Northern England and the price crash...

Trollfever

The Govt has started to expand its employment opportunities in the NE by buying Northern Wreck.

Biggles

RubyShoes wrote: »

I had a conversation with my mum today. She was telling me about the last house price crash. She told me that when it happened, the north was not affected, and that house prices simply stagnated, rather than dropping like in southern areas.

That's quite true, though there's never really been a 'crash' anywhere at any time. While the national average house price dropped from £63k in 1989 to £50k in 1993, the 'North' region stayed pretty static (£43k to £45k)

Gorgeous_George

Let's say salaries are 10% lower in the North. Houses are 30%-40% lower.

If the credit crunch limits lending to modest multiples, the impact up t'North will be less IMHO.

If 70% of the GDP of NE England is from Govt spending, I can only assume that the South has 80%-90%. What do southerners do that will protect them from a global credit crunch?

GG

real1314

The Olympics 2012?

Remind me where they built the millenium done - was it near The Tyne or the Wear? And the national football stadium? Isn't that centrally located?

Whilst there might be a dis-proportionate number of public sector jobs in the north (although maybe not - whitehall / parliament - and higher salaries), there's a hell of a lot of govt funding in the s-e region.

Anyway, from my experience there was minimal impact in the n-w.

OH bought a 3 bed (really a 2 converted to 3) terraced for about £32k in late 93, we sold it for £28k in 95 but the purchase was at an inflated price - done up (fairly badly) by a builder and the sale was fairly desperate.

That's the only period that prices dropped afaik.

Post 95/96 has seen constant rises.

PasturesNew

See for yourself: http://www.hbosplc.com/economy/HistoricalDataSpreadsheet.asp by posttown

These are actual figures, broken down into region and post town.
In Excel format
So download, open, play around.

Bf109

Gorgeous_George wrote: »

If 70% of the GDP of NE England is from Govt spending, I can only assume that the South has 80%-90%. What do southerners do that will protect them from a global credit crunch?

Is it your contention that the South is more dependent on government spending than the North?

According to the Centre for Economics and Business Research, in the northeast and Wales government spending accounts for almost 60% of the economy. In Northern Ireland it accounts for more than two-thirds of its GDP at 67%.

In London and the southeast government spending accounts for just one-third of the economy.

Gorgeous_George

Rather depends if you include all the jobs in Defence that are not directly funded by the Government, I think.

GG

Generali

Gorgeous_George wrote: »

Let's say salaries are 10% lower in the North. Houses are 30%-40% lower.

If the credit crunch limits lending to modest multiples, the impact up t'North will be less IMHO.

If 70% of the GDP of NE England is from Govt spending, I can only assume that the South has 80%-90%. What do southerners do that will protect them from a global credit crunch?

GG

In the South East and London I think it's more like 30% of GDP from Govt spending. Overall the figure is 42% for the coutry IIRC.

Clearly the South East is going to be very hard hit if the credit crunch continues as highly paid City and media jobs get culled, 2 things that really drive the South Eastern economy.

The thing is, this pays for everything else. The proportion of spending in the NE that comes from Govt spending is at the same level as it was in Czechoslovakia and Hungary under communism and we've seen exactly how sustainable that is.

Gorgeous_George

I just do not see many manufacturing plants down South. Jobs that shuffle paper yes, but what do they build?

A lot of the £28 Billion Defence Budget is spent down South. Is this part of the 30% quoted?

Northerners make things and Southerners shuffle paper. I'm a Northerner living in the South. I shuffle paper.

GG

dweeby

Generali wrote: »

My guess is that this time the North East is going to suffer more than any other region. They have very little economy beyond what the Govt spends (IIRC, 70% of the GDP of NE England is from Govt spending) and so if the Govt has to start reducing spending the NE is going to be particularly hard hit.

This is a very simplistic view. As you've said in another post, the south relies heavily on employment in the media and city sectors - which must be vulnerable at the moment.

Each region has a very different economy, split between all sorts of sectors. For example, I live in Cumbria. Whilst there is a lot of government spending, there's also a lot of farming, tourism and manufacturing (believe it or not!). But also, the house prices are still a fraction of those down south.

Simply saying the north relies more on government spending than the south (and house prices are going to dive) is too simplistic, anyway - why would the government cut spending? they have loads of money, I know, I pay the taxes!

My experience is that (whilst houses might not be selling), prices have not yet reduced.