Tuesday, Dec 08, 2009

November Index

Halifax: +1.4 % MoM -1.6 % YoY

Commenting, Martin Ellis, housing economist, said:
"House prices increased by 1.4% in November. This was the fifth successive monthly rise with prices more than 4% higher over the first eleven months of the year.
The recovery in house prices since the spring has been driven by increased demand for property, largely due to the improvement in affordability for existing homeowners and first-time buyers who can raise the necessary deposit.
Somewhat higher demand has combined with a low level of properties available for sale to push up prices. Further ahead, the prospects for the market will depend on how the UK economy evolves and whether there is a significant increase in the supply of properties for sale. Overall, our view is that house prices will be flat during 2010."

Posted by phdinbubbles @ 09:15 AM (3606 views)
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1. wdbeast said...

From yesterday's forecasts;

Crunchy said "Christmas draws near +1.3%. It's good for shopping."

I declare Crunchy the one with the most foresight.

Tuesday, December 8, 2009 09:31AM Report Comment

2. mrflibble said...

So where does this leave us gents? Have we now become the crazy uncle nobody listens to?

Tuesday, December 8, 2009 09:33AM Report Comment

3. smugdog said...

Its good to start a new post on this subject, we can then forget how wrong the "experts" were on the previous post, except Crunchy that is. You are special Crunchy!

Tuesday, December 8, 2009 09:37AM Report Comment

4. p. doff said...

Smugsy, you are starting to take this site too seriously. It affects a lot of bloggers that way with continued use!!!

Tuesday, December 8, 2009 09:44AM Report Comment

5. a saver said...

But they can put interest rates up now and stop QE.

Tuesday, December 8, 2009 09:46AM Report Comment

6. smugdog said...

Imagine tumbleweed blowing acorss a dusty empty road with just the whistle of a distant breeze. There you have it - HPC.

Tuesday, December 8, 2009 09:49AM Report Comment

7. mystie010 said...

This country has gone mad! I've given up the hope of ever owning my own home. I'm going to buy a nice car instead :-) HPC is over guys I think we should just accept it and move on. The powers that be are hell bent on keeping the bubble going and there isn't anything anyone can do about it. We were right that there was going to be a crash but we just had no idea about how much this market was going to be manipulated. In some respects there is no point in trying to second guess this market because it has become abundently clear that this is a waste of time as the natural course of events are not ever being allowed to play out. My advice - buy the smallest pad you can do it up and flog it at profit and benefit from rising prices. If you can't beat 'em join 'em. I still enjoy coming to this website but as far as a HPC is concerned I have thrown in my towel.

Tuesday, December 8, 2009 09:52AM Report Comment

8. smugdog said...

Mystie, step this way, I think I have the very place for you. But I think we will have to increase the price slightly, extremely sought after you know.

Tuesday, December 8, 2009 09:56AM Report Comment

9. nomad said...

Hats off to crunchy and his prediction, but smugdog let's not ignore the logic behind it - "Good for shopping".

Manipulation, manipulation, manipulation.

Tuesday, December 8, 2009 10:05AM Report Comment

10. Mrflibble said...

6. smugdog - Imagine tumbleweed blowing across a dusty empty road with just the whistle of a distant breeze.

I'm imagining... Is this the UK you speak of as every graduate leaves this island of overpriced houses and heads overseas for a better life?

Tuesday, December 8, 2009 10:05AM Report Comment

11. mrflibble said...

6. smugdog - Imagine tumbleweed blowing across a dusty empty road with just the whistle of a distant breeze.

I'm imagining... Is this the UK you speak of as every graduate leaves this island of overpriced houses and heads overseas for a better life?

Tuesday, December 8, 2009 10:06AM Report Comment

12. waitingfor hpc said...

guys - this is just stats - cooked up to look good!
I am getting reduced houses on the market all the time in kent. There are no price rises where i am looking. and as for this smugdog i think he should be called ' wishfull thinking'
I am viewing a house that has been on the market for 2 YEARS it started at £500,000 and is now up for £434,500. And i am told they will take offers........THE HOUSE PRICE CRASH IS HAPPENING NOW - THE PAPERS AND INDUSTRY ARE JUST NOT TELLING US!

