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gruffydd

How Much Will The Government Reflate House Prices By?

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I suspect they'll go for a reflation of around 30% pre-election, via QE.

If the markets let them (big question mark).

http://ftalphaville.ft.com/blog/2009/06/05...on-fights-back/

"The rise in government bond yields does not prove policy is “workingâ€. It proves that policy is overdone"

The QE has been "overdone" for good reason.

Edited by gruffydd

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THey will try and get prices ABOVE 2007 levels so they can claim their policies have removed negative equity and how good it is they did something as opposed to the Tories who would do nothing. (Doing nothing is actually the correct course of action).

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THey will try and get prices ABOVE 2007 levels so they can claim their policies have removed negative equity and how good it is they did something as opposed to the Tories who would do nothing. (Doing nothing is actually the correct course of action).

2-3% monthly rises will do my head in, but it's gonna happen. QE cash is clearly unlimited. Though the price recovery will clearly only be temporary. HPC 2.0 coming soon to a town near you (2010-2011). Just saw that another £25 Billion is being pushed for now. And on we go...

Edited by gruffydd

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I think you're crediting the government with far more control over events than they actually have. Such a reflation would require a combination of an unprecendented surge in mortgage lending (someone remind me what the net lending stats are again), combined with virtually forcing buyers to take on a massive amount of debt. It's just cloud-cuckooland stuff.

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I think you're crediting the government with far more control over events than they actually have. Such a reflation would require a combination of an unprecendented surge in mortgage lending (someone remind me what the net lending stats are again), combined with virtually forcing buyers to take on a massive amount of debt. It's just cloud-cuckooland stuff.

Well, it's clear they will lose control over inflation next year as a result of their current desperation. That really is crystal clear. But the government have complete control over QE between now and then, if the markets let them continue their splurge. Also, don't forget the role of both demand and supply issues due to artificially low IRs.

Edited by gruffydd

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they can try whatever they like but the concept that the government has the ability to control house prices is a load of rubbish. If we have learnt anything about the housing market over the past few years it is that the market is extremly complex, unpredicable and influenced by a large number of factors. The government didn't sit down in 1997 and say "right lets increase house prices by a few hundred pecent in the next decade" they didn't say in 2005 - "ok time for a last 35% push" etc.

the market will decide the price, the government can waste a load of money trying to prop it up or bring it down, but to think that they have the power to really dictate what it does is wrong

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I think you're crediting the government with far more control over events than they actually have. Such a reflation would require a combination of an unprecendented surge in mortgage lending (someone remind me what the net lending stats are again), combined with virtually forcing buyers to take on a massive amount of debt. It's just cloud-cuckooland stuff.

Was that a rhetorical Q?

Building society statistics April 2009

Building society gross lending amounted to £1,551 million in April 2009 compared to £3,921 million in April 2008.

Net lending by building societies in April 2009 was -£722 million compared to £704 million in April 2008.

Mortgage approvals in April 2009 were £1,599 million compared to £3,357 million in April 2008.

Building societies had a net withdrawal of £811 million in April 2009 compared to net receipts of £1,823 million in April 2008.

Including interest credited, savings balances held by building societies increased by £80 million in April 2009, compared to £2,918 million in April 2008.

Building societies had a net receipt of £201 million from Cash ISAs in April 2009, compared to net receipts of £2,052 million in April 2008.

Edited by Sybil13

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I think you're crediting the government with far more control over events than they actually have. Such a reflation would require a combination of an unprecendented surge in mortgage lending (someone remind me what the net lending stats are again), combined with virtually forcing buyers to take on a massive amount of debt. It's just cloud-cuckooland stuff.

The government have put money in the hands of those that will spend it.

You don't need to force them they will do it willingly.

Lending Reform is so yesterday.

I recall the BoE saying that they did not step in and cool the housing market as they didn't want to attract criticism for controlling a growing system (or something like that).

Here we are again. More money please, oh and some more please.

I really want a crash but I fear it isn’t going to happen.

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2-3% monthly rises will do my head in, but it's gonna happen. QE cash is clearly unlimited. Though the price recovery will clearly only be temporary. HPC 2.0 coming soon to a town near you (2010-2011). Just saw that another £25 Billion is being pushed for now. And on we go...

