UK Mortgage Debt / GDP Ratio Worse than U.S.
"I will not allow house prices to get out of control and put at risk the sustainability of the recovery."
Gordon Brown, 1997 Budget Statement.
Gordon repeatedly tells us that Britain will weather the global financial turbulence better than America. The Bank of England projects that over a million homeowners could face negative equity in the widely expected property market downturn. The data above shows that British homeowners are more indebted than even Americans...The National Association of Estate Agents reports that house sales and mortgage approvals have halved. First time buyers are an increasing rarity, below the asking price deals more common, properties are taking longer to sell and the number of buyers on agents books is down by a third. And Gordon still condemns the Tories for proposing to effectively remove first time buyers from paying stamp duty...
99 comments:
I don't see how encouraging first time buyers to buy over priced houses is a good way out of this crisis.
The only way out is to let the market work and let house prices fall back down to reasonable multiples income again.
Looking at your chart, we were in second place 1983, first place 1990 and first place 2006. Not much change there.
A house price correction is well overdue as we all know. The question is how serious it gets; more than 20% virtually gaurantees a recession.
On the other hand, reducing interest rates to stop a bust will release more inflation into the economy.
As a huge debtor myself I am of course in favour of inflation. Somehow I think think my position mirrors that of Broon.
The Government is issuing huge bailouts left, right and centre. I think it hopes these debts will be inflated away - as if there will be no damage from that!
And the market collapses as HIPs are introduced despite everyone warning the delectable Yvette Balls of the likely consequences.She knew better,of course.The damage Nulab's so-called "golden couple" have inflicted on the country is truly awesome.
There will be about a 10% correction, thats all. The amount they have gone up by in recent times, 10% is nothing. Gordon Brown has said it already, its containable. Where's fucking delicious! when you want to give him a good kicking for being wrong.
labour still the best said...
"There will be about a 10% correction, thats all"
LOL. Nice to know you can predict the future so well.
Even the IMF thinks prices are 30% overvalued and since prices usually overshoot on their way down, just as they do on the way up, 40% is entirely possible.
Worse, Brown promised in his 1997 budget that he would prevent housing boom and busts (read the budget speech for yourself!). He's done NOTHING.
labour's string vest said...
There will be about a 10% correction, thats all.
That's right, you just carrying on believing that, you half wide mug.
"I will not allow house prices to get out of control and put at risk the sustainability of the recovery."
Gordon Brown, 1997 Budget Statement.
"We’ve seen house prices rise by about 180 per cent over the last ten years."
Gordon Brown, 2008 BBC Radio 4’s The World at One.
Cityunslicker - couldn't agree more about zanuliebour inflating away its (our) debts. I am a saver as well as well as a modest borrower and 'socialist' governments always cheat us out of our savings by using inflation.
Brown bailouts will be more 'socialist' transfer payments from the prudent to the feckless just to stop his ow economic legacy unravelling aound him.
I shudder to think how much of our money he will use to bail out his luckless clients on the 'keyworkers' shared equity scheme that will trap them into homes as the market falls off a cliff.
The man is a shit and icompetent.
Interesting piece on this yesterday by Robert Peston.
http://www.bbc.co.uk/blogs/thereporters/robertpeston/2008/04/banks_selffulfilling_fears.html
Explains rather nicely how 10% fall would lead to another 10% fall, as buyers attempt to get a discount on the price to cover the expected 10% fall. And so on, and so on.
Just very glad I don't own a house and have no intention of owning a house. Or paying tax.
Which is something I heartily recommend to everyone. Stop paying, there's fuck all they can do about it if everyone stops.
Stamp duty is a complete and utter red herring.
The property bubble has been built up by a massive increase in the credit supply - it's got jack to do with 'demand and supply', 'planning rules', 'lack of housing'.
You take the credit away, you take away any demand at all (although there may still be desire).
People will pay £1,500 stamp duty to get on the ladder when they think they'll gain £20k a year in their house price. They won't pay diddly if they think house prices are going to fall - and house prices will fall by a lot more than the average Joe thinks!
The economy (or what's left of it at the end of this!)will be much better off with house prices at half their current level. people can save and invest for their future.
And great haunches of what the government deems they can keep from their wages (so kind!) won't be being paid in interest to insolvent banks and their directors bonus pool!
labour still the best said...
