Assetz^® News » HOME | FEED | LIST ALL ARTICLES | ASSETZ HOMEPAGE

Assetz^® Property News Service

Bank Of England Accepts That House Prices Are Important

---

Charlie Bean, the Bank of England's deputy Governor said six months ago that there was little link between house prices and consumer spending. This has been retracted this week with the confirmation that they believe stability in house prices is far more important than they previously thought.

Reductions in house prices damage the balance sheets of banks and reduce their willingness to lend said a report issued on Wednesday. Obviously it also reduces people's wealth, at least on paper and house price falls impede people's ability to withdraw equity.

I think the most important factor is the damage to banks balance sheets that significant house price falls will bring and, as I commented on in a blog entry earlier this year, it is quite reasonable to expect the Bank of England to consider defending house prices in order to defend bank's balance sheets and the financial system.

The falls in base rates that we are seeing are, I suspect very strongly, in part targeted at the defence of this nation's house prices and its housing wealth as part of the concerted strategy to stabilise the financial system. Good news for buy to let property investors and property investment generally.

This news story has come from the property investment blog by Stuart Law, CEO Assetz plc.

---

Accessing the news service

You can view all of the Assetz® UK, International and UK Property Investment Articles and News here.

We also provide an Feed of the news service, or you can view all articles. Click here to view more information on RSS readers and how they make reading online news more convenient.

Terms of content usage:
XML and other types of publication of this article title and the URL of this page are permitted using the RSS feed or other methods.
Article content strictly prohibited from duplication on any other site directly other than first paragraph included in the XML feed.

Copyright © 2001-2009 Assetz® News Limited. All Rights Reserved | Company Information | Assetz® Homepage
Assetz House, Newby Road, Hazel Grove, Stockport, Cheshire, SK7 5DA
TEL (UK): 0161 456 4000 FAX: 0161 482 7588
TEL (International): +44 161 456 4000 FAX: +44 161 482 7588