Monday, Sep 17, 2007
But noone worries hear, after David Smith said that it won t happen!
Tgraph: Alan Greenspan warns of UK house prices drop
Greenspan said that recent increases in house prices - particularly those in London and the South East - were unsustainable. "There are going to be some difficulties," he says. "Can [the boom] last No. You're already beginning to see the mortgage rates are moving; a lot of the two-year fixes are beginning to unwind, and the teaser rates are going," he adds, referring to mortgages where rates jump after an introductory period. He says that banks are already being forced to write off billions of pounds of debt. "It's going to turn, it's got to turn," he says. Mr Greenspan also warns that Britain is more vulnerable to the effects of the credit crunch than the US.
Posted by confused76 @ 08:33 AM (1334 views) Add Comment
23 Comments
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1. Orwell said...
Of course the question has to pose itself , whether Mr. Greenspan had some ulterior motive in lowering FED IR's to such an inflationary level in the frist place? London was supplanting New York in the International Finance stakes and once that is gone ...?
2. Nosignofdavid90210 said...
I wonder is Kirstie Allsop is ready to eat her hat.
3. tyrellcorporation said...
Yeah baby! Krusty and Phil will be thumbing through the Guardian Jobs pages as we speak!
4. Tyrellcorporation said...
'Greenspan has also praised Gordon Brown for turning Britain into 'the most open economy in the world'. He used his memoirs to spell out his admiration for the Prime Minister while savaging President Bush for being profligate with public money'
Oh dear, he's let himself down a bit with this comment. The UK is now one of the most taxed and watched societies in the World and for a decade Goorden has hose-piped public money at failing public services and Quangos!
5. magnifico said...
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Does that mean a bail out for the greedy bunch who cause this madness by borrowing over the odds to get on the band-wagon? If this is the case I feel sick.
Is a forged Mortgage application the lenders or the borrowers fault?
6. Sds said...
who is David Smith?
7. uncle tom said...
He's right, but it does sound a bit rich coming from him..
The influence this guy has had over the years does tend to make some of his prophecies self-fulfilling.
These words will not encourage vendors to hold out for high asking prices or speculators to keep buying. A would-be FTB reading this would think 'let's hold fire and see how this pans out' and a BTL portfolio holder with a tenant moving out might think 'time to bank some profit'
Any survey that now shows house prices continuing to rise will either be a statistical aberration - or a pack of lies...
8. Sds said...
Q: who is David Smith?
9. Realist said...
The very fact that this sort of thing is now making its way onto the front pages will shift sentiment, although we will need to see sustained price falls in order to convince the herd that house prices are not a one way bet. I predict the market at a standstill by year end with a slow but steady reverse beginning thereafter.
10. maddison said...
Can I be a bull please? Funnily enough a reversal of 15% year on year house price growth to say 0-5% and perhaps a slight reduction of 5% is what I predict. Lets not forget that that is a big change from what people have experienced for a long time and why everyone is worried. FTB's holding off and people not selling will cause stagnation.
11. auntie said...
Maddison - actually stagnation would not be the case. People 'holding off' buying lowers the price. The seller has to drop prices to encourage the sale, I am referring or course to forced sales due to divorce, redundancy etc.
12. speculatorone said...
How long can the greedy estate agents stand a market freeze? They will be the first to start encouraging people to sell their properties cheap in order to protect their fees and business.
13. dbnazz1 said...
Greenspan was widely slated for predicting a recession in the USA for this year. Well I am not sure that the USA is officially in recession yet, but that is only a matter of a short period of time. So far he is looking spot on and all those who slated hime are looking like complete idiots. So i also think that such a respected person is also going to be proven correct concerning his prediction for UK house prices. A
All of a sudden there seem to be so many people talking of a UK property crash, where as fairly recently such people were taking a very different view. I wonder if such people take the view that the facts now seem to be so obvious that they would ruin there reputations if they noew said anything else with a crash looking like it is on top of us.
14. Ricky said...
Is the grammar in this article deliberately terrible?
15. tyrellcorporation said...
speculatorone.
Spot on. The EAs will ironically hasten a price crash as their business and cash flows grind to a halt. The stagnation scenario just doesn't add up.
16. uncle tom said...
In the past, house price downturns have started with a stalemate, with vendors unwilling to drop prices, and buyers unwilling to pay, resulting in a period of low transactions, and a lean period for the EA's
The last couple of times this has happened, it has been the buyers who blinked first - resulting in a minimal fall in prices, and a resumption of upward price movement.
The slump of the nineties started with a huge amount of denial, and it was only when reposessed properties went under the hammer and sold for peanuts that people really accepted that their homes were now worth less.
This time it looks very different - the vendors will be less confident, and the buyers conspicuous by their absence.
There seems to be a growing expectation and acceptance that prices are going to fall now - things are developing much faster than I previously thought they would, and I would not be surprised to see a sense of urgency evolve now among those who are selling property but are not part of a chain.
17. Winnie said...
The EAs will quickly revert to type, preferring 5% commission from a property dropped in price by 15% than 0% from an overpriced one.....pure sharkdom.
18. tony marshall said...
SDS - David Smith is a rather foolish economics reporter (editor?) for the Times. He has denied all along that house prices will fall. He lives in cloud cuckoo land and my attempts (and those of others) to engage him in intelligent debate on his web-site have met with flannel and shallow thinking. We all hope that he will join Kirsty in eating a very large hat (she promised she would eat her hat if house prices crashed).
19. Orwell said...
I don't know,
David Smith has a job to do, namely erring on the side of caution and at the same time protecting his cosey sinecure at the Times (and his pension)...
He is only a Social Sciences graduate after all...
20. Bears Picnic said...
I have engaged David Smith over the past month. He is a tricksy character. He is currently running scared. He knows the game's up, but is trapped by his history. He had me removed from his site (I can't comment anymore) for trying to pin him down on some HPC related issues - says it all.
Don't really know what the guy is about. His view of life and economics is very one-dimensional: he is not actuall ythat bright, and has become the favourite knock-down guy of the bears. I suspect that it has been made clear to him that he is out of a job if he doesn't tow a certain line (as Orwell said).
21. Orwell said...
David Smith also removed a colleague I know, a trusted Commercial Lawyer in the smoke...
22. _woody said...
I too can no longer access his site since making balanced comments/assessment on Gordon Brown's record as Chancellor
23. _woody said...
I find Greenspan's comments slightly startling - After all his dramatic and aggressive interest rate cuts was one factor that propelled us to this period of asset price inflation.