Friday, November 16, 2007

Please cut rates pleads all banks and building socities.

House prices 'face 2008 slowdown'

House price growth is set to stall next year as the market witnesses a "significant slowdown", building society Nationwide has warned. There is no evidence that house price growth has completely stopped and if the BoE starts cutting rates it is 2005 all over again! SH*T!!!!

Posted by david20040_0 @ 11:16 AM (2169 views)
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30 thoughts on “Please cut rates pleads all banks and building socities.

  • Comedy post of the day… nice one!

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  • It is not a comedy post.

    If Nationwide states thatb house price rises will drop to 0% they are basically pleading with the BoE to cut rates again and it’s 2005 all over again.

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  • Sold My Soul To The Never Never Never says:

    david2004-0

    The interbank lending rate shot up last night, Standard Life is increasing its SVR from Monday and all the Banking shares seem to haemorrhaging at the moment. So if the BoE decide to reduce interest rates there is a good chance it won’t be passed on.

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  • Cut in rates unlikely to be passed on by banks, so I wouldn’t be worried. Money will not be as free and easy as it was in 2005 and prices will be on the way down by then anyway.

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  • From a financial point of view, interest rate cuts should be unlikely: oil up, food up, chinese imports up, £ down (or will be soon). From a political point of view, things may well be very, very different.

    The real-world always, but eventually, catches up with the unreal political view.

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  • The BOE can cut rates all they like. The key problems are an end to easy credit and real inflation that has to be paid for.

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  • Doesn’t bother me either way David, as I have heavily sold GBP (mostly against CHF and JPY) using oanda.com

    And I also think that sentiment is king in the housing market – and given that these reports are spread all over the news, and the amount of negative stories now far outweighs the positive, I don’t even think lowering interest rates will save the housing market.

    I am actually very happy in thinking that I will make a killing on the currency markets and house prices will crash as well. I think 2008 will be one of my better years.

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  • The only deja vu coming our way is from the early 1990’s

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  • Also David, did you notice that interbank rates are at their highest for years today?

    It won’t make the blindest bit of difference if the BoE cut rates. And that has been explained to you before, so please pay more attention in future!!

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  • Read between the lines “significant slowdown”. I my language that means a price drop of 15%+ . going from annual increase of +9% to -15% do the maths. I am looking forward to the new year.

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  • david20040 – they can’t just repeat 2005 – debt levels have risen since then, there was no credit crunch of this magnitude and the downward spiral has already started. Notice the language in which these bulletins are couched. 0% is not a ‘slowdown’, it’s a stop, or a reverse if they’re talking of 0% nominal values. Then we have Fionnuala (again) saying that certain factors “appear likely” to reduce activity. This illustrates the mincing language to which these people have become accustomed. These facors “are likely” would have done the job – “appear likely” just adds an unnecessary second qualifier – it’s not sure to be likely, it just appears to be likely. Note too that she talks of a reduction in “activity”, not in prices. As for BTL, its contribution to PRICE GROWTH will be “limited”. And the beeb just dutifully reports this tripe. Fionnuala, what do you say to the DTZ chairman, who told the RICS conference the other day that actual deals are taking place at 10% below June levels.

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  • Hehehe, has anyone else noticed that bullish vi’s are now trying ‘damage limitation’ articles instead of outright spin… They are pi$$ing against the wind… I am now so relaxed about the whole thing and its inevitability. The Government can do what they like at this stage and it wont make one iota of difference. Sentiment has left the market, the easy credit is gone, the music has stopped and there is tumbleweed blowing through my local ea offices (they are all getting pretty good at spider solitaire though)… Now the icing on the cake would be when I see one of them in particular driving a Skoda instead of his leased beemer,, smarmy little [email protected]

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  • george monsoon says:

    absolutely, cutting rates will have an even more negative effect.
    Inflation will continue to spiral and the credit crunch will tighten its bite on everyone.
    hard times ahead for all of us.. except the clever clogs who sold his currency for Yen.

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  • cutting boe rates will mean nothing: mortgage rates are going up today even with constant boe rates… think about it…

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  • planning4acrash says:

    The main factor will be capital gains tax going down to 18% in the Spring which will make the market more fluid and sentiment will really hold sway, and interbank loans and lending criteria will defo overtake base rate as a factor. BOE lost control in 2005 and can only regain it by bringing base rate up to interbank rate levels for a decent period IMHO.

