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purplemonkey

When The Crash Comes You Will All Be Sorry Too.

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You lot are wrong to be welcoming a house price crash. I've been wanting one for the last 4 years too, but looking at it, when it comes, what am I going to be able to do about it. if prices come down, when is a good time to buy? what if a 200k house comes down to 100k should I buy, it may continue to fall to 50k, maybe even lower. I don’t' think there’s anyway prices can come down when there are this many people waiting for the prices to come down. if prices come down, it will be because you all stop caring about the prices, and this will be because you've all lost your jobs, or your saved money will become worthless, or we'll be at war. Sure the US and OZ markets are turning, but they don't have the demand we have here, the only way to lose the demand is to turn great Britain into a rubbish place that no one wants to come to, and the main reason of that will be the pound becoming worthless, or there’s no jobs, or we're being shot at by someone.

I'm actually struggling to get work at the moment, I didn't have any trouble a year ago, but now I'm spending my savings or to be more precise my house deposit that’s been waiting for a crash. So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

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You lot are wrong to be welcoming a house price crash. I've been wanting one for the last 4 years too, but looking at it, when it comes, what am I going to be able to do about it. if prices come down, when is a good time to buy? what if a 200k house comes down to 100k should I buy, it may continue to fall to 50k, maybe even lower. I don’t' think there’s anyway prices can come down when there are this many people waiting for the prices to come down. if prices come down, it will be because you all stop caring about the prices, and this will be because you've all lost your jobs, or your saved money will become worthless, or we'll be at war. Sure the US and OZ markets are turning, but they don't have the demand we have here, the only way to lose the demand is to turn great Britain into a rubbish place that no one wants to come to, and the main reason of that will be the pound becoming worthless, or there’s no jobs, or we're being shot at by someone.

I'm actually struggling to get work at the moment, I didn't have any trouble a year ago, but now I'm spending my savings or to be more precise my house deposit that’s been waiting for a crash. So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

Do you think that if the house prices dropped by a sizeable amount over a short period, a lot of people would hold back a little and see if they dropped some more... which they might if enough people held back?

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I'm actually struggling to get work at the moment, I didn't have any trouble a year ago, but now I'm spending my savings or to be more precise my house deposit that’s been waiting for a crash. So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

Yeah, but the perma bears have an invisible cloak that will protect them from tight lending criteria and unemployment that will come of a routing in the housing market. That kind of stuff only happens to other people. You know? The kind that has MEWed to the eye ball and spent it on p*nis enlargement.

:lol:

Hope you find work soon, good luck.

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Yeah, but the perma bears have an invisible cloak that will protect them from tight lending criteria and unemployment that will come of a routing in the housing market. That kind of stuff only happens to other people. You know? The kind that has MEWed to the eye ball and spent it on p*nis enlargement.

Nope

Cash & a recession proof income.

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when is a good time to buy? what if a 200k house comes down to 100k should I buy, it may continue to fall to 50k, maybe even lower. I don’t' think there’s anyway prices can come down when there are this many people waiting for the prices to come down.

I undersatnd where you are coming from with this but I believe that the BTL business is here to stay provided there is money in it. At the moment it is being hyped by the VI's but even when this fad is over for the amatuers there will still be plenty of serious players out there to fill the gap.

IMO house prices particularly at the entry level will then be a function of rent values and interest rates. If a property will rent out for £500 per month and the interest rate is 5% then the house is roughly "valued" at £500 x 12 x (100/5)=£120,000. Anything less will be losing money for the LL. Its a very rough and ready calculation which doesn't take sentiment or capital gain into account but if you apply it to a "property near you" you will probably see the magical 30% current overvalue that is so often mentioned.

For example I rent at the moment for £725pm and the interest rate is 4.75% so using the above 725x12x100/4.75 = £183,000. The LL has the place valued at £260,000 (Offered to sell it to the previous tenant 6 months ago)... Overvalued by 32%.

Using my calculation in reverse then in order to make it worthwhile to rent it out the rent should be £1030 per month (same as BS interest on £26k).

God only knows why he rents it out. If it would sell for £260k he would be better off if he stuck the money in the B.S.

I guess I'm missing something here in my simple way and I hope someone can point out the errors in my thinking, anyway I've rambled on enough.

It would be interesting to see if the same calculation works in other parts of the country

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Guest pioneer31

This assumption is baloney and I'm sick of hearing it.

FTB's are screwed in a recession..........because they'll have no job?

and they'll be screwed in a boom......... because they can't afford?

May as well just kill ourselves now then. :rolleyes:

..................only, that ALL my mates bought during or just after the last big dip. They were all in work. However if they had to buy now, NONE of them could.

