8 thoughts on “Surprising bearish news from the MSM”
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general congreve says:
Bit hasty in my rush to post, here’s the scoop (even has liar loans in there!):
Why will house prices fall?
In the words of former US President Bill Clinton in his 1992 election campaign “It’s the economy, stupid!”
For sure, house prices are going to struggle, thanks to this toxic cocktail of seven ingredients:
* the continuing squeeze on household incomes caused by low wage increases and high inflation;
* cuts in government spending, leading to higher taxes and lower benefits;
* higher unemployment, fuelled by the loss of 500,000 public-sector jobs;
* higher mortgage rates as the Bank of England tightens monetary policy by raising its base rate;
* the end of the huge liquidity support provided to lenders by the Bank of England’s Special Liquidity Scheme and Credit Guarantee Scheme. From April onwards, this will drain roughly £250 billion from banks’ reserves;
* mortgage lending for new purchases running at less than half peak levels; and
* the end of ‘mad mortgages’, such as self-certified ‘liar loans’ and 100%+ home loans.
More or less goes on to say the supply squeeze pressure for maintaining high prices is nonsense.
miken says:
Look into my eyes, my eyes, not around my eyes, into my eyes. House price falls are a good thing!
“NIESR predicts real house prices will fall by an average of 1.5% a year. “. This is clearly a joke. The falls are going to be way more than that!
The way forward is to take the asking price. Reduce by at least 30%. Then make an offer. Simples!
enuii says:
Strangely the majority of properties in my neck of the woods that have sold in the last year have belonged to dead folks or those moving into retirement accomodation or care homes where they need a sale and have priced or sold accordingly. Everything else, especially anything over 250K is hardly shifting.
rantnrave says:
How mainstream is this article, because it’s bloomin good (compared to a lot of other tripe out there – any one see the Daily Express’ front page today?).
alan says:
@GC,
I think some of the reasons are potentially suspect:
1. Interest rates can be kept “on hold” by determined members of the MPC. look at their performance to date….
2. Inflation depends on how its measured. Its been a speciality project for governments in the past to keep it as low as possible in order to keep wage claims down.
3. The current Liquidity Support methodology is nearing its end, and a new one could replace it.
If I were you I’d buy something which will keep its value. The VIs are telling everyone its bricks and mortar… if precious metals drop considerably, then it may be worth buying in (although not as good as buying in 5 years back). But maybe I don’t need to tell you that 🙂
miken says:
enuiii, sometimes I think I might be nearing death before I actually plunge into the housing market! I’ve been waiting for 11+ years now. Unfortunately most of those years were very ‘wasteful’ years in terms of taxpayers money due to relaxed government policies. I thought the latest government might clamp down harder and sooner but they bottled it and instead went for a strategy that might keep them in power for 8-10 years instead. So now we are following a very slow downturn that will run for many years and will really harm the younger generation and this in turn will impact the economy severely.
markj69 str05 says:
miken, do not give up hope. There are many people waiting, 6yrs myself(After selling up in 05). I too thought that a new gov’t would act on the situation and pop the bubble. But that was before i realised that the gov’t aren’t controlling the economy, the self proclaimed elite financiers (SPEF’s) are. I’m now wondering how much pain the masses will endure before revolting. Although it will only ever be directed at the Gov’t. BOE and other banks will no doubt pass unharmed.
I’m also wondering why the property market and bank share holders, are being protected so. Perhaps there is just too much at stake? Perhaps there are too many ‘SPEF’s with too much too loose? But they still have enough dosh or power to pull the strings of MK(BOE) and the like. Gov’t are doing what they are told to do, when it comes to influencing the property sector, low IR and QE. Question is, at what point does it become less viable to keep the support up? What’s really going to trigger the change? Perhaps when their risks are significantly reduced, and no doubt when there are more profits to be made from letting it pop.
Sh1t on the little guys, suck us dry, putting the proles back in their places. Because ‘we’ve never had it so good!’
Jesse 320 says:
I’m sick and tired of the BOE and government looking after people who have borrowed too much, I knew it was wrong and didnt buy new cars and have expensive foreign holidays. Yet my savings are being made to suffer by the BOE not doing the job they are supposed to do control inflation, just to protect the overspenders and people who lived above there own means with the champagne lifestyle with a lemonade income. If people can’t afford there mortgage if interest rates go as high as lets say a whole 1%, I think they need to reflect on there own living standards and downsize, and the government should start looking after the people who have done the right thing, I only earn £25,000 a year I have a wife who doesn’t work and 2 kids and guess what i’m not in debt and nobody has ever left me or my wife a penny. Government and BOE take note House prices are too high and interest rates are too low get this right and we can move on.