Jump to content
House Price Crash Forum
Sign in to follow this  
TheCountOfNowhere

Bbc: Bank Of England To Get Extra Powers Over Housing Market

Recommended Posts

http://www.bbc.co.uk/news/business-29457607

The Bank of England has accepted new powers to prevent a housing boom and bust, as suggested by the Chancellor, George Osborne.

They are a bit late.

"The FPC also noted that high loan-to-value lending now accounts for just 9% of mortgages - compared to 25% in 2007, during the boom - suggesting that riskier lending has not got out of hand."

http://www.theguardian.com/money/2014/jul/02/leap-london-house-prices-unequalled-nationwide

"

London house prices leap by 25% "

",,,,30% higher than the peak reached in 2007."

Have they missed something ?

I'd write and complain about their biased reporting but instead i'm just not paying the licvense fee again.

Voting with my wallet.

It's deflation time for the BBc

Share this post


Link to post
Share on other sites

High loan are normal in a zero bound world. If interest rates stay low like Japan, this is not an issue.

Flat generates £1,000 pcm = £12k pa

Assuming 6% rental yield = £200k

Assuming 3% rental yiled = £400k (i.e. now!)

There is no bubble! House prices are just reflecting low interest rate enviroment. This will not change! You are all waiting for a crash that will not happen!

Share this post


Link to post
Share on other sites

High loan are normal in a zero bound world. If interest rates stay low like Japan, this is not an issue.

Flat generates £1,000 pcm = £12k pa

Assuming 6% rental yield = £200k

Assuming 3% rental yiled = £400k (i.e. now!)

There is no bubble! House prices are just reflecting low interest rate enviroment. This will not change! You are all waiting for a crash that will not happen!

Brainiac quotes the bleedin obvious...

Share this post


Link to post
Share on other sites

Sorry, just reading allot of nonsence on this site.

Stop drinking the coolaid and get on the property ladder - housing is fairly valued imho.

If inflations picks up and rates rise maybe not - but show me where this is happening?

Share this post


Link to post
Share on other sites

Sorry, just reading allot of nonsence on this site.

Stop drinking the coolaid and get on the property ladder - housing is fairly valued imho.

If inflations picks up and rates rise maybe not - but show me where this is happening?

no, you show us where we havent pointed out the props already.

You say it is perhaps not going to continue.

yet you say get on the ladder.

Now which is it?

Share this post


Link to post
Share on other sites

Wurzel,

no, you show us where we havent pointed out the props already.

You say it is perhaps not going to continue.

yet you say get on the ladder.

Now which is it?

I don't get the question.

I've come to the conclusion that house prices are fairly valued, there is no bubble. Now is as good a time as ever to get on the ladder. High loans are the future for a zero rate world. Nuffin to worry about.

Share this post


Link to post
Share on other sites

Wurzel,

I don't get the question.

I've come to the conclusion that house prices are fairly valued, there is no bubble. Now is as good a time as ever to get on the ladder. High loans are the future for a zero rate world. Nuffin to worry about.

Congratulations.

Share this post


Link to post
Share on other sites

The Bank of England has accepted new powers to prevent a housing boom and bust, as suggested by the Chancellor, George Osborne.

Next up: BBC: Camoron says recent housing bust "not my fault" and "It's the BoE's job to prevent devastating crashes, not mine."

Share this post


Link to post
Share on other sites

Sorry, just reading allot of nonsence on this site.

Stop drinking the coolaid and get on the property ladder - housing is fairly valued imho.

If inflations picks up and rates rise maybe not - but show me where this is happening?

How is it a ladder if the rungs get further and further apart as prices increase?

It's sort of irrelevant round my way anyway.

Prices of one bed flats are 14 times the local average wage (and I'm not in London).

A crash is inbuilt inside the next ten years whether you realise it or not.

Sooner or later the majority of the population won't have benefited from house price inflation, so simply won't be able to afford 90%+ of the UKs current housing stock at today's prices. There are millions of pensioners in family homes and millions of families who can't afford to buy them for the current market price when the time comes to sell them. Longterm, just like Japan, the only way is down.

