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B B C: U K At The " Tipping Point"


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http://news.bbc.co.uk/1/hi/business/6168793.stm

Last Updated: Friday, 29 December 2006, 00:05 GMT

New year could see debt 'tipping point'

By Julian Knight
Personal finance reporter, BBC News
Money could get very tight for some in 2007
The coming year could see hundreds of thousands of UK consumers suffering a debt "tipping point", a leading debt campaigning charity has told the BBC..../
And this, in Mr Gibbons words, could create a damaging "snowball effect" for the whole economy.
"People struggling with their debt repayments put their properties up for sale," he said. "This in turn increases supply and reduces house prices.

2007 is looking good folks. :)

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2007 is looking good folks. :)

One thing I dont understand from you lot is the glee with which you look forward to this.

Do you plan to profit from a housing crash?

Or is it that your ego is in a fragile state because you have been banging the drum for 3 years and have been wrong so far.

I share the sentiment of most and believe we are nearing the end of the road. I do question some on here who are whipping themselves into a perverse excitement that others will suffer. You are implying that every home owner in the UK is a greedy bar steward who has mortgaged his house 4 times this year to buy a new Audi.

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One thing I dont understand from you lot is the glee with which you look forward to this.

Do you plan to profit from a housing crash?

Or is it that your ego is in a fragile state because you have been banging the drum for 3 years and have been wrong so far.

I share the sentiment of most and believe we are nearing the end of the road. I do question some on here who are whipping themselves into a perverse excitement that others will suffer. You are implying that every home owner in the UK is a greedy bar steward who has mortgaged his house 4 times this year to buy a new Audi.

Just the fact that some have mortgaged their house to buy Audi is very worying. This atitude should dissapear, houses are places to live not piggy banks.

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Guest pioneer31

One thing I dont understand from you lot is the glee with which you look forward to this.

Do you plan to profit from a housing crash?

Or is it that your ego is in a fragile state because you have been banging the drum for 3 years and have been wrong so far.

I share the sentiment of most and believe we are nearing the end of the road. I do question some on here who are whipping themselves into a perverse excitement that others will suffer. You are implying that every home owner in the UK is a greedy bar steward who has mortgaged his house 4 times this year to buy a new Audi.

I can't speak for anyone else but I'm looking forward to the restoration of normality. I'm an FTB who saves hard, goes without things, drives a crap car etc. I look around and see recklessness rewarded and saving penalised. :angry: Yes, some people go OTT on here but what you need to remember is that many FTB's have been shut out in the cold for a long, long time We watch the media, banks, EA's and Gordon Brown gleefully crowing about HPI. They're all making a fortune out of other people's misery. We've had a gutful of property porn. Tell me, would you think it wrong to show programmes of people stuffing their faces to starving Africans.

HPI is damaging the country in all sorts of ways that most greedy, grabbing, vultures don't even realise. It's time for the wheel to turn.

I won't delight in the ordinary man getting clobbered

I will delight in the ruin of BTL, EA's and all the other avaricious scum who have helped me to put my life on hold for 10 years.

Edited by pioneer31
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Just the fact that some have mortgaged their house to buy Audi is very worying. This atitude should dissapear, houses are places to live not piggy banks.

Yep, the problem with Audis (and BMWs, Mercs, Fords...) is that they are a depreciating asset. You will still be paying for your new car 15-20 years later via the mortgage payments that are larger than they could have had. It is not very likely that you will be driving the car you borrowed the money for in 15-20 years..!

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HPI is damaging the country in all sorts of ways that most greedy, grabbing, vultures don't even realise. It's time for the wheel to turn.

I won't delight in the ordinary man getting clobbered

I will delight in the ruin of BTL, EA's and all the other avaricious scum who have helped me to put my life on hold for 10 years.

Too right. I'll never understand why people think a return to more affordable housing is a bad thing. When prices fall this is always good news. Homes are to live in not to profit from.

