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The Guardian, that Labour cheerleader, writes something sensible on house prices

That great carbuncle on the back of the British people, which sucks the life out of entrepreneurialism and drains all of our wallets, just can't be shaken off. Just when British property prices had moved from farcical to just absurd, and some of us thought they might be heading towards sanity, along comes another mini-boom.

It's taking place as unemployment approaches 2.5 million, when our national debt is rising faster than ever and when the experts tell us that, at best, the economy is bumping along the bottom. What is it about this monster that just can't be slain?

Nationwide said today that house prices rose by 1.6% in August, with the average home valued at £1,353 more than in July. So that's great, then. If you are saving to buy the average home, and you're on the average salary, then there's no way you could keep up.

As usual, the great weight of commentators welcome this madness. From my emails this morning: "The worst may be over" (er, it sounds like the worst is coming); "Where are the doom-mongers now?" (still here, and still ready to pour cold water over this nonsense); and "Landlords: four reasons to cheer" (Do these people have no shame?).

Sadly, the sensible savers who have been joyfully watching prices fall will now be tempted to jump in, fearful of never being able to afford a home. They will add more fuel to this bonfire.

But it will, thankfully, peter out. The chief reason why house prices have not fallen by as much as many of us expected is that, unlike the early 1990s, interest rates are extraordinarily low. At the same time, banks are being more cautious about repossessions, because it's the people who now own the banks.

Normally in a downturn, asset prices fall below long-term trends before they mean-revert. It has happened in boom-bust Ireland, where prices in Dublin have fallen to realistic levels (eg: €700,000 houses in the boom now go for €400,000). Yet property prices in Britain have started rising again before they have even dropped to long-term averages. This is no basis for "recovery" as affordability constraints make further growth impossible.

From the Guardian

:blink:

But someone in the mainstream had to say it

http://www.guardian.co.uk/money/blog/2009/...rices-rise-fall

Apologies if already posted

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Guest The Relaxation Suite
The Guardian, that Labour cheerleader, writes something sensible on house prices

From the Guardian

:blink:

But someone in the mainstream had to say it

http://www.guardian.co.uk/money/blog/2009/...rices-rise-fall

Apologies if already posted

An important piece which articulates what I have been saying all along. British land prices have always been an outrageous and unacceptable millstone round the necks of the people, and today is no exception. Nothing has changed. The establishment fought tooth and nail to keep land prices unaffordable and managed to screech the juggernaut to a halt at less than 20% drop. As I have written elsewhere however, the prices are still crashing, the volume is not there for a real recovery. 40% off still to come.

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So basically the message is

'If you have just bought a house, more fool you. You will live to regret it'

Daddy Bear take note! :lol:

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It is both fascinating and annoying how house prices have plunged elsewhere in the West but hardly any fall here in the UK. Nuts.

It's simple, MT.

Strong fundamentals, small island, growing population, not building any more land... *sigh*... you know the rest...

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That great carbuncle on the back of the British people, which sucks the life out of entrepreneurialism and drains all of our wallets, just can't be shaken off

nailed right there

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Given that inward population movement is likely to see the UK grow to over 75 million people in the next ten years then you don`t need to be a soothsayer to see that house prices can only go one way - what we need is the sort of land re-distribution which happened in Ireland during the 1920`s but the landed aristocracy are hardly going to allow that to happen ...

Edited by Wires 74

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Given that inward population movement is likely to see the UK grow to over 75 million people in the next ten years then you don`t need to be a soothsayer to see that house prices can only go one way - what we need is the sort of land re-distribution which happened in Ireland during the 1920`s but the landed aristocracy are hardly going to allow that to happen ...

another 15 mln competing for scarce resources on reduced wages due to competition. That's going to work

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another 15 mln competing for scarce resources on reduced wages due to competition. That's going to work

So whats the answer then - as a previous poster said we are not building any more land .

