I also sat through Black Tuesday and I remember having a mortgage payment of £270 and a monthly pay of £440 not much fun. However I currently find the gap between the haves and have nots (I am in the haves group) difficult to stomach - I think what is kinda lost in the current view (C4 how rich are you etc) is the gap at the bottom end, I was a kid in the 70s in a semi rural community and had a pretty good view on how well people lived, I still live in that community and see some fairy awful "gaps" people on minimum wage 30 hour a week jobs who get layed off as the work is seasonal then the employer jumps in his range rover and drives to the airport for three weeks in the sun?
Just for the record in my business no one gets layed off and the lowest salary I pay us £18k.
This very obvious imbalance is not healthy and the housing market suffers from the same imbalance however it's fed by fear and greed (fear of not getting on the housing ladder and equity greed ) we need lots more houses (probably millions) and lots more jobs - as ever it's all about supply and demand.
Oh look, EL rolls in with his usual incorrect analysis/spin
Incorrect analysis ? Only a dyed-in-the-wool Thatcherite like you would come out with this very silly comment : [i]"Intervention into in markets such as housing, interest rates, lending, FX have caused more problems than they have solved"[/i]
In contrast sensible opinion recognises that deregulation goes to the very heart of the causes of the worse financial crises since the 1930s.
Even the neo-conservative administration of George Bush was forced into massive and unprecedented intervention due to the catastrophic failures of the unregulated financial markets.
DC lying? (Although tbc, did he use the word austerity?)Of course he is. Pretty silly if folk don't spot that too.
So you reckon that David Cameron, despite what he is very clearly saying, intends to boost public spending back to the pre-austerity levels ?
I know that you are a Tory THM but have you always gone through life treating people as idiots ?
Not even a nice try this time Ernie, come on keep the standards up.
You really do have a thing for Mrs T don't you, not just the collection of photos.
The crisis was a crisis of leverage, the trigger was the flawed intervention - artificially low interest rates (to address/compound past errors) combined with flooding the world with excess liquidity. Oh and then encouraging banks to lend to those who shouldn't be lent to. So sorry, you diagnose is worn again as is the weak, clichéd attempt to pigeon hole people. The burden of dragging around political allegiances must be weighing in your shoulders.
DC is lying about taxes and where we are in the cycle of cuts. But try the actual question, did he mention austerity? They are not even half way through the required deficit reduction and remember what a deficit is when mis-applying the word austerity. GO talked tough but acted much lighter than others with different ideologies.
Idiots prove themselves, they do not need my encouragement. I take people for what they are.....
DC is lying about taxes
A classic THM tactic which you share with your fellow Tory Z-11, when in a sticky change the subject completely.
I haven't mentioned anything about David Cameron's tax policies, no one else has mentioned anything about David Cameron's tax policies, this thread isn't about David Cameron tax policies.
Of course for you it is more desirable to argue against something which no one has even suggested than to challenge the widely held view that deregulation goes to the very heart of the causes of the worst global financial crises since the 1930s. A view that is shared by Noble Prize winning economists but which you would arrogantly dismiss as too silly to believe.
the widely held view that deregulation goes to the very heart of the causes of the worst global financial crises since the 1930s.
Wasn't the regulation brought in because of 1929?
Therefore regulation = stability, no?
Has it been a tiring week? Come on raise the bar a bit.
ernie_lynch - Member
A classic EL tactic, when in a sticky change the subject completely.
FTFY. Remind me what the thread was about before the sidetrack?
I haven't mentioned anything about David Cameron's tax policies,
Correct I did, as an example of DC essentially lying. There will be more of this to come as we head to an election. Must be tough being a Tory if you have to defend this. Bit like Andy Burnham defending Wallace yesterday.
Of course for you it is more desirable to argue against something which no one has even suggested than to challenge the widely held view that deregulation goes to the very heart of the causes of the worst global financial crises since the 1930s. A view that is shared by Noble Prize winning economists but which you would arrogantly dismiss as too silly to believe.
Very happy to - it is/was a crisis of leverage. Pure and simple. Misdiagnose the problem and you get the wrong solutions. The Noble guys you refer to and I share similar thoughts on other things though, but I doubt this extends to praising the unlikely duo of Kirchner and Brown. I admire your tenacity in fighting lost causes. Admirable, if flawed.
Anyway, the housing market....
I admire your tenacity in fighting lost causes.
You really don't ever have an occasional day off from being arrogant and patronizing do you ?
Yeah, claiming that deregulation goes to the very heart of the causes of the worst global financial crises since the 1930s is a "lost cause".
We'll leave it there shall we as having an intelligent discussion with you is clearly impossible.
Just for teh record you both look like absolute ****ers right now. HTH
HTH
Yes thanks Northwind, that was a hugely useful contribution.
