Anyone Afraid We're All Wrong?

[Lucifer]

let me turn that around...with wages squeezed and immigrants on benefits...where is the income to support rising rents?

Incomes may come down but that doesn't mean rents can't rise to take an even larger share of that income: the

UK economy and political system now operates as a plutocracy...thus its all about impoverishing people to make the

rich even richer: read the signs...collapsed social mobility, falling wages, rising taxes, cuts in services, graduates leaving

Uni with massive debt (soon to be bigger) only to get a job flipping burgers...mortgage droughts and "housing shortages"

and a huge growth in an expensive private rented sector are just part of the impoverishment process.

Looks like Aviva are prepared to put £1bn of thier money where my mouth is...these guys want to make rented housing "a

new asset class," read it and weep.

AVIVA EYES NEW RENTAL HOMES FUND

[ingermany]

nah individual familly repossessions are small fry compared to the BTLers with massive portfolios. It's them we need to be forcing their property on the market more than indebted families.

No BTL firesales = No Crash.

Yes....the key is going to be benefit reform, as it's welfare benefits that make BTL profitable. There's lots of anticipatory squealing about benefit reform, not from the poor, but from the landlords who rake in the profits. Will the Tories cut HB and piss off their BTL mates?

Edit: my guess is YES.....................but it's ironic that it takes the Tories to dismantle one of capitalism's most grotesque abuses.

Edited October 14, 2010 by ingermany

[Liquid Goldfish]

They can and will lend if IRs remain low and they're given more money by the central bank. They did last time, they will again.

Is this true?

I can't remember a big easing in lending conditions during QE1, in fact the average LTV for completed mortgages went down to record lows.

There was definitley a bounce, but that may have been due to other Labour bribes which sucked in cash rich buyers.

Edited October 14, 2010 by oldsport

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

They won't again - they can't - the markets will not let them - not until inflation dives, so they'll be a long time waiting

[ingermany]

Is this true?

I can't remember a big easing in lending conditions during QE1, in fact the average LTV for completed mortgages went down to record lows.

That's true, but imagine what they would have been if B& B, A& L, HBOS and RBS had collapsed?

[Pent Up]

There was definitley a bounce, but that may have been due to other Labour bribes which sucked in cash rich buyers.

ZIRP. Negative real interest rates. People with money in the bank decided to put the money into an asset "that always goes up"

Unless they ramp up some sort of monster SLS and allowing banks to lend on pre 07 levels house price are going down.

Not enough people left who haven't already one this. Can't lower rates to entice more in.

[Bloo Loo]

Incomes may come down but that doesn't mean rents can't rise to take an even larger share of that income: the

UK economy and political system now operates as a plutocracy...thus its all about impoverishing people to make the

rich even richer: read the signs...collapsed social mobility, falling wages, rising taxes, cuts in services, graduates leaving

Uni with massive debt (soon to be bigger) only to get a job flipping burgers...mortgage droughts and "housing shortages"

and a huge growth in an expensive private rented sector are just part of the impoverishment process.

Looks like Aviva are prepared to put £1bn of thier money where my mouth is...these guys want to make rented housing "a

new asset class," read it and weep.

AVIVA EYES NEW RENTAL HOMES FUND

Im sorry, you agree resources are disaapearing, yet persist that people can pay more.

[Liquid Goldfish]

ZIRP. Negative real interest rates. People with money in the bank decided to put the money into an asset "that always goes up"

Unless they ramp up some sort of monster SLS and allowing banks to lend on pre 07 levels house price are going down.

Not enough people left who haven't already one this. Can't lower rates to entice more in.

In fact, on reflection, recent lending criteria have been the loosest for a couple of years with many good deals at 85% LTV. In spite of this demand for mortgages fell over the past few months according to the Credit Conditions Survey and the banks reported surprise at this.

[50sQuiff]

We're right in the long term, that's for sure. But what many of us severely underestimated was the power of government and their fascistic cronies to keep the plates spinning for a few minutes longer.

Like OP, I am really worried that they can extend and pretend for another year or two. But then again, perhaps it's when QE2 fails to buoy the markets this time, that we enter the "oh shit, they can't save us" capitulation phase.

[Democorruptcy]

They won't again - they can't - the markets will not let them - not until inflation dives, so they'll be a long time waiting

Isn't it the "markets" that make all the money from QE?

[Lucifer]

Im sorry, you agree resources are disaapearing, yet persist that people can pay more.

No..I'm saying they can pay a larger proportion of what they have. You are deluding yourself

in that you think the housing market is a rational economic model.

[Brave New World]

No..I'm saying they can pay a larger proportion of what they have. You are deluding yourself

in that you think the housing market is a rational economic model.

doing a fairly good job of following the hallowed market psychology chart so often sited on here.

cannot see btl propping a market that is proving in virtually every other country impossible to keep inflated.

