ingermany

I agree, and I guess it's now official UK policy to let inflation rip. This will support house prices. The economy is so dependent on stopping a HPC and mass loan default that they will facilitate the unthinkable combination of inlation and currency collapse. I suspect HPC will be over in 24 months, house prices in sterling much as they are now, average retail prices up 20%, wages up 10%. Value of money being erroded rapidly. Hope I'm wrong, but CPI is still 50% above target and BoE has cut IR to zero and started printing.

Good article, but I think it still under-rates the role of fraud. For several years it has been blindingly obvious that a majority of new borrowers were being advanced sums of money that they could NEVER hope to repay from their incomes. Their only hope of repaying the bank was to assume they could sell their house at a later date for much more than they paid for it. This is the fundamentally fraudulent basis for 10 years of house price inflation (or at least the latter 5 years of it). This is the only reason that UK and US house prices rose so rapidly. This is why all our banks are bust and why the government has to nationalise them, and ultimately print money to replace that which has been fraudulently removed from the system, not by the few, but by the many. If this fraud only involved a few people, they would be prosecuted, bankrupted, not handed taxpayers' money in massive quantities by way of rescue. What I find incredible is that so many intelligent brains in the financial services, banks and government were blinded to the obvious and massive fraud at the centre of our economy. They must have read about Ponzi and the Albanian pyramid scheme collapse of the 90s. Did they really believe thay had found a pyramid scheme that was different and could be sustainable? Their response is to "borrow" even more to replace what is "lost". More fraudulent accounting is the only solution offered to the problems caused by this mega-fraud. The guys in control still haven't figured it out, and that's what I find worrying.

DEBT DIARY bbc Reminded me of this woman's (annoying) journal on BBC. Her "friend" (who desperately wants a baby) decides to have an abortion so she can service her debts (presumably like the author, in order to accumulate BTL investments). The obscene scramble for housing wealth has totally distorted public attitudes and morality. The "need" to move up the housing ladder is viewed as grounds to abort a fetus, without any moral or ethical criticism. a bit like deciding to forgo the skiing holiday this year. I'm not a pro-life zealot, and I believe people have a right to choose, but it seems a generation has been brainwashed into believing that they can and should do absolutely anything in order to move up the housing ladder. This generation is going to be mightily pissed off in a few years.

Isn't that what's happening? If the taxpayer is compensating the banks for bad debts it means the banks are free to write them off. I thought that was the purpose of the 500 billion that went down the tubes in 2008. Now the government is printing money to devalue sterling and create high inflation. This willl also devalue the debts and help the borrowers. The costs are massive but these loans are being erased.

So, if I understand correctly this is a property-bull article rubbishing predictions of a 55% fall. It predicts only a 20% nominal fall, mitigated because of hyper-inflation and Sterling collapse (whilst conceding in REAL terms the further fall will be 50-60%). That should encourage home-buyers. A 20% capital loss, mass unemployment, food shortages, rationing and civil unrest (or whatever else goes with this sort of economic meltdown). It's worrying that many are so "house price inflation is a good thing" obsessed that hyperinflation and currency collapse are viewed as good outcomes because at least house prices might rise. Even the government and BoE are adopting this attitude.

Hope so, I've got 120K euros bought at 66-70p, and have been holding to sell at 1:1. Was starting to feel a bit embarassed for not selling at the 0.97 peak. For this euro rally, I'm heading for the bank at anything over 0.95. Or perhaps I'll take your advice and hold out for 1.25......................

Can't blame the banks. 1. It's not their own money they're lending. Brown gave them it (on condition that they give it away). 2. Brown has told them to lend more. To anybody and everybody. The banks are in no position to argue. Can't blame the borrower: 1. The system is beyond broken. It's going to be every man for himself. 2. If someone offered you a £75K gift you'd be crazy not to accept.

