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House Price Crash Forum


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Everything posted by ingermany

  1. "These initial measures will be followed by another significant announcement later in the month, which will make sure funds are allocated in a way that stimulates the market," a spokesman for the Communities and Local Government department told Reuters. I don't doubt the failure of the government to succeed in what they want to do, but the sheer malign intent is staggering. They want to use taxpayers money to drive up house prices (further) out of reach of the ordinary citizen. Imagine a promise to "stimulate the market" in fuel or food or domestic heating. I guess the government could intervene in the energy markets to drive up domestic fuel costs, but one assumes they wouldn't act in such a fundamentally immoral way. However, where housing is concerned there seems to be no constraint on this sort of abuse of power.
  2. It's all relative. The whole business is fundamentally fraudulent. There has been a conspiracy to dishonestly inflate prices and entice new mugs to "invest" with promises of massive returns. It is a fraudulent pyramid scheme. It may have been run with the collusion of banks, government and financial authorities, but there is no mistaking the characteristics of the underlying business model. Some may have been more blatently fraudulent than others, but the business as a whole has operated in much the same way as the various lottery scams that promise massive pay-outs if the victim makes an up front payment. No surpise then to find properties "valued" at 250K (no doubt promised to be 500K by next year) being sold for 80K, or being unsellable at any price. I do feel sorry for those honest people duped into the game., and I am not gloating because I am scared sh**less by the possible wider consequences. Homeowners or not, we are all in trouble.
  3. In the last 15 years numbers of people on incapacity benefit doubled to 2.6 million. That's a lot, even allowing for the effects of a couple of wars and mad cow disease. There has been a politically motivated campaign to re-classify the long term unemployed as disabled, and accept that they are permanently economically inactive. Financial incentives to claimants and doctors have achieved the political goal of reducing unemployment figures (by about the same amount as the rise in disability claimants). The number of men in this category has risen steadily. This means the unemployment statistics now cannot be compared with those in the 1990s recession.
  4. It's a very selective survey! It only includes older people who are applying to (who need to) borrow money through equity release with this one company. The selection bias in favour of those with financial problems/heavy outgoings is probably 100%, so it can't be extrapolated to show that all pensioners are in this position. It probably tells us more about MEW: those who MEW even in the 60+ age bracket, have comparatively large outstanding mortgages, and are probably using MEW to meet existing loan repayments, in the process gradually "spending" all the equity they own in the property. Loans used to pay interest on other loans.
  5. rightmove History date event 9th Jun 2008 * Price changed: from '£329,950' to '£280,000' 18th May 2008 * Initial entry found. Across Lincs/East Mids this is a fairly typical reduction. Lots of property has been on market in excess of 12 months. Nothing selling. Prices tumbling 10-20% since start of 2008. I suspect this house will sell at the 250,000 stamp duty threshold.
  6. And we'll all thank the government for creating zero inflation, as we take the 50 million pound note out of our wallet in the hope of buying a loaf of bread. Great idea, but I think Bob mugabe thought of it first.
  7. Yes, but that can all be changed without nationalisation. The job of the state is to pass and enforce legislation to regulate the activity of the banks (and other businesses). That is as far as state involvement should go. For example, the state passes legislation to govern how garages conduct MoT tests. It can do this without taking all private garages into public ownership. It is unnecessary and counterproductive to nationalise everything
  8. Exactly. Borrow 50K. Then tell the lender you can't pay it back. The government tells the lender they can't repossess your house (cos it's bad for morale). Eventually the lender gets a bung from the government to cover up the losses (120 billion and mounting). To paraphrase Dire Straits, it's money for nothing. This is the story of the last 7 years in UK plc. The party's over.
  9. Very worrying is an understatement. Especially as it seems that the government/taxpayer is ultimately going to take responsibility for wiping out the personal debt mountain. I thought the Rock nationalisation and the 50 billion bail-out was outrageous, but if these figures are realistic, it is just the tip of the iceberg.
  10. Fees, administration costs, "expenses" for the officials appointed to administer the system, and the inevitable 20% loss due to fraud and incompetence.
  11. As expected, the principles of EU Common Agricultural Policy will be applied to UK housing. The Government will use taxpayers money to buy up surplus housing at well above the market rate in an attempt to force prices up. It will be financially ruinous, and fraught with moral hazard. Whilst forcing prices up with CAP they will also use more taxes to increase "affordability" by easy credit, 100% loans and shared equity. It is a blatant attempt to create another bubble. Whether it can succeed or not is irrelevant. That it is being attempted is criminal.
  12. Some of you are missing the point. House price movement 339K-250K =26% fall in "value". No doubt another large fall in "value" is on the cards. It doesn't mean the hosue is good value at 250K (or 339K) or 125K for that matter. But some unfortunate was persuaded to fork out 339K for a similar house in 2006 (based no doubt on valuation and BS survey). The owner in this position, and the bank/BS is sitting on a huge paper loss, and this is why the taxpayer (thanks Gordon) needs to step in with emergency funding. The answer to the question "who bought a s***hole like this for 339,000 pounds?". We all did...........thanks to the Merv and Gordon show.
  13. finance Check out the above link: says you get 3 properties for the price of 1. "Our Gifted Deposit Schemes reduce the amount of capital required to purchase a property which substantially increases your leverage enabling you to buy three times as many property with the same amount of money. Find out how you can buy 3 properties for the price of 1 " That should cheer you up. Suggest you check the small print carefully.
