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The U K's Ersatz Recession

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That's how it seems to me at present.

The media spin has been "tighten your belt" but people are not tightening it because as yet they really have to, only because they feel somewhat, slightly worried enough, to do so.

I see no signs of a recession except slight numbers up at discount stores.

Was stuck on the M25 yesterday and was on many an A-road to the M25. Saw a procession of top priced cars sat in the traffic in the adjacent 3rd lane on the M25 (J23 approx) that looked like a feature for Top Gear.

Whether on credit or earnings, Britons - those who've done well in some way - seem very prosperous.

Witness the new or 07 sports cars shooting past me, including a red Lamborghini, on the A roads yesterday. (Being in my Bentley and with a full NCD, I always pull back to the left and let them go.) Witness the young ladies doing the Bohemian Rhapsody like Wayne's World in a red Corsa yesterday as they overtook me at their 80mph.

Britons ain't REALLY feeling the pinch, at least down here in the South East and London.

Well, that's how it seems to me.

So it looks like an ersatz recession at the moment. If and when the real wave hits it's going to be very, very different.

But if things mill pond along as they are now property price falls will be gentler and less steep for the time being.

Common sense says property is way over-priced, that the whole thing is built on illusion and credit, but common sense as chickens coming home to roost seems to be some way off yet from really affecting the masses and the property market in a way which seriously suggests that all ambition by BTLers and prop speculators is ground to dust.

I hope to be wrong, I should add. But looking around at some prosperous-looking places and new cars on the roads yesterday, I'm not wrong yet.

Edited by The Last Bear

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Totally agree.

Drive a year 2000 W-reg. Quite often play the game of spot the older car when out and about - it can take hours! And this is in Glasgow not the South East.

Where do all the new cars come from, and where do all the old cars go? Second hand cars seeme to have no value now once more than about 3 years old?

Do all the folks driving about in 50 grand machines have their mortgages paid off and their pensions all sorted out? I wonder!?

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That's a great way to describe it, 'ersatz recession'.

I particularly like all these 'make do with leftovers' articles popping up in papers like the Telegraph and Guardian.

They're obviously written by well-heeled 'middle class Marthas' (not my phrase, coined by a friend who is one!) about how to make shellfish soup out of the £7 cockles they bought at Waitrose as a tasty before-supper-snack, or the recipes that suggest using 'standard' cupboard leftovers like tahini and that spare tin of caviar you'd been keeping at the back of the larder...

The UK has a LONG way to go before the middle classes experience real poverty. I do feel extremely sorry for the not-middle-class-middle-England people who are going to suffer though - where £7 has to feed a family for several days, not buy half a meal that then gets chucked in the bin!

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Major Job losses, which I beleive are just around the corner, will cause a few problems and we can move out of the denial stage.

Many of my clients are cutting right back, some in advance of slower sales, others because of slower sales.

In a recession, of course, there are still many thousands of individuals with cash that can take their pick of the bargains, but there will be many more crushed under the weight of their debts, falling real salaries and job losses.

And officially, we are still growing!

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So there aren't any poor people in SE Ingerland who are feeling the pinch? Gimme a break! Mill pond along????? Are you retired? Or perhaps you work in the public sector? Take off the blinkers.

Edited by gruffydd

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Witness the young ladies doing the Bohemian Rhapsody like Wayne's World in a red Corsa yesterday as they overtook me at their 80mph.

Britons ain't REALLY feeling the pinch, at least down here in the South East and London.

Well, that's how it seems to me.

Even when people have less money they don't have any less fun, apart from the ones who really get pulled underwater in a recession.

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Most people have no choice but too get a new car. The 3/4/5 year deals on their previous cars have ran out.

So they either have to..................

1. pay back the balance ( Typically half the value of the car when purchased but they have no cash saved )

2. Hand the car keys back ( But they have no cash as a deposit for a new car. Life is not worth living without a car :lol: )

3. Sign up to another 3/4/5 years credit on a new car. ( They have been paying £200/300/500 a month for the past few years, so although things are a bit tight at the moment, the VI's are telling us it will be alright in a few months :blink: )

4. Buy a second hand car ( See points 1 and 2, they have no cash to buy it with. And think of the shame of driving around in a 5 year old car :lol: )

The way I see it, most sheep will choose option 3. I walk past a ford dealership most days and its always packed full of people signing on the dotted line for credit.

