The House Price Crash Thread

[snowychap]

well the Americans are doing their bit

The US Federal Reserve has announced a half-point cut in a key interest rate as it tries to stave off a recession.

BoE sure to follow suit over the coming months

I'm not so sure, Tony.

:-)

The Bank of England's policymakers have, cut interest rates - to the relief of millions of homeowners and thousands of businesses.

Members of its Monetary Policy Committee have trimmed the cost of borrowing by 0.25% to 5.25%.

This is less than the 0.5% reduction companies, especially retailers, had been calling for.

However, analysts point out the nine-strong committee fought shy of such a big cut because they are wary of stoking inflation.

My answer to your post was that I doubted that the BofE would 'follow' the Fed. I don't think a quarter point cut is 'following' a cut of one and a quarter points.

But, Tony, I am disappointed and saddened that you don't read all of my posts. :cry: :cry:

And I quote (from page 4):

If you were to push me on what I thought might happen, it would be a .25% cut in Feb followed by two or three months of no movement. Thereafter, it's anyone's guess.

Energy companies could suddenly decide to go through a round of cuts and the potentially good impact this would have on inflation could mean a further cut which might be half a percent.

On the other hand if CPI has gone anywhere near 2.5% pus or RPI is not around the same as currently, then there will be no way that I could see them cutting interest rates just to stimulate demand.

:winkold:

[tonyh29]

But, Tony, I am disappointed and saddened that you don't read all of my posts.

:-)

it's called selective quoting and helps with my points ..(see point scoring thread for explanation of rules )

no-one said you were allowed to retort by showing the full quote ..how dare you sir

[snowychap]

But, Tony, I am disappointed and saddened that you don't read all of my posts.

:-)

it's called selective quoting and helps with my points ..(see point scoring thread for explanation of rules )

no-one said you were allowed to retort by showing the full quote ..how dare you sir

Sorry. :oops:

I tried to read all the pages of the points scoring thread but it began to do my eyes in - all those quote boxes!

Feel free to throw the whole quote back at me when/if :winkold: the BofE cut rates again in the next three months.

[Gringo]

Britons collectively have nearly £2 trillion worth of wealth tied up in their homes after taking outstanding mortgages into account.

Around 26% of home owners own their home outright, accounting for around £1.4 trillion of the total said GE Money Home Lending.

And a further 36% of people have a mortgage on their property, but had still managed to accumulate £582bn of equity, it revealed.

That left the average home owner with £127,455 of mortgage-free wealth tied up in their home, quite a buffer against short-term house prices falls, it pointed out.

Doing the old pareto jobby, 80% of the people will own 20% of that wealth, so at the bottom of the scale, it would be a bit more spread out, but still a meaty 32k of equity.

However, they ain't gonna help them if they don't manage to finance the debt

Home repossessions rise to 27,000

The number of people whose homes were repossessed last year has risen by 21%.

The Council of Mortgage Lenders said 27,100 homes, the highest figure since 1999, were taken over by lenders after people fell behind with repayments.

The figure is more than the 22,400 in 2006, but not as extreme as the CML had forecast. It is much higher than earlier in the decade.

Numbers of mortgages in arrears at present are at similar levels to the first half of 2006, the figures show.

Added pressures on homeowners are expected this year, owing to higher energy bills, food costs and more than a million people coming off fixed-rate mortgages.

[snowychap]

Gringo,

I think you are being very generous in applying Pareto to this.

Wealth distribution is rarely that fair!

[snowychap]

I think with news like this the BofE will be glad that they didn't take the bold step called for by the chamber of commerce (amongst others).

Price inflation of goods leaving UK factories has reached its highest rate in 16 years, driven higher by petrol and food costs, official figures show.

Annual output price inflation reached 5.7% in January, up from 5% the previous month, according to the Office for National Statistics (ONS).

Prices paid by factories for their raw materials surged by 18.7% in the 12 months to the end of January.

Analysts said this could hold back the Bank of England from further rate cuts.

Core output price inflation, which strips out the effects of food and petrol, also rose much faster than expected, up 0.8% on the month, the fastest since records began in 1986, and was up 3.2% year-on-year.

[Jon]

Inflation figures up to 2.2%, figures just released say.

I think there won't be further interest rate cuts for a few months now, as the BofE will need to keep this in check ....

[snowychap]

2.2% CPI depressed because of excessive January sales.

[Salsa Party Animal]

So which part of brum is ok and have good house for around 100,000 pounds and not in chav slum area. I would prefer to live in between Birmingham and Walsall half.

Just like to know, what is possible. Bearing in the mind I don't want a house with paper thin walls due to loud home cinema need

[bully]

Inflation figures up to 2.2%, figures just released say.

I think there won't be further interest rate cuts for a few months now, as the BofE will need to keep this in check ....

