B B C Radio 5 Live 15.04.08 RICS report report incl FP
Posted 15 April 2008 - 10:06 AM
The people closest to you have been trying to tell you that you have made a difference. That you did change things for the better. The Universe is vast and we are so small. There is really only one thing that we can ever truly control - whether we are good or evil.
The political triumph of the American Right has been to advance relentlessly the economic interests of the country's richest people, while emphasising a swath of moral, social and foreign policy issues that motivate and certainly distract middle-class and poor voters.
Posted 15 April 2008 - 10:09 AM
I view this uncontrolled irresponsible reporting dangerous to Britainís economy and much more serious than insider trading the Government should step in to stop uninformed unqualified reporting to what is peopleís largest investment. As a property expert I am sick to the back teeth listening to the twaddle the BBC churn out every day.
There is only one reason why people are starting to panic and that stems from uninformed Journalists banging the drum every day. In the last recession pockets all over the country were affected and many pockets not. As like topics on Europe on other subjects no balance. If you take London the prime areas of Knightsbridge, Belgravia, Marylebone, Soho and Covent Garden were unaffected in the last recession.
BBC have like so many companies Journalists that have not got a clue and entertain a hypothetical line that has no bearing in the current prime London market with 5% interest rates and low unemployment, people should not believe all they hear from uninformed Journalists. In the last month I have seen five closed bid situations with prices ranging from 1M-4M
I think you should read around a bit outside your "property expert" box, and you might find out just how little you actually know. In the words of Master Yoda - "You must unlearn what you have learned".
It's not public sentiment. It's lack of credit. This guarantees a recession as we rebalance the economy. All else is pretty much irrelevant.
Posted 15 April 2008 - 10:10 AM
V.I.s who for some daft reason really believe that talk alone can drive down house prices regardless of fundamentals. You have to feel sorry for them, they're just so simple.
Posted 15 April 2008 - 10:12 AM
Secondly I do think there is credence to the point that falls will be much higher in some pockets... eg new build city centre flat environment, those areas with large penetrations of those who are financially struggling (by the by this dovetails quite neatly with BTL penetration). In other words the fall won't be something we can judge nationally as different areas will have different characteristics even beyond the county level eg Suffolk will be dragged down by Ipswich.... Essex will be dragged down by colchester, chelmsford, southend etc).
So in summary I do think he could have made the point he wanted to just as clearly by perhaps firstly breaking down the inflation effect from the actual price drop and secondly making the point about regional differences.
My own view for what its worth is that there will be a blood bath in the new build flat sector and in those areas where people are more stretched financially..... and that this will create a gloomy national picture... however we will not necessarilly see dramatic falls everywhere, and some house types in some areas may not have much of a correction at all. I would say as I have before that there are plenty out there who want to buy, who can afford it and who I see every day, but financing is getting in the way.... if we can find a way to reduce the margin between the BOE rate and LIBOR back to a more healthy 50 basis points (traditionally about 30 basis points) then I think the financing situation will ease considerably.
So they can't "afford it"
Posted 15 April 2008 - 10:12 AM
Listen again at 5 live breakfast show at 8.01am or so.
I was disappointed, normally you put across the facts so well - in the end it became a rant *sigh*
Posted 15 April 2008 - 10:17 AM
Go forward to just after 8am i.e. just over 2 hours
FP - Blimey, Steady tiger. Due to the good work of this site (and particularly you) and the powers (or the lack thereoff) of economic mis-managment, a crash is now inevitable. We can stop shouting, it is those that wish it not to happen that should be the ones shouting now. The facts are on our side, and with the inevitability of the crash now apparent to the sheeple, so too the majority of the media.
Remember what you said on Ch4 news last week, and this is something I have been going on about for donkey's on here as well; high IR's in the late 80's/90's are counteracted by high prices at present. 5% on £150K is the same as 15% on £50K. Do not let them get away with this "we have low IR's compared to the last crash". It is a lie.
Good work and thanks for the link.
Posted 15 April 2008 - 10:29 AM
There are 10^11 stars in the galaxy. That used to be a huge number. But it's only a hundred billion. It's less than the national deficit! We used to call them astronomical numbers. Now we should call them economical numbers.
~ Richard Feynman (1918 to 1988)
Posted 15 April 2008 - 10:31 AM
Or Peter Schiff.
Cap'n, you cannae change the laws of... Economics!
