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Billy Ray Valentine

House Price Growth 'approaching Madness'

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“Cuts to the Help to Buy scheme would send a stronger message that the authorities are willing to take action to cool an overheating market,” said Matthew Pointon, property economist at Capital Economics.

Or rephrased:

No cuts to the Help to Buy scheme would send a stronger message that the authorities are willing to pour petrol on an overheating market.

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They will never repeat the run up to 2007, that was a one off IMO, this is just to keep the borrowers happy before the election. With a spat with Russia entering the frame, anything can happen, don`t borrow yourself into an over-priced property folks.

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They will never repeat the run up to 2007, that was a one off IMO, this is just to keep the borrowers happy before the election. With a spat with Russia entering the frame, anything can happen, don`t borrow yourself into an over-priced property folks.

HTB has always seemed to me like a policy born out of desperation. Perhaps the craziness in asking prices in recent months has to a certain extent been an unintended consequence of this policy. Is it possible the Government only really hoping to sustain prices rather that drive them back up to almost peak levels in such a short time frame? Are they now panicking that because of this that this sucker might be ready to blow in a much shorter time than they expected?

I really can't see this craziness going on for much longer.

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HTB has always seemed to me like a policy born out of desperation. Perhaps the craziness in asking prices in recent months has to a certain extent been an unintended consequence of this policy. Is it possible the Government only really hoping to sustain prices rather that drive them back up to almost peak levels in such a short time frame? Are they now panicking that because of this that this sucker might be ready to blow in a much shorter time than they expected?

I really can't see this craziness going on for much longer.

I guess if they withdraw help to buy, there will be lots of people upset Solicitors, EA's, Builders, MP's, the media - basically anyone buy who it is supposed to help. More importantly for them, withdrawing it would be admitting that they were wrong on their flagship policy.

Keeping Help To Buy rolling, just makes the bubble bigger - nobody is complaining except us here on this forum! Even uncle Vince has shut up.

I'm afraid the bubble has got to go to the stratosphere (think Ireland price) and then collapses, with the IMF called, it's the only was as greed is human nature and currently the number VI's out number us.

Edited by Wurzel Of Highbridge

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HTB has always seemed to me like a policy born out of desperation. Perhaps the craziness in asking prices in recent months has to a certain extent been an unintended consequence of this policy. Is it possible the Government only really hoping to sustain prices rather that drive them back up to almost peak levels in such a short time frame? Are they now panicking that because of this that this sucker might be ready to blow in a much shorter time than they expected?

I really can't see this craziness going on for much longer.

Could be, the media seem very keen to convince us that there is a great Big BUBBLE all of a sudden :lol: Might be because they know it has popped?

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Hey, it can't be a bubble, because prices are still just shy of the prices they were in 2007, when people were taking out eye-watering 125% mortgages, Northern Rock collapsed and shortly afterwards, Lehman Brothers and nearly the whole of the Western financial system.

Or... alternative narrative... 6 years later it's still the SAME f'ing bubble, with just a tad of air let out! :D

Don't let them get away with this "not yet a bubble" narrative, folks.

Edited by FallingAwake

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Removing HTB would create a such huge vacuum at the bottom that very few buyers would be able to bridge the gap. They've created a monster and they can't control it - it will end up controlling them.

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In London and SE prices are 2007 plus between 10 and 30%, still no bubble here as transaction levels are down. And not to worry the latest sub-prime mortgages are backed by the UK government as the TV ads say so no banks will suffer in the making of this bubble. No expense will be spared in getting prices rising across the whole of the UK so expect some more help (because of the success of HtB) in the up coming budget.

Transactions in London are down because of lack of sellers, not lack of buyers. Properties that get listed typically sell in 1-2 weeks, usually around asking price or higher.

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Transactions in London are down because of lack of sellers, not lack of buyers. Properties that get listed typically sell in 1-2 weeks, usually around asking price or higher.

I think you are right. I have no idea where people are getting the money from! (BOMAD, huge mortgages) But houses in London seem to sell on first viewings with 50 odd people going to view!

I don't think we are at the top yet, seems to be far too much talk about bubbles. We do seem close to a new stage of compete mania though! And when all the media are on board and disbelieve has become expectants then we will see the true correction that we should have had back in 2008/9!

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Removing HTB would create a such huge vacuum at the bottom that very few buyers would be able to bridge the gap. They've created a monster and they can't control it - it will end up controlling them

+1 and it's even worse in a way- there's a basic asymmetry effect involved in propping things up- because taking that prop away after it's been leaned on tends to cause a collapse where there was previously just a vulnerability.

So HTB cannot be removed overtly without creating a serious risk of a price crash- what they will have to do is gradually raise the eligibility criteria to strangle it to death.

