Thursday, Jul 30, 2009
Nothing clever in this.......
BBC News: Homes 'may rise in value in 2009'
''The Nationwide's latest house price survey showed prices rose by 1.3% in July compared with the previous month.''
Posted by hpwatcher @ 07:03 AM (5354 views) Add Comment
145 Comments
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1. hpwatcher said...
So far, it would appear, that both the credit crunch and the recession are failing to have a significant impact on house prices in this country.
Any ideas, aside from the 'low volume' theory? Double dip recession anyone?
2. graham said...
My theory is that there is simply nothing left to invest in. Most people don't understand stock markets, can't get a decent rate at the bank, they look at the pitiful pension statements that they get periodically and look at the only thing over the last decade they've made any money at -- their house.
Well, if it worked then and the BBC tell me they're going up again why wouldn't I take all my money and put it into housing? If the economy tanks I lose wealth anyway in all other investments. At least with a house you can see, feel and touch it and as well as the 'inevitable' increasing value far above the base rate it will provide an rental income too.
If I weren't a disillusioned FTB with a handful of beans to my name I would have invested all of my money in property a decade ago.
3. mrflibble said...
Higher monthly rise than I expected - Patient FTB's must be getter really cheesed off by now!
I still believe that here in the UK we are trying to recover the housing market too quickly. Our bubble was huge and the start of our correction is being undone too aggressively by this mini 'recovery'. Prices need to settle at a sensible level and the longer we take to get there the more pain will be felt through a stagnant market that new entrants cannot enter.
All I can say to FTB's reading this site and getting anxious right now is to sit tight and watch the showdown.
4. mark wadsworth said...
Oh dear, it appears the government has outsmarted us for the time being.
5. hpwatcher said...
Oh dear, it appears the government has outsmarted us for the time being.
They are absolutely putting everything they have into this, just wait for the cuts....70's/80's UK here we come.
6. tyrellcorporation said...
Just watch the brain-drain in awe if 20, 30 and 40 somethings realise they'll be priced out forever. I already know of 4 highly trained professional couples who've left for Canada, Australia the US and NZ in search of a better life. Artificially keeping the biggest asset bubble in history afloat with future tax revenue is a road to disaster. Ultimately it won't work but just merely trying will devastate the public finances.
Labour are playing with fire!
7. happy mondays said...
@ 5 70's/80's UK here we come. NOooooooo ! Only the creative raw music please...With plenty of anti establishment sentiment.
8. Thewokman said...
Lagging Information. How many houses were actually sold during this period? These figures should come as no suprise, as we've all seen the spring froth. Anyone who looks at sales activity on the web can see that in the last 4 weeks, the whole market has ground to a complete halt.
9. paul said...
This is just more BBC state media propaganda. Honestly. Asking a mortgage provider if the price of assets are going to go up?!
This is the Nationwide remember who decided a year and a half ago that they were going to stop doing their monthly forecast (which the BBC always used to pounce upon and publish word-for-word religiously when it said house prices will go up).
If the Nationwide really want to comment on the future direction of house prices at this juncture they should resume publishing their monthly forecasts instead of hiding behind loaded comments to the media.
As for the BBC for runnning with the story without asking for any empirical evidence - shame on them. Exactly what we've come to expect though.
10. alan said...
Surely its time to put up IR to prevent a repeat of the housing bubble?
...anyway, where else is there to stash your funds? Anyone want to buy a painting, antique sword, pocketwatch, timeshare or allotment?
11. paul said...
Hang on. This is MoM not YoY?
The BBC's use of statistics in its reports has always been shaky, but comparing monthly fluctutations is utterly meaningless. I've NEVER seen them compare MoM falls before.
12. quiet guy said...
It looks like the bulls have the last laugh this month but how can this growth be sustained without more bubble economics?
http://www.nationwide.co.uk/hpi/historical/Jul_2009.pdf
“The improvement in housing market conditions, however, does not mean that the positive price trends of recent months can be extrapolated into the future in a straight line. If prices continue to increase at the rate of the last three months, they would soon rise to levels that would be noticeably out of line with earnings, rents and other fundamental determinants of housing valuations. One should also not underestimate the impact over time of high unemployment, which has implications both for buyer confidence and the financial pressure on existing owners to sell. It is unlikely, therefore, that price increases can be sustained for long at the very strong rate observed over the last few months."
13. andrew said...
"Just watch the brain-drain in awe if 20, 30 and 40 somethings realise they'll be priced out forever."
Agreed, my point of a few days ago, this whole thing is going to be kept afloat I believe, and we are all here because we want to buy at a reasonable price, agreed renting is okay and life is not on hold but ultimately we want to buy, I want to have my own house simply to live in, not too much to ask and that is the way it should be. Why hang around and wait for prices to fall in 10 years, what is the point?
Yes it does look like we are being priced out for about another 6,7,8 years, housing is the cornerstone of the UK economy and I think the forces holding it there are too strong.
14. paul said...
andrew with all respect mate that's just rubbish.
Can we just get back to fundamentals here please? This is the largest bubble in history. Let's just re-examine the good old Lifecycle Of A Bubble
Now, do you see why we're being spooked here?
15. george monsoon said...
BBC propaganda, in association with the biggest Building Society in the UK, that only a week ago announced that it was offering 100%+ mortgages.. co-incidence?
I think not.
and yes, I am a frustrated FTB, in my 40's, giving serious thought to moving out of the UK.
16. peter_2008 said...
In the middle of the worst recession in 60 years, while people are losing their jobs and getting pay cuts, this country's state media is celebrating an annualised 23% increase in property price.
I happen to work in an industry which historically has been proven to be the "half way point" to the bottom. Right now, we are getting hit very hard. Across the board, I would say 10% of work force has been laid off. So I reckon we are about half to the bottom. But I will only call the bottom when I see mass cut in public sector jobs, which in the case of a Labour recession, is always the last “industry” to feel the pain.
This means we will have to wait until next general election, when someone has the guts to stop using future generations’ money to bail out the current one.
17. andrew said...
Paul, I really do hope you are right and the fundamentals still apply. We will see in the next few months I suppose, but if this continues for longer, then your graph may be something from a byegone era, again I hope you are correct.
18. monty032 said...
Excellent chart, Paul. We have just experienced a twelve-year debt-fuelled boom during which house prices went up 223% while earnings went up 65% (nominal terms, 1995-2007. Source: Datastream). Anyone who thinks that the greatest house price boom ever has been fully counteracted by a two-year 20% correction is, to put it politely, a silly person.
