crumblingcon Posted May 9, 2020 Share Posted May 9, 2020 https://www.telegraph.co.uk/business/2020/05/07/bank-england-predicts-economic-record-crash-soaring-unemployment/ Britain could take a year to return to normal after plunging into its deepest recession for more than three centuries as the coronavirus pandemic stops households from spending, forces businesses to shut and brings the property market to a crashing halt, the Bank of England has warned. The economy will sink by as much as 25pc in the three months to June – the steepest drop since 1706 – before recovering “relatively rapidly” in the summer and into autumn as social distancing measures are eased, the Bank said. A crash on this scale could drag down house prices by as much as 16pc, the Bank estimates – plunging thousands of mortgage holders into negative equity. Quote Link to comment Share on other sites More sharing options...
Si1 Posted May 9, 2020 Share Posted May 9, 2020 MOTHER OF GOD Quote Link to comment Share on other sites More sharing options...
Si1 Posted May 9, 2020 Share Posted May 9, 2020 I think this is smoke and mirrors to back the govts lockdown strategy. Quote Link to comment Share on other sites More sharing options...
LetsBuild Posted May 9, 2020 Share Posted May 9, 2020 Too optimistic by half on both the time for recovery and severity of crash. This is the best case, try and manage expectations news. Quote Link to comment Share on other sites More sharing options...
crumblingcon Posted May 9, 2020 Author Share Posted May 9, 2020 I somehow missed this in the Daily Telegraph 2 days ago, where as 4 months ago an article like this would have stood out like a sore thumb they are now coming thick and fast. The really need to back off a little though, with the type of subscibers they normally get they could end up losing them, their readers know full well the damage negative sentiment can cause, even though it is often justified , reader comments just stink of fear now and are telling the DT to back off I AM F****G LOVING IT ? Quote Link to comment Share on other sites More sharing options...
longgone Posted May 9, 2020 Share Posted May 9, 2020 16% Pah that`s the layer of froth your friendly bar man uses his beer comb for. How about back to pre HTB levels. even that looks cheap now. Quote Link to comment Share on other sites More sharing options...
crumblingcon Posted May 9, 2020 Author Share Posted May 9, 2020 1 minute ago, LetsBuild said: Too optimistic by half on both the time for recovery and severity of crash. This is the best case, try and manage expectations news. Agree From 3 weeks into lockdown I came to the conclusion that the property market could drop to a level I am not even confident posting on this website out of ridicule, and it's not all C-19 related, far from it. Though a few posters did get it out of me one evening and after my 3rd Pinot Noir ? Quote Link to comment Share on other sites More sharing options...
MARTINX9 Posted May 9, 2020 Share Posted May 9, 2020 The Treasury predicted house prices would fall 18% if we voted to leave the EU back in May 2016. So it seems according to our statisticians the impact of a global pandemic shutting down our economy for months will have a smaller downwards impact on house prices. Just make a figure up - any old figure! https://www.theguardian.com/politics/2016/may/20/eu-referendum-george-osborne-house-prices-brexit Quote Link to comment Share on other sites More sharing options...
The Spaniard Posted May 9, 2020 Share Posted May 9, 2020 (edited) deleted - wrong thread! Edited May 9, 2020 by The Spaniard wrong thread! Quote Link to comment Share on other sites More sharing options...
“Nasty Piece of work” Posted May 9, 2020 Share Posted May 9, 2020 “return to normal” - read buying votes. Quote Link to comment Share on other sites More sharing options...
crumblingcon Posted May 9, 2020 Author Share Posted May 9, 2020 32 minutes ago, MARTINX9 said: The Treasury predicted house prices would fall 18% if we voted to leave the EU back in May 2016. So it seems according to our statisticians the impact of a global pandemic shutting down our economy for months will have a smaller downwards impact on house prices. Just make a figure up - any old figure! https://www.theguardian.com/politics/2016/may/20/eu-referendum-george-osborne-house-prices-brexit Everything at that time from both sides just needs to be ignored. Some of it was the truth and some of it will probably turn out to be a lucky or a an unfortunate guess. Leave or Remain, I personally think the effect on the economy would have been minimal either way, though I had opinions on the subject I wasn't heartbroken either way, Quote Link to comment Share on other sites More sharing options...