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One thing I dont understand from you lot is the glee with which you look forward to this.

Do you plan to profit from a housing crash?

Or is it that your ego is in a fragile state because you have been banging the drum for 3 years and have been wrong so far.

I share the sentiment of most and believe we are nearing the end of the road. I do question some on here who are whipping themselves into a perverse excitement that others will suffer. You are implying that every home owner in the UK is a greedy bar steward who has mortgaged his house 4 times this year to buy a new Audi.

I think many want to see the end to this disease known as HPI. It has created misery for hundreds of thousands through debt and consequential social problems including divorce, rising crime rates, alcohol addiction etc. It has sown the seeds of despair that will last a generation as the greed of the past 10 years will have to be paid for given that there is never something for nothing. Millions of young people are priced out of owning a home, second home buyers have devastated rural communities and economies and split families up as kids can no longer afford to live in the same town or village. Millions are indebted to shylock lenders and will be paying off debt for a generation or longer with the dodgy IO and "generational" mortgages.

HPI is a social and economic evil of the highest order many will be glad to see the back of it and its instigator, Gordon brown.

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One thing I dont understand from you lot is the glee with which you look forward to this.

Do you plan to profit from a housing crash?

Or is it that your ego is in a fragile state because you have been banging the drum for 3 years and have been wrong so far.

I share the sentiment of most and believe we are nearing the end of the road. I do question some on here who are whipping themselves into a perverse excitement that others will suffer. You are implying that every home owner in the UK is a greedy bar steward who has mortgaged his house 4 times this year to buy a new Audi.

It's not glee at seeing families in negative equity and I feel sorry for those who bought recently having believed what amounts of £billions of PR onslaught encouraging them to take on brutal debt to buy inadequate homes (although if your government keeps saying eating toxic sludge is good for you, there's a point where you'd have to be an idiot to believe them).

If they are families that bought years back and are now in debt trouble because they felt flush and wen on a splurge then screw 'em - all they did was collude with banks, albeit unwittingly, to create credit which has eroded the value of our money and created vast inflation and priced millions out of humble home ownership. Is it moral that the entire sum of monetary and political policy should be geared to helping debt-splurgers to the detriment of non-splurgers?

There are millions being asked to vast on vast loans and hand over a criminal protion of their income for a crap or merely so-so property with the threat of being priced out forever. To see that blackmail-based sickness of a state of affairs crumble could well provoke a gleeful reaction from many - and why not?

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Guest pioneer31

It's not glee at seeing families in negative equity and I feel sorry for those who bought recently having believed what amounts of £billions of PR onslaught encouraging them to take on brutal debt to buy inadequate homes (although if your government keeps saying eating toxic sludge is good for you, there's a point where you'd have to be an idiot to believe them).

If they are families that bought years back and are now in debt trouble because they felt flush and wen on a splurge then screw 'em - all they did was collude with banks, albeit unwittingly, to create credit which has eroded the value of our money and created vast inflation and priced millions out of humble home ownership. Is it moral that the entire sum of monetary and political policy should be geared to helping debt-splurgers to the detriment of non-splurgers?

There are millions being asked to vast on vast loans and hand over a criminal protion of their income for a crap or merely so-so property with the threat of being priced out forever. To see that blackmail-based sickness of a state of affairs crumble could well provoke a gleeful reaction from many - and why not?

Blackmail indeed. A generation has been held to ransom, whilst the govt have stood by and done absolutely nothing.

The same govt that bangs on about human rights, religious tolerance et al doesn't give a flying f**k about the injustice of letting greedy vultures gobble up a limited supply of housing. We must make sure that something as irrelevant as ticket touts are legislated against but housing can go and screw? What the hell are they smoking?

I'm still at a loss to understand why something so important as housing is left to the 'free market' whilst everything else is over-regulated and overprotected. We must stop the 'free market' when it comes to buying all sorts of goods - goods which have a limitless supply - from abroad but housing we'll leave alone. The UK has got it's priorities totally wrong.......and that's why it's the s**thole that it is fast becoming.

