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Ash4781

Uk Housing Hit By Credit Crunch, Boe Official Says

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http://www.guardian.co.uk/feedarticle?id=7398169

CHELMSFORD, England, March 19 (Reuters) - The credit crisis is making it more difficult for Britons to buy homes and affordability is unlikely to improve even if house prices fall this year, Bank of England policy-maker Kate Barker said on Wednesday.

House price growth in Britain has cooled markedly in recent months as the credit crunch hurts the ability of banks to get hold of cheap cash and as affordability constraints price out first-time buyers in the wake of a cooling economy.

Mortgage approvals have fallen to their lowest in more then 10 years.

"Mortgages, particularly for first-time buyers, have become more difficult to get as a result of the credit crunch," Barker said at a housing and planning event in eastern England.

Most analysts expect the once-red hot housing market -- prices have trebled in the past decade -- to weaken considerably this year, but higher mortgage rates and weaker consumer spending power may still make life difficult for buyers.

"We may see prices adjust downwards but there is no clear evidence that affordability will improve," Barker said.

However, she noted the total mortgage burden for existing homeowners was still below the peak of the 1990s and said sharp rises in house prices had reflected a greater ability to pay rather than decreased affordability. (Reporting by Christina Fincher; Writing by Matt Falloon; Editing by Frank McGurty)

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Its quite amazing when house prices are falling they are playing on the FTB card, when they were rising nobody gave a hoot about the FTB and was blowing the BTL horn. Its quite a reversal. It was BTL and Cheap Credit that has ramped up the housing market for so long . Now BTL is out of the equation and with the double whammy the CREDIT CRUNCH, not to mention the third whammy the forth coming RECESSION its a huge drop down to get a sniff of a FTB buyer now.

Lots more whammys to come :lol::lol::lol::lol:

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she noted the total mortgage burden for existing homeowners was still below the peak of the 1990s '

.............................for the time being..

................................and presumably higher than at any other time she might have picked for comparison.

p-o-p

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she noted the total mortgage burden for existing homeowners was still below the peak of the 1990s '

Assuming that the claim isn't an outright lie, I wonder how she's measuring the burden?

In 1993, the total debt was about £400 billion; It's now about £1,400 billion... there are about the same number of mortgagees, I'd have thought.

I love this bit of wording too: "and said sharp rises in house prices had reflected a greater ability to pay rather than decreased affordability." If this appears in the in-print Guardian, maybe we should write a HPC letter - and see if we can get it printed?

That's what would be called Fed-speak in the USA. The word "pay" is extremely ambiguous. The naive reader might assume it means the ability to repay mortgage debt... but it doesn't say that. It says that the rise in house prices reflected a greater ability to pay them... i.e. the credit bubble lending any amount to anyone.

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  • 295 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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