Warlord Posted May 9, 2020 Share Posted May 9, 2020 Optimistic. i reckon its going to be 30-40% If you're waiting to buy then your in a great position. Just hang in a bit longer . Quote Link to comment Share on other sites More sharing options...
Trump Invective Posted May 9, 2020 Share Posted May 9, 2020 Yeah, it will only take a year to bounce back from this ? Quote Link to comment Share on other sites More sharing options...
MARTINX9 Posted May 9, 2020 Share Posted May 9, 2020 8 minutes ago, Trump Invective said: Yeah, it will only take a year to bounce back from this ? Will it be V for victory or an L of a slump? Quote Link to comment Share on other sites More sharing options...
crouch Posted May 9, 2020 Share Posted May 9, 2020 Of course no-one knows anything at this point; the epidemic isn't over yet by any means. If the lockdown is ended too early we'll get a second wave which will send us into another downward spiral. There must be many small businesses which will never reopen even on the best case scenario so IMV any thought of the typical V shaped recovery is likely to be wide of the mark. Many people will remain cautious about ending the lockdown and there will be new procedures for many businesses, most of which will involve new costs and revenue reduction and folk might also be scared into saving more rather than living a debt fuelled lifestyle with nothing in the bank. Take all these things together and a V shaped recovery seems fanciful but the more likely L or extended U shaped recovery is not just slower but likely to affect growth potential for the future. Long term unemployment can result in "hysterysis", a permanent downgrade of the labour force which will affecr productivity going forward. Quote Link to comment Share on other sites More sharing options...
MonsieurCopperCrutch Posted May 9, 2020 Share Posted May 9, 2020 3 minutes ago, crouch said: Of course no-one knows anything at this point; the epidemic isn't over yet by any means. If the lockdown is ended too early we'll get a second wave which will send us into another downward spiral. There must be many small businesses which will never reopen even on the best case scenario so IMV any thought of the typical V shaped recovery is likely to be wide of the mark. Many people will remain cautious about ending the lockdown and there will be new procedures for many businesses, most of which will involve new costs and revenue reduction and folk might also be scared into saving more rather than living a debt fuelled lifestyle with nothing in the bank. Take all these things together and a V shaped recovery seems fanciful but the more likely L or extended U shaped recovery is not just slower but likely to affect growth potential for the future. Long term unemployment can result in "hysterysis", a permanent downgrade of the labour force which will affecr productivity going forward. One thing is for sure the triple lock will be history. Quite rightly. Quote Link to comment Share on other sites More sharing options...
Warlord Posted May 9, 2020 Share Posted May 9, 2020 (edited) If you look at the chart on the front page its well under the moving average and only going one way. This was before corona as well so imagine how far the average price will fall now... Edited May 9, 2020 by Warlord Quote Link to comment Share on other sites More sharing options...
Paul77 Posted May 9, 2020 Share Posted May 9, 2020 4 hours ago, crumblingcon said: Britain could take a year to return to normal after plunging into its deepest recession for more than three centuries Just a year..? I honestly doubt! Quote Link to comment Share on other sites More sharing options...
MarkD Posted May 9, 2020 Share Posted May 9, 2020 If it's anything like the 80's crash they'll drop rapidly, hit the floor, and stay there as sentiment turns negative. I remember flats changing hands in the pub for 5 grand a piece! Negative equity leaves a bad taste. Quote Link to comment Share on other sites More sharing options...
crumblingcon Posted May 9, 2020 Author Share Posted May 9, 2020 8 minutes ago, MarkD said: If it's anything like the 80's crash they'll drop rapidly, hit the floor, and stay there as sentiment turns negative. I remember flats changing hands in the pub for 5 grand a piece! Negative equity leaves a bad taste. Remember something similar, houses being purchased on a credit card, yes credit card. Not the using of a credit card in a desperate attempt to just about clear the deposit needed for an ex crack den today, but a credit card to buy a WHOLE HOUSE Quote Link to comment Share on other sites More sharing options...
