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Affordability gap widened

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Homes cost more than seven times income

Working people typically face house prices of more than seven times their annual earnings as affordability is increasingly stretched. The typical property cost 7.6 times average annual earnings of employees in England and Wales the OSN said. In 2007, the typical buyer faced paying 7.2 times their earnings on a property, but this was surpassed in 2015 (7.4 times) and again in 2016 (7.6 times). The official figures will make gloomy reading for potential first-time buyers whose wages have stagnated.

In Kensington and Chelsea, the typical property costs 38 times the average annual income of residents in the area. Buyers in Westminster had to pay 24 times typical earnings for the area last year, and it was 21 times multiple in Hammersmith and Fulham. BBC

 

What are the options for BoE after FED raised interest rates? And for how much longer can they hold on 0.25% base rate?

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32 minutes ago, rollover said:

 

What are the options for BoE after FED raised interest rates? And for how much longer can they hold on 0.25% base rate?

Until they are forced.

Every minute of negative interest rates is more money inflated off bank balance debts.

They will keep going until either external (£ sub/parity with dollar) or internal forces (inflation over 5%) push them to.

 

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2 hours ago, Fromage Frais said:

Until they are forced.

Every minute of negative interest rates is more money inflated off bank balance debts.

They will keep going until either external (£ sub/parity with dollar) or internal forces (inflation over 5%) push them to.

 

Have you forgotten we had inflation over 5% in 2011 when the rate remained 0.5% or is it different this time?

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New homes 'unaffordable for eight out of 10 locally'

Nearly eight out of 10 families across England are unable to afford newly built homes in their local area. Its research shows rising house prices hitting all parts of the country, not just London and the south-east. BBC

 

bar chart on housing affordability

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20 hours ago, Democorruptcy said:

Have you forgotten we had inflation over 5% in 2011 when the rate remained 0.5% or is it different this time?

Back then we where still in "disaster mode".  Whilst now bank support and rates are in disaster mode but everyone thinks this is normal now.

The signals now are conflicting house prices are much higher than then and one would assume that "seeing through" this inflation will not be so easy.

If everyone is lowering rates and their currencies you can "see though it" but if everyones are going up logic would suggest you would be seeing through to further inflation as the US interest rate gets much higher than ours and the  £ falls further.

 

Edited by Fromage Frais

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2 hours ago, Fromage Frais said:

Back then we where still in "disaster mode".  Whilst now bank support and rates are in disaster mode but everyone thinks this is normal now.

The signals now are conflicting house prices are much higher than then and one would assume that "seeing through" this inflation will not be so easy.

If everyone is lowering rates and their currencies you can "see though it" but if everyones are going up logic would suggest you would be seeing through to further inflation as the US interest rate gets much higher than ours and the  £ falls further.

 

We will have to see if reality continues to be suspended.

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20 hours ago, Fromage Frais said:

If everyone is lowering rates and their currencies you can "see though it" but if everyones are going up logic would suggest you would be seeing through to further inflation as the US interest rate gets much higher than ours and the  £ falls further.

But you can if you blame the falls of Sterling on Brexit. The earlier drop was a master stroke. I the eyes of the current stupid MSM that drop actually stopped further falls in Sterling. I've had people quote this to me :wacko:

No, rates stay down and we look through inflation. Remember a rise would increase mortgage payments and we can't possibly see that.

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The Government answer will be... a) More cheap money paid back over longer and longer time-frames so people can borrow enough to buy a home (b) You'll just have to rent and shop in pound shops.

Edited by Tempus

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They have no intentions of touching interest rates, probably for decades at least. With mass manipulation, the government and BoE can get the desired result, that is the result THEY want. The average person on the street doesn't feature in the desired result. I'm really surprised that the majority of plebs haven't worked this one out by now.

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