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House prices to plunge 35 per cent in no-deal Brexit

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1 hour ago, Freki said:

Why would cash rich people/institutions gobble more after a crash than now? 

I don't think it's obvious they will, but in part it depends on the opportunity. Consider the Wilsons' attempt to sell 900 houses in Ashford. Maybe some groups have looked into it, but decided it's too risky, or at least it's not worth it at the current asking price. But what if they are repossessed and the bank(s) offer a much better deal? If rich people and institutions aren't prepared to buy hundreds at houses in Ashford at 200k each, maybe they would be at 80k or 50k.

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38 minutes ago, winkie said:

......people will not accept wage cuts

How will that work?

If people understand that their employer cannot afford to maintain wages, then refusing wage cuts is equivalent to choosing unemployment. If many employers are doing this, either some people will start to accept the wage cuts, or there will just be a growing number of people choosing unemployment. Some of them may eventually accept lower paying replacement jobs.

In practice I think people usually do refuse pay cuts, but only because they are confident of earning at least as much at a different employer. This is because the pay cuts are a result of a failing employer, not a failing economy.

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23 minutes ago, Kosmin said:

I don't think it's obvious they will, but in part it depends on the opportunity. Consider the Wilsons' attempt to sell 900 houses in Ashford. Maybe some groups have looked into it, but decided it's too risky, or at least it's not worth it at the current asking price. But what if they are repossessed and the bank(s) offer a much better deal? If rich people and institutions aren't prepared to buy hundreds at houses in Ashford at 200k each, maybe they would be at 80k or 50k.

Houses aren't the only asset. The Rothschilds never bought sh1tty portfolios of random little houses.

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1 hour ago, 2rocketman said:

Sentiment is getting trashed now. Yes the financials and all the other variables are important BUT the market has turned end of. The crash is on. It would take something like HTB on all property now to boost it. Can’t see that happening. It would not create any new council tax income? Would not create jobs? No homes would have guarantees? It would not line the pockets of party donors? or house builders? tamp duty contribution? Done that not going to help. Interest rate lowered? 0.25% not going to change a thing?

I do believe so.

The govt surely couldn't sell another help to buy scam to the electorate, what with Brexit, taxes and austerity biting more.

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3 minutes ago, Kosmin said:

How will that work?

If people understand that their employer cannot afford to maintain wages, then refusing wage cuts is equivalent to choosing unemployment. If many employers are doing this, either some people will start to accept the wage cuts, or there will just be a growing number of people choosing unemployment. Some of them may eventually accept lower paying replacement jobs.

In practice I think people usually do refuse pay cuts, but only because they are confident of earning at least as much at a different employer. This is because the pay cuts are a result of a failing employer, not a failing economy.

So how will people live if their wages are not sufficient to live and pay their rent.....are you saying the state borrowing more and the tax payers should subsidise business owners, corporations and share holders.......workers, their earnings are the ones who support local communities, spend in the shops, buy products and services locally....they are not servants nor slaves.....if you want a servant to work for you you need to provide them a home to live in whilst they work for you.....then you are quite entitled to pay them less......;)

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3 hours ago, GregBowman said:

Pure old supply and demand Bruce - They ain't making any more land and they aren't building anymore 100 year old suburbs/villages

Whilst Ford is struggling people are paying £20k + for a 1992 Sabb 900 - same thing 

You may be right, but I doubt it, it's not what has happened in the past. Desirable houses may drop less than undesirable ones, but drop they will, no amount of wishful thinking will change that.

I bought a little house last year, fully expecting the price to drop. Because of what it is and where it is I would expect it to drop less than average, but drop it will, perhaps -25% if the average fall is -35%, or perhaps not, who knows.

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1 minute ago, Si1 said:

Houses aren't the only asset. The Rothschilds never bought sh1tty portfolios of random little houses.

The Rothschilds aren't the only rich people or institution!

 

If banks repossess a lot of houses (especially from multi-property landlords) they aren't going to hold out for years based on fantasy valuations. They will be prepared to sell cheaply and this may involve selling many together.

If very large numbers of landlords capitulate at the same time, one possibility is mass evictions. Another is that tenants stay in the houses which are sold. I don't know which is more likely. But I can imagine policymakers favouring the latter and perhaps intervening to facilitate this. Not only could they say they are saving the tenants from eviction, but also it may be their cronies benefitting from buying the sh1tty portfolios.

