[Closed] Is the recession getting worse or better, our house prices falling or not?

We are awaiting the effects of the cuts - my belief is they will tip us back into recession and it will be deep and prolonged.

House prices - very area dependent. Stable / rising here in Edinburgh

House prices in the NE (England) seem to be in freefall. We bought our house for £83 grand three years ago. One almost exactly the same has just gone on the market a few doors down for less than £70,000. 🙁

It's getting much much worse.

Huge trade deficit, huge losses in the public sector (and no the private sector won't simply "magic" up replacement jobs) yet Estate agents and the Halifax will still spout utter cr4p about house price rises selected from extremely biased information sources and using data so dodgy, it shouldn't be allowed into the public domain.

So any predictions on how long before a turn for the better?

surf matt. We are not in recession at the moment. The quantitative easing of the last government took us out of recession. The effects of the tory cuts are yet to be felt but its coming. Just the lack of confidence they engendered has had an effect.

I think it'll get worse in the New Year and like TJ, i think it will be prolonged.

It doesn't help that the media reports nothing but doom and gloom and creates panic, people tighten their belts further, spend less so more companies go under, creating more unemployment and more doom and gloom and so on and so on.........

Still, on a brighter note, if a recession has a nasty impact on 10% of the population, 90% come through it relatively unscathed and life goes on as normal. The trick is avoiding being one of the 10%.

5 year slide by about 10-20 % [redundnacy repossesions driving oprices do=wna nd non one able to buy]and an annual gain of 4 % after that

Oh I like this guessing game is someone saving this so we can see who was best at it?

It doesn't help that the media reports nothing but doom and gloom and creates panic

The quantitative easing of the last government took us out of recession

Oh yes. Of course. They saved us. Halleluja.

Get real 🙄

My house has been on the market for over a year. It's a starter home, and the type of people buying can't afford to get together a deposit.....the neighbours house was repossessed about a year ago and speaking with the new owner, he had got the house for £105k and had to put down £17k as a deposit to get the mortgage!!

So, pretty much a 16% or so deposit.

Can't see it getting any better & we are now looking at new builds so they can part ex the house and just take it off us.

We are not in recession at the moment.

Someone has a lot of faith in distorted information and government spin.

IMO the "official" recession was just a little taster of what's to come.

I like to get my predictions from this guy:

[url= http://richardheinberg.com/222-the-end-of-growth ]Richard Heinberg on "the end of growth"[/url]

House prices seem to be static or rising slightly where I am. I don't predict a prolonged slump as some do and several of the people I deal with have reported a boom in sales/profits/work in the last 6 months.And I've no idea how we have so many unemployed, one member of my family is freelance and between "proper" jobs has been employed every single time within a week of their last employment ending, and offered a permanent placement at the end of every one of those jobs. While not jobs in their field, they're jobs and they pay well enough.

It's laughable to think that some people seem to want to blame the current governments policies for putting us back into recession.

What happened in the the decade before the credit crunch, were we prudently putting away money for a rainy day? Paying a reasonable price for a house? Not buying a new car every 3 years on credit?

It's easy to point the finger at the government, the reality is we all put ourselves in this position by believing that growth could never cease and that houses would continually shite money.

I'm not old but I do remember the recession of the early nineties, how dod everyone else forget?

As for house prices, I would say no real increases for close to a decade now.

I would say no real increases for close to a decade now.

I would say that house prices went up by 200-300% in the decade before the recession, and have fallen back by about 20%. Still a long way to go before they are affordable for most (without signing up to a crippling level of debt).

Ziggy - sensible words. Good to see not everyone lives with their head in the clouds.

House prices are a tricky one. Sale prices are not the problem [i]per se[/i], sales volumes are.

The market is running well below normal levels at the moment (used to average 100,000 per month, now it's more like 50-60,000), so the lack of supply is tending to keep prices high. There are a lot of houses out there which are nominally for sale but which have not had the slightest interest shown in them, and which would need to be reduced substantially to get them sold in a reasonable time period.

I don't think we'll see housing price falls, more the continuation of people sticking with what they have, at least for the next few years.

Recession? Again, I don't think so, more a long period of prolonged nothingness, where we bump along the bottom with not-quite-but-nearly growth. Certainly, I don't see any net growth worth talking about in the next three years.

Ziggy's spot-on; we are the ones to blame, who borrowed recklessly based on cheap credit. How many times did I hear of people boasting of the 0% credit card they'd stuck a bunch of debt on? Sure, it was zero interest, but when was the principal going to be paid off? Yes, the banks didn't help, but we all have to take our share of the blame.

