Face It, There Will Be No Hpc...

[Bagehot]

...and that wont start until 2008 April. We'll know in 2007 future public spending increases. I think Brown will continue to borrow for the next 1-2 years and run an ever increasing budget deficit. This will end when he becomes PM.

I work in the public sector and see what is happening. Until classic Keynesian expansion of the public sector ends we will not suffer an HPC.

We need to stop grabing on to every piece of small insignificant news such as the meaingless RICS survey or other daft surveys and get over exicted by it all.

The above assumes 1) UK private sector doesnt miracoulsly start expanding; 2) there's no unexpected shock to the UK/global economic system.

No HPC for another 2 years at least....are you willing to wait that long?

[underpressuretobuy]

No HPC for another 2 years at least....are you willing to wait that long?

Do I have a choice?

[Bemused]

...and that wont start until 2008 April. We'll know in 2007 future public spending increases. I think Brown will continue to borrow for the next 1-2 years and run an ever increasing budget deficit. This will end when he becomes PM.

I work in the public sector and see what is happening. Until classic Keynesian expansion of the public sector ends we will not suffer an HPC.

We need to stop grabing on to every piece of small insignificant news such as the meaingless RICS survey or other daft surveys and get over exicted by it all.

The above assumes 1) UK private sector doesnt miracoulsly start expanding; 2) there's no unexpected shock to the UK/global economic system.

No HPC for another 2 years at least....are you willing to wait that long?

Carefull I was just shot down for saying the very same thing ...

[jellybean]

No HPC for another 2 years at least....are you willing to wait that long?

Yes.

[Quokka]

...and that wont start until 2008 April. We'll know in 2007 future public spending increases. I think Brown will continue to borrow for the next 1-2 years and run an ever increasing budget deficit. This will end when he becomes PM.

I work in the public sector and see what is happening. Until classic Keynesian expansion of the public sector ends we will not suffer an HPC.

I think thats a good call.

I have wondered long how North East house prices are so high when the place is a basket case economically.

Over 50% public employees seems to be the answer, especially as they apparently earn more than the private sector.

[Guest Charlie The Tramp]

...and that wont start until 2008 April. We'll know in 2007 future public spending increases. I think Brown will continue to borrow for the next 1-2 years and run an ever increasing budget deficit. This will end when he becomes PM.

I thought he had pulled all the rabbits out of the hat.

An economy consumer led, fuelled by massive debt, and HPI, now where did I hear that ?

The monkeys are now turning on the organ grinder.

[Bagehot]

There are more rabbits to be pulled out of the hat! Our current account deficit is "only" 3%ish. The Americans are at 7%+ and rising. If he gets rid of the golden rule, which he has to an extent, he can carry on borrowing and spending and places like the North East can continue to have 20% of its workforce on incapacity benefit and 40%+ on the public sector payroll or jobs that exist because of public spending.

There will be no HPC for a few more years yet.

[boom_and_bust]

...and that wont start until 2008 April. We'll know in 2007 future public spending increases. I think Brown will continue to borrow for the next 1-2 years and run an ever increasing budget deficit. This will end when he becomes PM.

I work in the public sector and see what is happening. Until classic Keynesian expansion of the public sector ends we will not suffer an HPC.

We need to stop grabing on to every piece of small insignificant news such as the meaingless RICS survey or other daft surveys and get over exicted by it all.

The above assumes 1) UK private sector doesnt miracoulsly start expanding; 2) there's no unexpected shock to the UK/global economic system.

No HPC for another 2 years at least....are you willing to wait that long?

Hi

People have to make their own minds up, it is very difficult if you have never lived through HPC before because it invloves emotions and aspirations. You are likely making a 25 year decision. What is 1,2,3 years in that process? It's like sex without contraception. It's a great feeling for a short while but what happens when you get an 18 year commitment at the end of it? It's a big, big decision with long term consequences. Approach mortgage debt in the same way. Most FTB's cannot afford. I do not suscribe to the idea of people holding back for a bargain. Most do not have the choice, simple. So what is a couple of years? What is your alternative? Lie on a mortgage application to live in a studio appartment with your wife and faimly for the next 10 or 20 years? What happens when that dream job overseas or in the other end of the country comes up? And you can't sell or have a ton of negative equity around you neck? What happens if you get crocked and you can't work for a year and you have a £1200 pm mortgage on your back? What happens when the missus wants kiddies?

I think like Cuz said, this is a big financial pyrmaid scheme. It doesn't respect sensitive feelings or bad days. If you can't stomach the emotions it involves, if you can't slap your self every so often and detach your brain from your heart, you will have alot of trouble seeing the cycle through. If you really have to buy, buy! You have lots of information around here and on other sites and other commentators, very view counter balance views to the mostly VI controlled mainstream media. Estate agents and mortgage lenders are not your friends, they will use whatever tactics they can to detach your brain from your heart. During the last crash, around 1993-1994 as the market was still falling and bottoming, it took alot of guts to buy then. It works both ways in markets. You have to make your own mind up and not blame anyone for decisions you make.

