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@contradevian

Correction In Property Values 'on Way'

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http://www.ft.com/cm...l#axzz2cDRRX0MR

Willem Buiter of the LSE predicted prices would de­cline by 30 per cent over the next couple of years, with no big effect. "On average, lower house prices don't make UK consumers worse off. They lose as owners but gain as renters," he said.

Well thats the theory, but I thought deflation was evil and that rents can 'only go up' :blink::lol:

Edited by aSecureTenant

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Funny enough, last night I was looking through the predictions section on the home page, there is also an archive section. It's amazing how so many with so much inside underestimated how far the government and bankers could rig the UK residential market.

I also find it amazing that people believe that 0% interest rates will last forever and the Pound will not collapse.

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From 2008???????????????? and the expert was wrong

If he was talking real terms, I reckon -30% was about spot on for where prices were by 2010...on the Halifax measure at least. Certainly the one that mirrors what has happened outside London. So he was right, we were right.

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Volumes have collapsed but they have managed to pump the average for the much smaller amount of sales back up. So what? A situation where most people are only avoiding realising a massive loss because rates are so low is a HPC by any other name. There are people, masses of them, who can`t move on with their life because the potential real world selling price will never match the debt price, they are mortgage prisoners now, no escape. When the VI`s bleat that "rising house prices cause a "feel-good factor" and "rising house prices encourage people to spend" I just laugh. Imagine being told your house is worth X, but you can`t sell it, and you have lost your job, and your son or daughter can`t afford to move out? Feel richer? - Thought not :lol: Of course in the days of unlimited MEW`ing, no problem, but those days are gone for the majority of people now. The stance of the VI`s at the moment is like the scene in Platoon where they have no choice but to dig into the fox hole and fight to the end. When they make the movie of all this madness Charlie Sheen can maybe play Boulger :lol::lol:

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Funny enough, last night I was looking through the predictions section on the home page, there is also an archive section. It's amazing how so many with so much inside underestimated how far the government and bankers could rig the UK residential market.

I also find it amazing that people believe that 0% interest rates will last forever and the Pound will not collapse.

The media like pumping the "low rates for ever" mantra, but I`m not sure how many ordinary punters believe it now, many IMO now know that they f*ucked up by taking on too much debt, especially mortgage debt?

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IF he was talking real rather than nominal and IF we exclude London and other places where prices fell AND concentrate just on Northern Ireland then prices fell by 50%.

Indeed, it really depends on where you live as to how satified you were with the doomongers predictions. Coming from Nottingham, the advice was about spot on. Not that I fully took on board their (or my own advice) because we are homeowners.

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Patting themselves on the back after trillions of pounds/dollars 'economist intelligence' gone to prop up and protect the failed ways. Really smart.

My #house price call pretty good http://on.ft.com/16hdtq4 Peak-trough 18% fall (I predicted 20%) followed by recovery http://******/16hdqdH

@johnvanreenen

All those awards medals and prizes. 'Best economist under 45 in Europe' lol.

Looks like a pro Gov 'spend spend' sort of person. Public spending to improve GDP, and not agree with one of the only wise things Merv said, that it's easy to spend, but difficult to find projects where the spending creates a feedback for positive revenue/growth.

Mass low-cost housing isn't low-cost in this environment, with land prices kept inflated, and punters being offered SO and HTB to meet developer's desire for higher profits/act for cover on their debts in the system. Same with everything else. Spending without the necessary adjustment having taken place, where things would be cheaper afterwards.

March 2013 http://blogs.lse.ac.uk/politicsandpolicy/archives/31735

Unwisely, public investment has once again borne the brunt of the spending cuts in the fiscal consolidation programme as it is less politically visible. It is now clear that this was a mistake and it makes sense to increase public investment now for four reasons.

..Second, financial markets are not likely to be concerned about the short-term increase in debt required for public investment because this creates an asset. It is borrowing to finance a mortgage rather than a cruise in Bermuda. It is crazy that we focus only on debt when making public finance decisions and ignore assets. No one would look only at one side of a firm’s balance sheet when evaluating whether or not it is financially sound. Third, the idea that there are no “shovel-ready” public investment projects is claptrap. There is a pressing need for low-cost housing, a multitude of road repairs and better schools (one of the first acts of the government was to cancel a major schools building programme).

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" That’s a very small subset of house sales to hang a housing bubble on."

Certainly is. It isn`t really a bubble any more, but the media like to cling to and perpetuate that illusion it seems?

It's most certainly an illusion, always more or less has been.

I'm not being personal here, DWS (I've enjoyed your posts and the posts of others for years before joining in the chat) but there are monstrous - seemingly impermeable - jungle regions beyond the HPC trees.

You may or may not be conscious, it wasn't clear from your reply to me earlier.

I don't think prices falling 50% in my area is out of the question when the can falls down the manhole.

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Patting themselves on the back after trillions of pounds/dollars 'economist intelligence' gone to prop up and protect the failed ways. Really smart.

All those awards medals and prizes. 'Best economist under 45 in Europe' lol.

Looks like a pro Gov 'spend spend' sort of person. Public spending to improve GDP, and not agree with one of the only wise things Merv said, that it's easy to spend, but difficult to find projects where the spending creates a feedback for positive revenue/growth.