Remember an avearge of 110,000 home sold in the boom years, that figure is now 48000. So less than 50% of house sales compared tyo when prices were rising! Labour are the mastets of spin and these figures by the lenders are full of spin.

Tuesday, December 8, 2009 10:08AM Report Comment

13. Basil said...

Big Johny Davis is predicting a 10 -15% drop in house prices next year, calculating this against his past predictions and reality = a 20% rise!! Thats a bit bullish Johny! By the way I will be round to see you on xmas eve to pick up my rent money.

Tuesday, December 8, 2009 10:09AM Report Comment

14. hpwatcher said...

HPC will come, it's just that UK plc will need to go bust first - which is a real possibility.

This is due to 2 things:-

1. The volumes are very low

2. Low interest rates

3. The governement are basically stopping the banks from reposessing any houses

Tuesday, December 8, 2009 10:11AM Report Comment

15. hpwatcher said...

sorry, 3 things....

Tuesday, December 8, 2009 10:11AM Report Comment

16. nomad said...

mystie@7. "My advice - buy the smallest pad you can do it up and flog it at profit and benefit from rising prices."

Steady now, you're turning into Kirsty.

The markets will have the last word and this extended bubble will burst. From yesterdays Money Morning four reasons why property prices are set for long term decline:

1. Unemployment is going to rise for a while yet

And that's the problem - that September job statistic looks like a false dawn. Even Alistair Darling confessed recently that, “unfortunately, unemployment will continue to rise for a while”.

2. Home loan approvals are still low

The second reason is home loan availability – or rather the lack of it. Housebuilder Bellway said last week that it expects half-year sales to be up 10% on last year. But the firm is still worried that potential home buyers can’t get their hands on loan finance.

Last week’s Bank of England figures showed that home loan growth is running at an annualised rate of less than 1%. OK, October saw a modest uptick in home loan approvals. But approvals are still 40% lower than their long-term, pre-credit crunch average. What’s more, says Seema Shah at Capital Economics, they’re 30% lower than the monthly level which history suggests is required for sustained house price rises.

3. Low interest rates won't last

A third reason to be wary is interest rates. Today’s record low levels are helping millions of homeowners with their loan repayments – for now. But that’s unlikely to last for too long.

Add this to the double whammy of rising job losses and lending curbs, and UK house prices could suffer a lot more damage. Why’s that? Because when house prices were rising sharply, many homebuyers seriously overextended themselves. Their borrowings were much too high as a multiple of their incomes.

The only thing that’s keeping them in their homes right now is the temporary reprieve granted by those record low rates. But as Jean-Pierre Husband at credit ratings agency Fitch notes, over two-thirds of UK borrowers are now on floating rate home loans (ones that change as underlying rates change, unlike fixed rates). That compares with under half in August 2008. “Their ability to service existing debt would be adversely affected by any hike in interest rates”, he says.

In other words, higher loan costs would mean a big rise in borrowers falling behind with their repayments. That in turn would cause a surge in repossessions. And an extra dose of cut-price properties would then hit the market – and values, too. So far prices have only fallen by about 13% from their 2007 peak. But Fitch sees that drop extending by at least another 20%.

4. The supply of homes is set to surge

And finally, we come to the last big argument put up by housing bulls – that there’s a ‘lack of supply’ which is keeping prices climbing. Clearly, even if there aren’t many buyers around, if almost no one’s selling, prices must rise.

But that too could be about to change in a big way. And not just because of rising repossessions – though that won’t help. There’s something on the horizon even more worrying for property bulls.

“There are big changes in the offing which could have a significant effect on the property market”, says Lorna Bourke on Citywire. “The ‘baby boomers’ of the 1940s and 1950s are now reaching age 65 and coming up to retirement. Many intend to use their homes to subsidise this by selling up and downsizing”.

