Carney's message to savers is surely to invest more aggressively. Choose stocks, bonds, property, pensions - anything but leaving it in the bank. That's what central bankers do when they want to get economies going.
Carney's message to savers is surely to invest more aggressively. Choose stocks, bonds, property, pensions - anything but leaving it in the bank. That's what central bankers do when they want to get economies going.
No no no - the government should provide us with our basic human right of ursary at 5% above inflation...
Carney's message to savers is surely to invest more aggressively. Choose stocks, bonds, property, pensions - anything but leaving it in the bank. That's what central bankers do when they want to get economies going.
On 870K he's clearly out of touch with ordinary savers! If you have enough spare cash to gamble on the stocks, fair enough - but what if you haven't?
Yet again, those who do the right thing are ignored and taken for mugs. No wonder so many people learn to do the wrong thing.
Look at the graphs from JonathonD - outside London there is ferk all HP inflation.
Non nil nada zilch.
And that is what the position should be in London. Instead we have everyone moaning that outside London house prices aren't going up and those in London rubbing their hands in glee.
When energy prices go up this autumn will we have everyone congratulating this?
I'm no fan of massive house price increases, and even less a fan of the chaos that massive deceases would cause, but comparing energy costs to house values is comparing apples to orangutans.
Should he ban foreign ownership of houses in London ? Double stamp duty inside the M25 ?
Alternatively the chancellor could encourage the chinese etc to invest somewhere other than London by giving tax breaks. Or doing a marketing campaign.
If London's a bolthole, so is the rest of England. Its all covered by the same property rights.
Those living in mansions in the north – even little old ladies – should be asked to cough up if they meet the valuation threshold. I’m openminded whether the tax could be met by a charge on the property to avoid an immediate requirement to sell.
Those living in mansions in the north – even little old ladies – should be asked to cough up if they meet the valuation threshold. I’m openminded whether the tax could be met by a charge on the property to avoid an immediate requirement to sell.
Or, alternatively, they have already paid enough tax, and the government should find ways to stop p***ing money away.
Those living in mansions in the north – even little old ladies – should be asked to cough up if they meet the valuation threshold. I’m openminded whether the tax could be met by a charge on the property to avoid an immediate requirement to sell.
They should cough up on a property paid for by income already taxed to cool the jets of those pesky Chinese investors in London ?
Is there any real evidence of a boom or bubble in house prices anywhere outside of London as all the data I've seen, seems to show house prices flat or falling outside of SE England?
So, a credit "guaranteed" fuelled housing scam [ sorry ! boom ]is working ? In the previous boom, at least they were not guaranteed. In your very partisan way [ unlike, Richard Nabavi, you don't even bother to pretend that you don't follow the maxim: anything done by a Tory government is good ] , so everything is smelling roses !
I'm not particularly happy with increasing house prices, but at least it's being done in moderation.
But the real question is: what is the alternative? Having been left in a precarious position by Labour, soft inflation for housing is least-worse option.
If the Tories pricked the housing bubble, Labour would spend the next 30 years screaming about how nasty the Tories were, causing all those repossessions.
That graph is a keeper for the bubblistas - "boom headshot" as the kids say.
The existence of that graph shuts down all silly bubble talk for ever.
London is crazy - nothing the CoTE can do to stop the madness there. The rest of the Uk plods on.
Are you serious? Do you not live in a world where cause temporally precedes effect and where predictions (clue in the name) of the effects of the Chancellor's proposed (clue in the name) actions can only ever be tested by events which have not yet happened?
Should he ban foreign ownership of houses in London ? Double stamp duty inside the M25 ?
Suggestions welcome.
Would that reduce the number of new foreign owners in, say, 2009?
Those living in mansions in the north – even little old ladies – should be asked to cough up if they meet the valuation threshold. I’m openminded whether the tax could be met by a charge on the property to avoid an immediate requirement to sell.
Or, alternatively, they have already paid enough tax, and the government should find ways to stop p***ing money away.
Carney's message to savers is surely to invest more aggressively. Choose stocks, bonds, property, pensions - anything but leaving it in the bank. That's what central bankers do when they want to get economies going.