Mass low-cost housing isn't low-cost in this environment, with land prices kept inflated, and punters being offered SO and HTB to meet developer's desire for higher profits/act for cover on their debts in the system. Same with everything else. Spending without the necessary adjustment having taken place, where things would be cheaper afterwards.

March 2013 http://blogs.lse.ac.uk/politicsandpolicy/archives/31735

The gov doesn't need to buy overinflated land that already has planning permission granted. It can simply buy farmland (dirt cheap) and self-grant that planning permission.

The things that constrain private developers don't really constrain governments if they choose to act.

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It's most certainly an illusion, always more or less has been.

I'm not being personal here, DWS (I've enjoyed your posts and the posts of others for years before joining in the chat) but there are monstrous - seemingly impermeable - jungle regions beyond the HPC trees.

You may or may not be conscious, it wasn't clear from your reply to me earlier.

I don't think prices falling 50% in my area is out of the question when the can falls down the manhole.

Not really clear what you are saying, you seem to agree it is a media manufactured illusion, but imply that the thinking on here is it`s own little illusion? No idea what you think the Jay Z video implies, I could only stand about 3 mins of it, why don`t you tell us?

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[/b]

The media like pumping the "low rates for ever" mantra, but I`m not sure how many ordinary punters believe it now, many IMO now know that they f*ucked up by taking on too much debt, especially mortgage debt?

I was at a get to together today and as always houses/homes come up. Most people there think rate will go up but slowly......

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The longer rates are kept low and the higher borrowing goes, the more likely rates are to rise.

Its flipping obvious.

We will know when it's no longer possible to maintain low interest rates. At that point the Tories will provoke a split with the Lib Dems, and call a general election, which they will win. How they cope with what happens next, could prove to be very interesting.

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We will know when it's no longer possible to maintain low interest rates. At that point the Tories will provoke a split with the Lib Dems, and call a general election, which they will win. How they cope with what happens next, could prove to be very interesting.

Are they not committed to a full term?

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Are they not committed to a full term?

They are politicians, are they not?

As it happens, there is a fair chance they can make it until Spring 2015 without a major interest rate hike. Remember they're relying on a growing economy throughout 2014, fuelled by Help-to-Buy intervention. They can probably withstand a small interest rate increase "to steady growth".

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Are they not committed to a full term?

Yes they are, the GE will take place in May 2015. Osborne's suicidal house price ramping schemes have almost guaranteed a Labour victory.

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I think you will find that George sees this a sure fire vote winner. HPI has never lost an election, the voters love HPI and all that free wealth and the silence from Labour is deafening; either they love HPI as well or they want it to go ahead as it is really suicidal for the Tories.

Problem is that Tory demand side reforms without the requisite supply side reforms is "inadvertently" creating a nation of renters. Now its possible over 9M renters could became a political force.

Reap what you sow and all that.

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They are politicians, are they not?

As it happens, there is a fair chance they can make it until Spring 2015 without a major interest rate hike. Remember they're relying on a growing economy throughout 2014, fuelled by Help-to-Buy intervention. They can probably withstand a small interest rate increase "to steady growth".

They should make it until 2015 without a base rate hike (gilt yields are a different mater) because the economy is still face down in the gutter. Steady growth requires accelerating credit. It's the credit impulse that generates the pickup in GDP. FLS did nothing because no new money was created by it (teaser rates came down a bit, SVRs went up). HTB part 1, on the other hand, has created a pick up in mortgage origination and a modest credit impulse which we see reflected in the economic stats. How long can this last? Inflationary expectations are already rising to undermine it. Ditto HTB 2.0. Maybe six months of elevated growth and then a progressively diminishing return. Osborne's pre-election bribe has been delivered much too early. As I see it, a year from now the UK will still have <1% growth, but with a debt-to-GDP that's even more elevated and higher inflation to boot. Lose lose.

Osborne may have to run the deficit up again to create growth and sustain the illusion of recovery, but that's going to be a hard sell.

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I think you will find that George sees this a sure fire vote winner. HPI has never lost an election, the voters love HPI and all that free wealth and the silence from Labour is deafening; either they love HPI as well or they want it to go ahead as it is really suicidal for the Tories.

Absolutely true. But efforts to generate sustainable HPI won't work unless prices have first corrected. Osborne is throwing petrol on a roaring fire. If Lawson had ended Miras pooling in 1986 rather than 1988 I suspect the housing market would have blown up in his face before the GE not after it.

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....not mentioned as much as it should be.....but apart from the obvious causes and manipulations the powers, and the powers that be have lent their hands to in creating the unhealthy effect of high, and try as they might forever inflating and rising house prices to the detriment of the growing many, mainly the young with increasingly louder mouths that have not been listened to or views and opinions considered, and up to now have had little option but to accept the scales are leaning heavily against them.

This is MEW....in other words the ability to borrow equity to purchase all sorts of stuff, using the house as a source of unearned income. (at one time equity withdrawal was not permitted, except for home improvements to the said house)......the worse type of equity extraction is borrowing to buy more property, thus taking limited resources out of the market altogether....limited because the supply intentionally or not has not been replenished, knowing full well that our population is increasing so has a need of housing. The choices have been taken away from the people....the choice as whether to rent or buy and the choice of when to rent and to buy........because of this more people will have fewer choices, many will not be able to buy....whilst others have been given the incentive to own more than they can live in.....but they only own one vote. ;)

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