basically a green light to HPI.

I think you're more bullish than the 'pro-HPI' mob.

mayonnaise

Graham_Devon wrote: »

Well, like the majority, I was at least expecting something on HTB.

So many economists, even those directly linked to the BOE etc have suggested reducing the limit to £300,000 it seemed almost a given.

Putting a cap of 300K on HTB would barely have an impact. If you would just look at actual data, you'll know why.

Graham_Devon

No point having a go at me chaps. Just put the radio on and listen to the economists. Even they are exasperated.


Unless you catch an estate agent celebrating, that is.

theEnd

But London's on the turn anyway.
For once, doing nothing is probably the right move.

purch

Generali wrote: »

What were you hoping for?

A 5 bed, 3 bath with triple garage and 1/2 acre for about £73,500 I imagine :eek:

mystic_trev

I've just taken a peek over on HPC This hasn't gone down at all well

mayonnaise

Graham_Devon wrote: »

No point having a go at me chaps. Just put the radio on and listen to the economists. Even they are exasperated.

Not sure if this was aimed at me, but I'm not having a go, Graham.
I was simply querying what a HTB cap at £300K would achieve, apart from being a symbolical gesture?

Graham_Devon

mayonnaise wrote: »

Not sure if this was aimed at me, but I'm not having a go, Graham.
I was simply querying what a HTB cap at £300K would achieve, apart from being a symbolical gesture?

Just that. It would achieve the symbolic gesture and dampen down confidence.

Secondly, there was huge potential here to look at HTB2, whcich does nothing but increase demand with us as guarantor if it goes wrong.

Many many people, economists and those in the housing industry itself have suggested this should be reigned in, but it's been left to continue.

I understand that many will be happy that nothing has happened today, but I would think that those same people will also be pleasantly surprised.

Generali

wymondham wrote: »

Granted, but there will be people who insist/like to buy in London who use a mortgage who will suffer when these rises reverse??

There would be (if it happens) but it's not the job of the BoE to stop bad things happening to individuals.