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Uk House Prices 'to Slump As Credit Crunch Returns'


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Well done Pete. Your powers of observation never cease to amaze me. Gordo would be pwoud of you son.

I think you meant to say...labour want he who dares to succeed.

Whatever they want, it brought about the collapse of the banking system so, er, I think we'll give the Tories a go now if it's alright with you

Tough times ahead as they reign in the excesses of the last 13 years :o sorry that was meant to be a :lol:

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When buying a house a buyer want s to see some value for the house and for the last five or so years the buyer has been unable to see any value in what he is paying..

Where i live the local estate agents tell me they last saw any first time buyers in any numbers in 2006..we have house now entering their third year of being on sale with plenty of others well into the second year.

The market has dropped 20% round here in the last 12 months but that still leaves the first time buyers having to pay 140k for a 3bed and wages here are not any where near the national average..so what does this mean for the future.? well buyers have gone on strike and sellers are trying to find a level where people will bite but we are no where near that level yet. ..so falls are to me a cert unless they start giving 100% mortgages again and i dont think they will rush to that one again in the near future.. :P

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Whatever they want, it brought about the collapse of the banking system so, er, I think we'll give the Tories a go now if it's alright with you

Tough times ahead as they reign in the excesses of the last 13 years :o sorry that was meant to be a :lol:

lol....I like your style...Im all for giving the tories a chance btw. Im sure they will carry on the sterling work NL have done over the years.

TBH I do not see them being any different...infact they could be worse as they have a great escape clause because of the finacial turmoil were are in. That means scope for new legistlation and inventive new strategies in moving foward. HPI wold be well and alive under the tories imo.

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When buying a house a buyer want s to see some value for the house and for the last five or so years the buyer has been unable to see any value in what he is paying..

Where i live the local estate agents tell me they last saw any first time buyers in any numbers in 2006..we have house now entering their third year of being on sale with plenty of others well into the second year.

The market has dropped 20% round here in the last 12 months but that still leaves the first time buyers having to pay 140k for a 3bed and wages here are not any where near the national average..so what does this mean for the future.? well buyers have gone on strike and sellers are trying to find a level where people will bite but we are no where near that level yet. ..so falls are to me a cert unless they start giving 100% mortgages again and i dont think they will rush to that one again in the near future.. :P

Geoff.....say helo to shared equity....the goverment want to help guys like you. the goverment will put the 30-50% down for you and this leaves you with the task of finding a bank to lend you the other 70-50% Now with deals like that on offer there shall be no problem for 1st time buyers in the very near future. The best bit.....well...here it is. After 10 years have elapsed you get the ooportunity to buy out the goverment or sell up.........if you chose to sell the HPI you enjoyed will be shared with the goverment and the profits recycled back into affordable housing :)

It's almost like magic!! the tories will provide you with all the information on this in the comming months.

Edited by Jister1
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lol....I like your style...Im all for giving the tories a chance btw. Im sure they will carry on the sterling work NL have done over the years.

TBH I do not see them being any different...infact they could be worse as they have a great escape clause because of the finacial turmoil were are in. That means scope for new legistlation and inventive new strategies in moving foward. HPI wold be well and alive under the tories imo.

if they've got any sense they'll want to lance some boils first, otherwise their entire next term will be spent trying to keep the economy at current levels (which is looking more impossible day by day now, never mind over a 5 year term!)

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Savers will be forced to spend ... really! Lots of people will be miserable that their savings are not earning much interest but, in a hostile world of government spending cuts, tax rises and rising unemployment - people are going to hoard their money like never before.

Precisely, if ever there were an example of this it's Japan. Low IR's haven't made people go out and spend their savings have they? The uncertanty of the economy etc have if anything made them more determined to hold onto their cash. To hoard. That is what people do in the face of adversity. They don't go out and spend money on cr@ppy things that need replacing in a few years.

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You can have your beliefs - we all can. But some of us like to think things through and base our conclusions on something other than sheer hope - or whatever it is that drives you.

You haven't addressed anything I pointed out.

I'll try again for the sheer hell of it.

After the election:

Government spending will be slashed

taxes will go up (not heard the 20% VAT stories - they will come true - income tax will go up too)

interest rates will rise (we're not far off Greece on the debt front and they are paying 7% to borrow - our turn will come - soon)

Yet you say growth will come from exports due to a low pound.

