Carney: Uk Housing Market Has 'deep Problems'

[byron78]

NIMBY-ism on a grand scale is their policy. Keep the current homeowners happy at the expense of the majority, i.e. the same as the current Gubbermint.

Suspected as much.

UKIP strike me as deeply regressive not progressive, and it's progress and action we need now, not more of the same.

[winkie]

If part of their remit is financial stability but they don't have the tools (Carney has come out and stated this a number of times) then they can't complete those duties. There might even be a statutory duty which I guess mean Carney would be blamed ? Last time around tgey had that tri regulation - boe, fsa and I think maybe the Treasury ? That worked really well

Of course they have the tools....they just don't want to use them, reasons?.... answers on a postcard.

[stormymonday_2011]

Oh George, you came too soon.

Much much too soon.

A bad case of premature political elation ?

Edited May 18, 2014 by stormymonday_2011

[zugzwang]

Well, they should know, they are the ones underpinning prices with printed money and low interest rates.

It's strange that when I emailed them a few mopnths ago they're reply was there was no issue.

Hmmmmmmmmm.

Send it back and see what they say now.

[stormymonday_2011]

I'm surprised so many posters are so unimpressed and cynical about this - this is good quality bear food and a million miles from the pre-2008 Bank of England position on high prices and rising levels of private debt.

Come on Mark, get your macro-prudential tools out for the lads!

I agree I think it is significant even if he does nothing.

Foreign investors in London property have certainly had their cards marked.

Needless to say, the smart money has already gone.

Edited May 18, 2014 by stormymonday_2011

[billybong]

And from the housing minister.....

.

+1

Elections are in the offing.

He's saying that the current incumbents, that is the Con and BoE parts of the BoLibLabCon, can't be responsible for the housing problem as it's so "deep deep" and so "structural" so you can't blame the current incumbents (who gave him the job) - and then the housing minister steps in and says "It's clear evidence the government's long-term economic plan is working." trying to jump on the "not to blame" electioneering opportunity when they're currently using the deep deep structural problems to try to push up house prices for electoral reasons and at the same time tinkering around the edges of the housing problem.

It's deeply deeply wicked.

The government department that the housing minister has a job in doesn't even have housing in its name. It's the Department for Communities and Local Government and that's how important house building is to them.

Severe problems with the housing market were identified decades ago and they've done little or nothing about it. He's also trying to pretend that there's an expansion of the general economy and that is despite the housing market 's structural problems - when any statistical expansion is actually linked to house price effects (along with QE, imputed rent and etc etc etc).

Edited May 18, 2014 by billybong

[shindigger]

Watched the 'interview' on sky news, and whilst the problems are at least acknowledged all I see is a squirming worm on a hook. The 'deep deep problems' was the strongest language used in the discussion and reading between the lines it seemed to me he was basically saying it was a hell of a mess before he even got here and theres not much he can do about it.

Its all about political manoeuvres now, he no doubt senses he has been bought in as the patsy and is deflecting that whilst the government are setting him up for a fall. Whilst this goes on of course no-one does a thing about the actual problems. They all play politics when they should be actually running the country.

The cynicism is well founded, and I for one am not comforted by their first public admissions that they realise there is a problem that has been as plain as day to us amateurs on this forum for the last 10 years.

At least 10 years.

[giesahoose]

When the boe made their statement this week saying that interest rates won't be going up for a while they really took down the 5 year gilt rate.http://www.bloomberg.com/quote/GUKG5:IND It will be interesting to see how this reacts from now.

[pig]

Strong words. I wonder what your reaction would have been had he stated t that there was no bubble or housing shortage:)

The reality that he is drawing attention to is that he has a limited number of tools available to him. Interest rates may be too blunt a tool given the overall economic situation. Changing capital requirements on mortgages is far more effective and he does refer to it - this is probably him signalling that this is on the way.

He makes the very important point that there is a lack of houses being built and that is out of the Bank's hands - we need some supply based changes rather than more demand led stimulus. Only the government can do anything about this.

Until the are more houses built, nothing the bank does will get to the heart of the problem.

Well, building houses is a problem, but its not THE problem. I don't think we can build houses faster than investors can buy them for one thing.

The problem is house prices are too high. The conventional answer is to manipulate them back down by building more houses. Again, compared to the policies designed to manipulate them up it seems a rather long-winded and hopeless measure.

[bomberbrown]

Reminds me of the Stewart Lee line: "People say they're going to vote for UKIP as a protest vote. That's like shitting on your hotel bed to protest bad service, and then having to sleep in it."

As a life long Tory voter (not including 2010) I'm so despondent, politically, that if that's what I had to do, that's what I would do. I am literally now at the point where I feel, politically, I have nothing to lose. For this reason alone, I will be voting UKIP (again) next week and in next years general election.

Furthermore, I am not ashamed to say this. I think I know how Bruce Banner feels too.

[Democorruptcy]

Someone, Shapps? Has advised Cameron and Osborne that their only chance of winning next year's election is to pump up Labour's housing bubble some more rather than sort it out.

