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What The Press Said Back Then

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Guest Daddy Bear

This is a convenient summary taken from this site of relevant articles from the last crash. It particularly focuses on the Halifax and shows clearly their vested interests.

The denial and obvious spin and false projections is breathtaking in hindsight.

The Times

SAT 05 MAR 1988

House prices increase by 16.9 percent

House prices increased by 16.9 per cent in the year to the end of February, compared with 16.3 per cent to the end of January, the Halifax Building Society announced yesterday. It said this increase, which shows the property market generally has not ...

The Times

TUE 24 MAY 1988

Prices boom as property 'cauldron' bubbles; House price rises

House prices increased by up to 50per cent in the Hereford area in the past 12 months and are rising by 40per cent a year in East Anglia, estate agents report in a survey published today by the Royal Institution of Chartered Surveyors. They are examp...

The Times

WED 22 MAR 1989

Marking time;House prices in Britain

House prices in Britain are likely to stagnate this year, the Halifax Building Society said yesterday. It expects high demand in the Midlands and North but a slowing down in the South.

The Sunday Times

SUN 16 APR 1989

House prices still rise in the north;Personal Finance

HOUSE PRICES in London and southeast England have fallen during the last quarter, according to figures published by both the Halifax and the Nationwide building societies. But the fall has been tiny. Nationwide's figures show a 0.2% decrease for old...

The Times

FRI 04 AUG 1989

All house prices `may fall'

House prices throughout the country could fall next year, the Halifax Building Society says in its latest survey. It is the first Halifax price index to forecast a fall in prices. Until now, it has said prices next year would be flat. Prices are fla...

The Sunday Times

SUN 05 NOV 1989

House prices may rise next spring

BRITAIN'S depressed housing market could pick up much sooner than expected, according to a forecast to be published this week. The Morgan Grenfell bank believes the housing market has reached a point where recovery is in sight. It says rising income...

The Times

THU 09 NOV 1989

House prices 'to rise'

Property prices in London, the south-east and East Anglia will recover next year and begin to increase by about 10 per cent a year, according to Morgan Grenfell, the merchant bankers, in a report on the housing market published yesterday. The recover...

The Times

WED 04 APR 1990

10% fall forecast for house prices

HOUSE prices will fall by between eight and 10 per cent this year, according to two surveys published yesterday. In London, however, the prospect was more optimistic as prices only fell by 2.6 per cent in the first quarter. The most depressing foreca...

The Times

WED 11 APR 1990

House prices are still falling, Halifax says

HOUSE prices are either static or still falling slightly, the Halifax Building Society reported yesterday. The annual rate of house price inflation, which was more than 34 per cent a year ago, fell to zero by the end of last month, with prices unchan...

The Times

WED 06 JUN 1990

Halifax predicts prices will keep falling;Houses

THE fall in house prices is accelerating nationally and is expected to continue for the rest of this year, Britain's biggest building society reported yesterday. But a firm recovery is forecast for next year. The Halifax monthly

survey showed that p...

The Sunday Times

SUN 14 OCT 1990

House prices bottom out

THE long slide in house prices could be nearing its end. The Halifax's latest quarterly survey of the property market shows that prices in general rose by 0.5% in September, and the indications are of a definite bottoming-out. Last week's cut in the...

The Sunday Times

SUN 18 NOV 1990

House prices set to take off in spring

THE worst slump in Britain's housing market for more than a decade will end next spring, an authoritative report will forecast this week. Prices will rise by an average of 20% within two years, Lower interest rates and higher wages will combine to s...

The Times

THU 06 DEC 1990

House price inflation up

THE annual rate of house price inflation rose in November. The 0.2 per cent year-on-year increase in prices was the first recorded since February by the Halifax Building Society. In October, prices had fallen 0.4 per cent compared with a year earli...

The Times

SAT 29 DEC 1990

Two-point cut in bank rate 'could revive house prices'

A CUT in interest rates by 2 points in the next few months could signal a recovery in the housing market and an increase in house prices of 5 per cent by the end of 1991, the Halifax Building Society predicts today in its annual review of the housing...

The Times

THU 08 AUG 1991

Halifax building society revises its forecast on house prices

The Halifax building society yesterday revised its forecast of a 5 per cent increase in house prices this year. Britain's biggest building society said it now expected prices to rise by less than 3 per cent this year due to the recession and soaring...

