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Debate House Prices
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House prices: disaster ahead - today's Times
Comments
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The best indicator bar none is the LTV value vs rate for your mortgage .
100% + No deal
95% + expensive
75% - cheap.
And the availability in each band. Banks who can't borrow, cos of the crunch are pricing according to level of risk, and likelyhood of repossesion. They will price higher for riskier bets. On the basis that they still want the revenue, but are costing in a percentage of repossesions at higher LTV's
Also earnings to loan ratios. The IMF think 27%.
On this basis 25-30%0 -
last CPI was flat. last Rpi up a tad.
Does anyone believe the official inflation figures any more?
So according to the government 'inflation' is only 2.5% over the year then? Gee, I guess my diesel which is about 30% more expensive than six months ago, my heating oil up about 60% on the year, bread, milk, cooking oil etc. etc. is just a figment of my imagination?
Rising prices are a major point of debate again - people are talking about how much more everything is suddenly costing. I hear it in pubs, in taxis, at work, in discussion shows on the radio.
Coming up with improbably low CPI figures, which will be used to justify yet more irresponsible inflation-boosting interest rate cuts isn't fooling anyone any more :mad:--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
Does anyone believe the official inflation figures any more?
Well RPI is a better indicator, but if you factor in house prices (not just intrest payments) then inflation is def on the way down.
The biggest threat believe it or not is deflation. IE falling prices.
Inflation leads to recessions.
Deflation leads to slumps.
A period of inflation, with increasing wages, and devaluation of the currency, makes people feel better, even as growth slows, and a recession starts, so intrest rates rise, unemployemnt rises, as people reduce spending, and the correction happens. Normal boom and bust.
A period of deflation which is the risk here and in the US is awful, as people stop spending completely. companies stop selling. Loads more bankruptcies, un-employment rockets, and you are looking at breadlines, and riots. Normally a few wars start at the same time.
Iraq - In full swing
Tibet - about to kick off
Palestine - about to kick off again big time.0 -
last CPI was flat. last Rpi up a tad.
I think the government (by putting pressure on the MPC/massaging the figures) might well do everything in its power to ensure we inflate ourselves out of this slump, by lowering interest rates. Inflation isn't nice, but then nor are recessions, and the government may decide we'll have more election-winning feel-good factor if house prices don't crash much than if we find our daily spending going up by 50%. I think that would be wrong by the way, as falling house prices only directly hit those who've recently over-extended to buy a house, whereas rising prices of everyday essentials hit everyone, particularly those on fixed incomes like pensioners. But that's not to say the government might not be short-sighted enough to try it.0 -
jamescredmond wrote: »I KNEW IT. you're 2 timing me carol.
What, another one?!!! I think my husband might have something to say on that!0 -
Question:
Can the Government (New/Old Labour, Conservative or LibDems) really, really afford a house price crash of +20% and more?
A lot of people probably planned to use the positive equity of their houses to fund their retirement and are now going to have a big problem ... yesterday 4-bed flat in Fulham, tomorrow council flat in Stockwell?
What is going to happen, is there anything the governement could do? I mean, they bribed you into buying with shared ownership, help with your deposit and tax before ...0 -
I have had my offer accepted on a house for 129000, I have a 25% deposit shall I pull out and wait for the prices to drop.0
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Well RPI is a better indicator, but if you factor in house prices (not just intrest payments) then inflation is def on the way down.
The biggest threat believe it or not is deflation. IE falling prices.
Inflation leads to recessions.
Deflation leads to slumps.
A period of inflation, with increasing wages, and devaluation of the currency, makes people feel better, even as growth slows, and a recession starts, so intrest rates rise, unemployemnt rises, as people reduce spending, and the correction happens. Normal boom and bust.
A period of deflation which is the risk here and in the US is awful, as people stop spending completely. companies stop selling. Loads more bankruptcies, un-employment rockets, and you are looking at breadlines, and riots. Normally a few wars start at the same time.
Iraq - In full swing
Tibet - about to kick off
Palestine - about to kick off again big time.
Actually in the strictest definition, inflation is the increase in money supply.
Rising prices (too much money chasing the same amount of goods) and rising salaries (people demanding more money to pay the inflated cost of living) are the symptoms of monetary inflation.
Yeah, if we factor house prices in it reduces inflation. But then I didn't see anyone factoring them in as they were rocketing upwards and the government was telling us all that we had low inflation. I wouldn't be at all surprised if the govt decides to now lump house prices into the figures in order to make them look lower and justify too-low interest rates.
What we're seeing now is house price deflation but general cost of living inflation. The CPI of 2.5% in no way reflects the real rise in the cost of living. Anyone with a house and a big mortgage should be worried about both the rising cost of living and the falling cost of their house.--
Every pound less borrowed (to buy a house) is more than two pounds less to repay and more than three pounds less to earn, over the course of a typical mortgage.0 -
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