How far will house prices fall? [Volume 3]
Discussion
Andy Zarse said:
scenario8 said:
It seems only yesteryear a Cortina Ghia X was considered posh and a 518i was for the seriously well off.
Not sure about this. I had a 518i in 1988, when aged 26. No choice, company car. It was truly and wilfully awful by the way.Digga said:
Andy Zarse said:
scenario8 said:
It seems only yesteryear a Cortina Ghia X was considered posh and a 518i was for the seriously well off.
Not sure about this. I had a 518i in 1988, when aged 26. No choice, company car. It was truly and wilfully awful by the way.
t. Even with alloys shod with 205 TRXs it had woeful levels of grip and a set of brakes off the 318i so it didn't stop either. Needless to say, impressionable big-haired shoulder-padded girls loved it, or at least they liked being seen in it.It was however beautifully screwed together, though I don't believe I have ever hated a car more.
Andy Zarse said:
Digga said:
Andy Zarse said:
scenario8 said:
It seems only yesteryear a Cortina Ghia X was considered posh and a 518i was for the seriously well off.
Not sure about this. I had a 518i in 1988, when aged 26. No choice, company car. It was truly and wilfully awful by the way.t. Even with alloys shod with 205 TRXs it had woeful levels of grip and a set of brakes off the 318i so it didn't stop either. Needless to say, impressionable big-haired shoulder-padded girls loved it, or at least they liked being seen in it.It was however beautifully screwed together, though I don't believe I have ever hated a car more.
I suppose it sold on the coat tails of the success of the more expensive models. all I know is, from a passenger's perspective, the 635i rode very firm and flat and the straight six engine was a peach. But then comparing that to a 518i..
Digga said:
Andy Zarse said:
Digga said:
Andy Zarse said:
scenario8 said:
It seems only yesteryear a Cortina Ghia X was considered posh and a 518i was for the seriously well off.
Not sure about this. I had a 518i in 1988, when aged 26. No choice, company car. It was truly and wilfully awful by the way.t. Even with alloys shod with 205 TRXs it had woeful levels of grip and a set of brakes off the 318i so it didn't stop either. Needless to say, impressionable big-haired shoulder-padded girls loved it, or at least they liked being seen in it.It was however beautifully screwed together, though I don't believe I have ever hated a car more.
I suppose it sold on the coat tails of the success of the more expensive models. all I know is, from a passenger's perspective, the 635i rode very firm and flat and the straight six engine was a peach. But then comparing that to a 518i..
Alright guys, let's not get too obsessed with the specific models I mentioned (I had intended to name check higher up the BMW range but couldn't remember if they were 525i or 525e models at the time).
My point was merely that it wasn't that long ago that anything outside the mainstream models (Cavalier/Cortina/Sierra) was pretty rare, yet these days we seem to trip over 530d Msports, and Bentleys are now spotted once or twice a day, not per year. I swear there are more RR Sports than Fiestas in Surrey. It is very common to see £40k plus cars sitting outside what would have been council houses pre sell off. I find that change remarkable. A lot of people had a lot of fun during the cheap credit years - and made a lot of paper money on the back of house price rises during those years. Sadly (for them) lots of people are now waking up to a hangover.
My point was merely that it wasn't that long ago that anything outside the mainstream models (Cavalier/Cortina/Sierra) was pretty rare, yet these days we seem to trip over 530d Msports, and Bentleys are now spotted once or twice a day, not per year. I swear there are more RR Sports than Fiestas in Surrey. It is very common to see £40k plus cars sitting outside what would have been council houses pre sell off. I find that change remarkable. A lot of people had a lot of fun during the cheap credit years - and made a lot of paper money on the back of house price rises during those years. Sadly (for them) lots of people are now waking up to a hangover.
scenario8 said:
Alright guys, let's not get too obsessed with the specific models I mentioned
How very dare you. This is PistonHeads, after all. The whole point of everything is cars. Right?scenario8 said:
My point was merely that it wasn't that long ago that anything outside the mainstream models (Cavalier/Cortina/Sierra) was pretty rare, yet these days we seem to trip over 530d Msports, and Bentleys are now spotted once or twice a day, not per year...I find that change remarkable. A lot of people had a lot of fun during the cheap credit years - and made a lot of paper money on the back of house price rises during those years. Sadly (for them) lots of people are now waking up to a hangover.
