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Mark Carney Does it Again...

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  • Mark Carney Does it Again...

    Fresh off his success in a leading role creating the bubblicious inflation of Canadian urban property prices, it looks like the colonial with the "toolkit" now in charge of the BoE is going to forward guidance the mother country down the same policy path...
    6 September 2013Last updated at 10:51 ET

    UK house prices have risen by 5.4% in the year to August, according to the Halifax's latest house price survey.
    It is the highest annual rate since June 2010.

    On the Halifax's measure, the average price of a house also went through the 170,000 mark for the first time in five years.


    However, the figures are still well below the peak of the market in August 2007, when the average price was almost 200,000.


    The Halifax said housing market activity was up thanks to an improving economy, low interest rates, and government-backed schemes such as Help to Buy...

    ...The number of mortgage approvals for house purchases - an indicator of completed house sales - rose by 10% between the first and second quarters of 2013.

    In July alone there were 60,600 approvals, the first time the number has exceeded 60,000 since 2008.

    The rise in prices and market activity, coupled with the Help to Buy scheme, which offers a government-backed loan of up to 20% of the price of the property, have increased fears that the country could be heading for another property bubble.


    But last month Mark Carney, governor of the Bank of England, said he was "acutely aware" of the risks, and had a "toolkit" of measures he could employ to combat unrestrained mortgage lending...



    Estate agents and surveyors call for house price growth cap


    Rics says Bank of England should use powers to calm market as new figures suggest record rise in prices

    The Guardian,


    In the latest stark warning about the housing market, Rics which represents surveyors and estate agents is calling on the Bank to limit house price inflation to rein in consumers' and lenders' expectations and give a clear sign of when the Bank would use its new powers to calm the market. This week, the organisation warned that house prices are rising at their fastest rate since their 2006 peak...

  • #2
    Re: Mark Carney Does it Again...

    what is the purpose of all of this? to pump up false wealth assets. look i need a house right? who cares if it is 100k or 500k. When I move, I'm going to have get another one so my gains are just used to get another house. Kids with poor job prospects are getting hurt. The only thing that higher prices helps is flippers and down sizers.

    Cap increases at 5% yoy? I know my salary is not. I could not afford to buy the house i live in now.

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    • #3
      Re: Mark Carney Does it Again...

      Originally posted by charliebrown View Post
      what is the purpose of all of this? to pump up false wealth assets. look i need a house right? who cares if it is 100k or 500k. When I move, I'm going to have get another one so my gains are just used to get another house. Kids with poor job prospects are getting hurt. The only thing that higher prices helps is flippers and down sizers.

      Cap increases at 5% yoy? I know my salary is not. I could not afford to buy the house i live in now.
      You will NEVER make it to be a Central Banker with that sort of attitude...

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      • #4
        Re: Mark Carney Does it Again...

        This is nothing to do with Mark Carney and everything to do with two recent government backed schemes called funding for lending and help to buy put into place before his appointment.In this scheme borrowers are being offered 20% of a mortgage, interest free, backed by the government. The reality is that the government is charging banks only 0.25% (basically nothing) interest (on 20% of a loan)to any bank that borrows money to make mortgage loans. This scheme has been running since August 2012. It prompted me to sell the majority of my gold at the time to become a landlord for the first time. A good decision so far but not one to make me feel good.

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        • #5
          Re: Mark Carney Does it Again...

          Originally posted by llanlad2 View Post
          This is nothing to do with Mark Carney and everything to do with two recent government backed schemes called funding for lending and help to buy put into place before his appointment.In this scheme borrowers are being offered 20% of a mortgage, interest free, backed by the government. The reality is that the government is charging banks only 0.25% (basically nothing) interest (on 20% of a loan)to any bank that borrows money to make mortgage loans. This scheme has been running since August 2012. It prompted me to sell the majority of my gold at the time to become a landlord for the first time. A good decision so far but not one to make me feel good.
          Don't fret. He had lots of government help in Canada too

          Most of it from the Finance Department, headed by long time Minister Jim Flaherty.

          And as a result lots of Canadians have become "landlords"...in the delusional belief that Canadian housing property is an "investment". Few are even covering their carry costs with the rents they can command on the properties they have purchased, and I suspect the most overleveraged ones are going to lose their all their up front equity before things return to anything resembling sanity...

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          • #6
            Re: Mark Carney Does it Again...

            Sorry didn't mean to come across like that. I feel fairly secure so far. 9% return after costs (which has gone towards rebuilding my gold position ), 1 tenant and no hassles so far, but I may just have beginner's luck.
            UK FIRE has everything locked up and is managing the situation. Housing supply is tight and new builds have fallen to all time lows mostly because local authorities aren't allowed to build public housing and the private sector just sits on building plots.This is despite a massive 20% increase in UK population in the last 10 years.
            Outside of London there was a 25/30% decrease off the peak adjusting for inflation which was quite a decent correction. In the UK it's often cheaper to mortgage than rent but unfortunately people can't afford the 20% down that banks have been demanding. However with the new scheme only 5% deposits are required meaning that houses are getting bid up again. The house next door but one to my recent purchase went for 15% more than I paid 9 months ago. Oh yes, the pols have things bubbling along very nicely once again which is not surprising considering most of them are landowners and landlords themselves!
            Originally posted by GRG55 View Post
            Don't fret. He had lots of government help in Canada too

            Most of it from the Finance Department, headed by long time Minister Jim Flaherty.

            And as a result lots of Canadians have become "landlords"...in the delusional belief that Canadian housing property is an "investment". Few are even covering their carry costs with the rents they can command on the properties they have purchased, and I suspect the most overleveraged ones are going to lose their all their up front equity before things return to anything resembling sanity...

            Comment

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