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Debate House Prices
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London property prices to fall 30%....
Comments
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Mortgage rates have been, within a rounding error, unchanged for 7 years. You can't really be saying the market is so inefficient that the BoE changes of early 2009 still haven't yet been fully reflected in house prices?
No. That's why I didn't say that.
I have to say I'm quite confused on your stance with this one. All over the place you have said policy change needs time to be reflected in the wider economy.
Yet it appears as you must disagree with shortchanged and myself, you are now expecting the housing market to go up and down (in the short term) in straight lines in reaction to fiscal policy changes?0 -
Mortgage rates have been, within a rounding error, unchanged for 7 years. You can't really be saying the market is so inefficient that the BoE changes of early 2009 still haven't yet been fully reflected in house prices?
Every month that the rates stay low, confidence is raised that the new "norm" is low.
When rates dropped to 0.5% it was assumed that within a few years they would be back to 5%, now its not.0 -
Mortgage rates have been, within a rounding error, unchanged for 7 years. You can't really be saying the market is so inefficient that the BoE changes of early 2009 still haven't yet been fully reflected in house prices?Graham_Devon wrote: »No. That's why I didn't say that.
In quite a literal way, you did:Graham_Devon wrote: »A new price ceiling is created due to the lower interest rates ... That ceiling isn't hit within the first month that interest rates fall ... That confidence comes much later ... Should there be no change to rates, this will continue until the new price ceiling lower rates have bought is hit ... this has now been hit ... the market does not react instantlyIf you think of it as 'us' verses 'them', then it's probably your side that are the villains.0 -
Graham_Devon wrote: »No. That's why I didn't say that.
I have to say I'm quite confused on your stance with this one. All over the place you have said policy change needs time to be reflected in the wider economy.
Yet it appears as you must disagree with shortchanged and myself, you are now expecting the housing market to go up and down (in the short term) in straight lines in reaction to fiscal policy changes?
You're always confused. It's obvious that policy change needs time to be reflected in the wider economy - nowhere have I suggested an interest rate change 7 years ago will take 7 years to be fully reflected in house prices.
I would've thought 18 - 24 months would be a more sensible timeframe to consider interest rate changes to be fully costed.0 -
can we expect this interest rate to be causing YoY falls in 2018, 2019, 2020, 2021 & 2022 as well?
Quite possibly. People will do all kinds of things to keep servicing a mortgage that they can simply no longer afford, so it will take time for things to stabilise. And the falls quite likely won't be YoY and we'll see a price pickups along the way.I am not a financial adviser and neither do I play one on television. I might occasionally give bad advice but at least it's free.
Like all religions, the Faith of the Invisible Pink Unicorns is based upon both logic and faith. We have faith that they are pink; we logically know that they are invisible because we can't see them.0 -
Dubai not even listed in that at risk graph?Mortgage (Nov 15): £79,950 | Mortgage (May 19): £71,754 | Mortgage (Sep 22): £0
Cashback sites: £900 | £30k in 2016: £30,300 (101%)0 -
martinsurrey wrote: »Every month that the rates stay low, confidence is raised that the new "norm" is low.
Only if you ignore the wall to wall media speculation and BoE warnings about when rates might rise.
Even assuming confidence is building that the new norm is low it's a huge stretch to try and link that to the YoY London increases of the last few years.0 -
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gadgetmind wrote: »Quite possibly. People will do all kinds of things to keep servicing a mortgage that they can simply no longer afford, so it will take time for things to stabilise. And the falls quite likely won't be YoY and we'll see a price pickups along the way.
Looking at annual HPI in London it accelerated peaking at 20% of so in 2014 - 5 years after the BoE dropped rates. That's the opposite of what really happens when interest rates rise - a reasonably quick assessment by the market followed by a longer tail.0 -
London HPI is less linked to local wages/local interest rates than other parts of the UK.
London has had other factors as well i.e. foreign money as well as increasing popularity amongst both the natives and foreigners (both rich and poor).0
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