Over 1.3m over-50s plan to cash in on their properties for retirement purposes, says new research from insurer LV=. This implies more than a million properties coming onto the market over the next few years. Many of these will be in upper price brackets where, supposedly, there’s currently a shortage. So even if many of the ‘downsizers’ buy back into the market at cheaper price points, the amount of money about to be extracted from UK housing will be huge.

In a nutshell, this completely blows the ‘lack of supply’ case right out of the water.

Add this all up, and it’s very hard to see how UK house prices can avoid falling into a long, and painful, decline.

Tuesday, December 8, 2009 10:18AM Report Comment

17. Maddison said...

Basic economics. Demand and Supply. There is little demand but even less supply. Supply is low simply because of low interest rates and banks not repossesing...

Tuesday, December 8, 2009 10:20AM Report Comment

18. Basil said...

Waiting for a HPC have you thought that the asking price of the house was WAY to much in the first place. Consider this..... a bed sit in the roughest part of Bradford is on the market for £500,000 it doest sell (suprise) so the owner reduces it by £450,000 (huge house price crash) you (the idiot buyer) "this property has been hit by the crunch and prices are gonna fall and unemployment blah, blah, blah" offers £40,000 "cos your clever" does this meen that bed sits in Bradford have fallen 92%?

Tuesday, December 8, 2009 10:21AM Report Comment

19. alan said...

@ mystie,
"The powers that be are hell bent on keeping the bubble going".

Yes, that's true. It's also true that this government is telling everyone there is a painless way out of its current difficulties. I don't believe this to be the case. Certainly educated economists don't.

All around I know of people with reduced wages, lost jobs. Savers returns are chopped to almost nothing by unsound banks. Not exactly a recipe for posterity and growth going forward, which is what is required for healthy house price growth!

A HPC has been averted by putting the whole country at risk.... That's fabulous, Gordo! The wheels could come off the economy anytime.

Tuesday, December 8, 2009 10:21AM Report Comment

20. ontheotherhand said...

I don't have an updated chart, but we're on month 28 compared to the last crash. Why do people always expect things to move in a straight line?

Tuesday, December 8, 2009 10:29AM Report Comment

21. paranoia blue said...

We are merely, still, in an asset-bubble blowing state!
Stand by your beds, this isn’t going to be a gentle pop, but a catastrophic explosion!
The only question: Will they detonate in series, or concurrently?

Tuesday, December 8, 2009 10:30AM Report Comment

22. mrflibble said...

14. nomad.

This is all well and good but if the currency continues to fall during this housing decline then surely we are just kidding ourselves that a crash is actually happening? Brown has successfully kicked the hpc into the long grass, so if we now have it as the rest of the world comes out of recession we are going to be completely screwed as a nation. The housing racket in the UK is too big a part of the economy to fail while the economy in general grows, we have become too reliant on it for this to happen. The hpc debate is no longer about housing thanks to Brown fecking it all up with his endless meddling.

Tuesday, December 8, 2009 10:32AM Report Comment

23. mark wadsworth said...

I'm the crazy uncle that not even Mr Flibble @ 2 will listen to.

Tuesday, December 8, 2009 10:43AM Report Comment

24. mark wadsworth said...

@ OTOH comment 16, here's the chart comparing price changes from 1989 Q3 onwards and 2007 Q3 onwards.

Tuesday, December 8, 2009 10:48AM Report Comment

25. mrflibble said...

19. mark wadsworth - I'm the crazy uncle that not even Mr Flibble @ 2 will listen to.

Off course I will, we'll have plenty to talk about in the asylum after Brown has hollowed out our wealth to keep this housing racket going...

Tuesday, December 8, 2009 10:50AM Report Comment

26. wiltshire said...

I have complete confidence in Gordon Brown completely screwing this whole situation up, remember "No more boom and bust" and selling gold at the bottom etc? He is an oaf who has bought the British public with THEIR own money.

