Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
I see its Glyn Razell's public parole hearing today. It really is a weird case, no body has been found and he is still protesting his innocence 21 years later which will no doubt mean his parole will be rejected.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
This is a distortion of what happened in the 90s. There was a mini-boom in new construction in the late 80s which went into reverse but private home construction in the trough of the 90s was still above the level of the early 80s.
The mid-90s was a golden age to be a 20-something with an average income. Young people now face a much more difficult economic environment and @Nigel_Foremain's glib answer of 'work harder and maybe set up a successful business' will only work for a minority.
The stock market went down by 20% last year. Why should elderly home owners be protected when young people have their costs jacked up?
Indeed. Stock market falls should be considered much, much worse than house price falls.
There's no upside to stock market falls, its a loss of value but nobody has to pay rent to the stock market and anyone who wants to buy stocks can invest small amounts not all or nothing.
House prices are a cost. Its dead money expense, not a gain, for your cost of living. High house prices are as damaging as high gas prices or high electricity prices. House price falls are as beneficial as electrical goods falling in price.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
But the facts show that first time buyers were able to buy in the 1990s.
And people who are using equity gains from house price rises to flip or get extra houses can't outbid first time buyers with their equity gains when the price falls, so first time buyers gain market share - as happened in the 1990s.
In every objective measurement the 1990s were better for first time buyers than anything that's happened since.
The later part of the 90s once people had moved out of negative equity. But nothing was moving for two or three years. And then normal business resumed and again first time buyers were priced out. You are picking a relatively small window for your example.
Far better to have house prices unchanged for a long period of time which gets the same effect of allowing first time buyers on to the ladder without causing a breakdown of the whole system.
It could never be done but it would be great if house prices could never go up by more than inflation so effectively they ceased to be an investment.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
No, you don't.
Try being a FTB today. You were lucky.
There's a reason home ownership rates went up in the 1990s, and down since. You're taking your good fortune for granted.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
People who feel the squeeze from the rising cost of living. You want the price of houses denominated in milk or bread to fall, but just not denominated in currency.
Pints in pubs in Mayfair this afternoon: £5.85, £5.35, £6.05 (so far). Where are people buying these £8 pints of internet legend? Must be fancier establishments, because it can't be fancier areas.
It's a tribute to the egalitarian nature of London boozers that pints cost roughly the same as that on the Old Kent Road and Whitechapel road (and indeed the Angel Islington).
However applying an inflation calculator to the 14p that a north London pint cost when I started getting a taste for it in 1972 it should now cost in the region of £1.57.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
90s saw record home ownership gains not losses. Record number of people able to get onto the housing ladder.
What's negative or glib about that?
Ahem.
The 90s saw record home ownership levels, but it did not see a record rise in home ownership.
In the 80s, you sent from 55% to 67%. In the 90s, you went from 67% to around 70%.
Fantastic pedanticbetting, well done.
*bow*
Yes I should have said it saw record levels in home ownership.
Which undermines your argument somewhat. If the rate of new ownership dropped in the 90s compared to the 80s then isn't it at least arguable that the negative equity episode of the early 90s damaged confidence in the housing market and led to fewer people getting on the ladder?
John Redwood is having a pop (quite rightly) at the Government for basing anything on the OBR's 5 year forecasts when they can't even forecast what they'll be having for dinner that day:
So we learn that UK state borrowing was £11.3 bn less in the first four months of this financial year than the OBR forecast.Spending was up so the main reason for a further large error once again was understating tax revenues. Income tax was up by a massive 13% . The OBR often understates revenue when the economy grows a little.
I renew my question to Ministers. Why do you make the OBR five year forecast of the deficit the key control on your economic choices? As the OBR cannot get within £10 bn for the immediate year why believe the 5 year forecast? If the OBR model regularly understates tax revenue why accept advice to hike tax rates?
The numbers were further distorted by the transfer of £14 bn to the Bank of England to pay losses, taking the total to an astonishing £24 bn in just four months. The Bank’s decision to sell bonds at the low prices it has driven them down to instead of holding them to repayment has added to the misery and inflated government ex Bank borrowing and spending.
Radical idea - lets invest. Heavily. There are very many things we could invest in which deliver both a direct cash injection into the economy now as people do the work, but in the longer term as well thanks to the economic benefit of the infrastructure.
If we base the investment choice on a positive ROI then as an investment it stands apart from whatever make-believe forecast the OBR want to give. As a fiscally sovereign nation we have the ability to invest for the long term.
Markets get spooked when corrupt old duffers elect a numptie as PM and she promises a bonfire of cash to buy votes. They get very happy when sovereign's invest in their future long term growth and prosperity. Sovereign wealth and investment funds are a big thing. So invest. Screw the OBR.
Sadly what we will have is "who will pay for that", invest nothing, and then scratch our heads as we sit in a crumbling country getting rapidy poorer.
I think it's a little bit of a money-go-round though. We tax and regulate businesses almost out of existence (a lot of it due to Net Zero), then we give them a shiny new suspension bridge or tramway to make up for it.
The State takes more and more - you're a business person, and now you have your own small business. Shouldn't they just get off your f*****g back so you can invest in your own business? Raise the VAT threshold so you can grow your shop for example? Then when businesses are straining to get from Manchester to Liverpool quicker, the case for new infrastructure will be made.
To be honest I wouldn't trust this lot (or the seeming next lot) to make the right calls on large projects, nor the CS or quangocracy to deliver them.
A lot of business is low tax - Corporation Tax at 19% and staying there for SMEs is a great deal.
I don't trust this lot either, and our political system seems to make it impossible to plan any longer than the current parliament. But what choice do we have for the projects I mention?
The private sector cannot propose, plan and build new roads or railways or fibre broadband. The British obsession with spivism means they would charge £vast for something they build as cheaply as possible, with the only consideration being themselves - the M6 Toll as a prime example.
So we need the state, the power of a sovereign nation with a huge economy. To accept the problems we have and show the leadership to utterly transform our prospects.
My go to example is the industrialisation of Manchester. A vast array of private businesses which could only flourish by utilising the corporation-built centralised power to mechanically drive their machines. Build the infrastructure that needs to be centrally planned and delivered, then subsidise the industries who will use it to flourish.
I can't see any specific projects, as I think these must be in another post. The private sector built the railways, so I don't see why they shouldn't be able to do so again - they'd do a much better job than the public sector.
We need to find a way to make things work without costing the earth in this country. I am afraid the Civil Service mostly need to be bypassed. They're unfit for purpose.
Private sector did a bad job of the railways precisely because it was private sector - duplicated, cherrypicking, chaotic, often very poor quality indeed, crashed the economy at least once. Key strategic errors - Brunel broad gauge incompatible with the rest, and so on.
And we are left with the legacy of that total lack of integrated planning. For example, two stations in Bradford on opposite sides of the city centre, requiring a cross-town trek to make a simple journey like Ilkley to Halifax.
In some places, such as Leeds, the nonsense was resolved. So we don't have this bugger's muddle any more:
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
90s saw record home ownership gains not losses. Record number of people able to get onto the housing ladder.
What's negative or glib about that?
Ahem.
The 90s saw record home ownership levels, but it did not see a record rise in home ownership.
In the 80s, you sent from 55% to 67%. In the 90s, you went from 67% to around 70%.
Fantastic pedanticbetting, well done.
*bow*
Yes I should have said it saw record levels in home ownership.
Your exact words were that the "90s saw record home ownership gains".
Sorry to be a pedant.
I know, which is why I bowed before your pedantry.
This is pedanticbetting.com so absolutely such shouldn't slide. The 1990s saw record home ownership levels.
The 1990s saw the lowest levels on record unable to have their own home.
Better?
As it's political betting, it should really be pedantical betting.
John Redwood is having a pop (quite rightly) at the Government for basing anything on the OBR's 5 year forecasts when they can't even forecast what they'll be having for dinner that day:
So we learn that UK state borrowing was £11.3 bn less in the first four months of this financial year than the OBR forecast.Spending was up so the main reason for a further large error once again was understating tax revenues. Income tax was up by a massive 13% . The OBR often understates revenue when the economy grows a little.
