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Is Prime London Crashing? - Merged Threads


Damik

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ONS data out today - big tumble in YoY growth.

:wub::wub::wub:

http://www.ons.gov.uk/ons/dcp171778_406254.pdf

The price index for London is now 1.6% below the record level of 243.5 in August 2014 with an index of 239.7 in April 2015. However, the London index is 37.4% higher than the pre-economic downturn peak in January 2008 (174.5).

http://www.bloomberg.com/news/articles/2015-06-16/london-house-price-growth-slows-to-least-in-more-than-two-years

Edited by Damik
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We got evidence last week that they are going out of business in Central London. So perhaps it is just kind of brain rejecting the reality ... like when mother's child is killed ...

Edited by Damik
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Great news!

I know the economy currently has it's issues what with referendum, increased personal debt, overvalued stocks, issues with Russia/Grexit e.t.c but in it's current state will it really drive down prices in the same way as the financial crash in 07/08?

Or has the market just started exhausting itself of money and diminishing returns for the BTL'ers? Basically trying to get your feel for how much of a realistic drop we could expect, rather than our wishes!

This is from the ONS data this month for London; same pattern as for 2007/2008. I feel good:

http://www.ons.gov.uk/ons/dcp171778_406254.pdf

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Great news!

I know the economy currently has it's issues what with referendum, increased personal debt, overvalued stocks, issues with Russia/Grexit e.t.c but in it's current state will it really drive down prices in the same way as the financial crash in 07/08?

Or has the market just started exhausting itself of money and diminishing returns for the BTL'ers? Basically trying to get your feel for how much of a realistic drop we could expect, rather than our wishes!

The private debt ceiling was hit in 2008 and the solution was lower IR's and cheap money pumped into the system.

Our debt based monetary system requires people to take on more debt to have growth or else we have a recession. Boom and bust isn't just associated to Brown, it's the way the system works.

Check out the expansion of the UK money supply (credit) vs UK house prices historically and you'll see why prices have risen so much. Same around the world.

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The private debt ceiling was hit in 2008 and the solution was lower IR's and cheap money pumped into the system.

Our debt based monetary system requires people to take on more debt to have growth or else we have a recession. Boom and bust isn't just associated to Brown, it's the way the system works.

Check out the expansion of the UK money supply (credit) vs UK house prices historically and you'll see why prices have risen so much. Same around the world.

I recall seeing a chart that personal debt was about 3x higher than in 2008, so if people are in that much debt and cannot take on anymore. and debt is the trigger for a fall - I think there are other factors like how the local/global economies are performing, unemployment, government debt e.t.c.

Then on the basis of debt alone, we are due for this to be a big fall? as the IR is already at record lows...they can't do much more there....?

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Then on the basis of debt alone, we are due for this to be a big fall? as the IR is already at record lows...they can't do much more there....?

Many people have said we are due. Looking at the economy from this perspective makes me think that the HTB, FLS and selling off council stock in London has helped to pump up the housing market again, therefore expanding the money supply.

It's completely unstable IMO and with London topping out it's only a matter of time combined with flatlining salaries. It's just sad that debt expansion grinding to a halt means the same for the economy, causing pain for millions of people again. Never in recorded history has there been this much debt.

This crash (debt deleveraging) could be a lot bigger as the asset bubbles we have now have never been inflated at the same time: Housing, bond and stock markets.

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Many people have said we are due. Looking at the economy from this perspective makes me think that the HTB, FLS and selling off council stock in London has helped to pump up the housing market again, therefore expanding the money supply.

It's completely unstable IMO and with London topping out it's only a matter of time combined with flatlining salaries. It's just sad that debt expansion grinding to a halt means the same for the economy, causing pain for millions of people again. Never in recorded history has there been this much debt.

This crash (debt deleveraging) could be a lot bigger as the asset bubbles we have now have never been inflated at the same time: Housing, bond and stock markets.

Thanks for sharing your thoughts, all seems absolutely logical to me. I just hope the government doesn't have any further tricks up it's sleeve! .

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Thanks for sharing your thoughts, all seems absolutely logical to me. I just hope the government doesn't have any further tricks up it's sleeve! .

Your welcome :D

We could all be surprised and they pull something out of the bag. It appears that the bullets were mostly used up in 2008 and the only thing left is QE on a massive scale. IR's have no where to go unless they ban cash, then NIRP could be on the table.

Massive QE could more than likely destroy the purchasing power of western currencies and we end up with massive inflation they have to acknowledge.

Both the GBP and USD have lost over 90% of their purchasing power since early 1900's.

We either revise our monetary system to have sustainable growth or we all go down together.

I'm only 26 so I can't ride this out on a pension. Might as well grab the popcorn and invest in hard assets :P

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Your welcome :D

We could all be surprised and they pull something out of the bag. It appears that the bullets were mostly used up in 2008 and the only thing left is QE on a massive scale. IR's have no where to go unless they ban cash, then NIRP could be on the table.

Massive QE could more than likely destroy the purchasing power of western currencies and we end up with massive inflation they have to acknowledge.

Both the GBP and USD have lost over 90% of their purchasing power since early 1900's.

We either revise our monetary system to have sustainable growth or we all go down together.

I'm only 26 so I can't ride this out on a pension. Might as well grab the popcorn and invest in hard assets :P

QE requires assets to buy up.

When that has all been used up, there is no market for cash assets, and they have to print directly to the chosen recipients.

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