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munimula

Moneyweek

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People have started taking money out of their properties to finance consumption once again. But this is not the good news that it may seem.

Take the last housing crash. MEW peaked in the third quarter of 1988 and by early 1989 was falling fast. Then, in the third and fourth quarters of 1989, just as house prices were turning negative, MEW briefly rallied, even though by this time interest rates were double what they'd been the year before.

Then, as now, the late cycle rebound in MEW didn't reflect falling borrowing costs, nor was it facilitated by rising house prices. No, at this stage of the cycle it is now most likely that it reveals the desperation of those who can only finance their lifestyles through debt.

This rally in mortgage equity withdrawal is the harbinger of the twin evils of repossession and personal bankruptcy

I'll try and post the graph shortly

Edited by munimula

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Have you a link.

Thanks

sorry Charlie, don't have a link.

This is a must read article though, it's HPC porn;

What we could easily be seeing is the desperation phase (before the bankruptcy stage) of the more stretched cohorts of the mortgaged classes.

RIP 2005 UK Economy

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People have started taking money out of their properties to finance consumption once again.

muppets_cast_5001116.jpg

post-3226-1129308498_thumb.jpg

Edited by Flash

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They coud be BTLers MEWing because they have had no renters for 12 months?

I did see lights on in a couple of the 300k 'executive apartments' on my old road when I went back to pick up some stuff. Of course, maybe they're just trying to convince people that the place isn't empty, to make them easier to rent out for extortionate amounts.

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Yes please - can you post the graphs?

Also, do we know where we are in the cycle compared to last time: is this first quarter 89, or last quarter 88, or when?

Can we compare the graphs for now with then, and also assess the magnitude of the looming doom?

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Moneyweek really does harp on about the certainty of house prices crashing and seems to commision an article , if not an editorial, on the subject each week. Some, like this current one, are a bit thin on logic too.

Seems suspiciously like the editorial team are all Sell to Renters to me!

Edited by ILBB

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Munimula,

Was looking at one of KON's posts on TMF and thinking about the 89 blip in loan transaction numbers and wondering about that period - it stuck out like a sore thumb - screams of suckers rally - it happened in 3rd quarter '89 ish just before the main HPI indices finally went negative. After that every relised it was game over and transaction volumes slumped.

http://boards.fool.co.uk/Message.asp?mid=9...t=whole#9597116

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Guest Riser

The pattern of falling MEW then a small rise before resuming back down happened during the same stage of the last crash:

MEW during the last crash B)

Edited by Riser

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Moneyweek really does harp on about the certainty of house prices crashing and seems to commision an article , if not an editorial, on the subject each week. Some, like this current one, are a bit thin on logic too.

Seems suspiciously like the editorial team are all Sell to Renters to me!

Merryn Somerset Webb has been trying to sell her place in Paddington for about a year.

Tough she missed the top.

I suspect a number of the mag's contributors have been lurking on HPC, we seem to share many common themes on the state of things.

Considering how important the well-being of the housing market is to the wider British economy, I can well understand their concerns.

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Moneyweek really does harp on about the certainty of house prices crashing and seems to commision an article , if not an editorial, on the subject each week. Some, like this current one, are a bit thin on logic too.

Seems suspiciously like the editorial team are all Sell to Renters to me!

Probably not content with impersonating eastate agents some overzealous HPCers have become fake journos as well. Can't condemn it.

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  • 301 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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