[winkie]

Is anyone nervous that the government is going to print money on a massive scale, giving it to the banks as before, which will then prop up the share and housing markets and devalue our savings even further? Seems to me that a couple of months more falls and this will happen.

I have a nasty memory of a Sibley post in about March/April 2009 saying that QE1 was going to prop up the market, right before the bounce began. Admit it, he was right.

The Proclaimers had a great line(though referring to something different):

"What do you do, when minority means you?"

The contributors to HPC and first time buyers are the minority. The majority are indebted VIs.

So, boys and girls :

What do we do, when minority means us?

If it wasn't for QE we would be in massive deflation, to off set the 'money for nothing' party that had created an illusionary sense of wealth and prosperity....we felt rich because the banks flashed the ash cash now the highly indebted governments have nowhere to turn except to print to help keep the boat stable and floating.....it is a risk that requires careful balancing, too much will turn out to be worse than too little....either way as ever savings will be eroded....better to PAYG earn it then spend it or borrow it if you can get it and buy what you will need to live in the future, not what you think will make you feel comfortable in the future.

[Lucifer]

doing a fairly good job of following the hallowed market psychology chart so often sited on here.

cannot see btl propping a market that is proving in virtually every other country impossible to keep inflated.

You don't see it because of that psychology thing you mention..you don't want to see it!

[Acid In The Punch Bowl]

You don't see it because of that psychology thing you mention..you don't want to see it!

if you've got a point, make it.

[swissy_fit]

Yes the Tories are the rich people's party. If only people would stop reading the fantasy drivel in the Telegraph and go read something like Wikipedea they would understand what QE is and stop parroting the inane codswallop that AEP writes at ten minutes to closing in the pub in Fleet Street when he is half pissed. QE is the purchase of crap debt by the government with electronically created "new" money. Debt for debt. Not M0 or M1 or Base Money or any such measure.

The rich bankers lent money to people that can never repay the debt. These loans (many of them dishonest) were packaged up into derivatives that are now worth a fraction of the face value. Secured against dodgy assets like US residential real estate or some of the masses of unwanted commercial property lying empty in the UK these loans are "toxic". By swapping them for government debt or newly minted "money" (which is after all a government IOU) the banks can get rid of the rubbish and start to take on some more toxic loans.

The bank's losses are now YOUR losses. The rich are still rich. QE props up asset prices. Assets owned by the rich.

This is a long way of saying "They gave it to the banks" which was in the OP.

We(that's all of us) failed to riot and stop this, sadly.

[Bloo Loo]

You don't see it because of that psychology thing you mention..you don't want to see it!

back to normal...I see it now...

I see 5 fingers comrade.

[non frog]

This is a long way of saying "They gave it to the banks" which was in the OP.

We(that's all of us) failed to riot and stop this, sadly.

I apologise for my long windedness.

They gave it all to the banks.

[non frog]

If they print, inflation could go so high (inc VAT rise to come in jan which is est to add another 1%) that I believe they'll have to raise rates in order to retain any national credibility to sell gilts. Once that mindset starts to take hold I think it's game over for house prices (at least the lower end I'm looking at). Rates canot go much lower - that gave us the 'bounce'. How can they rise nominally if nobody can at the FTB level can keep their wages/savings up in equivalent terms.

I hope you don't need a mortgage - even with a 30% fall and a fair deposit monthly payments will still keep a lot of people out of the market. That's why it will keep falling - like the US. They still have ZIRP and have had near 90% falls in some places. Where the US goes the UK follows.

Whatever you do don't buy UK real estate.

[Zzzzzzzzzzzzzzzzzzzzzzzzzz]

Isn't it the "markets" that make all the money from QE?

Sure, but only against the right economic backdrop.

[Lucifer]

back to normal...I see it now...

I see 5 fingers comrade.

You can shout and scream and stamp your feet hold your breath and cover your eyes as much as you like,

but you ain't going to get your HPC. Deal with it.

[Bruce Banner]

You can shout and scream and stamp your feet hold your breath and cover your eyes as much as you like,

but you ain't going to get your HPC. Deal with it.

[nice tuna sandwich]

Whatever you do don't buy UK real estate.

In the UK there are two sorts of estate. The ones where you go hunting, and the ones where your alloys get stolen.

Real, on the other hand, is what you need to get- non frog.

[tallguy]

Would QE2 not render all these imminent austerity cuts a waste of time ?

It'll just mean the "austerity" for the rest of us will be even greater.

Someone's gotta pay for the big boys' lifestyles dontcha know

Edited October 14, 2010 by tallguy

[LiveAndLetBuy]

Why do we always say that "the banks couldn't survive a XX% fall"?

Spain, Ireland, USA, Japan have had major falls and except Lehmans (which was more down to Dick Holds arrogance) they are all still here....

Why couldn't the banks survive a fall in the UK prices?

What they really mean is that bankers' bonuses couldn't survive an xx% fall.