In the 1980's the Dead Kennedy's released an album titled 'Give Me Convenience Or Give Me Death' and that seems to sum up the era we now live in. As long as people have a nice warm mall to trudge through every Saturday they don't seem to have any interest in anything beyond consumption, such as economics, politics etc. We've been through the most turbulent period in economic history and it has affected the present and future of millions and yet all the British public can muster in response is a few letters to the newspapers. Well, we shall reap what we sow. Give the politicians and bankers an inch and they'll take a Square Mile.

Personally I think there will be another downward phase to this cycle. I have no idea when and it could be argued it's not a part of the same downturn. Essentially though I do not believe Gordon Brown is any kind of economic wizard. At the end of the day all he has done is allow the biggest debt bubble in history and then throw endless billions on top of that debt. That to me doesn't sound like a recipe for economic stability. I'll be really interested to see how Labour will deal with the issues should they manage to limp through to an Election win in May. With 4 years more power ahead of them they may choose to dish out the medicine sharpish.

Tuesday, December 8, 2009 10:56AM Report Comment

27. the number cruncher said...

Until interest rates rise and people start getting repossessed then the market is not going to move. That is not going to happen until people are too scared to lend money to the Government.

Remember humans are not good at watching long term events unfold, our brains are just not designed for it.

Tuesday, December 8, 2009 10:57AM Report Comment

28. letthemfall said...

I also think the debt is so large it is inconceivable that a normal economy will resume. At present we are still increasing debt, or at least deferring its repayment. That will have to end sooner or later.

Tuesday, December 8, 2009 11:07AM Report Comment

29. doomwatch said...

Tis the season to be Jolly:

1. Thin volumes = poor stats.
2. Baby boomers finally realising they can't have their 4 bed cake and sell for 500k.
3. Overpaid financial services parasites thankfully leaving our shores to peddle their spreads.
4. CGT on first home sales.

2010 is going to be a good year for us HPCers. Ho, ho, ho.

Tuesday, December 8, 2009 11:09AM Report Comment

30. smugdog said...

Seriously, it's all a false picture out there. @22 and @23 sum it up very well.

It would be fairly dumb to think all is good in the world, it isn't, and the pain will come, perhaps when Gordon is sure of another term, or when David can be in a postion to dump the blame on Gordon's doorstep (by that time, not No. 10).

Tuesday, December 8, 2009 11:15AM Report Comment

31. mystie010 said...

To nomad post 14 and Alan post 15 - Thanks for putting this into perspective for me you did cheer me up! We sold to rent not by choice but because of a job move nearly 6 years ago. Since selling up we have been unable to afford to buy a house. It was not for the want of trying but we were simply continually outbid on houses which I felt were overpriced anyway. Six years in landlord limbo land has left me fed up renting and I want to be secure I'm not getting any youger. Gordon you really are a moron! But to the rest of you thanks for keeping my chin up! Smugdog that includes you too, as you are so entertaining, and I mean that in the nicest possible way :-)

Tuesday, December 8, 2009 11:28AM Report Comment

32. timmy t said...

I can only really see two possibilities:

1. Labour stop meddling in the market and prices crash
2. Labour continue meddling and prices remain inflated but the pound crashes. Which means that house prices crash, just not in Sterling.

As I see it, Gordon has a choice of upsetting his precious home owning voters, or, in an attempt to keep them on-board, trashing the nation.

Tuesday, December 8, 2009 11:28AM Report Comment

33. shining wit said...

I only come on here now to read smugdogs comments....

...Brilliant mate, you are Al Murray and I claim my £500.

Tuesday, December 8, 2009 11:35AM Report Comment

34. tenant super said...

This is where we would be without market manipulation.


Tuesday, December 8, 2009 11:51AM Report Comment

35. letsgetreadytotumble said...

I'm not giving up on the HPC. Prices were crashing at the fastest rate in history because that's what the market really wants to do. There is that pressure waiting to be released. Brown then meddled to provide us with a fake economy. Interest rates have surely to rise, and although a simplistic approach, will be the death of the market.

Tuesday, December 8, 2009 11:57AM Report Comment

36. happy mondays said...

