Tuesday, December 4, 2007

I think LL TSB is missing the point. The 2006/07 recovery was fueled by the credit conditions which will not repeat. Yes, it was different that time!

UK housing market will slow further in 2008

"This relatively low rate of interest will, in our view, mitigate the potential fall in house price inflation in 2008, even with the credit market turmoil in full swing. And this is a key reason for not panicking; there is ample room for monetary policy to respond to the coming slowdown." I would perhaps agree with this were not for the dominant role of speculative demand in the market, which will make the price swings much larger. At the end of the day the 3.5x salary price average needs to be restored

Posted by confused76 @ 08:13 AM (531 views)
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5 thoughts on “I think LL TSB is missing the point. The 2006/07 recovery was fueled by the credit conditions which will not repeat. Yes, it was different that time!

  • Is it true that confused76 is a transvestite from Northamptonshire?

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  • So it’s taking data from only the last five years to extrapolate a cycle? WTF. Cycles of happen over decades, over that period we have been in the boom, and we’re nearing the top!

    Interest rates are not set to keep HPI positive, morons!

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  • This is a classic example of not being able to see the wood for the trees – I can’t help thinking the writer is an earnest bod who’s just got his degree in economics, but has yet to get a grasp of the big picture…

    When the house price bubble began to inflate it was a tough beast, and took the financial crises of the late 90’s in it’s stride – even when it began to over-inflate, it was still tough enough to survive the consequences of the Sept 11th attacks in 2001.

    As it became more and more distended, it became obvious that a smaller and smaller pin was needed to burst it – but nothing sharp came it’s way – until late this summer.

    The deflation of the bubble has now begun, and there is no serious prospect of the process being arrested – indeed it is likely to steadily gather pace as the chain of economic consequences begins to unfold.

    House prices will be significantly lower by this time next year – at that point the lenders will probably be despairing of getting auction sales for repo’d flats, and may start letting them go to auction without reserve – so I’m guessing the spring of ’09 will see the market in fire sale mode, – and ripe for bargains..

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  • Yes, how do you know

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  • ”Yes, how do you know”

    The dress is cute, but the beard is a dead give-away.

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