Posted 22 March 2012 - 11:50 PM
That makes sense. The more people you can allow to buy into the bubble on the way down the further around you can spread the suffering, (or from a lender's point of view, the more people you have carrying your water), so don't force foreclosures till you have to.
Credit tightening will keep prices moving down outside the London bubble. The Stamp Duty adjustment will keep London prices where they are, (at best).
Lenders like their spreads and hate to write down loans but isn't I still think that, just like closing up shop in certification, LTV and IO - whoever moves first loses least and sooner or later fear of being labelled the "nasty bank" will be small beer compared to the losses incurred by moving last.
I think that a lot of things that fed the bubble on the way up will feed into the crash on the way down, just like always, when greed turns to fear.
The national statistics paper over a lot of complexity. Outside London we are materially down in nominal terms. IMO the London bubble is about to run out of steam. To this point, the continuing run in London has hidden the fact that the game is up. Once London's climb halts, the signal from the national stats will be clear, even to non-executive directors who are paid to nod.
10% a year from here to the bottom. Ugly all the way down, but the truth is the truth, and a £200k mortgages against a rabbit hutch and claims of £45k joint earnings, (really a paper round and weekend shifts in a nail bar), was always nuts.
Wendell: It's a mess, ain't it, sheriff?
Ed Tom Bell: If it ain't, it'll do till the mess gets here.