UK house price slump to persist until 2012

mbga9pgf

Quite simple the Government spending part of GDP will start to fall out, sentiment is going to take a hit and once again, will drive down prices.

Plus, lots of repos coming onto the market as a result of the 6-12 month delay from job loss to reposession. Sad fact I am afraid but it happens.

See front page of guardian tomorrow to see the sort of headline that is going to make no bones about the future of sentiment in the UK.

I agree though, lending is up. BE interesting to see what effect it will have on falls in the upcoming months, together with increased lending is something that will be sustained or whether it is a short term spurt to please government (and before banks start taking heavier losses as a result of further writedowns).

Dan:_4

mbga9pgf wrote: »

Quite simple the Government spending part of GDP will start to fall out, sentiment is going to take a hit and once again, will drive down prices.

Plus, lots of repos coming onto the market as a result of the 6-12 month delay from job loss to reposession. Sad fact I am afraid but it happens.

Not everyone who is made redundant will end up being repo'ed.

Not everyone who is made redundant will have a mortgage.

Unemployment = reposession = lower house prices - is a weak argument im afraid.

mbga9pgf

Well, not really. Seeing as thats what happened last time.









Pretty strong correlation. Unemployment up, repos up, prices down. Of course, repos are not the only cause of lower prices, but the economic conditions of higher unemployment most definately contribute to lower prices. Thats pretty obvious to see.

Of course, last time, we werent faced with lower take home pay as a result of tax hikes to balance a budget from hell, nor were we facing an enormous reshape across a bloated civil service. All that cash the government is borrowing is keeping the economy artificially propped up. Once that falls out, as I said, its not going to keep prices stagnant, its going to make them fall.

chucky

mbga9pgf wrote: »

Plus, lots of repos coming onto the market as a result of the 6-12 month delay from job loss to reposession. Sad fact I am afraid but it happens.

expected repo numbers have been reduced for this year than the predicted original number at the begining of the year. they won;t be as many as initially predicted

mbga9pgf wrote: »

I agree though, lending is up. BE interesting to see what effect it will have on falls in the upcoming months, together with increased lending is something that will be sustained or whether it is a short term spurt to please government (and before banks start taking heavier losses as a result of further writedowns).

with most banks now making profit they are able to contain write-downs and many have had to make write-ups on the previously made write-downs. this won't be a biggie unless another Lehmans or Northern Rock comes along.

Dan:_4

lovely graphs.

mbga9pgf

Chucky, refer to my option Arm thread. You know, the one that you said wasnt going to be an issue, because decent white middle class americans wouldnt dream about defaulting on their mortgage.



Or did you forget all the write downs last wave came from the USA? Subprime is history. Prime, Alt-A and Option Arm are the next biggies. Some other stuff here:

http://www.fieldcheckgroup.com/blog/

expected repo numbers have been reduced for this year than the predicted original number at the begining of the year. they won;t be as many as initially predicted

What evidence do you have that repos simply havent been delayed as a result of government policy?

mbga9pgf

Dan: wrote: »

lovely graphs.

Lovely counter argument!

chucky

mbga9pgf wrote: »

Chucky, refer to my option Arm thread. You know, the one that you said wasnt going to be an issue, because decent white middle class americans wouldnt dream about defaulting on their mortgage.

i don't believe that this will be an issue and this would be factored in by banks.

how many states will this affect and really be an impact - the only one that it will be an issue that i can remember may be California...

mbga9pgf wrote: »

What evidence do you have that repos simply havent been delayed as a result of government policy?

i have no evidence and can only go by the data that the CML provides us.

as for government economic policy - of course it has helped with repos. it's also a good thing that it's reduced the number to help people through difficult times.

mbga9pgf

as for government economic policy - of course it has helped with repos. it's also a good thing that it's reduced the number to help people through difficult times.

All it has done has strung it out and is postponing the inevitable. If we get sustained long-term unemployment, as I suspect we will, all government policy can do is string out repossessions, delay them. They will still happen. Banks cannot afford to keep non-productive and even loss making assets on their books at a time of such low liquidity.

how many states will this affect and really be an impact - the only one that it will be a major issue that ican remember may be California...

Two main ones, Fl and Nv, with CA being hard hit too.




1.3% of ALL loans in the US went Delinquent in May. That is a heck of a lot. A lot of this paper will be on UK bank balances; I believe, personally, that a lot of the worst paper was purchased in the 18 months leading up to the credit crunch, when the worst suckers get pulled in. Read "suckers" as you will.

Now, my other leap of faith as it were goes along these lines. If you were a government, facing huge, insermountable losses, what would you do? Would you allow the banks to go bust? Financial system to collapse? Or, how about effect policy that spreads out the losses, whereby government support to banks can be minimised by allowing banks to use profits to offset losses through write-down? Why have no full scale reports been released showing state liabilities, the amount of toxic paper now on the publics books? How risky are those assets? Why has this info not been released to the public domain?

If I were in government facing such a crisis, I would try and offset bank writedowns with profits, but also realise that further bailouts will be necessary. But much better to run this situation than collapse of banks from day 1.

inspector_monkfish

ruggedtoast wrote: »

Prices are never stable Dan. Theyre either going up or down Dan.

Which one are you going to choose Dan?

Up?

or Down?

Dan.