Is the credit crunch really ending?

Markyt

fc123 wrote: »

No, in retail it's just beginning to kick in big time.

But doesn't retail always trail the trend by a couple of months? If the confidence is returning to the public, then retail will respond later.

Paul_N_4

nollag2006 wrote: »

Yup -seems to be an emerging consensus that the credit crunch is over...

Only by you and a few other 'straw clutchers' on this board. I think you'll find the banks think otherwise judging by the way most still seem to be raising mortgage rates, raising deposit requirements, and turning away mortgage applications.

All this talk of the credit crisis being overstated by the bank of england is the latest attempt to restore confidence after the £50billion bail out has been commented on by many to have little effect on the current liquidity problem.

You really think the banks will say "Oh we've been silly, the boe said our losses are not as bad as we think". You think the boe know more about the business of the banks than the banks themselves? The banks know the likely losses they are sitting on, not the boe, and have reined in all remotely risky lending to prevent that figure going even more south. They will turn their attention to other less risky but more secure ways of making money within their business.

The only way house prices will continue to rise from here is if 100% and 125% mortgages come back, even bigger salary mulitples than last summer are dished out, and another Northern Rock style asylum appears on the horizon. All of which is not going to happen.

When people have access to more money, they can afford to spend more, and the value of house prices go up. That's because demand is higher so people can charge higher prices. We've seen this over recent years with cheap, easy credit, cheap imports, cheap food, pretty much cheap everything, which has also allowed GB to up taxes and get away with it. The excess money has allowed house prices to rise.

We're now entering an era of more expensive, less available credit, more expensive food, more expensive energy bills, taxes still up, and as a result people have access to less money. Demand for homes at current prices falls (as we're seeing) because the money isn't there to buy them. Thus the price of house prices (again as we've been seeing for the last few months) will start coming down. Unless the above changes you will not see house prices rising any time soon.

brit1234

MarkyMarkD wrote: »

Have you short-sold A&L shares or something, brit? A&L are not "heavily linked" to the "buy to let collapse" apart from people who are talking out of their elbows (or another part of their body that they can't distinguish from them). A&L only started selling BTL mortgages in April 2007

Yeah apart from they jumped into buy to let in 2005. No I have sold shares in them and would never dream of having them.

By the way house prices down 4% year on year (Halifax) now.

WTF?_2

nollag2006 wrote: »

Yup -seems to be an emerging consensus that the credit crunch is over, and that service as usual in terms of rising house prices will (quite rightly) be resumed

I appreciate your attempts to inject a but of humour into the board.

You'll have to explain how houses are going to continue to rise 'service as usual' when they are many times out of kilter with earnings. Do you foresee the banks somehow getting even more lax with lending than they were prior to the huge crisis (precipitated by lax lending) that we are now in the middle of?

Let's assume that they somehow had huge amounts of capital to loan (invest, from their point of view). Would they loan it into a deflating bubble or push it towards lucrative and still inflating food and energy bubbles? Answers on a postcard please......

Vincenzo

I feel I should clarify my position on this. I do believe the credit crunch was/is overstated and that over the next 12 months the situation will improve vastly. However this does not mean a return to wreckless lending (I think the banks may have learnt their lesson this time - for a few years at least!).

Neither do I believe that the improving situation will lead to further HPI. I think we will see, as a market average, fairly stagnant prices. Of course regional variations, as ever, will be be large. Factor in the effects of inflation and houses will gradually become more affordable.

brit1234

brit1234 wrote: »

By the way house prices down 4% year on year (Halifax) now.

I may of been miss informed by BBCs Declan on live TV. It may be a drop 0f 1.3%, waiting for Declan to confirm things.

Vincenzo

ACTUALLY HALIFAX REPORTED 0.9% ANNUAL REDUCTION

http://news.bbc.co.uk/1/hi/business/7378215.stm

brit1234

Vincenzo wrote: »

ACTUALLY HALIFAX REPORTED 0.9% ANNUAL REDUCTION

http://news.bbc.co.uk/1/hi/business/7378215.stm

Apparently its a 3.7% fall year on year (April 07-08), the 0.9% is 3 months rounded and then compared with 12 months ago. Waiting for confirmation.

Vincenzo

brit1234 wrote: »

Apparently its a 3.7% fall year on year (April 07-08), the 0.9% is 3 months rounded and then compared with 12 months ago. Waiting for confirmation.

Waiting for confirmation from where? Anyway - see for yourself.....-0.9% annual change.

http://www.hbosplc.com/economy/HousingResearch.asp

nollag2006

brit1234 wrote: »

Yeah apart from they jumped into buy to let in 2005. No I have sold shares in them and would never dream of having them.

By the way house prices down 4% year on year (Halifax) now.

:rotfl: :rotfl:

No they are not !!! Currie is a muppet who can't read