MSE news: House prices rise marginally, says Land Registry

chucky

Thrugelmir wrote: »

One measure such as looking at headline unemployment numbers isn't enough. In the same way that saying that banks are borrowing at .5% and lending at 6%. So must be making big profits. The whole picture is far more complex.

Unemployment - what else.

(a) Redundancies announced not yet made.
(b) Contract workers given notice of non renewal of contract at end of term
(c) People working over 16 hours now part time. - not logged as unemployed
(d) Reduced working hours ( besides laying off 12% of our workforce all staff have reduced their hours and taken 8% pay cut in exchange).
(e) So far private sector has borne brunt. Public sctor yet to feel the axe.
(f) More companies will go bust this autumn. ( Weather can't be helping those dependent on school summer holiday business).
(g) Those with savings ineligible for benefits so again not on unemployed data.

Out of interest who are the banks going to lend to ( that they aren't already in a broad sense). Mortgage money is available for those who want to borrow and can afford to.

Until we at last reach a plateau with unemployment. Its hard to see enough people making life changing decisions regarding house purchase to influence the market upwards.

so do you think that unemployment will have a direct impact on house prices nationwide?

Thrugelmir

chucky wrote: »

so do you think that unemployment will have a direct impact on house prices nationwide?

Ultimately yes.

Hard to see otherwise.

Companies now are far more efficent in the way they operate than in previous recessions. Working practices , technology etc.

Thats why fewer jobs are being lost. As opposed to a cut in hours. As companies cannot afford to lose their employees expertise.

Example: A production line requires 3 worker to be on duty to operate a machine on nightshift under health & safety rules. Orders fall but machine still needs to run. Previously with no H&S cut to 2 workers. Now reduce their hours.

Same applies to accounts departments, or other specialities.

chucky

Thrugelmir wrote: »

Ultimately yes.

Hard to see otherwise.

i never disagreed - it's one of the factors that will affect it.

Thrugelmir wrote: »

Companies now are far more efficent in the way they operate than in previous recessions. Working practices , technology etc.

Thats why fewer jobs are being lost. As opposed to a cut in hours. As companies cannot afford to lose their employees expertise.

Example: A production line requires 3 worker to be on duty to operate a machine on nightshift under health & safety rules. Orders fall but machine still needs to run. Previously with no H&S cut to 2 workers. Now reduce their hours.

Same applies to accounts departments, or other specialities.

i think it's near enough what i said - companies have made redundancies very quickly to make job cuts to cut costs.

lemonjelly

Chucky, I think part of what Thrugelmir & I are trying to say (& apologies in advance if I'm misuderstanding you or getting you out of context Thrugelmir) is the question of where are these alleged green shoots coming from? If we have no green shoots/optimism etc, how is growth going to return to the economy?

People either have less work, or no work.

Almost every households income has fallen. Ergo, most households have less to spend. Ergo less cash is sploshing around the system, therefore less to invest.

Sure, government/councils can invest in big projects, but realistically, who else can? Consumers can't. If business' see cashflow reduced, they'll be less likely to look to expand. Currently, too many people/organisations are engaged in crisis management. "Lets just keep afloat".

With all the uncertainty, we spend less, be it on nights out, consumer goods, expensive contracts, or houses. Whatever, we haven't got the disposable income anymore.

So not only will it affect houseprices (and all associated linked markets, removal men, white goods etc etc), but other parts of the economy are bound to experience reductions/fallbacks. Except the essentials, food, fuels, undertakers etc.

There are 2 things I don't get. The first is, given that everyone is having the experience of not being as wealthy as they have for a decade, where is the spending power going to come from to re-invigorate the economy/high street/housing market?

The second, is people keep banging on about cuts to public services. I feel these are easy targets. What I don't get, and haven't heard a tangeable arguement for, is where these cuts can happen (in a non daily mail type way). See, my perception of good public services, are services that are there for the most needy, the most vulnerable, that people need when at their lowest. Such as homelessness services, jobcentres/benefits, the nhs, etc etc. These are services, not consumer goods. There is no right to them. God willing, we never have to access them. But sometimes we, or people close to us, need them. Without them, so many would be right royally F£$%*d. And in such circumstances, such services are a blessing.

Sure they're not ideal, could be improved. What system couldn't. But in times like now, we as a society need these services. Demand for them will increase. So how and where can we realistically cut them?

Generali

lemonjelly wrote: »

people keep banging on about cuts to public services. I feel these are easy targets. What I don't get, and haven't heard a tangeable arguement for, is where these cuts can happen (in a non daily mail type way). See, my perception of good public services, are services that are there for the most needy, the most vulnerable, that people need when at their lowest. Such as homelessness services, jobcentres/benefits, the nhs, etc etc. These are services, not consumer goods. There is no right to them. God willing, we never have to access them. But sometimes we, or people close to us, need them. Without them, so many would be right royally F£$%*d. And in such circumstances, such services are a blessing.

Sure they're not ideal, could be improved. What system couldn't. But in times like now, we as a society need these services. Demand for them will increase. So how and where can we realistically cut them?