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A gentleman quoted in the Times does not agree with the thrust of the Guardian artcile:

http://business.timesonline.co.uk/tol/busi...icle6813025.ece

From The Times

August 28, 2009

Housing revival puts pressure on lenders for easier mortgages

Rebecca "Becky" O’Connor

.../

“Recovery in the housing market is great news for all of us. Higher prices will lift many out of negative equity, encourage others to move and spend money, and remove any last excuses the banks have for not lending people money to buy a home. There are real bargains to be had in the market at the moment. Lenders, afloat on a sea of public money, must enable us to take advantage of cheaper homes.â€

If (if)* we do get another round of HPI Gordon will probably win the next GE.

_______________________

* If

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Given that inward population movement is likely to see the UK grow to over 75 million people in the next ten years then you don`t need to be a soothsayer to see that house prices can only go one way - what we need is the sort of land re-distribution which happened in Ireland during the 1920`s but the landed aristocracy are hardly going to allow that to happen ...

The population will NOT keep growing if housing remains so expensive, workers will just not come here. many will leave the uk to where there is better value property and a better quality of life. if the US were to allow open immigration from the UK, half the UK would empty by 2010 i'd wager.

this country is an over-priced, small and stifling cash-cow for corporations. it is the land where the retailer can make good bucks, it's called Treasure Island. it has no real industry except ponzi property.

75 million - those extra people would have to be here for a reason - those babies will want jobs, we simply do not have anything for them now except KFC and McD.

This ship is being steered by one of the most incompetent crews ever - that is why we are seeing now a sugar rush boom which is the result of a deluded "visionary" playing fast and loose with the economy and a buffoon of a Governor who lost control of the economy before and is now cheeky enough to pretend he can fix it.

it really all is beyond belief that these people are in charge and their reckless route is going on and on, with little mention of the consequences by a useless Opposition

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“. Lenders, afloat on a sea of public money, must enable us to take advantage of cheaper homes.â€

The UK`s baffling take on property summed up in a nutshell -simply bonkers ...

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The UK`s baffling take on property summed up in a nutshell -simply bonkers ...

Right. A sea of loose credit and an array of greedy bankers eager to earn mega bonuses would wipe out "cheaper homes" in a matter of weeks. BTW what cheaper homes?

None of this worries me as you can't beat the market. Unemployment will be Brown's nemesis and with his legacy will continue to go his sole contribution to the British economy: unaffordable housing.

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If (if)* we do get another round of HPI Gordon will probably win the next GE.

there is absolutely no chance GB will win any GE even if a 1 bed flat in basildon is £1.2m unless the vote is rigged. period.

Edited by loginandtonic

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The Guardian DOES - sometimes - tell it as it is.

Great stuff. :P

It is odd, isn't it? You get people like Larry Elliott who write books like Fantasy Island pointing out the ponzi scheme, and then you have the wild eyed loons like Polly Toynbee. I s'pose they have never been able to get over the fact that Labour is left wing in name only.

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The Guardian, that Labour cheerleader, writes something sensible on house prices

From the Guardian

:blink:

But someone in the mainstream had to say it

http://www.guardian.co.uk/money/blog/2009/...rices-rise-fall

Apologies if already posted

The media is bearish.. That is a bad sign as far as I am concerned.

Remember that the media were bearish as hell in 2001-2002. They then turned bullish from 2006-2007. Now they are bearish again.

They are ALWAYS exactly wrong. Higher prices ahead.

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From The Times

August 28, 2009

Housing revival puts pressure on lenders for easier mortgages

Rebecca "Becky" O’Connor

“Recovery in the housing market is great news for all of us. Higher prices will lift many out of negative equity, encourage others to move and spend money, and remove any last excuses the banks have for not lending people money to buy a home. There are real bargains to be had in the market at the moment. Lenders, afloat on a sea of public money, must enable us to take advantage of cheaper homes.â€

Is this rebecca woman for real or what. I dont know who she is or how she got this job with the times but she does not seem to have a clue and in my opinion should be banned from writing this bulls**t. She reckons high house prices are great news for all of us, i dont see how she can come to this conclusion. Anyone with half a braincell knows higher house prices are detrimental to most people and the UK economy. This has been exposed yet this woman comes out with this crap.