[2005]

...and that wont start until 2008 April. We'll know in 2007 future public spending increases. I think Brown will continue to borrow for the next 1-2 years and run an ever increasing budget deficit. This will end when he becomes PM.

I work in the public sector and see what is happening. Until classic Keynesian expansion of the public sector ends we will not suffer an HPC.

We need to stop grabing on to every piece of small insignificant news such as the meaingless RICS survey or other daft surveys and get over exicted by it all.

The above assumes 1) UK private sector doesnt miracoulsly start expanding; 2) there's no unexpected shock to the UK/global economic system.

No HPC for another 2 years at least....are you willing to wait that long?

I think you could be right - I raised a similar point on another thread recently with reference to Sweden.

Gordon is intent on achieving his policies - and he will do this no matter what it takes.

We all know what should happen eocnomically now but that doesn't mean it will.

Gordon can keep borrowing and spending for a while yet - maybe even longer than two years.

There is no point waiting for him to 'see the light' - it won't happen - he is committed to this programme.

He will only stop when either he is no longer in power or there really is no more money left - and he will go down with the sinking ship.

My fear is we are not in for a HPC in the next 12 months and a turn a round in 4-5 years.

I see house prices drifting down slowly over the next 2-3 years but continued attempts by Gordon to prop up the economy. What follows could be decades of poor economic performance.

The younger generation (our kids) are well and truly up the preverbial creak

Edited November 15, 2005 by 2005

[acidrob]

surely - if Gordon ignores the warnings of the IMF, and continues to keep borrowing - increasing our defict, the £ will drop in value. This will increase inflation - which is already above target - and the MPC will have to keep raising interest rates.

I don't see how Gordon can pull any more rabbits out of his hat, and interest rates to remain low.

Edited November 15, 2005 by acidrob

[boom_and_bust]

surely - if Gordon ignores the warnings of the IMF, and continues to keep borrowing - increasing our defict, the £ will drop in value. This will increase inflation - which is already above target - and the MPC will have to keep raising interest rates.

I don't see how Gordon can pull any more rabbits out of his hat, and interest rates to remain low.

Hi,

Also, the continuing budget defecit will require withdrawal from the EU stability pact. I know we like think that everyone is breaking it at the moment but that isnot the truth. France hovered a while, Germany was given provision for a 4% due to it's far greater economic size and East German runification. Britain is infact about the worst offender. Gordon signed the ratifiaction revision in March this year, promising to keep within 3% defecit in the short term, balanced budget over the longer term economic cycle. That was his main motivation for moving the goal posts of the business cycle earlier in the year so he could gain some breathing space from the EU central bank.

Continuing us 7% defecits? Go read the US media comentary on that position.

Boomer

[2005]

I don't see how Gordon can pull any more rabbits out of his hat, and interest rates to remain low.

He can raise taxes for a start or he could introduce windfall taxes - or he could do what NL always do - claim everything is going fine when it is collapsing around them.

Be under no illusion - Gordon will not admit that things are going wrong even if they are - we could have 10,000 homeless families living on the street and Gordon would claim they were just on a camping holiday.

Interest rise - no problem

"But chancellor, interest rates have risen"

Gordon "No they haven't 7% is still below are historical average - stop complaining and go and buy something"

Unemployment - no fear - he will do more of what he is doing now - delay entry into the labour market and speed up exit from the labour market (50% in higher education - allow early retirement). All countries do this when the economy is looking poor. Apparently, in Germany you now need a diploma to work on a supermarket check out! - and they are the experts in delaying and speeding up entry and exit of the labour market.

Your working life will soon be 21/23 - 55/60 years if you work in the public sector. Early retirement just means they can carry on employing the next genertion quicker.

If you work in the private sector - you f00ked.

It coulod be a while yet before the UK economic problems are so glaring that they can no longer be avoided - by then it will be too late.

I am not saying that Gordon can get away with this - I am just saying he will try bl00dy hard to do so.

Edited November 15, 2005 by 2005

[Rebel]

It is fine to talk about the theoretical aspects of borrowing/debt. However, on a practical level,

there are too many public service employees who earn large salaries waiting in the pipeline to

buy houses. The numbers are rising every year. You can clearly see this near hospitals and

schools- profusion of BMW`s and Porches and large gas guzzling SUVs, where we were seeing

Fords and Rovers previously. This section of the population do not think that the prices of

houses are going to crash.Gordon Brown will surely keep on with his spending in the near future.