Edited by pioneer31
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I can't speak for anyone else but I'm looking forward to the restoration of normality. I'm an FTB who saves hard, goes without things, drives a crap car etc. I look around and see recklessness rewarded and saving penalised. :angry: Yes, some people go OTT on here but what you need to remember is that many FTB's have been shut out in the cold for a long, long time We watch the media, banks, EA's and Gordon Brown gleefully crowing about HPI. They're all making a fortune out of other people's misery. We've had a gutful of property porn. Tell me, would you think it wrong to show programmes of people stuffing their faces to starving Africans.

HPI is damaging the country in all sorts of ways that most greedy, grabbing, vultures don't even realise. It's time for the wheel to turn.

I won't delight in the ordinary man getting clobbered

I will delight in the ruin of BTL, EA's and all the other avaricious scum who have helped me to put my life on hold for 10 years.

Yeah totally agree with this post

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Blackmail indeed. A generation has been held to ransom, whilst the govt have stood by and done absolutely nothing.

They are hardly going to stand in the way of something that's kept them in power for 10 years

They'll use the excuse that they can't 'buck the market' - a market they've created by limiting housing supply through mass immigration and planning restrictions...

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Blackmail indeed. A generation has been held to ransom, whilst the govt have stood by and done absolutely nothing.

The same govt that bangs on about human rights, religious tolerance et al doesn't give a flying f**k about the injustice of letting greedy vultures gobble up a limited supply of housing. We must make sure that something as irrelevant as ticket touts are legislated against but housing can go and screw? What the hell are they smoking?

I'm still at a loss to understand why something so important as housing is left to the 'free market' whilst everything else is over-regulated and overprotected. We must stop the 'free market' when it comes to buying all sorts of goods - goods which have a limitless supply - from abroad but housing we'll leave alone. The UK has got it's priorities totally wrong.......and that's why it's the s**thole that it is fast becoming.

I'm with you totally on the supply issue, and this is something that I'm glad that we are starting to see/hear more of. I'm convinced that it's the lack of supply that is the main factor that has pushed prices up and is, for the moment, keeping them there.

I consider myself fairly well informed about politics etc., but as yet I'm not clear exactly where the fault lies (I'm sure someone will be along to enlighten me!). As I understand it, there is a year-on-year shortfall of around 120,000 homes being built. I live in a medium-sized village where every time a small parcel of land becomes available it is quickly developed (there are 14 houses being built right outside my front window - the occupiers of the bungalow that was formerly there sold up for a reputed £1m). So the problem surely must be with planning laws restricting the availibility of land. And yet, it seems to me that when the govt. tries to do something they are pilloried by the Nimbys and the Daily Mail contingent for "concreting over the South-East", etc. and and large scale development (eg the plan near me to build on the other side of the A1(M) near Stevenage) is dragged out for years with appeals and enquiries, meanwhile housing gets more and more expensive. Is there no political will to change the planning regime? Or is middle-England so addicted to HPI that the govt. fears the backlash that would result from increasing supply and therefore ultimately reducing house prices? Until the electorate as whole can be convinced that "Good news for homeowners - prices have risen 10% this year" is in fact nothing of the sort, then I cannot see the situation changing.

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I'm with you totally on the supply issue, and this is something that I'm glad that we are starting to see/hear more of. I'm convinced that it's the lack of supply that is the main factor that has pushed prices up and is, for the moment, keeping them there.

Simonstock, you're wrong to equate supply with bricks and mortar. All the evidence points to no shortage of bricks and mortar. Check out the recent threads on:

1) Low rents due to oversupply of rental property

2) Surprising numbers of rental properties standing empty (40% of new-build flats in Leeds, I can dig out the link if you want)

3) BTL reposessions due to low rents and void properties (Ditto re link)

4) House price bubble in America where there are far fewer planning restrictions (Ditto)

5) House price bubble in France where the population is falling (Ditto)

The "supply" that is scarce is people who want to SELL their house. This has nothing to do with shortage of bricks and mortar and everything to do with people buying & holding property for speculative reasons and renting it out when they might previously have sold. (See 1-3 above). HPI is a speculative phenomenon, nothing to do with planners, JCBs and builders!

