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Waiting For David Cameron

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I've just read an article in The Times about how the expectation of a new government is affecting the Civil Service:

For the Tories it’s the beginning of the affair

I've been wondering if the housing market might be suffering from a similar effect. Suppose, just suppose, that you are someone living in Middle England (wherever that is) and you are thinking of selling your house. You know there's been a house price slump, and maybe you're enough in touch to believe that house prices are rising again - at least in some places. However, you're not very sure that you will get what you think your house is "worth".

You also blame Gordon Brown for everything from the banks not lending businesses money to the failure of Andy Murray to win Wimbledon. Logical course of action? Wait for David Cameron.

You say to yourself, "There'll soon be an election, and we can afford to wait. Once Brown has gone, the economy will pick up. David Cameron will see to it that house prices rise again - after all that's one of the reasons I'm going to vote for him. So I'm not going to do anything until the Tories have had 3 months to make it all right and get house prices back to normal."

I'm suggesting that this factor could already be helping the mortgage famine in keeping people from putting their houses on the market. I'm saying that we may have to wait until October 2010 before it even starts to dawn on these potential sellers that even David Cameron and the house-owner-friendly Tories can't turn the clock back to 2006-07 prices.

Meanwhile the supply of houses from non-distressed sellers could slow even further, keeping what few houses are on the market at high prices.

Like a number of other accidental STRers, we may find ourselves running out of patience and spare capital, and paying more or getting less so that we can leave off this "life on hold" phase.

Someone tell me this is just me being tired and fed up, not a real risk of an even more prolonged wait whilst too many vendors wait for David Cameron to perform miracles for them.

db

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If people thought the housing market was going to pick up when the tories win the next election, they'd be rushing to buy now, surely, before prices go up.

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If people thought the housing market was going to pick up when the tories win the next election, they'd be rushing to buy now, surely, before prices go up.

Interest rates will be going up after the election - the Conservatives understand the need for periodic shallow recessions, whereas by avoiding the last 2 Gordon has stored up a big one this time round.

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.. "There'll soon be an election, and we can afford to wait. Once Brown has gone, the economy will pick up. ...

Of course it will.

The sugar plum fairy will make it all OK and magic Dave will hand out fivers to old people on street corners.

I know it is "fashionable" to blame the current misguided PM of the UK for everything but the scapegoating is wrong and it is the economy stupid - not the government ....

The incoming Etonian toffs will make it all good.......... for their mates in the banks :D

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No, the problem is that Gordon is keeping interest rates artificially low, and is indulging in QE. Both of these are sort of supporting house prices. Come the next election, back to reality with a big bump.

So I agree that prices will not drop until after the election

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Of course it will.

The sugar plum fairy will make it all OK and magic Dave will hand out fivers to old people on street corners.

I know it is "fashionable" to blame the current misguided PM of the UK for everything but the scapegoating is wrong and it is the economy stupid - not the government ....

The incoming Etonian toffs will make it all good.......... for their mates in the banks :D

Ha ha hahahahahahah!

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My hunch is that Cameron would have controlled spending somewhat better than Brown/Blair, so he would have been able to fund a Keynsean expansion with less frightening borrowing levels. (He is always claiming that he would have repaired the roof while the sun was shining), but since the Tories are less inclined to Viv Nicholson type spending sprees, they may well have let unemployment rip a bit more.

Since Brown has almost finished his work, (the economy is almost done for), there is not much scope for Cameron to do anything different. Tories will no doubt spend less than Labour, which will cause pain, but eventually the economy will be stronger for it, ready for Labour to return and destroy it again.

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Of course it will.

The sugar plum fairy will make it all OK and magic Dave will hand out fivers to old people on street corners.

I know it is "fashionable" to blame the current misguided PM of the UK for everything but the scapegoating is wrong and it is the economy stupid - not the government ....

The incoming Etonian toffs will make it all good.......... for their mates in the banks :D

Listen, I never claimed that people were making rational decisions. In fact I thought I had clearly signalled that I believed their hopes irrational, but, as the man almost said, "The [housing] market can stay irrational longer than you[r STR fund will last]."

The chain of not-quite-reasoning goes like this:

"The housing market is in a bad way and I can't sell my house for what I think I should get for it. The state of the market is the fault of the Labour government in general and Gordon Brown in particular (v. Daily Mail, and quite a few posters on this site). Therefore if we want to things to get better we need to get rid of Gordon Brown and put in Dave and his mates. Therefore [and this is where the logic gets seriously dodgy], if we get in Dave and his mates things in general will get better. Therefore the housing market will get better, therefore my house will sell for more money, which will be a Good Thing. Therefore I should wait until the election, because after the election my house will be worth more."

Now the list of holes in the argument is long and painful:

1) House prices falling is not necessarily a Bad Thing, except for those whose house is already in negative equity.

2) Getting rid of a man who caused a bad smell doesn't mean that the smell goes with him.

3) Getting the other lot in does NOT mean that they can cure the problem - they might be as incompetent as the first lot.

4) Even if they can solve some of the problem (and it's actually not one problem, but many) it doesn't mean they can solve all of them.

5) Some of the problem may be insoluble.

5) The solution to the housing market problem might not be the one you want

6) Even if they can make house prices rise, the rise might not happen for a year or three.

BUT: I'll bet you that there are a lot of people out there who think that getting rid of Gordon Brown will "solve" the housing problem, and that some of them will hold their houses off the market until Brown goes in the expectation that things will be better, and they can ask for a higher price and get it.

To repeat, I don't think they are right - in fact I am sure such "reasoning" doesn't deserve the name. But I do think part of the reluctance to sell comes down to an expectation that prices will soon be back to "normal", and that a Tory government will be more friendly towards the "value" of large capital assets.

And anyone looking to buy, whether renters, upsizers or FTBs, had better bear that in mind.

db

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No, the problem is that Gordon is keeping interest rates artificially low, and is indulging in QE. Both of these are sort of supporting house prices. Come the next election, back to reality with a big bump.

So I agree that prices will not drop until after the election

Exactly. And the problem that any next government will have will be how to start paying back the borrowed money. This will be a combination of tax increases and public spending cuts*. It is going to get worse after the election because a new government can blame the last lot. Put the economy into a nose dive for a year or two in the hope that the plummet will re-ignite the engines.

* tax increases and public spending cuts are not an 'either/or' sort of argument. The country's going to experience both from the next government. It just depends on what type of citizen you are as to which you're more likely to experience.

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Guest KingCharles1st

Lets face it- since Brown has been PM- the country has "been" totally up shit creek- any challenged person can see that.

But- you and I know he was the prime cause of this nightmare, because we listen, watch and learn, the opposite to many voters, and we realise Brown was the architect of the current situation long before most people actually knew who he was.

So the one salient point is that everything appears, to the average voter, to have suddenly turned to shit since Brown has been in charge. So for these people then, the converse must also hold true.

And would anyone want to risk what little they have left tied up in their pwoperdee while Captain fuc_kwit still holds the reigns of power...

Edited by KingCharles1st

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And would anyone want to risk what little they have left tied up in their pwoperdee while Captain fuc_kwit still holds the reigns of power...

So they hang on to it, and hope that the Toff and his pals, who understand about property will make it all right.

Which they won't - probably because they can't. (Doesn't matter why they can't - problem intractableor deep-seated, needs global shifts, price of solution too high, people incompetent - but the likelihood is that they can't.)

But meanwhile all those who hope that they will are holding back, and the property market has one more factor keeping everything slow.

Unless there's another dip coming up in the next few months, we may have to wait until 6 months after the next election - or even until spring 2011.

Ah well.

db

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