How far will house prices fall [volume 4]

[Fittster]

Magog said:

baptistsan said:

ClaphamGT3 said:

Yes, let's not forget that this is an article written by David Cameron 6 months before an election he's looking stubbornly likely to lose to Labour. Do you not think he has a bit of a vested interest in peddling a message of we're not out of the economic woods yet - let's not leave the fragile recovery to the two Eds?

Indeed. But considering the Japanese economy has just taken a bit of a dive, there may be something in it.

It seems fairly foolish for Cameron to come out and say the warning lights on the dashboard are starting to flash, when so much activity in a modern economy is reliant on consumer and business confidence. It's hardly going to help sentiment is it.

Cameroon and Osborne really don't have a clue when it comes to economics. So they think there's the possibility of hard times just around the corner? There solution more austerity.

FFS. If the world economy tanks gilts are going to have even lower yields and it's time for fiscal policy to support growth.

Either his prediction is incompetent or his response to it is.

[NomduJour]

There is no austerity. It's a figment of the Left's imagination.

[Fittster]

NomduJour said:

There is no austerity. It's a figment of the Left's imagination.

You don't think there have been cuts to the welfare budget?

The trouble is austerity is damaging to the economy, reduces the tax take and widens the deficit.

"In one thing, the Chancellor has succeeded: he has delivered cuts to programs. By the fiscal year 2014, he will have slashed more than ten per cent from overall spending by U.K. government departments, according to the I.F.S. While some departments—including the National Health Service, overseas aid, and part of the education budget—are protected from the economic measure, others have seen savage budget reductions. But this hasn’t led to the improvement in the government finances that Osborne and his supporters predicted. As a result of the renewed slump, tax revenues are lower than expected and spending on benefits for the unemployed has risen. Overall government spending has continued to rise; the budget deficit has remained stubbornly high. And that’s why Osborne still will need to borrow so much money."

http://www.newyorker.com/news/john-cassidy/u-k-les...

[JagLover]

Fittster said:

Cameroon and Osborne really don't have a clue when it comes to economics. So they think there's the possibility of hard times just around the corner? There solution more austerity.

FFS. If the world economy tanks gilts are going to have even lower yields and it's time for fiscal policy to support growth.

Either his prediction is incompetent or his response to it is.

There hasn't really been any "austerity". Some modest curbs on welfare spending and the growth in public sector pay have been greeted by the left with great hysteria. When the money runs out then we will see austerity.

The policy since 2010 has been mainly to kick the can down the road. Running a persistently high deficit and reinflating the housing bubble. There have been some modest efforts to improve the business climate but nothing like the structural reforms needed.

[Thankyou4calling]

jonah35 said:

Flights anywhere are cheap. Europe often under £200 and America often £500 ish.

Wouldn't have been able to do that 20 years ago, 50 or 100 years ago.

I can't agree with that.

I used to regularly fly to the US on charter flights 20 years ago for £100 or less return. That was to Orlando or New York.

It's gone up significantly in that time.

[LucreLout]

NomduJour said:

There is no austerity. It's a figment of the Left's imagination.

:shock: say it isn't so!

What about these 5 years of "savage cuts to essential public services"? Yeah, I'd not noticed any real world effect either.

Austerity is going to have to come, whoever wins the next election or two.

We've tried holding spending level and it hasn't worked. The only option on the table for the next two governments is real austerity: real cuts, such that there is revenue left over to cut taxes, invest in the road network, and go for growth. Real growth as opposed to digging holes and filling them I make work growth.

[XJ40]

LucreLout said:

What about these 5 years of "savage cuts to essential public services"? Yeah, I'd not noticed any real world effect either.

Austerity is going to have to come, whoever wins the next election or two.

We've tried holding spending level and it hasn't worked. The only option on the table for the next two governments is real austerity: real cuts, such that there is revenue left over to cut taxes, invest in the road network, and go for growth. Real growth as opposed to digging holes and filling them I make work growth.

I don't agree, the government figures show that the deficit is steadily reducing, albeit not as quickly as some would like. Chopping back government spending ultimately reduces the tax take, prompting more austerity, then your looking at a downward spiral/race to the bottom. The coalition have handled a bad situation well in my view.

