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Politicians of all persuasions need to learn one simple lesson on housing: in order to make it more affordable, prices have to fall.

UK residential property is still valued way above any long-term measure of value to incomes, which is exactly why young people and first-time buyers cannot afford it.

The Daily Mail! I think I need to have a lie down!

Edited by Goat
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Banks must be ready to take their chances with a crash now? Media just coming on message for them? If most people own their own home outright, no mortgage, it is only right (in the bankers eyes) that they drop their expectations and take their hit for the greater good (so that the banks can lend again) ?

Edited by dances with sheeple
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There's definitely something going on. The media has been instructed to let rip. I think FINALLY it's crash time. The smart money has had four years to exit and are now out, sitting with their feet up ready for the show to begin. Banks are now prepared too. Its time for the big wealth transfer to begin, and financial Darwinism to reassert itself (it was suspended there for a while!)

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There's definitely something going on. The media has been instructed to let rip. I think FINALLY it's crash time. The smart money has had four years to exit and are now out, sitting with their feet up ready for the show to begin. Banks are now prepared too. Its time for the big wealth transfer to begin, and financial Darwinism to reassert itself (it was suspended there for a while!)

It's clearly all down to the lack of forthright actions and initiatives of our new Housing Minister

According to his website http://www.markprisk.com/newsshow.aspx?ref=334 the only thing he's done since being appointed is visit his local Cub pack.

Long may his horrified panicking continue.

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TulletPrebon seem quite sensible, see also this blog, e.g. Tim Morgan

Peter.

Yes, I feel like I could have written this:

"For a start, we tend to believe that high property prices are “a good thing”. This, assessed objectively, is simply nonsense. In economic terms, high house prices act as a sink for enormous amounts of capital which could otherwise have been put to productive purposes. Rising house prices may boost demand, but this is purely temporary, whereas the extra debt which always accompanies property bubbles is all too damagingly permanent.

Socially, of course, soaring property prices have blighted the lives of millions of young people. The older generation seems to think that the release of housing equity will fund a comfortable retirement – but who do they imagine they’re going to be selling their houses to? Martians? Well, it certainly won’t be to a younger generation which cannot afford current inflated prices. The property price correction has a long, long way further to go yet."

I like to think of myself as sensible.

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There's definitely something going on. The media has been instructed to let rip. I think FINALLY it's crash time. The smart money has had four years to exit and are now out, sitting with their feet up ready for the show to begin. Banks are now prepared too. Its time for the big wealth transfer to begin, and financial Darwinism to reassert itself (it was suspended there for a while!)

Who are the millions of FTB's who bought into overpriced houses betweeen 1997 and 2007 going to transfer their "wealth" to?

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Who are the millions of FTB's who bought into overpriced houses betweeen 1997 and 2007 going to transfer their "wealth" to?

http://www.moneyweek.com/investments/property/uk/right-side-uk-property-market-date-with-destiny-60800

Here’s how it works

The conspiracy is this: the boom and the bust that we have seen in housing in recent years was no accident. In fact it was the deliberately created by central banks, at the behest of the banking industry.

Why would they do such a thing? Well this is an idea that is regularly argued by Austrian economists. The basic idea is that central banks look to create credit bubbles to rob people of their savings. The central bank lowers interest rates. Banks sucker in borrowers while rates are low. And then when the central bank cranks up interest rates your borrowings become unsustainable. And so the bank ends up owning your property.

These credit bubbles rob people of their savings. They load you up with debt. Then they take away your property in the final bust – as happened during the Depression in the US.

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Good to see that Terry Smith is getting more publicity to the idea that we need a fall in house prices. Indeed earlier this week I spotted another critique of UK politicians and their housing strategy.

