Jump to content
House Price Crash Forum
Sign in to follow this  
Bruce Banner

To Me That Sounds Like A Bubble

Recommended Posts

BBC News are running a piece on Nationwide figures this morning.

Presenter "We're seeing, at the moment, inflation running at 1.9% and you were saying that we're going to see forward price increases of perhaps over 10% and to me that sounds like a bubble".

Noddy from Nationwide replied that prices are affordable due to record low interest rates :rolleyes:.

Share this post


Link to post
Share on other sites

Name and credit the presenter then Bruce.

I always assume that being Nationwide's economist is some kind of community service punishment for coming bottom in your year at college.

"What you do is you go out there and talk about mortgage affordability. Just that, affordability. Do not under any circumstances enter into a debate about the level of house prices or you're sacked. Don't try to hold onto any personal credibility as you lost that when you signed up here."

Share this post


Link to post
Share on other sites

On again now.

didnt realise you were a masochist...have you been converted by the Masked Tulip?

Share this post


Link to post
Share on other sites

http://www.bbc.co.uk/news/business-26368709

House prices rose by 0.6% in February, a 9.4% increase on the same month in 2013, according to the Nationwide Building Society.

The annual rate of growth is the fastest for almost four years.

It puts the average price of a UK home at £177,846, which is still almost 5% below the 2007 peak.

The Nationwide said sales and prices were being driven by record low interest rates, higher employment and the easier availability of mortgages.

The lender's chief economist, Robert Gardner, acknowledged that prices could accelerate even faster in the coming months, as more people took the plunge to buy for the first time or move. But he denied a house price "bubble" was being created.

"If you look at prices relative to earnings then housing does look relatively expensive by historic standards," Mr Gardner told BBC News.

"But if you look at how much it costs to service a typical mortgage, that suggests that housing isn't overly expensive at this point... because interest rates are at such low levels."

The Nationwide pointed out that prices were also being driven higher by a continued lack of new homes.

"Price growth is being supported by the fact that the supply of housing remains constrained, with housing completions still well below their pre-crisis levels," said Mr Gardner.

He added that just 109,500 new homes were built in England in 2013, which was 38% below the level recorded in 2007, and about half the projected number of new households expected to form each year.

The Nationwide's figures are based on a sample of its own lending and they show that on its own measure, house prices across the UK have been rising for the past 14 months in a row.

London has again led the surge in prices. The building society said house prices in the capital, at £345,186, were almost twice those elsewhere in the UK.

The precise level of house prices, and how fast they are rising, is a matter of some dispute. The numerous monthly surveys give quite different readings, though they are all recording a rise.

For instance, the government's own house survey, published by the Office for National Statistics (ONS), said earlier this month that prices were only 5.5% higher than a year ago - but that they had already reached a record national average of £250,000.

Help to Buy

The Nationwide figures come in the same week that some UK housebuilders reported their profits had more than doubled, thanks to the past year's revival of activity and subsequent increased demand for new homes.

Barratt Developments on Thursday recorded a 162% rise in pre-tax profits to £120m for the six months to the end of December.

Redrow's comparable figures revealed a 107% growth in profits to £48m.

Meanwhile, Persimmon said its profits jumped by more than 50% last year to £337m, thanks in part to the government's Help to Buy scheme.

The government's own figures show that despite the attention being given to Help to Buy in the housebuilding industry, its "equity loan" element, launched in April last year, has so far financed only 15,000 completed house purchases in England.

However, there are more in the pipeline, and even more sales may yet be stimulated by the recently launched second part of Help to Buy, which offers a government guarantee against losses for lenders who are prepared to offer mortgages to people with only a small deposit.

An admission that prices are high relative to earnings but it all OK because interest rates are low and of course interest rates are never ever going to go up again… until they do.

Share this post


Link to post
Share on other sites

I could have sworn I heard the business guy on the BBC breakfast program quote the average house price in the UK and then say something like - "that sounds like a huge amount of money". I honestly don't know whether it was his personal opinion or some Cameron style staged bull. Maybe he's a sympathiser.

Share this post


Link to post
Share on other sites

I'd like to give Alex Jones the female presenter on the One Show a name check.

Ok, I know The One Show is like Blue Peter for grownups, and I admit to watching it. They were doing a segment earlier this week on house prices and the north/south divide. They had some woman doing the feature who was getting positively excited and enthusiastic about London properties having open days and going for record amounts of money blah etc. As the segment closed, Alex Jones, dryly said "... Hmmm until interest rates go up of course..."

Share this post


Link to post
Share on other sites

http://www.bbc.co.uk/news/business-26368709

House prices rose by 0.6% in February, a 9.4% increase on the same month in 2013, according to the Nationwide Building Society.

The annual rate of growth is the fastest for almost four years.

It puts the average price of a UK home at £177,846, which is still almost 5% below the 2007 peak.

The Nationwide said sales and prices were being driven by record low interest rates, higher employment and the easier availability of mortgages.

The lender's chief economist, Robert Gardner, acknowledged that prices could accelerate even faster in the coming months, as more people took the plunge to buy for the first time or move. But he denied a house price "bubble" was being created.

"If you look at prices relative to earnings then housing does look relatively expensive by historic standards," Mr Gardner told BBC News.

"But if you look at how much it costs to service a typical mortgage, that suggests that housing isn't overly expensive at this point... because interest rates are at such low levels."

