UK House prices adjusted for Inflation

Below is an interesting look at house prices since the peak (Nationwide index) unadjusted and adjusting for inflation. I have used the RPI as a measure of inflation (Office for national statistics)). The first plot takes the raw data from the nationwide, while the second plot used PRI after taking out mortgage interest payments. . Both plots show that the return to growth of house price in 2009 faded by the end of the summer and has remained flat since. I will update this for the most recent figure (feb 2010) soon.

Changes to the Lending Code makes promotes excessive borrowing

http://www.independent.co.uk/money/spend-save/simon-read-new-code-shows-lenders-how-to-be-compassionate-1924575.html

I am looking to buy a house at the moment. I can follow two routes:

One way would be to spend within my means, make sure that if interest rates rise I will still be able to pay the mortgage and also making sure that while I pay the mortgage I can still save enough so that if I lose my job I will still be able to pay the mortgage for a couple of months.

But the above article makes me think that would be a mistake. I will spend as much as I can and not worry because if times get hard I will be bailed out by those who were prudent.

Last of Goodwin's RBS directors retires – with £13.5m pension pot

Gordon Pell will receive £582,000 a year after stepping down at the end of the month. He is the last of the Fred goodwin era and as a retiring director of the Royal Bank of Scotland will receive a £13.5m pension pot.

A little about this guys talent:

He was formerly group director of Lloyds TSB UK Retail Banking before joining National Westminster Bank Plc as a director in February 2000 and then becoming Chief Executive. He was also a member of the FSA Practitioner Panel and deputy Chairman of the Board of the British Bankers Association in September 2007.

What a great track record of poor performing banks (OK Nat West, not too bad. Smaller and easier than RBD and Lloyds though) and agencies. Well worth the money. You are paying for it.

Budget 2010: You are the Chancellor. What would you do?

If I were him I would keep screwing savers and those who have nothing (the next generation and current youngsters) to bail out those who overspent in the past.

However if I were me in his job I would reward people who make the right decisions, not the ones who make the wrong ones.

Adair Turner's report; home loans should be less easily available. More prudence.

http://www.guardian.co.uk/business/2010/mar/17/adair-turner-make-home-loans-less-available-larry-elliott


The end of this article has some truth  “Rising house prices simply transfer wealth from young people to their parents.” However more generally at the moment, low interest rates and rising house prices are transferring wealth from those who were prudent to those who were reckless

Bank of England unanimous on interest rate freeze. Shall we start complaining?

All nine members voted for no change, even though inflation is currently at 3.5%, well above the 2% target. The MPC was also unanimous in keeping the £200bn quantitative easing (QE) programme unchanged.


It does not look like they worry about the fact that inflation is above savings rates. The notes of the meeting said inflation was set to remain above the 2% target for some months to come, and that there were certain risks from the weak pound which has now fallen in value by 25% since 2007. So they care less about inflation and care even less about savers.

How about a demonstration at the next Bank of England meeting? 7th April.

No place like home: the generation who can't afford to buy

http://www.independent.co.uk/life-style/house-and-home/property/no-place-like-home-the-generation-who-cant-afford-to-buy-1921781.html

That's you, that is