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rantnrave

Housing Bubble Forming In London, Warns Ernst And Young

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He certainly looks familiar.

mervyn_king_0921.jpg

"There is no presence of the American bubbles in the city of London at all. We besieged them and we killed most of them."

"We are not afraid, and don't you be afraid".

"They are going to surrender or be burned in their banks. They will surrender, it is they who will surrender."

"What they say about a bubble is completely an illusion. They are sending their journalists to try to damage these sacred prices. . . they are trying to crack the market."

Edited by thecrashingisles

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There will only be a bubble when the majority think there is no bubble and rush to buy whatever they can before they miss out.

Let's face it, this forum as well as many forecasters have been calling for a bubble for a decade now but it has never gone down far enough to satisfy most people. Meanwhile, prices keep shooting to the sky and beyond.

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There will only be a bubble when the majority think there is no bubble and rush to buy whatever they can before they miss out.

Let's face it, this forum as well as many forecasters have been calling for a bubble for a decade now but it has never gone down far enough to satisfy most people. Meanwhile, prices keep shooting to the sky and beyond.

Ah yes, return to normal. We haven't been calling for a bubble, btw.

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There will only be a bubble when the majority think there is no bubble and rush to buy whatever they can before they miss out.

Let's face it, this forum as well as many forecasters have been calling for a bubble for a decade now but it has never gone down far enough to satisfy most people. Meanwhile, prices keep shooting to the sky and beyond.

....what are they buying with, debt?........easy to buy with cheap available debt when only servicing the debt at BoE base rate of 0.5%. ;)

....and yes, almost forgot funding for lending......how much funding left?......time to fund real business that actually create jobs and produce something of value.......

Edited by winkie

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FormING???

Have these people been in a coma the past year or two, or just taking sabbaticals in the Cayman Islands?

Forming implies it is still growing and hasn't stated to contract yet.

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Luckily the Government are doing all they can to stoke the bubble deal with the situation.

I love this quote;

Andrew Goodwin, senior economic adviser to the EY ITEM Club, said: "House prices across most of the country remain well below their pre-crisis peaks and there seems little danger of a bubble developing.

So because we are not yet at the point that the last bubble began to collapse this represents proof that no bubble is now forming?

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There will only be a bubble when the majority think there is no bubble and rush to buy whatever they can before they miss out.

Let's face it, this forum as well as many forecasters have been calling for a bubble for a decade now but it has never gone down far enough to satisfy most people. Meanwhile, prices keep shooting to the sky and beyond.

No, it is a bubble and has been for 10+ years. The only thing people on HPC were wrong about was the efforts Central Banks and Governments would go to to keep the system (and the bubbles) propped up.

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and Carney thinks a ratio of average earning to prices of 7:1 is 'quite low' when the long term trend was 3.5 to 4, so I assume he would like a ratio of 10:1 and the associated debt levels .... he loves debt as he showed in Canada with the massive property bubble there.

.....what would the ratio be if debt was completely interest free and had to be repaid in full before state retirement? ;)

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and Carney thinks a ratio of average earning to prices of 7:1 is 'quite low' when the long term trend was 3.5 to 4, so I assume he would like a ratio of 10:1 and the associated debt levels .... he loves debt as he showed in Canada with the massive property bubble there.

It all depends upon interest rates. If interest rates were 8%/9% house prices would be 50% cheaper and you wouln't be any better off unless you had a huge pile of savings.

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Forming implies it is still growing and hasn't stated to contract yet.

Well, if you want to be pedantic, I would say that a bubble has most certainly already FORMED. It is not in the process of forming, it is already here. It may be expanding, but that is not the same as forming from nothing in the first place.

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It all depends upon interest rates. If interest rates were 8%/9% house prices would be 50% cheaper and you wouln't be any better off unless you had a huge pile of savings.

You'd be much better off even without savings. Your interest cost would be the same and you'd have half as much principal to pay off.

Try it for yourself:

http://www.bbc.co.uk/homes/property/mortgagecalculator.shtml

Edited by Dorkins

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Struggling to get the BBC on the interweb, really must replace this valve computer. Had short wave earlier, Hilversum, Luxembourg all coming in fine.

Then again I just hate seeing the chirpy zany faces of the young Radio 1 presenters.

Edited by aSecureTenant

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FormING???

Have these people been in a coma the past year or two, or just taking sabbaticals in the Cayman Islands?

Labour's housing bubble, referred to by Osborne and Cameron, prior to and just after the last election, is still with us. Of course, they now deny it's existence and are saying that there can be no bubble because prices are still below the 2007 peak :rolleyes:.

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