How can we even be thinking of HPC 2.0.

Version 1 wasn't a real crash. Appartments and houses on ghetto estate - yes. But your average family home is still unaffordable on one average income.

Apart from us the nation wants house prices to go up, and without leadership the nation will get what they want.

And they deserve all that comes with it!

Edited by Total_Injustice

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Well theres going to be a glut of about 150-200 labour mps who will be needing to sell near westminster in the not too distant future.

Maybe Gordon will double London Prices in the next 12 months as a way of giving an extra pay-off to the MP's who lose their seats as a direct result of his incompetence!

Yes, I will go for prices to double, but only in London. He doesnt give a feck about the rest of the country. He knows he's toast and he now wants us all to die in debt and poverty.

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they can try whatever they like but the concept that the government has the ability to control house prices is a load of rubbish. If we have learnt anything about the housing market over the past few years it is that the market is extremly complex, unpredicable and influenced by a large number of factors. The government didn't sit down in 1997 and say "right lets increase house prices by a few hundred pecent in the next decade" they didn't say in 2005 - "ok time for a last 35% push" etc.

the market will decide the price, the government can waste a load of money trying to prop it up or bring it down, but to think that they have the power to really dictate what it does is wrong

The market comprises of:

- The Regulator (FSA, BoE / Government Policy)

- The Lender (Banks / Building Societies)

- The Mug (Buyer / Seller)

The market can be controlled, but the VIs are dominant. There is no long-term greater good. It is all about greed.

Edited by Total_Injustice

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I'm not sure the want or know how to reflate houses.

So far they've come up with loads of schemes, but none of them have happened or worked. Some of them aren't even bad ideas (bringing forward council house purchases, help for those out of work with mortgage etc).

Seems impossible to messure the success of QE (that's why they like it). Until they destroy the new money or we see hyper inflation, the effects must be tiny.

There's a bounce at the moment. Confidence drives most of this and until the next crisis it might continue.

Whatever happens, higher IRs and tax are certain.

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I'm not sure the want or know how to reflate houses.

So far they've come up with loads of schemes, but none of them have happened or worked. Some of them aren't even bad ideas (bringing forward council house purchases, help for those out of work with mortgage etc).

Seems impossible to messure the success of QE (that's why they like it). Until they destroy the new money or we see hyper inflation, the effects must be tiny.

There's a bounce at the moment. Confidence drives most of this and until the next crisis it might continue.

Whatever happens, higher IRs and tax are certain.

Trouble is Joe Public ain't cottoned on yet - colleague has just bought his first house and planning to BTL as well. No friggin idea what's round the corner. Complete madness.

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Trouble is Joe Public ain't cottoned on yet - colleague has just bought his first house and planning to BTL as well. No friggin idea what's round the corner. Complete madness.

Couldn't agree more, and with no leadership, who will save them from themselves?

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I was around 23 when the house inflation started... 7 years later it reached a crescendo... I don't think the downward spiral will stop in just a few months, nor will the recession stop any time soon, there's too much momentum. If house prices stagnate or increase we'll be back at square one with unserviceable debts and much moaning, bitterness between the have's and have nots. I think the government has as much control over the housing market as a weatherman's influence over the path of a tornado.

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How can we even be thinking of HPC 2.0.

Version 1 wasn't a real crash. Appartments and houses on ghetto estate - yes. But your average family home is still unaffordable on one average income.

Apart from us the nation wants house prices to go up, and without leadership the nation will get what they want.

And they deserve all that comes with it!

I fear you're spot on the mark with that. It may be spring next year before the hyper-inflation takes off, but when it does Goodbye Britain as a civilised nation. Remember that we have no way of being self-sufficient in food. Once we no longer have a viable currency to import our needs we'll either have to see millions starve or flee abroad.

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House prices can rise until wages have risen drastically.

Currently the government is using QE to print to pay for the shortfall in tax.

If they printed enough to push up wages as a whole, they'de trash the value of the pound.

The thing is, because we are so dependant on imports for food and energy, if you trash the pound food and energy will rise in price faster than wages... leaving people less money to spend, which doesn't lead to rising house prices!

Eventually, social order will fail.

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