House prices: disaster ahead - today's Times

WTF?_2

chappers wrote: »

I am aware and do realise the possibility for a larger more long lasting correction, and i will admit i am no financial analyst, however the economy is still holding up fairly well, generally, we still have high levels of employment and whilst the arrows in the intrest rate quiver are running low, the treasury does have other weapons at it's disposal, such as releasing more money to the lending markets and allowing those lenders with funds available to manipulate their securitisation. there is also alot of talk about forcing lenders to pass on intrest rate cuts to their borrowers , but personally I can't see that happening in a fair market economy.

The UK is essentially 'broke'. After many years of boom and record tax receipts there are in fact record public deficits. How the government managed this is a bit of a mystery but I'd suggest incompetence is quite a probable cause.

The so-called 'strong economy' relies upon people borrowing large amounts of money, often off the back of 'equity' in their property, to consume. Turn off the credit taps and the financial, housing and retail markets all seize up.


Real interest rates are still 'high' (in fact, money is still pretty cheap it's just that people are in so much debt that any sort of small increase hurts them) because the central banks kept them too low for too long and the lenders went on an orgy of irresponsible lending. Defaults on repayment and the resulting destruction of capital and tightening of credit is the inevitable and necessary conclusion of the chain of events triggered by lax lending.



Reading some of the posts put forward by the 'bulls' here it would seem that not only are we in for one of the steepest recessions ever, it but many people are absolutely unprepared and ignorant of the repercussions for them.

If nothing else, it should make for quite a show.

jamescredmond

dopester wrote: »

Whilst shaking my head in disbelief and going for the quote button I accidentally gave you a thumbs up for your post - when I couldn't disagree more with your post.

And that's right.. you are no financial analyst and completely unaware of just how much the Government / Treasury / BoE are restricted with room to move. The UK property market is sick... it doesn't need massive cocaine injections (it's already had enough)... it needs to let the illness work itself out.

sorry dopester, but when it comes to financial analysists, neither are you.
or me.
we express (hopefully) informed opinion and chappers is correct in stating that the economy is basically OK/unemployment low. these conditions will perhaps allow us to avoid the 'OMG we're all going to die' scenario and settle for ' jesus, this is going to hurt' instead.

having said that, you're right in putting him right viz. gov. intervention. short of emergency legislation (for 'emergency' read 'times of war') brown can only offer incentives to the banking sector (as he did today, reportedly) or rely on persuasion and half promises for the future.

a lot of posts are slagging brown into the ground but, when things start getting 'iffy', it becomes clear who's really in charge.

besides, the discussion isn't so much about how much about the sh1te we're in; it's more about the depth.

carolt

chappers wrote: »

I will stick my neck out and say I think we will see a sharpish downward correction of maybe upto 20%, but more like 10-15%, but I also think we will see a fairly quick recovery again fuelled by those, who are currently saying they are going to wait for prices to fall, coming into the market.
So my guess is a fall of maybe up to 20% with a turnaround back up to current prices of 5-6 years. With some of the more stable areas seeing smaller falls and quicker recovery.

There you go you heard it here first

Thanks for explaining your previous post in more detail.

So now we know it - chappers is a bear, a believer in 'a sharpish downward correction'. We clearly think along identical lines, although I think prices will probably fall nearer to 30-40% or possibly more, unless inflation going through the roof means that nominal falls are less required to bring prices down to the us income multiples (by no means inpossible). I would hesitate to predict how long the downturn will last; it could be as little as 5 years or it could be far longer My crystal ball is cloudy on those....

So presumably, as you believe we are in for 'a sharpish downward correction of maybe upto 20%', you would not advise those with little equity to protect them from price falls, such as most FTB's, to enter the property market now, except in exceptional circumstances?

Glad to hear our thoughts are so much in line: look forward to hearing more about how we agree, or if not, where you think our views of the future - as opposed to our current circumstances - differ.

JonnyBravo

carolt wrote: »

So presumably, as you believe we are in for 'a sharpish downward correction of maybe upto 20%', you would not advise those with little equity to protect them from price falls, such as most FTB's, to enter the property market now, except in exceptional circumstances?

He he he.

Good lass.

Becoming quite the reasoned poster I always thought you could!

<pats carolt on the head

carolt

Oh you are such a wit.

So, JonnyBravo, we'd love to hear your views on where the housing market is heading? Do you agree with chappers and me?

Looking forward to hearing your views on something other than me. Can't help but be flattered by the obsession, naturally.

JonnyBravo

carolt wrote: »

Oh you are such a wit.

So, JonnyBravo, we'd love to hear your views on where the housing market is heading? Do you agree with chappers and me?

Looking forward to hearing your views on something other than me. Can't help but be flattered by the obsession, naturally.

He he he

Oh carolt.... I'm glad this is a two way thing.... I've told you before I absolutely agree with you that the market is headed down. I told you I voted for the 20% option on someone's vote somewhere.....

But you knew that didn't you?.... you just wanted me to pop by again eh?

Enough about me carolt.... now let's get back to you.... tell me.... how do you eat a creme egg?

carolt

JonnyBravo wrote: »

Enough about me carolt.... now let's get back to you.... tell me.... how do you eat a creme egg?

Can't stand them.

You're not trying to change the subject again, are you? :rolleyes:

JonnyBravo

carolt wrote: »

Can't stand them.

You're not trying to change the subject again, are you? :rolleyes:

ahhh I've been rumbled.....

how about a flake?




is this you carolt?..... wash my mouth out..... sorry, obviously i meant is this you on a bad hair day?

carolt

I've obviously been rumbled too......

jamescredmond

I KNEW IT. you're 2 timing me carol.