Sunday, Oct 21, 2007
Economy is strong, there are no triggers, UK property can defeat gravity... forever!
Times: Housing ‘will avoid crash’
“Item does not believe that the tighter lending conditions for homebuyers will lead to a serious correction in UK house prices,” the report says. “With the labour market strong, it is unlikely there will be a major housing recession.” Of course not, house prices have been underpinned by hard cash savings of the UK households. We do not have £2tn in debt and UK public finances are not in the red. And of course interest rates have peaked and can only go down. Only problem, David has been saying that for 2 years and proven wrong every time. Personal debt has soared, mortgage rates have DOUBLED since 2004 and government spending is now a national emergency. Do not understand how this charlatan can still write in the Times.
Posted by confused76 @ 07:23 PM (513 views) Add Comment
4 Comments
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1. deepak said...
It will be, people who will not be able to service their debts that will lead to a crash.
Now debts for housing are three times as in 91. and the interest rates are between 7.69% - 11% and were 10-15% in 91.
So the total debt you will have to service to survive is higher even if I take the lowest figures it will be 150% at best compared to 91.
And slowing of the economy will lead to lower wage hikes and if you are maade redundant you will not be able to find a another job.
And that will lead to a HPC..
2. Icarus said...
The labour market is always strong - until it isn't. It was strong in 1929 - and then it wasn't. It's not a lead indicator - it weakens after other things weaken. It depends on spending by the government and the consumer and they are both badly in debt. And in the UK it depends also on, er... the health of the financial services sector.
3. Ihopeitgoeswithabang said...
Ah you see I can see where they made their mistake...
"using the Treasury’s model of the economy"
That would be the one full of political spin that just more or less tells people what they want to hear.
Nobody of this planet can believe anything a government or financial institution is telling them.
The only 'story' that you are going to get is that everything will be ok.
Anyway you can tell it's bullsh*t when the Economics Editor is just 'quoting' someone else. I.e. I don't really believe a word of this myself so I'm going to tell you someone else said it.
4. inbreda said...
spot on Icarus.
There is no use finding comfort in some stats