Harry Palmer
17:02 | 09 Nov 2009
listen to this
Richard SALTER - Theory
17:05 | 09 Nov 2009
You can't fault Mr Blanchflower's pedigree but like all markets driven by fear and greed his desire to apply 'science' to house prices can only give one view on what will actually happen. Headlines like this attract attention but with property prices already substantially down on there peak the downside is now much less than it was. As usual these pseudo scientists pull their punches and do not help us advise people in the real world. My own view is that there are pockets within the property sector where markets rose too far too fast (Ireland for example) and other pockets where price rises are entirely sustainable driven as they are by supply and demand (The Lake District or the Cotswolds.
One size does not fit all and never will. Blanket statments of 30% or, by inference, even greater falls 'markets over-react' are simply that... bland statements.
Individuals need to make their own value judgements - as in any market.
Mike Wilson - He CAUSED the problem
18:40 | 09 Nov 2009
Richard Salter says 'you can't fault Mr Blanchflower's pedigree ...' Sorry, you most definitely can fault his pedigree. The problem this country has is debt. We're up to our ears in it. Between 1997 and 2007 personal debt went from 650 billion to 1.43 trillion. While general inflation allegedly stayed low - due to massaged figures and the omission of housing costs from the figures - there was a massive house price boom. In many areas of the country house prices tripled in a few years during this period. Where did the banks get the money from to lend? Answer: They made it up, using tools like Mortgage Backed Securities to effectively lend the same money out over and over again.
Who was a member of the Bank of England's Monetary Policy Committee during this debt fuelled boom. Why, Mr Blanchflower no less. Who constantly argued for lower interest rates, to get people borrowing again, every time the economy showed the slightest sign of slowing down. Yes, that was Mr. Blanchflower. He does not have the most basic grasp of economics. If you borrow money you have to pay it back. You cannot create growth in an economy by way of a growth in debt. Look at what is happening now - people cannot borrow because, in case Mr. Blanchflower has failed to notice, our BANKING SYSTEM would have collapsed if tax payers had not been forced to bail them out.
What is his solution now that the credit crunch means people can no longer borrow beyond their means to repay? Well that's simple too - the government must do the borrowing on our behalf. The Bank of England must create money out of thin air, to buy the Government's debt, so it can continue to pay for a hugely bloated public sector.
Is Blanchflower working for someone who wants to see this country on its knees? If people listen to him, this country will be sucked into a vortex of debt followed by inflation. In either event, we'll be in big trouble with a younger generation doomed to pay higher taxes all their lives to repay this insane borrowing binge.
John Whipple - Catch up
22:20 | 09 Nov 2009
Many of us in real world have been saying this on Citywire for the last 3 years.at least. It is only QE that is supporting all asset prices that has cushioned the fall so far but the printing press has to fall silent at some point.
GT - He's right and its so obvious
22:26 | 09 Nov 2009
He's right
Why don't the press (who seem to love talking up property prices so the next generation of home buyers will be able to afford nothing after paying their mortgage) grasp the truth the reason house prices are rising is there are fewer first time buyers in the market hence the average price of houses sold has risen. The figures everyone seems to quote are flawed as they don't take into account the percentage of first time buyers. As far as prices in the Lake District being sustainable i have a friend who's chocolate box cottage has been on the market for 12 months and no takers. Now we've partially moved away from the perception that house prices can magically rise irrespective of income levels and they will be my pension perhaps we can get back to seeing them as a place to live not an investment to fund your retirement or whatever, and the whole country will benefit once the negative equity situation rights itself.
Why of why do we seem to think it is good that we spend a large chunk of our income on bricks and mortar when it could be spent elsewhere creating more jobs in other sectors especially manufacturing.
Alan Lazenby - Why will house prices continue to fall?
15:15 | 11 Nov 2009
Just a few things to get your heads around:
Stamp duty increase
Vat increase
New government, new taxes
Higher NI
Higher Income tax
Higher Capital Gains Tax
25% new tax to energy providers which gets passed to us next year
3 Million or more long term unemployed
Large deposits required
Regulated Income criteria on new Mortgages
These are just a few things happening in the near term that will help bugger the property market.
Oh, and by the way the majority of the unemployed are the youth, the people that start the property market by being first time buyers.
Hands up who thinks house prices will fall for a very long time? The Nationwide survey shows that in 1990 the crash started and finished in 1996, this is a worse recession so any ideas when this one will stop?
Anon - so I don't upset my neighbours!
12:25 | 16 Nov 2009
I don't like surveys of one but perhaps this anecdotal evidence of a moribund market might be of interest.
I currently live just outside Norwich in a very smart gated community of about 50 leasehold properties (a mix of apartments and houses). Out of those 50 properties, eight are currently on the market (that's 16% by my reckoning) - one of those, one has been off-and-on for the last three years and the asking price has steadily fallen from £350,000 to £275,000.
Of the other seven, five have been on for at least six months. Two more have just come on and evidently the people selling have not looked at the very local competition because they are asking silly money for their homes when you could get practically the same property for £25-45,000 less by looking 20 yards to your left or right.
What isn't included in the sales details is the fact that all these properties have services charges running to £2000 a year (and rising). They will also probably suffer disproportionately under any new council tax review since they will be charged extra for their views over woods and fields and the generally very beautiful setting.
Thankfully I only rent here (and would not buy here even if I could afford current prices)!