If refusing to Pay an extortionate amount of money, (sorry borrowing) for a crappy 2 up 2 down terrace house the size of a postage stamp, makes me CRAZY then yes i am crazy... a Crazy contented fool with no debt or have paid someone else for something that was stolen from the people a few hundred years ago...
"Great spirits have often encountered violent opposition from weak minds." Albert Einstein..
Viva la Revolution.. Simples...

Tuesday, December 8, 2009 12:08PM Report Comment

37. crunchy said...

30. tenant super........ Green with envy, so close, but yet so far.

This calls for a Plowman's & Guinness. No offense meant!

Tuesday, December 8, 2009 12:13PM Report Comment

38. tenant super said...

If there is a currency crisis and interest rates have to be raised sharply, there should be complete carnage. However, I wouldn't rule out a moratorium on the majority of repossession. This is one reason why Ireland is down less than 30% from peak ... the courts there are blocking repos if they feel the borrowers were lent too much money and putting long stays on if the property is occupied by children. There is a lot of political pressure for the courts to make the banks adjust the repayment terms to a level reflective of what should have been, had they been more responsible.

From Fridays IT:
"HOUSE REPOSSESSIONS should be legally prohibited in all but the most clearcut cases, an Oireachtas committee has heard.
Repossessions should not take place without an independent analysis of the homeowner’s capacity to repay, an examination of the “quality” of the mortgage and consideration of alternatives, the Joint Committee on Finance and the Public Service was told.
Many new mortgage-holders who are in difficulty should not face orders for repossession on the basis that they should never have been approved the amount of money they borrowed, the Prevention of Family Home Repossessions group told the committee."

They are saying there is no culpability on the part of the borrower. This kind of paternalism which treats adults like children and does not let them experience the consequences of their actions has terrible moral hazard. What are the odds on this happening in the UK when interest rates shoot up and people fall behind on their payments? The Banks loaned too much money and the onus for the loss is being put strongly on the bank. The taxpayer then has to bail out the bank. So this effectively amounts to you and I paying for Mr and Mrs Feckless to remain in their home. Forever. No repos, no crash.

Tuesday, December 8, 2009 12:15PM Report Comment

39. wiltshire said...

Interesting point tenant super @34.

I wonder what impact the General Election will have on this though. Obviously Gordon The Moron isn't going to want to upset any homeowners before next May but on the other hand there are more savers than borrowers in the UK and he's also got to try and keep them happy too (not that he's done anything for them so far).

I think Labour have just got to hope nothing blows up in their face in the next 5 months or so that would force their hand to do anything drastic. They just have to keep limping toward the finish line, with fingers grimly crossed. Once the election is over it will be anyone's guess as to what will happen. Does the British public have the appetite for bailing out the feckless at a high price to everyone else? Maybe the election will give us our answer to that question.

Tuesday, December 8, 2009 12:28PM Report Comment

40. tenant super said...

Savers will be happy when interest rates go up but this will not necessarily translate to lower house prices if repos are "legally prohibited ... on the basis that they should never have been approved the amount of money they borrowed". Of course new borrowers would face higher repayments and so there would likely to be long term stagnation with little movement in either direction. Maybe this is the 'keep everyone happy' strategy. Strangely, even friends of mine with whom I studied, who are young and rent, see rising prices as a good thing and they're not stupid either, it really is astonishing.

Tuesday, December 8, 2009 12:39PM Report Comment

41. crunchy said...

32. happy mondays said...'Viva la Revolution'

Don't start the Revolution without me comrade. C'est la vie!

Tuesday, December 8, 2009 12:39PM Report Comment

42. happy mondays said...

No Worries crunchy, All welcome, time for change..

Tuesday, December 8, 2009 12:47PM Report Comment

43. phdinbubbles said...

Halifax is playing catch-up with Nationwide (in terms of percentage drop from 2007 peak), so nothing new to see here anyway.

