Thursday, September 7, 2006
BBC looks at UK/US housing markets
UK may avoid US-style housing pain
The once-mighty US housing market seems to be on the slide. Since the UK is seen as tending to follow the economic and cultural lead of the US, is the UK housing market now set for a serious downturn?
Posted by jessica @ 03:42 PM (603 views)
9 thoughts on “BBC looks at UK/US housing markets”
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Tenantfromhell says:
Unfortunately for those waiting for a housing crash, this may be true. The big difference between us and our US and Aussie peers, is our immigration policy.
The hordes waiting at the Romanian border will soon bouy up the housing market by generating a larger need than ever before for cheap rental property. Even if rental prices increase dramatically, six or eight to a house will easily accomodate that.
It may be a conspiracy theory but I believe that the government are aware of the effect that a housing crash will have have upon an economy and look in horror at recent events in Australia and parts of America. One method of staving off a potential slump is to create a large housing shortage that will maintain high house prices and support continued spending.
So, in short, mass immigration will shore up a housing economy that should have, by now, imploded! Those waiting to buy at more reasonable prices – don’t hold your breath!
Me? – At 46, divorced and of modest means? – I haven’t a hope! I am spending my money on building a little photography/videography business to earn loads of cash from those newly ‘wealthy’ house owners who can’t resist the urge to unlock their equity. When things do go bang – I will spend my cash on the many ‘fire-sale’ properties that are left when the Romanians, Poles and Lithuanians have gone home………..
Bfskinner says:
not suprising that the bbc would spin it this way, but I think the most important quote from it was
“But there is a scenario that if the US housing market was to crash, then there could be a knock-on effect on its economic performance, which in turn would negatively impact the UK and its housing market.”
BFS
Darren. G. C. says:
Theres an ‘old,old saying what goes up must come down!. and deffinately it will come down, it has done all the time since records began. Its funny but when things stay up no one will think it will come down, but when propertys from 1990 to 1999, no one was talking that they will go up. When finally there is somewhere to put your money that will see money going up ,people are like sheep and follow and their will be too many selling and not enough buyers and propertys will collapse. Also in ‘History you have got to take into account wars and the economic hard times! they always come eventually. Governments say with migrants helps the economy but there is a balance and someone looses out! look how poor Brazil is with 200million people. So sometimes please pinch yourself to know you are alive!.
devil's advocate says:
This looks like a valid piece, why are there no comments??
M&m says:
Cause its not what the bears want to hear. They wear blinkers over their ears.
George Monsoon says:
I’ve been too busy watching the Dollar gain in strength, pushing my mining shares through the floor :O(
The Bald Man says:
Evrything in this article suggest that the Uk is experiencing a property price bubble (first time buyers clubbing together, borrowing from parents). Very reminiscent of the previous bubble. The “economic miracle” (borrow from the future to generate growth) is coming to an end. The bubble will surely burst.
indiablue19 says:
DA said….
Alright, here goes. I do think that lack of supply, as we have all noted in the past, is a significant issue in much of the UK. What Archer may be missing is that the problem in the USA now isn’t really new. Many houses were sold with negative equity in the 1990s following the Savings and Loan crash. The house price issue is really viewed there as a more cyclical event; without expectations that the market will only go UP. Houses are more available and there is a fairly good expectation that nearly anybody can own one. Not so exclusive a product as in the UK. Also, a main point that Archer and the BBC may not be detecting is that the downturn doesn’t look especially localized. There seem to be many areas falling victim to the “maxed-out” credit syndrome. There is quite a stigma associated with bankruptcy in the USA. You won’t have credit again, at least for seven years. The surprising contrast is, that in the UK, overspent credit seems to make no impact whatsoever — no on the individual morally, nor on their future prospects to borrow again. Now four people buy a home together if one or two can’t afford. Now UK banks give 100% loans to immigrants who can’t know what they’re signing. Parents throw away their retirement for children’s first homes and children give up their futures to fund parents’ mortgages. It’s remarkable and quite stunning and I haven’t heard the like in the States at all. In summary, I think the two places have different attitudes through house market history, and are taking quite different risks on the future as matters deteriorate.
Cstanhope707 says:
Other point is affordablity when I worked in the States my Salary was double what it was here for the same job. The main problem here is going to be the fact that people are stretched to the limit with very little scope for IR increases due very poor wage and salary growth.
Lets not also forget that many people have taken out even further loans based using their property as security…
US mortgaes are also generally fixed longer term unlike here……