The figures weren't as bad as many were predicting, so although it is unlikely that there will be interest rate cuts in the next couple of months there is a much stronger possibility of further cuts later in the year.

[greenz]

So which part of brum is ok and have good house for around 100,000 pounds and not in chav slum area. I would prefer to live in between Birmingham and Walsall half.

Just like to know, what is possible. Bearing in the mind I don't want a house with paper thin walls due to loud home cinema need

Oldbury way.... most are in the upper 100's but theres a few to be had, easy access to most places too 8)

[Gringo]

No cut next month as it is the week before the budget and would be seen as political shenanigans, and by april the next inflation forecast report will be in the hands of the BoE which will block out april and may. Come June we have a stalled market needing pepping, but with inflation (both CPI and RPI) on the way up the BoE can't vote for a cut unless the chancellor slackens their remit.

Prices paid by factories for their raw materials surged by 18.7% in the 12 months to the end of January.

And the BoE know this increase is on it's way into the market.

If they hold steady for another 10 months the energy rises will start to drop our of the inflation measure and cuts might be available. But without shenanigans it won't be before them.

[Gringo]

Mervyn appears to be ruling out shenanigans

BoE's King says 'odds-on' he will have to write to Chancellor in coming 2 years

- LONDON (Thomson Financial) - The Bank of England's governor Mervyn King said it is 'odds-on' he will have to write an explanatory letter to Chancellor of the Exchequer Alistair Darling explaining why inflation is so far above target.

In remarks following the publication of the central bank's quarterly Inflation Report, King said that in the central projection, CPI inflation rises sharply from 2.2 pct in January 'to around the level at which I would be required to write an open letter to the Chancellor'.

Since the BoE was granted independence in the setting of monetary policy in 1997, only one such letter has been necessary and that was last April when King wrote to then Chancellor Gordon Brown explaining why CPI inflation had risen by more than one percentage point above the 2.0 pct target.

King said today's inflation profile is 'significantly higher' than in the last report in November, reflecting the recent announcements of increases in household gas and electricity bills as well as rising import prices.

[Gringo]

Then again, some people always look on the bright side

Bank signals further rate cuts

Interest rates are set to come down further, but soaring inflation has dented hopes of US-style cuts in the cost of borrowing, the Bank of England signalled.

The Bank's latest quarterly inflation report reveals that Consumer Prices Index (CPI) inflation could spike sharply in the second quarter of 2008 if rates were cut as much as the City expects.

Markets have pencilled in rates to be reduced to around 4.5% by the end of the year, but the report suggests such dramatic reductions would see CPI inflation soar to more than 3% in the near term - which would force Bank Governor Mervyn King to write an open letter of explanation to the Chancellor.

But borrowers look set for some relief, with the report predicting that CPI would undershoot target in two years' time if rates were kept at 5.25%.

The quarterly report underlines the difficult task faced by the Bank in keeping a lid on CPI amid slowing growth and soaring inflation.

The Bank said the outlook for economic growth falls back "markedly" as the ongoing credit crunch takes hold.

The credit squeeze poses a particular risk to the economy, as conditions have tightened further, it added.

[ahamaad]

The US economy is in a full blown recession.

Our economy will probably follow suit in a few months time.

Very worrying, I note the amount of home reposessions is rising fast.

[snowychap]

The US economy is in a full blown recession.

Our economy will probably follow suit in a few months time.

Very worrying, I note the amount of home reposessions is rising fast.

Ooh, don't let any economists hear you say that.

It's not true. Recession is .... :winkold:

[tonyh29]

figures out today show UK house prices jumped by 3.2% during the past month as the market enjoyed an exaggerated "seasonal bounce",

[drat01]

figures out today show UK house prices jumped by 3.2% during the past month as the market enjoyed an exaggerated "seasonal bounce",

oops - sack the forecaster

[Gringo]

February House Price Index: Traditional February seller optimism boosts asking prices

I'm sure we're all aware of how organisations adjust for seasonal fluctations. Plus the rightmove index is based on asking prices, where as the halifax, nationwide and land registry indices are based on actual sale prices. It will be a couple of months before we can judge if this "bounce" feeds its way through into actual trade prices.

[Gringo]

Jeremy Warner's Outlook: Scarcer mortgages spell housing gloom

Yet if the first-time buyer was scarce before, he'll now be frozen out of the market altogether. Only those with parental money or other sources of equity will be able to get mortgages. That's obviously got to be bad for house prices, notwithstanding the fact that we don't have the growing levels of unemployment usually associated with an outright crash, or at least not yet.

The big test for house prices is about to arrive. Was their ever onwards and upwards rise the result of growing prosperity and shortage of supply, as the bulls always insisted, or was it, as most of us half suspected, largely down to the abundant availability of cheap credit, an environment which now seems to be at an end?