House prices set to crash from this point on

mr_fishbulb

HAMISH_MCTAVISH wrote: »

And has been bitter, angry and shouting about it to anyone who will listen ever since.

I wonder if he posts on here?

HAMISH_MCTAVISH

HammerSmashedFace wrote: »

After looking at your signature Hamish, I have a serious question. If those figures are to be believed (and I'm not disputing them), how can they be sustained on the back of......

Shrinking disposable incomes...... Well not so far they aren't, average pay rises of 1.6% for private sector last year, ahead of inflation. True, taxes will rise, but not by enough to make a real difference. The 50% rate only impacts a tiny number of people, and thats if they don't manage to avoid it, for the vast majority, it's an extra 1% or so on income, and perhaps a couple of percent on some consumption.

QE reversal...... QE is merely an instrument to control liquidity, and thus inflation. It will not be reversed until sufficient liquidity is in the sytem to cause inflation. And even then, rates may be used instead. Either way, we're talking many years.

Low rates that will not last....... They'll be extremely low for many years yet. And I doubt we'll see rates above 5% in the next decade.

Huge public sector cuts...... Which both major parties agree will be done through spending freezes and inflation for the most part. Big job culls are extremely unlikely for many years. And given how much scope there is to make huge savings through efficiency and natural attrition, may never occur.

Inflation in energy costs etc.... Oh, yes please.... Brilliant news for Aberdeen house prices.

I'm not denying Nationwide's figures as they see them, but have no idea how going forward they can possibly be sustained.

I'm not denying things will be slightly tougher moving forwards, but not enough to significantly impact house prices in the face of such a huge and unsustainable housing shortage. Don't forget, it's not people who are struggling that are buying houses. The average FTB is on the mid £30K income range. And as long as we keep building 30% of the houses we need, then only the top earning 35% of households need to be able to afford them for prices to rise.

For growth in those figures you will need real growth in the economy, the fundamentals after Gordon stops spending on his last credit card are absolutely terrible.

The fundamentals are markedly better than they were this time last year. Gordons spending is a temporary plaster, but the real economy is also healing underneath.

mr_fishbulb

HAMISH_MCTAVISH wrote: »

Shrinking disposable incomes...... Well not so far they aren't, average pay rises of 1.6% for private sector last year, ahead of inflation.

It's funny how CPI (currently at 1.9%) was used as a measure of inflation up until house prices dropped, because it didn't include mortgage interest. But now RPI is much better because variable rate mortgages have dropped, so you can say inflation is low.

For people who do not have a mortgage, have a fixed rate mortgage, or have not got a low enough LTV on a new mortgage, their RPI would not have dropped as much.

nembot

The fundamentals aren't really better at all though are they Hamish?

We have 2.4 million more unemployed and we will at some point in the near future be taxed at a higher level than I think you're imagining.

Not to mention talk of IR rises, which are the biggest factor in keeping the market ticking over.

Your post is more of a wish list, than actual fact young man.

HammerSmashedFace

HAMISH_MCTAVISH wrote: »

Shrinking disposable incomes...... Well not so far they aren't, average pay rises of 1.6% for private sector last year, ahead of inflation. True, taxes will rise, but not by enough to make a real difference. The 50% rate only impacts a tiny number of people, and thats if they don't manage to avoid it, for the vast majority, it's an extra 1% or so on income, and perhaps a couple of percent on some consumption.

QE reversal...... QE is merely an instrument to control liquidity, and thus inflation. It will not be reversed until sufficient liquidity is in the sytem to cause inflation. And even then, rates may be used instead. Either way, we're talking many years.

Low rates that will not last....... They'll be extremely low for many years yet. And I doubt we'll see rates above 5% in the next decade.

Huge public sector cuts...... Which both major parties agree will be done through spending freezes and inflation for the most part. Big job culls are extremely unlikely for many years. And given how much scope there is to make huge savings through efficiency and natural attrition, may never occur.

Inflation in energy costs etc.... Oh, yes please.... Brilliant news for Aberdeen house prices.



