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adrian777uk

Article In The Sunday Telegraph Today

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I'm pretty upset after reading this in the telegraph today ...

http://www.telegraph.co.uk/opinion/main.jh...8/03/do0301.xml

Surely, if that £50bn injection earlier this year made hardly a dent then this plan won't help either? Does anybody else have any thoughts on this?

p.s. would have liked to have posted this on the news front page but still don't really understand how to. Somebody else can feel free to.

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At the risk of being accused of being a nutty conspiracy theorist....................I think Brown will try something like this. In February when the HPI numbers started going negative he said he would do "anything necessary to get house prices moving again" . He didn't specify a direction, but we know what he meant. So I would expect some extravagant scheme to use public money in order to stimulate the housing market and move prices upwards. I also suspect that recent headlines in the Express and others about soaring house prices next year are politically driven. Government doesn't have to be fair, or even competent; they just need to get a commons majority in 2010 which means keeping about 40% of the population happy. If 40% of people are worried about falling house prices and negative equity then HMG are quite likely to magic up a windfall for them, even if it is at the expense of everyone else. They will do it in 2008-2009 because they can't leave it any later with a 2010 election looming.

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How can the Government guarantee mortgages?

They are shtting bricks over future pension liabilities, and even now are having to consider tax hikes for CURRENT expenditure in the falling economy.

Fear not, they cant do it. The SIV scam has failed, only a fool would try it again.... Then again.....

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At the risk of being accused of being a nutty conspiracy theorist....................I think Brown will try something like this. In February when the HPI numbers started going negative he said he would do "anything necessary to get house prices moving again" . He didn't specify a direction, but we know what he meant. So I would expect some extravagant scheme to use public money in order to stimulate the housing market and move prices upwards. I also suspect that recent headlines in the Express and others about soaring house prices next year are politically driven. Government doesn't have to be fair, or even competent; they just need to get a commons majority in 2010 which means keeping about 40% of the population happy. If 40% of people are worried about falling house prices and negative equity then HMG are quite likely to magic up a windfall for them, even if it is at the expense of everyone else. They will do it in 2008-2009 because they can't leave it any later with a 2010 election looming.

Which only delays the evil day when the fall occurs.

But GB doesn't care - he will hand over in 2011 to Balls who will use the UK economy to demonstrate a whole new meaning to Balls-up.

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PROPPING UP ASSET VALUES - very difficult

========

Dont forget, now that the peak is in, it will be very difficult to prop up property values.

Prices now want to go to a level where it is cheaper to Buy than Rent- ie Yields are above Rates.

Thus, any asset proppping measure is simply a temporary measure to hold value for a fw months

or maybe a year or two. in a desperate hope that incomes and rents will rise somehow.

If you read yesterday's FT them you know the really bad news: in London, rents are falling!

This will make the asset propping exercise even more difficulty and FUTILE

Dr Bubb,

Surely, when all of this is done and dusted, the "real" peak would have been summer 2005?

Any bounce since then has really been marginal and will just have made the bust worse. The i/r cut in Summer 2005 was the "temporary" holding measure designed to sustain value that you talk of?

The reason that I say this, is because ive read on here a couple of times in the last month that people are expecting a "bull trap" at some point. Surely the Bull trap was Dec 2005 to June 2007?

Incomes and rents never really rose and now we are in free-fall? Comments from those more informed welcome....

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If they do this I will have to immigrate, and I suspect that 100s of thousands would do the same.

Shafted by HPI and shafted by government intervention resulting in decades of even higher taxs, along with a lower standard of living. No thanks!

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Politicians will do anything to keep themselves in Power and in a job.

....but they can't defy gravity forever.

Due respect to the Conversatives back in 92 when they won a general election on the back of a bust by being honest with the electorate:

"Yes it hurt, yes it worked" was the catchphrase of the day I seem to remember (although I was a young 'un a the time!).

See Japan for their "lost decade" for the policies of how NOT to deal with a bust, (those that want i/r's cut right down - take note).

