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Eddie_George

If Deflation Goes On For A Fraction Too Long It Could Unravel Uk House Prices

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I'm currently delaying a house purchase because inflation has made the house I need cost twice as much as I am willing (or even able) to pay.

Scaring people into buying before they 'miss the boat' only works until the day the boat leaves.

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Biggest damage deflation does is the principal isn't eroded, in fact an interest only debt actually grows in size. Conversely cash under the mattress actually increases in value.

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Even more telling, the annual rate of house price growth slipped from 9.8pc to December to 8.4pc for the 12 months to January - and any slight drop in house prices makes it harder for people to move.

Quick, unleash HTB3!

How do they get away printing this rubbish! A slight drop in house prices does not make it 'harder for people to move'! Besides, a drop in house price growth from 9.8% to 8.4% isn't a slight drop in prices, it's only a slow down in the increases!

Why do I persist in reading these articles which do nothing but wind me up!

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Biggest damage deflation does is the principal isn't eroded, in fact an interest only debt actually grows in size. Conversely cash under the mattress actually increases in value.

This only relates to wage deflation

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"The one beneficiary in a longer term, deflationary scenario could be the cash-rich, buy-to-let investor, able to pick up cheap property. " :D

Cash rich?

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“If property prices drop existing homeowners will struggle to trade up, as a lower selling price will force them to take on a higher loan-to-value mortgage,” said Mr Codling. This will slow transactions, hitting house prices as demand to move cools further.

Mainly because the next step up the "ladder" home will be cheaper as well - but the mortgage will still be less than if property prices hadn't dropped.

The delusion is strong these days.

Edited by billybong

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The comments are refreshing. If you can't be bothered, in summary:

Housing as asset class gets attacked

Tories are subjected to much cynicism

forevaHPI gets trashed

Anna White gets savaged

Its so waspish you'd be forgiven for thinking you were reading the Guardian on a day Nigel Farage was made an OBE and Waitrose suffered an organic Quinoa shortage.

I enjoyed it immensely.

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The comments are refreshing. If you can't be bothered, in summary:

Housing as asset class gets attacked

Tories are subjected to much cynicism

forevaHPI gets trashed

Anna White gets savaged

Its so waspish you'd be forgiven for thinking you were reading the Guardian on a day Nigel Farage was made an OBE and Waitrose suffered an organic Quinoa shortage.

I enjoyed it immensely.

Anna white actually got paid to write a paper that would fail, badly, an academic marking exercise, but which masquerades as financial advice. There's injustice just in the fact she gets an income from this, never mind the moral issue of it being legal to publish it as informed advice.

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Has Anna White decided which side of the fence she's on yet?

She's probably on the side with the magnolia highlights (known to increase the value of your property by up to 20%)

Edited by Si1

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A lot of people in the comments section of the telegraph article seem to think if Labour get in then house prices will crash through their incompetence and profligacy (a new selling point to vote Labour). Maybe but it's not certain at all as if they get in they will be just as eager as the Conservatives and Libdems to support crazy house prices.

Before the last general election lots of people thought that a Conservative led government would mitigate house prices as good for the general economy but they (supported by the Libdems) like NuLabour before them have been complete failures and again went full speed ahead on crazy house prices and to pot with the general economy.

People shouldn't underestimate the LibLabCon's capacity for betrayal of the electorate.

Edited by billybong

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Maybe but it's not certain at all as if they get in they will be just as eager as the Conservatives and Libdems to support crazy house prices.

If Labour are going to continue to prop up house prices, while cheerleading on immigration, it's safe to say that Labour 1997 to present day absolutely hate the indigenous working classes.

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I think it is a misprint, they probably meant to say cash rich "HPC`ers".

:lol:

and any slight drop in house prices makes it harder for people to move.

Why is this my concern ?

Why are savers and workers being punished to allow someone who, through what they think is their own free will, have bought a executive apartment at the worst time in hisotry ?

Why are the home owning media types not outraged by people's earned, taxed incomes become stolen through inflation ?

why shouldnt someone who buys a flat/house not expect to have to live their the whole of their lives ? It''s their choice.

I am sick of the pro-hpc media brigade, what a bunch of self serving *********************************************************************s.

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Any slight rise in house prices makes it equally hard for people to have the luxury of owning a home in the first place! I'm with you Count, I'm very angry today!

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When crash starts, what can gov realistically do? Switch qe from gilts to mortgages like in US perhaps? Slam the door on new build supply? Get rid of mmr?bring back tax relief on mortgages? They won't sit on their hands and do nothing!

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Any slight rise in house prices makes it equally hard for people to have the luxury of owning a home in the first place! I'm with you Count, I'm very angry today!

Dont blame you. I've been getting more and more would up since the budget. I think seeing estate agent daves coupon on the TV every hour has put me over the edge.

Wearing a suit, lying to people whilst smiling, should not be an acceptible way to earn a living ( MPs. Bankers, Agents etc ).

This country is very very sick

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