The Times

THU 10 OCT 1991

Fall in house prices dashes market hopes

HOUSE prices fell by 0.8 per cent last month and by 1.1 per cent in the quarter to the end of September, dashing hopes that the market might show signs of recovery by the end of the year, according to figures from the Halifax Building Society yesterd...

The Times

THU 05 DEC 1991

Market weak

House prices fell by almost 1 per cent last month, confirming that the market remains "very weak", the Halifax Building Society said yesterday, publishing its latest figures. For the year ending in November prices declined by 2.4 per cent and are l...

The Times

MON 30 DEC 1991

House prices stuck 'till 1993'

THE housing market should begin to recover in the spring, but house prices are unlikely to show real gains until 1993, the Halifax Building Society says in its annual review published today. The review, prepared before the announcement of a rescue pa...

The Times

THU 06 FEB 1992

Prices of houses fall 3.6% in year

HOUSE prices fell by 1.2 per cent last month, the latest Halifax building society house price index shows. It comes after a fall of 1.3 per cent in December and means that house prices are now 3.6 per cent lower than a year ago. Although there are signs of a recovery on the way…

The Times

THU 07 MAY 1992

Lenders split on housing trends

HOUSE prices fell by 0.4 per cent in April, according to the latest Halifax house price index. The average price of a house is Pounds 60,534, 5.5 per cent lower than it was a year ago. The Halifax's figure contrasts with a 0.7 rise in prices recorde...

The Times

FRI 10 JUL 1992

House prices edge up

House prices rose 0.7 per cent last month, the Halifax building society said. The rise, it added, could be a sign that prices were stabilising. "Further recovery remains dependent on improvement in the economy and in employment prospects," a spoke...

The Sunday Times

SUN 09 AUG 1992

House-price market spirals downward towards crisis

FAR from showing even the first flickering signs of recovery, the housing market is plunging deeper into recession, with the situation, according to some experts, now rapidly moving towards crisis. Prices have already fallen longer and further in Lo...

The Times

SAT 05 SEP 1992

House prices down

House prices fell by 0.7 per cent in August, following a 0.4 per cent fall in July, according to the Halifax, the country's largest building society. Prices are 5.4 per cent lower than they were a year ago and the society predicted no upturn in the market for the foreseeable future…

The Times

FRI 09 OCT 1992

Record fall in house prices

HOUSE prices fell by at least 2.8 per cent in September, the biggest-ever monthly fall and equivalent to a one-third cut over a year. The precise figure will be issued today in the respected Halifax price index. It is understood to be at least double...

The Times

SAT 10 OCT 1992

House prices

House prices have now fallen an average 7.5 per cent over the past year, according to the Halifax price index issued yesterday. House prices fell by 3.1 per cent in September, although the seasonally adjusted index figure showed a 2.7 per cent fall....

The Times

WED 06 OCT 1993

Annual rise in house prices

HOUSE prices are now higher than they were a year ago, according to figures for September from the Halifax building society which record a 1 per cent increase on the same month last year the first annual increase in nearly three years. Prices rose 0....

The Times

THU 16 DEC 1993

House price boom predicted for 1994

HOUSE prices will rise by 19 per cent across the country next year, and by 25 per cent in the prime areas of London, according to the research department of Savills estate agent. Savills accurately predicted a fall of 8 per cent for prime central Lo...

The Times

THU 06 JAN 1994

House prices fall, says Halifax

HOUSE prices fell by 0.5 per cent last month, according to the Halifax Building Society's house price index. This contrasts with the Nationwide's experience of an 0.8 per cent rise. The Halifax says that prices rose by just 1.2 per cent for the yea...

The Times

THU 03 FEB 1994

House prices discord

House prices fell by 0.4 per cent last month, according to the Halifax Building Society. The figures conflict with those published earlier this week by the Nationwide, which said that prices rose by 0.4 per cent in January. The Halifax said yesterda...

The Times

THU 14 APR 1994

House prices show first annual rise in all areas

HOUSE prices have risen in every region during the past year, for the first time in nearly five years, the Halifax building society said yesterday. Prices in Northern Ireland are on average 9.1 per cent higher than they were a year ago, average price...

