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Evening Standard - Anthony Hilton -

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For those that missed it, there was a good article in the Evening Standard this evening by Anthony Hilton the Financial Editor

Banks parallel universe has collided with reality

It reinforces what most of you have been saying here:

The UK economy is in so many ways a smaller version of the US that trouble looks impossible to avoid. We have the same personal debt mountain, the same house price bubble, the same heavy involvement of finance in the overall economy and the same absence of room to manoeuvre. We see trouble coming but we can't get out of the way.

As the banks cut back on lending, consumer spending will slow and growth will slump. As that pain spreads personally, bankruptcy will mount and we will be very lucky to avoid a plunge in house prices.

Fortunately I personally have access to one bank that will still give me credit.... the bank of Mum and Dad. ;)

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Fortunately I personally have access to one bank that will still give me credit.... the bank of Mum and Dad. ;)

I wouldnt be so sure... unless you have access to their balance sheets.... they could have some nasty subprime credit card debt or MEW you dont know about.

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The evening news on the tv made the point that in the last few years the US housing market is in deep trouble and having gone up 2X. Bit late in the day to be saying that.

Incredibly in the same time the UK house market has gone up EVEN MORE - 3X.

They think on the news that UK economy and house prices will definitely follow the US direction.

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Fortunately I personally have access to one bank that will still give me credit.... the bank of Mum and Dad. ;)

Gosh, they must be proud of you.;)

Cheers for the link.

You're not anyone now in financial journalism if you aren't calling financial Armagedon. Shame they weren't around to tell people not to buy a year ago (or 5 really).

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More good stuff from Mr Hilton, who must have the editors of the London property section of his newspaper tearing out whats left of their hair.

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it seemed curiously appropriate for a headhunter to say, as one did the other day, that two-thirds of the people working in the City had just received bigger bonuses this year than last, for their work in the past 12 months.
.....the problem with losses in the current crisis is when do you declare them ......they are there but can you find them ...?..suspect there will be more loss realisation from the crisis this year in the UK...than say last...... <_<

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Guest Charlie The Tramp
Fortunately I personally have access to one bank that will still give me credit.... the bank of Mum and Dad. ;)

Not this Bank of Mum and Dad, their Credit Crunch is far more deeper than the Global one.

Swim, if you can`t, then simply drown.

Our customer was warned, advised, but did not listen, hopefully the water temperature is warm enough to make it more comfortable. <_<

BTW pump up the bicycle tyres, oil the chain, and get cycling Norman Tebbit`s dad`s style.

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I wouldnt be so sure... unless you have access to their balance sheets.... they could have some nasty subprime credit card debt or MEW you dont know about.

Quite.

Plus if you're waiting for the 'right' time to buy, 'The Bank Of Mum & Dad' will probably have suffered some significant 'write-downs' of it's own by then.

Think inflation (the REAL one), devaluing pound, HP deflation...

Still, at least you may only need a £15k deposit by then. ;)

Tucksy

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I wouldnt be so sure... unless you have access to their balance sheets.... they could have some nasty subprime credit card debt or MEW you dont know about.

Oh the Bank of Mum and Dad is a very secure lender.

My dad is a retired bank manager (over 10 years ago) and has always been very prudent and cautious with money. I think in his career he saw so many people blowing their money that it made him more sensible. Saying that he believes prices will remain flat in London, something I disagree with.

It is my sister and I that are more of a concern. We both have fixed rates coming to an end in a couple of years time. I am just in shared ownership and can take in a lodger, but my poor sister has a one bedroom starter home and her mortgage is with Northern Rock. I think she might need an emergency bailout form the Bank of Mum and Dad in a couple of years.

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Oh the Bank of Mum and Dad is a very secure lender.

My dad is a retired bank manager (over 10 years ago) and has always been very prudent and cautious with money. I think in his career he saw so many people blowing their money that it made him more sensible. Saying that he believes prices will remain flat in London, something I disagree with.

It is my sister and I that are more of a concern. We both have fixed rates coming to an end in a couple of years time. I am just in shared ownership and can take in a lodger, but my poor sister has a one bedroom starter home and her mortgage is with Northern Rock. I think she might need an emergency bailout form the Bank of Mum and Dad in a couple of years.

Not sensible enough to prevent you from committing financial Hari Kiri.

shared ownership is the devil's own **** I am afraid. A sign of the top of the last bubble in 88-89.

You absolutely have my sympathy and I am afraid that the banking industry, newspapers, government and Property programmes have helped to stitch up the younger generation. :(

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Incredibly in the same time the UK house market has gone up EVEN MORE - 3X.