The benefits culture has been expanded and extended in order to finance the housing boom. The £500bn in bail-outs to banks, money-printing and "mortgage rescue" are all part of the continuum of that culture. It has been obvious since 2002 that house prices could only rise if ordinary people were encouraged to borrow exceesive amounts of money that they could never afford to repay. It therefore became government policy, to: 1. Top up peoples wages with "credits" to let them take out loans and make repayments 2. Ignore inflation and keep IRs low 3. Indemnify the banks for reckless lending and ecourage the practice. 4. Bail out banks and individuals when rendered bankrupt by reckless lending/borrowing 5. When all the money's gone print more of it and tell banks to lend more. Six years ago I was earning £60k and was considered very well paid. If I was still earning 60K now I'd be claiming family tax credits and benefits. And this is after a period of "historically low" inflation. Prudence my a""se. Salaries have doubled in that time for almost everyone (with a job).

Err...........last figure I saw was that every man, woman and child now has a bill of £35K each, which is what the government has had to spend so far in order to limit the house price fall to 20% in 12 months. The government are now printing money and ignoring inflation in a Zimbabwean finale aimed only at the next 18 months before the next election campaign. I agree Brown has said he will do "anything" to keep house prices going up, and no one can accuse him of not trying. The problem is the cost in living standards, jobs, and social disintegration he is willing to pay in order to keep the illusion of wealth alive for homeowners. It is an illusion, and it won't last. It remains to be seen whether Brown will destroy the country in order to keep the illusion alive for one more year.

WOW...GREAT STATS from BBC.............Hartlepool going up by 9.8% per quarter and Gtr London down by 10% per quarter. This time next year all those monkey-hangers will be exchanging their terraced houses on Teesside for town houses in Kensington and Chelsea. Talk about North-South divide.

Last August the BBC news team were advising viewers to buy "win a country retreat" lottery tickets. Live on air they showed off the "great prize", interviewed the organisers and urged viewers not to miss the "opportunity of a lifetime". Of course it turned out the lottery was illegal and viewers have collectively lost £1m (legal process drags on apparently). I would be very cautious about believing any property "news" on the BBC. They are as credible as a QVC sales team.

I agree. Harman and Brown setting themselves up to denounce someone as "enemy of the people" and stripping him of his property is setting a worrying precedent (even if Goodwin is an odious thieving tw@). They should act within the law, or we're all potentially next in line. I can see Sir Fred becoming an unlikely symbol for liberty and workers' solidarity. It's a preposterous thought, but the shrill tones of Harman declaring the "judgement of the people" against this scapegoat for her own government's incompetence will make it possible.

Harman: "the court of public opinion" demands that his pension is slashed is very "cultural revolution" in tone. Who does she think she is? Perhaps the "court of public opinion" thinks that Brown should be put in shackles and tethered outside the Palace of Westminster so we can throw rotten fruit at him. Where do we draw the line?

Not in the true Vulcan meaning of the word obviously. Give the guy a break. Seems like common sense to me. Only problem in predicting the bottom is that the government are intervening in the market so much in an attempt to manipulate prices. At present they are pumping billions into housing in an effort to keep prices up. Politicians are capricious and the policy might go 180 degrees in future. The govt might run out of free cash or might decise to let prices find a market level, in which case you could see a huge drop, which you have no hope of anticipating because the decision to allow it will be made in secret and imposed without warning. The curve is unlikely to be a smooth one.

and if repayments are waived, or paid by the taxpayer on behalf of the "buyer". I don't think we can rule this out. I can also envisage a scheme where the government allows you to buy a house for 200K and the taxpayer picks up 50% of the cost,, so the actual price paid is 100K. The seller gets the full price, 50% of which comes direct from the taxpayer. This would solve the negative equity and affordability issues. With the massive government subsidy of banks and lending this is effectively what is being proposed anyway. It's just not so transparent.

Unbelievable. This won't rescue the housing/financial sector. It's like saying the car industry can be saved by bringing back British Leyland and building Austin Allegros. This isn't new finance, it's just money taken from public spending, from the same pot that finances benefits and social security. Unemployment benefit bills are going to go through the roof, the government will go bankrupt and for every pound they lend through the nationalised banks 80p will be lost in waste and fraud (and bonuses and pensions for bankers). It will be another 500 billion down the drain and house prices will still go down and people won't repay their loans. UK property is a pyramid scheme and all FTBs know they are going to get done over if they buy in (as always happens to newbies joining mature pyramid schemes). The only way they can be prsuaded to buy is if the government gives them a big fat bribe to do it. With the nationalisation of the banks there are now an extra 4 million neg equity homes effectively owned by the government (which owns the banks that own the mortgages). No wonder they are desperate to get some of these sold. The banks are just an arm of government with no commercial value. This is a catastrophe, and bribing the about-to-be unemployed to invest in it will just hasten the collapse.