You lot are wrong to be welcoming a house price crash. I've been wanting one for the last 4 years too, but looking at it, when it comes, what am I going to be able to do about it. if prices come down, when is a good time to buy? what if a 200k house comes down to 100k should I buy, it may continue to fall to 50k, maybe even lower. I don’t' think there’s anyway prices can come down when there are this many people waiting for the prices to come down. if prices come down, it will be because you all stop caring about the prices, and this will be because you've all lost your jobs, or your saved money will become worthless, or we'll be at war. Sure the US and OZ markets are turning, but they don't have the demand we have here, the only way to lose the demand is to turn great Britain into a rubbish place that no one wants to come to, and the main reason of that will be the pound becoming worthless, or there’s no jobs, or we're being shot at by someone.

I'm actually struggling to get work at the moment, I didn't have any trouble a year ago, but now I'm spending my savings or to be more precise my house deposit that’s been waiting for a crash. So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

All assumptions (and erroneous if I may say so)

However, my inability to afford a house right now, is VERY REAL.

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You lot are wrong to be welcoming a house price crash. I've been wanting one for the last 4 years too, but looking at it, when it comes, what am I going to be able to do about it. if prices come down, when is a good time to buy? what if a 200k house comes down to 100k should I buy, it may continue to fall to 50k, maybe even lower. I don’t' think there’s anyway prices can come down when there are this many people waiting for the prices to come down. if prices come down, it will be because you all stop caring about the prices, and this will be because you've all lost your jobs, or your saved money will become worthless, or we'll be at war. Sure the US and OZ markets are turning, but they don't have the demand we have here, the only way to lose the demand is to turn great Britain into a rubbish place that no one wants to come to, and the main reason of that will be the pound becoming worthless, or there’s no jobs, or we're being shot at by someone.

I'm actually struggling to get work at the moment, I didn't have any trouble a year ago, but now I'm spending my savings or to be more precise my house deposit that’s been waiting for a crash. So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

Christ, I thought I was a pessimist.

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if prices come down, when is a good time to buy? what if a 200k house comes down to 100k should I buy, it may continue to fall to 50k, maybe even lower.

A good time to buy, for me, is when I can get a reasonable home on borrowings that I can still afford to repay if IRs and living costs go up quite a bit more. If the value falls further after I've bought it then so what? It won't change the fact that I've got what I wanted – a home. Too many of these arguments are based on the notion that we all base out personal wellbeing on the amount of profit we've made on the box that we live in. The personal value I'll take from having my own space if far greater than any value in boasting to my mates how much profit I've made on it. Frankly, if I buy for £75K and it then falls to £1 I couldn't care less.

Edited by Bingley Bloke

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Hey Bingley,

How about you and the purple monkey buy a place together, that would solve both your problems?

<<<<<<<<<<<<<<<<<<<<hugs>>>>>>>>>>>>>>>>>>>>>

Edited by Flick

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So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

I don't really understand your post! You describe the demand for property in Britain as being something special compared to the USA and Australia. Um, what about San Diego then?

Those that have STRed and put a huge wedge in the bank won't be sorry. :lol:

Edited by Xurbia

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I totally fail to see how a deep recession is a great thing for anyone. The difference in a recession this time as against last time is immigration- all those new people chasing fewer and fewer jobs- any employer in the position to actually take on staff will have a field day chipping away pay and conditions- you can't work for that? tough, we can easily find someone who can.

This also applies in your "safe" occupation. In a recession your employer has less money to play with- people are the biggest cost- slashing the wage bill is a quick, easy fix when times get tight.

Let's assume that the banks have been lending too much money to too many people. If the wheels come off the mortgage market the banks are going to have so much Red ink on the balance sheet that being in the mortgage business no longer looks such a nice prospect- so mortgages get harder to find and lending criteria swings from reckless to over caution. Not much chance of an FTBer getting a good deal here.

The biggest problem is BTL- FTBer properties have been snatched by greedy folk who expect the likes of me and you to finance their little dreams of Rachmanesque riches.

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I totally fail to see how a deep recession is a great thing for anyone. The difference in a recession this time as against last time is immigration- all those new people chasing fewer and fewer jobs- any employer in the position to actually take on staff will have a field day chipping away pay and conditions- you can't work for that? tough, we can easily find someone who can.

This also applies in your "safe" occupation. In a recession your employer has less money to play with- people are the biggest cost- slashing the wage bill is a quick, easy fix when times get tight.

Let's assume that the banks have been lending too much money to too many people. If the wheels come off the mortgage market the banks are going to have so much Red ink on the balance sheet that being in the mortgage business no longer looks such a nice prospect- so mortgages get harder to find and lending criteria swings from reckless to over caution. Not much chance of an FTBer getting a good deal here.