I renew my question to Ministers. Why do you make the OBR five year forecast of the deficit the key control on your economic choices? As the OBR cannot get within £10 bn for the immediate year why believe the 5 year forecast? If the OBR model regularly understates tax revenue why accept advice to hike tax rates?
The numbers were further distorted by the transfer of £14 bn to the Bank of England to pay losses, taking the total to an astonishing £24 bn in just four months. The Bank’s decision to sell bonds at the low prices it has driven them down to instead of holding them to repayment has added to the misery and inflated government ex Bank borrowing and spending.
Radical idea - lets invest. Heavily. There are very many things we could invest in which deliver both a direct cash injection into the economy now as people do the work, but in the longer term as well thanks to the economic benefit of the infrastructure.
If we base the investment choice on a positive ROI then as an investment it stands apart from whatever make-believe forecast the OBR want to give. As a fiscally sovereign nation we have the ability to invest for the long term.
Markets get spooked when corrupt old duffers elect a numptie as PM and she promises a bonfire of cash to buy votes. They get very happy when sovereign's invest in their future long term growth and prosperity. Sovereign wealth and investment funds are a big thing. So invest. Screw the OBR.
Sadly what we will have is "who will pay for that", invest nothing, and then scratch our heads as we sit in a crumbling country getting rapidy poorer.
I think it's a little bit of a money-go-round though. We tax and regulate businesses almost out of existence (a lot of it due to Net Zero), then we give them a shiny new suspension bridge or tramway to make up for it.
The State takes more and more - you're a business person, and now you have your own small business. Shouldn't they just get off your f*****g back so you can invest in your own business? Raise the VAT threshold so you can grow your shop for example? Then when businesses are straining to get from Manchester to Liverpool quicker, the case for new infrastructure will be made.
To be honest I wouldn't trust this lot (or the seeming next lot) to make the right calls on large projects, nor the CS or quangocracy to deliver them.
A lot of business is low tax - Corporation Tax at 19% and staying there for SMEs is a great deal.
I don't trust this lot either, and our political system seems to make it impossible to plan any longer than the current parliament. But what choice do we have for the projects I mention?
The private sector cannot propose, plan and build new roads or railways or fibre broadband. The British obsession with spivism means they would charge £vast for something they build as cheaply as possible, with the only consideration being themselves - the M6 Toll as a prime example.
So we need the state, the power of a sovereign nation with a huge economy. To accept the problems we have and show the leadership to utterly transform our prospects.
My go to example is the industrialisation of Manchester. A vast array of private businesses which could only flourish by utilising the corporation-built centralised power to mechanically drive their machines. Build the infrastructure that needs to be centrally planned and delivered, then subsidise the industries who will use it to flourish.
I can't see any specific projects, as I think these must be in another post. The private sector built the railways, so I don't see why they shouldn't be able to do so again - they'd do a much better job than the public sector.
We need to find a way to make things work without costing the earth in this country. I am afraid the Civil Service mostly need to be bypassed. They're unfit for purpose.
Private sector did a bad job of the railways precisely because it was private sector - duplicated, cherrypicking, chaotic, often very poor quality indeed, crashed the economy at least once. Key strategic errors - Brunel broad gauge incompatible with the rest, and so on.
And we are left with the legacy of that total lack of integrated planning. For example, two stations in Bradford on opposite sides of the city centre, requiring a cross-town trek to make a simple journey like Ilkley to Halifax.
In some places, such as Leeds, the nonsense was resolved. So we don't have this bugger's muddle any more:
TBF they did build them with a siding between them to pass wagons through.
"The Caledonian and NBR stations were not immediately adjacent, being respectively west and east of the road that is now the A702. Each station had the usual facilities, including a locomotive turntable each. There was an exchange siding between the two stations for wagon exchange, but no through movements took place.[9]"
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
But the facts show that first time buyers were able to buy in the 1990s.
And people who are using equity gains from house price rises to flip or get extra houses can't outbid first time buyers with their equity gains when the price falls, so first time buyers gain market share - as happened in the 1990s.
In every objective measurement the 1990s were better for first time buyers than anything that's happened since.
The later part of the 90s once people had moved out of negative equity. But nothing was moving for two or three years. And then normal business resumed and again first time buyers were priced out. You are picking a relatively small window for your example.
Far better to have house prices unchanged for a long period of time which gets the same effect of allowing first time buyers on to the ladder without causing a breakdown of the whole system.
It could never be done but it would be great if house prices could never go up by more than inflation so effectively they ceased to be an investment.
Home ownership rates staying the same is better than what we've had for decades which is them going down.
First time buyers gained market share during and after the period of negative equity in the 90s as I said and you acknowledge. You're right that they were priced out in the decades afterwards, but that's why the decades afterwards were the problem not the period of negative equity.
Regular periods of negative equity to take the air out of the market and allow FTBs to gain market share should be a healthy part of the economy cycle, just as we have periods where stocks go down as well as up.
House prices unchanging would be better, but only if they weren't already too high.
Ideal would be a collapse of house prices back in real terms to a 3x multiple of income and then as you say for them to never go up by more than inflation afterwards. Having them unchanged at the peak is no better than keeping gas prices perpetually unchanged at their peak.
On the subject of homes and housebuilding, there is a tendency to fall into the sole actor fallacy.
There is not one single cause of falling levels of home ownership in the UK, there are many interrelated ones.
Here are some that have not really been mentioned:
(1) Build costs have risen dramatically across much of the country. Some of that is due to new build regulations and standards. Some to inflation in building supply prices. And some is due to a labour shortage: we haven't done a great job of training the people who actually build houses.
(2) Interest rates have risen. This makes it more expensive for developers to develop, as typically firms borrow much of the cost of construction via loans that are paid off when homes are sold.
(3) The tax system. Both stamp duty and council tax are seemingly designed to discourage people from trading down! If you're a single elderly person in a four bedroom home, then - after costs and stamp duty and the fact that you already get a discount on your council tax - the actual monetary benefits of moving to a smaller place can be very small. This means there is inefficient usage of the existing housing stock.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Part of the problem of course is that people moved into housing as an investment when the Government - especially one Mr G Brown - screwed them over on their pensions. As a reulst they were looking for other ways to fund their retirement. At the same time Governments of both stripes have seen rising house prcies as a way to keep the electorate happy and keep consumer spending up. People are more inclined to spend when they see an asset increasing in value.
I don't agree with it and, as I say, I seriously dislike the idea of houses being investments rather than homes, but I understand why people want it. This is a situation caused by successive Governments who have not considerd the consequences of their short term decisions.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
The fact that he's narrowly seen as being the real winner rather than Trump is interesting too.
The short excerpt I heard on the radio suggested the event was held in a lunatic asylum. Do we think the enthusiastic response of this specific audience reflects the wider (s)electorate?
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
I see its Glyn Razell's public parole hearing today. It really is a weird case, no body has been found and he is still protesting his innocence 21 years later which will no doubt mean his parole will be rejected.
The case for the defence relied on the blood evidence being a plant. Before accepting this it may be worth asking where whoever planted it got the blood from and how plausible this line of defence is.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Absolutely! 10% of 2.2x income is far, far easier to afford than 10% of 6x income.
Which is why the 90s saw the lowest rate ever recorded of people unable to afford their own home. And people call that "miserable". 🤦♂️
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
House prices have doubled in real terms since the very early 90s, which means that 10 percent deposit is the equivalent of 5 now. So buyers in the early 90s were definitely better off on that front than they were now
That, of course, is one of the reasons Ukraine want the F16.
Their current kit is a high risk if it goes to the altitude needed for glide bomb range; the F16 is much more able to detect and evade Russian missiles.
The JDAM glide munitions are much cheaper than HIMARS missiles, with a similar range and accuracy, and are available in very large quantities. (Also, if you were to stick a small motor on the back, you've potentially got a cheap missile with 100-200 mile range.)
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Mortgage affordability since the early 90s has a broadly flat trend line peaking in 2008
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Mortgage affordability since the early 90s has a broadly flat trend line peaking in 2008
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
But the facts show that first time buyers were able to buy in the 1990s.
