The next leg down begins
The IMF has warned that the pound is overvalued by 5pc-10p, in an update of its wide-ranging annual assessment of Britain's economy. After depreciating by 23pc between 2007 and 2009, the real exchange rate has gradually appreciated, and this trend accelerated from the middle of 2013, the fund said, as it praised the Bank of England for keeping interest rates low and welcomed signs that Britain's surprisingly strong economic recovery is broadening. "Wages are growing very slowly and, although output is beginning to pick up, the recovery is still at an early stage and there is still a lot of slack in the economy,"
You may not want to bring this up at any London dinner parties, but there are tentative signs that the bubble in U.K. housing prices that's helped boost the economic recovery by underpinning consumer confidence may be running out of puff. Given the British obsession with home ownership, any evidence of real-estate deflation will complicate the Bank of England's efforts to nudge borrowing costs higher.
HPC started 2 months back
The Problem With Getting On The Property Ladder
After the property market crashed during the 2008 recession, homeowners have been allowed a sigh of relief recently as things appear to be on the up again; but what about first time buyers? A combination of rising house prices and lacklustre savings rates has meant many of those wanting to get their foot on the property ladder have got to make some sacrifices.
Housing crash now on
An extra 2.7 million to be housed from 2008 to 2014 and lower income per capita to pay for it
After the IMF raised its U.K. growth forecasts to 3.2% on friday output per capita is still some way below 2008 levels, the U.K.âs performance by this metric does not compare well with most other developed economies. The UK has seen strong population growth adding another 2.7 million people to the books from 2008 to 2014. During this period U.K. GDP per capita measured in purchasing power standards adjusted for differences in price levels fell from 114% of the EU average to 106%, a decline of eight percentage points. For the crisis-stricken euro zone, the decline was from 109% to 108%, with Germany GDP per capita rising to 124% of the average from 116% with only Spain experiencing a similar relative decline in income per person to the UK.
Only just realised?
This is the baseline model for London. You can get 600 a month HB on a per room basis. Even a two bedroom house switches to three single occupancy (or double) rooms. That flat, you could fit a family in there, two kids sharing a room, but they wouldn't be able to match the rental costs. Truly this is a scandal because the government is maintaining a price level that they themselves arbitrarily decided, while at the same time switching provision from health care and education to keep the money flowing.
Mwahahahaha - Crashy, Crashy time in London!
The pace of house price growth has slowed to the weakest in 18 months â and the London market is cooling ârapidlyâ and âdramaticallyâ. Reporting this morning, Hometrack said that weakening demand and a slowing in property price inflation are âmore than just a seasonal slowdownâ. n London, Hometrack says that 11% of areas are now registering price falls, while only 12% of London postcodes registered price gains in July. The proportion of the asking price being achieved is also starting to decline nationally, as agents âfind it hard to push prices ahead in the face of weaker demandâ.