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Is this rebecca woman for real or what. I dont know who she is or how she got this job with the times but she does not seem to have a clue and in my opinion should be banned from writing this bulls**t. She reckons high house prices are great news for all of us, i dont see how she can come to this conclusion. Anyone with half a braincell knows higher house prices are detrimental to most people and the UK economy. This has been exposed yet this woman comes out with this crap.

It's good for her and her media mates - she has no interest in the wider scheme of things. Being a journalist she probably believes she is immune to the problems in the economy as well.

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The Guardian, that Labour cheerleader, writes something sensible on house prices

From the Guardian

:blink:

But someone in the mainstream had to say it

http://www.guardian.co.uk/money/blog/2009/...rices-rise-fall

Apologies if already posted

I'd agree with what they say BUT ( and its quite a big BUT) what they don't attempt is to try and analyse "where from here"... they say they would have expected a reversion below mean and that the reasons ( or at least some of them) why this hasn't happened include low rates and a different approach to repossessions by the banks.... they could add seller intransigence, a low pound, a different media environment etc etc etc...... what they don't say is where to now... from what they do say you might conclude that the crash is over until rates are higher or until banks start agressively repossessing things BUT I for one don't believe thats the whole picture.

I think we'll see things like, low supply levels, lower rates, relaxed repossession criteria, media hype etc holding back the tide (slowing the fall if you like) perhaps for the next 18 months... we'll see some falls overall though but not huge amounts.... this will in my view effectively take us through the period where the market might have massively corrected beyond trend... a soft landing if you like.

Not good for those hoping for a over done fall but in the round its not bad news as eventually house prices will become more affordable.... but its going to be slowly slowly.

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Given that inward population movement is likely to see the UK grow to over 75 million people in the next ten years then you don`t need to be a soothsayer to see that house prices can only go one way - what we need is the sort of land re-distribution which happened in Ireland during the 1920`s but the landed aristocracy are hardly going to allow that to happen ...

Land redistribution would have sod all of a difference, even with the so called 'landed aristocracy' the vast majority of their land is used in some way, particularly for farming.

The real problem is who owns all the properties. If in 2001 Brown had gone to the banks (via the FSA) and said that mortgage lending should be restricted to 3x salary and 10% deposit and BTL mortgages were only available to some other tight criteria (ie possibly no lending at all) we would not have the problem we have now.

There is enough housing in the UK, it is just badly distributed people like the Wilsons are allowed to buy 700+ homes based on leverage and remortgaging, others view BTL as some kind of hobby and that is the root of the problem, not the fact that the Duke of whoever owns 7000 acres of farm (or economically useless - as much of the land in the UK is) land.

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A gentleman quoted in the Times does not agree with the thrust of the Guardian artcile:

http://business.timesonline.co.uk/tol/busi...icle6813025.ece

From The Times

August 28, 2009

Housing revival puts pressure on lenders for easier mortgages

Rebecca "Becky" O’Connor

.../

“Recovery in the housing market is great news for all of us. Higher prices will lift many out of negative equity, encourage others to move and spend money, and remove any last excuses the banks have for not lending people money to buy a home. There are real bargains to be had in the market at the moment. Lenders, afloat on a sea of public money, must enable us to take advantage of cheaper homes.â€

If (if)* we do get another round of HPI Gordon will probably win the next GE.

_______________________

* If

The problem isn't the system, it's the people. People are greedy, end of. No, HPI is not great news for all, the people are not stupid but they are greedy. Greed > sanity.

People who live their lives blindly listening to anything they're told are the problem. It reminds me of people who want to sue McDonalds for being obese. Where does self responsibility end and corporate reponsability begin? In my opinion, there is no corporate, media, government responsibility when it comes to using your f*king brain.

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It is both fascinating and annoying how house prices have plunged elsewhere in the West but hardly any fall here in the UK. Nuts.

Totally agree, it's infuriating isn't it? Why is the UK unique? Spain, US, Ireland have all seen major falls. I know the bulls would argue that there is a shortage of supply here but obviously that isn't the case at the moment as practically no one can get a mortgage.

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