Edited by Selling up
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Simonstock, you're wrong to equate supply with bricks and mortar. All the evidence points to no shortage of bricks and mortar. Check out the recent threads on:

1) Low rents due to oversupply of rental property

2) Surprising numbers of rental properties standing empty (40% of new-build flats in Leeds, I can dig out the link if you want)

3) BTL reposessions due to low rents and void properties (Ditto re link)

4) House price bubble in America where there are far fewer planning restrictions (Ditto)

5) House price bubble in France where the population is falling (Ditto)

The "supply" that is scarce is people who want to SELL their house. This has nothing to do with shortage of bricks and mortar and everything to do with people buying & holding property for speculative reasons and renting it out when they might previously have sold. (See 1-3 above). HPI is a speculative phenomenon, nothing to do with planners, JCBs and builders!

links please? I too agree with what has been said here but it is just an understanding, it would be nice to see figures/facts. If rental properties are standing empty then it will only be time before these investments are sold and when they are the "supply" will balloon and with no one wanting to step into the breach the prices will need to fall for the FTB's to step in

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Simonstock, you're wrong to equate supply with bricks and mortar. All the evidence points to no shortage of bricks and mortar. Check out the recent threads on:

1) Low rents due to oversupply of rental property

2) Surprising numbers of rental properties standing empty (40% of new-build flats in Leeds, I can dig out the link if you want)

3) BTL reposessions due to low rents and void properties (Ditto re link)

4) House price bubble in America where there are far fewer planning restrictions (Ditto)

5) House price bubble in France where the population is falling (Ditto)

The "supply" that is scarce is people who want to SELL their house. This has nothing to do with shortage of bricks and mortar and everything to do with people buying & holding property for speculative reasons and renting it out when they might previously have sold. (See 1-3 above). HPI is a speculative phenomenon, nothing to do with planners, JCBs and builders!

Read Fred Harrisons "Boom Bust" and analysis of Property cycles and the relationship between land prices and HPI before writing off the fact that the availability of developable land is non-consequential.

It is not simply about credit and speculative forces; they affect "capital". What about "land" and "labour". The inter-relationship between all three is what is important here.

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Simonstock, you're wrong to equate supply with bricks and mortar. All the evidence points to no shortage of bricks and mortar.

Leaving the supply and demand vs HPI argument aside for a moment. I think the political ideology here is the root of the problem. As usual with our present government we have the worst of both worlds.

In a good capitalist model, speculators and home buyers are free to buy and sell as much as they like creating demand, which is then supplied by developers freely meeting that demand by building new housing.

A good socialist model would mean that house building would be regulated to meet the needs of the people, and no one would be allowed to own more than they 'need' and therefore deprive others of a home.

What we have is a bastardisation of both ideologies mixed to create the mess that we're in.

Speculators can buy and sell as much as they want but building new housing is restricted and controlled even though the population of the country is rising.

IMO the housing crisis is a political timebomb waiting to go off. If no mainstream party addresses this fundamental problem, people will increasingly turn to the extreamist parties to find a solution. We even see evidence if this on this forum. It's worrying.

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The reason house price inflation hasn't fed through into general inflation is because the increase is all based on increased prosperity, not baseless money supply increases. Anyone 'left behind' is only so because they are incapable of keeping pace with normal decent hard working people who have taken part in this move forward. The economy always grows and house prices have to grow with it. Some people are just jealous and not willing to do any work and that's why they can't afford a house.