The Nationwide pointed out that prices were also being driven higher by a continued lack of new homes.

"Price growth is being supported by the fact that the supply of housing remains constrained, with housing completions still well below their pre-crisis levels," said Mr Gardner.

He added that just 109,500 new homes were built in England in 2013, which was 38% below the level recorded in 2007, and about half the projected number of new households expected to form each year.

The Nationwide's figures are based on a sample of its own lending and they show that on its own measure, house prices across the UK have been rising for the past 14 months in a row.

London has again led the surge in prices. The building society said house prices in the capital, at £345,186, were almost twice those elsewhere in the UK.

The precise level of house prices, and how fast they are rising, is a matter of some dispute. The numerous monthly surveys give quite different readings, though they are all recording a rise.

For instance, the government's own house survey, published by the Office for National Statistics (ONS), said earlier this month that prices were only 5.5% higher than a year ago - but that they had already reached a record national average of £250,000.

Help to Buy

The Nationwide figures come in the same week that some UK housebuilders reported their profits had more than doubled, thanks to the past year's revival of activity and subsequent increased demand for new homes.

Barratt Developments on Thursday recorded a 162% rise in pre-tax profits to £120m for the six months to the end of December.

Redrow's comparable figures revealed a 107% growth in profits to £48m.

Meanwhile, Persimmon said its profits jumped by more than 50% last year to £337m, thanks in part to the government's Help to Buy scheme.

The government's own figures show that despite the attention being given to Help to Buy in the housebuilding industry, its "equity loan" element, launched in April last year, has so far financed only 15,000 completed house purchases in England.

However, there are more in the pipeline, and even more sales may yet be stimulated by the recently launched second part of Help to Buy, which offers a government guarantee against losses for lenders who are prepared to offer mortgages to people with only a small deposit.

An admission that prices are high relative to earnings but it all OK because interest rates are low and of course interest rates are never ever going to go up again… until they do.

High prices wrt incomes, and record low rates, yup, no problems there.

Real wages back to levels seen over a decade ago.

Sounds healthy.

Share this post


Link to post
Share on other sites

Not destined for a long career at the BBC methinks.

The genius of the landowners was to allow the surfs to own their own slave boxes. They are now in on the scam.

Edited by aSecureTenant

Share this post


Link to post
Share on other sites

I'd like to give Alex Jones the female presenter on the One Show a name check.

Ok, I know The One Show is like Blue Peter for grownups, and I admit to watching it. They were doing a segment earlier this week on house prices and the north/south divide. They had some woman doing the feature who was getting positively excited and enthusiastic about London properties having open days and going for record amounts of money blah etc. As the segment closed, Alex Jones, dryly said "... Hmmm until interest rates go up of course..."

Very nicely pitched Alex :)

Share this post


Link to post
Share on other sites

http://

www.bbc.co.uk/news/uk-politics-26376026

...

On Europe, Mr Farage said the UK had been "betrayed" by "a political class that had sold out to Brussels", resulting in the supremacy of British political and legal institutions being lost.

He suggested fundamental changes in the UK's relationship with Brussels were "unobtainable" and that David Cameron's pledge of a referendum in 2017 was designed to "kick the issue in the long grass" until after the general election.

One recent poll suggested UKIP was currently in third place behind both Labour and the Conservatives.

...

Just surprised he didn't say "the UK had been "betrayed" by "a political class AND had sold out to Brussels" ".

Edited by billybong

Share this post


Link to post
Share on other sites

Thankfully the man responsible for the biggest house price bubble in history ( in Canada ) will step in at any moment to stop this madness.

Maybe he's a secret HPCer.

I recall Gordon Brown being repeatedly portrayed by the media as a bit tight and forever banging on about prudence, well they got that right <_<

Share this post


Link to post
Share on other sites

Not destined for a long career at the BBC methinks.

The genius of the landowners was to allow the surfs to own their own slave boxes. They are now in on the scam.

Wonderfully succinct. 10/10. B)

Share this post


Link to post
Share on other sites
The lender's chief economist, Robert Gardner, acknowledged that prices could accelerate even faster in the coming months, as more people took the plunge to buy for the first time or move. But he denied a house price "bubble" was being created.

"If you look at prices relative to earnings then housing does look relatively expensive by historic standards," Mr Gardner told BBC News.

"But if you look at how much it costs to service a typical mortgage, that suggests that housing isn't overly expensive at this point... because interest rates are at such low levels."

Oh Robert, low interest rates inflate bubbles. It's not rocket science.

Share this post


Link to post
Share on other sites

I'd like to give Alex Jones the female presenter on the One Show a name check.

Ok, I know The One Show is like Blue Peter for grownups, and I admit to watching it. They were doing a segment earlier this week on house prices and the north/south divide. They had some woman doing the feature who was getting positively excited and enthusiastic about London properties having open days and going for record amounts of money blah etc. As the segment closed, Alex Jones, dryly said "... Hmmm until interest rates go up of course..."

Yeah, but she's dancing to the same tune.

Mortgages are expensive even if interest rates don't rise.

Alphaville chewed it over recently - can't find link.

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • The Prime Minister stated that there were three Brexit options available to the UK:   203 members have voted

    1. 1. Which of the Prime Minister's options would you choose?


      • Leave with the negotiated deal
      • Remain
      • Leave with no deal

    Please sign in or register to vote in this poll. View topic


×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.