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Gordon "miracle Economy" Brown: There Will Be No Hpc

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http://news.bbc.co.uk/1/hi/business/3656701.stm

Brown dismisses house price crash

Sunday, 25 April, 2004

Brown: 'No danger of imminent housing crash'

Britain will not see a housing crash while the cost of servicing debt in relation to incomes remains low, Gordon Brown has said.
"While house prices have certainly risen, as everybody knows, what is also the case is that people's debt servicing payments, mortgage payments as a share of their income are still far lower than they were 10 years ago," he said.

That is what Gordon said almost 2 years ago. How do house prices in relation to incomes look today?

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Britain will not see a housing crash while the cost of servicing debt in relation to incomes remains low, Gordon Brown has said.

It's a non statement isn't it really.

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Britain will not see a housing crash while the cost of servicing debt in relation to incomes remains low, Gordon Brown has said.

It's a non statement isn't it really.

Don't forget you can get a 10 year fixed rate mortgage for 4.69% from several major lenders now...

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Don't forget you can get a 10 year fixed rate mortgage for 4.69% from several major lenders now...

It isn't the interest rate that nails people, it's the debt burden.

I'm a net saver, and if rates hit 15% I'd just be getting wealthier, and have more to spend.

Right now we have a debt burden that is about as high as it was during the 90's crash.

This property market is finished.

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Britain will not see a housing crash while the cost of servicing debt in relation to incomes remains low, Gordon Brown has said.

It's a non statement isn't it really.

I think he may have been saying provided houses do not become too high in relation to people's ability to pay for them, then there will be no crash. As houses are about 8 times average income it seems that Gordon's nightmare has come true? It never was a question of interest rates but a question of debt to income whatever the rates.

I think his statement is at the heart of the "miracle economy." Provided imbalances (Al"s favourite word) do not occur there will be stability in the market.

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Back in 1997 he said he wouldn't allow house prices to get out of control in the first place...

'Budget 97':

http://www.bbc.co.uk/politics97/budget97/live/housing.shtml

Mr Brown said: "I will not allow house prices to get out of control and put at risk the sustainability of the future." He said he was determined that the UK should not return to the "instability, speculation and negative equity" of the 1980s and 1990s.

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Given the recent by election result north of the border, if GB can't convince the residents of the constituency just along from his that he is a good thing (whether for the economy or PM) can't imagine his chances of convincing middle england! I heard it was a 16% swing away from Lab!... Imagine what the electorate will be thinking of him in 2009 at th next election!

He will be the nearly man to end all nearly men and he will never escape it in his lifetime.

Edited by Tempest

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From Calc's excellent news round up on TMF.

http://www.thebusinessonline.co.uk/Stories...2E-D07EB5AA1CEE

REAL COST OF TAXES NOW MORE THAN HALF UK GDP

By Allister Heath

http://*******.com/d5z4f

BRITAIN’s high tax burden under Chancellor Gordon Brown is costing the UK economy an extra £138bn (E200, $247bn) a year in lost wealth by crushing incentives to work, trade and invest, according to a report this weekend. …

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Q:Gordon "miracle Economy" Brown: There Will Be No Hpc, Will his words of 2004 come back to haunt him?

A:Yes, I believe so.

I just posted in a thread about the unemployment figures, it seems that 2005 may well have been the year when the ground work was done, and the crash / recession will start to be known to the masses later on this year.

Anyone looked in the job sections of the newspapers recently? When I got my present job, exactly 2 years ago, there were over 15 pages of job advertisements. Now its down to 6 and job cuts are happening all over the place.

It feels like we're going to see a huge shift in sentiment this year.

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Guest Charlie The Tramp

Right now we have a debt burden that is about as high as it was during the 90's crash.

I would say it is very much higher today than the early 90`s.

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Problem solved. No HPC

Sarcasm assumed!

Only if most of the market took fixed rates of this length would prices generally be referable to cost of funding at those rates. As most of the market is on variable rates or jumps from one fixed rate to another, if rates rose generally, your 10 year fix would secure/help you service your debt burden but the price of the asset that is your house from time to time will be based on the cost to a buyer at the relevant time... If you have to sell or wish to sell at a low in the cycle, your 10 yr fix does not insulate the houe from the market vagaries!