People have no cash, full stop. They live from pay packet to paypacket. Its quite frightening really :unsure:

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In terms of performance cars I can assure you the situation is dire - there will always be very wealthy people who can buy a new top of the range Ferrari for cash, but the bulk of sales have fallen away - my local dealership called me in January to see if I was interested in a ltd edition because the person who had ordered it couldn't get finance - I was told even then that sales had plummeted

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That's a great way to describe it, 'ersatz recession'.

I particularly like all these 'make do with leftovers' articles popping up in papers like the Telegraph and Guardian.

They're obviously written by well-heeled 'middle class Marthas' (not my phrase, coined by a friend who is one!) about how to make shellfish soup out of the £7 cockles they bought at Waitrose as a tasty before-supper-snack, or the recipes that suggest using 'standard' cupboard leftovers like tahini and that spare tin of caviar you'd been keeping at the back of the larder...

The UK has a LONG way to go before the middle classes experience real poverty. I do feel extremely sorry for the not-middle-class-middle-England people who are going to suffer though - where £7 has to feed a family for several days, not buy half a meal that then gets chucked in the bin!

Hope you saw the absolute classic in last Saturday's Telegraph - a 'leftover' recipe that involved the shells of five lobsters :lol:

The writer had to call leftovers 'les restes' - because (as she put it) they could at least sound sexy in French.

Best laugh I had all weekend.

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I just served home made roasted tomato soup and organic bread for the family and I.

My daughter asked me if we "were paupers".

I'm so proud. :lol:

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The UK has a LONG way to go before the middle classes experience real poverty. I do feel extremely sorry for the not-middle-class-middle-England people who are going to suffer though - where £7 has to feed a family for several days, not buy half a meal that then gets chucked in the bin!

Very true.

Major Job losses, which I beleive are just around the corner, will cause a few problems and we can move out of the denial stage.

....

And officially, we are still growing!

Very much in the denial stage, with a nod to the "tighten belt" warnings. I don't think they can comprehend what it could all mean. It's rather like watching people row backwards towards a precipice.

Even when people have less money they don't have any less fun, apart from the ones who really get pulled underwater in a recession.

Ah, I thought it was you in the back! Shoulder-length brunette, right? ;)

Most people have no choice but too get a new car. The 3/4/5 year deals on their previous cars have ran out.

...

The way I see it, most sheep will choose option 3. I walk past a ford dealership most days and its always packed full of people signing on the dotted line for credit.

Do you know, I never realised that deal thing before, I've never bought a car on credit, I don't really believe in it, but I suppose some people fear being socially excluded or breaking down if their car's old.

In terms of performance cars I can assure you the situation is dire - there will always be very wealthy people who can buy a new top of the range Ferrari for cash, but the bulk of sales have fallen away - my local dealership called me in January to see if I was interested in a ltd edition because the person who had ordered it couldn't get finance - I was told even then that sales had plummeted

Shame they don't spend the money on driving lessons, knob coming up the slip road on my left in his Porsche, I had to swerve out to the right or risk him side-swiping me. Do they do that deliberately? I can't believe anyone can drive that badly. Of course he disappeared into the distance at 100mph+.

I just served home made roasted tomato soup and organic bread for the family and I.

My daughter asked me if we "were paupers".

I'm so proud. :lol:

:lol: I laughed so much a support bolt fell out my swivel chair!

Edited by The Last Bear

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Shame they don't spend the money on driving lessons, knob coming up the slip road on my left in his Porsche, I had to swerve out to the right or risk him side-swiping me. Do they do that deliberately? I can't believe anyone can drive that badly. Of course he disappeared into the distance at 100mph+.

I get bored with people in shite cars wanting to race me at traffic lights. Do they honestly think they would win if I gave a toss? Usually people in Mondeos and most types of Renault.

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Most people have no choice but too get a new car. The 3/4/5 year deals on their previous cars have ran out.

So they either have to..................

1. pay back the balance ( Typically half the value of the car when purchased but they have no cash saved )

2. Hand the car keys back ( But they have no cash as a deposit for a new car. Life is not worth living without a car :lol: )

3. Sign up to another 3/4/5 years credit on a new car. ( They have been paying £200/300/500 a month for the past few years, so although things are a bit tight at the moment, the VI's are telling us it will be alright in a few months :blink: )

4. Buy a second hand car ( See points 1 and 2, they have no cash to buy it with. And think of the shame of driving around in a 5 year old car :lol: )

The way I see it, most sheep will choose option 3. I walk past a ford dealership most days and its always packed full of people signing on the dotted line for credit.

