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jacob

The Negative Equity Trap

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If you think about it, as soon as you are in negative equity you cannot afford to sell (i.e. you cannot realise your loss) and the only option you have is to hope that prices will rise before you run out of cash. Some people will be forced to rent their house and move to a cheaper accomodation in order to meet the monthly mortgage repayments. Other will sell their car, hifi, plasma tvs etc....

The speed of the adjustement (crash) lies therefore in the hands of the banks (how easily they will start repossession procedures).

Also, to avoid a massive wave of personal bankruptices the government will probably keep rates lower than in the EU. Devaluation of the currency and high inflation will follow. If you work in a non exporting sector or in services (in particular retail) you will be fuc...d

Only bankers and day traders such as Dr. Bubb will laugh....

What do you think?

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The needs of the many should outweigh the needs of the few.

I assume that only a "few" people will be in a "potential NE situation" compared to the MILLIONS who are in jobs and own their homes from yonks ago, or bought in 1998, or will still be living with parents or renting with housemates etc etc etc....

IMO, New Labour have turned this housing boom into a political vote-winning issue, and THIS fact alone makes it much harder for them to deal with it. IMO they have made a massive (and needless) mistake with alone. They could have said "be careful, be careful" like Mervyn king did, but they didn't take the opportunity.

However, if/when push comes to shove, I reckon New Labour will have to bite the bullet and raise rates to try to head off inflation. This will bust a few people, but protect the many, or make no difference to the many, in the process.

The damage to NL's reputation will be some, but not as bad as if they let inflation rip and destabailze everything.

The Tories got voted back in during the 1992 recession and house price crash. Lesson: House Price Crash And Recession does not necessarily equate to Lose Election! (but it is a risk.)

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The Tories got voted back in during the 1992 recession and house price crash. Lesson: House Price Crash And Recession does not necessarily equate to Lose Election! (but it is a risk.)

good point well made. So Brown might get a full term yet.

Mind you, I still think it's a foregone conclusion that Lab will, at best, cling on next time. Probably a good thing actually, with any luck we might get a genuine 3 way split which should re-invigorate politics for the better.

Not holding my breath though.

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The Tories got voted back in during the 1992 recession and house price crash. Lesson: House Price Crash And Recession does not necessarily equate to Lose Election! (but it is a risk.)

Nah, the lesson is - even in a recession and house price crash - and even with a slightly geeky, odd bloke like John Major in charge - anyone can win an election if they are facing a party led by Neil Kinnock.

Kinnock could have gone up against Saddam Hussein and lost. He just didn't cut the mustard - like William Hague, Iain Duncan Smith and Michael Howard. Unelectable - that's what they are (to the tune of Unforgettable).

Looks like the Tories may be finally learning - with the groundswell of support for Cameron (electable) over Davis (not as unelectable as some - but still pretty unelectable).

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:lol:

Thanks Marina - When I posted I did have a niggling doubt in the back of my mind that someone would point this out, but hey.

So you reckon Cameron could kick some ass?

About time we had somebody.

Damn shame from the Lib Dems that they're sticking with whatshisface. A plate of jelly would be a better representation for the party.

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:lol:

Thanks Marina - When I posted I did have a niggling doubt in the back of my mind that someone would point this out, but hey.

So you reckon Cameron could kick some ass?

About time we had somebody.

Damn shame from the Lib Dems that they're sticking with whatshisface. A plate of jelly would be a better representation for the party.

GB is pretty unelectable. His advantage is that he won't need to be elected to become PM.

Cameron stands a better chance than Davis, who gives the distinct impression of being a deeply evil man. IMO!

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GB is pretty unelectable. His advantage is that he won't need to be elected to become PM.

He has to be elected as MP for his constituency, and he has to be elected as leader of the Labour Party, exactly the same as Tony Blair. Prime Ministers are not elected, and no one gets to vote on who they want to be the Prime Minister; they are appointed to the job by the Queen.

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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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