UK House prices: News & Views

[drbubb]

An FTB can't set the price if there is no-one around to lend money to him.

Sure he can.

he pays a deposit (pds.5k - 20k) and assumes a mortgage on a foreclosed property for the rest.

It is happening right now in the US

 

The FTB is the answer to the prays of the guy working out the troubled property portfolio.

My grandfather worked for a bank in th great depression and did deals like that

[drbubb]

Where would the money come from to give depositors their money back? With all the banks underwater to the tune of billions each - how could you let them crash and burn? Someone would have to take over the debts - and they would be in the same position. Loan book of 2x secured against assets of 1x. Still bankrupt and, most importantly, still unable to lend money.

That is where the government has to get involved.

 

The banks will have assets. Their equity shareholders get wiped out, and the silly old pensions discounted.

The govt steps in if needed

[G0ldfinger]

...

The present government's duty and intention is to get out the hole dug by the last government - without an economic crisis.

We are already 3 years in a crisis, and it is getting worse.

 

People don't get it: there is no way out of this without pain. The only variable is where and when the pain appears. The inflation route brings less pain at the start but drags it out for a long time and may still end in total collapse in the end.

[G0ldfinger]

That is where the government has to get involved.

 

The banks will have assets. Their equity shareholders get wiped out, and the silly old pensions discounted.

The govt steps in if needed

- How easy is it in the Uk to get of your debt anyway? Jingle mail is not as easy as in the US.

- All banksters on very small public service salaries.

- No bonus in state-owned/bailed out banks.

- Who pays bonus must be allowed to go out of business.

- Retrospective taxes ("financial recovery tax") on undeserved bonus of bankrupt/bailed out entitites (at 90%, up to 10 years back [there must be assets there to get certainly?]).

- Claw-back of undeserved bankster pensions (pensions down to public salary levels in bailed out banks).

- Print money (we do it anyway) to recapitalize banks somewhat.

- Inflate a little (we do it anyway).

- State emergency loans to businesses at reasonable interest rates (10%-15%?) The state-owned banks can manage these.

 

A managed economic collapse is needed, with some kind of emergency banking carrying on. The banksters should be encouraged to "brain drain" so the next collapse is somewhere else (maybe another planet). Sound money is needed, so after the inflation some kind of serious backing or serious money competition should be considered (e.g. no CGT on precious metals).

[G0ldfinger]

Waiting in the wings, of course, are the priced out younger generation. But, in the situation above, who is going to give them the 80k mortgage they now need to buy the 100k property. The banks sure as hell won't have the money to lend.

How about this: nationalize the mortgage business at fixed rates of 10% percent, state guaranteed, like in the US (and run by the now on 25K/year salary banksters). Everyone with a 25% deposit gets a 3-times income loan. House prices would possibly crash 67%, but many more people could afford one on a sound financial basis.

 

Back to my points before, for a proper solution, the state would have to jump in with emergency loans, but not to banks who just carry on as before, but to the businesses themselves, using the state-owned banks, whose banksters now get public level salaries (or, better, slightly less). Furthermore, bankster brain drain really has to be encouraged. We don't want these brains, they have ruined us.

[frizzers]

GF - where're your house price in US$ and € charts? I can't find them

[G0ldfinger]

GF - where're your house price in US$ and € charts? I can't find them

http://gold.approximity.com/since1968/UK_H...ces_in_USD.html

http://gold.approximity.com/since1968/UK_H...ces_in_EUR.html

[frizzers]

Thank you ...

[drbubb]

- How easy is it in the Uk to get of your debt anyway? Jingle mail is not as easy as in the US.

- All banksters on very small public service salaries.

- No bonus in state-owned/bailed out banks.

- Who pays bonus must be allowed to go out of business.

- Retrospective taxes ("financial recovery tax") on undeserved bonus of bankrupt/bailed out entitites (at 90%, up to 10 years back [there must be assets there to get certainly?]).

- Claw-back of undeserved bankster pensions (pensions down to public salary levels in bailed out banks).

- Print money (we do it anyway) to recapitalize banks somewhat.

- Inflate a little (we do it anyway).

- State emergency loans to businesses at reasonable interest rates (10%-15%?) The state-owned banks can manage these.

Governments are not very good at doling out pain, except through taxation and inflation,

but you have come up with a good list.