On 870K he's clearly out of touch with ordinary savers! If you have enough spare cash to gamble on the stocks, fair enough - but what if you haven't?
An ISA linked to the FTSE All Share Index would have increased in capital value by 6.25 times from the beginning of this year and that is before the tax benefit.
So there are definitely options available for investors with differing risk appetites.
If you like high risk follow Robert S, into Spain but don't go near Italy.
Those living in mansions in the north – even little old ladies – should be asked to cough up if they meet the valuation threshold. I’m openminded whether the tax could be met by a charge on the property to avoid an immediate requirement to sell.
You haven't been listening carefully to St. George, antifrank.
He has already stated that, given the current trajectory of the economic recovery and the fiscal consolidation plans already in place, there will be no need for further tax increases through to 2020.
I hope you are not therefore suggesting that hitting little old ladies over the head with their purses and piggy banks is justified on the basis of 'fairness' just because they live in large and draughty houses?
Yet again, those who do the right thing are ignored and taken for mugs. No wonder so many people learn to do the wrong thing.
Look at the graphs from JonathonD - outside London there is ferk all HP inflation.
Non nil nada zilch.
And that is what the position should be in London. Instead we have everyone moaning that outside London house prices aren't going up and those in London rubbing their hands in glee.
When energy prices go up this autumn will we have everyone congratulating this?
Tory policy to boost housing: limited govt. guarantee on mortgages that can be switched off at a day's notice.
Labour policy to boost housing: let badly regulated Yorkshire and Scotland based ex-building societies, run by non-bankers, borrow short and lend long on high earnings to value ratios , using securitised mortgage collateral that can't be unravelled; all of which was eventually switched off through a financial crash and five-year long, painful recovery...
AveryLP and Financier, I do wonder when peer to peer lending will dominate the lending market and then the banks and BoE will be sidelined. 10 years or sooner? The "banks as main lenders model" looks to my eyes an archaic unit, same as printed newspapers.
Just need to break out for a bit, so only a quick fire shot back. Mortgage lending by banks on UK residential housing stock amounts to some £2.2 trillion. That is some capital for peer to peer lenders to accumulate!
If deposits are moved elsewhere, banks cannot lend new money.
TCP
The main value of new entrants into the retail banking market will be the effect their competitive product development, service innovation and pricing will have on the large high street banks.
This is why the BoE wishes to encourage mutuals and niche operators into the market.
I don't think anyone is expecting large shifts of market share. It will be the threat of losing share that will keep the big boys on their toes.
In response to NEXT - "And that is what the position should be in London. Instead we have everyone moaning that outside London house prices aren't going up and those in London rubbing their hands in glee.
When energy prices go up this autumn will we have everyone congratulating this?
I'm no fan of massive house price increases, and even less a fan of the chaos that massive deceases would cause, but comparing energy costs to house values is comparing apples to orangutans. "
That's because you're comparing energy cost to house values. But housing is a cost. The confusion between cost and value is one of the things wrong.
If house prices stayed largely stable we would view them as homes rather than as assets and we would stop thinking that the way to make our fortune in this country was to buy and sell terraced houses to each other.
@AveryLP Great! So we can cool off the top-end of the property market and introduce other tax cuts.
Central London prime property is really a different market from the rest of the country.
Under occupancy is clearly a problem. Charles can't even borrow milk from a neighbour due to absentee owners in his block.
But foreign investment in property is linked to other forms of FDI which all governments will wish to encourage.
London is not really a resort city, more a place where foreign businessmen want to base their overseas operations at the same time as enjoying the city life.
But how can under-occupancy be taxed without deterring investment?
Yet again, those who do the right thing are ignored and taken for mugs. No wonder so many people learn to do the wrong thing.
Look at the graphs from JonathonD - outside London there is ferk all HP inflation.
Non nil nada zilch.
And that is what the position should be in London. Instead we have everyone moaning that outside London house prices aren't going up and those in London rubbing their hands in glee.
When energy prices go up this autumn will we have everyone congratulating this?
Can posters please stop talking about what else can be taxed.It's beginning to look and sound like a Labour Party committee meeting.There are enough taxes already..no more please..If we aint got it then we shouldn't spend it.
