Jump to content
House Price Crash Forum
Sign in to follow this  
crock

How Did We Get Into This Mess ?

Recommended Posts

After reading the posts of the land registry figures jan 04 - jan 05 showing a typical 40 - 50 % drop in volume sales across the whole of the UK you have to consider the fact that we might be in for a serious 30 % + drop.

How the **** did we get into this situation of such high prices ?

Average Joe Bloggs is going to be financially stuffed - if not bankrupt :o

Are we on the verge of a recession of epic proportions given that :-

a) High oil price

B) Public debt

c) Terrorisim

d) Small & large companies failing

What went wrong ? :angry:

Share this post


Link to post
Share on other sites
After reading the posts of the land registry figures jan 04 - jan 05  showing a typical 40 - 50 % drop in volume sales across the whole of the UK you have to consider the fact that we might be in for a serious 30 % + drop.

How the **** did we get into this situation of such high prices ?

Average Joe Bloggs is going to be financially stuffed - if not bankrupt  :o

Are we on the verge of a recession of epic proportions given that :-

a) High oil price

B) Public debt

c) Terrorisim

d) Small & large companies failing

What went wrong ? :angry:

We stopped creating real wealth. We don't make anything any more.

We built an "economy" on shopping and credit. You can spend your own money once, you can spend other people's money many times. Eventually they get fed up and want it back, and some.

This is where we are now.

NDL

Share this post


Link to post
Share on other sites

Whilst I would normally take the opportunity to put the boot into the MPC at this point, it should be pointed out that if the banks only lent 3.5x salary multiples and did away with interest only mortgages then we wouldn't be in this mess.

But of course it's too late now.... 1.1 trillion quids worth of debt later...

Share this post


Link to post
Share on other sites

How the **** did we get into this situation of such high prices ?

Well, I remember back in the late eighties, Angie in East Enders encouraging the younger

residents in the square to 'get mortgaged to the hilt, get on the ladder at all costs'

I think its the media. :D

Fortunately, I don't recieve UK terrestrial channels, so I miss out on most of the

pro VI property shows.

However, overCchristmas, I had to suffer UK TV, and was appalled by the daily

5 hours or so of programming on channel5 devoted to property.

The property developer one, the guess the right price and itsyours etc etc.

Small wonder people get deluded.

Now, had you bought on angies advice in , say 1987, and held on till

now, you would have a tidy profit, And nearly paid off the mortgage,

that is if your endowment isn't in shortfall.

(Aside, does anybody know anybody with an endowment that isn't...

makes you wonder about interest only mortgages)

But, if you bought in 1990, and had to sell before 2000, you probably lost out bigtime,

and lets face it, how many people live in the same place for the duration of their mortgage?

I saw a lot of my peers go through hell in the early to mid nineties with negative equity.

some were basically forced to hand over huge lump sums to the bank/bsoc just so they

could move out and get on with their lives.

Sadly, even this time around, famoly members were convinced another

crash coudl never happen. This time is different...

Hardly surprising given the wall to wall propoganda most people are subjected to

on a daily basis. If this were the eastern block, our media would call it

brainwashing.

So the answer is stop watching British telly, and let reality back into your lives.

(Actually, foreign telly is just as bad, just not in any position to exploit it or

be exploited by it)

Just my £0.02

ABB

Share this post


Link to post
Share on other sites

I believe there are several reasons:

1) back in the 90's people were given the right to buy their council property at a discount. Innevitably this meant people did so. Therefore the volume of available social housing fell.

2) The rules on bank lending were relaxed (90's????)

3) The dotcom crash meant people were fearful of the stock market.

4) In the late 90's to early 00's the lack of social housing, the ease of lending and the movement of investment away from the stock market encouraged people to use BTL and BTS as a mechanism for investment. In other words people bought like crazy.

"it will never happen again" - it always does because each generation forgets the boom/bust of the past

"they won't let it happen" - who are "they" and how on earth could "they" actually stop anything?

