Wednesday, Jun 17, 2009
Blanchflower sees no green shoots
Telegraph: Green shoots? Strictly for the colour-blind
Interest rate slasher and arch enemy of HPC.co.uk, Danny Blanchflower, sees no green shoots. He sees a toxic cocktail: sliding house prices, rising negative equity, inadequate levels of credit; soaring unemployment and zero, or even negative, wage growth. He's becoming useful for the HPC cause.
Posted by bobed @ 08:08 PM (427 views) Add Comment
3 Comments
- If you do not have an admin password leave the password field blank.
- If you would like to request a password allowing you to add comments and blog news articles without needing each one approved manually, send an e-mail to the webmaster.
- Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
- Please note that any viewpoints published here as comments are user's views and not the views of HousePriceCrash.co.uk.
- Please adhere to the Guidelines
1. inbreda said...
it's the way he planned it. That or he is an incredibly stupid person.
He is still teh enemy of hpc.co.uk though, as we do not wat boom and bust.
2. stillthinking said...
I am not sure that he ever supported artificially high house prices. Anyway,
"It also remains uncertain whether the banking system can lend enough to fuel the recovery" this is the unavoidable truth, bankrupt banks cannot provide pricing support above cash buyers .Government assistance so far is purely in support of existing lending.
What I think the banks would like ideally, because this is what I would want, is to restrict available funds to FTBs because I don't see that their rates can be profitable, which is being done with deposit requirements. But, the key part is for the -cash- buyers to step back into the market, because everytime a cash buyer moves back into property, probably that property is mortgaged (or certainly in many cases), so they are able to shrink the level of debt on their books. The mortgage gets paid off and a deposit account disappears. Cash buyers can reduce bank exposure.
This unfortunately is where house prices are exposed in sharp relief, because even if you talk to somebody who bought their 200K property at the height of the boom, if you asked them, if you genuinely -had- that money instead of borrowing it, would you really buy that small one bedroom flat next to Paddington railway line, or would you live the rest of your life on permanent holiday in Guam?
I think that there is an asymetry between debt and cash buyers. Houses in Britain look a really very poor deal in exchange for cash, but for people taking on debt, is viewed as swapping a monthly debt between landlord and bank.
3. Frank Williams said...
I agree: I think housing in Britain is a poor deal for many reasons. You have to first consider what you get: for most struggling first-time buyers it will be a grim flat in a crappy situation. You will hear the upstairs loo flush at midnight, you will have strange smells to contend with, you will have local crime, rising damp, and too-expensive utilities to pay. If you are willing to put up with this for the next 20 years, you will also have to contend with stressful employment in a crowded city like London, bad transport, high taxes, miserable, commuting colleagues who will never be your friend because they are just about hanging on to their life, and they have decided to live in a focused rut for 15 years before retiring and leaving the UK. It really is not worth it. Life is short and you should live it to the full. Leave the UK and go somewhere where your money goes further and the people are better.