And people who are using equity gains from house price rises to flip or get extra houses can't outbid first time buyers with their equity gains when the price falls, so first time buyers gain market share - as happened in the 1990s.
In every objective measurement the 1990s were better for first time buyers than anything that's happened since.
The later part of the 90s once people had moved out of negative equity. But nothing was moving for two or three years. And then normal business resumed and again first time buyers were priced out. You are picking a relatively small window for your example.
Far better to have house prices unchanged for a long period of time which gets the same effect of allowing first time buyers on to the ladder without causing a breakdown of the whole system.
It could never be done but it would be great if house prices could never go up by more than inflation so effectively they ceased to be an investment.
Home ownership rates staying the same is better than what we've had for decades which is them going down.
First time buyers gained market share during and after the period of negative equity in the 90s as I said and you acknowledge. You're right that they were priced out in the decades afterwards, but that's why the decades afterwards were the problem not the period of negative equity.
Regular periods of negative equity to take the air out of the market and allow FTBs to gain market share should be a healthy part of the economy cycle, just as we have periods where stocks go down as well as up.
House prices unchanging would be better, but only if they weren't already too high.
Ideal would be a collapse of house prices back in real terms to a 3x multiple of income and then as you say for them to never go up by more than inflation afterwards. Having them unchanged at the peak is no better than keeping gas prices perpetually unchanged at their peak.
If that happened as you wish then the housing market would cease to function. No one would be selling a house if they were in negative equity. And buyers would keep waiting for the price to be lower because as soon as they bought they would also be in negative equity. So no one wants to sell and no one wants to buy.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Yes, but you're in a much better position for a given monthly mortgage payment if the principal is smaller and the interest rate is higher because:
- Interest rate movements are more likely to be in your favour - Overpayments have more impact so it's easier to pay off the mortgage sooner - Higher general inflation means pay rises erode the debt burden
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
But the facts show that first time buyers were able to buy in the 1990s.
And people who are using equity gains from house price rises to flip or get extra houses can't outbid first time buyers with their equity gains when the price falls, so first time buyers gain market share - as happened in the 1990s.
In every objective measurement the 1990s were better for first time buyers than anything that's happened since.
The later part of the 90s once people had moved out of negative equity. But nothing was moving for two or three years. And then normal business resumed and again first time buyers were priced out. You are picking a relatively small window for your example.
Far better to have house prices unchanged for a long period of time which gets the same effect of allowing first time buyers on to the ladder without causing a breakdown of the whole system.
It could never be done but it would be great if house prices could never go up by more than inflation so effectively they ceased to be an investment.
Home ownership rates staying the same is better than what we've had for decades which is them going down.
First time buyers gained market share during and after the period of negative equity in the 90s as I said and you acknowledge. You're right that they were priced out in the decades afterwards, but that's why the decades afterwards were the problem not the period of negative equity.
Regular periods of negative equity to take the air out of the market and allow FTBs to gain market share should be a healthy part of the economy cycle, just as we have periods where stocks go down as well as up.
House prices unchanging would be better, but only if they weren't already too high.
Ideal would be a collapse of house prices back in real terms to a 3x multiple of income and then as you say for them to never go up by more than inflation afterwards. Having them unchanged at the peak is no better than keeping gas prices perpetually unchanged at their peak.
If that happened as you wish then the housing market would cease to function. No one would be selling a house if they were in negative equity. And buyers would keep waiting for the price to be lower because as soon as they bought they would also be in negative equity. So no one wants to sell and no one wants to buy.
Except that's not what happened in the 1990s. The 1990s saw people able to get on the ladder as houses were affordable, at barely over 2x income instead of 6x.
A return to that would see a rise in affordability, like it did then. That decade saw fewer people than ever trapped paying rent instead of able to get on the ladder.
Pints in pubs in Mayfair this afternoon: £5.85, £5.35, £6.05 (so far). Where are people buying these £8 pints of internet legend? Must be fancier establishments, because it can't be fancier areas.
It's a tribute to the egalitarian nature of London boozers that pints cost roughly the same as that on the Old Kent Road and Whitechapel road (and indeed the Angel Islington).
However applying an inflation calculator to the 14p that a north London pint cost when I started getting a taste for it in 1972 it should now cost in the region of £1.57.
Interesting game.
My favourite pint was 98p in 1983 (Old Thumper) so £4.23 today.
When I went to Uni that year, it was possible to get two pints for a quid at the SU bar, admittedly euro fizz lager.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
While visiting Kyiv on Ukraine’s Independence Day, Norwegian Prime Minister Jonas Gahr Støre informed that Norway will supply air-defense missiles for Ukraine
I now own a flat thanks to my privilege which I acknowledge. If the value of the property fell by 20% then so be it.
I would be delighted if the value of my property fell substantially since I never intend to sell. It is a paper value only and so largely meaningless. But if you want to help people onto the property ladder then such a collapse is not the way to do it.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
Because they were already on the ladder, yes.
People who got on the ladder in the 1980s didn't fall off it in the 1990s.
The 1990s meant that people who couldn't get on the ladder in the 1980s, were able to then instead. It was even better than the 80s because it was a step up from what was already a high to an even better high of home ownership.
Instead since then we've had continuous regression.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
Because they were already on the ladder, yes.
People who got on the ladder in the 1980s didn't fall off it in the 1990s.
The 1990s meant that people who couldn't get on the ladder in the 1980s, were able to then instead. It was even better than the 80s because it was a step up from what was already a high to an even better high of home ownership.
Instead since then we've had continuous regression.
So the rate of people getting on the property ladder dropped. There were fewer FTB than there would have been if the rates had continued from the 1980s. And you think that was a good thing?
On topic. (And I only watched the "highlights", so I may have missed some nuance).
Winners: Vivek Ramaswamy. Articulate. Positioned himself well to be the heir of Trump, but not Trump. Mike Pence. Maybe it was my low expectations, but he was articulate and hit a lot of the right buttons with the audience. Christie. Very combatative performance designed to pick up the anti-Trump votes.
Losers: DeSantis. Invisible and inarticulate. Scott. Invisible. Hayley. Invisible.
*If* Trump drops out, then Ramaswamy looks in a great position to pick up the Trumpian flame. If he does not, then Trump is clearly the favourite.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
The fact that we see it as a ladder is the problem.
Imagine, for a moment, if house prices didn't go up (other than keeping parity with inflation) because we built enough to keep up with demand.
Imagine, for a moment, a world where housing is no longer a speculative asset rigged by successive government interventions to always go up.
Imagine a world where people pay a reasonable proportion of their income on either rent, while they save for an achievable deposit, or a mortgage, which simply pays off their investment with no expectation of profiting from it. A world where a roof over your head is simply a roof over your head.
Imagine a world where all the unproductive capital that's currently locked up in the rentier economy, keeping people miserable while they pay for substandard accommodation where they can't afford to raise a family, suddenly becomes unlocked. A world where people can afford discretionary income, can afford to have kids, can afford a life beyond paying back the landlord, or the bank.
Why is that world so hard to imagine? How did we allow our economy become so fundamentally broken?
On topic. (And I only watched the "highlights", so I may have missed some nuance).
Winners: Vivek Ramaswamy. Articulate. Positioned himself well to be the heir of Trump, but not Trump. Mike Pence. Maybe it was my low expectations, but he was articulate and hit a lot of the right buttons with the audience. Christie. Very combatative performance designed to pick up the anti-Trump votes.
Losers: DeSantis. Invisible and inarticulate. Scott. Invisible. Hayley. Invisible.
*If* Trump drops out, then Ramaswamy looks in a great position to pick up the Trumpian flame. If he does not, then Trump is clearly the favourite.
Not everyone agrees with me, but I wouldn't rule Pence out of the race!
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
Because they were already on the ladder, yes.
People who got on the ladder in the 1980s didn't fall off it in the 1990s.
The 1990s meant that people who couldn't get on the ladder in the 1980s, were able to then instead. It was even better than the 80s because it was a step up from what was already a high to an even better high of home ownership.
Instead since then we've had continuous regression.
So the rate of people getting on the property ladder dropped. There were fewer FTB than there would have been if the rates had continued from the 1980s. And you think that was a good thing?