This applies equally to 2,3 and 5 yr fixes. One day the prevailing rates at the end of these short term fixes will be much higher than the rates when people went in - then they will see what happens to their house value.

This is why rates at the time you buy are relevant to the market value of the house you buy at that time but not later - this is conveniently ignored (or not even realised) by most people taking out these fixed rates.

Edited: And this is why they do not prevent HPCs!

Edited by Tempest

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I would say it is very much higher today than the early 90`s.

With regard to HPC, its not so much the total debt burden across the whole population, its the debts being caried by those who have bought and sold in the last few years.

If somebody bought a home 20 years ago for 50K, its now worth 250K and they have a mnimal mortgage (if any) so what if they MEW'd 50K for a new car and a couple of holidays

Yes, they now owe 50K, which is quite a big debt, but it won't affect the house prices, plus they had nothing to do with this current boom anyway

What about the person that bought back in 2001, MEW'd a year later, bought 2 BTL's and is living on credit cards, covering a negative yield?

The 50K they owe will have a significant impact on prices, because they are overextended and their only plan is 'property always goes up'

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Sarcasm assumed!

Only if most of the market took fixed rates of this length would prices generally be referable to cost of funding at those rates. As most of the market is on variable rates or jumps from one fixed rate to another, if rates rose generally, your 10 year fix would secure/help you service your debt burden but the price of the asset that is your house from time to time will be based on the cost to a buyer at the relevant time... If you have to sell or wish to sell at a low in the cycle, your 10 yr fix does not insulate the houe from the market vagaries!

This applies equally to 2,3 and 5 yr fixes. One day the prevailing rates at the end of these short term fixes will be much higher than the rates when people went in - then they will see what happens to their house value.

This is why rates at the time you buy are relevant to the market value of the house you buy at that time but not later - this is conveniently ignored (or not even realised) by most people taking out these fixed rates.

Edited: And this is why they do not prevent HPCs!

Thank you

Oddball

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BRITAIN’s high tax burden under Chancellor Gordon Brown is costing the UK economy an extra £138bn (E200, $247bn) a year in lost wealth by crushing incentives to work, trade and invest, according to a report this weekend. …

Am I the only one that dose not mind a high tax burden? I would rather have good hospital's, schools and roads than money to buy another foriegn DVD player or car. I would voluntarily pay more tax if it were possible. The ten year mortgage thing. Soembody seems to be expecting a sustained period of deflation I think.

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Guest Bart of Darkness

Don't forget you can get a 10 year fixed rate mortgage for 4.69% from several major lenders now...

Can you get a 10 year fixed job?

A 10 year fixed marriage? (i.e. no expensive divorce settlement).

A 10 year holiday from repaying any other debts acrued.

10 years without one partner taking time off to have children.

Thinking that a fixed rate mortgage is going to be a panacea for the ills of the housing market is very much EA style thinking.

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Guest Riser

Brown was on the BBC with Andrew Meyer this morning.

Reading between the lines I got the impression that he will justify an increase taxation in the Budget by saying Britain needs to be flexible in its response to a weakening Global economy by focusing money raised through higher taxes on Education and Defence.

He dismissed reports that productivity was at its lowest level for 10 years, that unemployment was on the increase, and that UK debt was at record high levels by simply saying he does not accept those figures. The presenter pointed out that some of the figures were from his own Office of National Statistics at which point he launched in to a rehearsed babble of meaningless comparisons. The buffoon is in denial, if he is prepared to dismiss economic measures produced by his own team god help us when he takes responsibility for wider issues.

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Am I the only one that dose not mind a high tax burden? I would rather have good hospital's, schools and roads than money to buy another foriegn DVD player or car. I would voluntarily pay more tax if it were possible. The ten year mortgage thing. Soembody seems to be expecting a sustained period of deflation I think.

Which is all well and good as long as 70% of the tax being paid towards such institutions doesnt go on pay.