Utter bollocks!! 10%, my arse! That's already happened - ask a few estate agents.
This housing crash is going to make 1990-92 look like a picnic!
In your 'seen elsewhere' column I was amused to see that Blair and Campbell are 'helping' Livingdeath.I was watching a newsclip of one of the Mayoral debates.Boris was sitting to Livingdeath's left.LD reached over very slowly and in an equally exagerated manner placed his hand on Boris' shoulder.This is the Keating method of bringing your opponent under your sphere of influence (as he tried with the Queen).It was the clip chosen to be presented on the news rather than a candidate answering a question.Deliberately done and deliberately shown (that particular action).
thanks lola - as in Guido's post of yesterday, petrol prices for scots may well be the next in line for a handy bailout.
Throwing money about solves all problems as we all know. Just ask the bankers...
The great thing this time unlike the 70s, when they last fucked it up, when we had strict exchange controls and so you had no choice but to watch your hard earned savings being decimated, this time at least you can sell your sterling and buy something less crap, that the twat gordon can't meddle with.
Over 50 years the average house price has always been roughly 3.5 x average income.
Today average household income is circa £28k whilst ave house price is £185k.
28x3.5 = 98k
therefore house prices should halve (roughly)
Bring it on I say and give FTB a chance of getting on the ladder. No amount of stamp duty bribe by DC is going to hide the fact we heed a crash.
Labour is still the best; what a balloon you are.
The house price 'correction' is already way past the 10% you quote. I hope for your sake that, like me, you have no mortgage to pay on your property, but with you being brainless I guess that's not the case. The 'correction' will amount to, at the least, 35%; happy negative equity you labour fool-fool.
I really do believe that it should be a capital offence to vote for labour; fucking wannabee capitalists.
Remember this; shit is brown, and Brown is shit.
Fucking delicious!
prices in california,florida and the 'rust belt' have fallen 25% in the last twelve months......our economy is in an even worse state then the u.s........there can be only one result......a massive crash and recession........
i cant wait for the food riots!
Labour is still the best; what a balloon you are.
The house price 'correction' is already way past the 10% you quote. I hope for your sake that, like me, you have no mortgage to pay on your property, but with you being brainless I guess that's not the case. The 'correction' will amount to, at the least, 35%; happy negative equity you labour fool-fool.
I really do believe that it should be a capital offence to vote for labour; fucking wannabee capitalists.
Remember this; shit is brown, and Brown is shit.
Fucking delicious!
The building shares of
Bovis -5.58%
32% down from 2008 high
-------------------
Barratt -12.84%
41.7% down from 2008 high
-------------------------
Persimmon -8.31%
34.97% down from 2008 high
--------------------------
Taylor Wimpey- 9.62%
39.6% down from 2008 high
-------------------------
TROUBLE AHEAD
The Bank of England does not project over one million householders could face negative equity. Their economist said 5% of households have less than 20% equity - that is not the same as a projection. I could project all sorts of things could happen - it depends on the assumptions you make.
As for the mortgage debt analysis - perhaps it might be slightly more meaningful if you indicated the % of home ownership in each country.
Less of the cod economics.
Was it not the case that overpriced property and reckless lending has largely caused this problem......yet we are throwing billions at the banks to try and help them continue to lend and to stop house prices falling??????? Confused? Too fecking right!!
anecdotal evidence but here goes. a luxury development in a popular town on essex/suffolk border saw 3 out of 6 property sales fall through (having all been sold off plan 3 months ago). all offered at 750k each looking for a bid having been valued at 850k+ just 3 months agao. another farmhouse in same village was offered at 1.2m 6 months ago and is now on the market at 890k looking for a bid.
the property market is already collapsing and we will be in recession within 6 months.
Brown's u-turn begins to spin out of control:
http://www.timesonline.co.uk/tol/news/politics/article3807163.ece
Is the real issue that Labour MPs would rather screw over the poor so that they can pad out their pensions for another 2 years???
Well, I am not sure about not having a mortgage - as long as it is modest in regards to one's earnings and house value (value? HAH!). Brown's inflation deceit will spirit it away, as he will now try to do with Gov't debt.