Its a view I suppose
Of course, people who'd already bought in the 1980s couldn't be FTB a second time in the 1990s. The 1980s was exceptional as Council Houses being sold off was a one-off, people who bought then for the first time couldn't redo the first time purchase again ten years later.
People who're already on the property ladder aren't the issue, unless for some reason they can't afford to keep their home, the issue is the ones who aren't.
The figure to look at is how many people can't afford a home. And that was lower in the 1990s than the 1980s or any other time before or since.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
Yep. 2008 reduced mortgage rates drastically but it didn’t do a lot for affordability because lenders required much larger deposits to protect them in the event of default.
House deflation has the same effect. To protect their loans lenders require more and more of a margin pricing those without access to a well funded bank of mum and dad out of the market.
It may be beneficial to have house prices deflate in real terms as we have at the moment but those who lived through the early 90s or the period after 2008 know for sure that absolute deflation of house prices is a disaster.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Absolutely! 10% of 2.2x income is far, far easier to afford than 10% of 6x income.
Which is why the 90s saw the lowest rate ever recorded of people unable to afford their own home. And people call that "miserable". 🤦♂️
No, affordability has 2 factors. The purchase price and the cost of borrowing.
If the price has dropped 30% but the interest rate has doubled, then affordability has not improved.
What happened after the negative equity of the early nineties was a sharp drop in interest rates, creating ideal conditions for affordability.
At the moment we have falling house prices and rising interest rates. Due to the prevalence of 2 year plus fixes those rising rates are on a time delay, but a significant drag on affordability for some time yet, and we probably haven't seen the peak yet.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Yes, but you're in a much better position for a given monthly mortgage payment if the principal is smaller and the interest rate is higher because:
- Interest rate movements are more likely to be in your favour - Overpayments have more impact so it's easier to pay off the mortgage sooner - Higher general inflation means pay rises erode the debt burden
I don't disagree with any of that, it is indisputably better to buy when interest rates are high and price-to-earnings are low.
HOWEVER, there are other things at work here. For a start, high interest rates and falling property prices tend to discourage new house building. Through the 1980s, house building levels rose, reaching 240,000 in 1989.
The early 1990s, which were such a great time to buy, were at least partially such a great time to buy because the recession and property price drop caused building levels to drop dramatically, falling to 170,000 in 1992.
In other words: those high interest rates are great for people who can afford to buy, but if they discourage new building, then they worsen housing availability later.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Absolutely! 10% of 2.2x income is far, far easier to afford than 10% of 6x income.
Which is why the 90s saw the lowest rate ever recorded of people unable to afford their own home. And people call that "miserable". 🤦♂️
No, affordability has 2 factors. The purchase price and the cost of borrowing.
If the price has dropped 30% but the interest rate has doubled, then affordability has not improved.
What happened after the negative equity of the early nineties was a sharp drop in interest rates, creating ideal conditions for affordability.
At the moment we have falling house prices and rising interest rates. Due to the prevalence of 2 year plus fixes those rising rates are on a time delay, but a significant drag on affordability for some time yet, and we probably haven't seen the peak yet.
Yes indeed and you were incredibly fortunate to be a first time buyer when you were, which is why you like most of your peers were able to do so.
Unlike the generation that came after you.
If you think its miserable to save a 10% deposit at 2.2x income, just imagine how miserable it is to save a 10% deposit at 6x income.
Which is why fewer people than ever before were unable to afford a home in the 90s. And more and more people have been unable to do so since.
Saving for a deposit at 6x income is far more miserable than doing so at 2.2x income.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see a slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
Yep. 2008 reduced mortgage rates drastically but it didn’t do a lot for affordability because lenders required much larger deposits to protect them in the event of default.
House deflation has the same effect. To protect their loans lenders require more and more of a margin pricing those without access to a well funded bank of mum and dad out of the market.
It may be beneficial to have house prices deflate in real terms as we have at the moment but those who lived through the early 90s or the period after 2008 know for sure that absolute deflation of house prices is a disaster.
It's the boom in house prices under the monetary policy regime instigated in 1997 that has been a disaster, and the failure to have a proper correction in 2008 is one of the major causes of our economic stagnation since then.
If you take any London suburban street at random, you will see countless examples like this one, and you can see from the 2020 listing that the property didn't have any work done on it:
Sold in 1995 for £220,000 Sold in 2020 for £1,620,000
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Yes, but you're in a much better position for a given monthly mortgage payment if the principal is smaller and the interest rate is higher because:
- Interest rate movements are more likely to be in your favour - Overpayments have more impact so it's easier to pay off the mortgage sooner - Higher general inflation means pay rises erode the debt burden
I don't disagree with any of that, it is indisputably better to buy when interest rates are high and price-to-earnings are low.
HOWEVER, there are other things at work here. For a start, high interest rates and falling property prices tend to discourage new house building. Through the 1980s, house building levels rose, reaching 240,000 in 1989.
The early 1990s, which were such a great time to buy, were at least partially such a great time to buy because the recession and property price drop caused building levels to drop dramatically, falling to 170,000 in 1992.
In other words: those high interest rates are great for people who can afford to buy, but if they discourage new building, then they worsen housing availability later.
You can add an additional factor of immigration. It's not much help having, say, 10% additional building if it's outpaced by additional demand caused by immigration.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Why carrots? You'd assume agricultural products would be fairly variable over time as harvests vary.
EDIT: Actually, the ONS publish time series data and this carrots are quite a bit cheaper now than in 2001, when there was a bit of a spike for whatever reason.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
Yep. 2008 reduced mortgage rates drastically but it didn’t do a lot for affordability because lenders required much larger deposits to protect them in the event of default.
House deflation has the same effect. To protect their loans lenders require more and more of a margin pricing those without access to a well funded bank of mum and dad out of the market.
It may be beneficial to have house prices deflate in real terms as we have at the moment but those who lived through the early 90s or the period after 2008 know for sure that absolute deflation of house prices is a disaster.
It's the boom in house prices under the monetary policy regime instigated in 1997 that has been a disaster, and the failure to have a proper correction in 2008 is one of the major causes of our economic stagnation since then.
If you take any London suburban street at random, you will see countless examples like this one, and you can see from the 2020 listing that the property didn't have any work done on it:
Sold in 1995 for £220,000 Sold in 2020 for £1,620,000
I would agree that monetary policy was kept far too loose for too long after 2008 and not nearly enough priority was given to “normalising “ interest rates from at least 2015 onwards.
This had several deleterious effects, one of which was asset inflation greatly enriching the wealthiest at the cost of everyone else. But governments focus on the short term and were anxious to avoid a recession on their watch. This drives policy to this day. I don’t believe for a moment that a change of government will change this.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
Because they were already on the ladder, yes.
People who got on the ladder in the 1980s didn't fall off it in the 1990s.
The 1990s meant that people who couldn't get on the ladder in the 1980s, were able to then instead. It was even better than the 80s because it was a step up from what was already a high to an even better high of home ownership.
Instead since then we've had continuous regression.
So the rate of people getting on the property ladder dropped. There were fewer FTB than there would have been if the rates had continued from the 1980s. And you think that was a good thing?
Its a view I suppose
Of course, people who'd already bought in the 1980s couldn't be FTB a second time in the 1990s. The 1980s was exceptional as Council Houses being sold off was a one-off, people who bought then for the first time couldn't redo the first time purchase again ten years later.
People who're already on the property ladder aren't the issue, unless for some reason they can't afford to keep their home, the issue is the ones who aren't.
The figure to look at is how many people can't afford a home. And that was lower in the 1990s than the 1980s or any other time before or since.
THere are always new first time buyers - at least as long as people still have babies. But if 100 people can get on tghe poperty ladder in the 1980s and only 50 people can get on the property ladder in the 1990s when the same number of people want to do so then that is a problem. Overall you still have more people as homeowners but the rate at which this happens has reduced.
This all stems from your inability to read data and thinking that an increasae in absolute numbers is the same as an increase in the rate. It is the debt/deficit argument in a different form.
You are absolutely right there is an issue with falling home ownership at present. But your 'solution' won't work. It will just make matters worse.