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If it was possible to stop a crash, no crashes would ever have happened :rolleyes:

Yep, 2 problems I see with "SLS"

1 Lenders still have to be willing to lend, when the economy crashes lenders will not want to lend the 90% low IR mortgages required to keep prices sky high.

2 Borrowers willing to borrow, as above.

If neither side wants to take up the risk, then no amount of credit offered by gov will help.

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If it was possible to stop a crash, no crashes would ever have happened :rolleyes:

Not too sure what you mean.

A crash / bust is part of a natural Economic cycle. There is no doubt about that.

The mistakes that are made are when Government (unless pressure from the Electorate) don't accept the bust, and try to re-inflate....which just prolongs the bust when it arrives.

As I say, see Japan....0% i/r's in their attempt to re-inflate, but gravity wanted to deflate, so their economy went through a decade long bust.

Over simplistic I know......anyone care to offer an alternative view?

Edited by Notlongnow

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And of course, its not that Banks dont "want" to lend.

Thats what they do, they convert illiquidity into liquidity.

The problem is they cannot lend in the lax way that people have become used to.

They need capital to lend at all, they are righting off BILLIONS which makes is hard for them to loan, and when they do, they need the loan to be pretty damn safe.

Setting up a UK Fannie would be very unpopular at a time when the highly established Fannie in the US is insolvent.

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For so many reasons this is just a pile of nonsense. The financial experiments the banks have been involved in have failed. No doubt all the banks would like the government to re-cycle some of their toxic debt, but for this to allow a return to the type of lax lending required to re-inflate the housing bubble? No way, not even in your deepest crack fuelled dreams. The mention of social engineering is laughable, yes it has happened big style under Liebour, but Broon has failed the first hurdle of how to win friends and influence people, he is UNATTRACTIVE to voters! he has even been dubbed a "vote repellant". You have to bring the people along with you before you socially engineer them! It is over. This type of article IMO just trys to counter the negative sentiment which will be felt by the sheeple as banks keep announcing new and astounding losses. It tries to pretend that "they" the government have the power to change the course of something as unstoppable as this housing crash. Don`t make me ******ing laugh!

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And of course, its not that Banks dont "want" to lend.

Thats what they do, they convert illiquidity into liquidity.

The problem is they cannot lend in the lax way that people have become used to.

They need capital to lend at all, they are righting off BILLIONS which makes is hard for them to loan, and when they do, they need the loan to be pretty damn safe.

Setting up a UK Fannie would be very unpopular at a time when the highly established Fannie in the US is insolvent.

We have one, it`s name is spelt B. R. O. O. N.

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Sunday 26 JUL 1992 - The Sunday Times - House prices continue to drop as Major studies rescue plans

The cuts in interest rates have not worked; the mortgage rescue package has failed; and the moratorium on stamp duty has done little to help. What can the government try now to rescue a housing market that seems bent on self-destruction? A report la...

Friday 09 MAR 1990 - The Times - Switch to poll tax 'may lift house prices 15%'

The switch from rates to poll tax could add 15 per cent to house prices nationally, according to research by the Institute for Fiscal Studies and the London Business School. It will also change the relative prices of houses in different areas, resea...

Wednesday 13 MAR 1991 - The Times - House prices predicted to rise 66% over five years

House prices in the UK are predicted to rise by an average of 66 per cent over the next five years as the housing market recovers from the slump through falling inflation and interest rates. The Housing Mortgage Corporation, in its latest house price...

Thursday 19 NOV 1992 - The Times - £750m buy-out unlikely to boost house prices

The government's Pounds 750 million plan to buy up empty property is unlikely to have much impact on the housing market. Housing associations, which are charged by the government to spend the money, have made it clear that they are unlikely to buy m...

Thursday 16 DEC 1993 - The Times - House price boom predicted for 1994

House prices will rise by 19 per cent across the country next year, and by 25 per cent in the prime areas of London, according to the research department of Savills estate agent. Savills accurately predicted a fall of 8 per cent for prime central Lo...

Thursday 09 NOV 1989 - The Times - House prices 'to rise'

Property prices in London, the south-east and East Anglia will recover next year and begin to increase by about 10 per cent a year, according to Morgan Grenfell, the merchant bankers, in a report on the housing market published yesterday. The recover...

