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Brexit, Mark Carney and the housing market

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  • gazzabboi
    gazzabboi Posts: 210
    First Anniversary First Post Combo Breaker
    Forumite
    edited 16 September 2018 at 2:03PM
    Let’s say you buy a house for £200k now.

    A 35% crash would make the house £130k.

    Chance of that happening is slim.

    Interest rates would be more likely to drop before they put them up while in negative equity. The news is fake, ramainers doing their best to avoid brexit.
  • gazzabboi wrote: »
    Let’s say you buy a house for £200k now.
    A 35% crash would make the house £130k.
    Chance of that happening is slim.
    Interest rates would be more likely to drop before they put them up while in negative equity. The news is fake, ramainers doing their best to avoid brexit.
    According to the Land Registry, in Blackpool 223 flats sold in 2008 at an average price of £106,941. In 2009 163 sold at an average price of £85,611 a 19.95% drop in prices. It's a lot but isn't 35%, so you might be right.

    But wait...
    In 2010 the average of the 101 flats sold was £83,213 a 22.19% drop on 2008.
    In 2011 it was 141 @ £71,700: a 32.95% drop.
    2012, 138 @ £67,934: a 36.48% drop.
    So in 4 years it was more than Carney's prediction for a no-deal Brexit.

    But wait..
    In 2013 they went up again, hurrah! to 141 @ £68,128. Only a 36.29% loss.
    Then it went pear shaped again in 2014 when 192 sold at an average of £66,786 or a 37.57% drop on 2008 prices.
    2015 they fell further: 169 @ £65,423 a 38.82% but since then the prices have recovered year on year until last year (2017) when they were only 29.48% lower than in 2008 based on 185 sales at an average of £75,413

    The figures are all there on the Land Registry website for you to examine. So, tell me again about this "fake news" of which you speak. And perhaps a quantitative analysis of what you would define as slim. Not only is there precedent for the housing market to fall by such an amount it was only 10 years ago when it did. And there are home owners who are still feeling the pain of this now who will undoubtedly bear the brunt of further drops whether that be 39% or 35% or maybe, if they are lucky 10%.

    Do I think it will happen? I don't know, I am not an expert economist, unlike Mark Carney, but quite frankly I'd take his side when the alternative is someone who thinks it is clever to mimic Donald Trump's answer to anything he doesn't like the look of.

    SP
    Come on people, it's not difficult: lose means to be unable to find, loose means not being fixed in place. So if you have a hole in your pocket you might lose your loose change.
  • 2008 was a banking credit crunch/crisis, the last real recession that actually affected people badly was in the early 80`s, easy credit has seen to it that people don`t experience real austerity any more, IMO anyway. They can`t reduce rates any more either, and the massive QE experiment hasn`t produced the growth results many hoped it would, plus the US is now raising rates and we have countries like Turkey with rates at what 24% at one point recently? With all the shadow banking/derivatives etc. nonsense that goes on I would say a big banking crisis is even more likely than in 2008, and the more MC and co. bang on about "stress testing" etc. the more I think that they know there are problems waiting in the wings. Even ignoring China/Trump and other global problems Italy/Turkey/Brexit has the potential to cause massive upsets to credit markets. Really really not the time to have a bubble mortgage IMO.

    I agree with most of your post.
    But I don't think it will be a BANKING crisis this time.
    Governments have a habit of always "fighting the last war" and so banks have been made much stronger. In fact some of the hassles the government has given them is making HSBC consider gradually moving back to Asia (where it originated).

    Ray Dalio said in his recent interview, that he thought the next crisis will have more of a social component to it. But I think he was talking more about the repercussions, rather than the triggers.

    I don't know what will trigger the next crash. Each crash is slightly different.
    Selling off the UK's gold reserves at USD 276 per ounce was a really good idea, which I will not citicise in any way.
  • According to the Land Registry, in Blackpool 223 flats sold in 2008 at an average price of £106,941. In 2009 163 sold at an average price of £85,611 a 19.95% drop in prices. It's a lot but isn't 35%, so you might be right.

    But wait...
    In 2010 the average of the 101 flats sold was £83,213 a 22.19% drop on 2008.
    In 2011 it was 141 @ £71,700: a 32.95% drop.
    2012, 138 @ £67,934: a 36.48% drop.
    So in 4 years it was more than Carney's prediction for a no-deal Brexit.

