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Interest rate from 0.5% to 0.75%

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ursaminortaur
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Re: Interest rate from 0.5% to 0.75%

#488219

Postby ursaminortaur » March 22nd, 2022, 9:00 am

Nimrod103 wrote:
gryffron wrote:
TUK020 wrote:While this country is governed by a party whose power base is fundamentally in hock to property owning 'haves' who appear to benefit from house price inflation, the 'have nots' are in deep doodoo.

That doesn't really follow. We had 13 years of Labour rule, and they also failed to build sufficient houses and indeed deliberately inflated house prices as part of their artificial economic stimulus. We've even had a LibDem coalition who also failed to address the same fundamental problems. So this isn't a party political issue. ALL parties are equally guilty.

Gryff


Under Blair's Labour Govt real house prices went up 2.6 times, from £100,000 to £260,000 (https://www.housepricecrash.co.uk/indic ... inflation/).
During the subsequent Coalition and Tory Govts, average house price inflation has to a certain extent levelled off.


Interesting graph showing that house prices fell in real terms following the early 1990s recession (following the Lawson boom), Financial Crisis , and having then just got back to the trend rate of growth fell again after the brexit referendum.

GoSeigen
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Re: Interest rate from 0.5% to 0.75%

#488264

Postby GoSeigen » March 22nd, 2022, 11:40 am

gryffron wrote:
TUK020 wrote:While this country is governed by a party whose power base is fundamentally in hock to property owning 'haves' who appear to benefit from house price inflation, the 'have nots' are in deep doodoo.

That doesn't really follow. We had 13 years of Labour rule, and they also failed to build sufficient houses and indeed deliberately inflated house prices as part of their artificial economic stimulus. We've even had a LibDem coalition who also failed to address the same fundamental problems. So this isn't a party political issue. ALL parties are equally guilty.

Gryff


This is all guff. The only "problem" causing house prices to rise was the same one that caused all yields to fall: the elimination of the pervasive inflation of the 1960s-80s. Inflation fell, gilt yields fell, other asset yields fell, housing yields fell. The idea that any government deliberately "inflated" house prices is a fantasy, they can't even find their toes half the time! Also "artificial economic stimulus"? What nonsense term is that? For most of the period of high house price growth both monetary and fiscal policy were tight as evidenced by the concomitant falls in yields and outstanding debt. By 2007 the government was practically irrelevant to the economy having been reduced to a bit part following decades of tax cuts, privatisations and debt reductions. gryffron has never taken this on board and simply repeats the same old canard about stimulus over and over again.

Additionally, I think Gryff completely misunderstood TUK020 who by my reading was saying that the Tory constituency is the largely property-owning blue-rinse generation whose wishes they pander to consequently ignoring the interests of younger and less wealthy people, an analysis I agree 100% with. He was not arguing that there is a shortage of housing AFAICT.

GS

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Re: Interest rate from 0.5% to 0.75%

#488337

Postby Charlottesquare » March 22nd, 2022, 4:06 pm

Nimrod103 wrote:
gryffron wrote:
TUK020 wrote:While this country is governed by a party whose power base is fundamentally in hock to property owning 'haves' who appear to benefit from house price inflation, the 'have nots' are in deep doodoo.

That doesn't really follow. We had 13 years of Labour rule, and they also failed to build sufficient houses and indeed deliberately inflated house prices as part of their artificial economic stimulus. We've even had a LibDem coalition who also failed to address the same fundamental problems. So this isn't a party political issue. ALL parties are equally guilty.

Gryff


Under Blair's Labour Govt real house prices went up 2.6 times, from £100,000 to £260,000 (https://www.housepricecrash.co.uk/indic ... inflation/).
During the subsequent Coalition and Tory Govts, average house price inflation has to a certain extent levelled off.


Not that much levelling , I bought our current flat in November 1997 for £105,000, if selling today it would be offers over £490k and I would expect nearer £530/550k, even had we sold in 2010 I suspect it would have been circa £250- £280k, to me our price has pretty much doubled every 10 years over the last 24 odd years, I see little levelling off.

Nimrod103
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Re: Interest rate from 0.5% to 0.75%

#488400

Postby Nimrod103 » March 22nd, 2022, 8:17 pm

Charlottesquare wrote:
Nimrod103 wrote:
gryffron wrote:
TUK020 wrote:While this country is governed by a party whose power base is fundamentally in hock to property owning 'haves' who appear to benefit from house price inflation, the 'have nots' are in deep doodoo.

That doesn't really follow. We had 13 years of Labour rule, and they also failed to build sufficient houses and indeed deliberately inflated house prices as part of their artificial economic stimulus. We've even had a LibDem coalition who also failed to address the same fundamental problems. So this isn't a party political issue. ALL parties are equally guilty.

Gryff


Under Blair's Labour Govt real house prices went up 2.6 times, from £100,000 to £260,000 (https://www.housepricecrash.co.uk/indic ... inflation/).
During the subsequent Coalition and Tory Govts, average house price inflation has to a certain extent levelled off.


Not that much levelling , I bought our current flat in November 1997 for £105,000, if selling today it would be offers over £490k and I would expect nearer £530/550k, even had we sold in 2010 I suspect it would have been circa £250- £280k, to me our price has pretty much doubled every 10 years over the last 24 odd years, I see little levelling off.


Hard to believe I know, but according to the graph in the link I provided, average real UK house prices are lower today than Q4 2007. Obviously quite a few variations across the country.

vand
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Re: Interest rate from 0.5% to 0.75%

#488785

Postby vand » March 24th, 2022, 9:04 am

It's gone rather off topic, but I honestly believe that house prices would have broadly followed the same trajectory as they did in the last 3 decades regardless of who was in power. No government would have had much influence on the power macro economic forces that drove down real interest rates over that time and inflated asset prices almost universally.

In my view the Labour adminstration were all to keen to enjoy the proceeds of the housing boom of 1997-2007, especially as it solidified their popularity whilst reminding the country of the previous housing bust under the Tories from 1992-96. Things got way too out of control on Brown's watch - I remember stupidness like people self-certing for a x6 mortgage, and the only reason it was self cert was that they were exaggerating their earnings in the first place.

But also the Tories have since extended support for housing with their generous relief schemes and done everything in their power to keep the market buoyed with SDLT tax holidays, 95% mortgages etc, all of which have helped to overinflate the market.

However when the rate of borrowing falls from 8% to under 2% you can get away with a lot of stuff. The next 30 years will not be anywhere near as kind to housing as the previous 30 - its impossible given the cost of capital today.


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