#Carneyge on UK house market

BANK OF ENGLAND FINANCIAL POLICY COMMITTEE TO CAP BULK OF HIGH LOAN-TO-INCOME MORTGAGES AND TOUGHENS UNDERWRITING STANDARDS

TO SET FROM OCTOBER LOAN TO INCOME RATIO AT 4.5 FOR 85 PCT OF NEW MORTGAGES

TOUGHENS AFFORDABILITY TESTS FOR NEW HOME LOANS FROM THURSDAY BY TAKING INTO ACCOUNT POTENTIALLY HIGHER INTEREST RATES

DOES NOT BELIEVE THAT HOUSEHOLD INDEBTEDNESS POSES AN IMMEDIATE THREAT TO STABILITY, MEASURES AIMED TO INSURE AGAINST THIS RISK

What a crock of shit.

What’s missed out?

Help to Buy (or Borrow or Sell) to continue.

Buy to Let lending to continue

4.5x income means 4.5 x Joint Income or 9 x income!…if each income is similar.  A generation ago it was 1 income and 3-4 x at that!

This is the reality of mortgage lending. And of our so-called economy.

And #Carneyge had the gall to repeatedly say The Bank of England is taking early action.  And the media – especially ‘PRAVBBC – laps it up.  FFS! 😦

Bank of England are Planned Economy Marxists and not free market capitalists.  They believe that all you have to do is regulate, tweak and pull X or Y lever and they can ‘manage’ the economy.

Wrong an all counts.  That is almost the definition of Marxism.  Name me one country in history that has served its people well with that regime.

‘We don’t care about house prices’.  Who said it?  Mark Carney, Bank of England Governor today at 10.58am.

Of course they don’t.  They want them to rise as much as possible to keep lending up to keep bankers rolling in bonuses.  It also keeps the costs of living and of running businesses sky high.  Thus, none of it is sustainable.

All they care about is keeping lending up and keeping spending up.  To Hell with the FACT that their lifestyles are only kept going by greedy ignoramuses borrowing beyond belief and putting themselves, eventually, into penury.  Look at the page on the image above.

Instead, oh I don’t know, how about #bringbackcapitalism and stop intervening in the market?  #banHTB and above all #banbankbailouts – let them fail when it all goes tits up.  Which it will.

The next time there is a global economic shock it will all go tits up.  But how many folk will have massive debts, having believed all will be well because the Bank of England is doing something about it?

This will not stop prices from eventually plummeting.  It will not happen due to anything going on internally. It will be the next global economic shock.

I refer you to this post.

 

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7 Responses to #Carneyge on UK house market

  1. Gary (?) says:

    hi mate

    Mr Anonymous may have a point there, after all I would have said two years ago the market was going to go down again… FLS and HTB did the trick to send it the other way (incidentally my personal belief is that HTB had much more effect through sentiment than through what it actually was)

    So some of the “box of tricks” may mess things up for another couple of years if they pull out the right tricks!

    If someone needs to buy in the next couple of years, would you recommend doing so now or holding off? unfortunately sometimes the market can remain irrational longer than you (or the wife) can bear to stay in rented accommodation…

    • Its too big to say definitively.

      Are house prices to rise for a while? Yes but I seriously doubt after the next global economic shock.
      And then we may turn Japanese…
      I would be amazed if little UK govt can do anything under those circumstances. Recessionary and people losing incomes w/ huge debts.

      TPTB have kept it bubbleicious for 10 yrs with hiccup 2008

      • Gary (?) says:

        hi mate

        that answers that one then… when you become aware of the next global economic shock just give us a shout via this blog!

        in all seriousness top of UK property market was late 2007 I believe… so there was time to get out after say Northern Rock runs wasn’t there?

        clearly the majority will never get out in time but maybe your readers and clients will?

        what do you reckon?

      • That’s what I’m trying to do

  2. Anonymous says:

    You refer back to your previous article on Global and UK house prices

    As I commented on that article, the Canadian experience (sadly) tells us that #Carneyge can push this a lot higher before it cracks

    Hopefully not but unfortunately entirely possible

    And sadly there are still plenty of measures the powers that be could bring in to push things higher now or pull out in the event of a downturn

    – cut base rate to nil
    – cut base rate below nil
    – revamped Funding For Lending scheme to reduce mortgage rates again
    – nationalised mortgage lenders so everyone can access finance at 1%
    – re-vitalised Support for Mortgage Interest benefit scheme
    – abolition of stamp duty
    – MIRAS
    – home buyer grants (as in Australia I think?)

    So I would definitely agree that you’re right that prices ought to fall a long way, but I’m very concerned that they could have higher to go up and there could be (yet another) massive bag of tricks to cushion their fall and push them up again

    • They will cut to Nil. Little change there.
      Unlikely -ve – see Japan. Deposit confiscations instead. (+ve for house prices?)
      Mortgage rates will be cut – lending is what matters.

      All the other stuff – whatever

      See Japan.
      Tried it all – 23 yr deflation. Now finally moving to inflation and probably eventually hyperinflation but that is now, not then.

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