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rantnrave

It's A Record!

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7.3% annual rate of increase in asking prices – highest since October 2007 and takes us back to pre-credit-crunch levels

New seller asking prices hit record highs in all four southern regions contributing to a new national average all-time high of £262,594 – up 2.6% on last month

By contrast, northern regions still an average of 6% behind October 2007 benchmark

The number of properties coming to market so far in 2014 up 13% on last year but supply shortages are still fuelling prices in many areas in the south

Will Mortgage Market Review take the heat out of demand, or will prices only top out when buyers 'borrow to the max'? Or will Financial Policy Committee use future powers to launch a pre-emptive strike to limit buyers' borrowing?

Interesting question from Shipside at the end there

Edited by rantnrave

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Given that it's an obvious bubble all the Mortgage Review will do is shift the locus of speculative activity away from London to the regions, while giving Carney and Osborne the figleaf of an excuse that they are 'doing something' to tackle housing unaffordability when in fact they are the principal bubble enablers.

The EY Stupid Club is also forecasting that emergency interest rates will now remain in place until the end of 2015, which reveals much more about the true structural unsoundness of the UK economy than anything else they have to say.

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Prices will top out when buyers 'borrow to the MAX'. they always do, why should this time be different?

The only reason prices are rising and MAX is higher is because of historically low interest rates. It's nothing to do with people becoming wealthier or taking home more money in their pay packet.

I still think that MAX is around 2007+50% which will take the level of the bubble up to around the same 'stupidly high' height as Irish prices were before they finally imploded.

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Prices will top out when buyers 'borrow to the MAX'. they always do, why should this time be different?

The only reason prices are rising and MAX is higher is because of historically low interest rates. It's nothing to do with people becoming wealthier or taking home more money in their pay packet.

Yes, why not just give everyone as much money as they want to pay for a house and see what happens. You know, it wouldn't be that much different from now.

It makes me laugh when these commentators try to explain house prices with regard to housing scarcity. If scarcity was driving up houses, then rents would be rising at the same rate as house prices.

Also, any rise in house prices above wage inflation is unsustainable. People borrow to buy a house using their income. Why is this so hard for people to understand?

Since 1997, or whenever the trough was, house prices have been determined by cheap credit, low interest rates and LIAR LOANS.

(Always wanted to say that last bit! :D)

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It makes me laugh when these commentators try to explain house prices with regard to housing scarcity. If scarcity was driving up houses, then rents would be rising at the same

My rent is insane. It is however nowhere close to the £4750 per month that the BTL mortgage calculator says a tenant should be paying (after a £350,000 deposit) compared to the current value of this 2 (3 if i'm being generous) bedder in a shitty part of North London.

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Prices will top out when buyers 'borrow to the MAX'. they always do, why should this time be different?

In think we are already there.

2-6 months ago "for sale" signs locally were going to SOLD as soon as they were put up....the sold signs are still sat there and all the new "for sale" ones have been there for 2 months...some have come back off the market.

Ding dong, the recovey is dead.

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My rent is insane. It is however nowhere close to the £4750 per month that the BTL mortgage calculator says a tenant should be paying (after a £350,000 deposit) compared to the current value of this 2 (3 if i'm being generous) bedder in a shitty part of North London.

:lol:

Can you give a rough idea of your rent? Or preferably the exact amount. :D

Edited by Eddie_George

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Also, any rise in house prices above wage inflation is unsustainable. People borrow to buy a house using their income. Why is this so hard for people to understand?

I disagree.

If the banking system can keep interest rates low or make them lower then property can rise above wage inflation as the cost of servicing such a mortgage becomes cheaper enabling the borrower to borrow more and push up prices.

Restricting wage to price multiples, LTV and mortgage term will prevent prices from rising. BOE could implement this today is they wished. They could have introduced it after the last hiccup.

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I disagree.

If the banking system can keep interest rates low or make them lower then property can rise above wage inflation as the cost of servicing such a mortgage becomes cheaper enabling the borrower to borrow more and push up prices.

Restricting wage to price multiples, LTV and mortgage term will prevent prices from rising. BOE could implement this today is they wished. They could have introduced it after the last hiccup.

I see your point, but there's probably a reason why interest rates haven't always been 0.5%. ;)

It's the short-termism of politicians that only care about the next election to enrich themselves than caring about the the country itself that's the problem.

We'll find out the hard way why an interest rate of 0.5% isn't natural. More malinvestment, more bubbles, more busts, more people struggling to pay bills, more social unrest.

Edited by Eddie_George

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I see your point, but there's probably a reason why interest rates haven't always been 0.5%. ;)

It's the short-termism of politicians that only care about the next election to enrich themselves than caring about the the country itself that's the problem.

