Tuesday, July 19, 2011

An alternative view

Reasons to be cheerful about the UK housing market part one,two but sadly not three!

Shaun Richards, who describes himself as a 'freelance' economist looks at the prospects for the UK housing market. By the way, Richards is no bear, in fact he seems to think a property market resurgence would be a good thing. After noting recent poor performance, Richards suggests that low gilt yields and lender forebearance are bullish for the UK property market but the Bank of England has not been accomodative enough to ensure that the banks will have sufficient credit to meet mortgage demand. This is not a typical HPC fare but I suggest that it's worth a read to get an alternative view about the state of the housing market.

Posted by quiet guy @ 05:48 PM (1240 views)
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One thought on “An alternative view

  • Having read the article and the accompanying comments I tend to disagree with the summary above. If we include both it looks as though the article is pointing out that there will be house price falls because the reasons to be cheerful will be more than offset by a weakening economy and lack of mortgage finance.

    However he worries that the accelerated withdrawal of the Special Liquidity Scheme by the Bank of England might lead to a mortgage supply crunch and hence much heavier price falls and perhaps a rout which would impact on the wider economy too. I have to say that 54 billion pounds in only 3 months seemed a lot to me.

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