19. cyril said...
Paul - I've seen that graph has been produced here many times, and each time a different interpretation of where we are now!
But I still think prices will go down towards the end of the year. HPC enthusiasts - Hold your nerve!
20. Cheekie Charlie said...
A bulltrap wouldn't work unless it fooled the majority of the people! It seems that the sheeple value the price of their homes more than their jobs!
21. Markc2004 said...
I pay £240 a month on my tracker mortgage. The government would be commiting suicide if they were to increase interest rates for at least the next 6 months. If I were to rent my house I'd recieve £1300 per month...
In the 90's recession rates went up to circa 12% - that's what caused the crash. It is very unlikely to happen this time around.
Everyone I know who doesn't own a property is buying at the moment as it is significanltly cheaper to buy then rent and people feel that the biggest drop in house prices has happened over the last 12 months.
With the US economy stabilising, the UK will follow. We can already see some banks announcing large profits and bonuses.
22. mrflibble said...
@12. andrew
"Yes it does look like we are being priced out for about another 6,7,8 years, housing is the cornerstone of the UK economy and I think the forces holding it there are too strong."
The fundamentals are just not there to sustain the current recovery in prices. Once the tide starts to turn again we are going to reach the 'oh sh*t' stage, where the firesale begins.
The UK mindset of 'prices only ever go up' is proving a hard nut to crack, but once it's cracked hang onto your seats...
23. japanese uncle said...
Paul's graph says it all. The same pattern has repeated in every bubble in history. We are now in the phase where we observe less cautious and more adventurous people & firms generally classified as 'suckers' are literally sucked into the black hall. RIP.
24. timmy t said...
I'm not clever enough to put graphs on here but could someone put the Haliwide figures into a graph so we can see how it compares to that in 13 please?
25. symo said...
Of course house prices will carry one rising forever. You only have to look at our strong finance economy and the incresing numbers of employment places.
Oh wait.
26. This comment has been removed as it was found to be in breach of our Blog Policies.
27. gone-to-colombia said...
This will pass, the reality of unemployment and debt will take their toll.
What we are seeing is hype combined with a bull trap.
28. alan_540 said...
@16 Andrew ...
Don't be fooled into thinking that this bubble is any different from any other.
What goes up must come down.
29. jack c said...
You need to stare at Paul's graph (Thursday, July 30, 2009 09:16AM) for several minutes and then quietly sing the chorus to Nightblindness from David Gray's White Ladder album - the whole crash concept should then become clearer for everyone
What we gonna do
When the money runs out
I wish that there was something I could say
How we going to find the eyes to see
The bright of day?
What we gonna do
When the money runs out
I wish that there was something left to say
How we going to find the eyes to see
The bright of day?
30. robh said...
Isn't volumes the issue here? Small numbers selling, with a big proportion of those that do at the more 'solid' middle class family home end of the market. This figure is a bit like inflation data; it is a precise measure of a quantity that applies to few people
The 'crash' so far seems more like a crumbly cliff where sections fall into the sea. Maybe the town centre studios and multi million properties are dropping off but the middle ground is still firm.
31. mystie010 said...
I hate to play Devil's advocate especially as I really want to buy a house and can't afford one yet, but I think that there is still too much money hidden away in our economy. The money the banks lost has gone somewhere it didn't just disappear it just changed hands. I myself have some of it in the form of equity from my last property when I sold to rent. Could this be why house prices have remained stubbornly high? We still have very cash rich buyers in our area snapping up properties at the lower end of the market so I tend to think that perhaps it is this 'lost' money (and there was a lot of it) - that is still fuelling the market today. It's just a thought and observation - what do you guys think?
32. little professor said...
HOUSE PRICE CRASH CANCELLED
33. uncle tom said...
Dear Nationwide,
- Wanna bet?
34. Iainp999 said...
Agreed with the person who commented on the potential "brain drain".
Doing my best to remain modest, myself and my girlfriend are both in jobs which require a pretty high level of education, and we've just about had it with the UK. We know many others who feel the same way.
35. nomad said...
The "mean line" is interesting. On Paul's chart it is very low leaving a precipice to fall off, maybe put this low for illustrative purposes.
The HP mean line, however, is where we are now!
36. techieman said...
my two penny's worth from a post last month:
"BUT every bear market i have ever known (and i'd probably guess i've known a few more than most, let alone those i have studied) has counter trend rallies. Now there may be one now or there may not be (i favour the former). That doesnt mean its all over.... not at all.
Many bloggers have said there will be continued falls and no rallies - maybe thats true, but i doubt it. Markets generally stop near some support (clue look at the trendline on the front page), they often reverse for a while and then re-test the support. And who could make such a thing happen? Well when a market that hasnt fallen for around 20 years falls, dont people think (wrongly in my view - unless i was able to trade it) its a good time to buy? Especially if they perceive the government is helping with tiny interest rates? You dont have a concept of oversold overbought indicators because its outside your experience. Markets are often contrary and although i would be the first to agree the property market is illiquid so doesnt have the same correlation to the indicators, it still consists of people."
The point is counter trend rallies often go higher and particularly faster than people think they will. If people are not prepared / expect such a rally then they get suckered. First weak handed bears throw in their chips in the squeeze, then more astute bears then some of the previously Uber bears.
If the bear market rally is not over yet then it will be when we get some more posts from the bulls telling us that once again we have missed the boat, and that alot of the bears capitulate and buy somewhere.
OF course i could be wrong .... see another counter indication ... self doubt :-).
37. monty032 said...
38. gone-to-colombia said...
techieman - All good points, I agree with you.
39. Poacher said...
mystie010@27
The money the banks 'lost' isn't lurking anywhere - it never existed in the first place. All 'gains' on asset classes whose prices are set at the margins are theoretical unless you get out while the goings good, like you, Goldman Sachs and a few others did. Banks lost money or found their capital ratios under pressure either because they'd held on to the high risk tranches of mortgage backed securities issues, or because they where exposed to weak counterparties via derivatives trades, or because they couldn't roll over debt, or because they were exposed (like hbos) to non-recourse borrowing on property assets which the principals had no incentive to service once the project's prospects went south. All are variations on, or have similarities to, leveraged PE plays (same as BTL capital gains but on a much larger scale) where if you see a capital gain in your asset you enjoy its full benefit while if you see a fall in value the entirety of your principal gets wiped out and a bigger fall puts you underwater. The gains where magnified by the leveraging mechanism and then the losses where too.
