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TheCountOfNowhere

Bank of England finally admit their role in the broken housing market

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https://www.thetimes.co.uk/article/bank-of-england-finally-admit-their-role-in-the-broken-housing-market-s0sbxqjh3

“We find that the rise in real house prices since 2000 can be explained almost entirely by lower interest rates,” the authors write. “Increasing scarcity of housing has played a negligible role.”

 

Anyone feeling vindicated? 

The question is.... What next. 

Prices are extreme is many parts of the country. 

Carney is leaving. 

 

Thinking of buying?  Might as well give it 18 months now. 

Edited by TheCountOfNowhere

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Bank of England finally admit the job is done and they have off-loaded all the dodgy QE money onto the public in the form of mortgages and can now do what the **** they like with interest rates/property prices.

Enjoy your sentences mortgage prisoners, they are going to be long ones.

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Supply and demand.... Innit

 

"We have a surplus of 1.1 million homes now, he estimates" 

 

This baby is going down. 

 

My favourite... "But not a bubble, even though house prices are now eight times average incomes, compared with 4.5 times in the 1990s". 

 

What about in London where prices are up to 15x? 

Edited by TheCountOfNowhere

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4 minutes ago, TheCountOfNowhere said:

Supply and demand.... Innit

 

"We have a surplus of 1.1 million homes now, he estimates" 

 

This baby is going down. 

I wish I could find them near me...folk are still competing for housing. There is absolutely not excess supply. 

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8 minutes ago, Wayward said:

I wish I could find them near me...folk are still competing for housing. There is absolutely not excess supply. 

The men with all the facts disagree. 

 

You just can't afford one of the surplus house 😂😂😂

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26 minutes ago, TheCountOfNowhere said:

Supply and demand.... Innit

 

"We have a surplus of 1.1 million homes now, he estimates" 

 

This baby is going down. 

 

My favourite... "But not a bubble, even though house prices are now eight times average incomes, compared with 4.5 times in the 1990s". 

 

What about in London where prices are up to 15x? 

A million surplus homes?  If there were a million more homes for sale than buyers prices would crash like a stone.

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3 minutes ago, iamnumerate said:

A million surplus homes?  If there were a million more homes for sale than buyers prices would crash like a stone.

... But as the Boe are pointing out... The price is related to the interest rate, the price and availability of debt... Not supply and demand. 

 

My conclusion from this report is, the banks are now able to withstand lower prices and higher mortgage rates. 

 

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12 minutes ago, TheCountOfNowhere said:

But as the Boe are pointing out... The price is related to the interest rate, the price and availability of debt... Not supply and demand. 

 

My conclusion from this report is, the banks are now able to withstand lower prices and higher mortgage rates.

Let's see what happens with rates I would be very surprised if they go up to the levels they used to be at - business likes low rates. 

51 minutes ago, TheCountOfNowhere said:

Anyone feeling vindicated? 

The question is.... What next. 

Prices are extreme is many parts of the country. 

Carney is leaving. 

 

Thinking of buying?  Might as well give it 18 months now. 

In a way it does not matter as the saying is it is what is is - being right does not mean it is easier to by a house and not pay huge rents.

43 minutes ago, Wayward said:

I wish I could find them near me...folk are still competing for housing. There is absolutely not excess supply. 

Same heer

22 minutes ago, iamnumerate said:

A million surplus homes?  If there were a million more homes for sale than buyers prices would crash like a stone.

Yes

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54 minutes ago, TheCountOfNowhere said:

https://www.thetimes.co.uk/article/bank-of-england-finally-admit-their-role-in-the-broken-housing-market-s0sbxqjh3

“We find that the rise in real house prices since 2000 can be explained almost entirely by lower interest rates,” the authors write. “Increasing scarcity of housing has played a negligible role.”

 

Anyone feeling vindicated? 

The question is.... What next. 

Prices are extreme is many parts of the country. 

Carney is leaving. 

 

Thinking of buying?  Might as well give it 18 months now. 

Yes it does make me feel vindicated, i have had the odd argument where I have tried to explain that it is the supply of credit and not the supply of houses that has been setting the price of housing. Problem is people are so brain washed that even a full blown apology on the telly by the men in suits will not reset that belief.

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4 minutes ago, mallish said:

SOME business likes low rates. 

 

2 minutes ago, LetsBuild said:

it is the supply of credit and not the supply of houses that has been setting the price of housing

I have been saying this for years too. It's quite nice when you explain it to someone and they actually get it.

29 minutes ago, iamnumerate said:

If there were a million more homes for sale than buyers prices would crash like a stone.

We've had this discussion before, but the homes can be surplus without being on the market.

Yes, if a million homes were suddenly put up for sale, it would likely lead to a fall in prices. So what? It would simply be a transfer of assets from the debtors to creditors.

 

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32 minutes ago, Locke said:

I have been saying this for years too. It's quite nice when you explain it to someone and they actually get it.