Well, with interest rates at 0.5% it can't get much lower. Not much of a boom in exports at the moment because the rest of the world is on its bottom too. When interest rates rise, our exports will get more expensive.

Savers will be forced to spend ... really! Lots of people will be miserable that their savings are not earning much interest but, in a hostile world of government spending cuts, tax rises and rising unemployment - people are going to hoard their money like never before.

The fact is the growth in the economy between 1997 and 2007 was based on debt - now that debt is out of the equation we have no growth. When the government starts paying down the debt - the only logical conclusion is negative growth.

More chance Interest rates will go negative before they go up. Allthough I agree that they will go up one day!

Savers will not hoard when they see inflation eliminate their savings....they will look to invest (Bricks and Mortar)

We are at the fore front in Medicine and invention. British talent and skills are in great demand. The financial services sector (Still have the best there is). Education.....we attract people from all over the world and we can export too.

It is nowhere near the end of the world. well....2012 will see the return of PLanet x .....but apart from that we should be fine.

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Two points;

1. This will not begin until 2011 and probably not in full flight until 2014 - how much rent will you pay in the next 4 years waiting for these prices to fall?

2. Blanchflower, who often writes for the Telegraph this morning, was talking on Fivelive this morning about the CPI figure being higher - nearer 4% - to take into account house inflation.

Yes, that is closing the door after the door is bolted but if that happened now then the result would be to keep IRs low - he even talked about IRs being negative - which would prop up house prices. The journo questioned about that punishing the prudent/thrifty and rewarding those who took on debt but the gist seemed to be to inflate away the debt - so watch out STRers.

beware the faux bears....

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Good post MT as always. People seem to forget that as real inflation roars away even if prices stay they same they are going down.

Personally if you take a standstill as from 2007 -2014 thats long enough Christ you are in IT MT, How long do these people want!

I think there will be wage pressure soon especially in our industry so the inflation machine will be in full operation. You can't just printy printy and have shedloads more paper chasing the same goods and services without that happening.

So your final 4 words are spot on which was I bought a house.

Real inflation implies higher wages, so debt is indeed eroded.

Price inflation without requisite wage inflation is stagflation and isn't going to help debtors at all, quite the opposite in fact.

I have no doubt that price inflation will eventually feed through to wage rises but there will be a big lag and it's highly unlikely that wages will ever catch up.

Given how horrendously overpriced houses currently are then rising consumer prices in essentials with static wages are going to exert downward pressure as irrespective of low interest rates, debt becomes harder to service as you have less disposable income after you pay for the essentials. Real world interest rates are likely to start rising sharply too as inflation means that no sensible lender is going to give their money away for nothing, irrespective of what the Central Bank tries to set them at.

At some point prices will drop to a level at which buying makes sense and in a high inflation environment they will be a good investment to boot but IMO we are a long way off that right now.

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Precisely, if ever there were an example of this it's Japan. Low IR's haven't made people go out and spend their savings have they? The uncertanty of the economy etc have if anything made them more determined to hold onto their cash. To hoard. That is what people do in the face of adversity. They don't go out and spend money on cr@ppy things that need replacing in a few years.

Most of these fckwits simply dont understand this concept, the simple fact is you cant force fear out of people which is what zirp and all the rest of the cr@p is trying to do. When people are fearful they will act prudently which is simply rationality returning to the market. History proves this 100% of the time, but this time its different apparently. The only way that spending will return to the economy is by fixing it which naturally removes fear. Telling people it is fixed when their own life experience tells them its not is about as effective as a chocolate fireguard.

The western leaders know this, they are carrying out exactly the same measures as they were specifically telling Japan dont work in the 90's because they knew what they are doing is ultimately futile. However when the shoe is on their foot so to speak politically they cant do what they know to be correct

Edited by Tamara De Lempicka
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More chance Interest rates will go negative before they go up. Allthough I agree that they will go up one day! Maybe much sooner than you think. Do you think Greece likes paying 7% to borrow money. It could all happen in a day - just like the day we got booted out of the ERM. Just one failed bond sale and IRs will be going up with a rocket attached.