Perhaps Sir Fred knows that in 3 years time a 650K pension will leave him just above the bread line. Reduce his pension and he'll be on income support before 2013. These guys all know what's coming.

Nothing changes. Last year the Breakfast "News" presenters were urging viewers to buy the "Million Pound House" lottery tickets, with incisive journalistic analysis including "what a great prize!" from Sian. Haven't seen today's offering but I assume they are telling viewers that it's a great time to buy a house. And they can't show an appeal for victims in Gaza because of fears of bias. Pathetic.

Does this mean that someone can default on their Negative Equity old Northern Rock loan, and have it paid off by the taxpayer? And then get a shiny 100% (or 95% with 5% gifted deposit) mortgage with NEW Northern Rock? House price inflation could be back on. Also the NEW Northern Rock won't have bad debts so bonuses will be due all round.

Nothing personal against the young mum involved, but: The loan is in hers and her mum's name, and she says mum has "lots of equity in her other house". I think if mum took out a mortgage to buy a second property and can't make the repayments then surely the bank can repo both properties to get their cash back, or mum takes out a top up loan to the max LTV of property no.1. In the property pyramid scam mum has profited (lots of "equity") at the expense of her daughter (bought over-priced asset). If daughter needs bailing out, why should mum retain the profits from the scam that put her there. You can't have a scam/market that only produces winners. As has already been said, if we bail out mum-2-homes, then someone else is denied a place to live at a reasonable price.

NR was nationalised, not bailed out. If the government find a way of taking financially distressed families into public ownership I'm sure they'll give it a go. I suppose it's the next logical step on the road to socialist dystopia we're heading for. Anyway, widespread bank failure would have left everyone shafted. Wheras individual failure only affects individuals, and will actually benefit other individuals who gain a cheap repo property. Repossession is a zero sum game. Stopping it actually deprives a person of an opportunity to get housed. The free market was exploited by those who bought property in the last 10 years. Why should they now be protected from it now that they have some (modest) losses?

I lost 10k in the last HPC, and back then it seemed like a catastrophe, to have a house I bought for 60K('88) sell for 50k ('98) , only to see it rise to 150k ('04) within 5 years of being sold. Where there is that sort of price volatility you will get winners and losers. One person's gain comes at the expense of another being shoved into the abyss. I'm sure the OP was gleefully rubbing her hands at the Daily Express reports of 10-15% per year price increses in 2005,6,7 ("guess how much my house earned this year?"). There is something fundamentally wrong with an economy and society that allows this to happen. The OP deserves sympathy, but absolutely no bail-outs. The bank needs to flog the house asap before its value falls another 50K, and then get the rest owing from the borrowers. This needs to be repeated a couple of million times until house prices are affordable. The OP will then be able to buy a house for a sensible price and get on with life. Then the govt needs to sort out a solution to prevent a re-inflation of this destructive housing bubble.

with a steering wheel on the left..........oh sh*t.

The only "bounce" we will see is one generated by government. They are paying off the mortgage of anyone who can't afford to repay their loans to the banks. This means that nobody needs to sell............ever. They have decreed zero repossessions, and I think they almost acheive that. The cost to taxpayers and savers will be ruinous, but if the government is effectively in the market offering to pay everyone's mortgage there will be no HPC. It is market intervention on a scale no one could ever have imagined.

Prices are only being supported where they are by the abuse of 100s of billions in taxpayers' money in order to prop up banks and subsidize mortgages of those who borrowed more than they could ever hope to repay. Welfare benefits are being diverted from those in need in order to subsidize home loans and mortgages. Sooner rather than later the government will bankrupt itself in this hopeless attempt at collective denial. Prices are now at 2003 levels. 2001 by year end 2009. Unfortunately this won't be cause for celebration as the whole economy will be in ruins by then, and there will be little left of our education, health, social welfare.