"Strangely, even friends of mine with whom I studied, who are young and rent, see rising prices as a good thing and they're not stupid either, it really is astonishing"

I'm constantly astonished by the number of youngish, supposedly well-educated people I know who think rising prices are a good thing, but in a Country run by the stupid for the stupid, the wise look foolish.

Tuesday, December 8, 2009 12:50PM Report Comment

44. crunchy said...

That's what Obama said, but he didn't tell us that it was ours! : (

Tuesday, December 8, 2009 12:50PM Report Comment

45. mark wadsworth said...

@ Wiltshire "he's also got to try and keep [savers] happy too (not that he's done anything for them so far"

This is where the genius sleight of hand beloved of Tories and Labour alike comes in - they'll "exempt" interest income from income tax, thus lifting net interest rates from 0.8% to 1%. How beneficent! How gracious!

Tuesday, December 8, 2009 12:55PM Report Comment

46. ontheotherhand said...

Howard Archer, chief economist, at IHS Global Insight commenting on the Halifax numbers,

"Despite the further significant rise in house prices reported by the Halifax in November, we remain sceptical that the house price rally seen since early-2009 can be sustained for much longer. Admittedly, very low mortgage interest rates are likely to remain supportive for the housing market for some considerable time to come, but other fundamentals are largely unfavourable - housing market activity is still at a low level compared to long-term norms despite improving in recent months, unemployment is high and still rising (albeit at a reduced rate), earnings growth is low and still falling, and house price/earnings ratios are currently moving back up.

"Indeed, [the] latest Halifax data show that the ratio of house prices to earnings rose back up to 4.68% in November from 4.32% in April. This took it further above the 1983-2009 average of 4.00. A relapse in house prices will be even more likely if the recent firming trend leads to more properties coming onto the market, thereby moving the supply/demand balance away from vendors towards buyers. Potentially significantly, the Halifax reported that there are “some indications that more people are deciding to put their homes on the market.”

"Consequently, while house prices may well rise further in the near term from their early-2009 lows, we suspect that they they will be prone to relapses in 2010. Indeed, we believe house prices will fall by around 5% next year, and would not be surprised if the slippage is greater still. "

Tuesday, December 8, 2009 01:04PM Report Comment

47. Crunchy said...

34. tenant super... There may be another creative option, a rent back deal of some sort. It's not the first time I have mentioned this.

Desperate times and all that. "Whatever it takes", remember. It could be the socialist way, but here's watching!

Tuesday, December 8, 2009 01:06PM Report Comment

48. peter_2008 said...

The recent HPI is created by destroying one of the very basic thousands years old mechanisms of market – that is you borrow money and you blxxdy pay it back.

Gordon.Co managed to manipulated the nature so much so that actually, now you borrow money; you don’t have to pay it back anymore (below inflation base rate, QE, banks not allowed to repossess, easy peacy personal bankruptcy etc etc). All measures are helping basically a MASS defaulting on debts.

The problem is that this takes away the incentive to lend. As non-government owned banks have recently complained that the UK nationalised banks are effectively lending at a loss. This is not a viable economy model.

I am expecting a second credit crunch.

Tuesday, December 8, 2009 01:12PM Report Comment

49. crunchy said...

tenant super.....There may be another creative way, a rent back scheme of sorts. It's not the first time I have mentioned this.

Desperate times and all that. Remember "Whatever it takes." Socialism for some is in fashion these days. I'm watching!

Tuesday, December 8, 2009 01:12PM Report Comment

50. vacuouspolitician said...

It's called kicking the can down the road and looking after potential voters (eg VIs ...the grey pound )

Perhaps they wouldn't be so smug if everyone took all their money out of the bank'rupt's and checked out who their landlords are (eg not signing up to any BTL get rich quick merchants).

The young need to take much more action ...

Tuesday, December 8, 2009 01:14PM Report Comment

51. crunchy said...

45. vacuouspolitician said... 'The young need to take much more action'

I feel an Oscar Wilde quote coming on.

Tuesday, December 8, 2009 01:27PM Report Comment

52. tenant super said...

Crunchy @ 44...

