What's Next From The Free Market Tories ?

[TheCountOfNowhere]

The market has clearly turned.

What will the pre-election free market tories do ?

House prices could be YoY negative by October and in the run up to the election could collapse.

Will they dare use more of our money/futures to prop up prices ?

Do they want to loose the election anyway, let Labour be the patsy they deserve to be ?

[THE BALD MAN]

The market has clearly turned.

What will the pre-election free market tories do ?

House prices could be YoY negative by October and in the run up to the election could collapse.

Will they dare use more of our money/futures to prop up prices ?

Do they want to loose the election anyway, let Labour be the patsy they deserve to be ?

There are no free markets...most are manipulated either by politicians, large multinationals, fund managers etc....

[WageslaveX14]

With 'masterful' timing from Osborne, I think the YoY negative figures will only start appearing in March/April 2015. He might just get away with it, but with a bit of luck the price fall headlines will arrive in enough time for the general public to become fully aware before the election.

Down here in London, the market was still crazy going into Spring, and the stories about the MMR and 'something must be done to cool the market' only started in earnest in May/June - London prices in the areas I was looking at probably increased by about 15% in the first 4 months of 2014 alone. The real price increases were between summer 2013 and spring 2014.

Because of this, I don't think we'll see any YoY falls in the figures until roughly 12 months from the April peak.

There's still scope for an Autumn statement re-introducing mortgage interest relief for owner occupiers, removing IHT on primary residences, making it more tax efficient to use your pension fund to buy property, etc, etc, but I don't think we'll see any of these. If I were a Tory strategist (which I'm certainly not), I would float one or more of these options, blame the Lib Dems for vetoing them, and then try and blame the 'resulting' house price falls on Clegg & Co.

[crashmonitor]

I'm guessing they will start back tracking on threatened interest rate rises. The market is being controlled with words not interest rates.

[TheCountOfNowhere]

I'm guessing they will start back tracking on threatened interest rate rises. They hope The market is being controlled with words not interest rates.

[@contradevian]

I think the worm is turning with regard to house prices. Well its taken long enough. Also I think NIMBY's are going to find themselves on the back foot and start encountering some opposition to their hegemony

[katchytitle]

Oldest Central Bank trick in the book. Draghi uses it. Greenspan mastered it. And now Carney has control of an influential central bank he is using it with gusto. You don't actually have to act you just suggest that you might. The risk that you might actually be telling the truth changes the market.

Right now I think the MMR has simply slowed down demand in London. As soon as brokers and banks get used to streamlining the application process ( e.g putting in suggested answers or pre-populating forms that customers simply "agree with" rather than reading) prices will continue to eek forward. I know that's bad for the viewpoint on this site but I think we have all come to realise that manipulation can beat sheer mathematical certainty of failure as long as politicians and banks can simply re-write their rule books. The market can be irrational longer than our useful life expectancy.

Oh well, count ourselves lucky we weren't born in 1930s and conscripted to war or forced to live through dustbowl recessions post 1929....

[zugzwang]

With 'masterful' timing from Osborne, I think the YoY negative figures will only start appearing in March/April 2015. He might just get away with it, but with a bit of luck the price fall headlines will arrive in enough time for the general public to become fully aware before the election.

Down here in London, the market was still crazy going into Spring, and the stories about the MMR and 'something must be done to cool the market' only started in earnest in May/June - London prices in the areas I was looking at probably increased by about 15% in the first 4 months of 2014 alone. The real price increases were between summer 2013 and spring 2014.

Because of this, I don't think we'll see any YoY falls in the figures until roughly 12 months from the April peak.

There's still scope for an Autumn statement re-introducing mortgage interest relief for owner occupiers, removing IHT on primary residences, making it more tax efficient to use your pension fund to buy property, etc, etc, but I don't think we'll see any of these. If I were a Tory strategist (which I'm certainly not), I would float one or more of these options, blame the Lib Dems for vetoing them, and then try and blame the 'resulting' house price falls on Clegg & Co.

The big price hikes were coincident with the introduction of HtB2 then, as most us suspected would be the case. Being able to discount the 95% LTV rate to 75% clearly made a big impact. Too bad Osborne didn't wait until the original start date, the hpi tide will have gone out long before the GE now.

I deffo think he'll do something on IHT in the Autumn budget tho. Even if it does nothing for hpi it should help keep the Tory core vote onside.

[zugzwang]

Oldest Central Bank trick in the book. Draghi uses it. Greenspan mastered it. And now Carney has control of an influential central bank he is using it with gusto. You don't actually have to act you just suggest that you might. The risk that you might actually be telling the truth changes the market.

Right now I think the MMR has simply slowed down demand in London. As soon as brokers and banks get used to streamlining the application process ( e.g putting in suggested answers or pre-populating forms that customers simply "agree with" rather than reading) prices will continue to eek forward. I know that's bad for the viewpoint on this site but I think we have all come to realise that manipulation can beat sheer mathematical certainty of failure as long as politicians and banks can simply re-write their rule books. The market can be irrational longer than our useful life expectancy.

Oh well, count ourselves lucky we weren't born in 1930s and conscripted to war or forced to live through dustbowl recessions post 1929....

Markets determine the cost of money not central bankers. Exponential (ponzi) debt production via the PBoC and the Chinese shadow banking system is what's kept the global casino viable for the last three years. I certainly don't consider that to be a fortunate state of affairs.