The problem is that all services, no matter how vital, need to be paid for somehow. The Government has 3 sources of cash: tax, borrowing and printing new money. Ultimately, the last two are limited if the economy isn't going to be wrecked so assuming that the Government doesn't want to mess up the country, the money to pay for these services has to come out of taxation.

However, as you correctly say:

lemonjelly wrote: »

Almost every households income has fallen. Ergo, most households have less to spend. Ergo less cash is sploshing around the system, therefore less to invest.

Less cash sloshing around the system means lower taxes for the Government to spend. It doesn't matter how necessary something is, if you haven't got the money and can't borrow the money, you can't have it.

Over the past 60 odd years, this idea has grown up in the UK (and many other countries for that matter) that the Government can solve just about any problem if they try hard enough. I think that if anything good is going to come out of the current mess it'll be to show that Governments can't solve all our problems, that people need to take a little individual responsibility. I doubt it will happen but I can always hope.

Thrugelmir

lemonjelly wrote: »

Chucky, I think part of what Thrugelmir & I are trying to say (& apologies in advance if I'm misuderstanding you or getting you out of context Thrugelmir) is the question of where are these alleged green shoots coming from? If we have no green shoots/optimism etc, how is growth going to return to the economy?

Thanks Lemonjelly. Though we are on different sides of the working spectrum we are seeing a similar world.

In response to Generali's post as well. The largest cost to Public Services is wages. The cuts will ultimately come in reduced pay across the board. We are not worth the wages we pay ourselves.

The house price bubble created wealth that didn't exist. The borrowed money has to be repaid.

I'm sure a few public sector Unions will pull their members out on strike. But will they get public support? From the the private sector little. As those on the dole without work would happily do their work for less pay.

We are going to have a period of readjustment. Whether we realise it or not. There's no quick or easy fixes. Just a long uphill grind.

chucky

lemonjelly wrote: »

Chucky, I think part of what Thrugelmir & I are trying to say (& apologies in advance if I'm misuderstanding you or getting you out of context Thrugelmir) is the question of where are these alleged green shoots coming from? If we have no green shoots/optimism etc, how is growth going to return to the economy?

no need for any apologies

i don't disagree with what you're saying just the scale of it maybe.

i'm not a believer of green shoots as we are a long way from recovery, however we are also quite a bit away from the times when Lehmans and Bear Stearns collapsed last year.

unemployment is worrying, GDP is a concern and public spending even more important. i don't dismiss them in any way.

Thrugelmir

chucky wrote: »

i'm not a believer of green shoots as we are a long way from recovery, however we are also quite a bit away from the times when Lehmans and Bear Stearns collapsed last year.

Do you think that the complex trades and fraudulent activity of Lehmans will be unwound in 10 months? Lehmans was in cahoots with NR alone for around 12 years. That over a million BTL mortgages were granted in under 10 years ( only 30,000 existed in 1999).

Lehmans through its subsidiaries sold sub prime mortgages in the UK through brokers. Thats also why it will take years for everything to unwind.

The boom as such didn't create anything. As the increased property values exported cash into holiday homes abroad. Record sales of BMW's in the UK.

My negativity is based on the assumption that we've yet to feel real pain before the healing can begin.

chucky

Thrugelmir wrote: »

Do you think that the complex trades and fraudulent activity of Lehmans will be unwound in 10 months? Lehmans was in cahoots with NR alone for around 12 years. That over a million BTL mortgages were granted in under 10 years ( only 30,000 existed in 1999).

not sure i go with the fraudalent story -if it were fraud there would be criminal charges or at least a civil case against these people. i'm assuming you're talking securitisation?

Thrugelmir wrote: »

The boom as such didn't create anything. As the increased property values exported cash into holiday homes abroad. Record sales of BMW's in the UK.

i'm seeing this as a generalisation trying to link it to mewing or even car loans.
i'm failing to see how you're linking the cost of flights becoming much cheaper and to many more destinations to property values. it's like saying that only property owners were the ones that took holidays and bought BMW's...

Thrugelmir wrote: »

My negativity is based on the assumption that we've yet to feel real pain before the healing can begin.

i don't disagree here but then i don't agree as i'm like most people that can't predict what is around the corner.

Thrugelmir

From the Independent Oct 2008.

Isn't it about time the Serious Fraud Office is called in over the collapse of Lehman Brothers? In the US, Federal investigators are crawling all over what is now unambiguously the worst financial crisis since the 1930s, yet in Britain, no criminal investigation of any aspect of the banking maelstrom has yet been announced. This is despite growing evidence of malfeasance in connection with the Lehman's insolvency in particular, but also more generally in the market-ing of some of the securities at the heart of the crisis. Where there is financial meltdown, there is nearly always fraud, so why isn't the SFO in there asking questions, collecting evidence and bringing prosecutions, as its US counterparts are in spades?

Britain has a notoriously more tolerant attitude to white-collar crime than the US, and this may be part of the explanation. The UK is less vigorous both at pursuing it and in prosecuting it. Yet it may also be partly down to the fact that here in Britain there were simply fewer rules to break. The regulatory regime applied to wholesale markets in London was not just "light touch", but almost wholly non-existent.