[boom_and_bust]

It is fine to talk about the theoretical aspects of borrowing/debt. However, on a practical level,

there are too many public service employees who earn large salaries waiting in the pipeline to

buy houses. The numbers are rising every year. You can clearly see this near hospitals and

schools- profusion of BMW`s and Porches and large gas guzzling SUVs, where we were seeing

Fords and Rovers previously. This section of the population do not think that the prices of

houses are going to crash.Gordon Brown will surely keep on with his spending in the near future.

Hi,

So, in the absence of a massive economic boom about to happen now to finance it, we are about to break away from the EU over the next few years?

Boomer

[Brian Potter]

I think consumer debt will be the main driving force behind house prices. In my view the HPC will be a side effect of this debt burden. People have had a party based on imagined wealth over the past few years and the bill will land shortly.

The credit card bill for this Christmas in March 2006 will be an interesting time. All IMO of course.

[Rebel]

Hi,

So, in the absence of a massive economic boom about to happen now to finance it, we are about to break away from the EU over the next few years?

Boomer

We have been sitting on the fence regarding the EU for a long time. They need us as much as we

need them.

Regarding the economic situation, who can talk about the future? Last couple of decades have

seen new technologies emerging and huge increase in our wealth. This has made the standard

of living much better (I do admit houses have not become better).It is this newly created wealth

that is keeping the house prices high along with everything else. We will find new ways to

increase this wealth. Look at this news item:

Tesco boss 'eyes Indian market'

[Guest Bart of Darkness]

No HPC for another 2 years at least....are you willing to wait that long?

Yes.

I wasn't intending to even consider buying until at least mid-2007. Another year will just mean another 15 to 20k added to my deposit fund.

I can wait.

[Mushroom]

What you have to remember about our Gordon is that he thinks he can create the Socialist Utopia by "using" the profits of Capitalism.

Thus, as I have said before, the "Faustian Pact" he is engaged in with the forces of Capitalism.

He, indeed this Government has said, feel free to make the money however you can, but we will take a good proportion of that to fund our social programmes.

Then, don't forget the prescriptive nature of this Government, which thinks it knows how we should conduct our lives.

It is totalitarian by nature.

The rise of the "target setting" culture is indicative of this as is the "spin" (propaganda) machine.

[apom]

...and that wont start until 2008 April. We'll know in 2007 future public spending increases. I think Brown will continue to borrow for the next 1-2 years and run an ever increasing budget deficit. This will end when he becomes PM.

I work in the public sector and see what is happening. Until classic Keynesian expansion of the public sector ends we will not suffer an HPC.

We need to stop grabing on to every piece of small insignificant news such as the meaingless RICS survey or other daft surveys and get over exicted by it all.

The above assumes 1) UK private sector doesnt miracoulsly start expanding; 2) there's no unexpected shock to the UK/global economic system.

No HPC for another 2 years at least....are you willing to wait that long?

Or Interest rates will go up as the globle currency draws it upwards..

Look at graphs showing debt levels now to last time.

We hit 6% and it will be as catastrophic as it was when it hit 15%

[boom_and_bust]

We have been sitting on the fence regarding the EU for a long time. They need us as much as we

need them.

Regarding the economic situation, who can talk about the future? Last couple of decades have

seen new technologies emerging and huge increase in our wealth. This has made the standard

of living much better (I do admit houses have not become better).It is this newly created wealth

that is keeping the house prices high along with everything else. We will find new ways to

increase this wealth. Look at this news item:

Tesco boss 'eyes Indian market'

Hi,

Yes, absolutley. I think I did post my case here before, way back in the mists of time. I am a partner in a software and communications technology developer. We have won several awards for inovation in the past. However, over the past three years we have moved most of the operations between Canada and Germany. Britain has become a very expensive place to run business, or at least business that is not in the square mile or business that involves buying and selling houses to your fellow citizens. For our part, it is nigh on impossible to retain key staff for lengthy periods due to the costs of living - standard of living combinations. It is a very competitive market place, Canada and Germany make it viable. It's either that or let a viable business get trampled by a hyper-inflation economy (housing HPI drives alot of costs directly and indirectly).

My point is, with the current level of ***gasp*** 1.2 trillion consumer debt, 30 billion fiscal AND trade debts, the economy needs engine growth NOW. Not a hypethetical point 5 or ten years down the line. NOW. Unless Gordon plans to toddle off the the International Monetary Fund again like in the 70's, cap in hand, to bail UK plc out.