BTW I am beginning to think that Cameron's tactic is to - not quite - call him a tosser whenever they meet at the dispatch box. Clearly Brown cannot handle being seen to be and known to be a tosser. He's clever and arrogant and it really irks him. Sooner or later, if Dave and Nick keep it up, he's going to flip, and won't that be delicious.
http://formbymuddy.blogspot.com/2008/04/some-homes-worth-less-than-their-copper.html
Bergen:
If you really think that this situation has anything whatsoever to do with HIPs, then you are a financial ignoramus.
Go read 'Economics 101' before you post any more comment on this subject.
tory boys never grow up said...
Something sensible on Guido for a change. Its all pie in the sky bollocks from this lot of whinging right wingers. Their worse than the housepricecrash rabble, grow up you idiots! Fucking delicious, 35% he reckons. I think Seriously Fucking Deranged! would be a good name change.
There will be a limiting factor on the cost of property - people will just stop selling. Negative equity doesn't actually hurt you unless you want to trade downwards, so the market will disappear until demand exceeds supply, if it ever does.
At least Twat will stop planning to tarmac over the English countryside and put prefabs on it.
Lola - serious question, what makes you describe The Clunking Fistula as 'clever'?
He inherits a great economy, he rides the wave of cheap Chinese/Indian imports, he demolishes our pensions, sells half our gold at the bottom of the market, turns our tax system into a House of Infernal Horrors, and spends our money which he forcibly takes from us with an abandon and incompetency that is staggering to behold.
As my granny might have said "from where comes 'clever' already?"
Untargeted means tested benefits is the new answer to the 10p rate abolition.!
Gordon , Gordon , Gordon.. please! you dont ever target a tax rise on the poorest..unless you are some kind of Feudal overlord, which I suppose he may be.
Paxman said that leaders are supposed to make the weather not get blown about by it. With a little luck he might just blow away completely.Can we not get him to test some new hot air balloons or something?
As our mortgage debt/GDP ratio was worse than the US in both 1983 and 1990 I fail to see what your point is Guido.
Bill Q: You must have seen this about the ballooning priest.
I can get helium cheap -- anyone know a source of party balloons & how to attach them to Broon without his knowledge?
bill quango:
'With a little luck he might just blow away completely.Can we not get him to test some new hot air balloons or something?'
That fat bastard could not be blown away in a force 10 gale!
"The Bank of England does not project over one million householders could face negative equity. Their economist said 5% of households have less than 20% equity - that is not the same as a projection. I could project all sorts of things could happen - it depends on the assumptions you make."
There are 20million homes in this country. 5% of those would be 1million homes. So 1 million homes have less than 20% equity at the present time.
The OECD is predicting that prices will fall by 30%. Thus one can see that a 30% reduction in price would cause AT LEAST 1million homes to go into negative equity. THAT is the projection.
Now by all means claim that the OECD is talking a load of old balls, but I don't seem to remember you making such claims when the OECD were praising Brown's handling of the economy when it last went pear-shaped back in 2001. Unfortunately for you Labour dingbats, they have realised since then that he is a bit crap.
Tonight on question time live from Slough the panel is..
Jack Straw, Lord Chancellor and Secretary of State for Justice.
Arabella Weir, comedian, actress and writer
Sarah Teather, Member of Parliament for Brent East
and
Stanislav, a young Polish plumber.
And the first question from the lady there.. with the green head band .. yes you.
[lady] do the panel believe that it is time for a change of leader?
[Dimby] Stanislav?
and then just let him go.. a roaring, rolling fury of anger. A tirade against everyone and everything. The panel, the PM ,the BBC, the audience, Blair, War, education , Scotland, Fuel, Tax, Immigration.. the Clintons.. everyone.
And please please let Jack Straw just start to interrupt;
"Shut mouth up, stinking secretary of warmonger,rebel without a claws, junkie, terror-fiddling son of ancient crone of.." ending with a full on water jug in the face..
ahh I can't do it even close!
But I'd love to watch it.
Judith - he's 'clever' in the sense of passing exams and deceit.
More accurately he is a clever idiot. More elegantly he is intellectually autistic.
Labour Still The Best [1.39]
You are really Gary Elsby from Stoke on Trent and I hereby claim my prize...