More worrying is the 'reluctant landlord' phenonoma that Nationwide where citing on Radio 4 this morning - a generation of homeowners have been obliged to double up on property, only able to do so thanks to historically unprecedented low interest rates. A burden has been turned into a cash cow for the propertied classes, but now a mortgage apartied exists whereby FTB pay three to four times as much to acquire an equivalent asset.
40. fubar said...
If that trend on your graph Little Professor continues beyond Dec-Jan then I am leaving. I can't watch another debt fuelled frenzy of property speculation aka our national sport of "cutting our noses off to spite our faces." However I think there is a herculean effort afoot by the current incumbents of Downing Street to see that line(s) pass into positive territory. Which I also think is actually indictable criminal behaviour. Because if the situation is as dire at it would seem then the post election come down is going to be an even bigger disaster than the one they are trying to stop. Perhaps the slogan for Labour's manifesto could "Bust or BUST"
41. monty032 said...
42. techieman said...
Flash will know that in the old days the G8 as was, was often in the Forex market, to smooth out fluctuations and to teach those bad Forex traders a lesson or two. They used to come in with the finger in the dyke method - i.e. when they wanted to defend a target whever that was in the market. So they were just as likely to come in when the market was slap bang in the middle of a move - eg. no stretched overbought / oversold indicators, as they were to when the trend was pronounced and quite mature, and very oversold / overbought.
They learned though that that wasnt a great idea - as the markets would often taken no notice and just plough through where they wanted the move to stop, so they then seemed to get a bit more clever and either indicate they were going to come in with size if the market didnt stop going the way they didnt want it soon, or they just took on a reverse position at an extreme of a move. That (the second option) killed some of the shorts / longs which created volatility and forced liquidation of some positions.
"Serves em right" you might say.
Anyway why am i twittering (or is that twattering - Cheers Dave) on about this for?
Well either by accident or design the monetary / fiscal stimulia have halted the move right at the mean average line on the chart..... is that a co-incidence?
43. luckyjim said...
I think it would be useful to see a chart showing 'the cost of buying a house' rather than just the house price. House prices have fallen about 20% but the cost of buying has dropped by around 30% (based on long term fixed interest rates).
Of course the cost of buying only means anything IF you can get a mortgage. I think the people buying now are STRs who didn't like the idea of their capital earning 1% in a dodgy bank (I'm one of these) and FTBs who are lucky enough to have parent with a bit of cash. There aren't enough of these to sustain things for very long.
So what happens next will depend on the banks and building societies. If they believe we have reached the bottom pricewise they will start to relax their lending criteria and the market will continiue to recover. If they don't, prices will soon start to fall again.
44. landofconfusion said...
"Now did you read the news today?
They say the danger's gone away.
But I can see the fire's still alight...
burning... into the night."
Land of Confusion by Genesis.
45. 51ck-6-51x said...
Monty032 ( Keith is it?)
- You cannot post an image that is on your local hard drive. Try uploading it to an image hosting site like http://imageshack.us/ first.
46. little professor said...
Full report (pdf):
http://nationwide.co.uk/hpi/historical/Jul_2009.pdf
47. uncle tom said...
Bear in mind that Nationwide is currently only writing about 2,000 mortgages a month, down from around 10,000 a couple of years ago.
Divide that sample into the various categories, needed to create the index; and you realise that the resultant data is going to have a very wide margin of error at the moment.
48. jack c said...
To add to UT's point above (Thursday, July 30, 2009 11:12AM) Nationwide's data is IMO now less relevant than it once was for example Abbey and Alliance & Leicester claimed a 16.3% share of gross mortgage lending in the first six months of 2009, making it the second biggest mortgage bank in the UK. Abbey’s gross mortgage lending share for the first six months of the year was 16.3% including A&L, and 13.6% without it. (Source mortgagestrategy)
I don't have the figures for the Lloyds Banking group (which now incorporates the largest residential lender ie Halifax) however Halifax previously held a 22-25% share of the market - the overall market is thus dominated by 2 large lenders. Essence of the tale - you cant IMO read too much into the latest stats from N'wide.
49. techieman said...
further to what UT says - here's an extract from a TA site: (the reference to down candle is to Japanese candlestick charts - its just where the close is lower than the open)
"Volume and Trend
Volume helps to learn about the health of a trend.
An uptrend is strong and healthy if Volume increases as price moves with the trend and decreases when price goes counter trend (correction periods).
When price is going up and volume is decreasing, it tells traders that a trend is unlikely to continue. Price may still attempt to increase at a slower pace, but once sellers get the grip on it (which will be signified by an increase in volume on a down candle), the price will fall.
A downtrend is strong and healthy if volume increases as price moves lower and decreases when it begins retracing upwards.
When price is falling and volume is decreasing, the downtrend is unlikely to continue. Price will either continue to decrease, but at a slower pace or start to rise."
50. Chris said...
Globalisation and loss of manufacturing industry has left the UK with an economy based almost completely around artificially inflating house prices to provide an illusion of growth. The government are fully aware of this and will stop at nothing to prop up the housing market and reinflate it. We all knew deep down they would do this as they cannot maintain the illusion of growth any other way. The end result will be a worthless currency and no jobs other than in the public sector. Then a complete collapse.
51. letthemfall said...
The following quote from the FT article on this:
"But many economists are sceptical that the run of good news on house prices will continue. Although mortgage approvals for homes have risen sharply, they remain below the levels that many think are consistent with rising prices. Furthermore the Royal Institute for Chartered Surveyors has said that although demand for housing has risen sharply, house prices appear to be being supported by a lack of supply as wary sellers keep their properties out of a depressed market. Finally, with unemployment expected to continue to rise, demand for house purchases may well ebb later in the year."
In short the restricted market suggests the rises are anomalous. This lack of supply is curious. Either people are funding two+ houses, or they are not moving. Neither can be sustainable.
52. 51ck-6-51x said...
Hmm...
Nationwide's chief economist said,
"""
The price of a typical house rose for the third consecutive month in July, increasing by 1.3% on a seasonally adjusted basis.
...
House prices are still 6.2% lower than 12 months ago.
...
For the first seven months of 2009 as a whole, prices have risen by a cumulative 1.3%, suggesting there is now a reasonable chance that prices could end the year slightly higher than where they started.
"""
By 'house prices' below I mean Nationwide's seasonally adjusted index value...
For house prices to rise during 2009 the must rise at least 6.6% ( 2 S.F. )
100 * ( 1 / ( 1 - 6.2 / 100 ) - 1 ) = 6.60980
During the first seven months they rose 1.3%
We have five months left.