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The reason house price inflation hasn't fed through into general inflation is because the increase is all based on increased prosperity, not baseless money supply increases. Anyone 'left behind' is only so because they are incapable of keeping pace with normal decent hard working people who have taken part in this move forward. The economy always grows and house prices have to grow with it. Some people are just jealous and not willing to do any work and that's why they can't afford a house.

REAL general inflation ('cost of living') is running HIGHER than HPI

Wages are not keeping up with either - hence 2/3 of borrowing is now MEW - to supplement peoples virtually static wages

Anybody taking out a new mortage will be constantly have to increase the debt through MEW to bridge the gap between the real 'cost of living' and their relatively static income

Anybody without a home or is unwilling to MEW will see a drop in the their standard of living as real general inflation outstrips their wages

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I can't speak for anyone else but I'm looking forward to the restoration of normality. I'm an FTB who saves hard, goes without things, drives a crap car etc. I look around and see recklessness rewarded and saving penalised. :angry: Yes, some people go OTT on here but what you need to remember is that many FTB's have been shut out in the cold for a long, long time We watch the media, banks, EA's and Gordon Brown gleefully crowing about HPI. They're all making a fortune out of other people's misery. We've had a gutful of property porn. Tell me, would you think it wrong to show programmes of people stuffing their faces to starving Africans.

HPI is damaging the country in all sorts of ways that most greedy, grabbing, vultures don't even realise. It's time for the wheel to turn.

I won't delight in the ordinary man getting clobbered

I will delight in the ruin of BTL, EA's and all the other avaricious scum who have helped me to put my life on hold for 10 years.

Very well put too.

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:angry:

The reason house price inflation hasn't fed through into general inflation is because the increase is all based on increased prosperity, not baseless money supply increases. Anyone 'left behind' is only so because they are incapable of keeping pace with normal decent hard working people who have taken part in this move forward. The economy always grows and house prices have to grow with it. Some people are just jealous and not willing to do any work and that's why they can't afford a house.

Possibly the worst post I've read on here for a while. What is it that makes you think that because you own property you work harder than those who don't?

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:angry:

Possibly the worst post I've read on here for a while. What is it that makes you think that because you own property you work harder than those who don't?

I agree. This is a speculative bubble generated by excessive lending. I can see no connection with hard work.

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The reason house price inflation hasn't fed through into general inflation is because the increase is all based on increased prosperity, not baseless money supply increases. Anyone 'left behind' is only so because they are incapable of keeping pace with normal decent hard working people who have taken part in this move forward. The economy always grows and house prices have to grow with it. Some people are just jealous and not willing to do any work and that's why they can't afford a house.

the reason houe price inflation hasn't fed into the inflation figures is primarily because it isn't included in the figures - the rpi includes mortgage payments which can fluctuate dependent upon how loan is repaid - it doesn't reflect the actually price of the house - if everyone moved to an interest only mortgage with no repayment vehicle i.e. reducd their monthly payment, then that would actually have the effect of reducing inflation despite house prices having doubled in 5 years

as for your 'hard working' argument - the average 'hard working' person is having to pay double what they would have 5 years ago so your argument doesn't really add up

i would insult you but i suspect you would be too stupid to understand

Edited by the end is nigh
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people who have taken part in this move forward. The economy always grows and house prices have to grow with it. Some people are just jealous and not willing to do any work and that's why they can't afford a house.

And you are just an idiot!

Edited by rondy
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The reason house price inflation hasn't fed through into general inflation is because the increase is all based on increased prosperity, not baseless money supply increases. Anyone 'left behind' is only so because they are incapable of keeping pace with normal decent hard working people who have taken part in this move forward. The economy always grows and house prices have to grow with it. Some people are just jealous and not willing to do any work and that's why they can't afford a house.

Under this high and mighty ideal, how do you account for those who havent previously been in a position to 'keep pace'? Until recently I have been studying and not earning so purchasing has not been an option. However I am totally priced out of the market inspite of a good job and salary. How would you propose I should have been keeping pace with the market?!

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