news & politics:discussion

[Neil]

Just now, fraybentos1 said:

Also I don't want house prices to crash. A slide in nominal terms of say 10-15% would be good and then flatline for a decade while people's wages catch up to the insane disparity. Hardly an unreasonable suggestion?

its not about wages catching up, its about borrowing to buy being affordable - houses prices were always controlled via the availability of loans to buy.

 

[steviewevie]

Bog off Bentos

[fraybentos1]

5 minutes ago, Neil said:

its not about wages catching up, its about borrowing to buy being affordable - houses prices were always controlled via the availability of loans to buy.

 

Yes people have been able to borrow too much due to stupidly low interest rates. But also the historical 4x your income thing has been blown apart partially by insane house price rises and also by stagnant wages for like 15 years. 

The most painless way to fix things is for house prices to flatline and then affordability would improve over the years as people's wages increase.

They could also build a lot more houses but the tories defo won't and labour probably won't/

[fraybentos1]

11 minutes ago, fraybentos1 said:

Also I don't want house prices to crash. A slide in nominal terms of say 10-15% would be good and then flatline for a decade while people's wages catch up to the insane disparity. Hardly an unreasonable suggestion?

 

1 minute ago, steviewevie said:

Bog off Bentos

Pretty reasonable comment from me tbh, what's the issue with it? Also you've taken me off ignore again 😂 must be a boring day for you!

[Neil]

2 minutes ago, fraybentos1 said:

. But also the historical 4x your income thing has been blown apart

by the govt relaxing the obligation of banks to keep a link. (and historically it was 3 times).

[fraybentos1]

5 minutes ago, Neil said:

by the govt relaxing the obligation of banks to keep a link. (and historically it was 3 times).

Ok and one way that could be made better is if house prices flatlined and over time wages increase then the multiple will lower. 

It's currently 7x I believe as an average. Totally insane.

[Guest]

32 minutes ago, Neil said:

its not about wages catching up, its about borrowing to buy being affordable - houses prices were always controlled via the availability of loans to buy.

 

People were able to afford their mortgages just about even with energy bills rising. Then the BoE thought that they would make peoples mortgages more expensive too which has only made the situation worse.

The BoE don’t even want wages to go up, they’ve said that rising wages will make inflation worse (yet they happily take their pay rises) so they couldn’t give a damn whether wages catch up or not. 

[fraybentos1]

8 minutes ago, Ozanne said:

People were able to afford their mortgages just about even with energy bills rising. Then the BoE thought that they would make peoples mortgages more expensive too which has only made the situation worse.

The BoE don’t even want wages to go up, they’ve said that rising wages will make inflation worse (yet they happily take their pay rises) so they couldn’t give a damn whether wages catch up or not. 

So should we have kept IRs at 0.1%? Would only prolong the agony. IRs needed to rise substantially and all central banks know it

[Neil]

31 minutes ago, Ozanne said:

. Then the BoE thought that they would make peoples mortgages more expensive too which has only made the situation worse.

you missed out the bit where truss crashed the pound - that's what f**ked the interest rates the most.

[Neil]

biggest control of house prices is from the govt, and how much land they release for housing thru the planning process - that controls the price of land, which controls the price of houses.

[fraybentos1]

1 hour ago, Neil said:

 houses prices were always controlled via the availability of loans to buy.

 

 

11 minutes ago, Neil said:

biggest control of house prices is from the govt, and how much land they release for housing thru the planning process - that controls the price of land, which controls the price of houses.

make up your mind!

you were right the first time anyway.

Edited August 2, 2023 by fraybentos1

[Neil]

2 minutes ago, fraybentos1 said:

 

make up your mind!

if you get economics you should be able to economically  rationalise both of those.

[fraybentos1]

2 minutes ago, Neil said:

if you get economics you should be able to economically  rationalise both of those.

they're obviously both factors but credit availability is far more important. The other day I read this:

''between 1997 and 2007 the housing stock grew by 10%, but the population only grew by 5%. 