Friday 17 NOV 1989 - The Times - House prices to recover next year

House prices are expected to reach a turning point in the third quarter of next year after a two-year decline, Charterhouse the merchant and investment banking group said yesterday in its annual study of the housing market. A week ago another firm of...

http://www.housepricecrash.co.uk/wiki/1988...paper_Headlines

:rolleyes:

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Thanks gfrolms, those headlines say it all, especially about the £750m buyout that obviously didn't have much effect at the time.

Other than that opinion seems pretty split on whether it would work. If it did then I and many others would be well and truly shafted.

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I am reconciled to the fact Brown will no doubt choose the option Cosby comes up with to stabilize the housing market at the tax payers expense. Its Browns only chance of winning the next election. Not so sure it would work though.

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Sunday 26 JUL 1992 - The Sunday Times - House prices continue to drop as Major studies rescue plans

The cuts in interest rates have not worked; the mortgage rescue package has failed; and the moratorium on stamp duty has done little to help. What can the government try now to rescue a housing market that seems bent on self-destruction? A report la...

Friday 09 MAR 1990 - The Times - Switch to poll tax 'may lift house prices 15%'

The switch from rates to poll tax could add 15 per cent to house prices nationally, according to research by the Institute for Fiscal Studies and the London Business School. It will also change the relative prices of houses in different areas, resea...

Wednesday 13 MAR 1991 - The Times - House prices predicted to rise 66% over five years

House prices in the UK are predicted to rise by an average of 66 per cent over the next five years as the housing market recovers from the slump through falling inflation and interest rates. The Housing Mortgage Corporation, in its latest house price...

Thursday 19 NOV 1992 - The Times - £750m buy-out unlikely to boost house prices

The government's Pounds 750 million plan to buy up empty property is unlikely to have much impact on the housing market. Housing associations, which are charged by the government to spend the money, have made it clear that they are unlikely to buy m...

Thursday 16 DEC 1993 - The Times - House price boom predicted for 1994

House prices will rise by 19 per cent across the country next year, and by 25 per cent in the prime areas of London, according to the research department of Savills estate agent. Savills accurately predicted a fall of 8 per cent for prime central Lo...

Thursday 09 NOV 1989 - The Times - House prices 'to rise'

Property prices in London, the south-east and East Anglia will recover next year and begin to increase by about 10 per cent a year, according to Morgan Grenfell, the merchant bankers, in a report on the housing market published yesterday. The recover...

Friday 17 NOV 1989 - The Times - House prices to recover next year

House prices are expected to reach a turning point in the third quarter of next year after a two-year decline, Charterhouse the merchant and investment banking group said yesterday in its annual study of the housing market. A week ago another firm of...

http://www.housepricecrash.co.uk/wiki/1988...paper_Headlines

:rolleyes:

Amazingly during this period there was very little about the Property Crash, there was no internet so it was very much by word of mouth so it began quite slowly. The Recession usually kicks in a couple of years after the boom has stopped. E.g the boom stopped 1988, panick started late 1990 about the Recession and layoffs ensued. Seems like nothing has changed.

I just love the above headlines and the first increase wasn't until 1996, it was dropping until this point even with the lowest interest rates ever and that was in London it took a couple of years to ripple out into the regions.

Its amazing its deja-vu all over again

Edited by joey

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Dr Bubb,

Surely, when all of this is done and dusted, the "real" peak would have been summer 2005?

Any bounce since then has really been marginal and will just have made the bust worse. The i/r cut in Summer 2005 was the "temporary" holding measure designed to sustain value that you talk of?

The reason that I say this, is because ive read on here a couple of times in the last month that people are expecting a "bull trap" at some point. Surely the Bull trap was Dec 2005 to June 2007?

Incomes and rents never really rose and now we are in free-fall? Comments from those more informed welcome....

In its purist sense, yes I agree. IR were used as the stimulant in Q4 2005 to keep prices going (much like you would inject adrenaline to keep a patient from dying). However, this no longer works as the patient has now built up a tolerance.