 

Can we add in "banksters put into stocks alongside Mr. Brown, with rotten tomatoes sold at subsidized prices"

- then I would be happy.

 

This is good too:

...Furthermore, bankster brain drain really has to be encouraged. We don't want these brains, they have ruined us.

 

I think Mr.Brown's political skills could be very useful in Africa. Perhaps Nigeria.

[drbubb]

WHOOPS !

 

David Cameron called an 80% Loan "respectable" ... Did he mean: "reckless" ??

 

The Prime Minister warned that the housing market was “stuck” and would not improve until banks and building societies got back to “respectable” lending. He vowed to get the market moving again.

 

In his strongest comments yet on buyers being denied access to the housing market, Mr Cameron said the reaction to crash which exposed people on unsustainable mortgages had now gone too far.

 

He said: “In a way the pendulum has now swung too far the other way. If you are a single person, you are earning a decent salary, you go to the bank or building society, you are actually quite a good risk, they won’t give you 80 per cent of the value, they won’t give you four times your salary.

 

“So we are working with them to try and say, look of course we don’t want to see the unsustainable boom of the past, but we’ve got to get proper lending, respectable lending going again.”

 

/more alarming nonsense: http://uk.finance.yahoo.com/news/Banks-gon...2hhdmVnb24-?x=0

 

Does he really want to have to bail out the reckless banks another time ?

[John Doe]

WHOOPS !

David Cameron called an 80% Loan "respectable" ... Did he mean: "reckless" ??

80% seems OK (100% was/is stupid)

 

[drbubb]

80% seems OK (100% was/is stupid)

 

Not if prices are going to drop by 30% over the next 3-5 years which is truly possible IMHO

[tallim]

WHOOPS !

 

David Cameron called an 80% Loan "respectable" ... Did he mean: "reckless" ??

 

The Prime Minister warned that the housing market was “stuck” and would not improve until banks and building societies got back to “respectable” lending. He vowed to get the market moving again.

 

In his strongest comments yet on buyers being denied access to the housing market, Mr Cameron said the reaction to crash which exposed people on unsustainable mortgages had now gone too far.

 

He said: “In a way the pendulum has now swung too far the other way. If you are a single person, you are earning a decent salary, you go to the bank or building society, you are actually quite a good risk, they won’t give you 80 per cent of the value, they won’t give you four times your salary.

 

“So we are working with them to try and say, look of course we don’t want to see the unsustainable boom of the past, but we’ve got to get proper lending, respectable lending going again.”

 

/more alarming nonsense: http://uk.finance.yahoo.com/news/Banks-gon...2hhdmVnb24-?x=0

 

Does he really want to have to bail out the reckless banks another time ?

 

I had the TV on yesterday afternoon while he was saying it live in a press conference. My assessment is that it's just a nice soundbite for TV rather than anything real. There's a Parliament seat up for election in Oldham on 13th January after the Labour MP's victory was annulled by a court and the results are going to be pored over by the British media as an assessment of the coalition government as a whole.

 

If they even had that conversation with the banks and building societies it would go;

 

David Cameron: Why have you upped your lending standards this much?

Bank: Because our old lending standards got us into lots of trouble, do you want to bail us out again or guarantee our loans?

DC: No

Bank: OK, keep the cheap funding going and you can make us the bad guys for 'Not lending enough'

DC: Fair enough, are we still on for lunch next Tuesday?

 

Shelter had a good press release today;

 

http://england.shelter.org.uk/news/january...r_home_on_cards

 

They did a poll in August and 6% of respondents had paid their mortgage or rent with a credit card at least once in the prior 12 months.

[John Doe]

Not if prices are going to drop by 30% over the next 3-5 years which is truly possible IMHO

Real prices or nominal? That's all the banks care about

 

Anything's possible, but that's quite unlikely IMHO.

[drbubb]

Real prices or nominal? That's all the banks care about

Anything's possible, but that's quite unlikely IMHO.

I agree that it seems unlikely now.

But if something near my Worse Case arrives, it will be worse than that.

[John Doe]

I agree that it seems unlikely now.

But if something near my Worse Case arrives, it will be worse than that.

Apart from war/plague/total-worldwide-financial-collaps etc, the only thing I can see causing nominal falls of that magnitude would be a massive, sudden rise in rates (>8%).