[XJ40]

jonah35 said:

If it wasn't in the news i would have thought the economy is booming.

Everyone on ph likes to think that while they're doing ok everyone else is scraping by.

Everyone nowadays has a gym membership, iphone, newish car, holidays abroad, Sky, nights out etc. what more do people want? Ok some in Surrey ,any want a nanny to bring up their children or a large Range Rover that they can't park or a school to send their kids to that they don't enjoy or a boarding school where their kids miss their parents but in the real world most have it easy.

Cheap phones, cheap supermarkets, cheap flights, cheap hotels, cheap car leases, cheap utilities, cheap mortgages.

We have never had it so good, but read the wail and it is as if the world is coming crashing down.

Oh, the stock market is near record highs too.

I agree that many have a relatively high standard of living these days, there's no shortage of consumer goods about that's for sure. The problem is that it can be relative, even though someone may live like a king in relation to historic and global average standards, if the Jones next door is doing better then there can be discontentment. Most people I know are like "everyone" you describe, but outside London/home counties/south east I've heard that some people are quite hard up.

[XJ40]

Yazar said:

NomduJour said:

jonah35 said:

We have never had it so good

And how is it all funded?

Shush now.

That is clearly for our children and their children to worry about. Let the debt party continue.

Exponentially increasing debt, but also exponential monetary inflation, asset prices, etc. just seems to be how capitalism works, personally it doesn't bother me. At the end of the day, debt is just a man made concept, a number in a computer, a mechanism to allow us to progress. Maybe down the line some of this debt we all owe each other will have to be written off, so be it.

[LucreLout]

XJ40 said:

Exponentially increasing debt, but also exponential monetary inflation, asset prices, etc. just seems to be how capitalism works, personally it doesn't bother me. At the end of the day, debt is just a man made concept, a number in a computer, a mechanism to allow us to progress. Maybe down the line some of this debt we all owe each other will have to be written off, so be it.

Writing off my debt means writing off your assets. It means no public sector pensions, for these are a debt. It means no premium bonds. It means no cash in the bank. Any bank. It means a busted stock market.
Writing off debt is an easy thing to say and a tricky thing to do, assuming you want to avoid economic armageddon.
Better to cut taxes meaning people have more money to repay their debts. Better to reintroduce miras, meaning people can afford their mortgages.

[AstonZagato]

XJ40 said:

Yazar said:

NomduJour said:

jonah35 said:

We have never had it so good

And how is it all funded?

Shush now.

That is clearly for our children and their children to worry about. Let the debt party continue.

Exponentially increasing debt, but also exponential monetary inflation, asset prices, etc. just seems to be how capitalism works, personally it doesn't bother me. At the end of the day, debt is just a man made concept, a number in a computer, a mechanism to allow us to progress. Maybe down the line some of this debt we all owe each other will have to be written off, so be it.

That is worryingly cavalier. It will bankrupt some and enrich others. The effects are not spread evenly. In particular it creates a skewed incentive structure. Those that are prudent and save for the long-term are the most likely to be impoverished. Those that are reckless and overleveraged are the most likely to end up richer.

And endless and limitless expansion of the money supply is not a good thing.

In the Weimar Republic, people were sent their life's savings by banks as it was not longer worth them keeping the accounts open. The stamp on the envelope cost more than the value of the savings.

Reading "When Money Dies" by Adam Fergusson gives an insight to what happens when the state thinks it can keep deficit spending by endless debasement of the currency. It is worth noting (though I am not invoking Godwin's here) that it led to a totalitarian regime.

The following maxim was probably born from that experience:

"A democracy cannot exist as a permanent form of government. It can only exist until the majority discovers it can vote itself largess out of the public treasury. After that, the majority always votes for the candidate promising the most benefits with the result the democracy collapses because of the loose fiscal policy ensuing, always to be followed by a dictatorship, then a monarchy."

[XJ40]

LucreLout said:

Writing off my debt means writing off your assets. It means no public sector pensions, for these are a debt. It means no premium bonds. It means no cash in the bank. Any bank. It means a busted stock market.
Writing off debt is an easy thing to say and a tricky thing to do, assuming you want to avoid economic armageddon.
Better to cut taxes meaning people have more money to repay their debts. Better to reintroduce miras, meaning people can afford their mortgages.

