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House Price Bubble Warning From Building Societies

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Wonder if anyone will listen to them?

http://www.bbc.co.uk/news/business-22949429

Building Societies are warning of the danger of a house price bubble, unless the government takes action. The Building Societies Association (BSA) said the government needs to have an exit strategy from its Help to Buy scheme. Without that it said there was a danger of "a seriously distorted housing market, and the very real risk of a future price bubble".

Probably not ...

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Of course, I could take this and similar warnings at face value and assume they're trying to wake up a dopey chancellor.

Or we could see it as being a deliberate or incidental thing that turns into GO's get out of jail free card so that he calls off the scheme, merely to heed the industry experts' warnings.

Or it could be that these 'warnings of more HPI' push people to buy sooner or now rather than later as they fear further HPI, whether designed to do that or not I wouldn't know.

Feel free to shoot me down, as am simply speculating because experience suggests some cynicism is often called for in this life

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Of course, I could take this and similar warnings at face value and assume they're trying to wake up a dopey chancellor.

Or we could see it as being a deliberate or incidental thing that turns into GO's get out of jail free card so that he calls off the scheme, merely to heed the industry experts' warnings.

Or it could be that these 'warnings of more HPI' push people to buy sooner or now rather than later as they fear further HPI, whether designed to do that or not I wouldn't know.

Feel free to shoot me down, as am simply speculating because experience suggests some cynicism is often called for in this life

More likely, and as most people don`t have the means to buy at peak prices the chances of another bubble is Zero. Building societies are probably so up to their necks in bad property loans that putting about the fantasy of returning property bubbles is all they can do now :lol: All I am hearing just now is people desperate to offload property, and not having great success.

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More likely, and as most people don`t have the means to buy at peak prices the chances of another bubble is Zero. Building societies are probably so up to their necks in bad property loans that putting about the fantasy of returning property bubbles is all they can do now :lol: All I am hearing just now is people desperate to offload property, and not having great success.

That sort of adds up the the "news" about "asking prices"! :huh:

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Of course, I could take this and similar warnings at face value and assume they're trying to wake up a dopey chancellor.

Or we could see it as being a deliberate or incidental thing that turns into GO's get out of jail free card so that he calls off the scheme, merely to heed the industry experts' warnings.

Or it could be that these 'warnings of more HPI' push people to buy sooner or now rather than later as they fear further HPI, whether designed to do that or not I wouldn't know.

Feel free to shoot me down, as am simply speculating because experience suggests some cynicism is often called for in this life

Shoot you down? :)

I think it is a good summary of the possibilities. I favour the third possibility. I believe the whole purpose of the present policies is to stoke up a housing bubble or to rescue the present one which is slowly deflating.

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I usually get shot down in flames on other places for this, but house prices are massively overpriced today. There is only really one winner in all this, the Banks who create money, and loan it out at interest over decades, great if you can get it.

..it's the government which is keeping HPs artificialy high...there are many under water 'assets' around.. :rolleyes:

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..it's the government which is keeping HPs artificialy high...there are many under water 'assets' around.. :rolleyes:

Governments, Banks what is the difference any more. Boe is supposed to be politically neutral, we know it is'nt now. Most of the banks rely on the state, the state relies on q.e via boe, the tories rely on bankers donations about 50% right now from the city iirc.

Their interests have merged and they have begun to as well.

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Old landlord told me he will be lucky to break even on the 2002 price. Time will tell I suppose, but sentiment has shifted where I am.

Yes.

Unless i had a lovely detached house in one of the better school catchment areas, or a snazzy new town flat - i would hate to be trying to sell anything in Edinburgh right not.

Very little happening anywhere.

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Wonder if anyone will listen to them?

http://www.bbc.co.uk/news/business-22949429

Building Societies are warning of the danger of a house price bubble, unless the government takes action. The Building Societies Association (BSA) said the government needs to have an exit strategy from its Help to Buy scheme. Without that it said there was a danger of "a seriously distorted housing market, and the very real risk of a future price bubble".

Probably not ...

I like the danger of "a seriously distorted housing market, and the very real risk of a future price bubble". What's this danger bit? We are already in a seriously distorted housing market and price bubble.

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I usually get shot down in flames on other places for this, but house prices are massively overpriced today. There is only really one winner in all this, the Banks who create money, and loan it out at interest over decades, great if you can get it.

There is another winner.

If it takes lot of income to buy an house then that means two workers and two lots of income tax for the government.

In 1998 it was 3 times main income plus 1 times second income. 3 x 17k plus 1 x 8k = 59k same as the average house price. Now it's 4 times joint income in many cases = 4 x (£25k + £15k) = £160k. In 1998 a decent main income meant the second earner could stay at home and look after the children. Joint income mortgage multiples created more tax revenue for the government.

Applying 1998 lending criteria to wages now lending should be 3 x £25k + 1 x £15k = £90k

High house prices = debt slavery. An extra £70k debt to pay mortgage interest on.

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There is another winner.

If it takes lot of income to buy an house then that means two workers and two lots of income tax for the government.,,,,,,,,,,,,

High house prices = debt slavery. An extra £70k debt to pay mortgage interest on.

High house prices = debt slavery. An extra £70k debt to pay mortgage LIAR LOAN interest on.

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This could be a worrying time for the HPC crowd. I know it is for me.

Many will have a pot of cash that's a real struggle (if not impossible without substantial risk) to maintain the real terms value of.

Up until recent months, the bank interest rates were hovering around the official rate of inflation, and, in any case, house prices were only going sideways (nominally).

Both of those 'comforts' no longer seem to apply: real terms value of savings is reducing, and the asset that those dwindling savings are intended to buy in due course is increasing (and looks possible to increase more).

It worries me anyway.

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I like the danger of "a seriously distorted housing market, and the very real risk of a future price bubble". What's this danger bit? We are already in a seriously distorted housing market and price bubble.

The danger is that people might notice.

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This could be a worrying time for the HPC crowd. I know it is for me.

Many will have a pot of cash that's a real struggle (if not impossible without substantial risk) to maintain the real terms value of.

Up until recent months, the bank interest rates were hovering around the official rate of inflation, and, in any case, house prices were only going sideways (nominally).

Both of those 'comforts' no longer seem to apply: real terms value of savings is reducing, and the asset that those dwindling savings are intended to buy in due course is increasing (and looks possible to increase more).

It worries me anyway.

Your words chime with me, to a degree.

But, Carney will have to be able to keep a bubble inflated in the face of wages which are losing pace with life's essentials at a few percent a year, and already at real levels last seen when the millennium bug was a recent concern.

Unless banks/Govt. are literally going to throw money at the housing market, it has only one way to go. It is taking a long time, mind.

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Your words chime with me, to a degree.

But, Carney will have to be able to keep a bubble inflated in the face of wages which are losing pace with life's essentials at a few percent a year, and already at real levels last seen when the millennium bug was a recent concern.

Unless banks/Govt. are literally going to throw money at the housing market, it has only one way to go. It is taking a long time, mind.

Do you see the graph turning ?

If anything real world price drops accelerating.

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  • 242 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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