"There will be a limiting factor on the cost of property - people will just stop selling"
WRONG! Because some people have to sell from time to time, the price can just keep on falling. It is the properties that are traded at the margins that determines the notional value of ALL the properties! So if someone is desparate to sell (perhaps because their job at Barratt Homes has gone up in smoke?) then they WILL sell at whatever price they can get - and thus determine the value of all properties in that market. But if they can't sell even then, the banks will repossess and sell at auction. The very fact that prices are deflating causes people to stay out of the market, of course, and people holding property start to panic. That's the problem with deflation - its self-driving.
I know some one bed flats in Southend-on-Sea, Essex that were valued at £65,000 18 years ago. They fell to LESS THAN ONE QUARTER of their previous value to £16,000 as a result of the last housing bust. They were valued in 2007 at £95,000. I don't see any reason why they shouldn't fall back close to £16,000 once people start losing their jobs in large numbers.
Tory boys never grow up and Labour still the best,
Question. Who will be the next Chancellor to go cap in hand to the IMF?
Clue :- The last one was labour as well.
"The only way out is to let the market work and let house prices fall back down to reasonable multiples income again."
Gordon won't want that. You see, the banks would have to right off the assett value of those properties and that would make their problems even worse than they are now. Credit would dry up even further.
Anecdotal I know but I looked at buying a new house at christmas abd the price was 195.000 and the salesman told me that the price was sure to rise if I didnt put a huge deposit on straight away! Well over the next months I have had increasingly desperate calls from the developer giving me ever more generous dicounts and incentives etc. The Nu price of this house is now 170.000 and its still got no buyers who can actually get a completion on their mortgages! Why am I being chased? I do not need a mortgage as I sold my gaffe three years ago and banked the cash! What am I going to do? I think I will wait for the price of that house to fall to around 150.000 and then buy! Ha Ha Ha. Perhaps I should spend the money on a luxury round the world trip courtesy of fuckwit Brown and his bubble?
Judith said
As my granny might have said "from where comes 'clever' already?"
Obviously incoherence runs in the family.
Ghost of that racist shit Ian Smith
Hardly likely especially given that this year and next the IMF expects the growth of the UK economy to exceed the average for all developed economies.
This is so boring. Who cares?
What is the situation regarding buy-to-let investors, particularly established ones ?
The way I see it is that this different to the '90s. There appears to be an emerging new World order in which Asia is usurping the West. Brown's economic mismanagement has left us particularly exposed at this time of economic flux - the man's no genius that much is becoming clear.
But are BTLs going to give the long-term return that was expected, especially if we find that our economy is not on an overall upward curve of wealth gain ?
With the levels of unemployment I envisage before year end who is going to be able to afford the standard £900 pcm rental needed to finance an investment accommodation ? Then there's depreciation to consider.
I suspect that secretly most BTL investors wish they'd bailed out top-end six months ago.
I'm with those here who would say property has to crash to bring some reality to our economy (I have a mortgage btw).
At last we may see an end to those infernal property programmes on TV - I'd give 40% of my equity just for that !
cassandra - make him an offer.
195,000 x 0.7 = 136,500 less all your costs, say £2500 = 134,000. Say 130,000 for safety.
(That'll help drive the market down and fuck Brown and the Banks)
Interesting seelction of data in your diagram, that I may find useful to use with my students. Try inserting Denmark, the Netherlands and Austalia into your bar chart. How striking is the UK statistic then?
Well I'm still up for going out tonight if any of you fancy it?
for cassandra
save your money.buy a house in thailand for £20,000 and leave this shithole.
for lola.Brown? clever? i think you are far too charitable.he once wrote a thesis on some jock who lived in the 1920's with a flat cap and whippets......not exactly groundbreaking was it......
In fact he was so clever to raise 100 stealth taxes and raid pensions that now the savings ratio is almost non-existent and most people will be donald ducked as they got suckered in to the bull run on property trying to use it as a pension substitute.
pure genius.....
@lola said...
// Judith - he's 'clever' in the sense of passing exams and deceit.
More accurately he is a clever idiot. More elegantly he is intellectually autistic. //
Just autistic, actually, and if not formally that, clearly Aspergic. He has a major problem relating to other humans. Nasty bit of work.