The biggest problem is BTL- FTBer properties have been snatched by greedy folk who expect the likes of me and you to finance their little dreams of Rachmanesque riches.

You're right of course. We face an immigration backlash and worse. Not pleasant.

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I'm actually struggling to get work at the moment, I didn't have any trouble a year ago, but now I'm spending my savings or to be more precise my house deposit that’s been waiting for a crash. So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

you're in the wrong industry then.

A few years ago I was in a similar boat but I changed tack slightly and did freelance work.I now work in a field where work is abundant for the forseeable future.

things come and go out of fashion,so do jobs...if you want to survive you have to give a customer the means to do more with less.

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You lot are wrong to be welcoming a house price crash. I've been wanting one for the last 4 years too, but looking at it, when it comes, what am I going to be able to do about it. if prices come down, when is a good time to buy? what if a 200k house comes down to 100k should I buy, it may continue to fall to 50k, maybe even lower. I don’t' think there’s anyway prices can come down when there are this many people waiting for the prices to come down. if prices come down, it will be because you all stop caring about the prices, and this will be because you've all lost your jobs, or your saved money will become worthless, or we'll be at war. Sure the US and OZ markets are turning, but they don't have the demand we have here, the only way to lose the demand is to turn great Britain into a rubbish place that no one wants to come to, and the main reason of that will be the pound becoming worthless, or there’s no jobs, or we're being shot at by someone.

I'm actually struggling to get work at the moment, I didn't have any trouble a year ago, but now I'm spending my savings or to be more precise my house deposit that’s been waiting for a crash. So even if prices came down now there’s nothing I could do about it. And this will be the same song for most people when the great world recession arrives.

Predicting a house price crash and discussing is different from welcoming one. I think the fascination with prices, high or low is the main point that grabs everyone; its almost as if everyone is seeing a shelter as an asset of material wealth when in reality its just somewhere to live. Buy, rent share... who cares. Do what ever suits.

Why worry about collapse of jobs, get of your butt and make something out of nothing. What do you think people have been doing in the middle of africa for centuries. Get a grip and think how your survive instead of worrying about who is gonna give you a job.

A good tip instead of worrrying about eating into your deposit would be to invest it and make your money work for you, it ain't gonna do nought just sitting there. Best not to act like Golam and look at your deposit thinking 'oh precious'.

good luck

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I totally fail to see how a deep recession is a great thing for anyone. The difference in a recession this time as against last time is immigration- all those new people chasing fewer and fewer jobs- any employer in the position to actually take on staff will have a field day chipping away pay and conditions- you can't work for that? tough, we can easily find someone who can.

This also applies in your "safe" occupation. In a recession your employer has less money to play with- people are the biggest cost- slashing the wage bill is a quick, easy fix when times get tight.

Let's assume that the banks have been lending too much money to too many people. If the wheels come off the mortgage market the banks are going to have so much Red ink on the balance sheet that being in the mortgage business no longer looks such a nice prospect- so mortgages get harder to find and lending criteria swings from reckless to over caution. Not much chance of an FTBer getting a good deal here.

The biggest problem is BTL- FTBer properties have been snatched by greedy folk who expect the likes of me and you to finance their little dreams of Rachmanesque riches.

Several Points about the coming recession:

The recession will not not be catastophic for everyone. If unemployment reaches 3 million (as it did in the last recession) there will still be a large number of people employed. Many of these people will have purchased their homes before 2000 and will ride out the recession without too much discomfort. However, this must be qualified by the 'Unemployment fear factor' that is likely to prevail throughout the recession.

A number of people will end up in severe financial difficulties. These will be people who have overstreched themselves with debt. Some of these people will experience unemployment for a time. A number of them will will see their incomes drop due to firms reducing overtime. The self-employed might see their business revenues fall. Some people will have to take on jobs with lower salaries. In all of the above scenarios, high debt levels will cause severe financial difficulties, repossessions and bankrupcies.

The recession is likely to be long and deep due to the 'baby boomer effect'. A fifteen year Japan style recession could be on the cards.

The running down of household savings, that has occured in this boom, will not help matters.

The recession is likely to affect more people than previous recessions due to the high level of debt in the economy. However, the level of debt varies from household to household as does the level of savings. Many Households with low levels of debt will most likely be OK. However, households with high levels of debt are currently walking into sinking sand.

Many people will be caught out by the myth that the price of their house will continue to rise. This have lured a number of people into running down their savings or increasing their borrowings.

