We are not ready for a price correction

macaque_2

Many property owners believe that the government has a vested interest in protecting them. This is not true. For every property owner the government saves, they create two dissafected voters who cannot afford accomodation. The governments real aim is to avert another banking crisis.

At the moment, UK banks could not survive even a modest price correction and another banking crisis would be more serious than the last. The only solution is for the banks to deleverage. This means taking on new property debt at much higher deposits. The lure for this is low short term interest rates and hype. Some are taking the bait but not enough.

The two sleeping elephants in the room are interest rates and government spending. At some point, external factors will force UK interest rates up. In terms of government spending cuts, this process has hardly started. When it does, the impact on jobs and disposable income will be severe. Either event will force down prices.

The clever bit is to get the banks in a better shape before house prices adjust to more affordable levels. It is looking very touch and go at the moment and too few people are buying.

Despite all the crowing from the bulls (bulls crowing?), we are in a very parlous position. St Augustine said, 'Grant me chastity and continence, only not yet'. It would seem that the modern version is 'Grant us financial prudence and affordable housing, only not yet'

julieq

Bookmarked for a good giggle 12 months hence. Ta Macaque, you never disappoint.

HAMISH_MCTAVISH

We've already had the price correction.

Now we're in the "bump along the bottom" phase.

neas

i think the phase we are having is the crash that is damped because of external influencing factors.

So instead of a massive correction we will get corrected slightly by inflation, by overcrowding and not enough houses being built and by low interest rates alllowing people to thrive and survive.

nobody can predict what will happen and its over a year since i purchased and nt much has happened, house roughly same price as got a nice fdiscount... houses around selling for slightly more without double glazing for example.

Got my interest rates fixed, altho could've made a bit more out of going onto a lower 2% rate but hey still cheaper than renting.

Sibley

Why are people bothering to speak about a crash. We are not going to do one sorry.

paddyrg

All of us futurologists are just guessing, of course. Personally I see a further correction is inevitable, the price decreases so far are minor compared with year after year of rampant explosion in prices, where people would smug up about how they were making £100/day in the increased value of their houses.

Blacklight

paddyrg wrote: »

All of us futurologists are just guessing, of course. Personally I see a further correction is inevitable, the price decreases so far are minor compared with year after year of rampant explosion in prices, where people would smug up about how they were making £100/day in the increased value of their houses.

Yeah, just like last time... and the time before that... and the time before that... and, oh wait no. That's totally wrong.

Loughton_Monkey

macaque wrote: »

Many property owners believe that the government has a vested interest in protecting them. This is not true.

It is true. You just wrote it, so it must be true.

macaque wrote: »

St Augustine said, 'Grant me chastity and continence, only not yet'.

And wasn't it his brother, St Gigolo the Incontinent, who said 'Grant me House Price Inflation, and I want it now.'?

purch

We are not ready for a price correction

After all those 70% predictions and you are still not ready :eek:

Loughton_Monkey

purch wrote: »

After all those 70% predictions and you are still not ready :eek:

Obviously not! He wants the banks all nice and ship-shape first, by which time the economy will be growing again, all back to work, Stock Markets fully recovered..... and then he'll want his 30% crash.

paddyrg

Blacklight wrote: »

Yeah, just like last time... and the time before that... and the time before that... and, oh wait no. That's totally wrong.

Which bit is wrong? That house prices were (and probably still are) overinflated? Or that we haven't got out of this financial meltdown yet?