Have you got something to say on what caused the 1989 house price crash ? Or are you limited to just one useful contribution per thread ?
What ernie says THM you really do like to patronise folk to death.
I think its hard to argue that the Tories are not ideologically wed to the idea of a low tax* low spend small state as they are slowly achieving bia "austerity" measures.
It may well be fair to debate whether they have delivered on it but not whether they want to deliver it.
* IIRC CMD said this was a moral imperative recently
@ NW I quite enjoy watching a Bighitathon....then again I would
ernie_lynch - Member
Yes thanks Northwind, that was a hugely useful contribution....Have you got something to say on what caused the 1989 house price crash ? Or are you limited to just one useful contribution per thread ?
Ernie +1 😀
As an aside, heavy rainfall and rising water levels not restricted to the South I see.....
has no one blamed fatcha yet?
thats my leftytrackworld contribution
greed is good* always seems to get us in the shit in the end
though recently it seems the shit is being shovelled downhill to the bottom of society, another 10 years of similar income inequality and Russel Brand may well end up having his revolution- imagine that!
newsnight apparently modeled a SNP-PLaid Cyrmu-Green coalition last night, wed be more socialist than cuba!!!
*currently selling our house and am guilty of that too
kimbers - Member
has no one blamed fatcha yet?
Her not-so-secret admirer mentioned her indirectly, but I think he got away with it.
What ernie says THM you really do like to patronise folk to death.
😆 oh the ironing 😆
Can we have a league table of who the bighitters are?
Oh yes I am guilty of it for sure. Out of interest what did I do to you as you never miss the opportunity to have a dig about this but I have forgotten you 😉
See what i did there
As an side something strange about the South written in tongues with an abbreviation no one else UFTAFW
Anyway riding to be done
Enjoy play time...and be nice to each other
I am crushed 😆
I needn't of worried, they price index system reckoned it had increased by 20%.No down turn around here then? Is it ever going to stop?
But 2 years ago the market was well down on the previous peak. This is more a sign of a recovery, but not future price trends. Our house (and most UK houses) have increased in value significantly over the last couple of years. Our estate agent has openly said that the market was looking good at the tail end of last year but has completely stalled again in the last 6 months. My accountant wife thinks the recent tightening on bank lending criteria has hurt the market. Large ratio loans are much harder to get under the new regime.
It's too early to tell.
Keep an eye on Scotland's prices over the next year. Due to tax changes we are seeing an acceleration in expensive houses changing hands before April. The analysis is that the cheaper housing stock will slow to April, then after accelerate. But I'm not sure, due to the supply demand issues, and think it may cause a re-correction of the market post April, we shall see. As they say watch this space.
If the Lloyds data is correct, Scotland is the only region where current price-earnings ratios are close to average since '83. Not surprisingly in our heavily distorted market, greater London is now a historic high and other areas in the south getting close.
Some free market.....?
Mortgage repayments as a percentage of income in Scotland are actually close to historic lows. Canny folks north of the border in housing and knowing how to vote.
Some free market.....?
Whaddya mean?
Occasionally, the UK is mistakenly described as being being a free market with ruling parties fixated and driven by certain ideologies. The housing market is an excellent example of why this is false. Even a supposedly RW government, actively intervenes in and distorts the housing market as a deliberate instrument of policy. This has two predictable consequences (1) nice sources of revenue for their coffers and (2) exacerbated booms and busts. But they can't help themselves, even the Tories.
Some free market.....?
Whaddya mean?
Deliberate shortage of supply from lack of building for years and years, followed by deliberate adding in more money when prices become unaffordable rather than letting prices fall as per free market supply and demand - Funding For Lending and Help To Buy.
Falling house prices will make people feel poorer even though rising house prices make people actually poorer as they're left with lower disposable incomes. The market's being manipulated - otherwise prices would have fallen back to historical income multiples after the 2008 crash... how else do you get 20% increase in prices (in London) whilst during the same period wages are stagnant. The London population didn't increase 20% last year so clearly there's more than your free market supply and demand going on...
It's surprisingly naive IMO - if governments have as much control over markets as they seem to think, they'd have prevented the 2008 crash, surely? How they think they'll prevent a correction in house prices is a mystery
the last statements released by carney on why he didnt raise interest rates shows that the wool of artificially propping up the housing market to create "economy" hasnt been pulled over his eyes.
our economy hasnt recovered - the only thing we seem to be mass producing is housing. we cant export that.
Plus consumption in the UK represent about 65% of total aggregate demand - boy, can we consume! Rising house and other asset prices boosted consumption via the wealth effect. Everyone "feels" better and the incumbents get voted back in. Simple really except for those who get caught in the aftermath. There will be many when IR finally normalise as they should if the market was free and allowed to function properly. Alas, we prefer to kick the can down the road....