Dames

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I watched Crash Gordon on Sunday AM this morning with my head in my hands. The interviewer, Andrew Marr, usually one of the better journos at the BBC who isn't afraid of asking proper questions (no Paxman, I grant you, but not a complete sycophant like his predecessor David Frost). I couldn't believe how fast GB was spinning and, unfortunately Andrew Marr let him get away with it.

He was asked about UK productivity and how we had slipped to 13th in the list of EUROPEAN countries - GB resonded by saying he simply didn't accept the analysis, mainly because the USA has much better figures only because their retail sector has access to lots of land and cheap money. The UK is, apparently, more productive than Germany and Japan and catching up with France. So that's OK then.....

When questioned on our massive debt, he justified it saying that our debt was in fine shape - just compare it with the USA. It's like saying Adolf Hitler was great because he wasn't as bad as Genghis Kahn!

On exports, he believes that 'education' is set to be one of the UK's strongest exports! He then managed to twist the conversation around to the usual 'on message' fable of more money spent on blah, blah, blah....

What utter twaddle. This guy is in total denial and he thinks he can pull the wool over everyones' eyes long into his reign as PM. I used to have some respect for him (mainly because he seemed more socialist than Tony Bliar) but now he seems to be more like that big fat conjuror from kids programmes of the 70s - I think he was called The Great Suprendo or Ali Bongo or something like that.

I'm really worried that this idiot will allow the Tories to sneak in through the back door under a guise of that every so nice and reasonable David Cameron - with all those nasty, self-serving bigots in the Tory party under his wing.

Cheers

LL

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Guest Riser

This week could be a big one for Brown and Blair as ID cards hit the news again:

Gordon Brown interviewed by Andrew Marr - Terrorists and Identity Cards, partial transcript

Chancellor of the Exchequer Gordon Brown continues his media spin campaign to try to convince the world that he is going to replace Tony Blair as Prime Minister, by pontificating on a wider range of subjects than simply the economy.

He gave a glimpse of his confused thinking about Terrorists and ID Cards in his interview with Andrew Marr on the BBC's Sunday AM morning political TV slot (AM - Andrew Marr, = ante meridian = Morning - doh !), ahead of his heavily leaked speech to the Royal United Services Institute tomorrow.........

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http://news.bbc.co.uk/1/hi/business/3656701.stm

Brown dismisses house price crash

Sunday, 25 April, 2004

Brown: 'No danger of imminent housing crash'

Britain will not see a housing crash while the cost of servicing debt in relation to incomes remains low, Gordon Brown has said.
"While house prices have certainly risen, as everybody knows, what is also the case is that people's debt servicing payments, mortgage payments as a share of their income are still far lower than they were 10 years ago," he said.

That is what Gordon said almost 2 years ago. How do house prices in relation to incomes look today?

That was an "On average" lower then a decade ago..

You see most havent bought at todays prices so the low IR's do provide cheeper repayments..

At today's mortgage rates they are okay..

Trust me, you have to go back to 15% IR's to find a more expensive time when compared to todays prices.

For example a decade ago my parents house was worth £110,000 now one has sold for £250,000

and note he did say "While debt repayments remain low" Those IR's ahd better not climb...

Unless of course you need pensions etc..

Am I the only one that dose not mind a high tax burden? I would rather have good hospital's, schools and roads than money to buy another foriegn DVD player or car. I would voluntarily pay more tax if it were possible. The ten year mortgage thing. Soembody seems to be expecting a sustained period of deflation I think.

If we had a good NHS yes..

If women had to die because £20,000 a year for breast cancer meds wasn't too much as the NHS wasted many millions on a computer system that does not work..

If a family of 8 on benifits gets the equivilent of a £50,000 after tax salary..

If at some level it was working..

Which it isn't..

If Schools gave kids a chance to leave able to read and write.. If the jobs that they would take were not flooding overseas at a massive rate..

If we didn't have so much debt that money is spent on cheap imported goods, pumping the money less people are earning abroad as our taxes go to keep those who have lost their jobs as they are outsourced abroad..

Less job's, poor investment, even councils outsourcing abroad..

England seems to have the financial brains of an 18 year old with a half dozen store cards and no idea yeat of what happens when it comes time to pay up.

Edited by apom

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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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