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Ologhai Jones

Today's Money Morning

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It'll be interesting to see what happens when help to buy hits the open market and not just new buys.

In my area this is the current trend is that houses come on the market and their asking price gets dropped until someone bites.

It had been a promising sign but it looks like the last few days of ramping plus the input of more silly credit is going to balls this all up.

Personally, I was actually looking at buying as we're getting thrown out of our rented flat, but it's still just too expensive for us at the mo.

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MoneyWeek's website: Cash in as our desperate government inflates a new housing bubble.

It looks like even housing bears have to acknowledge that two years' worth of house price rises are on the cards?

First comment says it all for me.

(from the article) " Overall, house prices in the UK cost four and a half times the average person’s income. That compares with a historical average of 3.4 times”

(comment) This is wrong – The average salary is £26k and average house price is £165K, therefore the ratio is well over 6.3X

Also most of the builders have had their prices inflated during the last 12 months and the government scheme success is already factored in.

Now is the time to be selling the builders or you will get caught out.

I’m surprised at the advice given here, it seems very wrong to me."

The article reads like just some claptrap to set up a commentary by the writers which is just more claptrap. Prices and sales are certainly not increasing from where I`m sitting, if anything vendors are starting to realise the game is up.

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If there is a "rebound" the housing market is very likely to form a double top and crash twice as much as it would have done without the "help".

All kicking the can further down the road and making the eventual outcome for the housing market much worse - and a much worse outcome for the UK economy as well. Those buying now seem to be taking an awful risk and there might even be some hoping to make a short term profit by selling in a couple of years time. Good luck with that as they'll have to be very nifty with timing as insiders will likely have sold before them and started the ball rolling.

The UK political parties greed for power at the expense of jettisoning the UK's economy over the years is getting very blatant.

In the past (before NuLabour) It was still obvious that they would go to any lengths to stay in power or to get in power but there always seemed to be an understanding overarching it all that there wouldn't be any significant harm done to the UK economy as a whole.

These days that understanding has been completely jettisoned and that greed for power is blatantly and obviously at the expense of the well-being of the UK as a whole.

Edited by billybong

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First comment says it all for me.

(from the article) " Overall, house prices in the UK cost four and a half times the average person's income. That compares with a historical average of 3.4 times"

(comment) This is wrong – The average salary is £26k and average house price is £165K, therefore the ratio is well over 6.3X

Also most of the builders have had their prices inflated during the last 12 months and the government scheme success is already factored in.

Now is the time to be selling the builders or you will get caught out.

I'm surprised at the advice given here, it seems very wrong to me."

The article reads like just some claptrap to set up a commentary by the writers which is just more claptrap. Prices and sales are certainly not increasing from where I`m sitting, if anything vendors are starting to realise the game is up.

But what is the average FTBer salary? .... That's the point.

Not to mention the actual average income when you include the many unemployed young people.

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But what is the average FTBer salary? .... That's the point.

Not to mention the actual average income when you include the many unemployed young people.

Exactly, starter flats in city centres need to be about 50k, or there is no point in young punters leaving home really, unless they have a well paid job? Those at the top of the Ponzi get nothing if the young folks won`t play the debt game.

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You know the market is moving up when Moneyweek admit defeat. I'm inclined to agree. The dead cat bounce of 2009-2010 was clearly over -hyped, and I felt on sure footing remaining in the Bear camp, and the fact that prices are about the same four years on bears that out. This time around I am not so confident, the main difference is that I see that stuff is actually selling.

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You know the market is moving up when Moneyweek admit defeat. I'm inclined to agree. The dead cat bounce of 2009-2010 was clearly over -hyped, and I felt on sure footing remaining in the Bear camp, and the fact that prices are about the same four years on bears that out. This time around I am not so confident, the main difference is that I see that stuff is actually selling.

I'm inclined to agree.

But then Moneyweek have been wrong so often, maybe this will finally be the crash?

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The article reads like just some claptrap to set up a commentary by the writers which is just more claptrap. Prices and sales are certainly not increasing from where I`m sitting, if anything vendors are starting to realise the game is up.

Given how house prices in London/SE have defied economic gravity over the last five years, it seems entirely likely that they could be pumped up even more with a patently moronic scheme like HtB, at least in the short term.

There's plenty more stupidity to be unleashed after that - they are not out of bullets in the war on affordability. e.g. Only a matter of time before there's a clamour for MIRAS again.

Edited by Sour Mash

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You know the market is moving up when Moneyweek admit defeat. I'm inclined to agree. The dead cat bounce of 2009-2010 was clearly over -hyped, and I felt on sure footing remaining in the Bear camp, and the fact that prices are about the same four years on bears that out. This time around I am not so confident, the main difference is that I see that stuff is actually selling.

Its a shame I won't be able to change my username to 14 Year Itch till later next month then.

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You know the market is moving up when Moneyweek admit defeat. I'm inclined to agree. The dead cat bounce of 2009-2010 was clearly over -hyped, and I felt on sure footing remaining in the Bear camp, and the fact that prices are about the same four years on bears that out. This time around I am not so confident, the main difference is that I see that stuff is actually selling.

The last bear..... and all that?

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MoneyWeek's website: Cash in as our desperate government inflates a new housing bubble.

It looks like even housing bears have to acknowledge that two years' worth of house price rises are on the cards?

Plausible, but far from given. Bernanke can capsize Osborne's lunatic ambition long before 2015. My own belief is that the Fed will need to taper before US house prices get out of control again. As the median US purchase price is now just 7% shy of 2006's bubble high we shouldn't have to wait long. That won't deter the BoE, of course, but rising US debt costs would have a considerable knock-on effect in the UK and diminish the impact of Help to Buy proportionally.

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  • 244 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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