 

With the UK debt structured as it is, that remains a very faint possibility.

 

PS I'm hoping for everyones sake that your (or mine for that matter) "worse case" doesn't arrive

[neil324]

Went for a job interview today, 'all round builder' the guy said he had about 70 applicants as far afield as Chester, the job being in Birmingham Not exactly good pay either.

 

Applied for another position of bricklayer/all rounder sent of my CV yesterday saying that i would do a 1 week work trial without pay to show my skills set and work ethic. This just to try and get ahead of the hundreds that will apply no doubt.

 

The point i'm making it's grim out there. Even worse than the papers or figures are saying.

 

Now just noticed a house in my target area come up today, needs complete renovation, it still has an outside toilet so will be viewing tommorrow if not sold already and almost certain of a cash offer going in. With this thinking i can at least keep active and spend my time doing the house up.

[drbubb]

Now just noticed a house in my target area come up today, needs complete renovation, it still has an outside toilet so will be viewing tommorrow if not sold already and almost certain of a cash offer going in. With this thinking i can at least keep active and spend my time doing the house up.

I hope you can buy it cheaply enough to make a nice profit doing it up

 

I do not envy your situation, and would not want to see you fall into a loss, simply to stay busy

[BoldAsBrass]

Went for a job interview today, 'all round builder' the guy said he had about 70 applicants as far afield as Chester, the job being in Birmingham Not exactly good pay either.

 

Applied for another position of bricklayer/all rounder sent of my CV yesterday saying that i would do a 1 week work trial without pay to show my skills set and work ethic. This just to try and get ahead of the hundreds that will apply no doubt.

 

The point i'm making it's grim out there. Even worse than the papers or figures are saying.

 

Now just noticed a house in my target area come up today, needs complete renovation, it still has an outside toilet so will be viewing tommorrow if not sold already and almost certain of a cash offer going in. With this thinking i can at least keep active and spend my time doing the house up.

 

Like house prices themselves, this varies hugely from region to region. My eldest son is working for a small builder at the moment - he (the builder) does mainly extensions and the odd new build. My son was working for him as a labour only subcontractor as a sort of cross between a labourer and a right-hand man - but, luckily, the builder has so much work on that he has taken my son on full time and is paying for him to do a foundation course for a degree. (He wants to move more into development rather than building and wants my son, in the future, to take much bigger role in the business).

 

And, being in the building game, he now has a wide network of contacts - roofers, brickies, tilers, sparks etc. etc. - and they're all busy. Not flat out (turning work down) but definitely with plenty of work on. Why, how and where the money is coming from baffles me - but there does seem to be a lot of money floating around in my area.

 

Whereas, when my wife was looking for a job (office - sales - admin - crappo stuff), she was finding that most jobs had over a 100 applicants.

[BoldAsBrass]

Apart from war/plague/total-worldwide-financial-collaps etc, the only thing I can see causing nominal falls of that magnitude would be a massive, sudden rise in rates (>8%).

 

With the UK debt structured as it is, that remains a very faint possibility.

 

PS I'm hoping for everyones sake that your (or mine for that matter) "worse case" doesn't arrive

 

It surprises me the number of people that think interest rates are going to go up soon - and by a large amount. People are criticising the BOE for ignoring inflation etc. Which baffles me. Of course you use interest rates to try to tackle inflation caused by consumer demand. But when inflation is primarily caused by increases in global commodity prices - what earthly use would it be to raise interest rates? Okay, global commodities would become a bit cheaper as the pound rose - but, for the average Joe - £10 a week saved on the food/petrol bills would be wiped out by an extra £50 a week on the mortgage.

 

I think Mervyn King understands this - but those journalists who parade themselves as economics experts do not.

[neil324]

Like house prices themselves, this varies hugely from region to region. My eldest son is working for a small builder at the moment - he (the builder) does mainly extensions and the odd new build. My son was working for him as a labour only subcontractor as a sort of cross between a labourer and a right-hand man - but, luckily, the builder has so much work on that he has taken my son on full time and is paying for him to do a foundation course for a degree. (He wants to move more into development rather than building and wants my son, in the future, to take much bigger role in the business).

 

And, being in the building game, he now has a wide network of contacts - roofers, brickies, tilers, sparks etc. etc. - and they're all busy. Not flat out (turning work down) but definitely with plenty of work on. Why, how and where the money is coming from baffles me - but there does seem to be a lot of money floating around in my area.