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  • The more i read of David the more i KNOW he is Trevor Bayliss in disguise. He is definitely getting everyone “at it”.

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  • Economies ‘grow’, businesses ‘grow’ – house price ‘growth is inflation not growth. It’s a sign of how brainwashed the sheeple are that this inflation is tolerated like it is

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  • The market has been quietly filling up with unsold properties – the ‘must sell by Christmas’ factor is now likely to push down prices quite severely, so negative HPI could be with us by the spring..

    ..that’s when the BTLers discover that in truth, they mostly ain’t in it ‘for the long term’

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  • Uncle Tom

    My sentiments precisely! I have just seen this lunchtime a sh*t load of BTL ‘lifestyle’ apartments hit my local estate agents windows (Woking), can’t be long now………….

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  • Comments here are probably right: the Bank can’t do the interest rate trick again – inflation,etc, and anyway there is Libor, which might not follow so closely.
    However, that doesn’t mean they won’t, given the complacency of the Govt. and Bank over the last decade. But if they are foolish enough to do so, it just means a bigger crash later. No doubt most of us here would prefer it to happen now.

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  • @ uncle tom – agreed

    the fast buck stops here for BTLers, property ‘developers’ and speculative builders who will have to sell even when regular ‘mortgaged-within-their-means’ homeowners are able to sit tight

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  • Rentinginthesouth says:

    Hmmm, just thinking about what p4c said..
    If you take the avg house price in UK £230,474
    40% capital gains = £65,850… payable
    18% capital gains next spring.. = £35,158 payable..
    which means a £30k saving for waiting….

    If I was a BTLer.. I would certainly be waiting to sell next April to collect my £30k… unless of course the market started dropping significantly…

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  • Might be a good idea to write to your local MP saying how stupid it was to hold IRs down for so long (people getting in debt over their heads, FTBs priced out, how your dog could see this coming etc) and how it would be even more stupid to cut them now. My local MP is LibDem so might like some ammo to throw at Liebour. Come to think of it, is it just me or are the opposition parties being abnormally quiet when there’s so much they could say?

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  • Look guys! When will you realsie that David2004 is one of the moderators trying to keep the site bristling……and/ or Wrongmove from the forum….. He is an undoubted troll. Trolls get a lot of airplay by positioning themselves as having a form of aspergers

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  • @Letthemfall

    “if they are foolish enough to do so, it just means a bigger crash later.”

    That’s a bit too insouciant for my liking. I think that the coming HPC will be a symptom of a wider economic crisis that will touch virtually everybody in the country. Prudent savers will be hurt as well as overstretched speculators. We need to start paying off debts and defending our currency now to reduce the pain later. During the last decade of easy money, instead of saving and investing in productive capacity and infrastructure we have borrowed to the hilt to create a bubble in non-productive assets. I find this very worrying. Labour are terrified that the public will come to understand what a mess we’re in before the next election hence they are not addressing urgent economic problems.

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  • Renting And Praying says:

    Interesting comment about the BTL’s delaying selling until April to take advantage of more favourable CGT rules. This overlooks the fact that in many areas, to sell in April, the owner would need to have the property on the market now. If there is to be a rush to the exits, I think that it will happen now rather than later.

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  • the northerner living in oz says:

    8. wdbeast said…

    The only deja vu coming our way is from the early 1990’s

    I agree only this time it will not be a mild correction
    It will take a while to gather up speed.

    The only growing industry over the next few years will Debt collection & Debt consuling services

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  • Ihopeitgoeswithabang says:

    If you are a BTLr you probably have tenants already in. So April 2008 is probably when u wud be sellling if you were thinking about it now.
    So what if property prices goto to 0% inflation. Which in itself is a stupid statement from the Nationwide.
    A 0.5 pc cut would make no difference to the situation now.

    Everybody in this country knows that house prices are too high and not realistic! So why on earth is is soooo unacceptable that they drop?
    It is just the free market correcting itself.

    There is no way out. Except down of course.

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  • And lawyers Oz… Thanks…

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  • There seems to be selective reporting of BOE policy.Bloomberg just report BOE cutting interest rates next year.They forget to mention that the rates will only be cut marginally ,in order to compensate for the global slowdown.The bank does not want to reflate the economy or house prices they are just trying to make the slow down orderly,and not a crash leading to a recession and/or more bank failures.
    Please read the report on the BOE web site,and let me know if I am wrong

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