If it was a healthy functional market, do you think a supposedly free-market party like the Tories would be using a multi-billion pound socialist policy (Help-To-Buy) to prop up prices and make basic starter homes available to families on 40K+ a year incomes?

That's the definition of nonsense.

Edited by byron78

Share this post


Link to post
Share on other sites

High loan are normal in a zero bound world. If interest rates stay low like Japan, this is not an issue.

Flat generates £1,000 pcm = £12k pa

Assuming 6% rental yield = £200k

Assuming 3% rental yiled = £400k (i.e. now!)

There is no bubble! House prices are just reflecting low interest rate enviroment. This will not change! You are all waiting for a crash that will not happen!

Errrrrrrr.....what about the no wage growth along with the cost of living explosion eating away peoples disposable income.

The collapse of the housing market and the economy is inevitable.

Share this post


Link to post
Share on other sites

Such posts show people are terrified of collapsing prices. FEAR.

Facts mean nothing to people who want to believe otherwise.

No matter who tells him ( or her ), or how many times they are a f**kwit, they will never believe them.

Share this post


Link to post
Share on other sites

Such posts show people are terrified of collapsing prices. FEAR.

Facts mean nothing to people who want to believe otherwise.

No matter who tells him ( or her ), or how many times they are a f**kwit, they will never believe them.

It might be more illuminating if you'd set out why you believe this to be the case.

For instance, yields are low, nominal wages are rising and real output is growing.

Share this post


Link to post
Share on other sites

Having the power is one thing. Using it is another. They have the power to raise rates too but seem to have forgotten how to.

They will raise the rates when they think people have the money to pay the higher rates...ie a pay rise, which in effect is no pay rise at all..... ;)

Share this post


Link to post
Share on other sites

It might be more illuminating if you'd set out why you believe this to be the case.

For instance, yields are low, nominal wages are rising and real output is growing.

Sorry, you mistake me for someone that believes the "official" statistics.

Look around you.

Share this post


Link to post
Share on other sites

I generally agree with you but...

http://en.wikipedia.org/wiki/social_credit#the_A_.2b_b_therom

by the great c.h. douglas should help to explain why you are wrong. as it stands cheep credit and low interest rates are propping up the housing bubble but when they go it will crash and the only way to avoid that is prolonged negative interest rates which amount to a government default and stop incoming value due to negative return on investments.

as I understand it the only people who would want that are the 1% due to cash having little to no value due to the fact they own the central banks around the world and what is important for them is the control rather than the value of return, due to the fact it helps them achieve their goals which are out of line with the general population, their goals are the speculation of the conspiracy theorists, the same theorists that Cameron has now stopped ignoring, stopped ridiculing and is now fighting as the global mafia reach their end game and the emperors clothes fall off.

feel free to correct me if ive missed something you crashie people:)

Share this post


Link to post
Share on other sites

High loan are normal in a zero bound world. If interest rates stay low like Japan, this is not an issue.

Flat generates £1,000 pcm = £12k pa

Assuming 6% rental yield = £200k

Assuming 3% rental yield = £400k (i.e. now!)

There is no bubble! House prices are just reflecting low interest rate enviroment. This will not change! You are all waiting for a crash that will not happen!

3% gross - repairs, letting agent fees, tax, voids = 1% Yield

Great investment Einstein - Why not put your money in Zopa for a 5% pre-tax return? Oh, no capital appreciation - I see.

Edit: Just to add to your own point, since yields have completely priced in maximum rental extraction and interest rates at 0.5% prices will not go up any further. As most property investors rely on capital gains they will be offloading property - just look at Rightmove in London and you will see the stock piling up.

As prices collapse banks will stop lending, credit crunch MK2 and falls aplenty. The reason this crash will be worse is because there are more liquid investors holding property.

Edited by Wurzel Of Highbridge

Share this post


Link to post
Share on other sites

Having the power is one thing. Using it is another. They have the power to raise rates too but seem to have forgotten how to.

A free market would set interest rates according to supply and demand of currency.

Not slavishly follow the dictates of a centralised statist authority with mechanisms (such as money-printing and taxation) for exempting itself from market forces.

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:   208 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.