    But wait..
    In 2013 they went up again, hurrah! to 141 @ £68,128. Only a 36.29% loss.
    Then it went pear shaped again in 2014 when 192 sold at an average of £66,786 or a 37.57% drop on 2008 prices.
    2015 they fell further: 169 @ £65,423 a 38.82% but since then the prices have recovered year on year until last year (2017) when they were only 29.48% lower than in 2008 based on 185 sales at an average of £75,413

    The figures are all there on the Land Registry website for you to examine. So, tell me again about this "fake news" of which you speak. And perhaps a quantitative analysis of what you would define as slim. Not only is there precedent for the housing market to fall by such an amount it was only 10 years ago when it did. And there are home owners who are still feeling the pain of this now who will undoubtedly bear the brunt of further drops whether that be 39% or 35% or maybe, if they are lucky 10%.

    Do I think it will happen? I don't know, I am not an expert economist, unlike Mark Carney, but quite frankly I'd take his side when the alternative is someone who thinks it is clever to mimic Donald Trump's answer to anything he doesn't like the look of.

    SP


    Be off with you Sir, with your facts and figures.
    We'll have none of your sort around here...
    Selling off the UK's gold reserves at USD 276 per ounce was a really good idea, which I will not citicise in any way.
  • _CC_
    _CC_ Posts: 362 Forumite
    According to the Land Registry, in Blackpool 223 flats sold in 2008 at an average price of £106,941. In 2009 163 sold at an average price of £85,611 a 19.95% drop in prices. It's a lot but isn't 35%, so you might be right.

    But wait...
    In 2010 the average of the 101 flats sold was £83,213 a 22.19% drop on 2008.
    In 2011 it was 141 @ £71,700: a 32.95% drop.
    2012, 138 @ £67,934: a 36.48% drop.
    So in 4 years it was more than Carney's prediction for a no-deal Brexit.

    But wait..
    In 2013 they went up again, hurrah! to 141 @ £68,128. Only a 36.29% loss.
    Then it went pear shaped again in 2014 when 192 sold at an average of £66,786 or a 37.57% drop on 2008 prices.
    2015 they fell further: 169 @ £65,423 a 38.82% but since then the prices have recovered year on year until last year (2017) when they were only 29.48% lower than in 2008 based on 185 sales at an average of £75,413

    The figures are all there on the Land Registry website for you to examine. So, tell me again about this "fake news" of which you speak. And perhaps a quantitative analysis of what you would define as slim. Not only is there precedent for the housing market to fall by such an amount it was only 10 years ago when it did. And there are home owners who are still feeling the pain of this now who will undoubtedly bear the brunt of further drops whether that be 39% or 35% or maybe, if they are lucky 10%.

    Do I think it will happen? I don't know, I am not an expert economist, unlike Mark Carney, but quite frankly I'd take his side when the alternative is someone who thinks it is clever to mimic Donald Trump's answer to anything he doesn't like the look of.

    SP


    "Not only is there precedent for the housing market to fall by such an amount it was only 10 years ago when it did"


    No it didn't.


    See https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/jan2017



    Maybe it did in your specific example, but that makes up less than 0.1% of the residential housing sold in those years.
  • _CC_ wrote: »
    "Not only is there precedent for the housing market to fall by such an amount it was only 10 years ago when it did"


    No it didn't.


    See https://www.ons.gov.uk/economy/inflationandpriceindices/bulletins/housepriceindex/jan2017



    Maybe it did in your specific example, but that makes up less than 0.1% of the residential housing sold in those years.

    Correct. Using Blackpool as an example is a bit specific.

    The only people who buy flats in Blackpool are landlords who fill them with benefit claimants and child abusers from all over the country.

    The town is in serious decline......but if you're going to claim benefits, why not claim them in a ''fun'' place like Blackpool
  • Correct. Using Blackpool as an example is a bit specific.

    The only people who buy flats in Blackpool are landlords who fill them with benefit claimants and child abusers from all over the country.

    The town is in serious decline......but if you're going to claim benefits, why not claim them in a ''fun'' place like Blackpool
    Well of course it is specific, it is what is known as "an example" all examples are specific: it is the nature of examples. It is an illustration of an area where something has happened which was discounted as not going to happen.

    Your reasoning is flawed as Blackpool is known as having a larger than average proportion of HMO's due to "landlords who fill them with benefit claimants" who don't buy flats - which is why I used them as an example - they buy houses, often guest houses to turn into HMO's. Pointless trying to turn a 1 bed flat into an HMO when you can pay twice the price and get a 10 bed guest house, isn't it?

    Do you discount everything that only hits poorer areas as too specific? Is it all ok because the multimillion pound properties in Surrey a similar decline?

    Here are some more figures for you for Blackpool in the years preceding the crash:
    2000 £38,143 111
    2001 £40,254 142 6%
    2002 £40,877 150 2%
    2003 £53,054 167 30%
    2004 £82,707 173 56%
    2005 £120,587 272 46%
    2006 £102,675 241 -15%
    2007 £92,729 239 -10%


    Do those look like figures of a town "in serious decline"? No. The crash caused the decline in prices not the other way around.