"Hardly likely especially given that this year and next the IMF expects the growth of the UK economy to exceed the average for all developed economies."
Growth is measured as total GDP. Since total GDP is driven by the total money supply in the system, the more debt you create the greater your GDP will be. Thus growing the money supply through debt by 15% per annum will certainly give rise to an apparent increase in GDP. Since this GDP increase is not due to increased production, but only increased money supply, it will cause inflation. Thus we see the inflating of a huge property bubble, followed by its collapse and the creation of inflation in commodities as the money drifts to a new home.
If you don't believe this, ask yourself this question - if we had REAL growth ahead of all other nations for ten years, how is it we have a record trade deficit and have slipped from 4th most competitive nation to 24th?
It's rather like going to a cash machine, using your credit card to draw out loads of cash, then looking at the pile of cash and saying "ooh look, I'm rich!". Well, for a while you are, but unfortunately it doesn't last. If you delude yourself in believing that you are rich when you are in debt then you will quickly end up bust. A bit like Argentina did.
@Anonymous said...
This is so boring. Who cares?
3:24 PM, April 24, 2008
//
You, presumably, which is why you are here.
labour still the best
Oy vey, you must have missed the valuing diversity course.
tory boys never grow up
"that racist Ian Smith"
The racist that didn't murder 15,000 Matabele on advice from North Koreans, nor starve 100,000 of his own people. Most Zimbabweans that I know would welcome a return of racist Ian Smith's Zimbabwe.
Reserve your smug cant for Mugabe.
"As our mortgage debt/GDP ratio was worse than the US in both 1983 and 1990 I fail to see what your point is Guido."
Agreed, but it is rather worrying that 1990 was about the time of the last peak and it was only 55% of GDP outstanding then, now its risen to 80%. So when the crash happens it could be much worse this time, perhaps?
Still, looking at Ireland and Spain things could be much worse. With growth like that in mortgage debt their entire GDP is probably based on the creation of funny money to buy houses on the never-never. So when the crash happens they will be totally wiped out. Still, I expect they will just have to go back to the EU with the old begging bowl. We'll end up paying for them too.
Oh, how well the chattering-'came second'-classes, revel in the political and economic misfortune of the masses.
Tory Twats.(capitals deliberate)
Gary
Ghost of that racist shit Ian Smith
Members of the half-wit anti-racist community will never forgive Ian Smith and Enoch Powell for being right. Even now they're trying to blame them for the results of their own policies. Brown's brought the same lefty wisdom and foresight to the economy.
Wankonymous@ 3:24
You'll fucking start to care once you're jobless, the price of food is high enough to make your head spin and the graph showing oil prices looks like the arc you make when you and your mates see who can piss highest up your bedsit wall so you can't even afford to drive down to the dole office to pick up your pitifully small benefit cheque that Brown will probably have started fucking taxing and you realise that if only people like you had put one second's thought into any of this there would be blood-thirsty rampaging in the streets to remove these glutonous, lieing, corrupt, useless fuckwits from power but its all too late by then because your next client has just arrived to pay you £20 to fuck you in the ass.
The entire Nu Liebour front bench is an example of student politics as a dangerous weapon: Their heads are filled with communist ideals and they've been left in charge just long enough to put their foot on the accelerator and point the steering wheel at the biggest brick wall they can find before turning their backs so they can congratulatoraly slap each other on them.
Yep, thought about this again. 1983 - global recession, house prices very low. 1990 - would have been about the peak of the housing market - housing market crash in US, Sweden and the UK. 2008? Sweden no worse than last time, but US much worse and UK even worse than US. Oh dear. Quite the most worrying graph I have seen on the housing market crash, to be honest.
Perhaps Gordon will bail us all out by nationalising our homes. He could call them "council houses".
What about housing demand, does that not vector into this equasion?
Surely, with an average of 976 non British people a day turning up at the door of UKPLC looking for permanent housing the demand on housing stock & therefore the price of housing will remain strong.
I could be wrong though - I did vote Labour at the last 3 elections so I do have a track record of being very wrong indeed.