The only alternative to keep high house prices is to spend a huge sum of money to prop up the market indefinitely. This would be the biggest cheque ever written by a UK government in the domestic economic context, IMO. And sadly it is doomed to failure.

Think of it as moving the critical patient onto a respirator. The organs are failing, but you can maintain some sense of life whilst life-support is hooked up. Sadly this machine is metered. GB is next to it, but is running out of 50 pence pieces to put in it.

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So the Telegraph is suggesting that the government should try to keep house prices artificially high, for various reasons.

Delaying the inevitable for a while, maybe, but it will require ever increasing and vast amounts of money to prolong it for any length of time.

I doubt that it would increase transactions significantly except for the unwary buyer but it might in effect massage the price statistics.

The proposal doesn't consider the people who might buy when this ploy is in operation as it will inevitably fail and if the current crash is bad you won't have seen anything when such a scheme eventually goes under and the false support turns into an outright vacuum.

Talk about a rollercoaster :lol: .

From "no boom and bust" it's going to be boom! bust! boom! bust! and then some.

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If they do this I will have to immigrate, and I suspect that 100s of thousands would do the same.

Shafted by HPI and shafted by government intervention resulting in decades of even higher taxs, along with a lower standard of living. No thanks!

"immigrate " does that mean your still here but your not

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At the risk of being accused of being a nutty conspiracy theorist....................I think Brown will try something like this. In February when the HPI numbers started going negative he said he would do "anything necessary to get house prices moving again" . He didn't specify a direction, but we know what he meant. So I would expect some extravagant scheme to use public money in order to stimulate the housing market and move prices upwards. I also suspect that recent headlines in the Express and others about soaring house prices next year are politically driven. Government doesn't have to be fair, or even competent; they just need to get a commons majority in 2010 which means keeping about 40% of the population happy. If 40% of people are worried about falling house prices and negative equity then HMG are quite likely to magic up a windfall for them, even if it is at the expense of everyone else. They will do it in 2008-2009 because they can't leave it any later with a 2010 election looming.

I'm sorry man but you just don't get it.

The 3 main parties are in bed togeather playing good cop, bad cop.

That new Borris guy in London could had scrapped the congestion charge over night and yet he decided to run a publisity campaign about reducing crime.

Did you see any head roll over the WMD lies ?

Has Camron said he would reduce tax on petrol ?

No my guess is all you see is MP's passing new laws to protect themselves from any accouantability and awarding themselves bigger pay rises and more hidden perks.

100's of case need to go back to court because the law say people can not be anomious witnesses and yet no one has been sacked. Do you think it has anything to do with many MP's are lawyers or solicitors ?

If you want to see oposition to goverment then look at George galloway (Even if he's a dickhead)

Who gives a $hit if you are cow and are moved from one farmers field to another ! You should be looking to jump the fance and to be free.

Voting is all about maintaning the ilusion about democracy and it's fooling far to many people.

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Surely, when all of this is done and dusted, the "real" peak would have been summer 2005?

The reason that I say this, is because ive read on here a couple of times in the last month that people are expecting a "bull trap" at some point. Surely the Bull trap was Dec 2005 to June 2007?

It depends where in the country you are. In London the most spectacular gains were post 2005 and prices are still at least 50% higher than early 2006. i.e. we need a 25% drop just to get back to the prices we had then.

Edit: I meant a 33% drop.

Edited by thecrashingisles

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Even if prices could be stabalised then result is the same as MEW was pumping 8% into the high streets and static prices means that must return to zero and thats forgetting all the 8% that will need to be paid back.

The proposal doesn't consider the people who might buy when this ploy is in operation as it will inevitably fail and if the current crash is bad you won't have seen anything when such a scheme eventually goes under and the false support turns into an outright vacuum.

Spot on if you said this back in 2000-1 but now i think we are entering the second phase where we are going to get a bigger crash and little to nothing can stop it.

Run on banks are not as common as some people think and IMHO it's worth stashing some food just incase it goes into a ful blown meltdown.

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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% +
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      • Even
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      • up 5%



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