To achieve a 2009 rise a steady MoM rate would need to be at least 1.3% ( 2 S.F. )
100 * ( ( 1 / ( 1 - 6.2 / 100 ) ) ^ ( 1 / 5 ) - 1 ) = 1.28834
That does not sound like a reasonable chance to me.
53. alan_540 said...
@34 fubar...
"However I think there is a herculean effort afoot by the current incumbents of Downing Street to see that line(s) pass into positive territory. Which I also think is actually indictable criminal behaviour. Because if the situation is as dire at it would seem then the post election come down is going to be an even bigger disaster than the one they are trying to stop."
...Maybe Uncle Gordo has accepted that he's gonna lose and is determined to bugger things up for the conservatives when they win, leading to an early return to the next labour government? If so.... let's just hope Uncle Gordo is long gone by then.
54. luckyjim said...
Techieman
That theory suggest that the falls we had last year were 'unlikely to continue' as volume was also falling. Prices and volume are both increasing now though so this is a 'strong and healthy' uptrend ?
55. techieman said...
Hi Jack "Essence of the tale - you cant IMO read too much into the latest stats from N'wide".
You are right "you can't" but the Times / BBC / Krusty and ?Phil? etc will!!!
56. techieman said...
aha LJ :-). I was going to change it a bit myself before i posted since its applied to a liquid market (but i thought against it). Its just saying that counter trend moves are typified by lower (than "average" of the main trend if you like) volumes. Now whether you accept that where we are now is a counter trend move to the down-move from the high, OR if the downmove from the high is itself a counter trend move, and this current move is just the reinstatement of the prior (long term) uptrend then you pays your money and takes your choice!!.
For example the falls in 2005 were counter trend to the uptrend (although yep easy in hindsight) and maybe these falls since the 07 top are counter trend rather than the start of a bear trend.
All in all i agree that this is a major trend reversal from the top, but that effectively it will just itself be a correction of the large upward trend since (well take your pick) 1950's , 1930s etc. Its the depth of this correction we all are concerned with.
All about timeframes innit - but remember in the "long run" we are all dead!
57. luckyjim said...
51ck-6-51x
Eh ?
House prices are 1.3% higher now than at the start of the year. So to end the year higher than at the start they just have to stay static until December (or fall by less than 1.3%).
58. george monsoon said...
I suppose this whole saga just goes to show that somewere, someone out there (probably in middle England) has money to spend.
This is not the case where I live.
Jobs are being shelved faster than ever where I live. Local business parks are emptying as the "to let" signs go up all over.
Two of my close relatives and 1 good friend have been made redundant in the last month alone.
Everyone I know and his mother is struggling to pay bills. Most are maxed out on credit cards, or mortgaged to the hilt and with rising fuel bills and food on the increase, its not going to get any better soon.
Surely this is the picture across the whole of Britain, or am I wrong?
I myself, work in a company that is threatening me with redundancy.
There is no hope of a recovery at the moment, how the HELL are people actually affording to buy? It must be the North / South divide again, as those who have wealthy parents are jumping into the property market with those "houses only go up" blinkers on.
WE ARE NOT RECOVERING, .... Joe public is burying his head in the sand as usual. I believe this government will go down in history for what it is currently doing to our economy and hopefully lessons will be learned in the future (but to be honest, I seriously doubt it!).
I predict this short spell of optimism will evaporate very quickly when inflation starts to really march and the interest rates are pushed up again.
Does anyone here actually have a prediction around inflation. I am reading in the press that inflation is currently zero, but this does not reflect my reality. Everything I spend money on is going UP in value, not down. What will be the major trigger for rampant inflation and subsequent base rate hike? Will it be a run on the pouind, caused by us losing our AAA rating, or something else?
Thoughts please..
59. luckyjim said...
Techieman
Quoting JMK now ?
60. jack c said...
Hello techieman - good point, sadly a lot of people will get sucked in by this. I met with a potential client yesterday and the situation she finds herself in because of Northern Rock's ridiculous 2007 lending policy (Together 125%) is nothing short of criminal. I sincerely hope we avoid any repeat of what has gone on in the last decade.
61. andrew said...
GMonsoon, I can see people loosing jobs and struggling with bills and complaining about money, but when I pop out to buy the odd thing every month (I hate shopping) the shopping centres are still stuffed, with people shoppin like mad, I still see new cars on the road, which is why I would dearly like to know where all this money is coming from. I am not on a bad salary and cutting back and still find it hard. Either the tax credit computer has gone awol or people are printing their own money, but I don't see evidence of really hard times.
62. quiet guy said...
@Jack c
"Nationwide's data is IMO now less relevant than it once was"
Fair enough but would you have said that if Nationwide reported that prices are dropping? I think we are lapsing into our old habits of being selective again.
63. p. doff said...
If that's a standard free market bubble graph at 13, I wonder what a bubble graph with goverment tinkering looks like.
64. p. doff said...
'n'
65. techieman said...
Luck J - I'll quote Maynard wine gums if you prefer : "all you've got to do is chew".
Better?
66. letthemfall said...
george monsoon
It is all a bit strange. The low inflation (RPI) seems to be down in large part to the fall in mortgage rates, which obviously does not benefit us renters/savers. The apparent rise in house prices may be a statistical quirk as much as anything - the data is not publically available to test. Certainly there is wealth in the hands of a sector of the population: we've witnessed strong transfers of wealth over the last decade, partly due to the housing boom. So some of these will be putting more money into houses. The question is how long (and how much) will this have an impact on prices. Is there enough money concentrated in the hands of these people to hold prices above historical values for any length of time? I wouldn't have thought so.
We seem to be living in a Kafkaesque time. Despite a near financial calamity and record debts, politicians and bankers are telling us that recovery is imminent. The housing obsession is still strong in some quarters. Rising prices are declared to be good. Very odd.
67. str 2007 said...
luckyjim
You mentioned lenders relaxing criteria if they think the bottom has been reached.
Personally I think lending criteria is already quite relaxed.
90% mortgaes are out there and although the rates are higher, based on a repayment mortgage the difference between 5% and 7% isn't huge in the monthly repayments.
With a 40% deposit 4-5 times single and 3.5-4 times joint is also available.
The public are being led to believe the low numbers are due to strict lending criteria by the banks and if you qualify you're very lucky so bight their arm off.
The truth IMO is not many people want to take on fresh mortgages and that is why the figures are so low.
And anyway if the numbers of approvals were low because people couldn't raise a 10% deposit what does that say about the strength of any signs of growth ?
