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Samuel Whiskers

Tipping Point In Sentiment

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I know that we have all been waiting for this to happen for a long time, but looking back at the last few days headlines I cannot but feel that we are now at the tipping point of sentiment in the housing market.

Judging from the numbers already defaulting on their mortgages it looks like the house of cards is very finely balanced indeed.

I think it is a bit like a dam - we only need a small pinhole to appear before the whole thing comes crashing down.

Where will that first pinhole appear?

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I think you may be right. A review of all the major papers online this morning shows nothing but panic, doom and gloom, terror and shrill warnings that its just beginning. Even the big accounbtancy firms are blowing the whistle now with warnings that we are just seeing the tip of a very big iceberg.

It is all a bit scary because there will be a nasty recession to go along with perhaps the biggest asset bubble bust of all time. Sentiment will take a huge hit with all the TV programs on debt plus the newspapers sounding the warning.

Today may be the day when HPI-MEW died. It will just take a few months for the corpse to rot.

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A review of all the major papers online this morning shows nothing but panic, doom and gloom, terror and shrill warnings that its just beginning.

Er, where?

Two stories regarding personal credit and this

And you forgot to mention the delay (could be never) in lenders passing the rate rises on to borrowers.

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Er, everywhere, look at the other threads and the print versions of the news. And it's immaterial whether the rises are passed onto borrowers - SENTIMENT is king.

Edited by Badger

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?Er, where

Two stories regarding personal credit and this

And you forgot to mention the delay (could be never) in lenders passing the rate rises on to borrowers.

Here are just a few:

Chavalier Times (The Sun) with largest readership in the nation:

http://www.thesun.co.uk/article/0,,2-2006360166,00.html

Financial Times

http://www.ft.com/cms/s/743bce2c-2396-11db...00779e2340.html

The Times

http://business.timesonline.co.uk/article/...2299508,00.html

Daily Mail

http://www.dailymail.co.uk/pages/live/arti...in_page_id=1770

Guardian

http://money.guardian.co.uk/creditanddebt/...1837871,00.html

Telegraph

http://www.telegraph.co.uk/news/main.jhtml.../05/nbust05.xml

ABCMoney

http://www.abcmoney.co.uk/news/0520062524.htm

The Independent

http://news.independent.co.uk/uk/this_brit...icle1214546.ece

Reuters

http://uk.news.yahoo.com/04082006/325/drow...ve-minutes.html

To name just a few.

Edited by Realistbear

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Er, where?

Two stories regarding personal credit and this

And you forgot to mention the delay (could be never) in lenders passing the rate rises on to borrowers.

Ha Ha! Libor has jumped, they've already started factoring in the rate hikes into their mortgage products, and will continue to do so!

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Er, where?

Two stories regarding personal credit and this

And you forgot to mention the delay (could be never) in lenders passing the rate rises on to borrowers.

What delay would that be then?

http://business.timesonline.co.uk/article/...2297402,00.html

August 03, 2006

Nine banks or building societies including Cheltenham & Gloucester and the West Bromwich have already increased their standard variable and discount rates by 0.25 per cent and the big five are expected to follow suit next week.

I expect they raised after a nice lunch.

Dames

Edited by Dames

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There certainly seems to be an air of panic in the press, they do what they can to sell papers, which means telling everyone houses are "soaring" following a rate cut and "diving" when a rate hike is in place. It's good to see so many bearish headlines, I don't think I've seen so many. At times HPC has had to scrape the barrell for bearish press, but not this week! I can just imagine the panic if rates go up again. That would really knock the stuffing out of property.

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What delay would that be then?

http://business.timesonline.co.uk/article/...2297402,00.html

August 03, 2006

I expect they raised after a nice lunch.

Dames

From that Times article you quote, I notice that they could not help their bullish comments as usual on housing & retail, with bold highlights. Muppet corporate c--k suckers that they are :rolleyes:

We'll see what this IR hike does to HPI and didn't I read somewhere the other day that retail was 5% down year on year ?

"This morning there were also further signs of a resurgent property market, with the Halifax reporting that house prices rose by 0.2 per cent in July after posting losses in the two previous months. The lender also increased its forecast for full-year price increases to 5 per cent from 3 per cent.

Earlier this week, Nationwide said house prices rose by 0.8 per cent in July from June. On a year-on-year basis, prices rose by 5.9 per cent, the biggest annual gain since April 2005.

