Really really gloomy article from Robert Peston this morning

nickmason

mewbie wrote: »

This is a completely unfair and misleading comment. There were some people who foresaw the coming problems, and still more who watched while house prices were pumped ever higher by crazy and reckless borrowing. It is a cause for celebration that perhaps our children will one day be able to afford a place of their own to live in. It is not our fault that those who pumped the bubble ever higher have effectively caused these problems.

I do not celebrate the recession, loss of jobs, etc. Nor do I take the blame for it. I watched the madness and did not profit from it. If you want to see anger, then those people who have saved sensibly, worked hard and waited, have the most right to be angry - as the foolish gamblers seem to have screwed the entire world.

Absolutely agree. I have already recounted the story of being told in 2002 not to buy property, by the head of risk at Bear Stearns, no-less! (If you look at the graph on the homepage of housepricecrash, and adjust downward the trend line to remove the influence of post 2002, you'll see how such a prediction that 2002 was near the top was vaguely sound).

So, for five years after that, I saw the average local house price go up each year by something roughly equivalent to my take-home salary. And I saw people MEW that money, and worse, gloat about how they are making more from their property than from their industry. Now, I'm going to pay (one way or another, or probably many ways) for them to be rescued from their own profligacy.

And it's not just me, it is indeed those hardworking families that are omnipresent in Brown's rhetoric; it's the people that genuinely need assistance from the state through social services; it's the future of our country through investment in education; it's the health of our people through the NHS - all of this is going to be cut to shreds.

Of course, maybe I should have just added into my predictions that the government would ride this wave as long as possible, and then shift the repayment into the long grass, spread across everybody. And with such a conclusion, maybe I should have just joined the masses, and said to hell with personal responsibility, let's look after number one and see what I can screw out of the future of GB. That I didn't, I like to think of as to my credit, not an illustration of idealistic naivety. The possibility that that viewpoint is outdated fills me with even greater horror at the decay of what we stand for, and hold dear.

That's why I for one, am pretty angry, because it all seems, not simply unfair, but unjust.

Guy_Montag

wintersunshine wrote: »

My comment is neither unfair or misleading. The HPCers did cheer when houses prices started to fall, they did act as if it was something great, they did act as if they would be immune to the fall out.

It is not a cause of celebration if your children can afford a house but haven't got a job. It's not a cause for celebration if their career choices are limited because the economy is smashed to bits. It is not a cause for celebration if we can nolonger afford a decent public sector so your children can nolonger access high quality education, NHS services, etc because we no longer have the taxes to pay for it.

You have what you wished for.

Oh stop being so melodramatic, the country isn't going to fall apart* because house "values" drop from ludicrous, to quite good value. We'll have what? 3-4 years of recession, & with a bit of luck, a generation of sensible house prices.

Yes, it's going to be hard for those 3-4 years, but don't blame us (G)HPCers for this sh1tstorm. We weren't the ones that encouraged people to borrow & lend beyond their means; we sat, like Cassandra, telling anyone that would listen that this would end in disaster. We were condemned as doomsayers, yet when the it happened most of us were surprised at just how severe the problems have been. I certainly didn't think the UK banking system would be nationalised, though I did see NRK going down the tubes.

Now tell me one good thing about high house prices?

*The country may fall apart due to this crash, in which case I would lay the blame squarely at the feet of the govt. Yes, the banks played their part; yes the BoE played their part; yes, borrowers played their part; yes, the FSA played their part, but the govt. are there to do the best for society when society does not do the best for itself.

caveman38

can nolonger access high quality education, NHS services, etc

Where do live mate, we have none of that where I live. We have to pay private for either of those.
I assume you have no children in their twenties either and have had to watch them in depair while they save for years for a deposit on a house which when they have enough, then increases in value yet again. Buying a house in London for todays twentysomethings is impossible, and if I can help my two buy a place - and I hasten to add that they earn good wages - then I am more than happy to see a crash. I am more than happy to lose £250K off the value of my house. It is of no value to me at all.
What good is high house prices any way. Just equity that is useful when your children leave home and you scale down.

nickmason

wintersunshine wrote: »

My comment is neither unfair or misleading. The HPCers did cheer when houses prices started to fall, they did act as if it was something great, they did act as if they would be immune to the fall out.

It is not a cause of celebration if your children can afford a house but haven't got a job. It's not a cause for celebration if their career choices are limited because the economy is smashed to bits. It is not a cause for celebration if we can nolonger afford a decent public sector so your children can nolonger access high quality education, NHS services, etc because we no longer have the taxes to pay for it.

You have what you wished for.

I totally agree with your second paragraph. The prospect of the economy being completely trashed was precisely why the HPC had to come; because the more it kept rising, the more likely the effect would be structurally catastrophic. I'm not sure those cheering were all being so selfish as to be satisfied by a sense of their own personal immunity. I think they saw the crash - or at least "realignment" - as a necessary bad thing, to mitigate the prospect of a larger problem.

And yes, it's frustrating to feel that everyone else still sees the emperor's new clothes.

tradetime

wintersunshine wrote: »

House prices were high because we had full employment. We have never had full employement before.

This is true, possibly along with increased migration however, house prices were absurdly high because the media setup a fan club for an industry of amatuer property developers to buy up and flip property at ever increasing prices, whilst lax lending standards allowed people to overpay for those properties and support this temporary mini industry. Similarly those lax lending standards supported and fueled a btl bubble industry. Those responsible for oversight could have stopped this at any time they chose if they had their eye on the ball, or even cared.

The only thing that was ever going to bring house prices down was a recession and they are ugly. And this one is going to be really ugly.

That's true once you get to bubble territory, but as already stated we did not have to go there in the first place.

Cannon_Fodder

wintersunshine wrote: »

It is not a cause of celebration if your children can afford a house but haven't got a job. It's not a cause for celebration if their career choices are limited because the economy is smashed to bits. It is not a cause for celebration if we can nolonger afford a decent public sector so your children can nolonger access high quality education, NHS services, etc because we no longer have the taxes to pay for it...

Yada yada yada yada

Oh, do stop being such a doom-monger...you'll make the recession worse.

zappahey

wintersunshine wrote: »

House prices were high because we had full employment.

Absolute nonsense.

nickmason

caveman38 wrote: »

What good is high house prices any way.

Again, a question I keep asking!!

dopester

wintersunshine wrote: »

You have what you wished for.

If you had your way the average slavebox would cost £1 million+... and x40 earnings.

You'd have property speculators borrowing or MEW-ing forever to push prices up, which pushes up values for everyone else, just regular home-owners, many of whom are stupid enough to celebrate the perceived increase in value as a good thing.

Except you pay no mind to the younger generations having to buy a place at crazy money. Price them out, force them to try and take on crazy debt obligations, or have them renting one of your BTLs, as you kick back and enjoy HPI capital appreciation.

Those times are gone miladdo. The economy is crashing thanks to your addiction to credit. Soon will come a realisation that crazy high house prices are in a twillight zone compared to the rotten foundations of the economy. Enjoy the crash.

You gave no thought to younger generations being forced in to debt slavery to buy a house and now the market is going to punish you. Hopefully in some instances, the debts some older people have taken on with greedy speculation will see them lose property portfolios, allowing younger generations to get in at a very reasonable price that reflects real market conditions. Take your medicine.

moneymass

zappahey wrote: »

Absolute nonsense.

Ah someone beat me. Made me lol though.