Well actually -- in many areas nearer 4 x at the peak -- but - weirdly - the meedja isn't reporting the reality already out there -- a general 10-15% drop ALREADY in house "prices"....

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Guest An Bearin Bui
Oh the Bank of Mum and Dad is a very secure lender.

My dad is a retired bank manager (over 10 years ago) and has always been very prudent and cautious with money. I think in his career he saw so many people blowing their money that it made him more sensible. Saying that he believes prices will remain flat in London, something I disagree with.

It is my sister and I that are more of a concern. We both have fixed rates coming to an end in a couple of years time. I am just in shared ownership and can take in a lodger, but my poor sister has a one bedroom starter home and her mortgage is with Northern Rock. I think she might need an emergency bailout form the Bank of Mum and Dad in a couple of years.

Run on the Bank of Mum and Dad!!

Get out while you can - protect yourselves! This is 100% correct. Guaranteed.

Seriously though, aren't you just a little ashamed to be taking money off your 70+ father (assuming that age if he retired 10 years ago)? Presumably he's worked his whole life to build up a good pension and solid funds so I'm puzzled as to why you assume he should just stump up the cash to bail you or your sister out of any financial problems.

It's not really something to boast of: "my financial situation's just fine because I have an elderly father I can go to for money any time I like". I'm puzzled why you think your dependency on an elderly, retired parent is something to be proud of or happy about. :blink:

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In the process they built a monstrous inverted pyramid of speculation and borrowing - and of course commission - which balanced precariously on only the smallest wedge of genuine economic activity. Now it is beginning to fall, it is a very long way down.

Good line that. I would even say its the simplest way of illustrating eventual deflation, but l shant risk summoning the "Unpartial" lesser daemon of the gold realm.

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Guest AuntJess
More good stuff from Mr Hilton, who must have the editors of the London property section of his newspaper tearing out what's left of their hair.

:lol::lol::lol:

and why not? Why should they get away without developing a stomach ulcer the size of Derbyshire? The rest of us have been driven to the wall...it's their turn now. :lol:

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Guest X-QUORK
Run on the Bank of Mum and Dad!!

I'm puzzled why you think your dependency on an elderly, retired parent is something to be proud of or happy about. :blink:

Bloody good point.

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Bloody good point.

Nah, they have it piss easy compared to us youngsters.

My dad hasn't worked since the miners strike started (when he was 40), my mum was a low level civil servant - most she ever earned was 17k, retired a few years ago. They've got a fully paid for 3 bed detached bungalow, go abroad at least 6 weeks a year and have started to pass money down the generational gap, because they don't need it. It's unthinkable that someone with an average job today would be in this poisition - they'll still be working when they're 70.

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Well actually -- in many areas nearer 4 x at the peak --

I think they were using overall averages but indeed there will be areas where the increases are much higher.

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Well actually -- in many areas nearer 4 x at the peak -- but - weirdly - the meedja isn't reporting the reality already out there -- a general 10-15% drop ALREADY in house "prices"....

Completely right. We are already seeing a drop of 10% for those that want to have any hope of selling. I'm monitoring the lower end of the market (150k and below) using Property Bee.

The number of flats for sale in Birmingham is frightening....alot have already dropped by 5/10k. Guess what: alot of these are being sold with "no onward chain" and photos show they are empty...I wonder why that is?!

Some areas (such as Tamworth) Ive seen 100 new instructions in a little over a 7 weeks.

Some FTB's may see this as bargain time...I see it as meltdown.

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Run on the Bank of Mum and Dad!!

Get out while you can - protect yourselves! This is 100% correct. Guaranteed.

Seriously though, aren't you just a little ashamed to be taking money off your 70+ father (assuming that age if he retired 10 years ago)? Presumably he's worked his whole life to build up a good pension and solid funds so I'm puzzled as to why you assume he should just stump up the cash to bail you or your sister out of any financial problems.

It's not really something to boast of: "my financial situation's just fine because I have an elderly father I can go to for money any time I like". I'm puzzled why you think your dependency on an elderly, retired parent is something to be proud of or happy about. :blink:

Sorry, what I was saying was tongue in cheek. I will be much clearer next time. Perhaps my sense of humour doesn't translate well to Forums, or I need to select a more appropriate smiley face icon.

I haven't asked or taken money from my parents except for a small amount my family and my wife's family offered when we half bought our home in 2005 and they helped get me through university about 10 years ago. They also used to give me pocket money when I was a child :P (again this is my sense of humour don't get upset anyone!)