People have no cash, full stop. They live from pay packet to paypacket. Its quite frightening really :unsure:

I bought a new car the other week...

Should have seen the guys face when I told him i was paying cash....

(got it for 40% off list with partex and haggling, plus the paying cash knocked a few bob off as well).

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3. Sign up to another 3/4/5 years credit on a new car. ( They have been paying £200/300/500 a month for the past few years, so although things are a bit tight at the moment, the VI's are telling us it will be alright in a few months :blink: )

For anyone without savings, those finance deals are a nasty trap... "Here, try this heroin. You can give it up any time you want".

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I bought a new car the other week...

Should have seen the guys face when I told him i was paying cash....

(got it for 40% off list with partex and haggling, plus the paying cash knocked a few bob off as well).

I know what you mean - bought my last one with cash, much to the surprise of the salesman and in-house financier!

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For anyone without savings, those finance deals are a nasty trap... "Here, try this heroin. You can give it up any time you want".

Indeed, the Rise and Fall of PCP, it'll be a documentary in a few years time. At the time of buying my last car it broke my heart to only buy the car I could afford to buy (1.6) rather than the one I could afford to lease (2.0 turbo)

Still, I'll have cheaper running costs and 'free' motoring during the recession, ersatz or otherwise :)

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Do you know, I never realised that deal thing before, I've never bought a car on credit, I don't really believe in it, but I suppose some people fear being socially excluded or breaking down if their car's old.

It is odd... I don't think it is any cheaper to own a second hand car from - say - 3-6 years old when compared with leasing a new car from brand new to 3-year-old... especially if you take into account deals that include free servicing; cheap/included insurance - and the fact that there's a warranty and breakdown cover to eliminate any expensive shocks... (such as, for me, when every two months, for most of a year, a £300-fitted oxygen sensor failed putting the engine-management into 'emergency mode' - requiring me to rent cars and take time out from work and generally be inconvenienced at great cost.)

My nearly new Avensis cost £11K @ 2years old - and has had maintenance bills (etc) totalling ~ £5,000 over 3 years... and depreciated to about £4K. (Including all incidental costs.)

That's a cost of about £4K per year. I can currently lease a brand new Avensis for £241 per month - all in - or an annual cost of £2892 - which means, from a cost perspective, that I'd have been better off leasing... plus I'd have been able to make any break-downs someone else's problem... plus benefited from a newer car design (possibly better fuel consumption, say) - plus that cost could be offset by interest on my capital which could have remained invested in an NS&I bond.

I go for owning my car by preference - mainly because it allows me to ignore the consequence of the ding someone gave it in a supermarket car park - and the scratch someone put into the drivers' door - etc. It allows me not to care about it - to treat it as a tool as opposed to a cherished possession... to throw stuff in it without worrying about wear and tear. I pay dearly for that privilege.

Leasing makes great sense if you prefer a newer to an elder car... providing you're willing to look after it... and don't expect it to suffer loads of cosmetic scrapes that you'd be happy to ignore.... and want one of the models for which there is a good deal.

I'd like my next car to be a 2006 Audi A3 2.0 - but they're still holding their values rather well.... maybe in a year or two's time. ;)

Edited by A.steve

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There is nothing quite like having that brand new car parked on your driveway.

The twitching of the curtains as the neighbours look in envy asking eachother I wonder how much he paid for that and making comments like "Oh it's alright for some' & "some people have got more money than sense".

For me it has to be a brand new car every 3 years just to rub the noses of the neighbours in it.

Far as I am concerned tough shit for all this you fail to prepare for you own future be prepared to fail..

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It is odd... I don't think it is any cheaper to own a second hand car from - say - 3-6 years old when compared with leasing a new car from brand new to 3-year-old... especially if you take into account deals that include free servicing; cheap/included insurance - and the fact that there's a warranty and breakdown cover to eliminate any expensive shocks... (such as, for me, when every two months, for most of a year, a £300-fitted oxygen sensor failed putting the engine-management into 'emergency mode' - requiring me to rent cars and take time out from work and generally be inconvenienced at great cost.)

My nearly new Avensis cost £11K @ 2years old - and has had maintenance bills (etc) totalling ~ £5,000 over 3 years... and depreciated to about £4K. (Including all incidental costs.)