As I said to a friend recently, if banks lent every home buyer a million pounds and one times their salary, how long do you think the average house price would stay below a million pounds?

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2 hours ago, Wayward said:

I wish I could find them near me...folk are still competing for housing. There is absolutely not excess supply. 

Plenty of excess housing/empty furnished housing.....not available for sale.;)

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1 hour ago, LetsBuild said:

Yes it does make me feel vindicated, i have had the odd argument where I have tried to explain that it is the supply of credit and not the supply of houses that has been setting the price of housing. Problem is people are so brain washed that even a full blown apology on the telly by the men in suits will not reset that belief.

If you believe that, why have an online name of 'LetsBuild'? You think house prices are not related to actual demand vs supply.

If you offer free £1 million loans to every buyer, of course prices will go up by £1 million, but demand vs supply will be unchanged. The balance of affordability/unaffordability will be unchanged. That is controlled by the number of buyers vs supply of suitable houses for sale.

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23 minutes ago, onlooker said:

If you believe that, why have an online name of 'LetsBuild'? You think house prices are not related to actual demand vs supply.

If you offer free £1 million loans to every buyer, of course prices will go up by £1 million, but demand vs supply will be unchanged. The balance of affordability/unaffordability will be unchanged. That is controlled by the number of buyers vs supply of suitable houses for sale.

Who is the Boe agreeing with... Ye or Me? 

Now that's sorted, the Big question is... What happens now. 

 

The cat is out the bag, deliberately id wager, that says to me one thing.... 

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3 hours ago, TheCountOfNowhere said:

 

Anyone feeling vindicated? 

 

 

not in the slightest - it was going to end one day, but the damage is now done, much of the transfer of wealth is irreversible now. Lives have been ruined in order to buy the 2005, (attempted 2010), 2015 and 2017 elections.

 

Quote

Thinking of buying?  Might as well give it 18 months now. 

only 18 months? I'd say 18 months at the bottom end, 18 years at the top end of expectations.....

Edited by Si1

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16 minutes ago, TheCountOfNowhere said:

it could be a play to keep interest rates down - before - we can drop IRs as much as we like they are not responsible for inequality. After - oh no house prices are set by interest rates we can't raise them now.

Watch what they do.

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15 minutes ago, TheCountOfNowhere said:

Now that they have recognised that they are the main cause... Why would they want to be blamed for the crash? They produced the boom, we hate it... but for some people it meant becoming rich. Going from rich to poor (or deeply broke, to be more precise) is a really difficult process mentally.

I personally don’t care about them or anyone who thought that buying at more than x6 average wage was a good idea (because they always go up innit?), but the BOE or politicians don’t think the same I am afraid....

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2 minutes ago, Burbujista said:

Now that they have recognised that they are the main cause... Why would they want to be blamed for the crash? They produced the boom, we hate it... but for some people it meant becoming rich. Going from rich to poor (or deeply broke, to be more precise) is a really difficult process mentally.

I personally don’t care about them or anyone who thought that buying at more than x6 average wage was a good idea (because they always go up innit?), but the BOE or politicians don’t think the same I am afraid....

That's a fair question. 

 

The only answer I can see is the bank bail out is over. The banks are stable. The banks need a functioning market to lend into. The banks need better margins. The banks can collect on their free help to buy hand outs. The banks need the establishment parties in power. 

 

The banks, the banks, the banks.... 

 

It's always been about the banks. 

 

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Ooooh:

"Dame Colette Bowe, an incoming member of the Bank’s financial policy committee, calls housing “a social issue” and has questioned whether the commitee is getting its approach wrong. The Bank’s new analysis may be a good place for her to start."

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1 minute ago, TheCountOfNowhere said:

That's a fair question. 

 

The only answer I can see is the bank bail out is over. The banks are stable. The banks need a functioning market to lend into. The banks need better margins. The banks can collect on their free help to buy hand outs. The banks need the establishment parties in power. 

 

The banks, the banks, the banks.... 

 

It's always been about the banks. 

 

Just a little point. Banks love high interest rates (as business), but bankers (business people) don’t. That is the problem. They destroyed banks by lowering interest rates, making their model unsustainable. Then they bailed them out to allow bankers to get bonuses and keep receiving their wages even if the system is ******ed. They kept making their balance sheets liquid with QE and making investments good by pushing prices up. The banking system looks good on paper, and bankers have gotten extremely rich in the process.

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7 minutes ago, Burbujista said:

Just a little point. Banks love high interest rates (as business), but bankers (business people) don’t. That is the problem. They destroyed banks by lowering interest rates, making their model unsustainable. Then they bailed them out to allow bankers to get bonuses and keep receiving their wages even if the system is ******ed. They kept making their balance sheets liquid with QE and making investments good by pushing prices up. The banking system looks good on paper, and bankers have gotten extremely rich in the process.

There is a further point to be made that the parasite doesn't want to kill the host, in the long run.

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  • 277 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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