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eric pebble

The Vi's Are Fighting Back With Yet More Drivel! Telegraph:

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A recipe for a recovery in UK house prices

Tracy Corrigan at the Telegraph writes her wishful thinking:


Note how the emails sent in after the article, once again, smash down this VI drivel.

This is just one which I liked:

"Honestly, the UK has gone so far down the path of money-for-nothing spivvery that it makes me weep. People should be able to own a house in proportion to their earning power, not in proportion to their ability to time a wildly fluctuating market or execute dog-eat-dog financial manoeuvring. The UK housing market has become a machine for transferring money from workers to speculators, and it has been ruining people's lives by curtailing their ability to engage in reliable long-term planning.

Posted by John Mack on August 1, 2008 6:00 AM"

Edited by eric pebble

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Other quote:

He thinks the mortgage-backed market is dead for the foreseeable future and that, since more than half of banks' existing mortgage-backed borrowings will need to be repaid over the next three years, the "shortage of mortgage finance will persist throughout 2008, 2009 and 2010."

That means mortgage approvals wont be going up in that time frame. Since £40bn from depositors is required to just to deal with the rollovers in older securities, approvals can only head lower.

And we all know what that does to house prices.

Any preditions for a 3% MoM fall later this year?


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This time round, I can predict with some certainty that the UK mortgage-backed market will eventually be revived, in some form. I can also safely say that this will not happen for some time, even if the Government helps out by further bolstering liquidity. But I'm not even going to try to pin down exactly when that revival will start.

Well, she's not really saying much. She's saying the market's stalled, aka dire.

If you look at auctions around the SE provinces, you can see even there in many cases it's getting like the 90s, with 70% unsold. Of course, some auctions I went to back then it was 99% or all unsold.

Basically her article is a Seinfeld article - about nothing new. Pretty much as this post is.

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Why is anybody surprised that articles like this appear?

Read the newspapers from last time, it seemed amongst the gloom, the recovery was always 'just around the corner'... all the way down to the bottom. I expect the same to happen this time.

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Can somebody have a crack at the post by 'Blawjaws' near the top. I'm sure he's talking crap but I just can't come up with a pithy counter argument.

Actually the last two sentences are very good.

Supply and demand and ability to pay is the problem with the supply argument used by BlawJaws. House pricing is not a how-many-people-to-how-many-properties problem. Flip the argument on its head. Look at the massive house building in spain, ireland and US, none of these huge amounts of construction contained the boom there, why do we think more houses here are the answer. It was only when affordability became a problem that houses fell.

House prices in the long run are all about access to capital, either in wages or through credit. If a thousand people want to buy a single mars bar, but none of them have more than £1 to spend on it. That Mars bar is still £1 at the market rate.

Hope that helps.

Edited by thedebtisreal

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  • 401 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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