That's a cost of about £4K per year. I can currently lease a brand new Avensis for £241 per month - all in - or an annual cost of £2892 - which means, from a cost perspective, that I'd have been better off leasing... plus I'd have been able to make any break-downs someone else's problem... plus benefited from a newer car design (possibly better fuel consumption, say) - plus that cost could be offset by interest on my capital which could have remained invested in an NS&I bond.

But... is not the cheapness of leasing predicated on cheap and easily available credit coupled with good residual values in a high consumption society? Especially the 'prestige' brands (BMW/Audi) who seem so much cheaper on the lease front. More 3s than Mondeos remember. Will that Avensis be £241 a month in 3-4 yrs time?

With the housing market, you the punter is left with the shortfall of negative equity. If the car market goes south, the future value was decided at purchase. Who takes a bath when cars are handed back and worth less than the original figures needed to make them add up?

What fate will car leasing see over the next few years?

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My nearly new Avensis cost £11K @ 2years old - and has had maintenance bills (etc) totalling ~ £5,000 over 3 years... and depreciated to about £4K. (Including all incidental costs.)

That's a cost of about £4K per year. I can currently lease a brand new Avensis for £241 per month - all in - or an annual cost of £2892 - which means, from a cost perspective, that I'd have been better off leasing... plus I'd have been able to make any break-downs someone else's problem... plus benefited from a newer car design (possibly better fuel consumption, say) - plus that cost could be offset by interest on my capital which could have remained invested in an NS&I bond.

Hmm let's work it out... Take a basic Avensis then, www.carselect.co.uk has a 4DR 1.8 new for £14,293.50. The deposit is £2,858.70 (20%), the amount of credit is £11,434.80 which works out as £250.35 a month. The final payment is £4,637.43. Total amount payable is £16,508.73.

What you're forgetting is that effectively you're paying an additional £79.41 a month (the deposit over 3 years), ignoring interest and inflation. So really its costing you £329.76 a month - but most people just look at the monthly figure quoted.

You're paying them £2215 in interest over 3 years. At the end of the 3 years you have a car with an effective value of £4637.43, so its cost you £11871.39 over 3 years.

Now compare to what you paid secondhand - £11K plus £5K costs with a resale value of £4K - total cost £12K over 3 years.

Umm, the figures are remarkably similar! Now I do think £5K servicing is a bit steep - I would have expected for a Japanese car a lot less, but the figures actually surprise me. Anyone find any flaws?

Edit: of course I forgot to include servicing costs for the new car. Still, it will be under warranty so they should not be much?

Edited by fumble

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That's how it seems to me at present.

The media spin has been "tighten your belt" but people are not tightening it because as yet they really have to, only because they feel somewhat, slightly worried enough, to do so.

I see no signs of a recession except slight numbers up at discount stores.

Was stuck on the M25 yesterday and was on many an A-road to the M25. Saw a procession of top priced cars sat in the traffic in the adjacent 3rd lane on the M25 (J23 approx) that looked like a feature for Top Gear.

Whether on credit or earnings, Britons - those who've done well in some way - seem very prosperous.

Witness the new or 07 sports cars shooting past me, including a red Lamborghini, on the A roads yesterday. (Being in my Bentley and with a full NCD, I always pull back to the left and let them go.) Witness the young ladies doing the Bohemian Rhapsody like Wayne's World in a red Corsa yesterday as they overtook me at their 80mph.

Britons ain't REALLY feeling the pinch, at least down here in the South East and London.

Well, that's how it seems to me.

So it looks like an ersatz recession at the moment. If and when the real wave hits it's going to be very, very different.

But if things mill pond along as they are now property price falls will be gentler and less steep for the time being.

Common sense says property is way over-priced, that the whole thing is built on illusion and credit, but common sense as chickens coming home to roost seems to be some way off yet from really affecting the masses and the property market in a way which seriously suggests that all ambition by BTLers and prop speculators is ground to dust.

I hope to be wrong, I should add. But looking around at some prosperous-looking places and new cars on the roads yesterday, I'm not wrong yet.

Why not just change your status to bull and be done with iy.

Every few weeks you start another thread along these lines. Face facts, it's slipping away for many just because you can't see it doesn't make it so.

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The way I see it, most sheep will choose option 3. I walk past a ford dealership most days and its always packed full of people signing on the dotted line for credit.

People have no cash, full stop. They live from pay packet to paypacket. Its quite frightening really :unsure:

Really? Do you pop in each time and check that's what they're signing? How do you know it's not an order form and they're paying with heard earned cash!?

Gotta lurve this forum... :lol::lol::lol::lol::lol:

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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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