I could not agree more.Look at the prices that Bentley GTs and Aston DB9s suddenly plummeted to early 2009. There was real fear.
Look at the sheer numbers of Range Rover Sports in the PH classifieds...
Something's got to give.
Digga said:
scenario8 said:
Alright guys, let's not get too obsessed with the specific models I mentioned
How very dare you. This is PistonHeads, after all. The whole point of everything is cars. Right?scenario8 said:
My point was merely that it wasn't that long ago that anything outside the mainstream models (Cavalier/Cortina/Sierra) was pretty rare, yet these days we seem to trip over 530d Msports, and Bentleys are now spotted once or twice a day, not per year...I find that change remarkable. A lot of people had a lot of fun during the cheap credit years - and made a lot of paper money on the back of house price rises during those years. Sadly (for them) lots of people are now waking up to a hangover.
I could not agree more.Look at the prices that Bentley GTs and Aston DB9s suddenly plummeted to early 2009. There was real fear.
Look at the sheer numbers of Range Rover Sports in the PH classifieds...
Something's got to give.
If you only had an S rather than a GL then you were scum.Looking at those RR Sports in the PH Classifieds, yeesh! There's nearly 700 of the f
kers for sale! Mostly around the £25-30k mark with 60k plus miles on the clock. Useful enough car, but at that money it's a huge risk waiting for the 'box to go pop! I might be tempted when they get down to £10-15k...Trommel said:
Availability and acceptableness of credit is the biggest reason why there are so many of them (and cars are cheaper now in real terms), then there's MEW, dodgy cash etc.
Not just the acceptability of credit, but the frankly crazy types of credit.I never really looked or asked for these sorts of finance schems but was idly reading the motoring section of the Sun Times one weekend when I had my attention drawn to it. There was an ad for a new Audi RS4 with the headline figure of £499 per month and IIRC about £10k deposit. I realised there and then that a lot of these motors would never be paid for - just handed back in lie of the final balloon payment.
I guess for some 'owners', it was a means to an end and for the dealers it was a good wheeze for shifting more metal, but it must have built up some real grief for other owners. I've heard more than a few interesting tales about cars (one was a DB9) being 'stolen' just as the balloon became due.
Andy Zarse said:
Digga said:
scenario8 said:
Alright guys, let's not get too obsessed with the specific models I mentioned
How very dare you. This is PistonHeads, after all. The whole point of everything is cars. Right?scenario8 said:
My point was merely that it wasn't that long ago that anything outside the mainstream models (Cavalier/Cortina/Sierra) was pretty rare, yet these days we seem to trip over 530d Msports, and Bentleys are now spotted once or twice a day, not per year...I find that change remarkable. A lot of people had a lot of fun during the cheap credit years - and made a lot of paper money on the back of house price rises during those years. Sadly (for them) lots of people are now waking up to a hangover.
I could not agree more.Look at the prices that Bentley GTs and Aston DB9s suddenly plummeted to early 2009. There was real fear.
Look at the sheer numbers of Range Rover Sports in the PH classifieds...
Something's got to give.
If you only had an S rather than a GL then you were scum.Looking at those RR Sports in the PH Classifieds, yeesh! There's nearly 700 of the f
kers for sale! Mostly around the £25-30k mark with 60k plus miles on the clock. Useful enough car, but at that money it's a huge risk waiting for the 'box to go pop! I might be tempted when they get down to £10-15k...Digga said:
Noel, one thing I have never dodged is the long term financial problem that Banks and SME's built up prior to the crunch.
However, I do not beleive it is a black and white case of blaming one party over the other. Neither now are banks decisions to not lend entirely black and white. (I do hope you don't naiively assume - like Mr City AM - that it is in any way possible to glean incorovertable and objective proof of this in either way.)
Most small start-up businesses gow to who they know to set up their businesses banking - their 'friendly' one size fits all, high street bank. Since the early nineties, most banking relationships developed along these lines;
Now we can all see the error of letting businesses rely on unstructured, immediately repayable funding - no argument - but the fact is it happened, and on a huge scale.
