Saturday, Mar 09, 2019

Was the any chance of a House Price Crash killed by QE?

BBC: Was the millennial dream killed by QE?

An article marking the tenth anniversary of the start of Quantative Easing.
Personally I feel that the Banking Crisis led to the recession that never happened.
The recession in 90s was far more noticeable to me.
I wonder if they will ever expect the £435 Billion to be paid back ?

Posted by tenyearstogetmymoneyback @ 10:33 PM (1303 views)
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1. stillthinking said...

yes, along with annuities.inflation is the hidden tax. its appalling really, to think that people have spent the last decade with crippled annuities, or people who have borrowed 100s of 1000s more than they needed for a house. and not only has it not worked, but there is a silence across the land nobody even knows what happened.
saving in sterling is a mugs game. you can see powell is on a hair trigger tightening too fast because he knows in the case of the usa prices would go through the roof to sop up the money. the italians are starting to see they own the game and the ecb and demanding extra printed funds, and our own mr.carney.. is silent.

Sunday, March 10, 2019 12:20PM Report Comment

2. a saver said...

Yes stillthinking it is appalling. A large part of the population has been effectively forced to heavily subsidise the rest via low IRs, HTB etc and the young having to borrow ridiculous sums to own a home and therefore relying on continued low IRs. Don't know what to think re the likelihood of continuing HPC, have noticed dozens of price reductions in Eastbourne and Brighton recently and not just smaller ex-BTL properties either, with estate agents blaming Brexit uncertainty. In Dundee and St Andrews there seems to be a dire shortage of properties for sale, with fierce competition for anything nice at all. For Sale signs have got rarer every year. My mum's house just went for 8k over valuation. Maybe the BTL offload has been delayed up here?

Sunday, March 10, 2019 04:43PM Report Comment

3. taffee said...

The problem is that we have never been in this position in history so no one knows the consequences .All well followed commentators seem to agree there will be a day of reckoning and it will be bad

Prices being reduced here and couple of building sites appear mothballed

Shortage of property for sale stopping prices fall

Don't forget the elephant in the room is there is not a shortage of property in the UK...its in the wrong hands

Monday, March 11, 2019 05:29AM Report Comment

4. mombers said...

@3 'building sites appear mothballed' - it's perverse that it is so cheap to simply stop being economically productive and sit and wait for everyone else to push prices back up. Without some sort of holding cost for land, it's all too easy to leech off the community. There's an abandoned £1m+ house near me, the owner can't be bothered to do anything with it. It's made him/her more than the average salary every year without them lifting a finger and is blighting the neighbourhood. Double council tax only kicks in after 2 years neglect, IMHO as soon as the windows are boarded up and a chain is one the door it should be close to 100% of site value. Squatting in a clearly abandoned building should return to being a civil matter rather than criminal, would sharpen minds further.

Monday, March 11, 2019 08:06AM Report Comment

5. taffee said...

@4 Its interesting that more people rush to sell property and shares when prices start really falling

Which in turn feeds on itself....

Monday, March 11, 2019 08:56AM Report Comment

6. taffee said...

In the dotcom boom one of the reasons for the boom was the lack of Sellers right to the top

Followed by panic selling on the way down!

Monday, March 11, 2019 08:58AM Report Comment

7. stillthinking said...

everybody wants to get out or get in asap. so its very easy to compensate for the lack of spending, oh the general populace isn't spending = deflationary crunch ( not price realignment as others would see it), so we can print and spend. because even though others have the money to spend they are not.
qe is hidden by a collapse in the velocity of money. but when this picks up... watch out. in the usa it would mean prices going to 10x the current level. powell must be bricking himself. its why central banks -have- to be on the ball to curtail things before they get out of hand, because as soon as raising interest rates makes the general debts of the populace unpayable then game over.

at the same time, its easier to just see that the real value of sterling falls at about 7% compounding every year, and to see that UK house prices are exactly the same as they were in the 1970s (in gold) its just that inflation hasn't come into wages yet. you may also ponder on this most cynical of thinking by Thatcher's lawson, which was that unemployment in the north of england was a price worth paying to control inflation. Its all so managed and unfree market. then you get corbyn

Monday, March 11, 2019 12:14PM Report Comment

8. tenyearstogetmymoneyback said...

Good to see the site hasn't completely gone to sleep.

I wonder if equity release is related to QE. The belief that house prices will never drop certainly is.
Personally I think Equity Release is the next scandal like PPI or Endowment Mortgages waiting to happen.
The adverts really wind me up. When did equity Release start and where is all the money for it coming from ?

I know quite a few people who have "downsized" and in every case it was to get a property more suitable for their old age.
I don't think any of them actually made any significant money from doing so.

The two who moved to Churchill retirement properties are paying significant maintenance charges but loving the lifestyle.
Another lady moved just 200m up the road from a 3 bed house to a 2 bed bungalow. By the time she paid estate agents fees and stamp duty I it was easy to calculate that she made very little profit.

Presumably equity release would effectively lock you into the same property until you croak or get wheeled off to a council funded care home.

Sunday, March 17, 2019 09:40PM Report Comment

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