Mortgage Approvals for August Rise to 2009 High .

Generali

Thrugelmir wrote: »

But increases in unemployment lags a recessionary period. Thats a known fact. We will be out of recession shortly.

Cutting public service workers has no effect on GDP as well.

Unemployment will reduce demand for houses. People will be trapped where they are for a considerable length of time .

Cutting the budget deficit will reduce GDP however.

You're right about unemployment though. I did rough calculation that in the UK, unemployment continued to rise for 18 months after the end of a recession and it took many years for unemployment to fall back to pre-recession rates. I only used the last 3 recessions though so it's not really a statistically valid sample.

chucky

Thrugelmir wrote: »

But increases in unemployment lags a recessionary period. Thats a known fact. We will be out of recession shortly.

Cutting public service workers has no effect on GDP as well.

Unemployment will reduce demand for houses. People will be trapped where they are for a considerable length of time .

but how much unemployment will reduce demand for houses?

the UK's economy was driven by house prices. therefore, house prices and the economy must correlate somewhat, up or down.

look at the contraction in the economy in relation to unemployment - now compare it to previous recessions. that ratio today is much, much less. the economy has shrunk 5.5% over the past year but employment rate has only fallen 2%.

for the amount of contraction we should have a larger number of unemployed if it were to have an affect on house prices.
the growth numbers have exaggerated the recession or it shows Britain’s job-market is limiting the unemployment pain of the recession.

so either you're saying unemployment will get much, much worse because the current number of unemployed isn't having much effect on house prices. the reverse of what you're saying in fact.

michaels

Who said anything about height?

JonnyBravo wrote: »

It's a well known fact that most of the moaning minnies on here are simply jealous of others.... I've no idea how tall they are.

wageslave

chucky wrote: »

but how much unemployment will reduce demand for houses?

the UK's GDP was driven by house prices. therefore, house prices and GDP must correlate somewhat, up or down.

look at the contraction in GDP in relation to unemployment - now compare it to previous recessions. that ratio today is much, much less.

for the amount of contraction we should have a larger number of unemployed if it were to have an affect on house prices.

so either you're saying unemployment will get much, much worse because the current number of unemployed isn't having much effect on house prices. the reverse of what you're saying in fact.

Look at it another way Chucky. Lower public spending, higher taxes, higher unemployment. Are you saying these things wont affect house prices?

chucky

wageslave wrote: »

Look at it another way Chucky. Lower public spending, higher taxes, higher unemployment. Are you saying these things wont affect house prices?

see i don't think you're a bear - you're far too intelligent to mix with that rif-raf. here's what i said to you before about unemployment and house prices.

chucky wrote: »

i tend to agree with you with regards to unemployment but it only starts to affect house prices after it goes over 10% which is some where around 3 million. if we're still in recession when unemployment goes over 3 million, yes it will affect house prices for a few years. in my opinion unemployment won't be the biggest constraint on house prices.

i'd go with your lower public spending and higher taxes that may have an effect on house prices and that won't be happening for 12-24 months.
not unemmployment as much. not in or after this current recession.

wageslave

chucky wrote: »

see i don't think you're a bear - you're far too intelligent to mix with that rif-raf. here's what i said to you before about unemployment and house prices.



i'd go with your lower public spending and higher taxes that may have an effect on house prices and that won't be happening for 12-24 months.
not unemmployment as much. not in or after this current recession.

Oh Riff-raff. I ADORE Rocky Horror.

It isn't about bears or bulls or even intelligence. It is common sense Chucky. The country is fiscally f*cked and that is going to affect house prices. They might not fall by much but they will fall and they will stay down until someone balances UK PLC's books.

It has amazed me how each and everyone of you has been arguing about month to month house price figures and ignoring the bigger picture. The price of your house or mine is irrelevant, it is the state of the economy that matters.

bigheadxx

chucky wrote: »

the only reason the total lent has gone down is due to the low volume of remortgages, the number of mortgages approved for house purchases is still increasing each month :rolleyes:

http://www.bba.org.uk/bba/jsp/polopoly.jsp?d=145&a=10106

There were 193,000 mortgage approvals in June 2007 and that was down on June 2006. We are a long way off seeing anything like that figure in the near future.

chucky

wageslave wrote: »

Oh Riff-raff. I ADORE Rocky Horror.

It isn't about bears or bulls or even intelligence.

i know - it was a joke. i couldn't find the font for sarcasm when i posted it.

wageslave wrote: »

It is common sense Chucky.

but people still claim unemployment is the key driver. no-one can explain that it is without the usual standard sound bites.

wageslave wrote: »

The country is fiscally f*cked and that is going to affect house prices. They might not fall by much but they will fall and they will stay down until someone balances UK PLC's books.

It has amazed me how each and everyone of you has been arguing about month to month house price figures and ignoring the bigger picture. The price of your house or mine is irrelevant, it is the state of the economy that matters.

so what should we be expecting 70% off house prices?

wageslave

chucky wrote: »

i know - it was a joke. i couldn't find the font for sarcasm when i posted it.

Now dont go developing a sense of humour on me or I'll be googling Dutch sex museums

chucky wrote: »

but people still claim unemployment is the key driver. no-one can explain that it is without the usual standard sound bites.

Unemployment isn't the driver any more than higher deposits. It is a combination of all the factors. We really are in an Indian Summer.

chucky wrote: »

so what should we be expecting 70% off house prices?

I doubt it will be that drastic but what do I know? It depends on what the next government does and how quickly they do it.

Watch Obama. Where America leads we inevitably follow.

Thrugelmir

chucky wrote: »

but how much unemployment will reduce demand for houses?

the UK's economy was driven by house prices. therefore, house prices and the economy must correlate somewhat, up or down.

look at the contraction in the economy in relation to unemployment - now compare it to previous recessions. that ratio today is much, much less. the economy has shrunk 5.5% over the past year but employment rate has only fallen 2%.

for the amount of contraction we should have a larger number of unemployed if it were to have an affect on house prices.
the growth numbers have exaggerated the recession or it shows Britain’s job-market is limiting the unemployment pain of the recession.

so either you're saying unemployment will get much, much worse because the current number of unemployed isn't having much effect on house prices. the reverse of what you're saying in fact.

The UK's economy was not driven by house prices. As very little of the capital appreciation in the value residential property was reinvested into wealth producing assets. The majority would have been exported in the form of foreign holidays, foreign goods and acquistion of property investment overseas. Also around half the total current mortgage debt which was incurred between 2000 and 2008, around £300 billion, was borrowed from overseas. So the interest on this debt is also leaving the country for some years.

Rising property prices have been achieved by saving less and borrowing more.

The UK economy benefited from the growth of financial services and related property services, that boom has passed. The real jobs meanwhile have transferred across to China and more recently Eastern Europe over the past 15 years or so.

This is a different recession to the past. The effects will be longer lasting for the majority. For those that didn't make money in the past 10years then times will be tough.

Unemployment won't singularly affect house prices but adds to the downward pressure when combined with everything else.