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Is The -0.5% Gdp Good Or Bad For Nominal House Price Falls?

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Rising rates will probably be the straw that breaks the camel's back if we are to get a fall in the short run. This delays the inevitable as the other negative factors take longer to work their way through to prices in a very low interest rate environment.

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I presume we'll see even more stagnation. Static prices, with falls in real terms. Terrible news for savers and those wanting a raise in interest rates to hurry the crash along. I can't see any chance of a rate rise with things looking so shakey.

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A rise in interest rates was on the cards. I guess we can kiss goodbye to that now. It's as if the whole thing is rigged against us. What do I mean "as if"!

Rates kept low and zero growth looks like we could be in for a long haul Japan style deflation.

Rather than rates increased and a short sharp shock.

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I reckon that if anything it'll lead to (further) nominal house price falls.

OK so it may increase the likelihood of more QE, and reduce the likelihood of IR increases, but I think that will be outweighed by tighter lending criteria, higher unemployment, more uncertainty and a further change in sentiment. Don't forget that the rise in VAT is tantamount to a rise in IRs anyway. We're in stagflation city - people simply have less and less money to spend. The last crash was mainly halted by reduced supply and cuts to base rates, a double dip will push more forced sales onto the market, interest rates can't be cut any further, and it seems that QE leads to more imported inflation anyway.

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Where have you picked that up from? I thought we'd seen that last of that awful phrase on here.

Because economic contraction is used as the excuse for printing money, errr I mean 'Quantitative Easing'.

They are already attempting to handwave away the obvious inflationary results of debasing the currency with the last round of QE and this might give them the cover they need to go ahead and debase it even more.

It certainly makes it even less likely that interest rates will rise until such time as the market pulls the rug from under the bond market and forces higher rates upon us but even then, that would give another excuse for the govt to employ QE in an attempt to basically print their own borrowing requirement under the guise of maintaining low interest rates to 'save the delicate economy'.

Overall effect on house prices will be to reduce nominal falls and increase stagflation.

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Ive gone for good for falls. Although I like the idea of an IR hike hitting house prices, massive inflation and a devalued £ will do more in my eyes to break people than a 1/4pt change in IR.

extra risk in the UK and increased borrowing costs for our banks will hike SVRs much more than any IR rates. I'm not very clued up but thats just my way of thinking

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A rise in interest rates was on the cards. I guess we can kiss goodbye to that now. It's as if the whole thing is rigged against us. What do I mean "as if"!

Rates kept low and zero growth looks like we could be in for a long haul Japan style deflation.

Rather than rates increased and a short sharp shock.

Agree no chance of IR rise now. Q1 would have to be 1%+ to have a hope in hell before Q4 at the earliest. Deflation? Wtf, Inflation will be over 4% already. If the economy is really not growing expect weaker £ v $ and more inflation to come Petrol soon to be £1.50+ no doubt and the rest. We will be lucky if inflation is in single figures in a year to two at this rate.

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The almost locked-in Double Dip will also re-put off all those buyers that had just began to stick their heads above the pit again.

Nothing moving, nothing reducing, nothing happening, again. One big giant stalemate.

staley staley

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I reckon that if anything it'll lead to (further) nominal house price falls.

Don't forget that the rise in VAT is tantamount to a rise in IRs anyway.

I am not going to get any more income from savings but have to pay more for everything!

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The p****y p****y phrase. Makes me think of people typing on their laptop whilst covered in spittle and with their care nurse never far away.

I've honestly given up. My white flag is out. We had morons in charge, then we got more morons and now we've the original morons itching to get back in. What is one to do other than just laugh?

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Can see two triggers for a large fall in house prices:

1. interest rates go up - if the economy picks up and the BoE can focus their attention on curbing inflation again they need to put up rates

2. economy goes into recession and people are laid off and need to sell

Ironically, having an economy bumping along at the floor may give the strongest support for the current house price levels

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I am not going to get any more income from savings but have to pay more for everything!

Yes I should clarify - in relation to house prices the rise in VAT is tantamount to a rise in interest rates. (In relaton to savings it's tantamount to a kick in the gonads)

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The GDP number will put the wind up the MPC and push them towards holding off any IR hikes, I reckon.

They'll wait to see next qtr's number. If it turns out to be a one-off "snow" effect then business as usual but if GDP continues falling they'll say feck inflation we've got to pump the economy to preserve jobs.

QE2 is out though. They wouldn't dare with CPI at 3.7%

So house prices won't get any sudden shocks. Jobs will be lost but the various welfare hand outs will stop this feeding through into house prices, SMI etc.

The dog which STILL hasn't barked is sterling crisis. One day the markets will say the UK is toast we don't want their currency or bonds anymore. However the new govt has pushed back that day by quite a bit. The fall in this month's PSBR will give warm glow to anyone worried about the government's determination to stick it to the people where it hurts.

Edited by Nationalist

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What do you think?

Reduced GDP means lower income e.g. reduced demand and aggregate debt servicing capability.

But it also gives an excuse to the BOE to keep real interest rates negative thus helping maintain supply low by artificially maintaining aggregate debt servicing capability at a high level.

Time will tell.

The final outcome is unavoidable either way.

grimreaper1.jpg?w=500&h=375

100% guaranteed.

Edited by _w_

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Reduced GDP means lower income e.g. reduced demand and aggregate debt servicing capability.

But it also gives an excuse to the BOE to keep real interest rates negative thus helping maintain supply low by artificially maintaining aggregate debt servicing capability at a high level.

Time will tell.

The final outcome is unavoidable either way.

grimreaper1.jpg?w=500&h=375

100% guaranteed.

My avatar agrees wholeheartedly.

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  • 312 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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