We'll find out the hard way why an interest rate of 0.5% isn't natural. More malinvestment, more bubbles, more busts, more people struggling to pay bills, more social unrest.

They won't stay at 0..5% for much longer. New Zealand has already started raising their rates - they also have a MASSIVE housing bubble.

Full steam ahead on interest rate rises

Reserve Bank governor Graeme Wheeler has signalled an aggressive, front-loaded start to the interest rate cycle now under way.

He delivered the rise he had all but promised in the official cash rate from 2.5 to 2.75 per cent yesterday and indicated that the only question in the bank's mind at this stage - if the facts change it will change its mind - is whether there will be another three or four similar increases by the end of the year.

The interest rate projections the monetary policy statement has pencilled in suggest further OCR hikes April, June and July.

..blah...blah....nearly three-quarters of the mortgage debt is at floating rates or fixed for less than a year.

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They won't stay at 0..5% for much longer. New Zealand has already started raising their rates - they also have a MASSIVE housing bubble.

Full steam ahead on interest rate rises

One of the reasons for this interest rate rise is due to the amount of money being poured into the economy to rebuild Christchurch.

I arrived there last September on the day Gidiot introduced Help to Buy 2, at the same time the Prime Minister of NZ was announcing how the minimum deposit for a mortgage was to be 20%.

http://www.nzherald.co.nz/business/news/article.cfm?c_id=3&objectid=11111719

If you could have heard the sense he spoke about how he wanted lower prices as not to have people overburdened with debt you would have thought he wanted to help the next generation not destroy them like our traitorous, crony capitalist government.

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They won't stay at 0..5% for much longer. New Zealand has already started raising their rates - they also have a MASSIVE housing bubble.

Full steam ahead on interest rate rises

Well, yeah. There's no easy way out of this mess. Someone will take the pain, the government's job is to manage who takes this pain. In the case of all three major parties it seems that they want to protect the bankers and landowners as much as possible.

If interest rates do rise in this country, it will not be because the government/BoE want them to.

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The markets don't think we're going up more than 0.1% in next 2 years:

http://www.bloomberg.com/quote/GUKG2:IND

There is no external force for us to put rates up. The reason they went to 15% was because we were in the ERM at the time.

IR aren't moving until business investment is off the charts regardless of what any other country does.

About this time last year the Fed announced intention to taper their bond purchases. US 10 year treasury yeilds subsequently rose 1.5%. Gilt yeilds also rose almost exactly the same amount over the same period - the UK economy (and its interest rate) is a cork bobbing in the ocean. That said, there is deflation showing up everywhere now so I don't think you're wrong saying that rates won't rise. That is unless our humungous 5% current account deficit eventually spooks our creditors and there's a run on the pound. Some economists in the press are saying this is a genuine risk.

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A rate rise has been about 12 months away for five years now. I'll see it when I believe it. As in 2008, only outside events will force the UK's TPTB away from the current track they are on.

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Well, yeah. There's no easy way out of this mess. Someone will take the pain, the government's job is to manage who takes this pain. In the case of all three major parties it seems that they want to protect the bankers and landowners as much as possible.

If interest rates do rise in this country, it will not be because the government/BoE want them to.

Sterling will take the pain. Everything denominated in sterling will be wiped out. The FSCS deposit protection will be honoured in nominal pounds.

As with Japan, it's difficult to imagine how base rates could rise to even 2% without triggering a debt catastrophe.

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Sterling will take the pain. Everything denominated in sterling will be wiped out. The FSCS deposit protection will be honoured in nominal pounds.

As with Japan, it's difficult to imagine how base rates could rise to even 2% without triggering a debt catastrophe.

I agree.

It protects the value of homes in Sterling, so appeases homeowners.

Devaluation is embarrassing for the government (although they can palm it off as the BoE's fault), but it's preferable in their eyes to a housing bust.

It should make our exports more competitive as well. They'll need to time it well to avoid a fuel price surge in winter.

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I think Walthamstow is skewing the figures. Road near me which was low to mid 3s in summer of 2012 has had two 600+ sales this year and latest asking price is 750, think that is a property that would need a decent decorate too.

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I think Walthamstow is skewing the figures. Road near me which was low to mid 3s in summer of 2012 has had two 600+ sales this year and latest asking price is 750, think that is a property that would need a decent decorate too.

Thats pretty much the same over all of east london - its been a 20% increase in the last 6 months in several areas, at least in terms of asking price. Edited by Smyth

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I wish I hadn't clicked this thread. SSDD.

High house prices are here forever, shoot me now. government spiv asses!

don't worry that feeling is normal! I feel it on almost every tread, like I am in some crazy nightmare!

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