I earn a good salary, enough that if I posted it up here I'd have cries of "no-one's worth that sort of money" but I buy secondhand cars, secondhand bikes, and save as much as I can, because you never know when things will turn pear-shaped. I remember the '70s recession, the '80s recession, the '90s recession, and I've been expecting one for some time. There was no way the economic carousel could continue, though timing always takes you by surprise.

What happened in the the decade before the credit crunch, were we prudently putting away money for a rainy day? Paying a reasonable price for a house? Not buying a new car every 3 years on credit?

It must only have been 2-3 years ago that all the resident "experts" on here were insisting that borrowing as much money (or even more than) as you were able to was the most sensible and prudent thing to do. Mortgaging yourself well beyond your means because property was a guarranteed win, and it was impossible to go wrong. Are any of them still out there?

I think things are looking up (honestly) 😀

Have to say though that round here (Dorset) there do now seem to be a lot more houses on the market since the demise of the ill thought out HIP.

but we all have to take our share of the blame.

No we don't - I've not had any debt, other than my mortgage (which I'm overpaying) since I was a student.

Its going to get sooooooooooooo much worse before it gets better. We ain't seen nothing yet

Unless... UNLESS... you're a natural Tory. When the big fat tory grandee said the other week "You've never had it so good". He meant "Myself and my freinds have never had it so good". And its only going to get better

By the time this lot have finished lining their own pockets while dismantling the state, we'll be back to Victorian levels of inequality.

They'll be minted. We'll all be ****ed!!!!!

We are awaiting the effects of the cuts - my belief is they will tip us back into recession and it will be deep and prolonged.

prepared to put a hat on it? 😉

only joking

There was a graph on here some time ago, that showed the cyclical nature of house price rise and falls.

It said the bottom would be in about 18 months time. Anyone got a link?

Personally I don't see where the money will come from to keep pushing prices up.

It's laughable to think that some people seem to want to blame the current governments policies for putting us back into recession

They are not responisible for the current economic situation but it is reasonable to hold them to account for what their response does create. If cutting jobs and spending creates another recession I say oh dear George told you so etc. If a wave of market enterprise overcomes the public spending cuts and leads to growth and massive recovery I think george might just say told you.

rprt - I get your point. I'm in the same position; no car loans, anything on the credit card automatically cleared off each month, no overdraft, overpaying massively on the mortgages. I've been responsible, but as a result of everyone else, I now have no personal allowances and a 50% tax rate. Whoopee!

I like the way everyone dismisses mortgages when talking about debt.

Errmmmm.... It's a HUGE debt.

We are awaiting the effects of the cuts - my belief is they will tip us back into recession and it will be deep and prolonged.

and I am going to copy and paste that and beat you over the head to a bloody pulp with it every Quarterly GDP publication from now for the next 3 years TJ...

No we don't - I've not had any debt, other than my mortgage (which I'm overpaying) since I was a student.

Hear, hear.

Errmmmm.... It's a HUGE debt.

It's a debt for somewhere to live which is something we all have to have (though the magnitude of it may be questionable) and in the long term (which a mortgage typically is), it will almost certainly increase in value. That's not the same as spunking a big loan on a car
that will be near worthless in 7 years 🙄

It's a debt but then it's also an investment - only those who think it's a quick road to riches are fooling themselves about it.

I like the way everyone dismisses mortgages when talking about debt.

Errmmmm.... It's a HUGE debt.

yes but its backed by an asset

the [b]real liability[/b] is the difference between the mortgage and the price you will get for the house less transaction costs. This obviously flexes with the market conditions at the time

Seeing improvement here. I'm allied to the building trade and hit rock bottom a year ago. I've seen an upturn since September. My problem is I need customers spending thousands which means often borrowing.
Friends in retail are having bumper years becaue people are blowing the money they have from low interest rates on bikes, TVs etc.

The housing market is so regional it's difficult to say. We've just sold two properties in SW London had 20-30 viewings before we got an offer. Plenty of supply and buyers can really take their time viewing everything before making a decision. Plus it doesn't help that at the moment you need a big deposit to get a decent mortgage.
Both of our properties were bought near the top of the market (2006 / 2007) and both made close to what was paid for them... one 10% over, one 10% under.

As for the recession, at the moment in the City, there is scarily little sign of it. I know of a number of companies who've been paying out selective mid-year pay increases in order to retain specific individuals, results, in the main, are pretty good and it just doesn't feel like it did back in late '08/'09.

