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David Smith At It Again


Antsy
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Sunday Times Economics Editor David Smith told delegates at a major housing conference in Wales today that the UK was coming out of the longest period of economic growth ever seen but was not about to face a recession or a house price crash.

Housing professionals at the Chartered Institute of Housing (CIH) Cymru annual conference in Cardiff heard the leading economist's assessment that "the housing market is integral to the UK economy" and that demand for housing was outstripping modest rises in house building figures. David Smith said that despite a slow down in house prices, a rise in the cost of borrowing and a cut in the supply of mortgage products by around two thirds, "we should not over-do the gloom".

Quoting a "strong and unusual rise in house prices" over the past ten years where average prices had gone from £60,000 to £180,000, Mr Smith said, "house prices would have to fall quite a lot before we saw the return of negative equity".

Peter Williams, Executive Director of the Intermediate Mortgage Lenders Association, also speaking at the CIH event, emphasised the differences between the UK market and the United States, whose problems with sub prime lending have led to the credit crunch. In the UK sub prime lending accounts for around 6% of the mortgage market, rather than around 20% in the USA. Tighter lending criteria in the UK, a lack of tax relief on mortgages and generally higher interest rates than the USA, made the picture very different in this country, he said.

Hmm, so according to his wisdom, little negative equity is likely. Has he never heard of MEW? People made packet on paper, but sadly huge numbers pi***d it all away on bling. Anyway, house prices are static and falling, mortgage bills are rising and there's no new money to feed the market. David - given all this news, at what point DO people have the right to start 'doing the gloom'? Armageddon? Even then he'd be running through the streets shouting 'it's just a blip'. As for the 'strong and unusual rise' in prices... David, for the last time it's called a BUBBLE, geddit?

Edited by Antsy
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Quoting a "strong and unusual rise in house prices" over the past ten years where average prices had gone from £60,000 to £180,000, Mr Smith said, "house prices would will have to fall quite a lot before we saw the return of negative equity".

I've helped him out by fine tuning his speech. Tosser.

Edited by dazednconfused
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I have spent years reading David Smith. Reason being that I want to see him write something more than superficial. For years I have been disappointed. He is the most laughed at economics correspondent among those of us in the wholesale financial markets...

And I imagine, he is up against some pretty stiff competition.:)

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The same David Smith who said oil would be about 50 bucks a barrel now thinks negative equity is unlikely?

Try telling that to someone who bought a flat in Manchester city centre last year on a 100% mortgage, Dave.

Or, in about 6 months, to ANYONE who bought on a 100% deal in the last year...

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housing is central to the Uk economy.

He may be right:

1. Housing creates no wealth of its own.

2. Its value is held up by puff and spin

3. nobody beleives things can get worse than they already are.

4. Values only ever go up.

5. If anything happens, gordon will step in and save it.

Sounds much like it IS the UK economy. :lol:

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My favourite Smith quote:

There are two things one should bear in mind about the housing market. One is that mere mention of a slowdown brings the “crash” obsessives out in force, their latest ammunition being the problems in the American sub-prime market. That has as much relevance to Britain’s housing market as the baseball world series has to whether Chelsea or Manchester United will win the Premiership.

http://www.economicsuk.com/blog/000484.html

It just shows how little he, or many of the other rent-a-quote economists that populate our media, actually understood about the situation they were commenting on.

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Sunday Times Economics Editor David Smith told delegates at a major housing conference in Wales today that the UK was coming out of the longest period of economic growth ever seen but was not about to face a recession or a house price crash.

Housing professionals at the Chartered Institute of Housing (CIH) Cymru annual conference in Cardiff heard the leading economist's assessment that "the housing market is integral to the UK economy" and that demand for housing was outstripping modest rises in house building figures. David Smith said that despite a slow down in house prices, a rise in the cost of borrowing and a cut in the supply of mortgage products by around two thirds, "we should not over-do the gloom".

The guy is a c0ck...

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