Wednesday, February 14, 2018

England & Wales -0.4%, London -4.3% YoY

London leads house price plunge into ‘the red zone’ as market records worst performance since financial crisis

In answer to Frizzers' post below ... the capital heads a year on year slide, now reflected in E&W figures too.

Posted by nickb @ 10:23 AM (3 views)
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4 thoughts on “England & Wales -0.4%, London -4.3% YoY

  • “Mortgage regulation is designed that people don’t overstretch themselves.” …

    Given that most bank credit expansion is based on mortgage loans I think its more accurate to say that the regulations are there to restrict lending instead of interest rate rises.

    I do wonder though if we are out of the deflationary woods yet, because when Carney was complaining about RPI I felt it was unusual to go public over, and that he was doing so because the payments that are set by RPI, mechanically feed into -all- the inflation measurements i.e. RPI is self-fulfilling because it sets (influences) prices which puts him in the hot spot for not raising interest rates to cool things down, or worse sets them too high.

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  • Land Registry / ONS have prices rising over 5%.

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  • ST – factors pushing inflation (US led) include Energy Prices, wage inflation, synchronised global growth and a weak dollar. In addition QE was predicted to fuel inflation at some point they just didn’t know when.

    On the lending front (albeit they are a small lender)

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  • I don’t believe for a moment that the BOE will raise interest rates unless there is a complete crises, their only priority is to keep asset prices high because that is the only thing bringing “investment” into the UK to balance the payments, and underlying a large proportion of peoples “wealth”. People waiting for these higher interest rates are going to be sorely disappointed, its all talk from the BOE as they want to avoid inflation while preserving the housing market at all costs.

    Eventually they will have to choose, they will choose the housing market though as they have in the past when inflation went much higher.

    Things will only get interesting if something happens that forces their hand, a run on the pound or some other shock. If you want to bet against the BOE and the housing market buy precious metals, or stocks in companies that export, both will fare better as they both benefit from a weak pound which is where the BOE’s leads to today.

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