If you want to be radical (and a bit communist) then get the Government to pass a law that house prices cannot increase by any more than 1% below the rate of wage inflation. The housing market won't suddenly dry up but houses will get cheaper for first time buyers relative to their pay.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
The fact that we see it as a ladder is the problem.
Imagine, for a moment, if house prices didn't go up (other than keeping parity with inflation) because we built enough to keep up with demand.
Imagine, for a moment, a world where housing is no longer a speculative asset rigged by successive government interventions to always go up.
Imagine a world where people pay a reasonable proportion of their income on either rent, while they save for an achievable deposit, or a mortgage, which simply pays off their investment with no expectation of profiting from it. A world where a roof over your head is simply a roof over your head.
Imagine a world where all the unproductive capital that's currently locked up in the rentier economy, keeping people miserable while they pay for substandard accommodation where they can't afford to raise a family, suddenly becomes unlocked. A world where people can afford discretionary income, can afford to have kids, can afford a life beyond paying back the landlord, or the bank.
Why is that world so hard to imagine? How did we allow our economy become so fundamentally broken?
I remember being lectured, when I was just in my first permanent job, by a friend's father, on how I needed to get ASAP onto the bottom step of what he called, not a ladder, but an "escalator" - with appropriate gesture of a hand held out flat and sweeping up ever so smoothly diagonally into the heavens. This was c. 1984 ...
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Why carrots? You'd assume agricultural products would be fairly variable over time as harvests vary.
EDIT: Actually, the ONS publish time series data and this carrots are quite a bit cheaper now than in 2001, when there was a bit of a spike for whatever reason.
Yes, sorry, I just mean 'stuff' generally. It goes up not down. That's the way of the (inflationary) world. Bet if you take 100 random things at any random time at least 75 of them will cost more than they ever have before.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Ah 'The Grocer'. Excellent. But yes the price of most things will usually be at an all time high. That was my point about carrots actually.
Well, that's what inflation is.
But you said: "Some markets should see a slow unnewsworthy rise over many many decades and no falls. Eg carrots."
The first part of that is broadly correct but the "and no falls" isn't, and you've picked a poor example because agricultural products are quite variable.
A better example would be something fairly labour intensive like haircuts, as wages do tend to rise and rarely fall in nominal terms (but not necessarily real terms). As soon as you look at commodities, or areas with a lot of technological change, not so much.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
The fact that we see it as a ladder is the problem.
Imagine, for a moment, if house prices didn't go up (other than keeping parity with inflation) because we built enough to keep up with demand.
Imagine, for a moment, a world where housing is no longer a speculative asset rigged by successive government interventions to always go up.
Imagine a world where people pay a reasonable proportion of their income on either rent, while they save for an achievable deposit, or a mortgage, which simply pays off their investment with no expectation of profiting from it. A world where a roof over your head is simply a roof over your head.
Imagine a world where all the unproductive capital that's currently locked up in the rentier economy, keeping people miserable while they pay for substandard accommodation where they can't afford to raise a family, suddenly becomes unlocked. A world where people can afford discretionary income, can afford to have kids, can afford a life beyond paying back the landlord, or the bank.
Why is that world so hard to imagine? How did we allow our economy become so fundamentally broken?
I remember being lectured, when I was just in my first permanent job, by a friend's father, on how I needed to get ASAP onto the bottom step of what he called, not a ladder, but an "escalator" - with appropriate gesture of a hand held out flat and sweeping up ever so smoothly diagonally into the heavens. This was c. 1984 ...
He was right. In 1985 I bought my first flat for all of £10250 and over the next 12 months that flat made more money than I did as a trainee solicitor.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Absolutely! 10% of 2.2x income is far, far easier to afford than 10% of 6x income.
Which is why the 90s saw the lowest rate ever recorded of people unable to afford their own home. And people call that "miserable". 🤦♂️
No, affordability has 2 factors. The purchase price and the cost of borrowing.
If the price has dropped 30% but the interest rate has doubled, then affordability has not improved.
What happened after the negative equity of the early nineties was a sharp drop in interest rates, creating ideal conditions for affordability.
At the moment we have falling house prices and rising interest rates. Due to the prevalence of 2 year plus fixes those rising rates are on a time delay, but a significant drag on affordability for some time yet, and we probably haven't seen the peak yet.
Yes indeed and you were incredibly fortunate to be a first time buyer when you were, which is why you like most of your peers were able to do so.
Unlike the generation that came after you.
If you think its miserable to save a 10% deposit at 2.2x income, just imagine how miserable it is to save a 10% deposit at 6x income.
Which is why fewer people than ever before were unable to afford a home in the 90s. And more and more people have been unable to do so since.
Saving for a deposit at 6x income is far more miserable than doing so at 2.2x income.
No, I was a FTB in 1992, sold in 1996 at the same price. The house I bought second doubled in price in 5 years, which was crazy.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
10% of less is better than 10% of more.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
No one was getting on the ladder in the early 90s. And fewer people were getting on the ladder in the later 90s than in the 80s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
People who already got on the ladder in the 80s only had to stay on the ladder. In the 90s, more were able to do so, rather than less in subsequent decades.
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
And yet as you have admitted after Robert corrected you, fewer people, got on the ladder in the 90s than had in the 80s.
The fact that we see it as a ladder is the problem.
Imagine, for a moment, if house prices didn't go up (other than keeping parity with inflation) because we built enough to keep up with demand.
Imagine, for a moment, a world where housing is no longer a speculative asset rigged by successive government interventions to always go up.
Imagine a world where people pay a reasonable proportion of their income on either rent, while they save for an achievable deposit, or a mortgage, which simply pays off their investment with no expectation of profiting from it. A world where a roof over your head is simply a roof over your head.
Imagine a world where all the unproductive capital that's currently locked up in the rentier economy, keeping people miserable while they pay for substandard accommodation where they can't afford to raise a family, suddenly becomes unlocked. A world where people can afford discretionary income, can afford to have kids, can afford a life beyond paying back the landlord, or the bank.
Why is that world so hard to imagine? How did we allow our economy become so fundamentally broken?
I agree with that. But to be fair the housing ladder term long predates the boom in house prices and didn't traditionally refer to increasing asset value per se.
It was based on the idea that when you first buy you buy small because that is what you can afford. Then as earnings improve and you pay off more of your mortgage you have capital to buy a bigger place to cope with a larger family. The house price boom actually works against the ladder because with everything going up at a similar percentage, the jumps between houses become more and more difficult.
But as I say I agree it would be great if house prices never rose - or only did so at around the rate of inflation. Thios was the norm for much of the 20th century when houses were seen as homes rather than investments.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Ah 'The Grocer'. Excellent. But yes the price of most things will usually be at an all time high. That was my point about carrots actually.
Well, that's what inflation is.
But you said: "Some markets should see a slow unnewsworthy rise over many many decades and no falls. Eg carrots."
The first part of that is broadly correct but the "and no falls" isn't, and you've picked a poor example because agricultural products are quite variable.
A better example would be something fairly labour intensive like haircuts, as wages do tend to rise and rarely fall in nominal terms (but not necessarily real terms). As soon as you look at commodities, or areas with a lot of technological change, not so much.
Probably the first real threat to the hairdressing business came from covid because millions of people were forced to make do themselves.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Ah 'The Grocer'. Excellent. But yes the price of most things will usually be at an all time high. That was my point about carrots actually.
Well, that's what inflation is.
But you said: "Some markets should see a slow unnewsworthy rise over many many decades and no falls. Eg carrots."
The first part of that is broadly correct but the "and no falls" isn't, and you've picked a poor example because agricultural products are quite variable.
A better example would be something fairly labour intensive like haircuts, as wages do tend to rise and rarely fall in nominal terms (but not necessarily real terms). As soon as you look at commodities, or areas with a lot of technological change, not so much.
I take that edit happily. Point being, contra William, that all rises and no falls *doesn't* mean a flawed market. It can but it doesn't have to.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Absolutely! 10% of 2.2x income is far, far easier to afford than 10% of 6x income.