However whilst we have seen price falls in many areas in the UK we have seen an extraordinary resistance to it from our political class and establishment who seem unwilling to even countenance a fall in prices. The Bank of England has cut base rates to 0.5% and has undertaken some £361 billion of asset purchases designed to lower longer-term interest-rates and hence fixed-rate mortgages. We have seen also stamp duty (for foreign readers you pay stamp duty as a percentage of the value of a property when you purchase it) holiday for first time buyers for a period by the Coalition government. On this concept there seems to be some sort of political consensus as the Labour opposition has proposed a two-year holiday from stamp duty for first time buyers. We also now have the Funding for Lending Scheme from the Bank of England which is designed to help reduce mortgage costs and if you think about it represents quite a critique of its Quantitative Easing operation as otherwise why is it necessary to do the same job? All this comes before the peak of the insanity represented by the "idea" that pension lump sums could guarantee house purchases for offspring.

The catch with all this is that if you argue that house prices in the UK have been in quite a boom it is hard to deny that they are now relatively expensive. So our political class seems to want to make the transaction costs involved with purchasing overpriced houses lower. I fear that they are encouraging first-time buyers to overpay for houses.Would it not be better to let house prices drift lower to allow them to become genuinely more affordable? Then they would become genuinely "affordable" rather than meriting that description from officials and politicians who of course have no intention of ever living there. It seems that the more policy failure we see the more convinced our political class is that in the words of Gerry Rafferty.

Cause if you get it wrong you?ll get it right next time (next time).

http://www.mindfulmoney.co.uk/wp/shaun-richards/what-is-happening-in-the-uk-housing-market-why-will-our-politicians-not-stop-meddling-with-it/

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Yes, I feel like I could have written this:

"For a start, we tend to believe that high property prices are "a good thing". This, assessed objectively, is simply nonsense. In economic terms, high house prices act as a sink for enormous amounts of capital which could otherwise have been put to productive purposes. Rising house prices may boost demand, but this is purely temporary, whereas the extra debt which always accompanies property bubbles is all too damagingly permanent.

Socially, of course, soaring property prices have blighted the lives of millions of young people. The older generation seems to think that the release of housing equity will fund a comfortable retirement – but who do they imagine they're going to be selling their houses to? Martians? Well, it certainly won't be to a younger generation which cannot afford current inflated prices. The property price correction has a long, long way further to go yet."

I like to think of myself as sensible.

Rising house prices cannot happen without 100% collusion with Bankers/The City and Govt 'plants' except for the top wealthy/millionaire class who may have the cash.

Estate agents cannot bid up house rises if no one can borrow the money in the first place!

People also need teaching at skool where the houses/economy is in regard to the financial cycle so they can influence house prices by putting off buying - if some greedy City Banker/Govt b'stards are set on making them soar out of control

You would be insane to pay multiples of your salary whilst we have these economy robbing Green initiatives which are theiving more and more of people's spare cash off them thru energy bills/'green' taxes(pure Evil)

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Whilst it would be nice to think that there is a shadowy cabal planning such bubbles, if you read Thackerey's I AM AN IDIOT thanks for everyone for pointing out my idocy :( 'The madness of crowds' you can see example after example from across time. I think it is just innate to the majority of humans to be over reckless with 'free stuff' (debt). I'd even see the supposed habit of early man overkilling megafauna for easy food - far more than he could eat - as an example of this human species behaviour.

All it should mean, for those of us who look further, is we can see the bubbles forming and take advantage. Unfortunately, I am not sure we live long enough to do so....

Edited by wherebee
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http://www.moneyweek.com/investments/property/uk/right-side-uk-property-market-date-with-destiny-60800

Here’s how it works

The conspiracy is this: the boom and the bust that we have seen in housing in recent years was no accident. In fact it was the deliberately created by central banks, at the behest of the banking industry.

Why would they do such a thing? Well this is an idea that is regularly argued by Austrian economists. The basic idea is that central banks look to create credit bubbles to rob people of their savings. The central bank lowers interest rates. Banks sucker in borrowers while rates are low. And then when the central bank cranks up interest rates your borrowings become unsustainable. And so the bank ends up owning your property.

These credit bubbles rob people of their savings. They load you up with debt. Then they take away your property in the final bust – as happened during the Depression in the US.

There will (and should) be a transfer of wealth from older people to younger people once prices fall substantially but there will also be a transfer of wealth from younger people who bought into the "house prices only evergo up" myth, to bankers, as you point out.

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  • 415 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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