I do hear what your saying, yes writing off large amounts of debt would be problematic I agree, and I hope it doesn't come to that (though I think eventually some sort of amnesty may be required). As I say though, we effectively owe it to each other in a round-about way. The assets, products, scientific and technological advancements created by capitalism and said debt wouldn't disappear though. The material reality would still be the same, though potentially the allocation of it would change around a bit...

[AstonZagato]

anonymous said:

[redacted]

I agree. To those politicians suggesting it, I'd like to pose this question?

“Since this is an era when many people are concerned about 'fairness' and 'social justice', what is your 'fair share' of what someone else has worked for?” - Thomas Sowell.

[princeperch]

exchanged on the sale of my flat this pm.

paid 250k in Q2 2011 for it. exchanged today for 435k. the service charge has gone up 15 pc in that time and it'll be due a redec in the common parts next year or so too I reckon.

of course the house i'm buying has also gone up in the past 2 years since the bloke has owned it but hes spent 35k on it and it looks good. and there is no service charge. which is worth its weight in gold.

[Justayellowbadge]

http://www.bbc.co.uk/news/business-30094813

Up 12.1% yr on yr, 18.8 in London, according to ONS.

[Thankyou4calling]

princeperch said:

exchanged on the sale of my flat this pm.

paid 250k in Q2 2011 for it. exchanged today for 435k. the service charge has gone up 15 pc in that time and it'll be due a redec in the common parts next year or so too I reckon.

of course the house i'm buying has also gone up in the past 2 years since the bloke has owned it but hes spent 35k on it and it looks good. and there is no service charge. which is worth its weight in gold.

Whereabouts have you sold and bought?

[princeperch]

Thankyou4calling said:

princeperch said:

exchanged on the sale of my flat this pm.

paid 250k in Q2 2011 for it. exchanged today for 435k. the service charge has gone up 15 pc in that time and it'll be due a redec in the common parts next year or so too I reckon.

of course the house i'm buying has also gone up in the past 2 years since the bloke has owned it but hes spent 35k on it and it looks good. and there is no service charge. which is worth its weight in gold.

Whereabouts have you sold and bought?

sold 1 bed flat E3 - 435

buying 2 (formally 3) bed freehold victorian house in E11 for 388 (which is more than I ideally wanted to spend but they guy has refurb'd it pretty well and has spent a lot of money on it.

to be honest towards the end I actually viewed the flat as more of a liability with the service charge than anything else...

ETA: whilst I say 388 was more than I wanted to spend it was a v fair deal compared to the poor couple who paid 475k for basically the same house nextdoor at the height of the market earlier in the year

:-/

Edited by princeperch on Tuesday 18th November 17:16

[Muncher]

princeperch said:

sold 1 bed flat E3 - 435

buying 2 (formally 3) bed freehold victorian house in E11 for 388 (which is more than I ideally wanted to spend but they guy has refurb'd it pretty well and has spent a lot of money on it.

to be honest towards the end I actually viewed the flat as more of a liability with the service charge than anything else...

The property lawyer I sat with in my first seat got stung for a £15k surcharge, with another £15k due next year. Ouch.

[XJ40]

princeperch said:

exchanged on the sale of my flat this pm.

paid 250k in Q2 2011 for it. exchanged today for 435k. the service charge has gone up 15 pc in that time and it'll be due a redec in the common parts next year or so too I reckon.

of course the house i'm buying has also gone up in the past 2 years since the bloke has owned it but hes spent 35k on it and it looks good. and there is no service charge. which is worth its weight in gold.

Well done on getting there, what a gain in only several years.

[princeperch]

Muncher said:

princeperch said:

sold 1 bed flat E3 - 435

buying 2 (formally 3) bed freehold victorian house in E11 for 388 (which is more than I ideally wanted to spend but they guy has refurb'd it pretty well and has spent a lot of money on it.

to be honest towards the end I actually viewed the flat as more of a liability with the service charge than anything else...

The property lawyer I sat with in my first seat got stung for a £15k surcharge, with another £15k due next year. Ouch.

it was time to get out.

they made me agree to a £500 retention for 18 months which I didnt resist!