North or South Falling the Most?

IveSeenTheLight

dopester wrote: »

Yes; Scotland. The place the crash won't hit.

Are you making this statement? I certainly do not.
I only say that I believe Scotland will be LESS affected than other regions due to affordability.
http://www.hbosplc.com/economy/includes/25_07_08Affordability.xls


You may have a point though.;)
This link shows that prices are up 4.6% in Scotland. I guess the UK average would be worse if this region was still not rising
http://news.bbc.co.uk/1/hi/scotland/7584596.stm
I guess the credit crunch must be lagging up in Scotland as well.
Maybe as they are less cultured the news hasn't filtered up there amongst the sheep yet <big tongue in cheek> (Sorry)

If you go to the source you get more detailed information
http://www.ros.gov.uk/pdfs/2008_08_release.pdf

Generali

IveSeenTheLight wrote: »

Are you making this statement? I certainly do not.
I only say that I believe Scotland will be LESS affected than other regions due to affordability.
http://www.hbosplc.com/economy/includes/25_07_08Affordability.xls


You may have a point though.;)
This link shows that prices are up 4.6% in Scotland. I guess the UK average would be worse if this region was still not rising
http://news.bbc.co.uk/1/hi/scotland/7584596.stm
I guess the credit crunch must be lagging up in Scotland as well.
Maybe as they are less cultured the news hasn't filtered up there amongst the sheep yet <big tongue in cheek> (Sorry)

If you go to the source you get more detailed information
http://www.ros.gov.uk/pdfs/2008_08_release.pdf

Scotland makes up 8% of the UK by population and a similar amount by GDP.

It would be reasonable to assume that it is also about 8% of the UK housing market.

Average house prices rising by 4.6% in Scotland would push up average house prices by about 0.35% over the country as a whole.

The Scottish oil economy is likely to hold up well for now as rising oil prices have more than compensated for falling production. That is unlikely to be maintained as the recession starts to reduce the demand for and price of oil.

Also the subsidy in Government spending that Scotland gets from the rest of the UK (aka the Barnett Formula which in reality is a subsidy from London to Scotland) is likely to come under pressure as a result of falling tax take in London as the City shrinks and people in England increasingly resent the highly visible signs of higher Govt spending in Scotland (such as 'free' nursing care).

IveSeenTheLight

Generali wrote: »

Scotland makes up 8% of the UK by population and a similar amount by GDP.

It would be reasonable to assume that it is also about 8% of the UK housing market.

Average house prices rising by 4.6% in Scotland would push up average house prices by about 0.35% over the country as a whole.

I would not argure with this rough estimation, but conversly you can see that you cannot take the UK average as fact for different regions

Generali wrote: »

The Scottish oil economy is likely to hold up well for now as rising oil prices have more than compensated for falling production. That is unlikely to be maintained as the recession starts to reduce the demand for and price of oil.

I know for a fact that operators make a profit on 13 dollers a barrel.
They have a target to reduce this to profit on 8 dollers a barrel.
Remember, that Aberdeen is not limited to only North Sea Oil, operations are now truly global

Generali wrote: »

Also the subsidy in Government spending that Scotland gets from the rest of the UK (aka the Barnett Formula which in reality is a subsidy from London to Scotland) is likely to come under pressure as a result of falling tax take in London as the City shrinks and people in England increasingly resent the highly visible signs of higher Govt spending in Scotland (such as 'free' nursing care).

This is an old one.
Allow us independence and in time you will see who benefits.
Why do you think Westminster is against allowing Scotland to become independent?

mitchaa

Generali wrote: »

The Scottish oil economy is likely to hold up well for now as rising oil prices have more than compensated for falling production. That is unlikely to be maintained as the recession starts to reduce the demand for and price of oil.

Also the subsidy in Government spending that Scotland gets from the rest of the UK (aka the Barnett Formula which in reality is a subsidy from London to Scotland) is likely to come under pressure as a result of falling tax take in London as the City shrinks and people in England increasingly resent the highly visible signs of higher Govt spending in Scotland (such as 'free' nursing care).

The British government take oil and gas revenue from Scotland and then have the bare faced cheek to state that Scotland is subsidised

If Scotland got to keep 100% of its oil/gas revenue, there would be absoloutly no need for any subsidies from London. Scotland just like Norway would be far better off and 1 of the richest countries in the EU.

But let's not talk politics;)

Generali

We'll see what happens and I really have no axe to grind regarding London vs any other part of the UK. The crux of the matter is that London has a net outflow of tax to the rest of the country of approximately £20,000,000,000 per year. The rest of the South East has a small surplus too and the South West is about tax neutral.

The economy of London and the South East is about to take a massive battering as The City shrinks considerably - UBS announcing it's cutting its wage bill by 1/3rd is just the beginning. Thus I reckon that the subsidy to the rest of the country will shrink or even disappear entirely. If that happens then I just don't see where the Government is going to replace that source of revenue. Borrowing? Perhaps but you need someone to lend them the money. Higher taxes? Electorally pretty sensitive at a time of falling real incomes.

I've not read any research written outside Scotland that claims that Scottish oil revenues could support the higher level of Govt spending in Scotland over England. I have no knowledge either way though.

fatpig_2

It don't really matter what happens to Scottish house prices as nobody wants to live there anyway. It's cold and wet and the local cuisine is truly awful.

justpurchased

fatpig wrote: »

It don't really matter what happens to Scottish house prices as nobody wants to live there anyway. It's cold and wet and the local cuisine is truly awful.

Another great response! why have a rational argument when you can say the above.:rolleyes:

dopester

Generali wrote: »

The economy of London and the South East is about to take a massive battering as The City shrinks considerably - UBS announcing it's cutting its wage bill by 1/3rd is just the beginning. Thus I reckon that the subsidy to the rest of the country will shrink or even disappear entirely. If that happens then I just don't see where the Government is going to replace that source of revenue. Borrowing? Perhaps but you need someone to lend them the money. Higher taxes? Electorally pretty sensitive at a time of falling real incomes.

It sure is scary for the Government's coffers - and our own.

And the pain spreads out from the city. Some people seem to be minded that this is as bad as it will get, and that it is their absolute right to earn £25K+, and if they don't get a good enough pay-rise, they'll move to another company that will immediately hire them..

We haven't seen anything yet. The impact on house prices looks like it will be so severe.

Generali

dopester wrote: »

It sure is scary for the Government's coffers - and our own.

And the pain spreads out from the city. Some people seem to be minded that this is as bad as it will get, and that it is their absolute right to earn £25K+, and if they don't get a good enough pay-rise, they'll move to another company that will immediately hire them..

We haven't seen anything yet. The impact on house prices looks like it will be so severe.

The point that a lot of people miss about the Square Mile is that while there are quite a few people earning £xxx,xxx pa, there are a huge number on say £30-80k whose earning capacity doing a similar job for a non-financial institution would be closer to £18-30k. There are a lot of people who are going to be facing a very large drop in earnings. They'll be paying a lot less tax in the next year or two.

ManAtHome

And companies declaring losses will pay less tax this year and possibly for a good few years to come.