Savers will not hoard when they see inflation eliminate their savings....they will look to invest (Bricks and Mortar) Most savers have a few grand saved. I think the ones with more than that have been the ones propping the market up for the last year. There can't be that much saved money around to keep this going.

We are at the fore front in Medicine and invention. If you say so. British talent and skills are in great demand. If you say so. The financial services sector (Still have the best there is). Pause for chuckle. Education.....we attract people from all over the world and we can export too. Our education system is now crap and sooner or later foreign students will realise this and go to the States. They only come here because, by historical whimsy, English is the world language. It's hardly enough to drive an economy.

It is nowhere near the end of the world. well....2012 will see the return of PLanet x .....but apart from that we should be fine.

I never suggested we were near the end of the world.

My belief is that the economy will not recover. And that it will get a lot worse before it gets better. And we're looking at a 20 year timescale.

I do wish you'd address the basic (and in my opinion, irrefutable) points.

When UK consumers were borrowing £78 billion a year, we had 2% to 3% growth.

When the credit crunch turned us into net savers, almost overnight, we went into recession. The economy contracted at 2% - 3% a year.

When it was clear we were in the deepest recession since the war, the government started borrowing at £6000 a second, to try to get growth back int the economy.

They have failed.

So, same question. We've had a low pound for a while now. We've been education foreign students for a long time. We have been (if you say so) at the forefront in medicene and invention for a long time.

So, how come we went into recession when consumers stopped borrowing?

Please, just answer that one question. Using your logic, we should be growing now.

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Guest DoubleDigitCrackPipe

More chance Interest rates will go negative before they go up. Allthough I agree that they will go up one day!

Savers will not hoard when they see inflation eliminate their savings....they will look to invest (Bricks and Mortar)

We are at the fore front in Medicine and invention. British talent and skills are in great demand. The financial services sector (Still have the best there is). Education.....we attract people from all over the world and we can export too.

It is nowhere near the end of the world. well....2012 will see the return of PLanet x .....but apart from that we should be fine.

Pure comedy gold

Labour is still sucking them in. One born every minute.

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More chance Interest rates will go negative before they go up. Allthough I agree that they will go up one day!

That'll ensure two things

1) People withdraw their deposits from the banks, causing more bank runs

2) The pound draws parity with the rupee.

So, in summary, fat chance.

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More chance Interest rates will go negative before they go up. Allthough I agree that they will go up one day!

Savers will not hoard when they see inflation eliminate their savings....they will look to invest (Bricks and Mortar)

We are at the fore front in Medicine and invention. British talent and skills are in great demand. The financial services sector (Still have the best there is). Education.....we attract people from all over the world and we can export too.

It is nowhere near the end of the world. well....2012 will see the return of PLanet x .....but apart from that we should be fine.

Economically illiterate multi-id trolling.

-_- Zzzzzzzzzzzzzzzz

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1) The intention has always been to wait until at least 2013 to rebuy in the UK, i would imagine for alot STR's rent is being covered by interest/ cap gains on the STR so is practically zero

2) Blanchflower is a plank whos idea was to solve the problem of malinvestment by lowering interest rates even earlier. For some reason people fog over and dont understand his solution is the exact cause of the current problems

Ive come off the fence on interest rates now and think they are more likely to go negative than up over the next 3 years, if interest rates go negative that is deflation, it will destroy the economy, houseprices will collapse the same as they did in 08. I dont understand this sites obsession with interest rates going up to cause a price crash, they really dont need to

I originally calculated that I wouldn't start getting interested until around October 2011 as I wrote here http://retirementinvestingtoday.blogspot.com/2010/01/burj-dubai-and-real-estate-cycles.html I'm however also starting to think around 2013 now as well. The Bank of England and Government have distorted the market through record low interest rates, money printing plus giving the banks the £300 billion or so in SLS and CGS. This has just prolonged the inevitable IMO. House prices on historic ratios are still too high, earnings in real terms are decreasing, under employment is increasing and the public sector whether the government likes it or not is going to have to be reduced. I'm now wondering if when the time comes, the fact that they have distorted the market (rather than letting the market work) will cause the down leg will be worse than it would have otherwise been?

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  • 439 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%



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