Yet again, those who do the right thing are ignored and taken for mugs. No wonder so many people learn to do the wrong thing.
Look at the graphs from JonathonD - outside London there is ferk all HP inflation.
Non nil nada zilch.
And that is what the position should be in London. Instead we have everyone moaning that outside London house prices aren't going up and those in London rubbing their hands in glee.
When energy prices go up this autumn will we have everyone congratulating this?
Property purchase is investment in an asset.
In which case, profits should be taxed.
By "profits" do you mean capital gains on sale or income taxes on an implied rental benefit?
Carney's message to savers is surely to invest more aggressively. Choose stocks, bonds, property, pensions - anything but leaving it in the bank. That's what central bankers do when they want to get economies going.
On 870K he's clearly out of touch with ordinary savers! If you have enough spare cash to gamble on the stocks, fair enough - but what if you haven't?
An ISA linked to the FTSE All Share Index would have increased in capital value by 6.25 times from the beginning of this year and that is before the tax benefit.
So there are definitely options available for investors with differing risk appetites.
If you like high risk follow Robert S, into Spain but don't go near Italy.
Thanks for the info, Avery. I do have an account maturing in the near future, so may consider other options.
In response to NEXT - "And that is what the position should be in London. Instead we have everyone moaning that outside London house prices aren't going up and those in London rubbing their hands in glee.
When energy prices go up this autumn will we have everyone congratulating this?
I'm no fan of massive house price increases, and even less a fan of the chaos that massive deceases would cause, but comparing energy costs to house values is comparing apples to orangutans. "
That's because you're comparing energy cost to house values. But housing is a cost. The confusion between cost and value is one of the things wrong.
If house prices stayed largely stable we would view them as homes rather than as assets and we would stop thinking that the way to make our fortune in this country was to buy and sell terraced houses to each other.
Not really.
Houses are assets because they are not 'consumed'.
Their state is the same at the beginning and end of any accounting period.
Even as assets they do not really depreciate in value (although a technical argument can be made that the building depreciates whereas the land doesn't, but you have to be able to separate the two values reliably for this to be a useful distinction in accounting practice).
Tory policy to boost housing: limited govt. guarantee on mortgages that can be switched off at a day's notice.
Labour policy to boost housing: let badly regulated Yorkshire and Scotland based ex-building societies, run by non-bankers, borrow short and lend long on high earnings to value ratios , using securitised mortgage collateral that can't be unravelled; all of which was eventually switched off through a financial crash and five-year long, painful recovery...
Know which I prefer...
At least Labour were kicked out as a result. Just think of the horrors if they were still in office.
Carney's message to savers is surely to invest more aggressively. Choose stocks, bonds, property, pensions - anything but leaving it in the bank. That's what central bankers do when they want to get economies going.
On 870K he's clearly out of touch with ordinary savers! If you have enough spare cash to gamble on the stocks, fair enough - but what if you haven't?
An ISA linked to the FTSE All Share Index would have increased in capital value by 6.25 times from the beginning of this year and that is before the tax benefit.
Tory policy to boost housing: limited govt. guarantee on mortgages that can be switched off at a day's notice.
Know which I prefer...
Can't, Carney has said if things get out of hand he won't renew the policy after initial 3 years
Also politically impossible, if it triggers a bubble then shutting down highly likely to trigger a bust.
Also worth remembering is that the guarantees are self-liquidating.
They apply at a maximum of 14.25% of initial purchase price. The bank (or mortgagee through a 5% deposit) covers the first 5% of loss. The mortgagee covers the next 0.75% and the government guarantees the bank's loss on the next 14.25%.
A fee is paid by the bank to the government for the guarantee which in aggregrate should (but not necessarily will) cover the taxpayer's exposure.
The fee and the guarantee should be treated like an insurance premium and insured interest respectively. The National Accounts don't currently treat government guarantees in this way but there are moves afoot internationally to move to this accounting method.
Guarantees are only available on repayment mortgages, where the mortgagee pays down the principal over the course of the loan. The amount insured by the government therefore reduces each year by the amount of principal paid down by the borrower.
