Over recent months there’s been a growing mood to exploit the power of quantitative easing to accelerate growth in key parts of the UK economy and for the Bank of England to buy other assets other than Gilts – UK Government bonds. Here in Part 1 I’ll be looking at the background to these calls and, in Part 2, I’ll look at why, if we are to experiment further with QE, we should look to housing as the alternative to Gilts…
The various data suggesting how house prices shifted over 2011 are mostly in and the vast array of pundits have made their predictions for the market in 2012. So here’s a round up of the prospects for the housing market in the year ahead and a suggestion of what it might all mean for house building. If we look at all the indicators, the picture painted for 2011 was of house prices flatlining. Some indicators were up a little, some down…
Hallelujah! The plight of trapped first-time house movers has finally got into the national headlines. Recent research undertaken by Lloyds Banking Group exposes the problem of increasing numbers of financially-constrained first-time homeowners trapped and unable to make the second step up the ladder.
There’s little doubt that we need radical solutions to build more homes. There is a broad consensus for that view, leaving aside supporters of Malthus, the Daily Telegraph anti-house-building campaign and a few others. There’s little doubt also that the issues are complex and we need a strategy rather than one big idea to save the day. But unless I am very much mistaken the 88-page Laying the Foundations: A Housing Strategy for England probably doesn’t amount to a strategy…
The 360,000 first-time buyers who bought in 2007 are likely to be trapped in their first homes, says a press release dated yesterday from the bank HSBC. The research isn’t brilliant. What makes this story so unusual and, for me, interesting is that despite it being such an obvious and serious problem so little has been written about it. So what’s the story?
There is a heightened sense of concern over the fragility of the economy after yesterday’s speech by Mervyn King, Governor of the Bank of England and the release of its monetary policy committee minutes today. It all fuels the worry that we really are heading back into the deep doodoo. The downsides are obvious. The upside is that this should help to pull inflation down in the medium term, after a series of “special factors” raised the rate to a level not…
As the parallels with the 1930s depression become increasingly unavoidable, I sense a new romantic surge of interest in the notion of a private-sector-led house-building boom driving economic recovery. For those not familiar with the 1930s private house building market, completions in England in 1934 hit almost 290,000. That is near on three time current levels. Never before nor since has there been such numbers of private homes built in England. The public sector was not workshy over that period…
The housing market survey released today by the surveyors’ body RICS adds to other recently released data that all seems to points to a slide in prices everywhere except London – which in housing terms is another country. The RICS data show a negative balance of 23% of those questioned suggesting prices were falling rather over the past three months above those that saw prices rising. This fits with most other house price indicies which suggest that prices are tracking…
The two best words to sum up the picture that emerges from the latest housing market data would probably be fragile and flatlining. The surveys may have slight differences, but they all point to a market in a state of uneasy equilibrium. So, with a steady flow of disappointing economic data of late, this leaves wide open the question of whether the market has the resilience to avoid being tipped again into decline. The graph probably shows you all you…
The latest jump in CPI inflation is worrying – at least to me. Yes Mervyn King, the Governor of the Bank of England, had sought to soften views by warning with the release of the latest Inflation Report that there may be spikes ahead. And economist had been expecting a rise this month – although not this big. But looking at the hard figures, the jump of more than 1.1% in a month – a fairly rare event – seems…