Tuesday, Oct 13, 2009

Am I deranged?

Bloomberg: U.K. Housing Market Strengthens on Home Shortage, RICS Says

'The Bank of England says that rising asset prices may buoy the economy and encourage Britain’s recovery from recession.' I'm starting to seriously question my sanity here. How are inflated asset prices 'good for an economy'? How is huge amounts of cash being spent to service debt/mortages and not being spent or invested elsewhere 'good for the economy'?
I give up!

Posted by tyrellcorporation @ 09:46 AM (865 views)
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1. mark wadsworth said...

This is one of the finer propaganda coups of the Home-Owner-Ist Party.

Not only do they selflessly "protect The Hallowed Greenbelt" against rabbit hutch-sized houses for the Benefit Of Future Generations, they will nobly allow their home values to be ramped up for the Benefit Of The Economy.

So the priced out generation ought to be grateful to them. In exchange for having to take out eye-watering mortgages, the occasional vendor might just splurge a bit of the proceeds back into the real economy, whence some money might trickle back down to those who created all the wealth in the first place.

See also "Council tax pays for local services"; "House prices can only go up"; "In my day we saved up a decent deposit"; "Young people refuse to take responsibility" (Continued page 94)

Tuesday, October 13, 2009 10:03AM Report Comment

2. mark wadsworth said...

From the corresponding BBC re-hash of the same press release:

"Supply of good quality property remains limited, which has resulted in prices holding up," said Paul McSkimmings of Edward Watson Associates in Newcastle-upon-Tyne. "The volume of transactions continues to be hindered by limited availability of mortgages," he added."

Aren't those two factors opposites? Small number of properties on offer (which is not true anyway) = prices up; small amount of finance available (which is true) = prices down.

Tuesday, October 13, 2009 12:19PM Report Comment

3. nickb said...

we need to keep that greenbelt... ;-) food for when peak oil kicks in...

Tuesday, October 13, 2009 02:20PM Report Comment

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