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mel in w9

What Will Spending Cuts Mean For Scotland

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I just read this morning that the public spending cuts announced yesterday translate to Scotland losing 900,000 million GBP of their budget. (well at least it wasn't a billion).

Obviously this means many local jobs (all over the country) will be affected. I suppose it will be another knock on property prices.

What do you think?

Edited by mel in w9

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I just read this morning that the public spending cuts announced yesterday translate to Scotland losing 900,000 million GBP of their budget. (well at least it wasn't a billion).

Obviously this means many local jobs (all over the country) will be affected. I suppose it will be another knock on property prices.

What do you think?

Well if theres no jobs theres no paypacket, if theres no paypacket there has to be a decline in prices maybe not a cliff drop but certainly a steady decline is on the horizon.

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Sure you read that right? 900 billion would be the size of the entire Scottish economy and then some. I knew the public sector was large, but I didn't think it was more than 100% of GDP.

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The problem is that unlike in places like Ireland where they have had public sector pay cuts here the looters have kept their swag.

When they talk about the NHS budget being guaranteed it appalls me. Lots of it has gone on wages which they have now been told they can keep. I was reading about BTL mortgages and the typical client is a doctor with several properties. My doctor in Scotland had three properties.

Without pay cuts for the last minute looters the inequality just gets worse. If there are any public sector job losses the bosses will decide to keep thir jobs but sacrifice those at the bottom of the pay scale to make the savings necessary to maintain their inflated wages and pensions. Therefore it will mean frontline cuts to protect top line wages.

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There's no reason why house prices will not suffer the same fate here as they will in the rest of the country.

As the winter progresses i am sure things will get uglier. The housing market is struggling as it is so one can assume it will get worse with cuts still to hit.

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Nothing. Scotland is different. Cuts ? Bah - we piss on cuts. Our house prices will just triple as a result to prove the point.

On another note we have 3-5 more years of gradual sliding prices IMO. Even the likes of previous uber bears like the ESPC and Warners are now telling people in Edinburgh to expect no rises for a long long time and no return ever to 2007 levels of sales.

If this lot are finally getting it then the general public cannot be far behind. I reckon barring the constant BBC brainwashing most are well aware of this already.

When was the last time someone at your work told everyone how much they had 'made' on their house ? Or how many flast they were trying to buy ? Or even mentioned it in passing ?

The obsessions is very slowly waning.

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Piss on cuts :lol:

It will be interesting to see how things develop over the winter especially with properties which have been on since early in the year and have still not sold. You would have to think that prices will drop or at least factor the price drops into your offer (if making one) .

My plan is to offer 15-20 below what i consider the value of the property and not the added on made up value which the owner has asked the surveyor to bump the price up by. Buyers have to remember that its time to play hardball, let the sellers squeal for a change.

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Sounds like a plan.

Lets not just think about the places been on sale since the start of 2010. There are a few near me that have been on since 2008 will little or no change in price. One was clearly bought by 'developers' and done up. They really just need to accpet reality.

House opposite the Scotmid on Whitehouse Road in Barnton if anyone is interested. By looking at the sale price and what they paid fo rit - I think they have accepted it is not going to make them any money. How long to accept a loss however ? May take a little longer.

http://www.espc.com/buying/290295.html

They bought it for £575k in April 2007. been on sale since sometime in 2008.

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They should take the loss, greed can make you do stupid things however.

I don't know if i am been unrealistic with my "plan" and i admit i don't know the market that well here but if houses are not selling and all the talk is of falling prices, cuts to jobs and not to mention the fact that house prices are overpriced anyway then why not chance your arm ?

You should maybe make similar offer ccc if the ones close to yourself are what you are after .

Timing will be key if and WHEN prices do begin to fall.

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Not looking at present. Not sure I even want to buy but probably will. Probably in 18 months to 2 years from now.

Remember all teh chat back in 2007 about how long these things take to drag out, historic precendents etc..

Things change and you never know. However back then I put a year in of 2012 for somewhere near the bottom. All heading towards that to plan - so far anyway.

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good luck your plan. sticking to your guns is a good strategy, hopefully it will bear fruition.

Cheers and you too.

I am pretty flexible. Don't like to plan too much really. Just see what happens - and there is nothing at the moment telling me to rush into buying a house in Edinburgh. Nothing.

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Even the likes of previous uber bears like the ESPC and Warners are now telling people in Edinburgh to expect no rises for a long long time and no return ever to 2007 levels of sales.