 

Whereas, when my wife was looking for a job (office - sales - admin - crappo stuff), she was finding that most jobs had over a 100 applicants.

 

Why would a builder pay for your son, the labourer to do a degree when he can take his pick for free of already trained + experienced people?

 

Being my profession, I frequent a forum for bricklayers, which covers the whole of the UK. Work is DEAD, or if your lucky to be working prices and pay are 40% down. If the brickies ain't building the walls the roofers aren't putting roofs on,plasterers aren't plastering the walls etc etc.

 

This is what Nulabour and the banks have done to people in the UK, taken from the said forum a message posted 30 Dec 2010 poster from Glasgow.

 

For the first time in my life ,i want to leave the job i love , just can't survive anymore , have a full years work ahead of me but the prices are so bad , I know i,m lucky to say have a job for the next year but something has to give its all well saying

something s better than nothing but there comes a point where you have to draw a line ,have worked for the same guy now for over a year and yes he praises me and my squad all the time (because we do things right and keep the cow of his back )but just can't survive on his shite pay and he aint gonna put prices up any time soon and is adamant that he not gonna put anybody on a day rate' so have to think of another profession but at 38 with three kids dont know what to try anybody

got any suggestions , (not goin in police ,or army ) any help ?

 

 

The job i went for yesterday the employer said work was tight but he kept his workers working rather than laying off, to quote 'they all have mortgages'. All his work is on domestic private housing.

 

Job i phoned the other day, the work is national for BP, Morrisons, etc. The empylor said last year he only had enough work for 10 months out of the 12 months, but he had the lads doing the offices yard up etc rather than laying off.

 

Maybe you live in a parallel universe though.

[drbubb]

It surprises me the number of people that think interest rates are going to go up soon - and by a large amount. People are criticising the BOE for ignoring inflation etc. Which baffles me. Of course you use interest rates to try to tackle inflation caused by consumer demand. But when inflation is primarily caused by increases in global commodity prices - what earthly use would it be to raise interest rates? Okay, global commodities would become a bit cheaper as the pound rose - but, for the average Joe - £10 a week saved on the food/petrol bills would be wiped out by an extra £50 a week on the mortgage.

 

I think Mervyn King understands this - but those journalists who parade themselves as economics experts do not.

Real Interest rates are negative, and markedly so.

And that is encouraging people to speculate in things like commodities and properties. The BofE would be prudent to raise rates back to more sensible levels, so that real rates are POSITIVE, and that will help to reign in speculation and reckless lending.

 

If they do not do that, the losses for banks will be HUGE if inflation keeps rising and gets out of control. Then the required rate rise to slow inflation would be massive. It is better to be cautious now.

[neil324]

I hope you can buy it cheaply enough to make a nice profit doing it up

 

I do not envy your situation, and would not want to see you fall into a loss, simply to stay busy

 

Having slept on it and done the sums, it would appear not.

 

I'm not even thinking of selling it on. It's in my target area where i want to live when all this starts to bottom out. I don't won't to be working full time and doing up a house at the same time. So i was just trying use my time usefully.

 

I might be desperate but i'm not stupid.

 

Saying that i fully expect it to sell.

 

House up for £95K(offers over), same house down the road up for £140K done up. I'd imagine you would spend £20K on the property. With where prices are going the fact that a cheeky offer on the house already done up.

 

It's close as it's for living in, but to be honest i'm not 100% about the road the house is on, if it was a different road then i would have bought it.

[Concrete Jungle]

Things looking grim here (construction related) hardly any work on and not much on the horizon. So much so that I have applied for a part time job working evenings / weekends in a local shop. If I get the job it should help keep the wolf from the door should the worst happen, or I can add the extra money to my savings / investments. Quite a few people I know have been made redundant / facing redundancy in 2011 and from talking to them and what I see it looks like this year will be grimmer than 2007, 2008, 2009 or 2010. I don't know if I really want to buy/stay in the UK long term.

[drbubb]

Quite a few people I know have been made redundant / facing redundancy in 2011 and from talking to them and what I see it looks like this year will be grimmer than 2007, 2008, 2009 or 2010. I don't know if I really want to buy/stay in the UK long term.

Sorry to hear this, CJ

Where elsewhere might you go?