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Decades may be an exaggeration - but we've likely got 7 - 12 more years of Coalition or Tory government.

A mass UKIP protest vote will sink the Tories much more than it can damage Labour.

Given the precedents now set with TBTF banks - if not allowing a crash to happen is the political priority (for a Cameron led government) it's not a stretch to see that it's possible.

- Cost will be much lower than bank bailouts and more presentable (helping hard working homeowners)

- Precedent of printing for stability is set

Now, do we think Carney is giving up on QE because the economy is going well or because he's realised that the bond markets have rumbled the plan? The US can get away with a lot more QE. UK is close to the end of the rope.

- A minority of properties (I understand) have borrowing against them, of those borrowers most have no problem paying at current monthly cost

Only a fraction of houses transact in any one month even in booms. It's who drives those transactions that matter and how many. Nationwide, changes in price correlate pretty well with transaction volumes. If volumes fall below a certain level, they tend to plummet. H2B in my view is simply a panic measure to stop that slide before the election. The fact they've tried to bring it forward makes me think the panic levels have increased and the policy may stop 'working' before the election happens.

- As interest rates rise there is an arsenal of tools available including IO loans, mortgage tax relief, 30 year fixed rate, stamp duty thresholds to bring monthly costs down in parallel

IO loans are toast. You might as well wave a flag to the markets with "It's all over" if this is the only way out.

Mortgage tax relief is a possibility but a political gift to the Opposition, who will gladly accept the votes of the renting population and cheerfully point at the gaping hole in the public accounts.

Long-term fixed rate is a possibility*, but which bank would be daft enough to accept that? I know they're pretty daft but they have to draw the line somewhere. The government liabilities would be enormous. The advantage of H2B is that it's relatively cheap to support even if that bundle of mortgages goes south. Everything else costs a fortune.

* Although I think it would be good for the UK consumer to have a greater choice of mortgages that emulate the US system where rates are fixed for the term of the mortgage unless you renegotiate in the case of major shifts down (which isn't likely for a good long while).

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Unless banks restrict HTB2 offerings to those with proper secure jobs. Where the individuals more likely than not care about their credit rating, can't afford to go bankrupt, and have some sense about what is and what isn't value.

Not just some marketing executive, telesales manager, or recruitment exec, let alone Joe the roofer and Tracey the hairdresser who deserve the £375,000 house, and who many at HPC have had nervous breakdowns trying to rationalise their innocence on buying when slid in 2008 from the heights such couples bid them up to, with 'They just wanted a home'.

The banks will now have secret & confidential MARKET INTELLIGENCE BRIEFS on every sector. They may be playing along with HTB2 to keep Gubbermint sweet, and not follow up on it. Just like the Government/BoE anger towards them at not lending enough to business, when in fact too few good risks want to borrow, and many other businesses sitting on their money waiting for opportunities. HPC followed by massive lending to younger people at lower prices looks good to me for bank profits.

Fewer safe, secure jobs out there.....will the self employed or temp or casual or seasonal or unknown hours be eligible?

Why not help to build homes, homes people can afford to buy with the wages they earn........why guarantee people buying property at high prices, but not guarantee loans to businesses that are productive, add value and create jobs........no because SMEs are of little value, not worth investing in, only high house prices and copious amount of personal and government debt will get us out of this mess.....magic. ;)

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Why not help to build homes, homes people can afford to buy with the wages they earn........why guarantee people buying property at high prices, but not guarantee loans to businesses that are productive, add value and create jobs........no because SMEs are of little value, not worth investing in, only high house prices and copious amount of personal and government debt will get us out of this mess.....magic. ;)

UK banks don't like the risk profile of lending to small businesses (unless it's secured on property, natch). Lending to people simply buying property cuts out all the problems of having to risk-assess the business plan. It's easy, cheap and the government is happy to provide them with cheap money to do it. If the government made cheap money contingent on lending to business, the balance would shift. But, that involves letting the housing market find its own way which is currently politically unacceptable. Currently.

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Unless banks restrict HTB2 offerings to those with proper secure jobs. Where the individuals more likely than not care about their credit rating, can't afford to go bankrupt, and have some sense about what is and what isn't value.

Not just some marketing executive, telesales manager, or recruitment exec, let alone Joe the roofer and Tracey the hairdresser who deserve the £375,000 house, and who many at HPC have had nervous breakdowns trying to rationalise their innocence on buying when slid in 2008 from the heights such couples bid them up to, with 'They just wanted a home'.