Uber Bulls surely?

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I know this is hpc, so we tend to focus on house prices a bit too much.

Suffice to say - EVERYTHING will be affected. And that certainly includes house prices.

The country is going to be poorer for at least 2-3 years, with all the consequences that brings.

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The cuts to spending in Scotland will have a devastating result on Rural Scotland.

The Highlands and Islands is heavily subsidised and we will get something like the Highland Clearances.

People will all move into the cities - like Glasgow, Ed, Aberdeen and house prices will move even higher due to increased demand.

It's going to be a really good thing. :rolleyes:

And remember - your corner of your city is different and immune from any cuts. B)

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I know this is hpc, so we tend to focus on house prices a bit too much.

Suffice to say - EVERYTHING will be affected. And that certainly includes house prices.

The country is going to be poorer for at least 2-3 years, with all the consequences that brings.

Prices will drop, but will they FEEL lower? Not sure as we'll all be earning less, assuming we still have a job!

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I am looking for a family home in the morningside, bruntsfield, marchmont area. I think the public sector job cuts will have little impact on the prices of the places I am looking at. If any job losses were going to effect the prices of 3 bed + places in this part of town, it would have been the massive banking job losses. RBS alone has shed lots of jobs in the last few years (9000 rings a bell?), and house prices are still inexplicably shooting up... What would have more effect would be an interest rate rise, and after the recent growth figures, maybe an interest rate rise isn't that far off anymore.

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I know this is hpc, so we tend to focus on house prices a bit too much.

Suffice to say - EVERYTHING will be affected. And that certainly includes house prices.

The country is going to be poorer for at least 2-3 years, with all the consequences that brings.

Bankruptcies in Scotland are running at twice the average rate for the UK according to this in the Scotsman.

THE number of people being made bankrupt in Scotland has been forecast to climb once more after declining modestly in the last three months.

Scots continue to be made bankrupt at a rate nearly double that in the rest of the UK, despite a 4 per cent fall in the number of personal insolvencies in the three months to the end of September, according to figures published last week by the Accountant in Bankruptcy.

They were confirmed yesterday by the government's Insolvency Service, which also showed that insolvencies in England and Wales fell 3.7 per cent over the quarter. Some 0.41 per cent of Scots have gone bankrupt in the past year, according to PKF accountants and business advisers, compared to 0.25 per cent of those in England and Wales.

Anne Buchanan, corporate recovery partner with PKF, said Scotland's insolvency level was "worryingly high" given benign base interest rates and low mortgage costs.

"This would indicate that there remains an enormous backlog of individuals who have been teetering on the brink of personal insolvency for some considerable time but have only just tipped over the edge in the third quarter," said Buchanan.

She pointed out that many people have already been living beyond their means in an economy heavily dependent upon the public sector. And as creditors get tougher on people slipping into debt, growing personal insolvency levels will once more become the norm. She added: "Given that the impact of the spending review will start to be felt in the autumn and winter then I believe we will have many more quarters where large numbers of Scots are made bankrupt."

Interesting times ahead.

Edited by siskin

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Bankruptcies in Scotland are running at twice the average rate for the UK according to this in the Scotsman.

Interesting times ahead.

I think when they say "UK" they mean "England and Wales".

It is actually quite difficult to directly compare bankruptcies as the bankruptcy law in Scotland is different from E&W and the consequences different, where there is an oft used alternative to bankruptcy called an IVA-used by around twice the no. of people that actually go bankrupt. As for as I know Scotland does not operate an IVA system.

Debt and insolvency may indeed be higher in Scotland-but is lazy and/or ignorant journalism to not acknowledge these other factors.

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The effect on Scotland will for a large part depend on the SNP's policy. With over 60% of business generated by the state in Scotland, how well they apportion budgets to minimize job losses will make a huge difference. I work for the NHS and however popular protecting NHS from any cuts might be politically, in my view it's a huge mistake. I see hundreds of thousands of pounds wasted annually.

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Years ago I said to my husband (who is an economist) that everyone says that we will never suffer in Scotland from negative equity the way people did in the 90's in London. He replied, "that is exactly why it CAN happen - when people have blind faith that house prices can only go up." He kept going on about the affordability ratio as his wage rose each year by 1-3%, against house price rises of 10% or more. Of course job cuts will affect house prices next year. They going DOWN and we've just found a nice place to rent to wait and sit it out until 2012.

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