So why isn't this possible?

Dan:_4

Thrugelmir wrote: »

The Nationwide index doesn't even some parts of the Country so can't be refective of the country as a whole.

Nationwide index has been discredited on here since around April time.

mbga9pgf

chucky wrote: »

it's rumoured that the BOE will start buying corporate and commercial paper soon to avoid this scenario happening

All that would do is accelerate the situation, as all confidence would be shot apart.

Linky?

mbga9pgf

Dan: wrote: »

Nationwide index has been discredited on here since around April time.

Since they stopped publishing data for large swathes of the country in the lower priced data survey actually (check out their flats data).

chucky

Thrugelmir wrote: »

To track the stock market you'd have to have weighted holdings in every share.

So when people compare investing in property to shares , how can you compare returns?

you can if you simply look at yield - but that is way too simplistic.
my view is that you can't really as they're totally different asset classes with different fundamentals.

if you did try to compare it would be a very rough calculation and you would have to be able to compare X amount of cash when you started and when the investment ends the Y amount of cash.

Generali

Graham_Devon wrote: »

Well I'm not saying it can or can't happen here, I'm just wondering why it cannot possibly happen, according to some.

I.e. what makes us so different?

Do you know what he meant by the ageing population?

Time for some Generalinomics I think:

There are clear similarities between Japan in 1989 and the UK today and also some differences. The 'aging population' is one - the Japanese face severe problems paying for retirement and the realisation hit home in the early 90s. Basically they had a baby boom in the 1930s and those people started to look towards retirement in the 1990s. As stock and house prices were falling they discovered that it was going to be hard to pay for their own retirement and because they had had small families, the taxpayer (ie their kids) weren't going to be able to pay for their retirement either.

There was a big shift in mentality from wanting to have the latest toys and gadgets to a culture of thrift. IIRC, a woman became very famous there for providing tips on ways to cut down on spending (I think she wrote a book called something like How to Run Your House on JPYen100 a Day), I don't know if that reminds you of any popular websites in the UK right now....

The demand for money fell as people stopped borrowing and started saving. The result was a classic Keynsian deflation. Keynes said that as saving increased in a society as the result of a shift to a more cautious outlook, GDP would decrease and that has certainly happened in this case.

That's why British and other Governments are engaging in QE, running huge deficits and have slashed interest rates. It's all to try to keep consumers consuming and keep the economy going.

The trouble is, IMO, that the previous path the world's economy was on was unsustainable. Japanese consumers and the Chinese Government were saving huge amounts of money to lend to Western consumers and Governments allowing (forcing???) huge deficits to be run up on the Western side. Some nations (eg Australia & the US) even saw the savings rate turn negative which in laymans terms means that the average family (not just the profligate ones) is spending more than they earn! And that excludes non-MEW mortgage debt as money spent on buying and building housing counts as investment not consumption in the GDP figures.

My belief is that if the UK Government just tries to prop everything up problems will be made worse in the end.

Firstly, if these problems continue, the saving mentality may build up too strongly among UK consumers which is A Bad Thing for the country as a whole (not a fashionable viewpoint but one that is accurate from the position of orthodox economics).

Secondly, the Government by borrowing huge sums is just moving GDP problems into the future.

Finally, there is an excellent opportunity for the UK to get a free ride off the rest of the world. Everyone is busy QE'ing and deficiting like crazy, effectively expanding the world's money supply. As there are no capital controls to speak of any more in the world, a proportion of that money will flow into the UK. If the Government and the British people can accept a little pain now, they can come out of this very nicely with their competitors hamstrung with huge national debts and the need to service those debts. It's pretty clear that policy isn't going to be followed any time soon.

Thrugelmir

chucky wrote: »

you can if you simply look at yield - but that is way too simplistic.
my view is that you can't really as they're totally different asset classes with different fundamentals.

if you did try to compare it would be a very rough calculation and you would have to be able to compare X amount of cash when you started and when the investment ends the Y amount of cash.

Hi Mr C. My point was addressed at R2. Who said my property price change didn't reflect the average stats for the period.

My point was that to mirror average prices your own property holding would have to reflect the make up of the average. So as in the case of the stock market its impossible to track the market precisely.

Getting late and I'm tired. Some of the nonense on here makes me smile. As it seems that no one actuall reads real reports. Just pick up on edited news pieces. :beer:

chucky

mbga9pgf wrote: »

Since they stopped publishing data for large swathes of the country in the lower priced data survey actually (check out their flats data).

they didn't provide data for North, South Midlands, Northern Ireland and Wales.
That's only 4 out of 13 regions - it's due to low volume of transactions.

They also missed out East Anglia in the 1st Quarter but included data for the region in the 2nd Quarter.

chucky

Thrugelmir wrote: »

Getting late and I'm tired. Some of the nonense on here makes me smile. As it seems that no one actuall reads real reports. Just pick up on edited news pieces. :beer:

it wasn't a dig at you Mr T

it was a continuation on our yield discussion the other day about comparing yield for BTL or equities where we were discussing if you take the market value or investment value for the different asset classes.

mbga9pgf

chucky wrote: »

they didn't provide data for North, South Midlands, Northern Ireland and Wales.
That's only 4 out of 13 regions - it's due to low volume of transactions.

They also missed out East Anglia in the 1st Quarter but included data for the region in the 2nd Quarter.

Oh, but its amazing they didnt forget to include it for every other class of property further up the market.

Be very interesting to see how their mix adjusted model works. Start throwing zeros in equations and weird things start to happen. Be handy for them to print the volume data so people can make their own minds up.

Personally, I prefer the Halifax, purely because it has a larger sample and hasnt had any spurious data appear in the figures.

Generali

chucky wrote: »

it wasn't a dig at you Mr T

it was a continuation on our yield discussion the other day about comparing yield for BTL or equities where we were discussing if you take the market value or investment value for the different asset classes.

My opinion FWIW is that you can't really compare the yield on shares with the yield on a house directly as the house has costs associated with ownership the the shares don't (maintenence, council tax etc). BTL is more like a business than a simple investment IMO as you need to find a customer (tenant), keep them happy etc. And on a more practical note, the Chairman of BP won't call you on Boxing Day because the boiler's blown up! (unless your tenant is the Chairman of BP of course).