The banks will now have secret & confidential MARKET INTELLIGENCE BRIEFS on every sector. They may be playing along with HTB2 to keep Gubbermint sweet, and not follow up on it. Just like the Government/BoE anger towards them at not lending enough to business, when in fact too few good risks want to borrow, and many other businesses sitting on their money waiting for opportunities. HPC followed by massive lending to younger people at lower prices looks good to me for bank profits.

If they can drag themselves away from home cooked meals, laundry done, free telly, no council tax, no or little digs money in some cases, mum and dad probably still picking them up in the car when they don`t want to take a taxi etc. I think a whole generation just don`t want to own at any cost, the HPC is going to have to be MASSIVE.

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....hah ..hah..Tories trying a cheap ( will cost us dear) and nasty tactics to buy votes ...must think we are all simpletons...time for Carney to step in and stop these financially illiterate playground thugs from accelerating our demise from a third to a fourth world country....just ill educated in life practice and over educated in theory ...and they will never learn even when they are tossed out.... :rolleyes:

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Decades may be an exaggeration - but we've likely got 7 - 12 more years of Coalition or Tory government.

Given the precedents now set with TBTF banks - if not allowing a crash to happen is the political priority (for a Cameron led government) it's not a stretch to see that it's possible.

- Cost will be much lower than bank bailouts and more presentable (helping hard working homeowners)

- Precedent of printing for stability is set

- A minority of properties (I understand) have borrowing against them, of those borrowers most have no problem paying at current monthly cost

- As interest rates rise there is an arsenal of tools available including IO loans, mortgage tax relief, 30 year fixed rate, stamp duty thresholds to bring monthly costs down in parallel

Anyway - all this does is stress me out thinking about it - I'm going to try and forget about property for a while and focus energy on something less negative.

Sure I read somewhere that Millipede is 11% ahead in the polls? I think the figures for mortgages are 1/3 rent, 1/3 have no mortgage and 1/3 have some kind of mortgage? They haven`t stopped the crash because volumes have collapsed, international markets are allowing them to suppress interest rates, preventing people from having to realise their losses, that`s all?

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....hah ..hah..Tories trying a cheap ( will cost us dear) and nasty tactics to buy votes ...must think we are all simpletons...time for Carney to step in and stop these financially illiterate playground thugs from accelerating our demise from a third to a fourth world country....just ill educated in life practice and over educated in theory ...and they will never learn even when they are tossed out.... :rolleyes:

if you think carney will be the saviour look what happened in canada. and hes even given forward guidance on his determination to keep interest rates low.

the alternative to the tories is labour. do you want labour managing the housing market?

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I presume Cameron or Osborne have actually attempted to justify the £600k at some point?

Does anyone know how they did that, or if they managed to keep a straight face?

On a related note, I now want to email Cameron / Osborne / Clegg / Alexander / Cable etc. to vent my anger.

I don't want to use the stupid limited website forms, so does anyone know if there are actual email addresses I can use?

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I presume Cameron or Osborne have actually attempted to justify the £600k at some point?

Does anyone know how they did that, or if they managed to keep a straight face?

On a related note, I now want to email Cameron / Osborne / Clegg / Alexander / Cable etc. to vent my anger.

I don't want to use the stupid limited website forms, so does anyone know if there are actual email addresses I can use?

Try Davidcamoron@bubble.com

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"There is no housing bubble" then a few seconds later "The average family can`t afford the average house" :lol::lol: He looks uncomfortable and out of his depth, he knows a HPC will lose him the election, and he knows that HPC is close. What a plonker. Marr does his usual tough questioning I see. Probably years since I have watched the AM show, the opening credits tell you all you need to know and hitting the off button as soon as he jumps into the little car is the best approach IMO.

Spot on.

Incredible how the PM can delude himself, and be willing to go on national TV and say it out loud.... and for it to go totally unchallenged.

Edited by SleepyDog
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Sure I read somewhere that Millipede is 11% ahead in the polls? I think the figures for mortgages are 1/3 rent, 1/3 have no mortgage and 1/3 have some kind of mortgage? They haven`t stopped the crash because volumes have collapsed, international markets are allowing them to suppress interest rates, preventing people from having to realise their losses, that`s all?

only 2 in 5 houses has a mortgage on it. so over 60% of houses in the country are mortgage free and owned outright.

of the 11 million mortgages in the country the average amount outstanding is £110,000.

many people wont bear a loss in a negative equity sense because the majority simply own outright.

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Spot on.

Incredible how the PM can delude himself so totally, and be willing to go on national TV and say it out load.... and for it to go totally unchallenged.