Trouble was that post 2008, as I have repeatedly pointed out, this funding was arbitrarily withdrawn. Openly and also by stealth, where unused facilities vanished overnight. Sometimes the bank totally cut it's funding or cut it enough to deliver a killer blow. Other times the funding gap could be worked around. In another variation on the shafting theme, overdrafts were cut but replaced by (expensive and administratively onerous) factoring arrangements.
Did the banks need to recapitalise? Yes.
Did the banks have a duty to reduce their risk, post crunch? Yes.
Was a lot of business lending unwise? Yes.
Yes to all of the above but, at the same time, for the sake of the economy and their customers, I also beleive banks had a moral commercial duty to do all of this in a way which did not cause collosal and irreversable damage to the UK SME economy. Yet this does not ever seem to have been considered. Neither, once the problem was out in the open and the subject of concern - identified as a severe risk to the UK recovery since early 2009 by Alister Darling, Merving King and even the IMF - has it been resolved.
I've heard the banks and I've heard the businesses and I know who I beleive here. I have not axe to grind - I'm not singing for my supper here - but personally beleive this to be a far bigger problem than anyone presently acknowledges.
However, I do not beleive it is a black and white case of blaming one party over the other. Neither now are banks decisions to not lend entirely black and white. (I do hope you don't naiively assume - like Mr City AM - that it is in any way possible to glean incorovertable and objective proof of this in either way.)
Most small start-up businesses gow to who they know to set up their businesses banking - their 'friendly' one size fits all, high street bank. Since the early nineties, most banking relationships developed along these lines;
- Overdraft agreed
- Annual meeting to review/amend overdraft
- Repeat streps 1 & 2
Now we can all see the error of letting businesses rely on unstructured, immediately repayable funding - no argument - but the fact is it happened, and on a huge scale.
Trouble was that post 2008, as I have repeatedly pointed out, this funding was arbitrarily withdrawn. Openly and also by stealth, where unused facilities vanished overnight. Sometimes the bank totally cut it's funding or cut it enough to deliver a killer blow. Other times the funding gap could be worked around. In another variation on the shafting theme, overdrafts were cut but replaced by (expensive and administratively onerous) factoring arrangements.
Did the banks need to recapitalise? Yes.
Did the banks have a duty to reduce their risk, post crunch? Yes.
Was a lot of business lending unwise? Yes.
Yes to all of the above but, at the same time, for the sake of the economy and their customers, I also beleive banks had a moral commercial duty to do all of this in a way which did not cause collosal and irreversable damage to the UK SME economy. Yet this does not ever seem to have been considered. Neither, once the problem was out in the open and the subject of concern - identified as a severe risk to the UK recovery since early 2009 by Alister Darling, Merving King and even the IMF - has it been resolved.
I've heard the banks and I've heard the businesses and I know who I beleive here. I have not axe to grind - I'm not singing for my supper here - but personally beleive this to be a far bigger problem than anyone presently acknowledges.
Edited by Digga on Tuesday 26th October 09:09
Digga said:
However, I do not beleive it is a black and white case of blaming one party over the other. Neither now are banks decisions to not lend entirely black and white. (I do hope you don't naiively assume - like Mr City AM - that it is in any way possible to glean incorovertable and objective proof of this in either way.)
It would be good to see some more real world examples in the mainstream press - I think this is going to be the only way to get the banks lending Digga said:
Yes to all of the above but, at the same time, for the sake of the economy and their customers, I also beleive banks had a moral commercial duty to do all of this in a way which did not cause collosal and irreversable damage to the UK SME economy.
This all goes back to central bankers attempting to abolish the business cycle, so when the bust comes, it is a big one.XJ40 said:
So, "millionaire mansions double as house prices fall"?
This seems at odds with some of what I've read on this thread (the last volume) recently, seems quite surprising to me.
http://blogs.telegraph.co.uk/finance/ianmcowie/100...
Or a terrace in ClaphamThis seems at odds with some of what I've read on this thread (the last volume) recently, seems quite surprising to me.
http://blogs.telegraph.co.uk/finance/ianmcowie/100...
Andy Zarse said:
Digga said:
Andy Zarse said:
scenario8 said:
It seems only yesteryear a Cortina Ghia X was considered posh and a 518i was for the seriously well off.