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They can't withdraw HtB (before the election) as house prices would fall. Fascinating that Carney and Osborne set the 7% unemployment figure as a trigger to think about interest rate rises and it is reached years too early. HtB to promote a bit of HPI to 'make everyone happy; and it blows into a massive bubble a year too early. It's as if neither of them have a clue as to what will be the consequences of their actions, and to be fair everyone except Osborne knew HtB was gross stupidity but most people seem to have gone quiet. The 'recovery' is because of HPI so take away the rampant HPI and there is no recovery so maybe all the detractors now think HtB is good for the UK and everything really has been fixed.

As you say no-one is really calling out the bubble now and all the main parties support HPI as it boost their wealth and GDP.

And just when it was Jam all round....the Cold War starts up again :o Ex-president of Georgia even saying on Sky that withdrawal of Russian money from London would blow up the UK housing market :lol: Everybody and his dog knows that the emperor really is butt naked!

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I think you are right. I have no idea where people are getting the money from! (BOMAD, huge mortgages) But houses in London seem to sell on first viewings with 50 odd people going to view!

I don't think we are at the top yet, seems to be far too much talk about bubbles. We do seem close to a new stage of compete mania though! And when all the media are on board and disbelieve has become expectants then we will see the true correction that we should have had back in 2008/9!

I think this is because Estate Agents have got cannier. Many are not even offered personal viewings, the estate agent modus operandi now seems to be to run a hour long open house and tell anyone remotely interested that's your lot before it goes to sealed bids.

Less work for the EA and makes it look like there's massive demand for the house/flat/slavebox. It's a very clear trick and makes it look like the market is on fire.

There is some utter insanity out there though. A London colleague of mine was telling me about a relative with young kids, wife in an unstable arty job, who'd just bought a 2BR place for £700K. He's apparently something of a rising star in his construction related field. Even so, that's a hell of a lot of cash to find for a tiny place and he's completely hitched to this bubble.

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And just when it was Jam all round....the Cold War starts up again :o Ex-president of Georgia even saying on Sky that withdrawal of Russian money from London would blow up the UK housing market :lol: Everybody and his dog knows that the emperor really is butt naked!

Surely a blow up with Moscow/Kiev would drive said money into the safe haven of London, not out of it?

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And just when it was Jam all round....the Cold War starts up again :o Ex-president of Georgia even saying on Sky that withdrawal of Russian money from London would blow up the UK housing market :lol: Everybody and his dog knows that the emperor really is butt naked!

Bring it on. I think it would only blow up the prime London market, and would do a lot of good. Not so good for London the money laundering capital of the world but would restore much needed balance to the UK economy.

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HTB has always seemed to me like a policy born out of desperation. Perhaps the craziness in asking prices in recent months has to a certain extent been an unintended consequence of this policy. Is it possible the Government only really hoping to sustain prices rather that drive them back up to almost peak levels in such a short time frame? Are they now panicking that because of this that this sucker might be ready to blow in a much shorter time than they expected?

I really can't see this craziness going on for much longer.

Unintended consequence, no. It's not possible to understand the insane rise in house prices we're currently suffering without putting it into the context of the faux democracy we live in. Elections are now little more than a silly charade, a shuffling of pig snouts around around the trough. Whichever group of politicians get into power they will, broadly, follow the same agenda as the last lot. And that agenda is the plutocratic, corporatist agenda of their wealthy pay masters. Modern politicians do not think long term, they reflect the attitudes of those that pull that their strings: everything is about a short-term grab for more: more money, more influence, and as long as one can enrich oneself in the process and shield oneself from the negative consequences then ordinary people can go hang. A classic example of today's plutocrat-puppet politician is Tony Blair. This is a man who prostituted the office of Prime Minister with no other aim than building himself a nice career after he left office, even though that meant dragging his country into an illegal war that left hundreds of thousands of innocents dead. And how well he did for himself! He now has nicely paid "jobs" with the likes of J P Morgan and is worth about £70 million. So, here's my point. Cameron and Osborne (you can substitute Miliband and Balls here if you like, our politicians are faceless and entirely interchangeable) will carry on stoking house prices up to the next election because they know that that policy will get them back into power. Beyond that, they don't give a stuff. As far as they're concerned they want another 5 years in power, another 5 years with their snouts in prime position at the trough. that should be long enough to line themselves up lots of nice executive directorships, book deals and speaking tours. And if people suffer because they can't afford the rent/mortage, if the economy eventually crashes and burns when the housing bubble bursts: no matter, our politicians have no loyalty to place or people, if they have to follow policies to enrich themselves and please their master that destroy lives (literally and figuratively) then, well, that's just collateral damage isn't it?