Which is why the 90s saw the lowest rate ever recorded of people unable to afford their own home. And people call that "miserable". 🤦♂️
No, affordability has 2 factors. The purchase price and the cost of borrowing.
If the price has dropped 30% but the interest rate has doubled, then affordability has not improved.
What happened after the negative equity of the early nineties was a sharp drop in interest rates, creating ideal conditions for affordability.
At the moment we have falling house prices and rising interest rates. Due to the prevalence of 2 year plus fixes those rising rates are on a time delay, but a significant drag on affordability for some time yet, and we probably haven't seen the peak yet.
Yes indeed and you were incredibly fortunate to be a first time buyer when you were, which is why you like most of your peers were able to do so.
Unlike the generation that came after you.
If you think its miserable to save a 10% deposit at 2.2x income, just imagine how miserable it is to save a 10% deposit at 6x income.
Which is why fewer people than ever before were unable to afford a home in the 90s. And more and more people have been unable to do so since.
Saving for a deposit at 6x income is far more miserable than doing so at 2.2x income.
No, I was a FTB in 1992, sold in 1996 at the same price. The house I bought second doubled in price in 5 years, which was crazy.
I was an FTB in 1989. Had to give my half of the house to my ex-partner at he end of 1990 when we split and the £40,000 we had paid was only worth £30,000.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Why carrots? You'd assume agricultural products would be fairly variable over time as harvests vary.
EDIT: Actually, the ONS publish time series data and this carrots are quite a bit cheaper now than in 2001, when there was a bit of a spike for whatever reason.
Yes, sorry, I just mean 'stuff' generally. It goes up not down. That's the way of the (inflationary) world. Bet if you take 100 random things at any random time at least 75 of them will cost more than they ever have before.
"100 random things" is a bit vague, and high inflation over the past year will have pushed the numbers in your direction, but I rather doubt that you're right. A lot of things will have had price spikes at one point or another that makes that untrue (various grocery products particularly) while other things (often technology) will have launched at a high price and seen sustained price reductions at least until recently.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
Some markets should see slow unnewsworthy rise over many many decades and no falls. Eg carrots.
Ah 'The Grocer'. Excellent. But yes the price of most things will usually be at an all time high. That was my point about carrots actually.
Well, that's what inflation is.
But you said: "Some markets should see a slow unnewsworthy rise over many many decades and no falls. Eg carrots."
The first part of that is broadly correct but the "and no falls" isn't, and you've picked a poor example because agricultural products are quite variable.
A better example would be something fairly labour intensive like haircuts, as wages do tend to rise and rarely fall in nominal terms (but not necessarily real terms). As soon as you look at commodities, or areas with a lot of technological change, not so much.
Probably the first real threat to the hairdressing business came from covid because millions of people were forced to make do themselves.
I haven't been to the barber since COVID, and do it myself.
Even though I do say so myself, it looks an absolute f***ing mess. It's at the stage where I don't go now out of pure embarrassment.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Yes, but you're in a much better position for a given monthly mortgage payment if the principal is smaller and the interest rate is higher because:
- Interest rate movements are more likely to be in your favour - Overpayments have more impact so it's easier to pay off the mortgage sooner - Higher general inflation means pay rises erode the debt burden
I don't disagree with any of that, it is indisputably better to buy when interest rates are high and price-to-earnings are low.
HOWEVER, there are other things at work here. For a start, high interest rates and falling property prices tend to discourage new house building. Through the 1980s, house building levels rose, reaching 240,000 in 1989.
The early 1990s, which were such a great time to buy, were at least partially such a great time to buy because the recession and property price drop caused building levels to drop dramatically, falling to 170,000 in 1992.
In other words: those high interest rates are great for people who can afford to buy, but if they discourage new building, then they worsen housing availability later.
You can add an additional factor of immigration. It's not much help having, say, 10% additional building if it's outpaced by additional demand caused by immigration.
Oh yeah: you can add lots of new factors:
For example, single unmarried households under the age of 60. They used to be almost unknown, as people went from their parent's home to marriage. Now there are lots of single person households. If all those people were married (and therefore sharing a home), it would make a massive difference to overall housing demand.
Or divorce.
The rise in the number of divorces since the 1960s has created lots of demand for new housing. Now mum and dad both need a home. And you need kids bedrooms in both places.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
Perfect would be house prices to rise below the rate of increase in incomes (if any).
There's nothing perfect about a market in which prices never fall.
I mean in terms of letting the air out of the housing bubble without negative equity and people running around screaming.
People would be running around screaming about inflation anyway in your scenario and at the margins it would still mean some people would suffer financially.
Who would be suffering financially, if their house price goes up slowly or not at all?
Tenants who can't afford a deposit without house price falls.
One of the most difficult things during the slump in house prices in the early nineties was that deposits had to be bigger. Mortgages were limited to those with 10-15% of the asking price rather than 5% as lenders feared further drops. The rates offered to those with bigger deposits were far better too.
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
Yep. 2008 reduced mortgage rates drastically but it didn’t do a lot for affordability because lenders required much larger deposits to protect them in the event of default.
House deflation has the same effect. To protect their loans lenders require more and more of a margin pricing those without access to a well funded bank of mum and dad out of the market.
It may be beneficial to have house prices deflate in real terms as we have at the moment but those who lived through the early 90s or the period after 2008 know for sure that absolute deflation of house prices is a disaster.
It's the boom in house prices under the monetary policy regime instigated in 1997 that has been a disaster, and the failure to have a proper correction in 2008 is one of the major causes of our economic stagnation since then.
If you take any London suburban street at random, you will see countless examples like this one, and you can see from the 2020 listing that the property didn't have any work done on it:
Sold in 1995 for £220,000 Sold in 2020 for £1,620,000
I would agree that monetary policy was kept far too loose for too long after 2008 and not nearly enough priority was given to “normalising “ interest rates from at least 2015 onwards.
This had several deleterious effects, one of which was asset inflation greatly enriching the wealthiest at the cost of everyone else. But governments focus on the short term and were anxious to avoid a recession on their watch. This drives policy to this day. I don’t believe for a moment that a change of government will change this.
The only way out I can see is the "you can't kill a dying man" paradox; the best chance of necessary but electorally unpopular things happening is when a government has given up on the next election anyway. It's still not a good chance, but it's the best one
Jeremy and Rishi, your hour to be heroes has come. If it helps, I'll campaign for a statue in your memory.
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
Yes even if he is in jail and failed to win the GOP nomination or the RNC made him ineligible to be nominee he is likely to run as an Independent
The fact that he's narrowly seen as being the real winner rather than Trump is interesting too.
The short excerpt I heard on the radio suggested the event was held in a lunatic asylum. Do we think the enthusiastic response of this specific audience reflects the wider (s)electorate?
That poll is borderline voodoo. Pollster I've never heard of doing an online poll for dailymail.com with a small sample and no clear methodology that, really, shows Trump, DeSantis and Ramaswamy all there or thereabouts. And then claims only a 4.4% MoE.
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Yes, but you're in a much better position for a given monthly mortgage payment if the principal is smaller and the interest rate is higher because:
- Interest rate movements are more likely to be in your favour - Overpayments have more impact so it's easier to pay off the mortgage sooner - Higher general inflation means pay rises erode the debt burden
I don't disagree with any of that, it is indisputably better to buy when interest rates are high and price-to-earnings are low.
HOWEVER, there are other things at work here. For a start, high interest rates and falling property prices tend to discourage new house building. Through the 1980s, house building levels rose, reaching 240,000 in 1989.
The early 1990s, which were such a great time to buy, were at least partially such a great time to buy because the recession and property price drop caused building levels to drop dramatically, falling to 170,000 in 1992.
In other words: those high interest rates are great for people who can afford to buy, but if they discourage new building, then they worsen housing availability later.
You can add an additional factor of immigration. It's not much help having, say, 10% additional building if it's outpaced by additional demand caused by immigration.
Oh yeah: you can add lots of new factors:
For example, single unmarried households under the age of 60. They used to be almost unknown, as people went from their parent's home to marriage. Now there are lots of single person households. If all those people were married (and therefore sharing a home), it would make a massive difference to overall housing demand.
Or divorce.