And he will continue to go unchallenged, at least by media presenters like Marr who will almost certainly lose a major proportion of their wealth when house prices correct.

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I think a whole generation just don`t want to own at any cost, the HPC is going to have to be MASSIVE.

Another drag on prices. It's real too. Young couple I know have taken refuge with an older relative who was living alone in her family home (3 bed house) to save some money. They're contributing though, to the tune of £4K a year. Just last week they paid the £190 bill to fix broken gutters (roof beams are damp and the felt is shrilled up) and get some tiles replaced. All the little kind of maintenance work on houses that would stretch them/me financially on top of a jumbo mortgage, even at low rates, and hell when rates rise, paying for everything else in life (caring Ed's elec and gas bills), including raising a family.

Funding conditions worse in late 2011 versus 2008 according to Merv. Despite all the QE and FLS. I can't see it's really picked up much since, despite all the spin. Too few credit-worthy borrowers.

November 28, 2011

The nature of the crisis, changes to the banking system - this has made life extremely hard. What we failed to understand was how long it would take for conditions in the banking markets to get back to normal.

We thought that by now funding conditions would be better but in fact they are worse. That's one of the things that has made assessing the economy very difficult.

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Spot on.

Incredible how the PM can delude himself, and be willing to go on national TV and say it out loud.... and for it to go totally unchallenged.

Halifax will lend around £170k (about average house price) against a joint income of around £40k(about average household income level) . At 5% that is around £1000/month out of a net income of about £2500 (probably affordable) but at 10% the monthly repayment becomes nearer £1500 per month (unaffordable). So at 5% raising the deposit is the main issue (sorted by h2b) but at 10% the main issue will be paying it back each month..

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1380470613[/url]' post='909400863']

How?

On the off chance this was not a rhetorical question, why is the government/taxpayer guaranteeing the mortgage in the first place?

My simple example:

100k house = 5k deposit and 95% mortgage by borrower..

.

HPC and/or borrower defaults and house gets sold for 80k some time down the line = .

5k deposit lost by borrower

15k guarantee lost by tax payer

80k back to the bank plus any interest accrued over the years

Edited by bomberbrown
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only 2 in 5 houses has a mortgage on it. so over 60% of houses in the country are mortgage free and owned outright.

of the 11 million mortgages in the country the average amount outstanding is £110,000.

many people wont bear a loss in a negative equity sense because the majority simply own outright.

So the banks are holding something like £1.2 trillion of housing debt

How much of that is 'at risk' (ie likely to be wiped out by a true housing correction such as happened in the early 1990s) ?

Although I don't have the figures one assumes that the housing market leverage has gone down in the period since 2008 as some people must have been using the low interest rates available to pay down their mortgage debt.

The question I would like some journalist to ask Cameron, Osborne and Co is why he thinks it makes economic sense for people with uncertain employment prospects and stagnant or declining earnings to lever up with more debt to buy a house, particularly as there is no guarantee that interest rates are going to stay low. How does tying up a huge chunk of peoples earnings on repaying debt on an essentially unproductive asset boost the rest of the economy. Also why is it a good idea to tie up so much of the capital in the financial system in supporting this activity rather than doing something productive. I would have thought boosting leverage in the housing market was precisely the idiocy that blew up the UK banking system in the first place. Why does he think it is going to be different this time. Surely repeating the same process is just madness.

Edited by stormymonday_2011
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It would be ironic if 6 years pent up demand to sell hit the market in Q1 2014 in response to HTB. No way enough credit worthy buyers in the market to soak up that sort of surge in supply.

Many South East towns are now at peak or peak + 5%. Loads of frustrated 1st time sellers out there, I have seen enough of them over the last 6 years.

If they all come to the party at once things will get interesting indeed,

Peak plus 5%? If only. I'm seeing the silly old fart in the identical un modernised granny flat upstairs stick hers up for peak plus 22%

Edited by hans kammler
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On the off chance this was not a rhetorical question, why is the government/taxpayer guaranteeing the mortgage in the first place?

My simple example:

100k house = 5k deposit and 95% mortgage by borrower..

.

HPC and/or borrower defaults and house gets sold for 80k some time down the line = .

5k deposit lost by borrower

15k guarantee lost by tax payer

80k back to the bank plus any interest accrued over the years

Because the lenders have priced a 20 per cent drop in the market into the system and continue to do so. But Cameron wants to win an election.

The bank actually gets back £95k because the government has promised to back that bit. The question is: will the government write off that money or pursue it student-loan style?

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So the banks are holding something like £1.2 trillion of housing debt

How much of that is 'at risk' (ie likely to be wiped out by a true housing correction such as happened in the early 1990s) ?