If house prices were a function of supply and demand, they should have fallen slightly over this period. They didn’t. They rose by more than 300%.''

 

[Guest]

27 minutes ago, Neil said:

you missed out the bit where truss crashed the pound - that's what f**ked the interest rates the most.

That’s true, Truss did f**k the economy up pretty badly but after that it’s more on the Tories overall and the BoE for miss-managing things. 

[Neil]

7 minutes ago, fraybentos1 said:

they're obviously both factors but credit availability is far more important. The other day I read this:

''between 1997 and 2007 the housing stock grew by 10%, but the population only grew by 5%. 

If house prices were a function of supply and demand, they should have fallen slightly over this period. They didn’t. They rose by more than 300%.''

 

What that doesn't include is the change in living patterns , households are smaller than they used to be and there's many more single person households.

[Neil]

3 minutes ago, Ozanne said:

That’s true, Truss did f**k the economy up pretty badly but after that it’s more on the Tories overall and the BoE for miss-managing things. 

Boe should have increased rates much more after 2008.

[fraybentos1]

2 minutes ago, Neil said:

What that doesn't include is the change in living patterns , households are smaller than they used to be and there's many more single person households.

ok here's a more recent one then:

 

In the ten years to 2021, the housing stock in England and Wales has grown by just above 6%. The population by a similar amount - 6.5% in England and quite a bit less - 1.4% - in Wales. 

But average UK house prices over the same period went from £167,000 to £270,000 (more in England). Mortgage lending, meanwhile, more than doubled (from £153bn to £316bn) over the same period. The relationship between money supply, aka credit, and house prices is obvious

[fraybentos1]

Just now, Neil said:

Boe should have increased rates much more after 2008.

correct. And they defo shouldn't have gone to 0.1 which is insanely low. People getting mortgages of 1. something percent and going wild with it. Just daft. 

[Guest]

22 minutes ago, Neil said:

Boe should have increased rates much more after 2008.

Lower interest rates then and in the pandemic was the right course of action given the economic situation at the time. They should’ve kept interest rates at that level when inflation started to bite for all the reasons I’ve mentioned before. 
 

They are stuck now, do they keep raising them and making things worse for people or pause/lower rates ergo admitting they got it all wrong? It’s a tough call but we know what they’ll end up doing all while taking their big pay rises and bonuses as well.  

[steviewevie]

 

[fraybentos1]

38 minutes ago, Ozanne said:

Lower interest rates then and in the pandemic was the right course of action given the economic situation at the time. They should’ve kept interest rates at that level when inflation started to bite for all the reasons I’ve mentioned before. 
 

They are stuck now, do they keep raising them and making things worse for people or pause/lower rates ergo admitting they got it all wrong? It’s a tough call but we know what they’ll end up doing all while taking their big pay rises and bonuses as well.  

It's crazy how wrong you are yet so confident while saying it. Interest rates should have been kept at 0.1% when inflation was in double figures? You're thick as sh*t. Dangerously stupid, thankfully you're just spouting this nonsense on efests and dont actually have any influence on anything.

[Neil]

1 hour ago, fraybentos1 said:

correct. And they defo shouldn't have gone to 0.1 which is insanely low. People getting mortgages of 1. something percent and going wild with it. Just daft. 

when people's houses are earning more than they are - a recession is coming.

[Neil]

13 minutes ago, steviewevie said:

 

benefit of Brexit, fewer checks than when a member of the EU.

[Guest]

I agree with this, the BoE should but interest rates tomorrow and start to help people in the cost of living crises rather than hinder them. 

[fraybentos1]

1 minute ago, Ozanne said:

I agree with this, the BoE should but interest rates tomorrow and start to help people in the cost of living crises rather than hinder them. 

Yeah sorry but you’re a moron. You do realise just cause you can find a tweet of someone agreeing with you, it doesn’t make you correct?

 

Cutting interest rates when inflation is running rampant 😂😂😂idiocy