Very interesting to see where the Irish Republic stands on your graph, Guido. I have marvelled at the thousands of amazing little palaces that have sprung into being behind their grandiose garden gates & wondered, "What is it all based on? How long can it continue?" Is there any factor that will not apply there, so that they will be better protected than us?
when you are driving around look at all the for sale boards , do you notice how long some of them have been up??
new mortgage business 40% lower and now you need a deposite of at least 5k to get one .
re earlier post on wage vs house price 3.5 x 28k should be about right for your first flat or starter home .
sorry if its old news but some ones outed hazel tree as john taylor who ever that is , any conformations !! blogg it was done on is "gordon loses his podium" in telegraph
someone posted a sad and decietful day for blogging how can that be ??
being as nearly everyone has a witty blogg name that isnt there real one!!
I say, Elsby old chap, they've obviously let you out for the afternoon.
See you've cottoned on to the fact that the masses are in economic doo-doo. Wonder how that happened?
Would offer you a glass of champers, but the sun's not over the yardarm yet, and you'll be due back in before they lock the doors at 6.
Oh, how well the chattering-'came second'-classes, revel in the political and economic misfortune of the masses.
And you should know. Isn't Thursday Giro Day? Of course pretty soon you won't even have a post office to cash your pittance from the state. Still I imagine Stoke is well supplied with Cheque Cashing joins. Shame that they'll want their cut though. That means less money to spend on skag Gary. Bad luck old chap.
Liberal left and daft. It's alright. You've seen the light so I (we?) forgive you.
Brown has read a lot of impressively thick books and knows a lot of long words but the fact is he is a shite economist. God knows how he's got away with it all these years. (Have the economics press all been in a coma until now, or what?) He lies and fantasises as a matter of course, his 'moral compass' being made entirely of Scotch mist. His aims are concerned wholly with power and with himself. My stomach heaves when I hear him talk lovingly about the poor because he and those like him (a) make the lot of the poor immeasurably worse (b) use the poor ruthlessly to ensure their own hold on power.
What Brown is good at is that old-fashioned Labour practice which has not dared speak its name since 1997: redistribution... from the industrious and prudent to the incorrigible and amoral, needless to say, and most definitely not to the poorest who pay more tax when they work than is acceptable to anyone with a conscience, understanding of the imperfectibility of Man (something a Socialist like blind-in-both-eyes Brown could never understand) and a rudimentary grasp of economics. Which Brown...
And of course Brown's vain, blind and mendacious cruelty in no way conflicts with the abiding basic instincts of the Labour Party -- before, during, after and despite Blair -- since their fundamental objective is the centralising of control in their hands, and the creation of a vast clientele is the way to ensure it.
Everything else - everything else - they do, including cuddling up to the City, can be filed under 'smokescreen', 'secondary objective', 'tactic' or 'unavoidable concession in the face of invincible opposition'.
Ed Balls, Brown's allegedly human representative on Earth, is the (not very) nattily-suited but authentic and extremely unpleasant face of the innately thuggish Class War Party. To paraphrase Gerry Adams: 'They haven't gone away, you know'.
Liberal left and daft, 4.13
Your comment was a joke, am I right ?
Let's not conflate overcrowding with wealth. Some of the most poverty stricken areas on the globe have the highest population densities.
House prices are determined by what people can afford to pay for them.
We have been in the midst of a CREDIT boom for the last 10 years, not a HOUSING boom. The removal of lending gimmickery during the credit crunch proves it.
Cocky muzorewa
Since when have two wrongs made a right. One evil (and treasonous) bastard begat another evil bastard.
Lay off Gazza. He means well but is a thick as pigshit. Not his fault . Sadly a product of the Sirley Williams school of enlightened education of the masses.
Keep the fuckers stupid and dependent under the guise of 'caring and sharing'. Thats Labour, Old and New.
Gazza for fucks sake think for yourself and drop these Dave Spart cliches. You are better than that.
"What about housing demand, does that not vector into this equasion?"
Nope. For several reasons. Firstly because you always have people selling houses (sometimes the just die, for instance) but people can choose not to buy houses. Secondly because there are enough houses to go around, but just not enough of the right houses. If people stop wanting to go up the housing ladder (because they want to avoid taking on more mortgage debt on buildings that are losing value) then the whole edifice collapses as chains can't be created. Buy-to-let and shared-equity "get rich quick" schemes start to look less attractive because you need to put more money down and all of it is at risk. Less credit available also reduces the market.
