Boomtime: Britain bounces back....

HAMISH_MCTAVISH

Share prices, house prices, luxury cars... The recession is over and the country has started spending again

Howard Archer, economist at IHS Global Insight, is one of many experts concerned about the housing market overheating in London.

“But talk of a bubble outside of London is not correct,” he notes. “If you look at the latest data from Nationwide, 11 of the 13 regions of the country are still below their 2007 peak levels.”

The key thing for Archer is not rising prices, but the increase in housing transactions we are seeing – more properties changing hands.

“First of all, it helps tax receipts,” he says. “And it generates business for all the estate agents, surveyors and lawyers. And, if you move house, you may well buy yourself a new washing machine or carpet – increased housing transactions help boost retail sales.”

There are definite signs that this virtuous cycle is starting.

The average number of homes sold per chartered surveyor in the three months to September reached 18.7, according to RICS. Although still historically low, this is the highest number since late 2009.

A booming housing market, and Government intervention, is also helping to drive a dramatic – and much-needed – pick-up in construction. Some of the biggest beneficiaries have been bricklayers, many of whom abandoned the industry when house-building ground to a halt four years ago.

Nick Hammond, managing director of Brick Baron, a bricklaying contractor based in Beverley, Yorkshire, says: “I’ve been in the industry for 28 years and this is the best I’ve ever seen it. In my experience there’s absolutely been a boom, we noticed the change in the last three or four months. We couldn’t have foreseen it.
“The labour prices have increased by nearly 100 per cent. It’s down to the upturn of work in the housing sector and the lack of bricklayers in the industry. They are able to drive the prices up themselves.” The rates are per thousand bricks, rather than hours, he explains. “Three or four months ago the average was £250 a thousand – it’s up to £380 now and it’s going to be £400 soon.”

In response to demand, he has doubled his workforce. Plasterers and joiners are, he adds, also seeing a return to the glory days – echoes of a time when Harry Enfield, with his “Loadsamoney” character, parodied the seemingly endless cash being earned by tradesmen.

As if to underline this suggestion that the Thatcher boom years may be back, Jaguar – one of the last great car manufacturers in Britain – has been reporting record profit growth. David Gidman, a senior car salesman in Stratstone, Manchester, says: “I’ve got 24 years’ experience of sales, and in the Jaguar world it’s probably the best I’ve ever seen it.”

It is, undoubtedly, hard to square this exuberance with the news that energy companies are putting up their prices again and that the Red Cross will be helping to run food banks in Britain, the first time it has operated in this country since the Second World War. Economists say that it is understandable that the majority of consumers – those not working in construction, housing or the City – will not feel any better off.

The most recent figures suggest consumer prices are rising at 2.7 per cent, but average wages are only going up by 1 per cent, a depressing phenomenon that has made most of us feel consistently worse off over the last five years.

Vicky Redwood, economist at Capital Economics, says: “Consumers’ budgets are still being squeezed. It will take time for inflation to dip below wages growth.

“But things are moving in the right direction. The return to normality is not far off.” By next summer, she believes, employees should finally see their pay packets increase by more than consumer prices. That, then, should further help growth.

Howard Archer, too, is cautiously upbeat. “The economy is still vulnerable to shocks, but my feeling is that there is an improvement and we should be able to carry on growing,” he says.

“Consumer confidence has been moving up strongly in recent months. Obviously, that has been from a very low base and we’ve had a decent summer, with sporting success, a royal baby – that all helps matters.

“But what really fuels consumer confidence is people becoming more optimistic.

Hopefully what you get is people spending a bit more, then that boosts the economy and helps employment, and if more people are employed then that pushes up wages.”

http://www.telegraph.co.uk/finance/economics/10372896/Boomtime-Britain-bounces-back.html

:beer:

chewmylegoff

I don't think harry enfield's 'loadsamoney' character was supposed to be a plasterer! That's pretty funny!

calicocat

Just had friends over for a meal tonight for one to tell me my house has just gone up 5%. There are no houses here up for sale though (which is how I ended up paying 10K over valuation) I bought 3 months ago and keep looking at what's about and there are less now than when I bought. Every week I get probably 3 letters shoved through my door asking me to sell, however have just moved in so that isn't happening yet.

