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Prices Could Drop Another 30% Back To 2003 Level

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Guest pioneer31
"Professor Blanchflower, who joined the Bank in June 2006, is calling for interest rates to be cut sharply to avert a deep and painful recession"

Surprise!!!

'We can't just sit and do nothing as we have done for too long

Nice of you to own up..........finally!

Edited by pioneer31

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BOE member states prices could drop ANOTHER 30% taking prices back to 2003 level,Blunt talking from BOE.

http://www.dailymail.co.uk/news/article-10...mber-warns.html

It's Blanchflower however - no doubt wants some more ammo for his interest rate cuts.

OTOH, is it possible Blanchflower was a bear all along and has just been trying to mitigate the effects of the crash?

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The assessment from David Blanchflower, a member of the Bank's interest rate-setting committee, would mean about £55,000 being wiped from the value of the average home, currently £180,350.

Blanchflower's still way off the mark as this would still mean the average house still costs £125,350. :blink::blink:

This is going to be a 60% plus crash. He must know this but doesn't want to frighten the punters that much......yet.

Average Salary is, lets say, £25,000 so 3.5 multiple is £87,000 + 10% Deposit of £8,700 = £95,700. This outlook is AT BEST.

It will probably be around 80-85k for an average property when we reach the bottom IMO.

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Could fall 30% and more than likly will fall further or do people think 2003 was afordable cus i sure as hell didn't

3.5 X income less MIRAS less Stealth taxes less mega high energy prices would indicate we need to get back to 1990's figures

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Blanchflower's still way off the mark as this would still mean the average house still costs £125,350. :blink::blink:

This is going to be a 60% plus crash. He must know this but doesn't want to frighten the punters that much......yet.

Average Salary is, lets say, £25,000 so 3.5 multiple is £87,000 + 10% Deposit of £8,700 = £95,700. This outlook is AT BEST.

It will probably be around 80-85k for an average property when we reach the bottom IMO.

I think we are in for serious falls, but I think you are over egging it. 10% deposit is really not very much, especially when that is only £8,700. On average, there is more than one income going towards the mortgage. Its very difficult to talk averages though, and no dooubt there will be examples of the falls you talk about. This is before factoring in inflation, which will mask nominal falls to a degree at least.

Edited by worzel

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"Professor Blanchflower, who joined the Bank in June 2006, is calling for interest rates to be cut sharply to avert a deep and painful recession, instead preferring a hyperinflationary meltdown."

Corrected it.

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Guest DissipatedYouthIsValuable

I'm all for ethnic diversity, but can we get rid of a few of these Yanks?

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Blanchflower's still way off the mark as this would still mean the average house still costs £125,350. :blink::blink:

This is going to be a 60% plus crash. He must know this but doesn't want to frighten the punters that much......yet.

Average Salary is, lets say, £25,000 so 3.5 multiple is £87,000 + 10% Deposit of £8,700 = £95,700. This outlook is AT BEST.

It will probably be around 80-85k for an average property when we reach the bottom IMO.

But this ignores joint incomes, so average salary is a bit misleading. When you think of all the working couples, then actually call it average household income it will be pushed up into the lower £30k's I should imagine. I can't see it going as low as 60% (although I hope it does) as there will be lots rejoining the housing market by the time it gets to say 40%. Who knows though?

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Blanchflower's still way off the mark as this would still mean the average house still costs £125,350. :blink::blink:

This is going to be a 60% plus crash. He must know this but doesn't want to frighten the punters that much......yet.

Average Salary is, lets say, £25,000 so 3.5 multiple is £87,000 + 10% Deposit of £8,700 = £95,700. This outlook is AT BEST.

It will probably be around 80-85k for an average property when we reach the bottom IMO.

your assumption relies on the fact that someone on an average salery should be able to afford an average house. don't think that's ever been the case in the uk - there's always a large number of people in social housing, and a portion of society living with parents etc who will be on minimum wage. it also assumes the average person will only buy one house in their lifetime - if first time buyer of 25 got on the ladder, 25 year mortgage, they'll have paid approx 50% of the equity off in 15 years (rough estimate), so by the age of 40. this will (by your figures, assuming inflation is 0%) then give them a deposit of £52,200, plus £87k mortgage would give them £139,200 - 14k more than the drop mentioned by blanchflower. this is ignoring joint mortgages and the average income != average house owner

I'm not saying housing isnt overpriced, but I think that figures derived this way are way off the mark.

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Guest DissipatedYouthIsValuable
your assumption relies on the fact that someone on an average salery should be able to afford an average house. don't think that's ever been the case in the uk - there's always a large number of people in social housing, and a portion of society living with parents etc who will be on minimum wage. it also assumes the average person will only buy one house in their lifetime - if first time buyer of 25 got on the ladder, 25 year mortgage, they'll have paid approx 50% of the equity off in 15 years (rough estimate), so by the age of 40. this will (by your figures, assuming inflation is 0%) then give them a deposit of £52,200, plus £87k mortgage would give them £139,200 - 14k more than the drop mentioned by blanchflower. this is ignoring joint mortgages and the average income != average house owner

I'm not saying housing isnt overpriced, but I think that figures derived this way are way off the mark.

I know something. Having waited until my mid-30s to get a house, I'm going to be a complete **** over the price.

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I'm all for ethnic diversity, but can we get rid of a few of these Yanks?

Does Blanchflower really exist?