Absolutely. Whatever the exact details, the plan is keep the overstretched borrower in their over-priced house whatever the cost. I have also considered an massive extension of the current sale and rent back scheme (currently available for vulnerable households only) as one way of achieving this.

Tuesday, December 8, 2009 01:34PM Report Comment

53. mrflibble said...

Sale and rent back funded by the taxpayer, now that would be the cherry on the cake.

Tuesday, December 8, 2009 01:39PM Report Comment

54. matt_the_hat said...

Without reading all this thread I suspect the YOY figures will remain negative for sometime without 'seasonal adjustement'

Tuesday, December 8, 2009 01:45PM Report Comment

55. hpwatcher said...

The recent HPI is created by destroying one of the very basic thousands years old mechanisms of market – that is you borrow money and you blxxdy pay it back.

I thought NuLabour had abolished that, or are they in the process of abolishing it?

Tuesday, December 8, 2009 01:47PM Report Comment

56. crunchy said...

50. "Your home is at risk if you do not keep up repayments on a mortgage or other loan secured on it."

Oh really! (No further comment.)

Tuesday, December 8, 2009 01:53PM Report Comment

57. Mrflibble said...

Brown's changed all that...

"Your country is at risk if you do not keep up the repayments on everyone else's mortgage."

Tuesday, December 8, 2009 02:06PM Report Comment

58. mrflibble said...

Brown's changed all that...

"Your country is at risk if you do not keep up the repayments on everyone else's mortgage."

Tuesday, December 8, 2009 02:07PM Report Comment

59. crunchy said...

52. Jump ship, it's the red plague! (lots of splashing and gnashing of jaws)

Tuesday, December 8, 2009 02:28PM Report Comment

60. mark wadsworth said...

Mr Flibble "Sale and rent back funded by the taxpayer, now that would be the cherry on the cake."

Yup. Home-Owner-Ism is the New Socialism, only it's a kind of socialism that's acceptable to Tory voters.

On the topic of whether they can reflate the credit bubble, don't forget The Golden Rule - deposits and bank reserves don't create borrowing - borrowing creates deposits and bank reserves (or destroys them).

The credit happy people simply can't load up with any more debt, and the natural savers are even less likely to spend their savings now than they ever were, so the only way out of this is a Japan-style two-decade long stagnation. We have simply reached the end of the road.

Tuesday, December 8, 2009 02:44PM Report Comment

61. crunchy said...

54. mark wadsworth said..."We have simply reached the end of the road."

Oh no you don't mark, we still need you. There is still room for some fun and games. The Feral Reserve is the weak link in the chain and all is not rosy just yet..

Go Ron!

Tuesday, December 8, 2009 03:17PM Report Comment

62. crunchy said...

Out for now, said the bishop to the actress.

Tuesday, December 8, 2009 03:22PM Report Comment

63. rumble said...

Mystie, same reasons as last time, and time before that, and time before that, and time before... these hpi figures have become a small and relatively meaningless part of a bigger picture. Stats/lies.

Did someone say revolution? About bloody time.

Tuesday, December 8, 2009 05:01PM Report Comment

64. tenyearstogetmymoneyback said...

In a long post Nomad wrote

Fitch notes, over two-thirds of UK borrowers are now on floating rate home loans (ones that change as underlying rates change, unlike fixed rates).

I'm not surprised. I was in Nationwide last weekend (paying in a cheque) and noticed that while the SVR was 3.99%
a two year fix was 6.14%. What does this say for their expectations of mortgage rates in a couple of years time ?
How many people on the SVR will realise that and think I really must increase my payments now before rates go up ?
I'm sure that before the crash it was the other way round so that people could remortgage on a low fixed rate and
rush out to spend the money they were "saving".

Tuesday, December 8, 2009 07:20PM Report Comment

65. tom101 said...

Trouble is you have to go outside to revolt... and its raining.... and footy's on.... and i've got work early tomorrow (probably, hopefully)........and so forth.......

Tuesday, December 8, 2009 08:48PM Report Comment

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