There needs to be more houses on the market for sure, down south there may be an abundance to choose from but up north its very limited at the moment, so I sometimes wonder how all this movement is going to take place.

Fella

chewmylegoff wrote: »

I don't think harry enfield's 'loadsamoney' character was supposed to be a plasterer! That's pretty funny!

He was! "I am a plasterer and plasterers are GREAT" was how he started that slot occasionally.

Generali

Fella wrote: »

He was! "I am a plasterer and plasterers are GREAT" was how he started that slot occasionally.

IIRC he was a plasterer and then right at the end of his 'life' started repossessing houses. It went something like:

"What's your house like?"
"Oh, lovely. Laura Ashley wallpaper......"
"No! I said, 'What's your house like?' This one's mine! Loadsamoney".

Road_Hog

Now,I'm not one of those negative envious people wanting to get on the housing ladder, I've made a lot of money from housing and being a landlord.

And here's the but, reading between the lines, we're going to have a mini boom in housing for the next 12 to 18 months.

And then it's all going to go Pete Tong. Economies are broke, still borrowing way beyond their means and we're going to have an economic collapse sometime between 2015 to 2020, that makes 2008 look like a fairy tale.

Too much borrowing, interest rates rising, bail ins, wage deflation, unemployment rising (in the UK we're going to have 500K Romanians and Bulgarians arrive shortly), underemployment continuing to be the norm and trans-national corporations all paying virtually no tax.

And we won't mention inflation which apparently is only risig slowly, except they don't seem to include food and energy prices in the equation. For your average Joe in the street, times ahead are going to be pretty tough and this could hit property prices in the medium term.

floridaman

There are definitely people spending again and the mood has changed from people I have spoken to. House prices are going up and the whole country should see this as welcome news.

With the govs help to buy sceme there is no reason for a FTB not to buy if they are already paying rent (which is likely to be more than current morgage repayments).

gazzabboi

HAMISH_MCTAVISH wrote: »

So in real (inflation adjusted) terms then, what's the next boom going to look like?

In my opinion the current artificial repressing of house prices through mortgage rationing is starting to end, and the lowest house building in a century is about to meet the biggest generational bulge of FTB age people in history.

As soaring population and the existing million house shortage, worsened by 5 years of mortgage rationing causing century low house building, have now all but ensured the next boom will be the biggest ever.

Leading to the likeliest outcome by far being a near doubling in house prices in real terms over the next cycle....



Of course, other opinions may vary..... But they've mostly been wrong so far

I'm with hamish on this one.

Generali

Road_Hog wrote: »

And we won't mention inflation which apparently is only risig slowly, except they don't seem to include food and energy prices in the equation.

Perhaps you're thinking of US core inflation...? UK inflation figures include food and energy prices:

http://www.ons.gov.uk/ons/guide-method/user-guidance/prices/cpi-and-rpi/cpi-and-rpi--updating-weights/index.html

Food and non-alcoholic beverages 10.6%
Housing, water, electricity and gas 13.7%

If you search the ONS website you can find the break down right to the level of types of food etc.

Things actually look pretty good for the UK to me. Spending is coming under control having gotten completely out of control over the last decade under Labour. The economy is on the up which is the other piece of the jigsaw towards fixing the finances of the Government. The Tories seem to have committed to further reducing he size of the British Government through to 2020 if they win the next election, something that is looking increasingly likely:

http://ukpollingreport.co.uk/voting-intention-2

chewmylegoff

chewmylegoff wrote: »

I don't think harry enfield's 'loadsamoney' character was supposed to be a plasterer! That's pretty funny!

Double face palm.

Loughton_Monkey

No more boom or bust!