Carney, the Governor of the supposedly independent BoE is powerless to intervene. I'm starting to feel a little sorry for him as his reputation will suffer as a result.

All we can do is to try to make sure that this disappointing government does not get re-elected, in my case by voting UKIP.

You feel sorry for an ex-Goldman Sach's stooge who blew up a Canadian house price bubble?

Help to Buy could have been his idea and put in place for his arrival. Canada already had government insurance:

Former Finance Minister Jim Flaherty tightened Canada’s mortgage insurance rules four times in the wake of the financial crisis. The most recent set of changes took place in July 2012 and, among other things, capped the maximum length of an insured mortgage at 25 years.

Mr. Flaherty made changes that he felt were necessary to keep consumer debt loads and house prices from rising too quickly. The changes were very specific – for instance cutting amortizations and saying that homes over $1-million weren’t eligible for government-backed insurance. Beyond his concerns about debt levels and home prices, Mr. Flaherty also had an interest in limiting the amount of exposure that taxpayers were building up to the housing market. The government backstops the vast majority of the country’s mortgage insurance.

http://www.theglobeandmail.com/report-on-business/economy/three-key-questions-about-canadas-new-mortgage-insurance-rules/article17956565/

[Bloo Loo]

Watched the 'interview' on sky news, and whilst the problems are at least acknowledged all I see is a squirming worm on a hook. The 'deep deep problems' was the strongest language used in the discussion and reading between the lines it seemed to me he was basically saying it was a hell of a mess before he even got here and theres not much he can do about it.

Its all about political manoeuvres now, he no doubt senses he has been bought in as the patsy and is deflecting that whilst the government are setting him up for a fall. Whilst this goes on of course no-one does a thing about the actual problems. They all play politics when they should be actually running the country.

The cynicism is well founded, and I for one am not comforted by their first public admissions that they realise there is a problem that has been as plain as day to us amateurs on this forum for the last 10 years.

Banks dont create wealth.

Carney might try to give the illusion they do, but all they can do is control the amount of credit and money their system issues.

If prices are rising its their fault.

[billybong]

At the moment he's talking voters talk for the current incumbents.

When the imminent eu and local elections are out of the way for sure he'll be back to can't do anything about London house prices for tax escapees, money launderers, banks' spare bailout money and anyone from overseas who has a few million to spend talk until just before the May 2015 general election when it'll be back to voters talk.

Edited May 18, 2014 by billybong

[Blod]

Banks dont create wealth.

Carney might try to give the illusion they do, but all they can do is control the amount of credit and money their system issues.

If prices are rising its their fault.

His problem is that any measure no matter how small could crash the market. So what he's doing is simply covering his ass and waiting for the crash.

What could he reasonably do now to halt a crash, and I do mean reasonably not silly things.

[renting til I die]

Watched the 'interview' on sky news, and whilst the problems are at least acknowledged all I see is a squirming worm on a hook. The 'deep deep problems' was the strongest language used in the discussion and reading between the lines it seemed to me he was basically saying it was a hell of a mess before he even got here and theres not much he can do about it.

Its all about political manoeuvres now, he no doubt senses he has been bought in as the patsy and is deflecting that whilst the government are setting him up for a fall. Whilst this goes on of course no-one does a thing about the actual problems. They all play politics when they should be actually running the country.

The cynicism is well founded, and I for one am not comforted by their first public admissions that they realise there is a problem that has been as plain as day to us amateurs on this forum for the last 10 years.

This is all it's about, covering ones a***! If Carney says this every now and again, if house prices drop on his watch then he can say "well I told you so". I'm sure if we don't see a HPC before the election, then Osbrown (if the tories win!) will start saying similar things after, maybe withdrawing HTB2 ect.

Edited May 18, 2014 by renting til I die

[renting til I die]

There have been calls in the last year, in newspapers I could easily get a link to, for elderly to be exempt from stamp duty if they downsize. Such an incentive really annoys me, for they'd get yet another big bung on outbidding me for smaller homes. Yet it highlights the issue of family homes being hogged by the elderly.

http://www.dailymail.co.uk/news/article-2564434/Stamp-duty-break-help-elderly-downsize-Call-exemption-free-larger-homes-younger-families.html

The last such house (5 bed Edwardian detached) one I followed on Rightmove went to market at £750,000 (probate sale... first listing only exterior and gardens). I looked previous owner up on London Gazette... very old guy who had died - been living in it by himself to the end. On regional forum (this isn't London or SE), one member thought it was fair value for him at £550K. 8 months standing empty, but new photos of inside (austere.. empty rooms). It was later cut to £650K. It sold start of the year for £590K, and I know the buyers. Successful business people intheir 40s and a few kids, who had been renting. I'm genuinely pleased for them (but still think it's expensive at £590K as it needs a lot spent on it). I'm just pleased for them.. can't help it. An underused home going to a family.

One flipper nearby has come to market with a listing showing house half-done.. at £595K, and it's a much smaller semi, with small garden. I think the turn of events has worried him.