I have some concerns that we are trying to inflate our way out of debt. With interest rates being kept low despite governmant measures of inflation being above target and QE being talked about again, the value of your money will be dropping even if the actual prices are static.

The Euro situation is also a concern, it seems to be in a precarious position. And while we are fortunate enough not to be part of the currency our links with it and Europe mean we are tied to it's fate.

Surf-Mat - Member

"We are not in recession at the moment."

Someone has a lot of faith in distorted information and government spin.

IMO the "official" recession was just a little taster of what's to come.

Do you actually understand what a recession is? or is your tinfoil hat blocking your thinking?

We are not in recession now. This is an undeniable fact. We are in positive growth.

[img] [/img]

http://www.statistics.gov.uk/cci/nugget.asp?id=192

Oh yes. Of course. They saved us. Halleluja.

Get real

Don't forget GB saved the world as well.

Houses were very over valued prior to recession, confidence isn't there to boost the housing market too far.

Speaking to the MD of a large conservatory building company they've seen business increase, his thoughts are people are not moving and are staying put, albeit with the desire for extra space met by a conservatory.

We are not in recession now. This is an undeniable fact. We are in positive growth.

If we had to borrow the money to achieve this growth then surely it is not growth? If a household was spending a fortune servicing its debts, struggling for survival and then managed to borrow a load more cash which stimulated a shopping trip to Tesco's would we consider them to be on the road to recovery?

You have some very weird ideas about economics TJ.

It's not a debt if you can/are paying it. That's a pearl.
Never buy unless you can afford it twice, that's another.

You have some very weird ideas about economics TJ.

+1 😆

growth is growth. Measured by internationally recognised methods we are in positive growth hence we are not in recession

Surf matt -Follow the link I gave - its easy to understand for the hard of thinking

You have some very weird ideas about economics TJ.

I agree normally, but in this very simple, un-arguable case, he's correct. He's just wrong the rest of the time. 🙂

missingfrontallobe, seeing a lot of that. people are extending or making their homes faultless.

Thank you stoner.

but in this very simple, un-arguable case, he's correct.

Okay, so explain to me how these growth figures are going to look in the context of the inevitable inflationary backlash that QE has assured we will have to endure?

The rate of inflation of the currency is currently obscured by the re-capitalisation of the bank but the debt is still a part of our currency. Does growth against an inflating currency still count as growth?

These are all genuine questions as I appreciate I am no expert, it just seems to me that any growth we are currently experiencing is an illusion against the backdrop of unrealised inflationary pressures.

It's laughable to think that some people seem to want to blame the current governments policies for putting us back into recession.

What happened in the the decade before the credit crunch, were we prudently putting away money for a rainy day? Paying a reasonable price for a house? Not buying a new car every 3 years on credit?

It's easy to point the finger at the government, the reality is we all put ourselves in this position by believing that growth could never cease and that houses would continually shite money.

+1

There is a multitude of folk on this forum & out in the real World who love to do do nothing more than export the blame for the current mess on the "condems" (oh so f*cking witty), yet refuse to acknowledge it was the decade or so under Blair that has led us to where we are now..

For me? We are still in the smelly & face a long haul out of it.. The only thing that changes your stance is your political perspective - I very much doubt there is anyone here who really fully understands the intricate economic mechanisations involved (its certainly too damned complex for me to grasp). The truth is cuts needed to be made EVERYWHERE. We have over-spent for years & put nothing aside & now the country has to pay.

There was a graph on here some time ago, that showed the cyclical nature of house price rise and falls.

It said the bottom would be in about 18 months time. Anyone got a link?

[img] [/img]
[img] http://www.houseprices.uk.net/hpuk/house_price_server.php?width=768&height=576&year_min=1980&year_max=2010&type=price&flag_q=0&flag_nw=1&flag_hf=1&flag_rm=1&flag_ft=1&flag_lr=1&flag_o=1&flag_ma=0&lag_yoy=0&lag_qoq=0&lag_odpm=1&leg_pos=0&flag_logy=0 [/img]

growth is calculated in real terms, not nominal.

Inflation or deflation doesn't affect GDP output figures (it effects output itself though, obviously)

rondo, that second graph needs adjusting for inflation in order to be compared with the upper graph as the mean trend in the upper graph is arithmetic, not geometric as it would be if it was in nominal prices.

it effects output itself though, obviously

So whilst we may be able to say that the economy is growing in terms of GDP, we could actually be seeing negative growth of the actual output of the country?

Rather makes one question the relevance and meaning of the national growth figures that TJ was quoting dontcha think?

