While all eyes are on what central banks will do with interest rates, consumers and investors alike should really worry about what commercial banks will do.
Continue readingTag Archives: housing
Bank of England doubles down on house price inflation
This may not be the main thing that financial markets are looking at right now, but the Bank of England has announced it is thinking of removing another hurdle from the path or house price inflation.
Continue readingHousing wealth soars while productivity lags
A century ago, the roaring ’20s were a time of hedonistic excess. After the horror of World War I, people wanted to rebuild, but also to forget. Wealth increased, and so did prices.
While we like to think we are smarter, or at least more knowledgeable than 100 years ago, there are worrying similarities between the two periods. If anything, the excesses this time around are much greater.
Continue readingWhy the ECB is in no hurry to fight inflation
The euro has lost a lot of ground versus other major currencies as the European Central Bank (ECB) is taking a very dovish stance even compared to the usually dovish Bank of England.
As expected, a German has the difficult task of being a lone hawk amid doves: Isabel Schnabel, member of the ECB’s Governing Board, recently warned that the central bank has consistently been wrong in its inflation forecasts.
Continue readingECB pays lip service to worries about inflating a housing bubble
The European Central Bank (ECB) raised its inflation target last week, at the same time going to great lengths to try to persuade people that it did not.
In the process, the central bank also stated that it will find a way to deal with an issue that is increasingly pressing: that of runaway house price inflation.
Continue readingHow to make renting attractive in the UK
Central banks have been busy saving the West from its own excesses since the great financial crisis of 2007, but in the process, they have made housing unaffordable for young people, particularly in the UK.
House prices have surged in many UK cities, with record low interest rates and money printing making homes more affordable for “investors” and less so for those who actually need them as places to live in, as opposed to assets to speculate on.
Despite record low mortgages and various subsidies, homeownership is increasingly unaffordable for a rising number of people.
The consequence is deepening inequality, which makes the UK look more like a feudal, rather than modern, society.
One of the ways to tackle the so-called “housing crisis” would be to make renting an option perhaps as good, if not better, than buying a property.
Here are four ways in which the UK government could go about making renting a truly affordable option for young people in the UK – and a few of the reasons why it will never do it.
Continue readingTo fight inflation, wealth needs to be taxed more
Even though the vaccines have the potential to reduce the Covid-19 pandemic to manageable levels, the scars will be felt for years to come.
Beyond the tragedy of the loss of human life, deepening inequality is perhaps the worst consequence of the pandemic. Governments around the world will seek to take steps to reduce it, fearing civil unrest.
House prices are becoming red hot, and this is scary
House price growth is accelerating in the UK and the rest of Europe, but it is far from healthy growth. The consequences of lax rules on lending to house buyers could be devastating.
Continue readingMortgage guarantee could sow the seeds of trouble
The UK government awarded hard-working medical staff a meagre 1% pay rise in the most recent budget, all the while splashing out on yet another indirect subsidy for house prices: the mortgage guarantee.
Continue readingThe UK should stop subsidising house prices post-Brexit
Forget Covid-19 and Brexit. The question to which most people in the UK would want an uncertain answer is what will happen to house prices in 2021.