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tegs07

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Posts posted by tegs07

  1. The former governor of the bank of England, Mervyn King  once said “house prices are a matter of opinion, debt is real”.

     

    The debt is dependent upon affordability which is dependant upon interest rates.

     

    House prices are no longer tied to (sensible) salary (multiples) as the criteria for purchase IMO but are totally dependent upon access to cheap credit. Remove this from the equation and what houses are really “worth” will be revealed.

     

    My personal opinion is that two decades of ultra cheap credit has distorted the economy entirely, shifted asset ownership into the hands of people who can afford the risk of loading up on cheap credit and made the risks far higher for those on the first rungs of the ladder. This disproportionately affects the young.

     

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