Sunday, June 3, 2007

… they even mention us

Is housing close to the edge?

"MPC's job is to keep inflation - as measured by the CPI, which excludes mortgage payments - as near to the 2 per cent target as possible. The MPC did not try to prevent the house price boom by lifting rates higher, so hard-pressed homeowners should not expect the committee to ease rates if house prices fall. The rental income of many investment properties does not cover the mortgage, but landlords have been happy to make up the shortfall as long as rising property prices will net them a profit when they sell. But once prices start to falter, buy-to-let will become a lot less attractive."

Posted by confused76 @ 06:13 PM (531 views)
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6 thoughts on “… they even mention us

  • speculatorone says:

    I think market forces are starting to take hold of housing market. I hope this time around the BOE and GB won’t be able to prop up the market with their smoke and mirrors…

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  • Good sober reportage.

    Remember that current price levels can only be sustained for as long as the BTL brigade continue making a net increase of 10,000+ properties to their portfolios each month – replacing those who would buy if they were not priced out.

    With the stock market on a roll, interest rates only going one way, and the new rules on deposits; it would not surprise me if a significant number of BTLers considered this to be a good time to get out, and as many more decided not to buy additional properties.

    That’s all that’s needed to push the market over the edge now…

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  • Uncle Tom is right. If the housing market is so great, why do even the most optimistic city liars shit bricks every month at the time of the MPC meeting? Excuse the link between housing and shitting bricks.

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  • and FTBs will be nowhere to be seen …

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  • talking rot says:

    UT

    Where did you get that figure from please? (Prices can only be sustained if the BTL brigade continue making a net increase of 10,000+ properties to their portfolions each month!) Seems rather high but I’ve never looked into this issue.

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  • TR – Table MM6A from the CML is the easiest source of data, and indicates an annual growth rate of around 150k properties. CML data can be misleading, and often understates because they don’t collate data from the whole market – the actual figure is probably around 15,000 pm.

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