So, 4 days on, were Remain scaremongering or not?

octatonic

thomasross20 said:

Sweet Jesus.... Carney the clown is talking about printing even MORE money. 

See, this is kinda what I am talking about- re Dunning Kruger Effect.

He's an expert in his field and he's expressed a view that is way more complex than simply printing more money.

To dismiss his approach out of hand like this is simply not credible.

I'm not saying you can't have an opinion of course, but this sounds like a massive oversimplification of what I heard Carney speaking of about an hour ago.

p90fool

Exactly. Dig deeper Thomas , don't go all tabloid on us.

quarky

I am not sure a bit of inflation is a bad thing at this point. Not great, but not terrible either.

thomasross20

Watch this, my savings will devalue and housing will go up lol!!! 

quarky

You should get more interest on your savings. Let's face it, interesting rates can't get any worse.

paulmapp8306

quarky said:

You should get more interest on your savings. Let's face it, interesting rates can't get any worse.

It was reported the the BOE are considering an interest rate cut today.

thomasross20

I sold a shedload of NS&I certs, I'm getting about 6-12% from 1/4 of my savings. Rest is in safer bankaccounts, about 2.4% after tax

RaymondLin

2.4% is good lol

octatonic

thomasross20 said:

Watch this, my savings will devalue and housing will go up lol!!! 

That sounds terrific.

Well, for me anyway.

richardhomer

thomasross20;1133486" said:

Watch this, my savings will devalue and housing will go up lol!!! 

Has it occurred to you what a housing crash would result in?

Once again, banks would have loans which exceed the value of the properties they are secured on, resulting in a massive tightening of lending criteria, in a 2008 style credit crunch. This would feed through into business lending and kill many companies which are trading satisfactorily, by choking off their access to trading capital.

This isn't specifically aimed at you - but perhaps those who voted 'Leave' with such conviction should have considered the economic warnings about the risks of doing so, so soon after the worst recession most of us have lived through....

quarky

paulmapp8306 said:

quarky said:

You should get more interest on your savings. Let's face it, interesting rates can't get any worse.

It was reported the the BOE are considering an interest rate cut today.

That is based on the assumption that we don't get inflation though. Printing money if that happens, could well cause that!

quarky

richardhomer said:

thomasross20;1133486" said:

Watch this, my savings will devalue and housing will go up lol!!! 

Has it occurred to you what a housing crash would result in?

Once again, banks would have loans which exceed the value of the properties they are secured on, resulting in a massive tightening of lending criteria, in a 2008 style credit crunch. This would feed through into business lending and kill many companies which are trading satisfactorily, by choking off their access to trading capital.

This isn't specifically aimed at you - but perhaps those who voted 'Leave' with such conviction should have considered the economic warnings about the risks of doing so, so soon after the worst recession most of us have lived through....

Without trivialising the hardship that some people have been through, the number of people who would be unable to repay a mortgage with modest interest rates rises if statistically low. Very low. A 10% (or more!) cut in house prices would be good for a lot of people though.

hungrymark

Seems to be the consensus that leave voters didn't think it through properly or don't know as much as the remain camp. Generalisation upon generalisation. I voted remain, by the way.

capo4th

Except for all the people in London who have just overpaid £100-300k over the odds for their new house in the last 12 months.

Chalky

hungrymark;1133569" said:

Seems to be the consensus that leave voters didn't think it through properly or don't know as much as the remain camp. Generalisation upon generalisation, from both sides.

True. The Remainers I've talked to know next to nothing except "Staying in the EU is best. It removes all risks."

richardhomer

quarky;1133566" said:

richardhomer said:

thomasross20;1133486" said:Watch this, my savings will devalue and housing will go up lol!!! 

Has it occurred to you what a housing crash would result in?

Once again, banks would have loans which exceed the value of the properties they are secured on, resulting in a massive tightening of lending criteria, in a 2008 style credit crunch. This would feed through into business lending and kill many companies which are trading satisfactorily, by choking off their access to trading capital.

This isn't specifically aimed at you - but perhaps those who voted 'Leave' with such conviction should have considered the economic warnings about the risks of doing so, so soon after the worst recession most of us have lived through....

Without trivialising the hardship that some people have been through, the number of people who would be unable to repay a mortgage with modest interest rates rises if statistically low. Very low. A 10% (or more!) cut in house prices would be good for a lot of people though.

My point was not about interest rates, or individuals' abilities to pay their mortgages - it was pointing out that a wholesale fall in house prices affects a massive cross-section of society, as banks restrict credit across all sectors.

No economic instrument is needed to undermine prices if confidence is rocked heavily - peoples' fears will effectively do the same job of higher interest rates....

quarky

A fall in house prices is good for many existing home owners because it makes it easier to trade up. It is also good for first time buyers.

paulmapp8306

I cant see a fall in house prices though - isnt that price primarily determined by supply and demand?  Im pretty sure the demand is much higher than the supply is (covered on BBC4 a couple of days ago, that house price falls were very unlikley).

exocet

paulmapp8306;1133704" said:

I cant see a fall in house prices though - isnt that price primarily determined by supply and demand?  Im pretty sure the demand is much higher than the supply is (covered on BBC4 a couple of days ago, that house price falls were very unlikley).

Very true, but demand is also influenced by the supply of money which is largely dictated by the banks - they set the lending criteria. Right now, there hasn't been a visible change in money supply nor physical demand for housing. However there was a story this morning about a Singaporean Bank putting a hold on lending for UK property market e.g investment in London market due to worsening outlook. It may not come to anything but if the London market is hit, it will impact elsewhere as well.

richardhomer

quarky;1133674" said:

A fall in house prices is good for many existing home owners because it makes it easier to trade up. It is also good for first time buyers.

Theoretically right - but in practice wrong.

Those siting in bigger houses simply stay put until prices recover - thereby preventing people in smaller houses from moving up.

First time buyers were faced with the need to provide massive deposits in the Credit Crunch because high loan-to-value mortgages were unavaible, as banks aimed to cushion themselves against future falls in property values. 20% of 90% of today's prices is a lot more in pound-amount terms than 5% of current values....

Dramatic 'shock-driven' house-price falls always knacker the economy, in my experience.