Housing Bubble Forming In London, Warns Ernst And Young

[winkie]

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.

The thing with having an above average well paid job, it is these types of people that have been able to take on, and taken on the greatest amount of debt.....therefore they have the most to lose in more ways than just the one....turkeys and all that.

[Venger]

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.

Disagree. Low interest rates have fuelled huge extra bursts of HPI, but are low because risk is high in many markets, and a lot of uncertainty for jobs/incomes. And besides, I do have some saving to put down. Don't want such savings zapped into nothing in correction from price levels as they are.

Not that I'm interested in any house price inflation I were to buy (at a fair price) post-crash, but some valid points in here.

It is far better to pay a low price with a high interest rate than a high price with a low interest rate, even if the mortgage payment is the same either way.

You can refinance when you buy at a higher interest rate and rates fall, but current buyers will never be able to refinance for a lower interest rate in the future. Rates are already as low as they can go. A low price lets you pay it all off instead of being a debt-slave for the rest of your life.

http://patrick.net/housing/crash1.html

[Mrs Bear]

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 .

In London a good many are way above the 2007 peak, and that includes non-fashionable, non Waitrosed areas sarf of the river.

[Bruce Banner]

In London a good many are way above the 2007 peak, and that includes non-fashionable, non Waitrosed areas sarf of the river.

Which is why, at the next election, we need to vote for something other than LibLabCon.

[Mr X]

"There is no bubble in London. We have tools to deal with this" Tariq Aziz - BoE

That isn't Tariq Aziz, it's Muhammad Saeed al-Sahhaf.

[R K]

That isn't Tariq Aziz, it's Muhammad Saeed al-Sahhaf.

You're quite right. Apologies. In my defence the pic was captioned wrong on t'internet.

[eric pebble]

....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.......

."...what are they buying with, debt?"

Q...what are they buying with?......WHAT ARE THEY BUYING "WITH"???

A.... PREDATORY LIAR LOANS

And THAT is how the whole mess started....... and has kept going.....

Edited February 3, 2014 by eric pebble

[oracle]

"There is no bubble in London. We have tools to deal with this" Tariq Aziz - BoE

well I suppose you are quite right in your assertion that milliband, balls,osbourne,cameron and blair can quite rightly be classed as "tools"(in the defamatory slang sense)

[Oh Well :(]

House price inflation is a deliberate policy.

The muppets feel richer but actually the property investor is being taxed at 28% on the increase in value. It will all end in tears of course.