Houdini Posted May 9, 2020 Share Posted May 9, 2020 Having had the Guardian - have the Mail's story https://www.dailymail.co.uk/money/mortgageshome/article-8288951/Should-drop-offer-house-coronavirus.html Quote Link to comment Share on other sites More sharing options...
Trump Invective Posted May 9, 2020 Share Posted May 9, 2020 10 minutes ago, Houdini said: Having had the Guardian - have the Mail's story https://www.dailymail.co.uk/money/mortgageshome/article-8288951/Should-drop-offer-house-coronavirus.html "Do not drop your offer, you will look like a chancer." LOL Quote Link to comment Share on other sites More sharing options...
crumblingcon Posted May 9, 2020 Author Share Posted May 9, 2020 24 minutes ago, Trump Invective said: "Do not drop your offer, you will look like a chancer." LOL I really cannot wait to see what estate agents do in the early days of the post virus return to work days. Of course the UK seller are a breed to themselves and no amount of reasoned logic will get in their way as to what their little pile of bricks are worth. I really don't care if estate agents play along with delusional sellers for a while, that's what greasy haired or tit implanted uneducated slimey spiv estate agents do, it's in their DNA. But for all the delusional sellers there will be the 10% that have their heads screwed on and will see a 10% haircut being better than a 35% one, and that's where the new prices will be set in stone. Quote Link to comment Share on other sites More sharing options...
Burbujista Posted May 9, 2020 Share Posted May 9, 2020 (edited) 4 hours ago, MARTINX9 said: The Treasury predicted house prices would fall 18% if we voted to leave the EU back in May 2016. So it seems according to our statisticians the impact of a global pandemic shutting down our economy for months will have a smaller downwards impact on house prices. Just make a figure up - any old figure! https://www.theguardian.com/politics/2016/may/20/eu-referendum-george-osborne-house-prices-brexit Listen, the forecast was actually correct. The problem is that you believe that just reading news titles is enough to get the idea, but it isn’t (because journalism is shit in this country, not actually your fault). Reality is that the forecast, as the same article you posted clearly states: “The chancellor said he would publish an official analysis next week saying house prices would be lower by at least 10% and up to 18% compared with what is expected if Britain remains in the EU.” If the UK had stayed in the EU, price rises would have probably continued rising as before. A figure of roughly +7% annually. However, because of Brexit it slowed to +2.5 annually. Given that 3.75 years passed to leave the EU (being generous with you, because we haven’t left in practical terms)... that’s an underperformance of -18%, which is actually at the lower end of the prediction. Now they are predicting an actual drop of -16% in house prices. Nothing relative to any other benchmark. And it’s based on their BEST SCENARIO (because they assume no second peak and return to normality in a year...). I believe it will be -40%, because India, Brazil, Sweden, USA, Pakistan and other countries (who aren’t low on population) are not containing the virus. The guys are the Bank of England and the Treasury may be bastards, but they aren’t stupid. Edited May 9, 2020 by Burbujista Quote Link to comment Share on other sites More sharing options...
Burbujista Posted May 9, 2020 Share Posted May 9, 2020 4 hours ago, crumblingcon said: Everything at that time from both sides just needs to be ignored. Some of it was the truth and some of it will probably turn out to be a lucky or a an unfortunate guess. Leave or Remain, I personally think the effect on the economy would have been minimal either way, though I had opinions on the subject I wasn't heartbroken either way, It’s not to be ignored. They are usually right. Actually, they were right with their Brexit forecast, just see the post I have just written to respond the issue in this same topic. Quote Link to comment Share on other sites More sharing options...
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