Although I don't have the figures one assumes that the housing market leverage has gone down in the period since 2008 as some people must have been using the low interest rates available to pay down their mortgage debt.

The question I would like some journalist to ask Cameron, Osborne and Co is why he thinks it makes economic sense for people with uncertain employment prospects and stagnant or declining earnings to lever up with more debt to buy a house, particularly as there is no guarantee that interest rates are going to stay low. How does tying up a huge chunk of peoples earnings on repaying debt on an essentially unproductive asset boost the rest of the economy. Also why is it a good idea to tie up so much of the capital in the financial system in supporting this activity rather than doing something productive. I would have thought boosting leverage in the housing market was precisely the idiocy that blew up the UK banking in the first place. Why does he think it is going to be different this time. Surely repeating the same process is just madness.

It makes no economic sense whatsoever, but he does think it makes political sense.

The question is does it really?

Personally I believe with the size of the London bubble and the rate at which it's been growing, it's going pop before the general election. That will bring the whole house of cards down. I also think youngsters are not as stupid as he thinks they are. The 2008 world-wide crash will have opened a lot of eyes, as to whether house prices "always" go up. So HTB is going to have relatively little take up. It will have some no doubt, but not enough to cause a mini-boom or prevent the London bubble from popping.

I really really do hope it all blows up in his face before the election. That would wipe the smug grin off his face. What's more, if it does blow up then a heck of a lot of people are going to point to HTB as the reason for the bubble-crash, irrespective of how much it will have contributed to the bubble.

Edited by alexw
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So the banks are holding something like £1.2 trillion of housing debt

How much of that is 'at risk' (ie likely to be wiped out by a true housing correction such as happened in the early 1990s) ?

Although I don't have the figures one assumes that the housing market leverage has gone down in the period since 2008 as some people must have been using the low interest rates available to pay down their mortgage debt.

The question I would like some journalist to ask Cameron, Osborne and Co is why he thinks it makes economic sense for people with uncertain employment prospects and stagnant or declining earnings to lever up with more debt to buy a house, particularly as there is no guarantee that interest rates are going to stay low. How does tying up a huge chunk of peoples earnings on repaying debt on an essentially unproductive asset boost the rest of the economy. Also why is it a good idea to tie up so much of the capital in the financial system in supporting this activity rather than doing something productive. I would have thought boosting leverage in the housing market was precisely the idiocy that blew up the UK banking system in the first place. Why does he think it is going to be different this time. Surely repeating the same process is just madness.

its important as well not to think of it as just leverage since 2008. comparisons to 1990 also are difficult to make because thatchers right to buy scheme meant there was a flood of property buying in the 1980's when home ownership in the country really took off.

people have been paying their houses off since the 80's so todays situation is very different. it was easier to be under water in the 90's during a downturn in prices, but in 2013 many have paid off their mortgage by now and it doesnt affect them. the housing market today is a vastly different environment.

compared to the late 80's many people have not built up 5 years of equity but in many cases now 25 years of equity.

even someone buying in early 2005 is approaching nearly 10 years of building up equity too. a couple more years of low interest rates and they are halfway to home ownership.

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On the off chance this was not a rhetorical question, why is the government/taxpayer guaranteeing the mortgage in the first place?

My simple example:

100k house = 5k deposit and 95% mortgage by borrower..

.

HPC and/or borrower defaults and house gets sold for 80k some time down the line = .

5k deposit lost by borrower

15k guarantee lost by tax payer

80k back to the bank plus any interest accrued over the years

I know the maths but that is not the same as your original point. If someone cannot afford a 600k house now then they cannot afford a 600k house next week either under htb. You are confusing being able to pay back the loan with being able to raise the deposit.

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its important as well not to think of it as just leverage since 2008. comparisons to 1990 also are difficult to make because thatchers right to buy scheme meant there was a flood of property buying in the 1980's when home ownership in the country really took off.

people have been paying their houses off since the 80's so todays situation is very different. it was easier to be under water in the 90's during a downturn in prices, but in 2013 many have paid off their mortgage by now and it doesnt affect them. the housing market today is a vastly different environment.

compared to the late 80's many people have not built up 5 years of equity but in many cases now 25 years of equity.

even someone buying in early 2005 is approaching nearly 10 years of building up equity too. a couple more years of low interest rates and they are halfway to home ownership.

Good points.

I tend to agree. Many will rather become landlords than sell and if they have enough equity they can.

No crash - just Japan style deflation.

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  • 434 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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