The guarantee term is seven years by which time the first 20% of principal will normally have been paid down.
So unless the government renews or extends the scheme, insured losses reduce each year in a linear path until they self-liquidate in year seven.
Carney's message to savers is surely to invest more aggressively. Choose stocks, bonds, property, pensions - anything but leaving it in the bank. That's what central bankers do when they want to get economies going.
On 870K he's clearly out of touch with ordinary savers! If you have enough spare cash to gamble on the stocks, fair enough - but what if you haven't?
An ISA linked to the FTSE All Share Index would have increased in capital value by 6.25 times from the beginning of this year and that is before the tax benefit.
That looks like value, but 6.25% is more likely.
Yes.
I very much doubt that the FTSE All Share Index will increase by 6.25% in the second half of 2013 and on forward as well. But it did rise by over 23.5% (low to high) in the first half!
And it never harms anyone to warn that such investments can go do as well as up!
Home Office again another round of publicity for their campaign.
SkyNews - Probe Into Government's 'Go Home' Poster Van "The Advertising Standards Authority (ASA) is investigating the Home Office poster van campaign targeting illegal immigrants.
The ASA said it had received 60 complaints, which expressed concerns that the ads were "reminiscent of slogans used by racist groups to attack immigrants in the past".
The poster van carried the slogans: "In the UK illegally? Go home or face arrest." A second line on the advert claimed: "106 arrested in your area". It then encouraged illegal immigrants to text "home" to the number 78070.
The campaign attracted widespread criticism, including censure from the Business Secretary Vince Cable, who called it "stupid and offensive".
However, Downing Street insisted that it was working and that immigrants were volunteering to leave, although the Home Office did not provide figures."
How many "illegals" texted 78070. The answer is in the number provided, twice !
England crumbling like Liberal Democrats ! They can't even play Lyon. Until now, I thought the Aussie pace attack was better than ours. Now I amy ahve to rethink that.
The Aussie batting: let's say, they need to prove, Manchester was not a flash in the pan !
"England players Graeme Swann, Joe Root and Tim Bresnan spotted smoking in Manchester There has always been a suspicion that cricketers are stretching the definition of the word when they claim to be athletes."
Home Office again another round of publicity for their campaign.
SkyNews - Probe Into Government's 'Go Home' Poster Van "The Advertising Standards Authority (ASA) is investigating the Home Office poster van campaign targeting illegal immigrants.
The ASA said it had received 60 complaints, which expressed concerns that the ads were "reminiscent of slogans used by racist groups to attack immigrants in the past".
The poster van carried the slogans: "In the UK illegally? Go home or face arrest." A second line on the advert claimed: "106 arrested in your area". It then encouraged illegal immigrants to text "home" to the number 78070.
The campaign attracted widespread criticism, including censure from the Business Secretary Vince Cable, who called it "stupid and offensive".
However, Downing Street insisted that it was working and that immigrants were volunteering to leave, although the Home Office did not provide figures."
How many "illegals" texted 78070. The answer is in the number provided, twice !
Let's see what figure they announce. I reckon they'll give a number for how many calls they got, including people who phoned up to ask if they needed a visa to go to Willesdon and whether UKBA would pay for their taxi home to Harrow.
Sorry, Surbs, I missed your reply on first run through the thread.
You only really benefit if your properties increase in real terms and there is no opportunity cost.
By opportunity cost I mean the difference between the increase in value of, say, your second home including any rental income, and, the returns you would have got from a reasonably available alternative investment.
On the whole though, it is probably fair to say that an owner of two London properties would have suffered much less loss of value than owners of similar value properties located outside London.
And return on investment will probably have not been your primary motive in buying the properties in the first place. Somewhere to house your family may have been more important!
As for the government providing stimulus to business lending, it is not for want of trying. The BoE £375 bn QE was designed to free up bank funds for lending as is the Funding for Lending Scheme both of which are vastly larger than any stimulus being provided to the housing markets.
The need for bank restructuring and balance sheet improvement has constrained what the government and BoE can do to stimulate business lending. It has to be a first priority to ensure that our banks are sufficiently capitalised to avoid the need for future taxpayer bailouts.