We IMO are seeing a DCB, I will conclude though that without further external shocks we could see it running into and just after the election next year (until the newly elected government clamps down on the situation) forming a 'double top' on the house price charts at 2007 levels.
This is worst case scenario (for HPCers) IMO we will see bad news and more falls in the Autumn.
68. uncle tom said...
George,
Despite 12 years of a 'Labour' government, the divide between rich and poor has greatly widened. The top 10% are really quite comfortable, and don't seem to be that aware of the gravity of the difficulties facing the less well off.
I tend to focus on the third quintile; those 20% of households who are more affluent than those on state dependance (bottom 20%) but less wealthy than the other 60%.
These people are taking the brunt of this downturn, with rampant redundancies, and for most, a constant struggle with debt. 20% of housing needs to be affordable for these people, but at present, we are nowhere near that figure.
Lethemfall said:
"Either people are funding two+ houses"
Yes, this is the fashion of the moment; move to new house, and let your old one, because no-one will give you the 'right' price..
..and yes, it is unsustainable, and the people playing this game will get horribly burnt..!
69. The Realist said...
I've been a follower of this site for some time. This is my first comment.
Nobody really knows if we have reached the bottom yet. My view is that if you want to buy a house, can find one that you like and can afford then you should buy it now. One thing that I am sure of is that those who wait for the bottom will most probably miss it.
With apoligies to St Augustine, many seem to be praying
"Lord give me house ownership, but not yet"
70. jack c said...
@quiet guy (Thursday, July 30, 2009 12:01PM) - fair point and I hold my hands up I would very likely not have posted the information. Time will tell but my stance remains the same in that a downward path will resume.
71. techieman said...
GM @ 51 - i dont think you need inflation as a catalyst for increses in IRs. I said a while back that the medium term outlook for gilts was poor due to the funding requirements, regardless of the incidence of (hyper)inflation or otherwise.
Take a look at the Doctor Doom post i made yesterday. You might be surprised - he does get to this point eventually - its quite a good way to spend 40mins IMO.
72. luckyjim said...
str 2007
I'll admit my view of the mortgage market is based on the odd media report rather than looking closely at the market. Maybe a few FTBs are coming back into the market already. The next few months will be very interesting.
The problem with the DCB theory is that, more than any other market, the housing market is driven by sentiment. A short rally can turn sentiment around and what started out as a DCB can turn into a rising market for another three or four years. Unlike shares there aren't any objective figures you can point to to 'prove' that houses are overvalued. Houses are worth what people are willing to pay.
In the eighties crash we had much higher numbers of sellers who simply HAD to sell. Their mortgage payments doubled overnight and they had to take what they could get. Now we have relatively few forced sellers. Even house builders can afford to hold their prices now that they have reduced their inventory. Any indication that prices are not falling will simply encourage the stalement to continue.
73. Areadygone said...
re Paul graph@13
A while ago I did see a graph of the Japanese house bubble (can't find it now) which showed that prices rose ever so slightly over some months.
Does anyone have such a graph JU?
I suppose we have to wait until after the election when the younger generations vote with their feet? In fact when savers and pensioners also vote with their feet. Having said that, the powers that be, want high house prices in order to create more debt as long as people fall for it
74. 51ck-6-51x said...
luckyjim
- Oh my!
*slaps forehead*
What a dumb idiot I am.
E.T.C.
Thanks!
75. titaniccaptain said...
Don't people realize that this is an essential part of the crash?.......the remaining bulls MUST be suckered back in for the volumes to reduce....How Does that work?......Well the amount of people who can afford to save a deposit is dropping due to rising unemployment, and wage deflation.....ITS NOT JUST THE RICH THAT HAVE TO BE PULLED IN!!!!!......its everyone who can save a deposit.
Have a think about this......what do you think the Haliwide reports will be like when all those who have managed to save a deposit have been sucked in?............and don't forget this as good as it can get with wage deflation and rising unemployment.
Techieman has been predicting this DCB for a long time and ten out of ten to him.........If the amount of people suckered in is prolonged and increases then its very simple ....the cash rich and those who have managed to save a deposit are depleted leaving the market open to falling off the cliff........I believe the drops at that point will be unlike anything we have seen to date......probably at the end of the Autumn...
Speaking to a plumber doing work on my cottage and he is convinced that there is an army of tradesmen out there who can't put money away for their tax bill next April.......at that point he says repossessions for builders will soar....... None of this is to be gloated at...
76. techieman said...
LJ - Im not being stroppy here but:
"Houses are worth what people are willing to pay."
Nope but close - Houses are worth what people are willing AND ABLE to pay.
Im willing to pay £650k for a Bugatti - but im not able to do that, well not a new one anyway! Actually the ABLE bit is far more important because the Bank Of Mum and Dad cannot facilitate large scale purchases.Although they can assist in the short term. So ABLE is based on mortgage finance and a williness to take on debt in an uncertain time.
Anyway im sure you know all this and that was just a slip of the tongue. Re momentum, yes momentum divergence is a good way to spot a top / bottom in a market most of the time - especially (dare i say it) in a counter trend move.
77. techieman said...
in the words of benny "OK TC". I forgot to mention perhaps the withdrawal of the 2bn from the BS is in part due to the BOMAD withdrawing their cash to get Rupert and Jermima on the property ladder? It would be good to see how much of these purchases have been funded (i mean % of total purchase price) by the parents.
78. 51ck-6-51x said...
luckyjim said, "In the eighties crash we had much higher numbers of sellers who simply HAD to sell."
- I think this is the real crux. For real downward pressure people must either be forced into selling through unemployment, higher rates, deflation, etc... OR feel they have to sell due to accelerated falls ( the feedback of the former reasons ). Note that we have also seen some inertia of sales due to the move from seller to landlord, if there are problems filling these properties they are likely to fall into the forced seller category. House price crashes are generally relatively slow in motion due to factors such as these and the reliance on credit for the majority of purchases. I am still a bear, but it does not stop me looking for a [ first ] purchase at what I consider fair value for a home.
79. uncle tom said...
"Unlike shares there aren't any objective figures you can point to to 'prove' that houses are overvalued"
I would disagree.
If, due to shortage, house prices rise without speculative activity, the average number of people living under one roof will increase slightly, until an equilibrium is reached. This happened during the war, and immediately afterwards, due to the property loss caused by bombing.
If prices rise due to speculation, without any appreciable increase in the numbers living under one roof, then prices are potentially unstable.
I say potentially, because the size of households has trended down, and there are many people today who have set up home with a partner who might otherwise have set up home alone.