That wasn't the graph I remember....but those 2 certainly share an interesting shape!

hey it's all about happiness now, not GDP Mr Torm

hey it's all about happiness now, not GDP Mr Torm

Oh, that's okay then, I am always pretty chipper so I must be wealthier than ever (in my heart).

There really is a lot of rubbish talked on Singletrack.

TJ is [b]right[/b]* to say that we're not in recession. That doesn't mean that everything's rosy; far from it. Recession is typically defined as being a drop in the GDP for two or more consecutive quarters, ergo anything other than a drop means we're growing.

What happens if GDP's growing at 2.0% pa and inflation's growing at, say, 3% and rising? Regardless of what you might think, this does not mean recession; what it might mean is the start of stagflation, where there's a sustained period of very low growth, coupled with high inflation and high unemployment.

Long term, this would be much worse for us than recession; look at how Japan has suffered economically in the last decade or so.

*There, I've finally said it!

Here's the ones I meant:
[img] [/img]

[img] [/img]

Ooppps.....I was wrong - maybe buy in 5 years time instead

Why don't we all listen to In Business on R4 tonight - which questions whether we have reached the limits of growth, then reconvene in the morning?

rondo, that second graph needs adjusting for inflation in order to be compared with the upper graph as the mean trend in the upper graph is arithmetic, not geometric as it would be if it was in nominal prices.

yeah, fair enough:

[img] [/img]<

nickf - the gdp figures quoted are adjusted for inflation so that is growth in excess of inflation, whereas in your example there is no gdp growth.

We're not in recession but 2011 aint going to be pretty. How bad depends very much on where you live. Let me tell you, London is jumping, shops are full, so are restaraunts. We're not in the Euro so we've efectively devalued our way out of trouble, the amount of tourists in town are visible evidence of that.

However, if you live say in the North, where public sector jobs can be 50% or more of total employment its pretty obvious whats about to happen.

I dont think you can blame the current government. Labour didnt pay down the national debt in the good years (ran deficits since 2003? someone check that for me) and Brown sprayed money we didnt have in 2007/2008 in as part of his planned takeover of the Labour party, allowed him to look great to the Left.

Read Andrew Rawnsley's "End of the Party" for a blow by blow account of the TB-GBs. Terrific book.

I think the problem is recession is not necessarily equal to things being tight in the household budget.
This usually lags behind any statement of growth or contraction and is of course highly dependant on employment, location etc.

I've been through a few recessions now, home owner (mortgaged) in all of them - none of them really made me feel any worse off because I remained employed, kept paying the mortgage, didn't rack up any unsecured debt etc. But plenty of other poor sods did through often no fault of their own.

rightplacerighttime - Member
Why don't we all listen to In Business on R4 tonight - which questions whether we have reached the limits of growth, then reconvene in the morning?

The end of economic growth will have massive implications for us all.

I may see if I can tune into this program later on.

Thanks for letting us know it is on.

Not sure exactly what those graphs show exactly, looks like a case of lies damm lies and statistics.

Average earnings are inflated by the massive gains at the top over the past 20-30 years, and inflation is twisted by excluding housing and fuel costs etc. neither is a reliable mean for comparison.

Average earnings are inflated by the massive gains at the top over the past 20-30 years,

not really. The distribution curve for earnings has not changed a great deal. It is still [url= http://en.wikipedia.org/wiki/Skewness ]skewed[/url] in much the same way. changes in both frequency and value at the right hand tail of a skewed distribution do not have very powerful effects on the distribution mean. They do on the median though, but that is not a genuine "average" IMO and certainly isnt the one used in most income analysis.

[img] [/img]

this graph is Finnish, but the premise still stands.

And just because you dont understand something doesnt make it a lie. It just makes you look like a luddite. The graphs of nominal mean house prices is a very interesting one and illustrates a number of issues such as wage inflation, economic cycles, and even planning policy versus divorce rates or immigration issues.

this graph is Finnish, but the premise still stands.

grasping at unrelated straws there.

I would also suggest you look up the meaning of Luddite before you next use it in a sentence.

In modern usage, "Luddite" is a term describing those opposed to industrialisation, automation, computerisation or new technologies in general

I was implying you were opposed to something modern, like, you know, statistical analysis of house prices.....

and if you think a non-UK income distribution graph is clutching at straws in this context, then well you really dont understand it, do you.

[i]look at how Japan has suffered economically in the last decade or so.[/i]

mainly due to an unhealthy collusion between Govt. and the banking sector which allowed otherwise bankrupt banks to continue trading, rather than recessionary pressure

Nick, I was merly pointing out how an economy can get stuck in a nasty rut with minimal growth; quite agree with you on the causes of the Japanese situation.

and if you think a non-UK income distribution graph is clutching at straws in this context, then well you really dont understand it, do you.