Edited by Portent

Share this post


Link to post
Share on other sites
After reading the posts of the land registry figures jan 04 - jan 05  showing a typical 40 - 50 % drop in volume sales across the whole of the UK you have to consider the fact that we might be in for a serious 30 % + drop.

How the **** did we get into this situation of such high prices ?

Average Joe Bloggs is going to be financially stuffed - if not bankrupt  :o

Are we on the verge of a recession of epic proportions given that :-

a) High oil price

B) Public debt

c) Terrorisim

d) Small & large companies failing

What went wrong ? :angry:

George Bush. I blame him for everything these days. :rolleyes:

Share this post


Link to post
Share on other sites
What went wrong ? :angry:

The trouble with most bad situations is that they don't suddenly happen. You get there one step at a time, and as long as everyone else is walking the same way it seems like a good idea at the time... especially if you dangle virtual tenners in front of their noses and blind them to the fact that the main beneficiaries of high prices are banks and EAs.

But I agree with other posters who've pointed to property porn as being a significant factor this time around. I suspect property pricing will always be cyclical, but the steady drip-drip of TV (no, not Phil & Kirsty, stop being so uncharitable!) has got to have pushed the pendulum further and harder this time.

You can hardly blame TV though. It only reflects our preoccupations. I mean, let's face it, we're as preoccupied with property as the wannabe BTL millionaires and Beeny-castigated, 'anyone can make a bob or two in a rising market' wannabe property developers, aren't we?

I like to think we're preoccupied for socially responsible reasons though. I may just be deluding myself. :-)

Andrew McP

PS On a related note I actually still had a soft spot for Kirsty (it's the voice... go on Kirst, say b*gger again!) until her recent property chain show. She kept going on about folk buying a house for 3p in 1908 and selling it for £1,000,000.03p in 2004; a *profit* of one million pounds! No mention of inflation, or the fact the money was going into the next property and wasn't real money unless they downsized or bought a tent instead. Very frustrating. No excuse for it whatsoever. Shame, because it was a useful insight into the complexities of property chains otherwise.

Share this post


Link to post
Share on other sites

We have a monetary system where all money is created as debt. As banks need only keep a paltry 8% on reserve, they can lend money into existence. When a boom gets underway, money is easy, and anyone with a pulse get get huge loans and mortgages.

Of course, after a while the debt burden becomes too high, people struggle to pay the money back, confidence dives and people revert to living within their means. Jobs created by the debt-binge go and you get a downward spiral.

What makes the present cycle so dire is that is based merely on borrowing money to go to the shops to buy, mostly, cheap imports - so british agriculture, technology, and manufacturing has continued to slide despite the apparent boom.

This 'economic growth' has been destructive as the job market has created million of low-wage, skillless positions while continuing the offshoring, downsizing trend form the mid-ninties. The only people making money have been speculators and banks, who create zero real-world wealth.

Share this post


Link to post
Share on other sites
The only people making money have been speculators and banks, who create zero real-world wealth.

AMEN to that.

And to make matters worse the high-skill service sector jobs which were trumpeted by Thatcher as the future are now drifting offshore. Take IT for example. My company has just commissioned an elaborate new website and the quotes we obtained from UK web design companies were anything from £5K - £8K. We are now having it done for less than £1K in India where the charge-out rate for a highly skilled IT graduate with five years experience is just £25 a day. As for manufacturing our products are now made in China and Korea where labour rates are less than a tenth of the UK.

We are living in a rapidly changing global economy. Meanwhile the UK is being propped up by nothing more than inflated house prices and credit card shopping.

Share this post


Link to post
Share on other sites
My company has just commissioned an elaborate new website and the quotes we obtained from UK web design companies were anything from £5K - £8K. We are now having it done for less than £1K in India where the charge-out rate for a highly skilled IT graduate with five years experience is just £25 a day.

Red Baron, I'd be very interested to see what sort of quality of website you will actually get for £1K and what features it has. Typically, you get what you pay for....

Share this post


Link to post
Share on other sites
Red Baron, I'd be very interested to see what sort of quality of website you will actually get for £1K and what features it has.