I'm not denying things will be slightly tougher moving forwards, but not enough to significantly impact house prices in the face of such a huge and unsustainable housing shortage. Don't forget, it's not people who are struggling that are buying houses. The average FTB is on the mid £30K income range. And as long as we keep building 30% pf the houses we need, then only the top earning 35% of households need to be able to afford them for prices to rise.



The fundamentals are markedly better than they were this time last year. Gordons spending is a temporary plaster, but the real economy is also healing underneath.

Well I disagree with most of it, but can't deny that if you believe what you've written, then I see why you are bull.

One of us is going to be right, or closer to the mark than the other over the next 18-24 months, I still believe it's me, but time will tell.

Harry_Powell

HammerSmashedFace wrote: »

Not from the internet Harry, I read books on the subject mainly (lots of them), so can't remember for sure of the source. However the last books I read was 'The Long Emergency' by James Howard Kuntsler and 'The Party Is Over' by Richard Heinberg.

I'm almost certain the information you are looking for will be in one of those. However if you really want to get to grips with humanity's downfall read Twilight In The Desert by Matthew Simmons, written in 2004, his analysis is based on 20 years worth of official documents from Saudi Aramco and the subjects covered are almost prophetic, scarily so.

Cheers, Ad. I had a quick google on The Long Emergency and I can see how the US will be massively impacted by reducing oil and gas supplies, though I do wonder if the UK and EU will be as impacted?

The fact that many EU cities are centuries old means that it's easier to transition to a less petroleum based lifestyle. Again, in the US, many of their cities were built in the era of the internal combustion engine and so the transition wil be much more difficult.

While we have followed the US in certain respects with out of town shopping centres, we still retain high streets and could transition back to a more 1950's lifestyle (a time where hardly anyone had cars) and where we would produce more of our own goods (because while overseas labour is cheaper, transportation costs are more expensive) and working closer to schools, factories, etc. Many of our cities can be walked across in a hour or so, unlike in the US.

I actually feel it would not be such a bad thing if we can't send kids to schools in the next town, work and shop miles away from where we live. We might return to more cohesive communities where people actually know their neighbours. Bring it on, I say!

Sir_Humphrey

HAMISH_MCTAVISH wrote: »

True, taxes will rise, but not by enough to make a real difference. The 50% rate only impacts a tiny number of people, and thats if they don't manage to avoid it, for the vast majority, it's an extra 1% or so on income, and perhaps a couple of percent on some consumption.

You forgot the 2011 National Insurance increase old chap.

Rotor

HammerSmashedFace wrote: »

Not from the internet Harry, I read books on the subject mainly (lots of them), so can't remember for sure of the source. However the last books I read was 'The Long Emergency' by James Howard Kuntsler and 'The Party Is Over' by Richard Heinberg.

I'm almost certain the information you are looking for will be in one of those. However if you really want to get to grips with humanity's downfall read Twilight In The Desert by Matthew Simmons, written in 2004, his analysis is based on 20 years worth of official documents from Saudi Aramco and the subjects covered are almost prophetic, scarily so.

I'm currently reading " It's all going swimmingly" by Gordon Brown and "Granite houses worth more than gold" by Hamish McTavish:p

Dan:_4

Sir_Humphrey wrote: »

You forgot the 2011 National Insurance increase old chap.

It's only 0.5% + I would have had 2 pay rises by then.

chucky

nembot wrote: »

The fundamentals aren't really better at all though are they Hamish?

We have 2.4 million more unemployed and we will at some point in the near future be taxed at a higher level than I think you're imagining.

Not to mention talk of IR rises, which are the biggest factor in keeping the market ticking over.

no wish list here - but a bit more perspective is required bot man.

the fundamentals are much better than they were in September 2008 - nobody can argue with that, so the fundamentals have improved.

we had 1.6 million unemployed pre-recession we have 800,000 more. that's not a huge amount with the kind of recession we've had/been in.

rates are an interesting one though. the impact is over stated though it won't affect that many people who have mortgages but will definitely affect FTB's - what will hurt people more is the reduction in disposable income and those that are unable to re-mortgage. there's the issue.