Mortgage lending is relatively simple. Lending to business requires all kinds of credit risk assessment and specialist knowledge. It is much easier for the government to partially guarantee a loan for house purchase against catastrophic falls in market prices.
Working out a scheme that could guarantee all the scenarios in which business might seek finance would be beyond the competence of the civil service. It has to be left to the banks.
It is all a matter of patience and prioirities, Housing stimulus bolsters confidence which in turn stimulates demand. As demand increases spare productive capacity is utilised and new investments are financed.
The banks, bar RBoS, are now profitable and will soon be adequately recapitalised. The BoE and the banks are predicting increases in lending to business in the second half of this year. A slow but sure lift off is taking place.
And the old lesson of not being able to buck the markets applies. For all the good will in the world no government scheme could have solved the business lending problem before the market demand had returned and the supply infrastructure mended.
Comments
Double stamp duty inside the M25 ?
Alternatively the chancellor could encourage the chinese etc to invest somewhere other than London by giving tax breaks. Or doing a marketing campaign.
If London's a bolthole, so is the rest of England. Its all covered by the same property rights.
Just for houses that have gone up in value ? What about a mansion up north which has fallen in value by 20% - same tax rate as a Mayfair house ?
Stamp duty has already gone up on ££££ houses - a lot..
Nah - I'm out (in a Bannatyne accent)
An ISA linked to the FTSE All Share Index would have increased in capital value by 6.25 times from the beginning of this year and that is before the tax benefit.
So there are definitely options available for investors with differing risk appetites.
If you like high risk follow Robert S, into Spain but don't go near Italy.
He has already stated that, given the current trajectory of the economic recovery and the fiscal consolidation plans already in place, there will be no need for further tax increases through to 2020.
I hope you are not therefore suggesting that hitting little old ladies over the head with their purses and piggy banks is justified on the basis of 'fairness' just because they live in large and draughty houses?
People who don;t agree with upholding the rights of the property owner deserve to live in countries where that concept is government policy.
You'll be missed, anti frank.
(b) Governments don't "give away" tax cuts. They're simply not taxing people as much as they used to.
Careful Andy - Labour have been trying to keep that quiet for decades.
Energy use is consumption expense.
Property purchase is investment in an asset.
Labour policy to boost housing: let badly regulated Yorkshire and Scotland based ex-building societies, run by non-bankers, borrow short and lend long on high earnings to value ratios , using securitised mortgage collateral that can't be unravelled; all of which was eventually switched off through a financial crash and five-year long, painful recovery...
Know which I prefer...
The main value of new entrants into the retail banking market will be the effect their competitive product development, service innovation and pricing will have on the large high street banks.
This is why the BoE wishes to encourage mutuals and niche operators into the market.
I don't think anyone is expecting large shifts of market share. It will be the threat of losing share that will keep the big boys on their toes.
"And that is what the position should be in London. Instead we have everyone moaning that outside London house prices aren't going up and those in London rubbing their hands in glee.
When energy prices go up this autumn will we have everyone congratulating this?
I'm no fan of massive house price increases, and even less a fan of the chaos that massive deceases would cause, but comparing energy costs to house values is comparing apples to orangutans. "
That's because you're comparing energy cost to house values. But housing is a cost. The confusion between cost and value is one of the things wrong.
If house prices stayed largely stable we would view them as homes rather than as assets and we would stop thinking that the way to make our fortune in this country was to buy and sell terraced houses to each other.
Media Guardian @mediaguardian 1m
Prince George's birth leads to bumper July for Sunday newspapers http://gu.com/p/3tv3q/tf
Under occupancy is clearly a problem. Charles can't even borrow milk from a neighbour due to absentee owners in his block.
But foreign investment in property is linked to other forms of FDI which all governments will wish to encourage.
London is not really a resort city, more a place where foreign businessmen want to base their overseas operations at the same time as enjoying the city life.
But how can under-occupancy be taxed without deterring investment?
Also politically impossible, if it triggers a bubble then shutting down highly likely to trigger a bust.
Or both?
That's because you're comparing energy cost to house values. But housing is a cost. The confusion between cost and value is one of the things wrong.