The Times

FRI 03 JUN 1994

Fears for housing recovery as prices fall

HOUSE prices fell unexpectedly by 1.6 per cent in May, fuelling fears that the shaky recovery in the housing market is faltering. The Halifax Building Society, which published its monthly house price index yesterday, said that there were "no signs of a recovery …..

The Times

TUE 04 OCT 1994

House prices fall 2.9%

House prices fell last month by 2.9 per cent, their biggest drop since October 1990, the Nationwide Building Society said yesterday. The average price of a house in September was Pounds 53,918, which was Pounds 1,617 lower than in August. But prices...

The Times

THU 02 FEB 1995

House prices

House prices in the United Kingdom fell by 0.8 per cent in January, according to the latest monthly index published yesterday by the Nationwide. The Halifax index, due out tomorrow, is expected to paint a similar picture of a flat housing market. Na...

The Sunday Times

SUN 12 FEB 1995

House prices set for a `five-year freeze'

HOUSE PRICES are set for a five-year freeze, according to a new City forecast to be published tomorrow. The report, from the investment bank Kleinwort Benson, predicts that prices in real terms will be no higher in 1999 than they were last year. Rea...

The Times

WED 05 APR 1995

House prices fall 1.5% as Halifax piles on gloom

HALIFAX, Britain's largest mortgage lender, will today add further to the misery of 10 million people with home loans when it announces that house prices fell 1.5 per cent in the 12 months to March. As well as house price gloom, the new tax year star...

The Times

WED 03 MAY 1995

Halifax reports further decline in house prices

HOMEOWNERS today receive more depressing news, with the Halifax Building Society reporting that house prices fell slightly in April for the second month in a row. This, together with figures showing weak bank mortgage lending, confirms that there is...

The Times

SAT 03 JUN 1995

Fall in house prices is accelerating says Halifax

FURTHER evidence of the ailing state of the housing market was revealed yesterday amid speculation that the Government is proposing measures to help homebuyers in negative equity. The Halifax Building Society house price index for May showed a third ...

The Times

WED 02 AUG 1995

More gloom for housing as prices keep falling

HOUSE prices fell again in July for the fifth consecutive month and are now 3.1 per cent lower than a year ago, according to the latest Halifax index published today. On the evidence to date, it appears unlikely that prices will recover at all this year or...

HALIFAX FINALLY BECOMES A BEAR

The Times

WED 11 OCT 1995

House prices falling

THE latest survey of house prices published today will paint a gloomy picture of the housing market. Prices across all regions are now 2.6 per cent lower than they were in the third quarter of last year, according to the Halifax. The latest quarterl...

RECOVERY PROBABLY STARTED OCT 1995

The Times

WED 27 DEC 1995

Halifax forecasts 2% recovery in house prices next year

THE housing market will receive a much-needed boost today from a forecast by Britain's largest mortgage lender of a 2 per cent recovery in house prices during 1996. The Halifax Building Society, in its annual housing market paper, predicts that next ...

The Times

WED 03 JAN 1996

House prices remain lower than a year ago

HOUSE prices are still much lower than they were a year ago in spite of five consecutive monthly increases, according to Britain's largest mortgage lender. The Halifax, which has more than two million borrowers, will announce today that, on an annual...

The Times

TUE 02 APR 1996

House prices rise

BRITAIN'S biggest mortgage lender will today report a March increase of 1.2 per cent in the Halifax house price index. On an annually adjusted basis, the rate of house price inflation in the UK remains positive, at 1.7 per cent, compared with just 0...

The Sunday Times

SUN 05 MAY 1996

House prices continue to rise

RISING confidence in the housing market in April helped to lift property prices for the ninth consecutive month, pushing them back to the level of two years ago. But cheaper mortgages mean homes are more affordable. According to the Halifax's monthly...

And indeed somewhere around 1995 was the bottom of the last housing crash. Points to note it took about 7 years to fully manifest itself and at the beginning denial was very high and the bear market continued until the last bull (The halifax) became a bear! Only then did this - the next bull market start.

I do actually believe that history will not repeat itself this time it will be a hell of alot worse...

Daddy Bear

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That's a great summary. Very revealing - the early psychology and belief that prices couldn't fall is particularly relevant at this time.

7 years, blimey!

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I do actually believe that history will not repeat itself this time it will be a hell of alot worse...