To put this in context my parents had help from their parents when they first bought a home and many of my friends had similar help when they first bought. I am sure I will do the same for my children.

My parents actually recently offered money as they wanted us to move to a nicer area, they spent a lot on my sisters wedding and wanted the amount they gave us both to be even. I declined.

My wife and I love our home (maybe not the area!) and I have prepared for negative equity. The half that we rent (we actually only own 40%) is set well below market value. We actually have a bigger home than we could afford if we were renting because of this and as we are hoping to start a family we have decided we will be living where we are for quite a long time. In our case it is a home, not an investment. If the prices fall by around 30% I will only be around 8 - 10K in negative equity. We can also cope with large rises in interest rates. Job losses would cause problems longterm.

We actually are playing the system a bit as we have a lodger (which is allowed in our agreement), which covers the half we rent. So basically, being very open here, we have around an 80K mortgage, and we live in a two bedroom house in London. A fall might actually not be a disaster for us as (if mortgages are available) as we could buy the other half of our house when the market hits rock bottom. Of course it isn't as good a deal as if like some people here we had waited before buying anything.

As mentioned above, I think it is my sister that is more exposed and will need help. I am sure my parents would help her, we are after all a family. I would try and help her as well, depending on my financial situation. If one of us has a problem we don't just say, that is your own stupid fault and leave them to go turning tricks in Soho :unsure:

Just to clarify I am in no way dependent on elderly parents (My Dad retired early and really isn't an old man in that way anyway).

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Not this Bank of Mum and Dad, their Credit Crunch is far more deeper than the Global one.

Swim, if you can`t, then simply drown.

Our customer was warned, advised, but did not listen, hopefully the water temperature is warm enough to make it more comfortable. <_<

BTW pump up the bicycle tyres, oil the chain, and get cycling Norman Tebbit`s dad`s style.

not exactly a chip off the old block then? :unsure:

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Sorry, what I was saying was tongue in cheek. I will be much clearer next time. Perhaps my sense of humour doesn't translate well to Forums, or I need to select a more appropriate smiley face icon.

I haven't asked or taken money from my parents except for a small amount my family and my wife's family offered when we half bought our home in 2005 and they helped get me through university about 10 years ago. They also used to give me pocket money when I was a child :P (again this is my sense of humour don't get upset anyone!)

To put this in context my parents had help from their parents when they first bought a home and many of my friends had similar help when they first bought. I am sure I will do the same for my children.

My parents actually recently offered money as they wanted us to move to a nicer area, they spent a lot on my sisters wedding and wanted the amount they gave us both to be even. I declined.

My wife and I love our home (maybe not the area!) and I have prepared for negative equity. The half that we rent (we actually only own 40%) is set well below market value. We actually have a bigger home than we could afford if we were renting because of this and as we are hoping to start a family we have decided we will be living where we are for quite a long time. In our case it is a home, not an investment. If the prices fall by around 30% I will only be around 8 - 10K in negative equity. We can also cope with large rises in interest rates. Job losses would cause problems longterm.

We actually are playing the system a bit as we have a lodger (which is allowed in our agreement), which covers the half we rent. So basically, being very open here, we have around an 80K mortgage, and we live in a two bedroom house in London. A fall might actually not be a disaster for us as (if mortgages are available) as we could buy the other half of our house when the market hits rock bottom. Of course it isn't as good a deal as if like some people here we had waited before buying anything.

As mentioned above, I think it is my sister that is more exposed and will need help. I am sure my parents would help her, we are after all a family. I would try and help her as well, depending on my financial situation. If one of us has a problem we don't just say, that is your own stupid fault and leave them to go turning tricks in Soho :unsure:

Just to clarify I am in no way dependent on elderly parents (My Dad retired early and really isn't an old man in that way anyway).

I'm glad you've shared that with us. Now we know you better you don't seem quite such a feckless young shaver, a-sponging off the elderly. But there's a lot of that type out there - so our continued vigilance must be the order of the day.

As Alexander Pope once wrote:

And while I live, no fool or noble knave

Shall walk this world, in credit, to his grave

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The evening news on the tv made the point that in the last few years the US housing market is in deep trouble and having gone up 2X. Bit late in the day to be saying that.

Incredibly in the same time the UK house market has gone up EVEN MORE - 3X.

They think on the news that UK economy and house prices will definitely follow the US direction.

So since 1997 we have Price X x3. Now we get 3X * 90% (10% price fall) so we're still at 2.7X, hardly cheap is it ?

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  • 297 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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