Thursday, June 5, 2008

The same old story

Tempus analysis: Deja vu

For most homeowners, house price crashes are still synonymous with the early nineties. Halifax is keen to point out amid its latest dire house price figures that the economic conditions in the 1990s and today are very different. Interest rates are lower today, at 5 per cent. In 1989, they were as high as 15 per cent for a short period, and did not fall to around today's levels until 1994. Unlike the 1990s, unemployment today is still relatively low. Halifax says these factors "support housing valuations".

Posted by housebear @ 02:19 PM (810 views)
Please complete the required fields.



7 thoughts on “The same old story

  • Dave The Box says:

    More interesting is:

    “The figures speak for themselves. House prices have fallen by 6.6 per cent in the first five months of this year, wiping more than £13,000 off the price of an average home. In the worst year of the nineties crash, prices fell by 5.2 per cent. ”

    Yes it is different this time, it’s worse, MUCH worse!

    Reply
    Please complete the required fields.



  • In Defence of Currency

    is one possible reason why the BoE may have to put up rates.

    Reply
    Please complete the required fields.



  • Such benign economic conditions and still we have a HPC. Makes you wonder what it’ll be like when the jobs and economy really start to head south.

    Reply
    Please complete the required fields.



  • yorkshireman says:

    @ harold. I agree and looking back to the 1990’s the mortgage market was fairly strictly controlled at 3.5 times salary. Nothing like the absurd ratios you see today .

    Reply
    Please complete the required fields.



  • I love this quote of 15% that they always trot out. Now i maybe wrong but my recollection was (and i was trading short sterling at the time) that Lawson shadowed the DM from the late 80s (at about 3DM = £1) this then approx. became the official rate for the snake or the ERM (which was designed as a precursor to the Euro) . At around 92 things fell apart and the UK rates were raised to support the pound against the DM.

    For one day i recall rates raised intra-day to 15%. The WORST the rate short sterling was discounting was 10%. The 15% though held until the end of the day when Lamont then announces withdrawal of us from the ERM. Rates plumet over the next few months and the stock market goes through the roof. So the 15% had no affect on the actual rate.

    Now i suppose i should have looked at some websites to back this up, but i do remember someone i know (well really knew of i dodnt know him) bought out of the money Short Sterling calls @ 00.05 and as the rates plumeted he sold the – scale up – for up to 03.50. he had 100 lots. To be honest at the time i thought he was bonkers because i really did think the tories would support the currency with as they had said “whatever it takes”.

    So much for that.

    Reply
    Please complete the required fields.



  • surely, the 15% / 5% rate argument is only valid if the mortgages were of the same size…?

    Reply
    Please complete the required fields.



  • debt free – yes or to be more accurate the size of the mortgage relative to incomes all other things being equal. I was just pointing out that the 15% number is c*ap to start with.

    Reply
    Please complete the required fields.



Add a comment

  • Your email address is required so we can verify that the comment is genuine. It will not be posted anywhere on the site, will be stored confidentially by us and never given out to any third party.
  • Please note that any viewpoints published here as comments are user´s views and not the views of HousePriceCrash.co.uk.
  • Please adhere to the Guidelines

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes:

<a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>