Daddy Bear

Which month/year during the last crash best reflects the state of the present housing market - APR 1990 perhaps?

Edited by dinsdale

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I'd say we're up to about Autumn 1990.

We're just over a year since the peak, and the mainstream press is slowly cottoning on to the fact that there have actually been falls over the past year and that there might just be a rough ride ahead.

Like last time, many of the VIs are currently predicting that any falls will be short-lived and there's nothing much to worry about, despite evidence that supply is increasing and demand is decreasing.

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Guest Guy_Montag

What was the drop in house prices over that time.

Average house price at peak compared to average at bottom?

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Thanks for taking the time to do that Daddybear, very interesting reading.

You'll make him blush with shame Libitina. It was lifted in it's entirety from the The Motley Fool, Property Markets and Trends discussion board (without acknowledgement) :rolleyes:

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Guest Daddy Bear
You'll make him blush with shame Libitina.  It was lifted in it's entirety from the The Motley Fool, Property Markets and Trends discussion board (without acknowledgement)  :rolleyes:

Urban Hymm

It was not lifted in its "entirety from the motley fool board at all". If you had the ability to contribute in at least a slightly competent way and the intelligence to read my opening sentence which says "a summary taken from this site" you would have realised it is indeed an edited summarry focussing on the halifax's point of view TAKEN FROM THIS SITE in the FAQ's section. As I have acknowledged. Have a look atr the other articles - all spout the same stuff.

But yes it did take 15 minutes or so to edit out and try to focus on the Halifax viewpoint, and put the information in a more easily accessible and viewable form on 1 page so we all could discuss its content. But do not thank me as it allowed me to digest all the articles in a focussed way.

Urban hymm if you cannot make constructive comments and contribute to the actual content please dont bother, no ones interested.

Thats twice now you have been rash and overlooked something that was obviously staring you right in the face. Am I correct in thinking the last time was the Internet Bubble and obvious coming collapse? On the bright side urban hymn at least this is a little less costly. :P

End of discussion kermit.

Daddy Bear

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This is a convenient summary taken from this site of relevant articles from the last crash. It particularly focuses on the Halifax and shows clearly their vested interests....

I do actually believe that history will not repeat itself this time it will be a hell of alot worse...

Daddy Bear

I did some analysis. It is not scientific obviously but the results

were reliable enough to indicate there was some merit in what

came out.

Method:

1. Make a spreadsheet. Use two figures:

a) all stats normalised to a monthly rate

B) all "sentiments" and "predictions" also normalised to a monthly rate

c) counts of all stats and sentiments

Assumptions:

1. articles are reasonably representative of the column inches available at the time

2. all regional values were ignored

3. that figure quoted are accurate and represent other VIs as well as the Halifax

4. That accuracy can be determined by working back thru the numbers to reconstruct

what actually happened 1989-1996

5. (This is a big one). I am assuming that employment, interest rates, inflation etc are

all irrelevant. Analysis shows the only thing in common with the last few boom and bust

was two things: People and their access to easy money. I am assuming that people will

on average recklessly gorge themselves on easy money until it is forcibly removed.

Results:

A house valued at 100K in 1988 was taken as a baseline. This gave a house worth

122K in 1989, 83K in 1995 and 90K in 1996; not unreasonable and giving some confidence

that the information available was reliable and representative.

What was interesting was the spin and denial.

1988: Three values, all positive avg =1.87% per month

1989: Only one value - limited use

1990: Five values, 2 positive 2 negative one neutral, net -0.13% pcm - a mixture

1991: 4 values all negative, net -0.57% pcm (crash underway)

1992: 11 values; 10 negative; net -0.96% pcm

1993: only one value

1994: six values, 4 negative

1995: 4 values, all negative

1996: 2 values, both positive

Superimpose onto that the VI sentiments and predictions:

1989: 4 predictions averaging +0.21% pcm

1990: four more averagin +0.06%

1991: four more averaging +0.35%

1993: only one but indicating +1.58% pcm

1994: only one but indicating -0.08% pcm - finally!

1995: only one indicating +0.17%

SO what does this tell us?