Not sure about this. I had a 518i in 1988, when aged 26. No choice, company car. It was truly and wilfully awful by the way.t. Even with alloys shod with 205 TRXs it had woeful levels of grip and a set of brakes off the 318i so it didn't stop either. Needless to say, impressionable big-haired shoulder-padded girls loved it, or at least they liked being seen in it.It was however beautifully screwed together, though I don't believe I have ever hated a car more.
NoelWatson said:
Digga said:
However, I do not beleive it is a black and white case of blaming one party over the other. Neither now are banks decisions to not lend entirely black and white. (I do hope you don't naiively assume - like Mr City AM - that it is in any way possible to glean incorovertable and objective proof of this in either way.)
It would be good to see some more real world examples in the mainstream press - I think this is going to be the only way to get the banks lending The government and B of E can (and I guess should) encourage lending to SMEs which may help extant ventures to move a bit faster, but this won't replace the failed businesses. It took years for many of these firms to get where they were before the rull was pulled from under them and now is not IMHO a great time for start ups.
NoelWatson said:
Digga said:
Look at the prices that Bentley GTs and Aston DB9s suddenly plummeted to early 2009. There was real fear.
Look at the sheer numbers of Range Rover Sports in the PH classifieds...
Something's got to give.
I hope so. Less chavs in the gym carpark in the disabled spots.Look at the sheer numbers of Range Rover Sports in the PH classifieds...
Something's got to give.
Yes, I do notice the 'sort of car' that is parked by able bodies individuals in disabled spaces. I wonder what Alan Clark would have made of all these plebs driving Bentleys...Digga said:
I was pondering this issue again on the way into work. I think now, sadly, it's mostly a case of the horse having well and truly bolted. Credit was cut early 2009 and businesses either survived or did not.
The government and B of E can (and I guess should) encourage lending to SMEs which may help extant ventures to move a bit faster, but this won't replace the failed businesses. It took years for many of these firms to get where they were before the rull was pulled from under them and now is not IMHO a great time for start ups.
So the question now is "Have we learnt our lessons so there is less chance of it happening again?". I'm not convinced - people are still solely blaming the banks without realising the role of central banks and the population themselves.The government and B of E can (and I guess should) encourage lending to SMEs which may help extant ventures to move a bit faster, but this won't replace the failed businesses. It took years for many of these firms to get where they were before the rull was pulled from under them and now is not IMHO a great time for start ups.
NoelWatson said:
Digga said:
I was pondering this issue again on the way into work. I think now, sadly, it's mostly a case of the horse having well and truly bolted. Credit was cut early 2009 and businesses either survived or did not.
The government and B of E can (and I guess should) encourage lending to SMEs which may help extant ventures to move a bit faster, but this won't replace the failed businesses. It took years for many of these firms to get where they were before the rull was pulled from under them and now is not IMHO a great time for start ups.
So the question now is "Have we learnt our lessons so there is less chance of it happening again?". I'm not convinced - people are still solely blaming the banks without realising the role of central banks and the population themselves.The government and B of E can (and I guess should) encourage lending to SMEs which may help extant ventures to move a bit faster, but this won't replace the failed businesses. It took years for many of these firms to get where they were before the rull was pulled from under them and now is not IMHO a great time for start ups.
Not sure the lesson is entirely learned - that overdraft is not the wisest means of securing long term funding - but I'd say businesses are more realistic about what to expect from banks. Businesses don't blame the banks for the recession, but do blame them for the actions they subsequently took.
Let's face it, the banks have been at it everywhere, not just with businesses. Mrs Digga and I have a current-account type mortgage, which we've built up a decent wedge, offsetting interest, over the last five years. I took a 'phone call out of the blue from the bank last year asking whether I'd be 'needing' this money or whether I'd like to "reduce my facility". I was non-plussed - we'd saved this while everyone else was pissing money up the wall and, frankly, regarded it as an umbrella in case we hit a rainy day - so couldn't understand why they'd expect me to do this. I asked how much of a reduction they'd give us in the mortgage rate, which was met by dumb silence and then the answer that no reduction was "possible" so I declined their kind offer to change the terms of my mortgage contract so they could borrow my money. But I wonder how many other mugs they 'phoned who rolled over on that one?
I don't beleive any lessons will be learned. By banks or consumers, less still the government.
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