Since the last official inflation figures there have been further hikes in domestic energy costs while world oil markets remain firm.

Recent data has also suggested strong retail sales and price rises on the high street after this year's summer sales offered fewer bargains than last year"

Edited by Saving For a Space Ship

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The Bulls can't use the news of June & July to try and suggest that everything is surging forwards still.

The rate rise happened in AUGUST and its not going to be until we see August and September economic stats, that we can start to see if the change in sentiment that is seemingly taking place now is taking hold of the economy in a material way.

AFP

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And you forgot to mention the delay (could be never) in lenders passing the rate rises on to borrowers.

The base rate rise means the banks cost have increased, as this is the rate that is used to control the money suppy the banks are obliged to follow.

See setting interest rates: "The Bank supplies the cash which the banking system as a whole needs to achieve balance by the end of each settlement day. Because the Bank is the final provider of cash to the system it can choose the interest rate at which it will provide these funds each day."

The aim of the BoE is to get the banks to increase their rates. If the banks didn't the BoE would simply issue another 25 basis point rise, and put more pressure on the banks. They have to respond -- the BoE is bigger than all of them. :D

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The tipping point will only come when people start to see their friends and relatives losing their homes. While there has been a lot of coverge in the papers this week it will all be forgotten about next week when the next big story comes along.

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Yes expect a raft of "Property is the best investment ever" stories next week along with a pinch of "Prices never go down" and a big fat helping of "With troubled times ahead property is the best place to keep your money safe"....

Call me a cynic but!

The pressure needs to be ratched up on the government though, they have stood back and allowed this mess to unfold, it's time they were held accountable.

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Yes expect a raft of "Property is the best investment ever" stories next week along with a pinch of "Prices never go down" and a big fat helping of "With troubled times ahead property is the best place to keep your money safe"....

Call me a cynic but!

The pressure needs to be ratched up on the government though, they have stood back and allowed this mess to unfold, it's time they were held accountable.

I can't see Gordon accepting any blame for anything as his Miracle Economy has been built on HPI-MEW. He promised no more boom & bust just boom. Trouble is, economies are cyclical and you can't have one without the other.

Edited by Realistbear

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This isn't the tipping point. This has only caught peoples attention, and most people it was bearly a blip on the radar. If a.025% rate rise is going to affect someone, they we're fubar'd anyway (the rate increase only sped up the obvious). Now if there is an second rate increase of .25% pushing the base rate to 5% - then this is when people will being to pay some attention. Ignore the press, they are trying to sell newspapaers.

I suspeoct the true tipping point could be after a 3rd consecutive rate increase.

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This isn't the tipping point. This has only caught peoples attention, and most people it was bearly a blip on the radar. If a.025% rate rise is going to affect someone, they we're fubar'd anyway (the rate increase only sped up the obvious). Now if there is an second rate increase of .25% pushing the base rate to 5% - then this is when people will being to pay some attention. Ignore the press, they are trying to sell newspapaers.

I suspeoct the true tipping point could be after a 3rd consecutive rate increase.

There's more bust than boom on your avatar, Tekken! :P

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This isn't the tipping point. This has only caught peoples attention, and most people it was bearly a blip on the radar. If a.025% rate rise is going to affect someone, they we're fubar'd anyway (the rate increase only sped up the obvious). Now if there is an second rate increase of .25% pushing the base rate to 5% - then this is when people will being to pay some attention. Ignore the press, they are trying to sell newspapaers.

I suspeoct the true tipping point could be after a 3rd consecutive rate increase.

Isn't .25% on an INTEREST ONLY mortgage going to cost you much more each month than if it were only a repayment?

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Isn't .25% on an INTEREST ONLY mortgage going to cost you much more each month than if it were only a repayment?

no same markup on the interest, repayment stays the same.

2nd rise will be first time it hit 5% in a looooooong time. 5.25 and you will see people bricking themselves. i'm hoping for 6/7% in the next 2 years.

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no same markup on the interest, repayment stays the same.

2nd rise will be first time it hit 5% in a looooooong time. 5.25 and you will see people bricking themselves. i'm hoping for 6/7% in the next 2 years.

What advantage will 6/7% be to you? Why will it be good for you?

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What advantage will 6/7% be to you? Why will it be good for you?

More interest on savings, higher pound, lower house prices. Good thing all round, really.

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  • 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%



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