If house prices stayed largely stable we would view them as homes rather than as assets and we would stop thinking that the way to make our fortune in this country was to buy and sell terraced houses to each other.
Not really.
Houses are assets because they are not 'consumed'.
Their state is the same at the beginning and end of any accounting period.
Even as assets they do not really depreciate in value (although a technical argument can be made that the building depreciates whereas the land doesn't, but you have to be able to separate the two values reliably for this to be a useful distinction in accounting practice).
They apply at a maximum of 14.25% of initial purchase price. The bank (or mortgagee through a 5% deposit) covers the first 5% of loss. The mortgagee covers the next 0.75% and the government guarantees the bank's loss on the next 14.25%.
A fee is paid by the bank to the government for the guarantee which in aggregrate should (but not necessarily will) cover the taxpayer's exposure.
The fee and the guarantee should be treated like an insurance premium and insured interest respectively. The National Accounts don't currently treat government guarantees in this way but there are moves afoot internationally to move to this accounting method.
Guarantees are only available on repayment mortgages, where the mortgagee pays down the principal over the course of the loan. The amount insured by the government therefore reduces each year by the amount of principal paid down by the borrower.
The guarantee term is seven years by which time the first 20% of principal will normally have been paid down.
So unless the government renews or extends the scheme, insured losses reduce each year in a linear path until they self-liquidate in year seven.
I very much doubt that the FTSE All Share Index will increase by 6.25% in the second half of 2013 and on forward as well. But it did rise by over 23.5% (low to high) in the first half!
And it never harms anyone to warn that such investments can go do as well as up!
[Too late to correct error in original post]
The Aussie batting: let's say, they need to prove, Manchester was not a flash in the pan !
Ermine in the money.....
Seems that since I lasted posted (some many weeks ago) the world is starting to cotton on to the fact that
Ed Miliband will never be Prime Minister.
There has always been a suspicion that cricketers are stretching the definition of the word when they claim to be athletes."
http://www.telegraph.co.uk/sport/cricket/international/theashes/10227835/Ashes-2013-England-players-Graeme-Swann-Joe-Root-and-Tim-Bresnan-spotted-smoking-in-Manchester.html
And really great to see you back.
Shane Warne used it as evidence that English cricketers were "arrogant" which is a little bizarre.
The numbers of Lib Dem lost deposits at GE2015 could be in the hundreds
http://bit.ly/16zVFoU
Sorry, Surbs, I missed your reply on first run through the thread.
You only really benefit if your properties increase in real terms and there is no opportunity cost.
By opportunity cost I mean the difference between the increase in value of, say, your second home including any rental income, and, the returns you would have got from a reasonably available alternative investment.
On the whole though, it is probably fair to say that an owner of two London properties would have suffered much less loss of value than owners of similar value properties located outside London.
And return on investment will probably have not been your primary motive in buying the properties in the first place. Somewhere to house your family may have been more important!
As for the government providing stimulus to business lending, it is not for want of trying. The BoE £375 bn QE was designed to free up bank funds for lending as is the Funding for Lending Scheme both of which are vastly larger than any stimulus being provided to the housing markets.
The need for bank restructuring and balance sheet improvement has constrained what the government and BoE can do to stimulate business lending. It has to be a first priority to ensure that our banks are sufficiently capitalised to avoid the need for future taxpayer bailouts.
Mortgage lending is relatively simple. Lending to business requires all kinds of credit risk assessment and specialist knowledge. It is much easier for the government to partially guarantee a loan for house purchase against catastrophic falls in market prices.
Working out a scheme that could guarantee all the scenarios in which business might seek finance would be beyond the competence of the civil service. It has to be left to the banks.
It is all a matter of patience and prioirities, Housing stimulus bolsters confidence which in turn stimulates demand. As demand increases spare productive capacity is utilised and new investments are financed.
The banks, bar RBoS, are now profitable and will soon be adequately recapitalised. The BoE and the banks are predicting increases in lending to business in the second half of this year. A slow but sure lift off is taking place.
And the old lesson of not being able to buck the markets applies. For all the good will in the world no government scheme could have solved the business lending problem before the market demand had returned and the supply infrastructure mended.