  14. Not heard of this. The buyer is agreeing to pay 20% above market value, in order to dupe the lender, and then gets the 20% premium on price returned by the builder on completion. Conspiracy to defraud spings to mind, and I think that carries a custodial sentence (if there was enough room in the prisons). Perhaps being made to live in one of these flats is punishment enough? In any case, in between exchange and completion the market value will have dropped another 20%, so the purchase is very much above market value by the time it goes through. No wonder the banks are afraid to lend.
  15. On the housing rescue scheme. It will go like this: You have a 2 bed terrace in Scunthorpe with a 200K mortgage. You can't sell it at 200K, so the government will ask for an EA valuation which will be, say, 500K. If you sell it below valuation (say at 50K) HMG give you the difference between selling price and valuation to make sure you don't lose out. You will repeat the process a couple of times and be a millionaire. Also, if you want to MEW, the valuation is good for the loan (difference between valuation and mortgage....in this example 300K). You don't have to worry about repaying loans because HMG will own alll the banks and they will make sure its all taken care of. This will keep the economy moving long enough for Brown to escape to Panama or somewhere else without extradition arrangements.
  16. Sorry, must correct the grammar. It is WE ARE in recession.
  17. Good interviewing from Susanna Reid: Normally nice Susanna, but she seemed intent on putting the boot in today. Reid: what are you going to do about yesterday's results? Smith: we are going to listen to the voters and take action Reid: here's an email from a voter: "Dave from Bedford" (or similar) says Gordon Brown should resign now, are you going to listen to Dave from Bedford? Smith: squirms uncomfortably Reid: heres another email: "Pete from Colchester" says you should hold an immediate general election. Is that what you'll do? Smith: gibbering, lip wobbling........crisis from America, economic stability, 10 years of growth etc.
  18. Said several times that voters were "feeling the pinch" because of mistakes that foreigners had made, but UK was in a much stronger position than everyone else. Promised to 1. stop house values from falling, 2. help young people get on the property ladder. 3. Deal with high food and fuel prices. 4. reduce the crime figures Looks like she's got a busy day ahead of her.
  19. Not sure what the fuss is about. Halifax are calling it a 0.9% (negative) annual change in their own report. You say their figures and calculation are wrong (which I can quite believe). If that's true I don't think you can pick and choose which bits of their figures you're going to accept as reliable. If any of it is "**** then it's all "****. Nationwide are reporting YOY negative also. The stats are necessarily flawed, and as you have ponted out there is precious little transparency in method. A number is just magicked up and the press accept it. I doubt whether the numbers were true when they reported gains, and are no more likely to be true when they report losses (except that they have nothing to gain by under-reporting prices, in contrast to when they exaggerate them).
  20. It is moving. Downwards and very quickly. Job done then Mr Brown.
  21. Class sizes may be rising (not sure) but we have 20,000 more teachers and the school age population is actually falling. What are they doing? I know more are required in order to monitor targets, equality, politcal correctness etc. Same goes for medical services, nurses, doctors and the rest. Numbers employed have rocketed, costs have rocketed, and this is presented by government as an achievement in itself (backed up by some arbitary statistics and targets). This is very old labour thinking. I remember the Labour boast in the late 70's that the DHSS was the world's second biggest employer (after China's Peoples Liberation Army). This sort of mind-set has returned.
  22. As he is credited with being personally responsible for the spectacular demise of UK's biggest mortgage lender we should cut him some slack for his idiosyncratic TV appearances. I am surprised Brown hasn't added Robert Preston to the litany of those responsible for UK house price falls: the crisis.......... coming from America, and that [email protected]*ard Preston etc etc.
  23. #I agree with much of what you say. However, it is the homeowners who are now screaming for "nanny state" intervention to save house prices. The Govt have obliged with over 120 billion in aid to the UK housing market in the space of just 6 months. Compare this with the 4 billion in aid to the developing world in 2006-7. What sensible people are saying is that market forces applied when the housing market rose, so the same forces should apply when it falls. It will fall, and there is no point in the government bankrupting itself trying to stop it with handouts. It is also fundamentally immoral to give 100s of billions in handouts to private citizens who are already compratively wealthy; the money ultimately comes from our taxes, and we think it is being mis-spent and mis-appropriated. The housing market will crash. If the government continues to use public money to prop it up so will education, policing, the health service, and all public services. If this happens our streets will be a lawless wasteland of crime and deprivation. We already know that nice people in nice houses can be kicked to death on their own doorsteps for daring to venture outside. What will happen to people in nice houses if everyone else is living in poverty, with no policing or education because the government has given all its money away to aid homeowners?
  24. I heard the same argument trotted out on Ch4 News this week by the boss of Nationwide: FTBs can't afford houses because of the increase in mortgage interest rates and something MUST be done. Completely missing the blindingly obvious reason for houses being unaffordable. Problem is this reasoning is all pervasive and is never challenged. If the flawed logic is followed through, the solution is more liquidity, cheaper loans, zero deposits (or deposits supplied by the taxpayer), and this seems to be what the authorities are trying to pull off. What has already been pledged via Northern Rock and the (not) bail-out amounts to the equivalent of £20 from every man, woman and child on planet earth......just to prop up equity values of property on this one poxy island, to make sure no one has the embarassment of negative equity (but everyone keeps the 10 year 180% capital gain). Moral hazard, I think so.
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