So the net impact is that the bottom end of the market fails due to people being unwilling to risk their 10% deposit on a property that could lose that much in the first year, and the top end collapses due to the failure to build up property chains.
This post is far too close to policy debate for my liking, Guido. Why not just stick to the fun stuff - gossip, innuendo, etc?
There will be a limiting factor on the cost of property - people will just stop selling......
Think there may be a little chink in the argument. Ever crossed your mind that some people may be forced to sell - BTL where they've gone in over their heads, fixed rate ends, can't remortgage, interest payments increase 50% - result is they're fucked and have to sell.
Same thing for practically any first time buyer who has purchased in the last 2 to 3 years. On high loan to values, if you don't have the wherewithal to pay down some of the mortgage, you're stuffed. 2 year deals have gone from less than 4.5% to above 6% - an increase of 33% - and that's if they can remortgage at all! Go on the variable rate and your payments are going up over 50%!
And I don't know whether you eat or not but, if you've noticed, food prices have been rising. Oh, and so have petrol prices.. and gas and electric... oh, and my water bill came in yesterday 32% increase in paymnets needed... oh, and my council tax went up about 4.5%... oh, and becasue I'm low paid Gordon is taking another £5 a week in tax.
Got the message!!
The main issue is psychology. When house prices rise to unprecendented levels, the rise is driven by greed and over-confidence. Once house prices start to fall, for whatever reason, the deflation is driven by fear.
Bofl,
Re your post about Blowing England, I already did! Where I am now I can live a very reasonable twelve grand a year net income, prices are low and the government doesnt steal all my money BUT if I came back to the UK and bought a house and tried to live on my remaining lump sum which would provide a net income of about eight grand a year the taxes and sky high bills would destroy me straight away! Owning my own home and having a reasonable income isnt good enough now in the UK! You have to be well paid or go to the state with a begging bowl and become a client of the state for life!
Where I am now I can afford a reasonable lifestyle but back in the UK I would be poor even with owning a house!
I have worked out that I would be left with about five pounds a week after all the bills and taxes and cost of living is taken into account. Gordon Brown has already taken well over a third of my pension to fund his 'visions' and raised the age I can get to whats left by many years!
In Gordon Browns vision of the socialist workers paradise you either have to be rich or a state parasite to live a decent life?
How the fuck are decent people supposed to live when the state is trying to steal what little you have?
Cassandra - which country are you in?
Anonymous said...
This post is far too close to policy debate for my liking, Guido. Why not just stick to the fun stuff - gossip, innuendo, etc?
why dont you stick to the fucking Beano if you dont like it? Thick twat, piss off!
Anon 5:26, Cassandra has a nice little flat in Harare.
It's very difficult for Snottie McBean to know what's really going on out there because his head is planted very firmly up his arse and all he ever hears is what the sad bunch of sycophantes he calls his team decides to tell him...
So the British taxpayers are helping to bail out the Americans. Who is going to bail the Brits out?
Croatia/Greece/Northern Cyprus/Italy and Malta mainly!
Two issues that Liberal-left and Daft may wish to consider in their notion that net immigration may sustain house prices:
- Emigrants are generally qualified, immigrants generally aren't. (Downward pressure on wages)
- Immigrants are prepared to sleep 12 to a room.
If fact there is massive room for contraction in housing demand as indiginous people will be forced to experience the delights of multi-generational occupancy as our ancestors and Asian settlers were accustomed.
This is already happening with kids remaining with parents well into adulthood.
All that is needed for a 30% contraction in demand is a change in expectation - something which the coming recession may well force.
@ Labour Still The Best (1.39pm):
'It's all pie in the sky bollocks from this lot of whinging right wingers'
Using insults such 'as whinging right wingers' for those who choose to criticise this shower of shite Government is so very 1980's.
I used to be a member of your pathetic stain of a political party. I left as I didn't appreciate being lied to over Iraq- like so many others.
So will I now vote Tory? Erm, no- but I'd love a decent English Nationalist candidate to stand in my constituency come the next General Election.
And no- that does NOT mean I'm racist, either- as one of the brainwashed apparatchiks in your party accused me of being when I dared to question the regionalisation of England.