However, the influence of household size trends is totally dwarfed by the scale of the speculative boom we have seen. Not only have BTL speculators run amok, but individual homeowners borrowed far more than they might have otherwise contemplated, in pursuit of a financial bonanza.
A more complex calculation centres around the fact that the rampant borrowing that has attended the boom, has in itself fed the economy, creating a false illusion of prosperity, and the impression that high house prices were more affordable.
That particular pyriamid is quietly but rapidly collapsing at the moment.
Despite the bullish overtones of late, I am seeing some seismic cracks appearing..
80. alan_540 said...
as titanic captain says, we're in the the "return to normal" phase of the bubble, as regards timing, I think Autumn is probably a bit too soon... I don't think the powers that be will let that happen until after the election, so maybe next Autumn.
81. luckyjim said...
Techieman
Yes, I almost put in 'and able' but thought it would weaken my point. Should have known I wouldn't get away with that one.
What do you think of the DCB? Has it gone on longer than you thought? When do you think prices will start falling ?
82. Bear Necessities said...
"Patient FTB's must be getter really cheesed off by now!"
Amen, brother.
83. Phil S said...
"What do you think of the DCB?"
The Dead Cat is being held up by the neck via QE, low interest rates and low levels of repossessions.
GB will not let go till the election is over!!
84. mrflibble said...
@71. alan_540
How do you reckon 'the powers that be' can keep this train wreck moving? They have done all they can do, the cupboard is now bare...
85. letthemfall said...
" "Houses are worth what people are willing to pay."
Nope but close - Houses are worth what people are willing AND ABLE to pay."
I would say this applies to the price of a house, but not to its value, which I think is something intrinsic, ie. a function of the wealth of the economy. Hence the long term ratio of average price to average income. As we know, the reason for the boom, along with previous booms, is credit - borrowing from future income to inflate prices above fair value.
86. alan_540 said...
@73 mrflibble...
I didn't think that the government would be able to stop the initial fall in house prices let alone engineer the rise in prices we are now seeing! As to how it may be sustained, your guess is as good as mine.
Given what we have seen in the last year, my gut feeling is not to underestimate what lengths the current administration will go to to try and "keep the train wreck moving" until after the election.
87. andrew said...
"How do you reckon 'the powers that be' can keep this train wreck moving?"
Simples (sorry couldn't resist - I know it is annoying), they borrow money to keep the whole thing moving, then get the MSM to argue the point that QE and credit, shopping and spending is all good for you and everybody else and anybody that disagrees is an enemy of the state, different or bonkers, there is no Plan B and you better play along or we (they mean us) are screwed.
88. Harveyg said...
It's really hard to hold your nerve eh? man everyone's tempted to jump back in....you know why?
Interest rates are at 0.5%, so it's cheap to borrow money again.
They think they'll go up soon, so have that panic purchase feeling in the pit of your stomach.
Prices have dropped 20% or so and the media are telling me it's hit the bottom.
I feel it too, Gordon's doing a good job of masking the real deal, but I will hold off, I'll stay strong, and buy something in 18 months time when we've no doubt had another 20% fall or more. I'm really feelign it though, my parents, etc. are all saying 'it's about time your got yourself a house again' etc.
89. alan_540 said...
@andrew - doubleplusgood attitude! The job offer from the Ministry of Truth is in the post.
90. techieman said...
LJ - a common trait which i think we have all been guilty of. Good that you can see it though.
Re your questions i dont know (obviously!). My best GUESS would be a bit longer than everyone on here thinks. I hope (for the good of the country) it resumes soon and we dont get Gordon back because of the manufactured rally - although i think the electorate have sussed him out which is why the labour boys are getting twitchy.... I think a few of us said that Gordon should have gone before, i.e. when he bottled it because it would all go t1ts up subsequently.
That itself shows you how weak he is, not that i have much faith in Dave, but he is probably the best of two evils. And of course im a bit Anti- scots but then again hasnt Cameron got some scottish in him?
I think my mum is a pretty good indicator - when she says "i told you they were cheap and i told you they will go up again" thats the end of the DCB...... I'm holding my own at the moment - probably because i said i thought they would go back up for a while before new falls. So maybe ive manipulated that indicator too.
IF we dont go down between now or after a couple more months of rally and the end of the year, then i actually think you have a point - next spring will be unbearable for bears. As TC says though these things cant defy gravity for ever - i cant see this reflation working for much longer - but that sounds like the squeak of a desparate man (which it really isnt).
So yes i really hope i am wrong and that we can start to see new falls starting next month.
I will let you know re the mum indicator :-).
91. mander said...
Reading through a record number of comments on this post I have to say that you are the few people to still think clear about property in this country.
My opinion is that UK started to engineer the housing recovery way too soon. Let's remind ourselves that UK houses are almost double compared to US houses and earnings are similar in both countries. In Paul's graph I think we are just after denial phase and 3-4 months before Return to "Normal". Hopes that the global economy will recover soon and so will house prices it is just an illusion. The banks are done with the property business.
92. mrflibble said...
@76. andrew
They can borrow as much as they like and flush it into the economy but surely they still have to convince the average man on the street to go out, borrow and buy? So far they have done quite well at it, but surely they are now out of ammo? Historically low IR's, equity loans for FTB's, distressed mortgage assistance, VI ramping all over the show, etc, etc. What next?
93. techieman said...
LTF - yes i can see what you mean but i am a cynic as defined by Oscar Wilde. (at least i think its one of his). For certain people the price would be very inelastic (i.e. you are right) - eg. Your gran has lived in the same place for 50years and she takes no notice of booms and busts, and wouldnt sell because it was worth 20 times what she paid, also the family that has 4 kids all of a young age going to local schools and they are near the end of their mortgage term.
But prices are determined at the margins - so these people dont come into the equation. However the BTLr's price and value would be the same and very elastic due to it only working for a (positively) yeilding asset. This is where i think IRs are important by the way.
94. jack c said...
Hi techieman, picking up on your last point regarding interest rates it seems reasonably likely that rates will rise in the future (say 12-18 months time) - there is already a spike in fixed rate mortgages for those now seeking a new fix. This impacts heavily upon the affordibility factor that I frequently refer to and again will ultimately put downward pressure on prices.
Interestingly enough I'm rapidly heading for the 25 year anniversiary of my first mortgage (old git here) and just checking back through the paperwork the IR at the time was 12.75% rising to 15% at the height of the miners strike - I therefore had to laugh when a client phoned me the other day because his tracker deal of 0.4% above bank base had come to an end and he was really suffering on halifax SVR of 3.5% !