The rise in the number of divorces since the 1960s has created lots of demand for new housing. Now mum and dad both need a home. And you need kids bedrooms in both places.
Rise in those horrible sort-of-leased-rather-than-sold retirement place thingies has mopped up some of the oldies. (Was warned never to let my dad go into one, as they were bastards to sell at a decent price when he finally left one way or another, even if he had wanted to leace his 4br house and garden!).
Just had coffee with an old mate. He's a proper time served chippy who has a great reputation and sub contracts out to the big local builders. The site he's on now has just got rid of most of its subs, including him ( he actually offered to go, he's well off enough to retire and was going to get off the tools next year anyway). The building firm are scaling back all their sites as they see a drastic drop in the number of buyers looming. We've just made an offer on a house at 15% below the "Offers in excess of" price. The estate agent wasn't happy to take it to the seller, but the house has been on RightMove for ages, along with about half a million others! We're in no rush...
I'm sticking with my prediction. Property down 20% peak to trough in absolute terms.
You are such a gloom merchant
Indeed but for good reason.
A 50% trough would bring prices back in line better with historical standards and more like the much better 90s housing market that saw record numbers owning their own home, but unfortunately a 20% fall is about as good as we can hope for given the chronic shortage of housing.
50% would be catastrophic. How would people remortgage ? Everyone would be on about base +3 or 4 !
He doesn't care, in the same way as he didn't care about businesses that were fucked by Brexit and people that died in the pandemic. He is fundamentally a lazy selfish git.
I care about the people trapped unable to afford a house because of the absurdly high prices today. Which isn't me, I have one.
I couldn't care less if I end up in negative equity. Still better off than renting and it will make houses affordable for those younger and poorer than me. Good for them.
Those who remember negative equity in the nineties wouldn't be so glib.
What we need isn't so much a house price fall, it is for take home income to increase.
There will be some immediate losers, such as those who were first time buyers a few years ago and now can't afford SVR rates and have to be repossessed. I have sympathy for many of those people, but I have costed all my mortgages over the years on what would happen if rates went up a few %.
I have no sympathy for people that the press keep finding with houses bought in 2002 still with several hundred thousand outstanding, i.e. more than the value of the house when bought originally. If you haven't almost paid it off by now then tough.
There will be some people on negative equity who can afford the payments who are unable to move, which is a problem if you want to move location for work.
But a lot of people will be like I was in 1990, with property prices still well out of reach, sitting on my hands waiting for property to fall further. I, and almost all my friends, bought in 1993 once it bottomed out. Where I was at the time there was a fall of about 30%.
I've just looked at the Zoopla valuation of my first flat. I bought it when it was just over double my earnings - it is now at 2.5 times my current earnings, despite multiple promotions since then. (The previous owners had paid over 3.5 times my salary at the time, at the peak of the market - I would estimate based on similar second jobs post Uni now it's valued at 5-6 times salary)
So a long correction to go - though like others I don't think it will dip as far in real terms as in 1990.
You are ignoring the fact that when people move into negative equity the housing market stops working. This is exacly what happened in the early 90s. Anyone who didn't absolutey have to move didn't. And the builders stopped building as no one was willing to buy houses either because they were spooked.
If your house is worth less than you owe on your mortgage then you don't sell. It is that basic. The only way any houses were moved was either by people who were forced to move or by repossesions.
So first time buyers are still screwed.
Those of us who were FTB in the early nineties understand. It was a miserable and difficult time. Sure, things got better second half of the nineties.
It's much better to be a FTB when prices are below this line than when they are above it.
Albeit this is complicated by the fact that - because people buy on affordability - prices will tend to rise when interest rates are low, and to fall when they are high.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Yes, but you're in a much better position for a given monthly mortgage payment if the principal is smaller and the interest rate is higher because:
- Interest rate movements are more likely to be in your favour - Overpayments have more impact so it's easier to pay off the mortgage sooner - Higher general inflation means pay rises erode the debt burden
I don't disagree with any of that, it is indisputably better to buy when interest rates are high and price-to-earnings are low.
HOWEVER, there are other things at work here. For a start, high interest rates and falling property prices tend to discourage new house building. Through the 1980s, house building levels rose, reaching 240,000 in 1989.
The early 1990s, which were such a great time to buy, were at least partially such a great time to buy because the recession and property price drop caused building levels to drop dramatically, falling to 170,000 in 1992.
In other words: those high interest rates are great for people who can afford to buy, but if they discourage new building, then they worsen housing availability later.
You can add an additional factor of immigration. It's not much help having, say, 10% additional building if it's outpaced by additional demand caused by immigration.
Oh yeah: you can add lots of new factors:
For example, single unmarried households under the age of 60. They used to be almost unknown, as people went from their parent's home to marriage. Now there are lots of single person households. If all those people were married (and therefore sharing a home), it would make a massive difference to overall housing demand.
Or divorce.
The rise in the number of divorces since the 1960s has created lots of demand for new housing. Now mum and dad both need a home. And you need kids bedrooms in both places.
Yes, clearly if more British under 60s were strict Roman Catholics, evangelicals or Orthodox Jews or conservative Muslims we would have lower divorce rates, higher marriage rates and probably higher birth rates too and many of our housing shortage problems and our pensioner heavy population demographics would be resolved
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
I suppose it's unlikely, but not entirely impossible, that Trump pivots to being kingmaker to maximise the chance of the next President pardoning him.
I say unlikely because I think he has a pretty firm view that he is the most electable Republican and therefore his best route to a pardon is personally to get elected.
This also makes it less likely he'd stand as an Independent. If he lets Biden back in that way, he's shot himself badly in the foot. Biden may actually pardon him on federal convictions, but it's less likely and more humiliating than De Santis or Ramaswarmy.
Someone mentioned the monetary policy regime instigated in 1997. By which I assume they meant the independence of the BoE. I don't think BoE per se has been the problem - it's been the international consensus for many years that interest rates are there to manage consumer price inflation but should be agnostic to asset price inflation.
Back in the 1970s there wasn't really any distinction between the 2. It was in the 1980s that they started to decouple, with the stock market boom (and various busts) in the late 80s and then in particular the 1990s post-cold war deflationary boom that allowed spending to rise in the West without consumer prices going up, as China massively expanded its capacity while the former Soviet bloc reduced its commodity consumption.
UK monetary policy evolved to this new orthodoxy. In October 1992 after Black Wednesday Norman Lamont introduced a formal inflation targeting policy. In the following 5 years he and then Ken Clarke started to work more closely with the Bank of England in setting interest rates. The target remained at 2.5% from 1992 to 2003, when it went down to 2%.
Brown's decision to give the BoE independence was both a continuation of the trend of taking it out of the hands of the government, but also intended to be a prudent measure to prevent governments keeping rates artificially low. At the same time as the announcement the rate was increased by 0.25%. It didn't really change the monetary regime, it just changed the governance around it. Arguably we might have seen even more aggressive cuts during recessions if politicians retained control.
The fact that he's narrowly seen as being the real winner rather than Trump is interesting too.
The short excerpt I heard on the radio suggested the event was held in a lunatic asylum. Do we think the enthusiastic response of this specific audience reflects the wider (s)electorate?
That poll is borderline voodoo. Pollster I've never heard of doing an online poll for dailymail.com with a small sample and no clear methodology that, really, shows Trump, DeSantis and Ramaswamy all there or thereabouts. And then claims only a 4.4% MoE.
Hmm.
Pence 3rd in that post debate poll but Trump won't be happy about Ramaswamy beating DeSantis for 1st as he will take much of his support.
Expect Trump to likely be in the next debate if Ramaswamy cuts his primaries poll lead
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
Yes even if he is in jail and failed to win the GOP nomination or the RNC made him ineligible to be nominee he is likely to run as an Independent
If I were Trump and facing jail, I'd rather have Ramaswamy or De Santis holding the keys to freedom than Biden. Standing as an independent makes it much more likely to be Biden.
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
Yes even if he is in jail and failed to win the GOP nomination or the RNC made him ineligible to be nominee he is likely to run as an Independent
If I were Trump and facing jail, I'd rather have Ramaswamy or De Santis holding the keys to freedom than Biden. Standing as an independent makes it much more likely to be Biden.
