Friday, Aug 27, 2010
Homeownerism: the force is still strong
Guardian: Property props up UK spending
"There is one common thread that runs through these crippled economies, and it relates to property. While the UK suffered the after-effects of a massive house price bubble, it avoided the triple whammy the US, Ireland and Spain went through. Not only did they allow house prices to rip, but also fostered a massive building boom and widespread fraudulent buying and lending. Now they are left with hundreds of thousands of empty homes that depress prices and rob consumers of the springboard for spending – property wealth. There are obvious long-term benefits with lower house prices, especially for the young, but in the short term the situation only adds to economic woes."
Posted by quiet guy @ 12:05 AM (1346 views) Add Comment
11 Comments
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1. novice pete said...
"We are unlikely to have a property price crash."
I still believe this is wishful thinking, there has just been a delaying of the inevitable.
2. markj69 str05 said...
'Short term woes' are inevitable - there is no quick fix for the situation we are in.
One major benefit of the model highlighted above is, when prices stabilise (At an affordable level - say 3.5x salary), then each household will have more cash to spend/save. This will be the time of 'green shoots'.
However, we in the UK are not exposed to the model above. Therefore, expect few 'green shoots' for a very long time.
3. novice pete said...
I thought we already had the 'green shoots' , must have been of oak trees! Only another 400 years or so.
4. mark wadsworth said...
The USA didn't have a building boom. If the US Census Bureau is to be believed, even in 2006 they were only building a million new homes a year, which is much the same as the UK on a per capita basis.
And our price bubble, in absolute terms, was far bigger than in the USA.
And the UK also has hundreds of thousands of vacant properties.
So that's three misleading statements in one short excerpt, isn't it?
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6. peter said...
Typical economically illiterate Grauniad stuff, that puts the cart before the horse.
The idea that high house prices represent some kind of economic elixir is just absurd.
7. Jpjh said...
Is quiet amusing the delusion going on in the UK. People spend lots then inflation will take hold more and interest rates go up which will cripple a lot of home owners. Again there is no shortage, if there was we would see stories of 1000's of people on the streets. There is a massive number of second homes that sit empty. However no government will target that now will they, seeing as most of them are politician homes.
8. Simon said...
I found it refreshing that not even one of the commenters supported the journalists homeonanist angle .
As one of them says , only speculators use the term "properties" , a pet hate for many of us I'm sure .
9. sibley's love child said...
"Now they [US, Ireland & Spain] are left with hundreds of thousands of empty homes that depress prices and rob consumers of the springboard for spending – property wealth. There are obvious long-term benefits with lower house prices, especially for the young, but in the short term the situation only adds to economic woes".
Reading this article made me want to gouge my eyes out. This is the sort of myopic editorial guff i'd expect from the Telegraph. I don't quite understand how the Guardian can square that particular circle. A so-called left-leaning rag that is indirectly cheerleading the transfer of wealth from poor to rich. F*cking numpties.
10. miken said...
Got it in one where the article states: "Much of our feelgood factor (or the factor that makes lots of people feel OK enough to carry on shopping) is supported by policies put in place by Labour that are rapidly being dismantled by the coalition."
We can't afford to continue the party that Libour started. We're definitely in a 'wait and see what happens' phase right now in relation to house prices until it is clear just how severe the coalition will make cutbacks.
11. crash bandicoot said...
How do you spend "property wealth"? Does it go like this - "I'll give you two town houses and a luxury flat for that box of biscuits"?
If they are refering to MEW then that's just secured lending. It'd be the same as using the term "credit card wealth" for credit card spending. I think that we have been relying on a bit too much credit card wealth lately...