1. There were 4 sectors to the cycle: Boom, Peak, Bust, Trough, Boom (obviously)

2. VIs (on average) talked the market up on all four sectors, except immediately prior to trough.

3. VIs loudest just following a peak.

4. VIs became more optimistic the further into the bust they go

5. Once the writing is on the wall they stop being so vocal (maybe a credibility thing)

6. Most column inches at peak and first phase of the downslope.

7. Few column inches 4-6 years into the downslope (old news?)

Conclusions.

Remember this isnt scientific.

1. VIs at most pursuasive when peak is over and downward trend is underway.

2. Eventually go quiet when credibility starts becoming an issue

3. Finally start admitting defeat just as the trough arrives.

Where are we now?

We are just past the peak, maybe 12 months into the downslope. If it pans out like

next time, expect VIs to deny all until 2007, then go quiet, then admit defeat in 2009.

Sounds like the time to buy again would be 2010.

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On Balance I'd say the reports we are currently getting in the press are consistent with NOV '89.

...THE CRASH IS ALMOST UPON US!!!..Its a matter of less than 3 months until the real acceleration in drops is there for all to see.

if the last crash is anything to go by then we should be looking to pile in again in about 2-3 years from now.

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Guest Daddy Bear
Interesting to see that the Halifax then, as now, made ridiculous claims of the market bottoming out.

Ha! They are doing EXACTLY the same now. Let's see, they got it SPECTACULARLY wrong then. Good......

VP

Also very interesting to note that when the halifax (after turning bearish not until well into the crash) makes it's most bearish prediction (Wed 02 Aug 1995) " houseprices predicted not to recover this year or..". This was probably the bottom of the market! and it started to turn.

What do they say?.... "when the final bull turns bear"...

So on that basis in 5-10 years time when halifax or like is at most gloomiest in housing market - thats the time to buy!

Daddy Bear

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All this analysis of last time will change the course of this economic cycle and ensure that it's different this time.

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Guest struthitsruth
All this analysis of last time will change the course of this economic cycle and ensure that it's different this time.

:o

According to FT.com last week, not only this time, but EACH TIME

While comparisons may hold insights, it would be risky to base a forecast about the UK property market on what happened either elsewhere or a long time ago. As Andrew Farlow of Oriel College, Oxford, who specialises in housing economics, puts it: “Everything is always different each time.”

http://news.ft.com/cms/s/4d09ce50-18b4-11d...000e2511c8.html

;)

Economists huh ?

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Looking at the press clippings of the lawson boom and bust to forecast a bust now is utter delusional nonsense.

The lawson boom went bust when WAGE inflation grew at a 10% rate. Whatever you think of the tories, they instantly put up interest rates at 12% and made sure tough medicine was doled out to preserve the well being of the economy.

They didn't import millions of workers to absorb the inflationary extra money!

We now have unlimited mass immigration by government design. Labour has bo pricing power, by design in relation to capital. People who repeatedly deny that do no favours to themselves.

Human labour is so cheap in relation to capital/machines in some instances it's replacing machines!

What your wage growth like???

Edited by brainclamp

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Guest struthitsruth
Which means you won't be raising retail inflation 9% via your spending! Especially under the CPI measure  :P

Absolutely I won't.

But aren't you making an assumption that I'm spending within my earnings.

Many were not earning a living, but earning and borrowing a living, and now they've had the temerity to stop, or they've been stopped.

Hence the wailing and gnashing

:lol:

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Which means you won't be raising retail inflation 9% via your spending! Especially under the CPI measure  :P

Rates don't have to hit the 12-15% that they did last time.

With 1.1 trillion quid of debt & growing, a 6% interest rate will bring about severe and widespread hardship. (4.75% saw bankruptcies and repos explode)

3.4% wage inflation is plenty enough to achieve this.

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I bought my first place in April 1989! How ignorant I was then, thought I really had to buy or I would miss out forever. Hmm - biggest financial mistake of my life and it took me 12 years to recover.

Lesson to be learnt for anyone thinking of buying now.

well, dont blame yourself too much, back then the market was whipped up into a total frenzy, everyone was convinced if they didnt buy THERE & THEN they'd have missed the boat for life.

The current situation is far less excusable IMHO- all the indicators are there for all to see that this is a proper market bubble, yet numpties have been borrowing sums that could have bought Windsor castle a few years ago but have ended up with a grotty semi in Chav-ville.

Pure insanity

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