Saturday, Nov 17, 2007
But ... immigration, demographics, shortages ...?
BBC: House Prices "face slowdown"
Amazing how the BBC and Fionnullla change their tune on a sixpence.
Not two weeks ago house prices were going up up and away driven by immigration, population growth, divorce, demographics, lack of building ...
IT IS OVERSUPPLY OF CREDIT CAUSING A BUBBLE AND HIGH PRICES YOU MUPPETS !!!
Posted by voiceofreason @ 07:48 AM (1211 views) Add Comment
18 Comments
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1. voiceofreason said...
... but not for much longer .
I got a nice reply from Prof Peter Ambrose on oversupply of credit. Will post more info later.
2. Orwell said...
They really are idiots that belive their own bull... There wasn't a real recession in the South in the early to late 1990's was there Ms. Early?
3. Orwell said...
How much does Ms. Early earn for 'predicting' this crap
4. deepak said...
Remember, these lenders were saying 10% rise a few months ago. And also add BOE comments last week.
I think they could not say its going to collapse from that. So they are training you to 0% raise now.
Once you have accepted that will come the next killer blow.
5. paul said...
Good post. The commentators on the unfolding crash must think that most folk really are quite daft, after all if they think that their predictions two weeks ago are now invalidated, what does that mean for their predictions in the coming months?
Anyone with half a brain would figure out that they are talking bunkum, and desperately trying to shape opinion in their favour. It's not working though ...
6. new_order said...
Even if people believe the hype, where will the money come from?
Even if I believe (which I don't) that a studio flat in Hackney (a.k.a. murder mile) in a block with a broken lift and a puddle of piss on every floor on a 100 year lease and English being the third language in the block is worth £160,000 I don't have the money anyway and I am a senior engineer! The game is over!
7. david20040_0 said...
But with interest rates about to be slashed this crazy madness may just continue for another few years yet until the next credit crunch.
8. the reaper said...
Interest rates will probably not be slashed.If they do,then get ready for some bumper inflation figures futher down the line.The reality is that the supply of money to mortgage lenders is drying up big time.Years ago,I read in the FT that a 5% drop in demand would hit property for 20% in their opinion.What we're seeing at the minute in terms of mortgage approvals is far more than 5% down!
The reality is that they have been miscalculating inflation for years and wages have fallen well behind rises in the cost of living.It's all over now,just a matter of when people realise and start fireselling.Which is probably some time away yet,but measured in months not years.Especially given the number of people moving off two year fixes in the next few months.
On top of which,sterling is on a dollar like precipice and when it finally goes,inflation will be the result.
9. inbreda said...
David - we told you to go and buy a house before the bottom rung of the ladder is out of your reach. Haven't you done that yet?
I suggest you spend less time looking at this blog and more time house hunting.
10. Pete70 said...
Amateur BTL investors are already losing on their speculative exercises. Take, for example, a flat that was sold less than two years ago for £315k. The same flat is now being repossessed and on the market @ £230k. There must be hundreds of newly built properties like that.
I've never believed in 'shortage of properties' for a simple reason. If that really was the case then the rents would have been increasing in line with house price increases but in fact they have barely moved in many areas for the last few years.
Subprime crisis will hit the UK, it's only a matter of time. Not so long ago - but before NR fiasco - I had a cold call from a subprime loan seller. He was offering me a loan @ 10.9% secured on my flat. I said something like 'do you think I'm stupid or what, why would I take a secured loan @ that rate when unsecured loans are available @ less than 7%?' I also said that I had just happily remortgaged @ 4.99%. He didn't really know what to say but kept on arguing. I simply said that my number was listed on the Telephone Preference Service and that I would report him and his company.
Imagine all those people who have been successfully conned by subprime (or secured) loan sharks. Many people won't have a hope in million years to repay and will face repossession, resulting in declining housing market across the country.
11. dohousescrashinthewoods said...
David, a quick peek at yesterday's post about lenders not cutting rates if the BoE does should carry at least as much weight as a few VIs trying to pressure the bank by raising market expectations. I think it highly unlikely we'll see a sustained rebound.
12. ck one said...
Dave baby its been a while, how are you? Sorry I haven't commented for while on HPC but I've been enjoying a mini celebrity status as the oracle of all markets since August.
Anyway to p**s on your fireworks with the same statement most of us were making when the summer reality check kicked in (I don't call it the credit crisis as I don't see it as a crisis just a fait a compli) 'Central banks don't control the rates that easily anymore, the whole thing has decoupled, you don't borrow money from the BoE you borrow it from a high street bank. The rate that high street banks borrow money is dictated by the global credit market, this is the bit that is broken and isn't working... They can't borrow the money at low rates anymore because risk has been totally re-priced, in fact risk is probably now being over priced and it will only get worse!'
13. confused76 said...
David
To sum up and add to the points made by others above:
1. there is not going to be a slashing of rates otherwise Mervyn Christmas would have kept his mouth shut and done it at the right point in time. King's declaration of intents was meant to appease consumers and home owners, but the man knows his hands are tied behind his back. The pound would plunge if he really lower rates. The powerless king is waiting for the ECB to indicate direction of the next euro rate move. It is all politics, really. Britain cannot afford to have an independent monetary policy, lacking manufacturing industry, with N.Sea oil output declining 10% y-o-y and so dependent on foreign investments (see example of the sharia compliant bonds)
2. any rate reduction will be pocketed by the banks and not passed to borrowers (in other words is a bail out of the banking sector)
3. "continue for another few years yet until the next credit crunch"... not so fast, pal. we are still at the beginning of the current credit crunch, and you already talk about the nexy cycle
14. confused76 said...
Touching on the question of immigration, why EAs and the various Fionnallalaluulla Fayled Ecnmyst do not quote the NET number of immigrants into the UK (i.e. immigrants less British emigrants)
Apparently the net immigration is only a fraction of the gross number of immigrants, i.e. only 191k per annum versus 591k gross immigrants so widely publicized in the press
One Briton Left The U.K. Every 3 Minutes In 2006
http://www.allheadlinenews.com/articles/7009185294
15. paul said...
david20040_0, as an estate agent in disguise, you must be cacking yourself.
16. The Slump said...
Does anyone know the figures comparing immigration numbers with emigration numbers. I don't care who comes into Britain from where as long as an equivalent number,more or less, are are leaving, also how much of the immigration numbers merely make up for the shortfall in the young population? I's not as if native British people are so pleasant to live with, it's just numbers and overcrowding that worry me
17. geed said...
Whoever Dave is, he certainly gets us all thinking about why we believe in what we believe. In the face of such rational and informed replies, I know my mind cannot be swayed and my personal predictions are staring to ring true, albeit 2 years later than predicted (thanks BoE for the summer 2005 rate cut!)
g
18. Ihopeitgoeswithabang said...
The BoE had the option a couple of years ago to rein in peoples spending and stop houseprice inflation - which was the one thing that medium to long term could starngle this economy.
As expected of any government puppets they took the short term 'not on my watch' attitude.
Thus building everything up until it really hurts.
My brother works as a chippie. His boss has just been done for £55k by some Wooden Housebuilding Company that just went Bankrupt owing alot of money to alot of people.
Apparantly they couldnt sell their new houses for what they needed to or even expected to.
Once this sort of things starts to happen it spreads like a bad cold through the construction industry. The last time I remember this happening was in 1991/92.