    Now, I can hear those cogs turning, your going to say "Ah ha! Blackpool was in terminal decline in 2006/2007 before the crash. Look, the average has gone down." Well, yes it did, but the reason for that was the massive 56% and 46% rise in 2004/2005 which has skewed the results because of a single building known as Admiral Point (look it up). The average price of a the 66 "new" flats that sold in Admiralty Point in 2004/2005 was £195,804 and there has been nothing like it since or before.

    So, you don't like facts. That is ok: who needs them when you are so entrenched in a position that all else bows before your superior ignorance. One day you might pull yourself out of the mindset of a 5 year old and realise that just because you don't want something to be true does not make it so.

    Tell you what: you find me a town in the UK with a similar sample size to Blackpool where prices went up by a similar margin before the crash and continued to go up afterwards with the same detail I have provided and I'll show you some figures from other places where they have fallen by similar amounts. FYI The total sample base you will be looking at between 2000 and 2017 will be in the region of 2300 similar properties.


    SP
    Come on people, it's not difficult: lose means to be unable to find, loose means not being fixed in place. So if you have a hole in your pocket you might lose your loose change.
  • _CC_
    _CC_ Posts: 362 Forumite
    Well of course it is specific, it is what is known as "an example" all examples are specific: it is the nature of examples. It is an illustration of an area where something has happened which was discounted as not going to happen.

    Your reasoning is flawed as Blackpool is known as having a larger than average proportion of HMO's due to...

    [mumbo jumbo]

    So, you don't like facts.


    [more mumbo jumbo]


    You were given the facts in the link I posted.



    It showed your assertion was wrong.


    Maybe one day the team at the BoE will solely use flats in Blackpool in their modelling instead of the UK housing stock as a whole and your insight will prove helpful.
  • _CC_ wrote: »
    You were given the facts in the link I posted.
    It showed your assertion was wrong.

    Maybe one day the team at the BoE will solely use flats in Blackpool in their modelling instead of the UK housing stock as a whole and your insight will prove helpful.
    You really didn't read the data in the ONS report - and it is an ONS not a BOE report. It does no such thing. (If I'm being generous: didn't read is better than didn't understand). An aggregate of all figures of all variant types will give a broad brush indication of the market as a whole but the underlying detail is what matters to people in real situations. That's how statistics work. For instance, moving away from the housing market for a moment, did you know that the average human only has 1.978 legs? That's right - I can show you reports that "prove" most humans have less than two legs! Ridiculous? No more so than your interpretation of the data you are relying on for your argument.

    My initial response was to a post that claimed that an individual property's chances of falling 35% was slim. And I showed - including working, not some badly understood link - that those events were indeed possible and had happened to many people. At no time did I suggest that the level of drop had occurred throughout the country or to the same level, just that the drops were possible and that the pain of those drops are still being felt by many many people ten years on.

    You don't like Blackpool as an example? Ok, lets take somewhere mentioned in the report you are so reliant upon: Middlesbrough. Showing flats with % change in value from 2007.
    2007 £115,674 260 ---
    2008 £103,212 153 -11%
    2009 £100,771 45 -13%
    2010 £86,114 33 -26%
    2011 £99,959 50 -14%
    2012 £92,132 39 -20%
    2013 £76,654 67 -34%
    2014 £70,502 75 -39%
    2015 £65,250 74 -44%
    2016 £77,010 51 -33%
    2017 £79,451 59 -31%

    Don't like these figures either? Do you have a list of places you do accept figures about? Kensington & Chelsea perhaps? Anywhere that doesn't upset your little world view? Here you go, here's something to support your argument: Prices for flats in Knightsbridge and Belgravia:

    2007 £1,481,122 201 ---
    2008 £1,646,954 102 11%
    2009 £1,435,289 97 -3%
    2010 £1,553,501 104 5%
    2011 £2,224,891 100 50%
    2012 £3,823,453 107 158%
    2013 £3,240,946 131 119%
    2014 £3,879,664 170 162%
    2015 £3,981,560 119 169%
    2016 £3,215,513 88 117%
    2017 £3,782,620 107 155%

    There you go - you can use that data for all your arguments now, It totally proves your point. Well done you. I'm sure the millions of mortgage payers will sleep easier in their beds knowing that data is out there.

    SP
    Come on people, it's not difficult: lose means to be unable to find, loose means not being fixed in place. So if you have a hole in your pocket you might lose your loose change.
  • _CC_
    _CC_ Posts: 362 Forumite
    edited 17 September 2018 at 6:49PM
    You really didn't read the data in the ONS report - and it is an ONS not a BOE report.