Don't mention wages. Another example. Our productivity continues to decline in absolute and relative terms. And the response, let's intervene in the labour market and put up the price of labour despite all of this. And we wonder what happens to UK competitiveness.
Some free market.....
http://www.ft.com/cms/s/0/45f29b50-69b4-11e4-8f4f-00144feabdc0.html
Anyway, I digress, back to housing.
Even a supposedly RW government, actively intervenes in and distorts the housing market as a deliberate instrument of policy.
That is because not even the RW governments trust the market to deliver. I doubt anyone does tbh even you.
Re housing it is unlikely that any govt will remove all planning restrictions- ie it will never be "free" as the results are unpalatable. Housing at Stonehenge anyone - the market would deliver as they would make loads with them ...ditto wales/Snowdon, the lakes etc
We have a mixed economy all the parties do is vary slightly between how "free market" [ which means low intervention] and higher intervention/regulatory they are.
The same applies to wages - very few are willing to remove the MW which is interference or NI or sick pay or ....ah you get the point we want folk who work to have a certain standard of living.
No one trusts the markets as they are [ literally] amoral and human beings are , almost exclusively*, not.
* Not a personal dig to be clear.
Don't mention wages. Another example. Our productivity continues to decline in absolute and relative terms. And the response, let's intervene in the labour market and put up the price of labour despite all of this. And we wonder what happens to UK competitiveness.
What's the alternative?
As i see it, in the current climate it's either -
- push up wages
- subsidise wages via in-work benefits such as tax credits, child benefit etc etc
both of these are market distortions. Withdraw them both and the economy would fall through the floor in very short order, no?
...related -
found this article interesting. It's from a strongly pro-capitalist website, but argues that we do need some forms of regulation / interference for capitalism to be successful
One of the roles of government is to save capitalism from itself, by maintaining a competitive environment
http://www.capx.co/capitalists-would-be-crazy-to-ignore-inequality/
Not really, two things have/can happen - (1) wages are depressed until we become competitive - our output per head is well below US, Germany and France (2) a falling exchange rate with help. A relief that we at least have a flexible exchange rate unlike our poor friends in Spain who have been restored to competitiveness but the crude measures of massive wage deflation and unemployment. God bless the €!!!
If you increase wages without increasing productivity, the result has to be fewer people in work but earning more money (cough, more inequality). Economics 101, not that those politicians arguing about inequality have taken that course. Too much to hope.
Of course we need genuine supply side reforms but they take far too long for most politicians. Still at least there is one politician talking about them and he's a socialist with the lowest popularity ratings in Europe (I think). Funny old world.
Back to the housing market, of course letting the housing market return to correct levels would crush consumption and politicians are no turkeys! Economical with truth certainly, but rarely stupid.
Poor productivity has been blamed for the lack of earnings growth and the squeeze on real incomes in Britain over the past five years, though the Bank of England is expecting output per worker to pick up during 2014.
So given that for the majority of British workers over the past decade or more COLA increases have outstripped pay growth, particularly when you add in 0 hour contracts. Are British workers dis-incentivised?
Particularly as they see the richest's pay growth exceeding COLA by a large margin?
Whilst the 'crash' was happening I was busy getting loaded and shooting everything that moved. Corr it was glorious times.
greed
many factors that 'helped' it over the tipping point. Over-valuing and over-borrowing were the primary causes just like the 2008 and 2016 crash.What caused the 1989 house price crash?
🙂 yes everyone was urging me to buy in '88 but all I could see/hear was a strobe light and a thumping beat.
Me too...ahh madchester so much to answer for 😯
Foreign buyer
Cash buyers
and Buy-to-letters
3 very good reason why this market is where it is. What will see them disappear ??
Foreign buyers .... THM said GBP may/should devalue... but it's gotta devalue by a hell of a lot for our russian friends to be frightened out (the Ruble is on its knees) and how about the Chinese well I guess if their currency was to be valued correctly we'd be in trouble... but then so would they... so that isn't going to happen.
Cash Buyers .... where else you going to put your money ... if houses are over valued... so is every thing else.
Buy-to-let .... Sorry it may be wrong... but policy wise, none of the major parties will change a thing.
So were are we left.... I reckon consolidation at these levels for the next year until GE is over and then the BoE doesn't raise rate, because inflation is still flat.... after that, back up we go.
1/3rd of our MPs are buy to let landlords
the current situation suits them nicely
THM said GBP may/should devalue... but it's gotta devalue by a hell of a lot for our russian friends to be frightened out (the Ruble is on its knees)
You've got it backwards. A weak ruble means that Russian buyers find UK property more expensive (assuming they aren't earning in Euros or dollars).
I think the latest Bank of England stress tests included one scenario where UK house prices fall by 35%.
One of my colleagues has just been advised to sell equites (after the recent correction 😳 ) and buy housing in London ( 😳 ) . Sounds like only one party is going to make money out of that "advice."
