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Antonio Fargas

Don’t Sacrifice A Soft Landing Naea Warns Bank

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With expectations of an interest rate cut at some time in the first quarter of the year, the National Association of Estate Agents is advising the MPC against too quick a reduction of interest rates in early 2006.

NAEA believes cuts may raise the spectre of increased inflation and endanger the current soft landing in the property market.

Peter Bolton King, chief executive of the NAEA, says: "Although first time buyers and the retail market may hope for interest rates to be brought down at the beginning of 2006, it is now more vital than ever that the Bank of England’s Monetary Policy Committee gets its timing correct."

"A hasty rate drop runs the risk of encouraging people to spend money they do not have, which could easily draw us into a period of inflation. To counteract this, interest rates would then have to be raised, which would have a serious impact on the steady growth now predicted for the housing market."

Ongoing problems for first-time buyers and the retail sector should not distract the MPC, says Peter Bolton King. "Timing a rate rise incorrectly risks sacrificing a sizeable medium to long term problem for the minor benefits of a short term gain."

The next Bank of England MPC meeting is set for Wednesday and Thursday next week. Their decision will be issued at midday Thursday.

http://www.themovechannel.com/News/2006/January/6b.asp

Comments please.

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This is worrying, an EA that sees both sides of the argument.

Although this restored my faith

"A hasty rate drop runs the risk of encouraging people to spend money they do not have"

Can't have the BOE doing that, what would the EA be left with then!

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Must be hurting.

FTB's and peple all the way up the chain are priced out.

NAEA and co brought on this situation.

Now the lack of FTB's is killing their businesses.

Tough.

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NAEA advises against rate cut?

I need to go and lie down.

EA's want sentiment to go bearish as it will mean higher volume of sales. This is more important to them than rising prices at this stage.

frugalista

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I may be wrong here but I would guess they are actually fearing/anticipating an interest rate increase.

It's an attempt to change the debate away from increase/decrease to 'we all know it is going down so let's just debate how fast it is going fall'.

It's the sort of questioning that is used in courts of law sometimes - the question is framed in such away that you can't deny an event happened/didn't happen but can only comment on the specifics of the event (real or imagined).

Not sure this is very clear <_<

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EA's want sentiment to go bearish as it will mean higher volume of sales. This is more important to them than rising prices at this stage.

frugalista

i dont think there can be any doubt in this.

there is little prospect of further sustained price increases and volumes are down 30% + on 2003/04.

the only way they can earn enough to kepe their jobs is volume increases.

they know that once the price sentiment is negative it will be a downward slide in both prices and volumes as people dont want to buy in a falling market.

i think the reality is that we will see interest rate increases in 2006 and 2007 .

oh and a hpc as well

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When ... WHEN ... are they going to get fed up carrying this debt bubble?

IMO this talk would be about time.

Edited by megaflop

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i dont think there can be any doubt in this.

there is little prospect of further sustained price increases and volumes are down 30% + on 2003/04.

the only way they can earn enough to kepe their jobs is volume increases.

they know that once the price sentiment is negative it will be a downward slide in both prices and volumes as people dont want to buy in a falling market.

i think the reality is that we will see interest rate increases in 2006 and 2007 .

oh and a hpc as well

The agents operate the most basic and simplistic business model, times are good make money, times bad don`t. Why they sit there twiddling their thumbs constantly amazes me. Passed two this morning, both part of two chains, one a franchise. There is no salesmanship involved in most IMHO, they coyld and should try harder th re-educate the vendor

http://firstrung.co.uk/articles.asp?pageid...&articlekey=686

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EA's want sentiment to go bearish as it will mean higher volume of sales. This is more important to them than rising prices at this stage.

frugalista

Yup! Volumes is where it is at.

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some EA's i believe aere taking the view now that a short timescale crash is preferrable to longterm stagnation.

better to make nothing for 2 years than a little for 10.

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OH please Mr. BoE don't throw me into the briar patch!

IMHO the market is doomed regardless of which way the BoE goes. Put interest rates up and the crash happens sooner rather than later. Drop rates and the pound tanks and the economy along with it bringing on a short sharp crash of a serious magnitude that will leave homeowners realing from the shock for a decade to come.

Alas, all bubbles pop--its what they do when they get old.

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If Tony wishes to retain any kind of positve legacy he needs to hand over to Gordon quickly. All of the indicators are pointing down (employment, GDP, house prices--albeit moderately if the VIs are believed, energy reserves, retail sector, car sales etc) and momentum is building. Tony has maybe a couple of months, maybe 5 or 6 at best to distance himself from the coming economic correction.

Will the 20 MPs who are threatening to desert the LibDems join Cameron and thus create fresh momentum for a Tory return to power? The next election will be timed just right with the HPC in full swing and the homeowners and those who bought into Gordon's economic miracle still hurting.

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Comments please.

It's a bit late. If only they made this astounding leap of logic in 2003.

Also,

Gordon Brown: "If it crashes, its the BOE's fault, not mine, ive been a fantastic chancellor, Now vote me in 10 Downing St sharpish!"

This is the year the money runs out

"I am sick of being told that Mr Brown has been an exceptionally prudent Chancellor, writes Tom Utley. He did one sensible thing, when he handed over control of interest rates to an independent committee of the Bank of England in 1997."

Edited by BuyingBear

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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