Or is he a media/MPC joint construct designed just to flame us 'ere?

EDIT:- I'm missing sodding words out again. I wonder why I'm angry?

Edited by Laura

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Does Blanchflower really exist?

Or is he a media/MPC joint construct designed just to flame us 'ere?

I've watched video of him giving evidence... it was about unemployment figures - he was admitting that he had expected that they would be worse - but that he still expected them to deteriorate.

He annoys the hell out of me with his ultra-dove perspective - but at least he is only one... providing John Gieve doesn't vote with him... and the pair don't manage to sucker-in a few of the members with more balanced views. I wonder if he knows that he will be out-voted - hence allowing him to play politics?

I think his dire predictions are accurate - I just think that the situation would be even worse in the UK if his recommendations were implemented - not better.

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Okay, everyone is on the 50% bandwagon now. I am going to raise my forecast to 60-70%! That should take us to somewhere around 2000-2001.

Come to think of it, we may revert back to the previous crash low. 1995? In order for that to happen we would have to have a severe credit crunch, several banks failing, a massive increase in unemployment, a dose of carry trade problems, a sterling crash and a forced general election. Oh, hang on...............................

Edited by Realistbear

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It certainly could back to the 95s level. I didnt believe it before, but the likelyhood seems greater now.

At least we had manufacturing back then. I look around now - all those factories are now replaced with housing developments.

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When they vote together to cut rates he changes from 0.25% to 0.50% reduction, why? . It makes no difference because every other member is on 0.25%.

Is he just ******ing around or something?

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It certainly could back to the 95s level. I didnt believe it before, but the likelyhood seems greater now.

At least we had manufacturing back then. I look around now - all those factories are now replaced with housing developments.

IIRC Gordon allowed our manufacturing base to shrink 20% on his watch. He believed that HPI-MEW-BTL and the service industries that would spin off therefrom would render manufacturing a relic of the past. "Services" would be the new economy under New Labour for a New world of ever rising House prioces and limitless supplies of money from inflating prices.

Gordon has not only sold off the silver, he has sold off the gold reserves and our ability to recover through exporting manufactured goods.

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It certainly could back to the 95s level. I didnt believe it before, but the likelyhood seems greater now.

At least we had manufacturing back then. I look around now - all those factories are now replaced with housing developments.

I agree it was always said we had to keep a balance of manufacturing and service industries for the country to survive, we have gone to far towards relying on the service industry.

It was Maggie who started the destruction of our manufacturing and self sufficiency in energy supplies and this lot carried on from her, Now look at us we are at the mercy of several different countries for our energy who we are paying through the nose for energy.Now they are panicing and we have to rely on a windy day to keep the lights on, maybe they should put a few wind turbines outside the houses of parliment theres plenty of wind from there from more than one source.

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Okay, everyone is on the 50% bandwagon now. I am going to raise my forecast to 60-70%! That should take us to somewhere around 2000-2001.

Come to think of it, we may revert back to the previous crash low. 1995? In order for that to happen we would have to have a severe credit crunch, several banks failing, a massive increase in unemployment, a dose of carry trade problems, a sterling crash and a forced general election. Oh, hang on...............................

I'll go higher I'll say 75-85% :P

However seeing as we have no manufacturing base any more it might be even worse. Still at least we'll have our golden boys in the City to get us out of it.

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Of course the key thing here is that 30-35% is now mainstream.

Every paper, every TV programme has reported 30-35%, now I guess that means only an idiot would put an offer in that didn't try to knock 30-35% off the asking price, though this would probably have the effect of causing vendors to unnecessarily add 20% to the price, but any buyer can argue from the point of price history - "look house on this road were worth £400k in Summer 2007, so by my reckoning they are now only worth £280k as they will be 30% lower than that by 2009."

That means houses are now worth 30-35% less already, so I expect further falls.

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Blanchflower's still way off the mark as this would still mean the average house still costs £125,350. :blink::blink:

This is going to be a 60% plus crash. He must know this but doesn't want to frighten the punters that much......yet.

Average Salary is, lets say, £25,000 so 3.5 multiple is £87,000 + 10% Deposit of £8,700 = £95,700. This outlook is AT BEST.

It will probably be around 80-85k for an average property when we reach the bottom IMO.

Don't agree with this thinking. £125,350 is not too high, it's roughly in line with the long run 2.4%pa increase. 3.5 x average salary +10% deposit should not buy an average house! It should buy a starter home then after a decade or two of repayments and a couple of moves one might expect to find oneself in an average house.

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However seeing as we have no manufacturing base any more it might be even worse.

The UK is the 6th largest manufactuing economy in the world.

2006 - Manufacturing in US Dollars

United States		   $1724bn China				   $1096bn Japan					$929bn Germany				  $620bn Italy					$313bn United Kingdom		   $308bn France				   $275bn Brazil				   $231bn Republic of Korea		$216bn Canada				   $213bn Spain					$178bn Russian Federation	   $163bn Mexico				   $136bn India					$130bn Indonesia				$103bn Netherlands			   $85bn Australia				 $84bn Turkey					$83bn Taiwan Province of China  $76bn Thailand				  $62bn

United Nations Statistics Division

Edited by clv101

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I sense a downing street poll titled "People elected to the Bank of England's monetary policy commitee should be UK residents only" coming on. Anyone up for it?

Edited for spelling

Edited by symo

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  • 399 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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