[TheCountOfNowhere]

Oh well, count ourselves lucky we weren't born in 1930s and conscripted to war or forced to live through dustbowl recessions post 1929....

What, you dont think they would do that again

[interestrateripoff]

Oldest Central Bank trick in the book. Draghi uses it. Greenspan mastered it. And now Carney has control of an influential central bank he is using it with gusto. You don't actually have to act you just suggest that you might. The risk that you might actually be telling the truth changes the market.

Right now I think the MMR has simply slowed down demand in London. As soon as brokers and banks get used to streamlining the application process ( e.g putting in suggested answers or pre-populating forms that customers simply "agree with" rather than reading) prices will continue to eek forward. I know that's bad for the viewpoint on this site but I think we have all come to realise that manipulation can beat sheer mathematical certainty of failure as long as politicians and banks can simply re-write their rule books. The market can be irrational longer than our useful life expectancy.

Oh well, count ourselves lucky we weren't born in 1930s and conscripted to war or forced to live through dustbowl recessions post 1929....

Greenspan mastered it that well he engineered a bubble that crippled the global economy. Hardly a resounding vote of confidence.

[sPinwheel]

Another nice little boom.

[interestrateripoff]

They could create a true market in babies. You have to bid for the right to reproduce and ensure there are insufficient slots to keep everyone's bloodline going. (Either that or just make sure insufficient houses are built.)

You mean there needs to be more males than females?

[Fully Detached]

I don't think there's any possibility that they'd prefer to lose the election - if the housing market tanks badly on a tory watch for a second time, they'll be unelectable for a generation. And apart from that, power is intoxicating - they'd rather be captain of a sinking ship than be Roger the cabin boy on one that floats.

That aside, I think there's a very good chance that they might just soldier through until the election, without the general public becoming too aware of what's happening in the housing market. It's virtually August, so another two months of summer lull, then probably a bit of an autumn pick up, or at least, a decline in the rate of any falls we might see. Then, the average Brit spends October --> end January obsessed with Christmas and utterly unable to think of anything else.

That gives them 4 months to hold out - chuck in a couple of tax breaks and an Eastenders "whodunnit" and Joe Public probably won't even notice what's happened until he's already put his cross on the ballot paper.

[StainlessSteelCat]

Frack to buy?

[Democorruptcy]

At the Tory party conference (or in the Autumn Statement) Osborne will increase the stamp duty thresholds "to enable hard working aspirational families pay less tax". It will have the opposite effect because sales cluster below the thresholds. I don't see why Help to Buy was set at £600k if this wasn't always part of the plan, it was just a case of staggering the props. So 125k to 150k, 250k to 300k and 500k to 600k.

[winkie]

The thing is people will vote depending on how they are personally feeling......they will not vote on how they say they should be feeling, or on how others say they are feeling........ growing inequality only means there are more falling into the category of not feeling as good and would like to feel better than those laughing all the way to the bank with big bonuses, pay rises, security and property growing faster than debt in a modern society ........ growing numbers of dissatisfied people only means dissatisfaction with what they have, try something different time.....just saying.

[frederico]

They'll definitely pull a few magic bunnies out of the hat in the autumn with lots of promises for more in the lead up to the GE. It will all melt away after the election of course.

[TheCountOfNowhere]

The thing is people will vote depending on how they are personally feeling......they will not vote on how they say they should be feeling, or on how others say they are feeling........ growing inequality only means there are more falling into the category of not feeling as good and would like to feel better than those laughing all the way to the bank with big bonuses, pay rises, security and property growing faster than debt in a modern society ........ growing numbers of dissatisfied people only means dissatisfaction with what they have, try something different time.....just saying.

Ill be voting based on what they've done, not what what they said they will/did do.

[winkie]

Ill be voting based on what they've done, not what what they said they will/did do.

Does what they have done make you feel good?

[Eddie_George]

With impeccable timing, the new pension rules come into effect in April, just in time for the election. Lots of dosh could funnel its way into bricks and mortar.

[winkie]

With impeccable timing, the new pension rules come into effect in April, just in time for the election. Lots of dosh could funnel its way into bricks and mortar.

You would have thought people could be a bit more creative than that.......

Edited July 28, 2014 by winkie

[TheCountOfNowhere]

With impeccable timing, the new pension rules come into effect in April, just in time for the election. Lots of dosh could funnel its way into bricks and mortar.

takes too much time for that ti filter through to the indexes.

Maybe they really are setting up labour.

It's not a bad plan to be honest....pump up the bubble...crash it hard in the run up the election...labour take over a hung parliament with UKIP...the whole thing collapses.....new election, tories back in for 20 years.

[janch]

.....or bring forward the date of the election to the autumn.......?

[LiveinHope]

You would have thought people could be a bit more creative than that.......

I have a friend whose financial advisor has just encouraged her to switch her portfolio to property based investments - I am not sure which type, but I found it a strange move. However, having seen my friend's funds previous growth, I can't fault the advisor's previous strategy. it left me scratching my head a bit.

That aside, there must surely, be something for older savers who have retired, so I expect a token interest rate rise to give the feeling that the tide has turned. It won't come as a nasty psychological surprise to the indebted as they have been mentally, prepared.

Edited July 28, 2014 by LiveinHope