Sitting on the fence has been the UK approach to the single currency. That it not the same thing as the stability pact. We are signed up for that. We have to maintain the rules or leave. Gordon resigned it in March. He has roughly twelve months to get some money in now or start massively cutting back public sector spending and reduce the trade defecit. So, I cannot see how the public spending argument the EA's and VI's are trying to spin at the mo. can be a reality unless we remove ourselves from the stability pact (the EU itself) or get these new sources of economic engine in the next 12-24 months, at the back end of Gordon's revised timescale for balanced budgets.

Boomer

[Mushroom]

boom and bust.

Thanks for your post from the "coal face".

Another thing that has concerned me is that I see an attempt by this Government to have the majority of the population working for or supported by the State, either directly, or indirectly by the private sector having to rely on Government or LA projects and work.

Any comments?

[Goat]

I'm not sure that an economic slowdown is a necessary condition for an adjustment to house prices.

The rate of economic growth in previous years has been steady but unspectacular and the argument that the current level of house prices is a result of this does not stand up, as evidenced by the increase in income multiples and the growth in prices well beyond the rate of economic growth.

The mistake that buyers have made is that they have seen house price inflation as a trend that will continue ad infinitum and have priced properties on the back of expected future gains rather than economic fundamentals.

A similar (but opposite) point was made by London Landlady (in an earlier thread) when she recalls being told in 1996 that property is a terrible investment that would go down forever.

The key to understanding the current market is to realise that buyers are essentially noise traders, which is to say that they have no understanding of the fundamentals of the market but simply value property on the back of sentiment and recent experiences. A house is valued (by buyers) on the basis of prices paid for similar properties and not as a stream of future housing services.

As the bubble has arisen as a result of unrealistic optimism over future prices. the HPC will happen when expectations of future price trends return to realistic levels.

In my eyes the recent slowdown in the various surveys is strong evidence of a change in expectations amongst buyers over recent months, which IMO means that the long predicted crash is just getting under way.

[boom_and_bust]

boom and bust.

Thanks for your post from the "coal face".

Another thing that has concerned me is that I see an attempt by this Government to have the majority of the population working for or supported by the State, either directly, or indirectly by the private sector having to rely on Government or LA projects and work.

Any comments?

Hi,

Difficult to say, the public sector - private sector partnership can work quite well. France and Germany do it quite successfully. The french private-public sector approach has been phenominal in creating world class industries in technology, aerospace, satelitte communications, renewable energy and media. Germany is still the world's largest exporter nation, a viable financial competitor in some areas to the square mile. They can keep public utilities running efficiently, they haven't had anywhere near the HPI of the UK. Canada, well Canada runs healthy trade surpluses, has the highest standard of living title for a few years now. It can be done. Sure, there are prblems in all those nations, I am talking in general terms about visible success' of private-public partnerships. I really don't know where Gordon is going with his policy though. We are not producing the same results or anywhere near the level of public sector efficiency and success of those nations in those areas. Still, let's see. He is not coming forward with any rabbits from the hat at the mo., and he has some big issues to resolve. And Alistair Cambell isn't on the scene anymore to bail him out. I don't sit on the fence, I have lived through three crashes before, this one is really damaging the economy as well.

Boomer

Edited November 15, 2005 by boom_and_bust

[Marina]

There are more rabbits to be pulled out of the hat! Our current account deficit is "only" 3%ish. The Americans are at 7%+ and rising. If he gets rid of the golden rule, which he has to an extent, he can carry on borrowing and spending and places like the North East can continue to have 20% of its workforce on incapacity benefit and 40%+ on the public sector payroll or jobs that exist because of public spending.

There will be no HPC for a few more years yet.

I wonder why the market round here has been stagnant/falling for at least two years?

I wonder why when I went into a block of new build flats a couple of weekends ago the woman offered me a 15% discount (230k to 200k) without my even asking for it.

I wonder why the 4 bed detached houses seem to stay on the market as the seasons change - some see the full orbit of the sun and still don't sell.

As long ago as the middle of 2003 people were not getting their asking prices. There has been a stand-off ever since and the only stuff that sells goes after a long time and at prices well below asking.

I have monitored several blocks of flats near me on nethouseprices.com. In a block of 8 only 4 have ever sold (finished for 18 months now). First one sold at 255k, last one at 215k. Developer presumably has rented the other 4.

As far as I am concerned HPC is in full swing here. Already down an average of 10% to 15% from the asking prices of 2003 and the bigger stuff has had some massive falls.

A couple of years ago it was getting really silly. A 4 bed detached in a non-estate position on a third of an acre - well they were getting just daft - between 750k and a million.

Now those sort of houses are sub 600k.

Okay, a lot of that is anecdotal.

[ftbSean]

There are more rabbits to be pulled out of the hat! Our current account deficit is "only" 3%ish. The Americans are at 7%+ and rising.

Have you checked the latest growth figures for US and UK...Our rabbits arent breeding as quickly.