95. letthemfall said...
techieman
Yes, notions of value don't often come into housing and buying, at least not these days. I know an EA whose mantra is buy at any price because it will always be worth more if you wait long enough - a perverse outlook for anyone with a limited lifespan. But unless something fundamental has changed (eg. we now live in a world where owning a house must be achieved at any cost), fair value will return, which may perhaps be an opportunity to get a house for a price under fair value. What I wonder is how long might this take this time round. Suppose that IRs stay low in a deflationary economy for 10 years. Will this lead to persistently high prices in areas where securely well-off people live, while they collapse in economic ghettos? I think this unlikely, though present circumstances do at least raise the question.
96. 51ck-6-51x said...
Interestingly, even though the crash has been going on longer over the pond there is little evidence of any DCB there, at least looking at the S&P/Case-Shiller city indices:
97. alan_540 said...
98. alan_540 said...
Oops sorry.
99. alan_540 said...
Nationwide FTB Affordability Index :
http://img220.imageshack.us/img220/2310/nationwideftbaffordabil.jpg
Yeah... Didn't see that coming!
100. alan_540 said...
Nationwide FTB Affordability Index :
Yeah... Didn't see that coming!
101. uncle tom said...
Because the American market did not get as hot as ours, they are seeing a slump rather a crash, much as we did in the early 90's.
There will probably be a small DCB there, but very late in the day.
What we are seeing here is not a DCB but a false dawn - a modest uptick that will be followed a further price collapse.
Jack - if my reading of the runes is correct, we are already seeing the beginnings of rate rises; but actual ones, rather than BOE ones.
There is not much evidence that the cash injected by QE is having any significant impact on the banks' ability to lend. Indeed, it appears to have vanished into the system, possibly to settle obligations to overseas lenders.
That would suggest that unless there is a further round of QE - which might well spook the currency markets - we may move into an acute credit shortage, with substantial hikes in both savings and lending rates.
102. techieman said...
UT - im not sure i understand the difference between a false dawn and a DCB?
103. jack c said...
techieman - I take a DCB to be a steep drop in price before a short bounce and then price falls back again (possibly to Zero as DCB is generally associated with Shares) whilst a false dawn is where there is massive over optimism that the worst is truly behind us and things can only improve (not subsequently fall back) - this of course turns out not to be the case and sentiment is shattered.
UT - 2 things here
(1) rates in the market are significantly divorced from base rate here is an example from todays moneyfacts - Scottish BS FIXED RATE MORTGAGES of 5.69% & 5.99% for 3 years withdrawn w.e.f. close of business 30.7.09 & replaced with increased rates of 5.89% & 6.59% for 3 years, w.e.f. 3.8.09.
(2) Much debate in the financial press this week on whether QE will continue - this is causing massive concern for some fund managers - I'll see if I can retrieve the articles but certain members of MPC came in for a lot of stick for effectively leaking this info.
104. uncle tom said...
Techie,
A DCB in my book is when the market hits bottom, rebounds slightly, and then returns to the bottom again.
A False Dawn is where a market falls, arrests and recovers a little, before continuing its downward path.
(more or less what Jack said)
- Will this thread hit 100 posts??
105. jack c said...
UT
over 4000 views so far today on this thread which I suspect is a record? - I think this one will top the Ton
106. luckyjim said...
It won't top the ton.
107. str 2007 said...
Maybe if we keep posting !
Either way DCB or False Dawn without artificial intervention as we are currently seeing (QE and artificially low interest rates) house prices are unlikley to regain their 2007 levels (ie people that have bought have done so because they were getting 15-25% discount on 2007 prices (50% discount if some new build auction prices are to be believed), combined with historically low interest rates.
Interest rates can only fall if banks cut their margins (unlikely again IMO as they now have to price in a risk element)
No national debt repayment is currently hitting tax payers in the pocket - but it must.
Unemployment is set to be rising for the next 18 months.
Renters are unlikely to have more to spend on rent for a long time.
Despite the UK population in general being intent on pouring every penny the have (& haven't got) into property I strongly sense in can't continue for long.
108. str 2007 said...
luckyjim
I wouldn't bet on that.
109. luckyjim said...
I'll eat my hat.
110. little professor said...
No way will this get to a hundred posts
111. techieman said...
just to edge toward the century. re UTs false dawn / DCB
in this case wiki is as good as anything else :
"A dead cat bounce is a figurative term used by traders in the finance industry to describe a pattern wherein a spectacular decline in the price of a stock is immediately followed by a moderate and temporary rise before resuming its downward movement, with the connotation that the rise was not an indication of improving circumstances in the fundamentals of the stock. It is derived from the notion that "even a dead cat will bounce if it falls from a great height". (http://en.wikipedia.org/wiki/Dead_cat_bounce)
Looks like we must be reading different books :-).
112. techieman said...
actually this is better - as it has a pretty picture too -
http://www.mysmp.com/technical-analysis/dead-cat-bounce.html
oh dear i make that 100! ;-)
113. uncle tom said...
Jim,
Do what Kirsty failed to do...
:)
114. timmy t said...
Lucky Jim - Munch Munch
115. titaniccaptain said...
"Yee ha ....your all clear kid now lets blow this thing so we can all go home"...........not a line from Jacqui Smith's husband's home movies
There 100
116. titaniccaptain said...
bugger Techie beat me to it.
117. luckyjim said...
I did not say I would eat my hat. Never.
118. techieman said...
TC - i hope there is supposed to be a full stop between "bugger" and "Techie!?!?"
I'm just glad "to it" is there too!
Yep you are either quick or dead in "these markets" :-).
119. str 2007 said...
Lucky Jim
Can't believe you offered to eat your hat at 97.
I won't be too harsh on you. I think a Beret made of Straw would count just aswell. (That'll be a strawberry then ;-)
120. str 2007 said...
luckyjim at 105
You're clearly in the Denial phase (see Pauls post at 13).
121. luckyjim said...
Nobody saw this coming.
122. jack c said...
luckyjim - of course we did - I said at posting number 93 that we'd top the Ton.
123. str 2007 said...
luckyjim
Are you in actual fact Phil Spencer ?
124. mystie010 said...