It's a full e-commerce site and still under development, but the results we have seen thus far are very pleasing. The high standard is probably due to the fact that the project is managed by a UK company who subcontract all the legwork to their Indian software guys.

Share this post


Link to post
Share on other sites
It's a full e-commerce site and still under development, but the results we have seen thus far are very pleasing. The high standard is probably due to the fact that the project is managed by a UK company who subcontract all the legwork to their Indian software guys.

This is no surprise. Producing this sort of website is now a well understood process, with many people the world over knowing exactly how to do it. And good luck to them I say. There are a lot of smart people interested in IT, and it doesn't take long for knowledge and ideas to filter across national boundaries.

The UK IT industry can't expect to exist on this sort of thing for ever. If you want to continue to make money in IT in the UK, you have to stay at the cutting edge. There is still plenty of opportunity in software for people in this country; they just have to excel and specialise in the latest technologies and practices, and be associated with high value businesses. But just sitting still and turning the handle churinging out standard websites with a few customisations won't cut the mustard. Somebody will always find a way to do it cheaper.

Share this post


Link to post
Share on other sites
There is still plenty of opportunity in software for people in this country; they just have to excel and specialise in the latest technologies and practices, and be associated with high value businesses

I accept this point entirely. It's horses for courses. We simply required a bog standard e-commerce site and were looking for the best value.

On the other hand my business partner, who also runs his own industrial design consultancy, wanted a cutting edge corporate website and for this he commissioned a very bright Cambridge IT firm. They produced a spectacular (and very expensive) site incorporating all the latest technology. He would not have got that from India!

Share this post


Link to post
Share on other sites

Economic miricles - the public want to believe in them- but they dont exist.

UK plc=poor skills,poor investment,poor management,poor productivity.

The new asian economies and eastern europe may wake us up. but we do not like to hear the truth. dreams are far more comfortable, long live cool brittannia

Share this post


Link to post
Share on other sites

That's it. You've got it.

The only what to keep the UK from being destroyed economically by the emerging economies is for us to invest in Research and Development. And I mean invest big. We currently invest a pityfully small amount in R&D as a percentage of GDP.

In the past I've worked in places where even getting managers to agree to sending software developers on training course to learn the latest technology was impossible, because they'd block it by saying "If we train people in that, they'll just leave and get jobs somewhere else". (I kid you not!). That sort of mentality is doomed. We'll just end up as a second rate skills economy, with ideas way above our station, unable to compete with competition from overseas snapping at our heels, and then overtaking us in terms of technology and working practices.

If we don't invest our wealth in R&D, we will lose our wealth as a nation, and we will deserve to lose it too. There is no reason whatsoever why countries such as China and India and many others can't move forward and past us in technology and know-how. People are just as good at mathematics, computing science, etc. there as here. The only thing they lack is wealth to invest. But they will get that.

Time to get heads out of the sandpit!

Share this post


Link to post
Share on other sites

I thought I bet it's just a few coding jobs available, then I noticed the first hundred were from Today alone on one site!

edit:

and a just bit cut-throat

If you are doing business with a person in Romania or Mumbai, India, and have lost

contact with them please be aware that some parts of these areas are without Internet

connections due to unusually heavy flooding. If this is the case you can contact an

arbitrator to have the project reassigned (Affected coders will, of course, not receive a poor rating for the reassignment).

Edited by maxwell

Share this post


Link to post
Share on other sites
If you are doing business with a person in Romania or Mumbai, India...

how do you know you will get paid from these crappy countries is it cash up front or get paid after, how do you get paid at all, do you put time bomb in code, do you give source code or just exe, sounds dodgy to me, dont trust roumanian and russian and indian and pakistan etc

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp
Average Joe Bloggs is going to be financially stuffed - if not bankrupt 

Are we on the verge of a recession of epic proportions

Third, I believe that the massive increase in personal debt over the last eight years is a major factor and will become an even bigger problem in the near future. With Britons spending, on average, £110 for every £100 of take-home pay, financial mismanagement and over-stretched household budgets are bound to take their toll!

From the news blog

http://www.fool.co.uk/news/comment/2005/c050729d.htm

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.