All I'd really like is just a tilt in the number of downsizers (having more of a need to sell) to overwhelm the trickle of upsizing buyers left willing to pay silly high prices, and such downsizers willing to accept lower prices, to help bring wider values down in the market. There already appears (in my area at least) to be some weakness at higher end of market (large family homes) with more higher end homes coming to market, sitting on market with huge asking prices. Going to get interesting if the trickle of upsizers, occasionally meeting very high prices, does dry up. Yes in a way they are a problem... not being tempted to accept fortunes for their homes to downsize, in some areas, and more young being pushed out of areas where jobs are, due to very high housing/rental costs. Let them claim some more Winter Fuel Allowance for their £750,000 homes.

I think that Venger makes some good points about the lack of incentives for older owners to sell. Whatever you think about people living in houses far too big for they needs. If they had more incentive to sell it would free up a lot of housing stock. Although at current prices it might only be developers buying to knock the houses down and put up flats! It currently would help the supply side of the housing market.

[renting til I die]

BBC decided to ask an estate agent for her view on what Carney said

And what did he say, pray.... "nothing wrong here, mate. Move along!"

[MississippiJohnHurt]

I don't think they've given it a thought.

I'm voting for them because I can't think of anything that will piss-off this government more than a large swing to UKIP.

From what I've read they're worse than the tories - specific pledges to not build on green belt land etc

[TheCountOfNowhere]

From what I've read they're worse than the tories - specific pledges to not build on green belt land etc

I think you miss the point....they are not the tories or labour....voting for them will send shockwaves through government and the establishment....if they think people have had enough the mainstream parties will change policies. To continually votye for the same two parties who KEEP LYING TO US AND FAILING MOST OF THE POPULATION just because they are there is insanity of the highest order.

Voting UKIP is not a protest vote, it's the last chance for the establishment to change tact before there is real trouble in my opinion.

[Bloo Loo]

just watched a bit of Sunday Politics, and they moved to our region...5 or six parties all given the chance to speak about Europe.

ALL except the UKIP guy said we would all collapse into a nightmare of unemployment if we left.

UKIP guy made sense...he doesnt want NO CONTACT with Europe ( our trade balance with them is negative) he wants to sever the legal and Political control.

The ONLY party offering this option. The others are all 100% BS IMHO.. we trade with the rest of the World no probs. we can trade with Europe just as well.

Green party said it was a question of Peace in Our Time...course, If UK leaves, the same Europe would be there just the same. These guys think we are stupid...indeed, rely on it.

[zugzwang]

just watched a bit of Sunday Politics, and they moved to our region...5 or six parties all given the chance to speak about Europe.

ALL except the UKIP guy said we would all collapse into a nightmare of unemployment if we left.

UKIP guy made sense...he doesnt want NO CONTACT with Europe ( our trade balance with them is negative) he wants to sever the legal and Political control.

The ONLY party offering this option. The others are all 100% BS IMHO.. we trade with the rest of the World no probs. we can trade with Europe just as well.

Green party said it was a question of Peace in Our Time...course, If UK leaves, the same Europe would be there just the same. These guys think we are stupid...indeed, rely on it.

The point about the trade balance is worth repeating. It's Osborne's almighty debt bubble holding up the EU economies not the other way round.

[renting til I die]

When the boe made their statement this week saying that interest rates won't be going up for a while they really took down the 5 year gilt rate.http://www.bloomberg.com/quote/GUKG5:IND It will be interesting to see how this reacts from now.

A sharp correction indeed. However the trend is still up and the up trend line has not been broken so we may see a correction to it but unless it was to break the up trend remains intact.

[Blod]

I think you miss the point....they are not the tories or labour....voting for them will send shockwaves through government and the establishment....if they think people have had enough the mainstream parties will change policies. To continually votye for the same two parties who KEEP LYING TO US AND FAILING MOST OF THE POPULATION just because they are there is insanity of the highest order.

Voting UKIP is not a protest vote, it's the last chance for the establishment to change tact before there is real trouble in my opinion.

A vote for UKIP sends the strongest message to the establishment. Their comfortable fake party politics are finished. It'd be great if UKIP turned out to be the largest UK party represented in the EU.

It was reassuring to see Liebour's comments on the rental sector, it'd be great to see a similar response to other issues from the others.

[@contradevian]

Out of interest, what is UKIPs policy on house building and housing etc?

Not read much about it anywhere.

UKIP Housing Spokesman is a BTL landlord and NIMBY. All you need to know.

[@contradevian]

A vote for UKIP sends the strongest message to the establishment. Their comfortable fake party politics are finished. It'd be great if UKIP turned out to be the largest UK party represented in the EU.

It was reassuring to see Liebour's comments on the rental sector, it'd be great to see a similar response to other issues from the others.

UKIP are the establishment.

How nice of the establishment to give us another Tory 'protest' party.

This country makes Putin's version of democracy look good.

"You can vote for who you like, provided its 'rentier/Tory."