I hate to say it everyone, but just looking at the sheer number of posts here it looks to me that everyone has been spooked by this uptick in prices of three consecutive house price rises. Lets be honest if we all really truly believed that prices were not going to continue on an upward trend then would we all be here trying to convince ourselves otherwise? I think not. I have to say though I have found some of the comments re-assuring but I also think that this government are hell bent on re-inflating this bubble and I'm not sure that normal logic is going to apply any more in this market until this current shower (New Labour) have been well and truly kicked into the long grass!
125. 51ck-6-51x said...
... anyway.
I think a big contributing factor to the reported rise is that less FTB are able to buy - and those that can are the kind who can afford a more expensive pad, so proportionally less lower value properties are being bought, thus skewing the average up. This is coupled with the fact that cheap properties ( repos and desperate sellers ) are more likely to be bought without a loan ( e.g. at auction ). I think NW's ^ HF's methodologies are closer now than they were in '94, but they almost certainly still have their own market-sector-bias due to factors like the previous state of their book and their own, internal forecasts.
126. Eternal Sceptic said...
One thing you can guarantee. This is all going to end in tears.
127. 51ck-6-51x said...
Ah mystico - of course no one knows...
Yes, the general consensus is that there is a huge amount of support from non-supply-&-demand drivers ( low IRs / QE / fiscal stimulus / ... ) and the question really is, how long & how high before a rubber band snaps when the state has no spares and have to pull the one out of their knickers ( devalue )?
128. 51ck-6-51x said...
mystie010 even, sorry.
129. This comment has been removed as it was found to be in breach of our Blog Policies.
130. tenyearstogetmymoneyback said...
Just read through the whole thread. You have been busy guys.
Something a few people have touched on but seems really obvious.
An election is due in Ten months. Unless we end up with a hung parliament
the people who win will have five years to start applying some common sense
before they have to fight another one. If they don't start applying common sense
then the international markets / IMF will insist that they do.
131. uncle tom said...
Unfortunately, politicians and common sense are not natural bedfellows, especially when we have so many career politicians who have no real understanding of everyday concerns.
Moreover, the hung parliament that most people would like to see would be that of the grisly variety; one that required 645 lengths of rope..
However, there may be some benefit to be gained from having very occasional major national crises, those that demand immediate and dramatic remedies, clearing the decks and sweeping away obstructive vested interests to get things done.
In WWII, civil defences were approved, designed and built with incredible speed - the pillboxes you see dotted around the countryside were all conceived, designed and built in a matter of weeks.
On the other hand, the government's idea for 'eco towns' must be about two years old now, and as far as I know, not one site has got formal approval yet.
Cometh the hour, cometh the man.. Trouble is, our Dave doesn't fit the bill.
Hague, on the other hand, might be able to deliver..
132. Clockslinger said...
I have no doubt that only the finest minds and most careful research go into the creation of the information for the above graphs. All the more reason government needs to look at this carefully. Nationwide affordability index most favouable since 1989! Halifax graph curve shows likely 18% rise plus from Feb 09 to Feb 10 on present projections! Seems to me some responsible soul in the bank of England needs to start taking these figures seriously and get busy deflating this kind of obviously dangerous bubble with some really serious interest rate increases to set the tone. I'd suggest about a 3% rise right away with a further review monthly for the forseeable future based on the Halifax graph. Gordons tumescent plan has peaked prematurely! At this rate by the election it will be too late...like Weimar Republic too late! Can I also add just how good it woul feel to see the smug smile wiped off the face my boss who is presently gloating that his massive mortgage and buy to let portfolio borrowings are only costing him about thirty quid a week to pay just now...
133. shining wit said...
UT......
If you're expecting a bald t!t who claimed to drink 14 pints a night to ride out of the mist to save ol' blighty can I ask you one question.....
What exactly have you been smokin' ?
134. shipbuilder said...
I don't get this idea that the government have had anything to do with this bounce. As UT in post 89 said, there is no evidence that QE has done anything to improve lending. I see it more, as Techieman said, as a natural part of the crash.
For a linear crash, everyone with money would have to stand at the sidelines and wait for the bottom and as mentioned, that never happens - some believe they see value, some can't wait any longer to buy. These people however are always the minority, so the rally can never be sustained - once they have all bought back in, the crash continues.
135. shining wit said...
shipbuilder. at 134 (well was)
It's virtually impossible that pumping £125 billion into the economy has had no effect at all. It's a very , very large sum of money. And ridiculously low interest rates give people a false sense of security, especially those already in the brown stuff. They might as well borrow another 100-200k and got belly up in style.
Unfortunately the lunatics have taken over the asylum.... One of the is apparently in the Lake District trying to convince the locals that he is prime minister.
136. doomwatch said...
This is a Zulu moment. The VIs will run out of spears come DEC09, when it starts nose diving from the
bull trap.
137. str 2007 said...
Is it conceivable that Gordon Brown seeing these house price rises will call an Autumn election before they in actual fact do run out of ammunition?
138. titaniccaptain said...
Good question STR2007......its the best bit of publicity he can hope for in the next year.
139. Markc2004 said...
not really a debate when HPC won't publish any subjective opinions! Was of time losers.
140. uncle tom said...
"If you're expecting a bald t!t who claimed to drink 14 pints a night to ride out of the mist to save ol' blighty can I ask you one question.....
What exactly have you been smokin' ?"
I don't smoke, but I have been known to sink 14 pints..
..can you think of anyone in parliament who is better qualified?
141. uncle tom said...
"Is it conceivable that Gordon Brown seeing these house price rises will call an Autumn election before they in actual fact do run out of ammunition?"
Not unless the polls suddenly go charging in his favour, and that's about as likely as hell freezing over.
- what ammunition do you suppose he has left??
142. Beachbum said...
It just goes to show that most people in this country are living in complete denial of what is happen to this country. Massively over priced houses, huge personal debt - a lifetime of repayment, huge national debts not seen before, unemployment rising at its fastest rate, huge rises in service bills- gas and electric, no income for savings, huge increases in council taxes, huge hikes in tax to pay of our massive country debts, huge amounts of our money being pumped into the system to keep things looking normal, massive cuts in interest rate that aren't being pasted on fairly,. Once people take all this on board the HPC will return to full swing.
I think it will be after the next election when we get to know how bad things really are after Brown is ejected from office - I can't wait to see the back of him....
143. titaniccaptain said...
I agree UT Hague is the balls in the shadow front bench
144. str 2007 said...
Uncle Tom
I didn't think they had as much ammunition as they did. In fact they didn't, they simply borrowed/printed far more than any of us anticipated they would 18 months ago.
Question is will they stop borrowing/printing.
145. jack c said...
@str 2007 - check out my posting of todays date on the UK debt mountain (frightening)