There is likely to be a 1929 style stock market crash when retiring baby boomers convert their pension funds to annuities. Possibly around the turn of the decade.

The recession is likely to be long and and deep. However, it will eventually end and then we can go through the boom and bust cycle again.

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Guest grumpy-old-man

Several Points about the coming recession:

The recession will not not be catastophic for everyone. If unemployment reaches 3 million (as it did in the last recession) there will still be a large number of people employed. Many of these people will have purchased their homes before 2000 and will ride out the recession without too much discomfort. However, this must be qualified by the 'Unemployment fear factor' that is likely to prevail throughout the recession.

A number of people will end up in severe financial difficulties. These will be people who have overstreched themselves with debt. Some of these people will experience unemployment for a time. A number of them will will see their incomes drop due to firms reducing overtime. The self-employed might see their business revenues fall. Some people will have to take on jobs with lower salaries. In all of the above scenarios, high debt levels will cause severe financial difficulties, repossessions and bankrupcies.

The recession is likely to be long and deep due to the 'baby boomer effect'. A fifteen year Japan style recession could be on the cards.

The running down of household savings, that has occured in this boom, will not help matters.

The recession is likely to affect more people than previous recessions due to the high level of debt in the economy. However, the level of debt varies from household to household as does the level of savings. Many Households with low levels of debt will most likely be OK. However, households with high levels of debt are currently walking into sinking sand.

Many people will be caught out by the myth that the price of their house will continue to rise. This have lured a number of people into running down their savings or increasing their borrowings.

There is likely to be a 1929 style stock market crash when retiring baby boomers convert their pension funds to annuities. Possibly around the turn of the decade.

The recession is likely to be long and and deep. However, it will eventually end and then we can go through the boom and bust cycle again.

good, it will serve the greedy fookers right.........

apologies to anyone who is not a greedy fooker....... :ph34r:

good post unshure.

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Guest wrongmove

I totally fail to see how a deep recession is a great thing for anyone. The difference in a recession this time as against last time is immigration- all those new people chasing fewer and fewer jobs- any employer in the position to actually take on staff will have a field day chipping away pay and conditions- you can't work for that? tough, we can easily find someone who can.

I don't agree with this - much of the migration to uk is for economic reasons. The work disappears, and so will many of the immigrants. This will be interesting, because as employment shrinks, so will population, so unemployment may actually rise less than it would without immigrants.

Edited to add - if the above is true, then a recession would mean falling population as well as falling employment. Not a recipe for a house price boom :)

Edited by wrongmove

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There is likely to be a 1929 style stock market crash when retiring baby boomers convert their pension funds to annuities. Possibly around the turn of the decade.

The recession is likely to be long and and deep. However, it will eventually end and then we can go through the boom and bust cycle again.

There is one big difference - after 1929 (and Second War...) everything boomed again - now it will not happen. Why? Population structure...There is even now too many old and disabled people to compare with number of workers. With time this proportion will only worse. Old folks are not great consumers, are not great factory workers, are not house seekers.

Any recover have to be weak than. Just like shadow of old times.

Boom will occure, but in Asia and Russia probably.

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There is one big difference - after 1929 (and Second War...) everything boomed again - now it will not happen. Why? Population structure...There is even now too many old and disabled people to compare with number of workers. With time this proportion will only worse. Old folks are not great consumers, are not great factory workers, are not house seekers.

Any recover have to be weak than. Just like shadow of old times.

Boom will occure, but in Asia and Russia probably.

None of this will happen. I am from India and I know that India is being hyped about in the press these days, but when I look at India, there is *no* way its going to be a super-economy etc etc. India always has stumbled along and will continue to do so. I felt China will one day surpass the US but when I ask some of the educated Chinese that I know, none of them believe that's going to happen. My boss is a Brazilian and one day when he was feeling home sick, I asked him why he did not move to Brazil which was "booming" and he responded exactly as I suspected - the "boom" largely is a mountain made out of a molehill, mostly by popular press.

About the coming crash leading everyone to a never-ending depression, that's so balloney. The crash will happen, and after a couple of years, things will come back to normal as they always do and this boom and crash will be history. Life will go on as usual.

I remember, in the 50s the US worried about Russia taking over the world -didn't happen. Then in the 70s and 80s it was the Japs and Germans who would one day rule the world with their "miracle" economies. Didn't happen. Now its India and China that are slated to be the new super-powers. WON'T happen. These dooms-day scenarios sell and so they come up so regularly in the press. But what happens is never what is expected probably because the expectations are made by such extremely negative/positive news agencies that make money by sensationalizing something ordinary.

