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Low Interest Rates Spark House Price Boom Across Europe

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http://www.telegraph.co.uk/business/2016/03/02/low-interest-rates-spark-house-price-boom-across-europe/

House prices are rising or stable in all major European economies thanks to ultra-low interest rates, according to a new analysis by Standard & Poor's.

Low rates are being passed on to consumers, allowing home buyers to borrow more money to fund bigger property purchases - in turn pushing up prices.

Asking prices in Britain have been rising for several years and will climb by 5pc in 2016, the report predicted.

The UK's buoyant market will be matched by similar price rises in Germany and Ireland.

Spain and Portugal - which were hit particularly hard by falling prices during and after the financial crisis - should see them rise by 2.5pc.

Italy's house price growth will be more modest at around 1.5pc, while France's housing market is set to stay flat for the year.

Great news for the recovery, rising house prices to increase GDP.

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This bit, 'allowing home buyers to borrow more money to fund bigger property purchases', should be refrased as 'allowing home buyers to pay more for the same'.

Nicely put

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And the pensions minister Steve Webb said in parliament today that low interest rates represents 'a colossal transfer of wealth from the elderly to the 30 somethings'....

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And the pensions minister Steve Webb said in parliament today that low interest rates represents 'a colossal transfer of wealth from the elderly to the 30 somethings'....

Steve Webb is not pensions minister anymore, he lost his seat as a Lib Dem MP at the 2015 election. This was the election when the young abandoned the Lib Dems because the party clearly didn't stick up for them in government. Maybe younger voters are a smarter and more effective electoral group than people give them credit for.

P.S. Steve Webb now works in the financial sector.

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And the pensions minister Steve Webb said in parliament today that low interest rates represents 'a colossal transfer of wealth from the elderly to the 30 somethings'....

Er its the other way round.

Are you sure you've got the quote right?

Or are the LibDems even dumber than I thought.

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Maybe even deserves its own thread.

http://www.bbc.co.uk/radio/player/b071vgqf

@13.20

There has been a massive transfer of wealth from the elderly to the younger - because those owning the biggest mortgages are in their 30s. So Mr Webb thinks that debt is wealth. The 30 somethings have borrowed huge amounts of money to give to older owners who paid a fraction of the price, and this represents a transfer of wealth from the older generation to the younger?

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The big difference between house price rises in Europe compared to the UK is that European house prices were allowed to fall significantly before they started to rise.

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Just listened and massive was the word, but close enough.

Also 1/3 of journeys on pensioner passes in london was people travelling into work.

Does seem very unfair that all 60+ people get unlimited public transport for free when many are still working and people on JSA don't - they only get half price.

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Er its the other way round.

Are you sure you've got the quote right?

Or are the LibDems even dumber than I thought.

The latter, probably.

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They were pretty much assured to rise in Germany once their savings recycling scheme into the piigs collapsed as I said at the time. Nothing much to do with interest rates.

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Er its the other way round.

You're (probably) thinking house prices (old people have bigger houses).

He's (probably) thinking interest on savings (old people) and debt (young people).

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Er its the other way round.

Are you sure you've got the quote right?

Or are the LibDems even dumber than I thought.

The low rates reduce the return on savings and reduce repayments for the indebted.

I can see how he got there ; an over mortgaged 30 something relying on low rates to make ends meet means lower income to a pensioner with savings due to those same low rates.

But he misses half the picture;the 30 something pays 3x what the pensioner paid for the same house, and today a pensioner sitting in a massive mortgage free detached house paid for with a single wage requiring no formal education has a wealth and a lifestyle a university educated couple who both work will likely never attain. The pensioner cashes in from the work of the 30 somethings when they downsize or release equity;there the wealth transfer is rather obvious.

I don't spend as much time thinking about this as a politician should and its rather obvious to me, are they incompetent or liars?

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If banks are leveraged 25 to 1 (and most banks are probably leveraged more in Europe), if house prices fall 4% it wipes out all bank equity.

So why would politicians whose campaign promises are ultimately funded by bankers ever ever let that happen? People really don't understand how the world works. We are serfs...whether that is through slavery (i.e most of human existence) or debt. To keep control elites must subjugate the masses - if anyone read their history its all in there.

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If banks are leveraged 25 to 1 (and most banks are probably leveraged more in Europe), if house prices fall 4% it wipes out all bank equity.

So why would politicians whose campaign promises are ultimately funded by bankers ever ever let that happen? People really don't understand how the world works. We are serfs...whether that is through slavery (i.e most of human existence) or debt. To keep control elites must subjugate the masses - if anyone read their history its all in there.

Credit money to central bank money leverage is probably slightly higher. The entire system is leveraged.

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Credit money to central bank money leverage is probably slightly higher. The entire system is leveraged.

True. Literally the only way to stop the system is to stop playing. I remember the great ending to War Games - the only way to win is not to play. Sites like these, although bringing like minded people together, are a sign that people are so invested in this "game" of money, debt, ownership etc that they really can't see they are all being played for fools. Leadership in our democracies is a joke, they're all playing at being "business men" with no experience of actual risk and reward. They think that constantly borrowing on a current account deficit for "investment" with no return is sustainable. Our economies have been grossly mismanaged and real business men are the onyl people who have taken advantage a la tax avoidance

The elites will rig this game to win every time. The only way we would win is to stop playing - which some of you have by refusing to get in debt. If the majority did this the system would collapse, but historically the masses take a very long time to move, but when they do, it causes complete chaos and takes decades to return to a normalized system (see Roman Empire, Chinese Empire for examples). The wants and needs of man do not change, they are easily manipulated to provide some with the ability to have a better life at the expense of others through plausible excuses be it " a better afterlife" or "retirement" or "buy now pay later" each time people are sold certainty because they crave it desperately and they cannot understand that the world is truly uncertain and managing this is a part of life.

Edited by katchytitle

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It's a bankers wet dream.

A housing bubble to fix the problems caused by well...errr....a housing bubble.

You could not make this up

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Does anyone get the feeling, the UK muppets who bought off plan properties in 2005 onwards now expect the "low interest rate

House Price Boom Across Europe" to save them from their own stupidity.

Sorry, you were the greatest fools

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"The only way we would win is to stop playing - which some of you have by refusing to get in debt. If the majority did this the system would collapse"

+ 1

This is it in a nutshell katchytitle :)

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