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

Pension Crisis And House Prices

Recommended Posts

Hi long long time lurker here in need of the assistance of the financially literate board members. A thread on Motley fool pension board was discussing the fall in gilt yields wiping millions of the value of pension funds, this article in the FT suggests that this could impact on the housing market.

http://news.ft.com/cms/s/f404b3e0-8958-11d...00779e2340.html

Quote:Ben Broadbent, economist at Goldman Sachs, says that super-low bond yields may over time cause the misallocation of capital - hurting small companies relative to large ones - and threaten economic stability. "The market favours investment in large companies, which have the access to securities such as bonds and equities, but the smaller companies grow faster. Pushing resour-ces into big, mature companies could, at the margin, slow down the growth of the economy."

He points out the extremely low level of bond yields threatens to push up other asset prices, including house prices. "Given the fall in yields, there is a big incentive to offer long-term mortgages, pushing the average rate of mortages lower, and subsequently pushing up house prices further."

I have no knowledge of stock market, gilts, bonds etc and would welcome the boards assessment and hopefully dismissal of this statement.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 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%



×
×
  • Create New...

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.