People tell me that I'm slightly odd...

itsarandomworld

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I guess if they withdraw help to buy, there will be lots of people upset Solicitors, EA's, Builders, MP's, the media - basically anyone buy who it is supposed to help. More importantly for them, withdrawing it would be admitting that they were wrong on their flagship policy.

Keeping Help To Buy rolling, just makes the bubble bigger - nobody is complaining except us here on this forum! Even uncle Vince has shut up.

I'm afraid the bubble has got to go to the stratosphere (think Ireland price) and then collapses, with the IMF called, it's the only was as greed is human nature and currently the number VI's out number us.

Correct analysis.

Ireland was THE TEMPLATE of all templates....

How many people remember the UTTER & COMPLETE MADNESS of the Irish "property market"...? Even just a few years further on - NO ONE is drawing IMPORTANT LESSONS from the Irish Insanity....

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I think this is because Estate Agents have got cannier. Many are not even offered personal viewings, the estate agent modus operandi now seems to be to run a hour long open house and tell anyone remotely interested that's your lot before it goes to sealed bids.

Less work for the EA and makes it look like there's massive demand for the house/flat/slavebox. It's a very clear trick and makes it look like the market is on fire.

There is some utter insanity out there though. A London colleague of mine was telling me about a relative with young kids, wife in an unstable arty job, who'd just bought a 2BR place for £700K. He's apparently something of a rising star in his construction related field. Even so, that's a hell of a lot of cash to find for a tiny place and he's completely hitched to this bubble.

Yeah couldn't agree more with this. Seeing it quite a bit up north in Leeds by a couple of EA. Over 20 people were at a open house viewing 2 weeks ago. The offer accepted was 20+ above the asking price (according to the EA). There's one this weekend which I'd imagine will be similar.

The bubble isn't just in London. Family house in good area are going for silly money in Leeds.

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Correct analysis.

Ireland was THE TEMPLATE of all templates....

How many people remember the UTTER & COMPLETE MADNESS of the Irish "property market"...? Even just a few years further on - NO ONE is drawing IMPORTANT LESSONS from the Irish Insanity....

But didn't the mad Irish property market cause a mad amount of house building? Here the madness is too little housing not too much.

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Surely a blow up with Moscow/Kiev would drive said money into the safe haven of London, not out of it?

I think the idea was that a lot of the power in Russia already has their money in US/UK property and banks, and telling them that they would have assets frozen/travel restricted would be a blow to them, as he said Putin wants to be a dictator and land grabber, but on the other hand craves the playboy lifestyle and connections, this is his weakness according to this guy because Stalin supposedly lived simply and slept on a couch or something. The economic blow to trade etc. caused by tit for tat sanctions would offset any rush of private money to UK bank accounts and property anyway?

I suppose simply what I`m trying to say is that the economic negatives caused by a resurgence of the "Cold War" are bigger than any boost to property from a small number of rich people switching bank accounts/currency, the ordinary houses and flats up and down the UK are still going to face the inevitable correction, a spat with Russia just speeds it along IMO.

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Unintended consequence, no. It's not possible to understand the insane rise in house prices we're currently suffering without putting it into the context of the faux democracy we live in. Elections are now little more than a silly charade, a shuffling of pig snouts around around the trough. Whichever group of politicians get into power they will, broadly, follow the same agenda as the last lot. And that agenda is the plutocratic, corporatist agenda of their wealthy pay masters. Modern politicians do not think long term, they reflect the attitudes of those that pull that their strings: everything is about a short-term grab for more: more money, more influence, and as long as one can enrich oneself in the process and shield oneself from the negative consequences then ordinary people can go hang. A classic example of today's plutocrat-puppet politician is Tony Blair. This is a man who prostituted the office of Prime Minister with no other aim than building himself a nice career after he left office, even though that meant dragging his country into an illegal war that left hundreds of thousands of innocents dead. And how well he did for himself! He now has nicely paid "jobs" with the likes of J P Morgan and is worth about £70 million. So, here's my point. Cameron and Osborne (you can substitute Miliband and Balls here if you like, our politicians are faceless and entirely interchangeable) will carry on stoking house prices up to the next election because they know that that policy will get them back into power. Beyond that, they don't give a stuff. As far as they're concerned they want another 5 years in power, another 5 years with their snouts in prime position at the trough. that should be long enough to line themselves up lots of nice executive directorships, book deals and speaking tours. And if people suffer because they can't afford the rent/mortage, if the economy eventually crashes and burns when the housing bubble bursts: no matter, our politicians have no loyalty to place or people, if they have to follow policies to enrich themselves and please their master that destroy lives (literally and figuratively) then, well, that's just collateral damage isn't it?

People tell me that I'm slightly odd...

itsarandomworld

+1 UK Politics and MP's in a nutshell.

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