House Prices Up 2% in Jan, End Of Recession?

[Dimitri 11 10]

The weird thing is I know exactly what's going on with the US Treasury market because it is plastered all over t'internet but nothing about the Gilt market which isn't.

 

But... If things are going V. bad expect to see comments like "Gilt curve steepening". What this means is that overseas investors are moving out of long term debt and into short term, i.e. the price of short relative to long grows as demand moves to the short term end of the curve. That way investors such as China can just stop repurchasing Gilts or US Treasuries without generating the massive sell signals that would decimate the value of their remaining holdings.

 

If overseas investors move out of long term and into short term will this push the interest rate up? Would affect anything else in the British economy i.e. is it a particularly bad sign that we are in big trouble?

[Dimitri 11 10]

I am still unsure on where the economy will go from here it all depends on so many variables I still imagine (and hope I mudt admit) that we will start seeing sustained growth in 2010 but I still feel people buying now will look back and see it as a good decision in a couple of years time.

 

For buying now to be a good idea financially we need to have hit bottom or be very very close to it. 2010 doesn't promise too much - 3million unemployed by the end of this year looks likely and big cuts in public spending will be taking place just after the election which will add what, another 250-500k to the unemployed. We are going to reach a bottom at some stage but if this is it (I don't personally think it is) there is still no reason to rush in and buy as a, prices aren't looking like moving consistently upwards any time soon and b, job security isn't exactly what it used to be.

[Tricky 10]

If overseas investors move out of long term and into short term will this push the interest rate up? Would affect anything else in the British economy i.e. is it a particularly bad sign that we are in big trouble?

 

It's not a positive sign. It's a sign that the crew are edging closer to the life rafts. However it doesn't mean that they've got in the life rafts and are rowing away with all haste.

 

I don't know how it would effect the interest rate. I suppose that would depend on what Mr King wants to do about it.

[dazzler4 10]

it will be nice to see it stabelise, i dont think its going to rise as such. what needs to be realised that everything needs to fall back inline, not just the housing market. fuel, food, wages, the economy is all over the place, unless everything else falls in place i dont think the housing market is going to improve much.

 

i sit back and think how everyone was saying to me three years back that i should buy a house before it becomes a impossibility unless you loaded or mummy and daddy is loaded. All the way back then i decided not to, i have said over and over that its not safe to buy, the bubble will pop. everyone said i didnt have a clue and i would regret not buying!!!

[dazzler4 10]

if the interest rate does go back up again its going to make things much worse, its only those that have benefitted from the lower rates that are actually keeping the economy going at the moment, IMO.

[Dimitri 11 10]

it will be nice to see it stabelise, i dont think its going to rise as such. what needs to be realised that everything needs to fall back inline, not just the housing market. fuel, food, wages, the economy is all over the place, unless everything else falls in place i dont think the housing market is going to improve much.

 

i sit back and think how everyone was saying to me three years back that i should buy a house before it becomes a impossibility unless you loaded or mummy and daddy is loaded. All the way back then i decided not to, i have said over and over that its not safe to buy, the bubble will pop. everyone said i didnt have a clue and i would regret not buying!!!

 

You are going to hear the same soon as well, particularly if we see a couple of months of rises. It's all media driven though and the spring bounce/bull trap looks the most plausible explanation at the moment.

[Danny_Boy 10]

You are going to hear the same soon as well, particularly if we see a couple of months of rises. It's all media driven though and the spring bounce/bull trap looks the most plausible explanation at the moment.

 

 

I am also a firm believer that declines are media driven as well, at the moment all the doom and gloom in the news puts people off spending thus not helping the housing market or economy. Nobody actually knows what is going to happen the news I am getting from my sources is quite positive but I have to take it with a pinch of salt as they have a vested interest in the mortgage market. Whatever happens its not going to be easy because even if we do start to recover we are going to have to pay back all the cash pumped in to try and keep us afloat and thats going to have to come from us the tax payer.

Edited June 10, 2009 by Danny_Boy
spelling

[Cyclone 10]

That must mean DB that you have an explanation as to how the average house price sitting at 7 times the average salary was sustainable?

Maybe also why the long term historical average is about 3.5 times and it only creeps above that for a short time before crashing back (often to below that).

[saxondale 10]

That must mean DB that you have an explanation as to how the average house price sitting at 7 times the average salary was sustainable?

Maybe also why the long term historical average is about 3.5 times and it only creeps above that for a short time before crashing back (often to below that).

 

 

 

 

LOL, ignore the troll ................

[Cyclone 10]

I can't, I always feel the need to respond to you.

[Danny_Boy 10]

That must mean DB that you have an explanation as to how the average house price sitting at 7 times the average salary was sustainable?

Maybe also why the long term historical average is about 3.5 times and it only creeps above that for a short time before crashing back (often to below that).[/quote.

 

Fair point Cyclone but it was sustainable by people not borrowing 7 times their wages. I borrowed 4 times to purchase my property and I dont know a single lender that has offered more than 5 times wages for mortgage purposes in the time I have been an advisor. Most of my clients have borrowed around 3.5 to 4x their wages to be fair advisors have to explain how products are affordable to so its difficult to do anymore anyway.

 

People on the lower average salaries more than likely lived in social housing and the higher property prices where properly screwed by the prices in and around London so its not an exact science anyway.

[timlu 10]

student accomodation price is up too