    The thread is about BoE analysis / stress testing. The BoE's jurisdiction is the entire UK.



    I linked to the ONS which is the recognised statistical institute of the UK. The Land Registry is just England and Wales. The ONS uses the Land Registry as well as the registers for Scotland and Northern Ireland.

    It does no such thing. (If I'm being generous: didn't read is better than didn't understand). An aggregate of all figures of all variant types will give a broad brush indication of the market as a whole but the underlying detail is what matters to people in real situations. That's how statistics work.


    Exactly right.



    The thread is about Mark Carney's remarks, Governor of the Bank of England.


    His 35% figure is regarding the UK housing market as a whole.


    For instance, moving away from the housing market for a moment, did you know that the average human only has 1.978 legs? That's right - I can show you reports that "prove" most humans have less than two legs! Ridiculous? No more so than your interpretation of the data you are relying on for your argument.



    You're wrong here.


    Most humans do in fact have two legs.



    My initial response was to a post that claimed that an individual property's chances of falling 35% was slim. And I showed - including working, not some badly understood link - that those events were indeed possible and had happened to many people. At no time did I suggest that the level of drop had occurred throughout the country or to the same level, just that the drops were possible and that the pain of those drops are still being felt by many many people ten years on.


    It's possible, as you've shown, but there was a slim chance if you lived in a house within the UK pre-crash that it would go on to lose 35% value.


    Let's take the North West since you bring up Blackpool flats:


    (% represent annual change)



    Jan 08 3.9%
    Jan 09 -14.04%
    Jan 10 2.81%
    Jan 11 -0.89%
    Jan 12 -3.17%
    Jan 13 -0.96%
    Jan 14 4.18%
    Jan 15 4.82%
    Jan 16 5.22%
    Jan 17 4.35%
    Jan 18 4.15%


    This is based on transaction data.



    Clearly those people who bought flats in Blackpool are outside of the norm of what happened to the majority of residential property within the North West. They're the outliers in your statistical jargon.


    Let's drill down to flats in the North West:


    Jan 08 4.3%
    Jan 09 -15.6%
    Jan 10 -0.4%
    Jan 11 -2.5%
    Jan 12 -3%
    Jan 13 -1%
    Jan 14 4.3%
    Jan 15 4%
    Jan 16 4.4%
    Jan 17 4.3%
    Jan 18 5.4%



    Odds are, if you lived in the North West your property wouldn't have lost 35% value. It's a slim chance it would have; you would have had to lived in, say, a flat in Blackpool.



    You don't like Blackpool as an example? Ok, lets take somewhere mentioned in the report you are so reliant upon: Middlesbrough. Showing flats with % change in value from 2007.
    2007 £115,674 260 ---
    2008 £103,212 153 -11%
    2009 £100,771 45 -13%
    2010 £86,114 33 -26%
    2011 £99,959 50 -14%
    2012 £92,132 39 -20%
    2013 £76,654 67 -34%
    2014 £70,502 75 -39%
    2015 £65,250 74 -44%
    2016 £77,010 51 -33%
    2017 £79,451 59 -31%



    Again, you seem to be using a very selective group. Why do you keep using flats, too, I wonder?


    Okay, lets look at Yorkshire and The Humber:


    Jan 08 3.8%
    Jan 09 -14.7%
    Jan 10 5.75%
    Jan 11 -2.9%
    Jan 12 -1.7%
    Jan 13 -1%
    Jan 14 4.8%
    Jan 15 3.5%
    Jan 16 6.2%
    Jan 17 3%
    Jan 18 4.8%


    Again, these are all property transactions.



    Nope, still can't see the 35% drops.


    Again, it appears you've selected a group to fit your argument that clearly the majority of people do not fit into. So yes, there was a slim chance of the 35% drop during the last crash for most people, albeit possible.


    Don't like these figures either? Do you have a list of places you do accept figures about? Kensington & Chelsea perhaps? Anywhere that doesn't upset your little world view? Here you go, here's something to support your argument: Prices for flats in Knightsbridge and Belgravia:

    2007 £1,481,122 201 ---
    2008 £1,646,954 102 11%
    2009 £1,435,289 97 -3%
    2010 £1,553,501 104 5%
    2011 £2,224,891 100 50%
    2012 £3,823,453 107 158%
    2013 £3,240,946 131 119%
    2014 £3,879,664 170 162%
    2015 £3,981,560 119 169%
    2016 £3,215,513 88 117%
    2017 £3,782,620 107 155%

    There you go - you can use that data for all your arguments now, It totally proves your point. Well done you. I'm sure the millions of mortgage payers will sleep easier in their beds knowing that data is out there.


    No, these stats are equally unuseful for most people.
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