Finland top 10% earn 5.6 times as much as the poorest 10%, top 20% earn 3.8 times as much as the poorest 20%.

UK top 10% earn 13.8 times as much as the poorest 10%, top 20% earn 7.2 times as much as the poorest 20%

http://en.wikipedia.org/wiki/List_of_countries_by_income_equality

perhaps you would like to explain your genius in grasping the figures for Finland to prove your point about the UK.

Surf-Mat - Member
...IMO the "official" recession was just a little taster of what's to come.

+1

And for anyone who thinks their house has retained its value - look at how far the £ has dropped in the last year or so. You can buy less bikes per house now even if it's worth the same as it was 3 years ago.

And for anyone who thinks their house has retained its value

I reckon mine has
I paid £31k for it in 1988

Surf-Mat - Member

We are not in recession at the moment.

[b]"Someone has a lot of faith in distorted information and government spin."[/b]

I fear that it is [b][i]you[/i][/b] Surf-Mat, who has lot of faith in distorted information and government spin.

It is extremely important for the present government to convince people that the UK economy is in dire straits.

We are not in recession, but thanks largely to the doom and gloom of the Tories, their LibDem stooges, and their mates in the right-wing press, many people believe we are in recession.

So when the Tory inspired recession eventually comes, people will not necessarily blame them. Specially if they have been suckered into believing that the Tories inherited a buggered recession-strapped economy.

And judging by some of the comments on here, the Tory strategy appears to be working rather well.

Of course the British economy is far from being very healthy. But it is quite frankly staggering, that despite the worst global economic crises for 80 years, unemployment only reached 2.5 million........and almost everyone has managed to hang on to their homes.

In the Tory recession of the early 80s unemployment rose to over 3 million - the highest level since the 1930s. And in the second Tory recession of the early 90s, Britain endured the highest levels of home repossessions ever.........and the turnaround in the construction industry from profit to loss was the greatest of any industry in British history.

I fundamentally opposed the New Labour government throughout its 13 years in power. But I cannot deny that I was greatly impressed with their handling of the global recession/credit crunch. Of course they should have done much more ..... as far as I'm concerned, but I am both surprised and impressed with what they did actually do.

Yes we are not in recession but since the oringinal definition is "two down quarters of GDP" let's consider what that means - when something is bumping off the bottom, how can it decline anyway?

It's a bit like someone that's terminally ill saying "I feel slightly better today.

Ernie - so wreckless spending, spunking everyone's pensions, giving criminally laissez faire banks and all the rest greatly impressed you?

The rest of your post doesn't actually have a purpose apart from randomly reciting a few facts. Are you saying the Tories want us to feel things are worse than they are?

Just wait two years - 4+ million unemployed and possible DEpression looms.

The rest of your post doesn't actually have a purpose......

Thanks........I'll bear that in mind in the future.

Although posts with a "purpose" are not necessarily always my prime concern.

.......as this post might suggest.

Not scene any changes in London
But what i have heard a lot of buyers are waiting
to the signing over and asking for roughly £ 10,000 thousand less
or pulling out.

Here (SW Eng) things seem OK.

House prices fell about 15-20% then rose a little and now seem to be 10% off peak values. They are holding up as far as I can see. I think now that prices have been reported as falling, more sellers will withdraw and the situation will be similar to before when lower amounts of property on the market will cushion the falls to an extent. Increasing rents may also have an effect too. Of course in the North, things may be different, but low interest rates should be here for a year or two more, so will act against repossession.

I think the cuts will have a mixed effect - areas dependent on Civil Service will suffer more, while the devaluation of the pound and recovery will help other areas. Areas which recover better, eg the South, may see property prices hold up more, or even rise as both jobs are created and pay rises follow recovery. Areas where the cuts hit may not see this.

Overall there is still a net increase in immigration, and a percieved housing shortage - this has not been helped by the lower house building rates recently.

Tradesmen seem busy - prob due to the fixing up rather than selling and moving up trend.

On the subject of the recession, many forget that the trigger for all this was credit shortage caused by bad banking. I am not sure that long term demand across the world will be irreversibly damaged. Certainly not to the level the end of the world tinfoil hatters say.

One thing I am certain of though is that we can talk ourselves back into recession, but we can also work hard, keep on going and with using our intelligence and playing to our strengths, come out of the current troubles strongly. We will only fail if we allow ourselves to fail.