Save all the bullshit sloganeering, wake up and smell the coffee. Labour has been shite for this country. Only a brain-dead lobotomised twat with the intellectual capacity of an educationally-subnormal amoeba would disagree.
You patronising sucker of Satan' cock.
*rant over*
anon 7.42. Very well put if I may say so. So, as we seem to agree about the state of the politariat of all parties just who the fuck does a sensible thoughtful brit vote for?
Cassandra - got it - you're on a yacht in the Med aren't you.........
Good on you.....enjoy.
Does this mean that the 3 million or more houses what Gordo is planning to build, in order to give immigrants a roof over their heads, is dead in the water?
Yet more bad news for Gordon and his 10p tax shambles - YouGov reporting 18% lead for Conservatives(44% Con 26% Lab 17% LibDem).It obviously doesn't do to upset your "core vote".
I disagree! Thank you, fuck off and good night!
R Totale is right up to a point but the real extent of the property obliteration is going to be brain shrivellingly worse.
The 3.5 rule is used by just about every disinterested economist and is as near cast iron as economic rules come but here's the difficult bit...........
For the long term trend line to settle back to this average it will HAVE to dip BELOW this trend line for a short period at a very large amount under trend or a longer period of time at a lesser amount under trend to re-establish the average.
In a nutshell to get back to the 3.5 rule we could be in for property prices 75% less than they are now for up to a year.
Browns brain dead attempts to negotiate with the Banks this week show just what a closetted life he has had
On Monday he calls them in and just about gives them £50-100 Billion.Banks response"Ta mate we'll be back in 6 months when we've pissed it away"
On Tuesday he asks them to get mortgage rates down citing his previous days generosity-Banks response "Fuck off you twat"
Says Colonel Madd
Have the economics press all been in a coma until now, or what?
Prodicus, this article from April 2001 turned up a day or two ago. Brown seemed to put off the conclusions of the article by the credit bubble .
All he needs now is a miracle
Rupert Darwall
Telegraph 3/04/2001
GORDON BROWN is wreathed in pre-election laurels for his stewardship of the economy, not least by himself. He should enjoy the plaudits while they last. The true cost of his increasingly dysfunctional economic policies will become clearer in the next parliament.
Black economy, anyone?
Bank crisis ?
Banks insisting upon a 10% deposit and limiting loans to 3 X salary.
Call me old fashioned but that sounds more like a return to normality.
The housing market has been operated like a vast pyramid selling scam for the last 20 years and now that the pyramid is collapsing those that suffer will be the ones at the bottom of it.
bofl, Cassandra: Yup, that's the way to do it - cash in and buzz off with cash! There really are MUCH nicer and FAR cheaper places for one to rest one's head than the UK.
"For the long term trend line to settle back to this average it will HAVE to dip BELOW this trend line for a short period at a very large amount under trend or a longer period of time at a lesser amount under trend to re-establish the average."
No. It can come down to the current long-term average level and stay there. It doesn't need to dip below it. Any newly-calculated long-term trend will be distorted for a while but it is the current level that matters, not the trend.
@ lola (7.39pm)
To answer your question, if a decent English Nationalist or UKIP candidate isn't standing in my constituency then I think I will be spoiling my ballot paper tbh.
I will add my own 'none of the above' box and put a cross in that as a protest against the LibLabCon-spiracy.
Tonight on question time live from Slough......earlier.
Stupendously funny Bill Quango MP.
BTW make sure you get another member to employ your family and vice versa, you know it makes sense.
If i'm elected as Prime Minister I will cancel all mortgage Debt, IE Punish the Banks and the finance sector, not the British People.
What would the British People do with their new found wealth, why they would spend it of course.
So Kickstarting the economy.
After all the British electorate have put more into their homes than the International Bankers have, Money costs pennies to print and Credit is simply thin air, so what exactly will the Banks be losing, that's right, thin air ?.
Give the People their Homes, the Frauds Known as Bankers (to some) can start again, not the People.
http://www.youtube.com/watch?v=OnwLgrSJZKs
The Bank of England have got a lot to answer for. Rory Bremner puts it very nicely:
http://www.youtube.com/watch?v=8fNqIdiuoV4
It is not good news for the future of England. I think if sales cut down to that point then the banks have to face problems for funds.
___________________________
veny
Debt Consolidation
Post a Comment