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Mehitabel

Bearish Daily Mail Piece

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Further to Boom & Bust's post yesterday, I found this tucked away in the middle pages while perusing yesderday's Mail (NOT mine!) earlier today. Since it's not on their website I have labouriously typed it for the delectation of all you HPCers out there... Apologies if it's already been posted.

Daily Mail 16/12/05 p23

House sales slump to a 30-year low

Britain’s biggest estate agency firm said yesterday that the housing market has crashed to its lowest level of sales for 30 years.

Countrywide, which owns 1,200 agencies including Bairstow Eves voiced concerns which few of its rivals have dared to admit.

Managing director Harry Hill said: “It has been a desperately poor year. And anybody who says anything other does not have the information or is telling lies.” Over the last 12 months, 54 of the firm’s estate agencies have been closed down.

The average home now costs £180,000, which means a prospective buyer on average earnings of £22,000 would need to take out a mortgage of up to eight times their salary.

Mr Hill blamed the four interest rate rises last year for putting even more pressure on family finances.

In a typical year, about 1.2 million homes are sold in England and Wales, according to the Council of Mortgage Lenders. But it predicts that 2005 will go down as one of the worst years on record with 970,000 sales.

Fears about affordability were also raised yesterday in figures published by the Office of the Deputy Prime Minister. In 1997, fewer than six per cent of young people paid £100,000 or more for their first home.

Eight years later, this number has soared to nearly 60 per cent.

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Further to Boom & Bust's post yesterday, I found this tucked away in the middle pages while perusing yesderday's Mail (NOT mine!) earlier today. Since it's not on their website I have labouriously typed it for the delectation of all you HPCers out there... Apologies if it's already been posted.

Daily Mail 16/12/05 p23

House sales slump to a 30-year low

Britain's biggest estate agency firm said yesterday that the housing market has crashed to its lowest level of sales for 30 years.

Countrywide, which owns 1,200 agencies including Bairstow Eves voiced concerns which few of its rivals have dared to admit.

Managing director Harry Hill said: "It has been a desperately poor year. And anybody who says anything other does not have the information or is telling lies." Over the last 12 months, 54 of the firm's estate agencies have been closed down.

The average home now costs £180,000, which means a prospective buyer on average earnings of £22,000 would need to take out a mortgage of up to eight times their salary.

Mr Hill blamed the four interest rate rises last year for putting even more pressure on family finances.

In a typical year, about 1.2 million homes are sold in England and Wales, according to the Council of Mortgage Lenders. But it predicts that 2005 will go down as one of the worst years on record with 970,000 sales.

Fears about affordability were also raised yesterday in figures published by the Office of the Deputy Prime Minister. In 1997, fewer than six per cent of young people paid £100,000 or more for their first home.

Eight years later, this number has soared to nearly 60 per cent.

http://www.thisismoney.co.uk/mortgages/art...65&in_page_id=8

Not quite the same as your article, although interesting!

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What Mr Hill doesn't mention, and I can hardly believe that he is so naive, is that blaming his lack of business on rises in interest rates is exactly the wrong way round. It is clear to me that LOWERING interest rates has over a long time served to merely raise the CAPITAL cost of housing to the extent that it has become unaffordable and this far outweighs any gain assumed in other aspects by lowering rates.

VP

Edited by VacantPossession

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Guest Bart of Darkness
Managing director Harry Hill said: “It has been a desperately poor year. And anybody who says anything other does not have the information or is telling lies.”

Surely not!

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Guest Riser

What Mr Hill doesn't mention, and I can hardly believe that he is so naive, is that blaming his lack of business on rises in interest rates is exactly the wrong way round. It is clear to me that LOWERING interest rates has over a long time served to merely raise the CAPITAL cost of housing to the extent that it has become unaffordable and this far outweighs any gain assumed in other aspects by lowering rates.

VP

That’s an interesting point; lower interest rates have reduced the return from savings and cost of borrowing which has led to increased demand for tangible assets such as housing and commodities. This investment demand has pushed up prices effectively reducing the purchasing power of wages. Since the early 1990's, when artificially low interest rates were first introduced across the globe, we have seen the ratio of house prices to wages almost double from around 3.5 to 6, and he proportion of the UK housing stock with a mortgage continue to increase.

The government is committed to preventing wage inflation through continued erosion of trade union powers and introduction of cheap foreign labour. For evidence of the government’s position you need look no further than the 5000 British gas redundancies announced days after they went on a legitimate strike to protest about pension rights.

While Blair happily throws an extra £7 Billion down the EU toilet the UK is left running on empty with reduced manufacturing, lack of investment in R&D as companies and investors sacrifice long term stability for short term returns, and the myth that sending 50% of the population to university with will deliver an information lead economic recovery. Debt breeds debt and low interest rates over the past ten years have started a cycle which will snowball out of control and destroy more vulnerable members of society, the very same people Labour are supposed to protect.

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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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