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None of this will happen. I am from India and I know that India is being hyped about in the press these days, but when I look at India, there is *no* way its going to be a super-economy etc etc. India always has stumbled along and will continue to do so. I felt China will one day surpass the US but when I ask some of the educated Chinese that I know, none of them believe that's going to happen. My boss is a Brazilian and one day when he was feeling home sick, I asked him why he did not move to Brazil which was "booming" and he responded exactly as I suspected - the "boom" largely is a mountain made out of a molehill, mostly by popular press.

About the coming crash leading everyone to a never-ending depression, that's so balloney. The crash will happen, and after a couple of years, things will come back to normal as they always do and this boom and crash will be history. Life will go on as usual.

I remember, in the 50s the US worried about Russia taking over the world -didn't happen. Then in the 70s and 80s it was the Japs and Germans who would one day rule the world with their "miracle" economies. Didn't happen. Now its India and China that are slated to be the new super-powers. WON'T happen. These dooms-day scenarios sell and so they come up so regularly in the press. But what happens is never what is expected probably because the expectations are made by such extremely negative/positive news agencies that make money by sensationalizing something ordinary.

I think that we must distinguish doomsday scanarios from predictions of a serious recession (depression or slump). The Japanese economy has shown us what can happen to a very strong western style economy when a 'boomer greneration' goes into retirement. By 'boomer generation' I mean a generational age group that is larger than other generations within the economy. When such an age group reaches it's middle age, it has a strong positive effect on the economy. However when such a generation goes into retirement, it drastically cuts its spending and sells it's shares (held in pension funds) to convert to annuities. This results in the economy going into a serious recession.

Note also, that such a generation will demand a lot from the state in pensions and healthcare.

It is my belief that the 'baby boomer' effect will be the one that prolongs the recession and causes it to become a depression/slump. However, there are also other factors at work such as the high debt levels; low savings; and various asset bubbles. All of these point to a more serious recession than the usual recession that lasts for two or three years.

However, this is not a doomsday scenario. Japan's economy is now recovering. So too will the western economies (eventually).

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A few thoughts -

OP - if you haven't done so I think you probably need to get some advice from an IFA. You need to ensure that your savings are working as hard as possible for you. Apologies if you're already doing this.

I'd like to say that if it hadn't already been mentioned I was going to make the point about economic migrants. If there's a recession they will simply go to the countries where they consider the best prospects to be.

I agree that there are probably quite a few people in this country who are sitting tight waiting for house prices to become more realistical, be they FTB, STRs or anyone else. I think most of these people aren't hardcore 'I'll wait till prices have dropped by a minimum of 50%' type, they are likely to be people who will get into the market at the point they feel most comfortable and that's just how it should be because trying to predict the bottom of the market is as silly as trying to predict the top.

However, I do believe that no matter how many people are sitting tight waiting there are 1000s upon 1000s more who have stretched themselves beyond their means (both in terms of huge mortgages (with potential interest rate rises to further compound their pain) plus other debts) and their predicament would put any HPC into previously unchartered territory. Of course, the longer they waited before buying or more recently they moved up the ladder the more difficult their problems might be and the same goes for the johnny-come-lately BTL merchants. Many of them will be like rats off a sinking ship when they see their potential equity levels plummet and when sentiment turns. If these two groups (the skint and the amateur BTL) were to rush for the exit at roughly the same time who knows what might happen...............

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About the coming crash leading everyone to a never-ending depression, that's so balloney. The crash will happen, and after a couple of years, things will come back to normal as they always do and this boom and crash will be history. Life will go on as usual.

For those who loose thier jobs early in a reccession (as I did last time) , you will find it will last more than a couple of years before things look anything like rosy again, a reccession as measured by the government is re their measure of GDP growth, for real people a 2 year reccession lasts for about 5 - 6 years, this is how long it takes for unemplyment to realy drop and mainstream optimism to return. However the good news is that a deep reccession is when fortunes are made, use your cash pile to buy up what ever asset looks realy cheap (property?) You will of course need more cash savings to do this cause during a reccession the banks wont be lending anything like 95% mortgages, so those of you with a couple of hundred thousand deposit now saved can snap up that currently 500K priced terrace for a snippet!

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The rain always falls on the just and the unjust. We all have to pay for Gordon's years of irrational exhuberance but soome will pay more than others and some should have realised that the economic cycle marches on regardless of Iron Chancellors and illusions of miracles.

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If unemployment reaches 3 million (as it did in the last recession) there will still be a large number of people employed.

there are already 5 million on out of work benefits. Strip away Gordo's "pump priming" of the economy (debt funded growth, government and consumer) and some would argue that we are already in recession. When the funding for this dries up, it will become painfully apparent.

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  • 302 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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