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9 minutes ago, winkie said:

So how will people live if their wages are not sufficient to live and pay their rent

This is why people will accept pay cuts in a dire situation. Lower pay is better than no pay.

I'm not sure how severe the pay cuts and inflation are likely to be! But if many people are struggling to pay rent, landlords will have to accept one way or another that rents will fall. They can either accept sob stories and allow tenants to build up arrears, or they can evict, but face voids and then let to another tenant for less.

 

10 minutes ago, winkie said:

are you saying the state borrowing more and the tax payers should subsidise business owners, corporations and share holders.......workers, their earnings are the ones who support local communities, spend in the shops, buy products and services locally....they are not servants nor slaves.....if you want a servant to work for you you need to provide them a home to live in whilst they work for you.....then you are quite entitled to pay them less......;)

 

What does this have to do with wage cuts?

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3 minutes ago, Kosmin said:

This is why people will accept pay cuts in a dire situation. Lower pay is better than no pay.

I'm not sure how severe the pay cuts and inflation are likely to be! But if many people are struggling to pay rent, landlords will have to accept one way or another that rents will fall. They can either accept sob stories and allow tenants to build up arrears, or they can evict, but face voids and then let to another tenant for less.

 

 

What does this have to do with wage cuts?

I don't think lower pay if low to begin with is better than no pay, it only encourages unrest, greater inequality, crime, illegal working, homelessness etc (the effects are costly in more ways than just money) .....you are making it sound like you want us going back to the doss houses of the 19th century back to a 3rd world country where people were dependent on gifts and charity, the low taxed wealthy using tax savings to help the poor in a charitable way on their terms instead of paying them more, don't say we don't give you anything .......that is not progress.;)

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30 minutes ago, winkie said:

you are making it sound like you want us going back to the doss houses of the 19th century back to a 3rd world country where people were dependent on gifts and charity

That's not what I want and that's not what said.

We are discussing comments made by ftb_fml:

"Indeed.. the problem is of course that our increasingly consumptive and disposible economy has come to rely on cheap imported goods. In order to make domestically produced goods viable we're going to have to accept a price hike and probably wage cuts."

 

 

50 minutes ago, winkie said:

I don't think lower pay if low to begin with is better than no pay, it only encourages unrest, greater inequality, crime, illegal working, homelessness etc (the effects are costly in more ways than just money)

If people are unemployed and have no money there will be unrest. My history teacher used to say societies are only several meals away from riots.

Even in places where they are rioting, like Greece and Venezuela, people do accept pay cuts.

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5 minutes ago, Kosmin said:

That's not what I want and that's not what said.

We are discussing comments made by ftb_fml:

"Indeed.. the problem is of course that our increasingly consumptive and disposible economy has come to rely on cheap imported goods. In order to make domestically produced goods viable we're going to have to accept a price hike and probably wage cuts."

 

 

If people are unemployed and have no money there will be unrest. My history teacher used to say societies are only several meals away from riots.

Even in places where they are rioting, like Greece and Venezuela, people do accept pay cuts.

I didn't think you said that either.  BTW if the pound falls we are accepting a pay cut - just not an obvious one.

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Carney denies predicting no deal house price crash

After Mark Carney told a Cabinet meeting that house prices could fall by up to 35 per cent in the event of a no-deal Brexit, he told an audience in Dublin today that he had not made a ‘prediction of what’s going to happen’.

https://www.telegraph.co.uk/business/2018/09/14/pound-shrugs-carney-no-deal-brexit-warning-stay-course-best/

reg required

 

edit\; anyone got registered , so we can see whole article? 

Edited by Saving For a Space Ship

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7 minutes ago, Saving For a Space Ship said:

Carney denies predicting no deal house price crash

After Mark Carney told a Cabinet meeting that house prices could fall by up to 35 per cent in the event of a no-deal Brexit, he told an audience in Dublin today that he had not made a ‘prediction of what’s going to happen’.

https://www.telegraph.co.uk/business/2018/09/14/pound-shrugs-carney-no-deal-brexit-warning-stay-course-best/

reg required

Lol thanks for this, forward guidance appears to be AWOL 

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Carney wants to frighten the constituents of tory mps, put a bit of pressure on their representatives. A house price crash is equivalent to the angel of death taking the first born to middle england. If this was germany he would say industry will be decimated and there will hyper inflation(their worst fears) 

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2 hours ago, winkie said:

So how will people live if their wages are not sufficient to live and pay their rent.