"If they raise rates we're toast. If they don't its BECAUSE we're toast" Jonathan Davis Sky News March 2011
"That which is unsustainable will not sustain" Milton Friedman
Posted 15 April 2008 - 10:31 AM
Flats to fall nationally by more than the 44% that mine lost in Great Crash 1, which I think we need to rename "Minor Blip 1".
If there is a blood bath in the new build sector, how will current flat owners get onto the next rung of the ladder?
Bobthe...... don't quite get the point you are making.... do you think the reduction in prices is going to be worse nationally (drops aggregated up) than last time ?, do you think its going to worse than 20% in price and 20% in inflation related falls. Do you not think that the downturn (like the last one) will be characterised by some massive falls in certain parts with others only seeing price easing. if you look in depth at the current stats most of it is down to repossessions increasing in some areas, new build flats coming onto the market at a discount, a scew in some of the statistics towards lower than average priced housing coming up for sale etc etc.... looking only at a National figure I really don't feel helps understand the nature of any market correction. The media appear fascinated with the national number, as I have to say did the HPC rep this morning. To me its largely meaningless as it reveals very little about where or why prices fall.
Although it may sound silly to many prices are not falling solely becasue properties are overpiced, there are other stronger drivers out there.
The point about the new builds is that those prices will be hit hardest... anyone who has bought one to actually live in in the last say four years is likely to catch a cold... a lot have been sold to investors.. but some unfortunates have also been hoodwinked by the " free carpets, part -exchange, 5% deposit etc " marketing of these places, many didn't even bother negotiating much..... like the more savvy investors they should have pushed for 30% off the starting price... even then they'd be in trouble, just less trouble. These people will definately be in negative equity for quite a number of years. so the answer is they won't be able to get up a rung as you say unless they have more cash. Mnay will have their finances damaged for the next decade.
If there is a significant fall in prices it will however help people trade up, although in recognising that we are also recognising that prices are likely to canter away again pretty quickly once the drop has finished( becasue like most drops it risks being overdone if allowed to run forward unchecked)
Like many on here I share the view that prices will fall, but don't share the view that it will be national, and don't share the view that it will be anything like 40% in actual prices... I would argue even 20% in actual price and 20% in inflation would be extreme over the next four or five years.
Just to pose a point I just wonder what will happen if the credit crunch related financing issues are resolved in the next 6 to twelve months and some competitveness returns to the mortgage market. Personally I don't think it will trigger a bounce in house prices but I do believe it may well cut off much by the way of further falls. if the financing issues do disappear then in my view we could see whatever is going to happen this year 5/7/10 followed by say three years of stagnation........ I base this on the belief that without the financing crisis prices would have stopped rising and maybe dropped a little but not much more than that. I know that runs counter to some of the vested interests here but there we go thats my view. Its a balanced view.... and would in any event equate to say 26% in total with 10 being in actual price and 16% being inflation related.
Posted 15 April 2008 - 10:39 AM
its so hard to understand
when the world is your oyster but your future's a clam
Posted 15 April 2008 - 10:47 AM
No not quite. What happens in many cases is the instability of the situation puts them off.
Take couple A..... they want to buy a house for whatever reason.
A year ago they would have offered got their offer accepted , put the financing in place and moved ahead pretty quickly.
Now... they still want to buy ... for whatever reason... problem is they don't want to overpay obviously vs current conditions so it takes them much much longer to find someone who will accept a reasonable offer (many give up going through this stage where they wouldn't before), they can't "secure" finance in the same way as before, and even when they have an offer accepted quite a few pull out either because conditions have tightened and they cannot get a mortgage (if someone offered them one they would buy knowing they could afford it), or they again give up because deals available at lunchtime today are often pulled which creates trauma, and equally sometimes there are no deals out there that they like... eg they might specifically want a tracker but those are very very thin on the ground.
The financing situation I referred to is not solely about affordability... its also about product choice and Ex-clusion (currently) of various sectors of the market.
So no what I didn't mean was the financing costs have gone up so they can't afford it... what I meant was that the crisis has created a number of issues in the market that if resolved will help the situation. It goes beyond affordability.
Posted 15 April 2008 - 10:52 AM
I think it's right that the sane people in all this are getting angry... and are prepared to forcefully put their point across. We'll be even more angry if the taxpayer ends up footing the bill for this debt madness.
The wool is slowly dropping from people's eyes. More needed on the affordability issue, the silliness (unproductiveness) of high house prices and debt, bogus inflation figures...
The gospel according to HPC has gone mainstream!