What I think @ftb_fml is alluding to, and you're also suggesting, is that people's standard of living is going to fall, and possibly in a context of greater inequality. That's to be expected if nobody's willing to lend all the money needed to keep the house of cards from collapsing.

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35% drop...good, at last. I hope its more.

 

I am enjoying all the references in the media about the inevitable 2nd financial crash, most notably by ex-PM Brown.

He makes a good point about the lack of an overall international consensus...which was always enevitable the longer the slump went on IMPO.

 

Also loving Ress Moggs reference to the Governors eyebrows!

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36 minutes ago, Roman Roady said:

35% drop...good, at last. I hope its more.

 

I am enjoying all the references in the media about the inevitable 2nd financial crash, most notably by ex-PM Brown.

He makes a good point about the lack of an overall international consensus...which was always enevitable the longer the slump went on IMPO.

 

Also loving Ress Moggs reference to the Governors eyebrows!

The longer the bailouts, the more unequal picking of winners, and the more politically combustible it gets.

That's the price of moral hazard.

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Robert Peston assesses it well.

Peston's Politics:  Why Mark Carney must tell us exactly what he told ministers

Quote

Well the widespread leaks of what Carney told Cabinet has created a false market both in investment and politics.

The detail of what Carney said must surely be published so that it is possible to judge whether May’s “no deal is better than a bad deal” retains any credibility - either as a gambit for negotiating with the EU or as comfort to the rest of us that we don’t need to start stocking up on tinned food, candles and firewood.

 

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By this time next year, house prices will be either stagnant or rise/fall by 5% in southeast. We won't see major crash due to carney + hammond. Scotland is booming currently. Most of my friends believe scotland will break away anf join EU and house prices will go up there in coming years. Not sure if it happens or not.

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17 hours ago, winkie said:

That is how the younger generations with rising incomes should be able to overtake the older asset rich but falling income/cash poor with the rising costs of extra services/help required and costs the of long-term heath care.....life is full of its ups and downs.;)

I’m seeing this already.

OK, I’m more middle aged now than young (only just apparently), but i’ve seen salaries in Tech and Tech Sales zooming up for experienced people.

Just to set the scene, an experienced  Sales Rep at a Big Global IT firm could easily earn £65k with a £130k OTE for most of the last 10-15 years. I’m now seeing packages rise to the area of £150k Basic and £300k OTE for anyone half decent. Even more severe is some forms of Tech, if you are a genuine Deep Learning Capable Data scientist then you can now get a £350k base in London- this is basically following the Valley, in the US Google is paying upto $1M for similar roles.

My take is that with GBP having fallen so much, everyone needs at least a 30-40% payrise. If it puts firms out of business, they were probably low value add firms anyway.

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4 minutes ago, prozac said:

The crash will be over 3 years, yes I buy this my number is 50% but who knows 

Is that 50% from today or including the drops so far? If you go on Zoopla now, type in any area then search by (most reduced) the drops are anywhere from 10% + already. Bearing in mind there are still many who refuse to believe the market is dropping at all, I’m thinking Carney might have called it perfect. 30-35% from here seems logical. 

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13 hours ago, darkmarket said:

What I think @ftb_fml is alluding to, and you're also suggesting, is that people's standard of living is going to fall, and possibly in a context of greater inequality. That's to be expected if nobody's willing to lend all the money needed to keep the house of cards from collapsing.

......I do not disagree, people will feel poorer when they think their assets are not continuing to rise, psychological..... standard of living will fall, ability to take on more debt/leverage will not take up the slack like before....people will have to offset inflation of consumables, energy, food and essentials by creating their own deflation, by cutting back or dipping into savings to cover, overtime, part-time work....wages stagnant in real terms.... companies should attempt to negotiate long supply and short term sales and export contracts...reduce inventory and shorten borrowings prior to possible rate rises and inevitable recession.....no success without failure, no failure without success....😉

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