Trump's ego is so big he would rather be a martyr in jail with 20-25% of the vote as an Independent than a freeman who is no longer of significance in the conservative US right.
He is a billionaire who has already been President anyway
The fact that he's narrowly seen as being the real winner rather than Trump is interesting too.
The short excerpt I heard on the radio suggested the event was held in a lunatic asylum. Do we think the enthusiastic response of this specific audience reflects the wider (s)electorate?
That poll is borderline voodoo. Pollster I've never heard of doing an online po
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
Yes even if he is in jail and failed to win the GOP nomination or the RNC made him ineligible to be nominee he is likely to run as an Independent
If I were Trump and facing jail, I'd rather have Ramaswamy or De Santis holding the keys to freedom than Biden. Standing as an independent makes it much more likely to be Biden.
Trump's ego is so big he would rather be a martyr in jail with 20-25% of the vote as an Independent than a freeman who is no longer of significance in the conservative US right.
He is a billionaire who has already been President anyway
How much good will those billions do him when he drops the soap in the prison showers?
The fact that he's narrowly seen as being the real winner rather than Trump is interesting too.
The short excerpt I heard on the radio suggested the event was held in a lunatic asylum. Do we think the enthusiastic response of this specific audience reflects the wider (s)electorate?
That poll is borderline voodoo. Pollster I've never heard of doing an online po
The fact that he's narrowly seen as being the real winner rather than Trump is interesting too.
The short excerpt I heard on the radio suggested the event was held in a lunatic asylum. Do we think the enthusiastic response of this specific audience reflects the wider (s)electorate?
That poll is borderline voodoo. Pollster I've never heard of doing an online poll for dailymail.com with a small sample and no clear methodology that, really, shows Trump, DeSantis and Ramaswamy all there or thereabouts. And then claims only a 4.4% MoE.
Hmm.
Pence 3rd in that post debate poll but Trump won't be happy about Ramaswamy beating DeSantis for 1st as he will take much of his support.
Expect Trump to likely be in the next debate if Ramaswamy cuts his primaries poll lead
Trump is simply saving himself.
Once he goes comedy personal on Ramaswamy (which he will, and what his base are waiting for) he will go the same way as DeSantis.
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
Yes even if he is in jail and failed to win the GOP nomination or the RNC made him ineligible to be nominee he is likely to run as an Independent
If I were Trump and facing jail, I'd rather have Ramaswamy or De Santis holding the keys to freedom than Biden. Standing as an independent makes it much more likely to be Biden.
Trump's ego is so big he would rather be a martyr in jail with 20-25% of the vote as an Independent than a freeman who is no longer of significance in the conservative US right.
He is a billionaire who has already been President anyway
How much good will those billions do him when he drops the soap in the prison showers?
Presumably he would just try and shower with MAGA fans
If it's not Trump then, unless he dies, you've got to price him standing on the ballot anyway as an independent and thus denying another Republican candidate the victory.
I suppose it's unlikely, but not entirely impossible, that Trump pivots to being kingmaker to maximise the chance of the next President pardoning him.
I say unlikely because I think he has a pretty firm view that he is the most electable Republican and therefore his best route to a pardon is personally to get elected.
This also makes it less likely he'd stand as an Independent. If he lets Biden back in that way, he's shot himself badly in the foot. Biden may actually pardon him on federal convictions, but it's less likely and more humiliating than De Santis or Ramaswarmy.
His ego is too big for this and it would require a level of rationality he's hithero never demonstrated.
Comments
https://www.swindonadvertiser.co.uk/news/23744836.glyn-razzell-slams-blood-evidence-latest-parole-hearing/
http://www.mojuk.org.uk/Portia/archive 12/razzell.html
The mid-90s was a golden age to be a 20-something with an average income. Young people now face a much more difficult economic environment and @Nigel_Foremain's glib answer of 'work harder and maybe set up a successful business' will only work for a minority.
There's no upside to stock market falls, its a loss of value but nobody has to pay rent to the stock market and anyone who wants to buy stocks can invest small amounts not all or nothing.
House prices are a cost. Its dead money expense, not a gain, for your cost of living. High house prices are as damaging as high gas prices or high electricity prices. House price falls are as beneficial as electrical goods falling in price.
Far better to have house prices unchanged for a long period of time which gets the same effect of allowing first time buyers on to the ladder without causing a breakdown of the whole system.
It could never be done but it would be great if house prices could never go up by more than inflation so effectively they ceased to be an investment.
Try being a FTB today. You were lucky.
There's a reason home ownership rates went up in the 1990s, and down since. You're taking your good fortune for granted.
I am asking rather than stating.
In some places, such as Leeds, the nonsense was resolved. So we don't have this bugger's muddle any more:
https://upload.wikimedia.org/wikipedia/commons/3/32/Leeds_RJD_40.jpg
Otherwise I would be changing at Holbeck every time I go to Manchester.
https://en.wikipedia.org/wiki/Dolphinton_branch
TBF they did build them with a siding between them to pass wagons through.
"The Caledonian and NBR stations were not immediately adjacent, being respectively west and east of the road that is now the A702. Each station had the usual facilities, including a locomotive turntable each. There was an exchange siding between the two stations for wagon exchange, but no through movements took place.[9]"
https://maps.nls.uk/view/75652382
If the house price is lower, but the deposit is twice as big, then being an FTB becomes an impossible step.
Those of us who are actually old enough to remember know how painful it was.
First time buyers gained market share during and after the period of negative equity in the 90s as I said and you acknowledge. You're right that they were priced out in the decades afterwards, but that's why the decades afterwards were the problem not the period of negative equity.
Regular periods of negative equity to take the air out of the market and allow FTBs to gain market share should be a healthy part of the economy cycle, just as we have periods where stocks go down as well as up.
House prices unchanging would be better, but only if they weren't already too high.
Ideal would be a collapse of house prices back in real terms to a 3x multiple of income and then as you say for them to never go up by more than inflation afterwards. Having them unchanged at the peak is no better than keeping gas prices perpetually unchanged at their peak.
There is not one single cause of falling levels of home ownership in the UK, there are many interrelated ones.
Here are some that have not really been mentioned:
(1) Build costs have risen dramatically across much of the country. Some of that is due to new build regulations and standards. Some to inflation in building supply prices. And some is due to a labour shortage: we haven't done a great job of training the people who actually build houses.
(2) Interest rates have risen. This makes it more expensive for developers to develop, as typically firms borrow much of the cost of construction via loans that are paid off when homes are sold.
(3) The tax system. Both stamp duty and council tax are seemingly designed to discourage people from trading down! If you're a single elderly person in a four bedroom home, then - after costs and stamp duty and the fact that you already get a discount on your council tax - the actual monetary benefits of moving to a smaller place can be very small. This means there is inefficient usage of the existing housing stock.
https://www.dailymail.co.uk/news/article-12439783/Vivek-Ramaswamy-beats-Ron-DeSantis-best-performance-tops-Donald-Trump-real-winner-poll-Republican-debate.html
The fact that he's narrowly seen as being the real winner rather than Trump is interesting too.
Calling it painful is just false compared to what people have had to do in recent years.
What you underwent was much, much less painful than those failing to do so in recent years, which is why more people got on the ladder in your day than recently.
I don't agree with it and, as I say, I seriously dislike the idea of houses being investments rather than homes, but I understand why people want it. This is a situation caused by successive Governments who have not considerd the consequences of their short term decisions.
In the first half of the 90s, interest rates were much higher than - for example - in the first half of the 2000s.
Like so many of your 'solutions' to problems you simply don't understand how people or the systems work.
Which is why the 90s saw the lowest rate ever recorded of people unable to afford their own home. And people call that "miserable". 🤦♂️
Their current kit is a high risk if it goes to the altitude needed for glide bomb range; the F16 is much more able to detect and evade Russian missiles.
The JDAM glide munitions are much cheaper than HIMARS missiles, with a similar range and accuracy, and are available in very large quantities.
(Also, if you were to stick a small motor on the back, you've potentially got a cheap missile with 100-200 mile range.)
The 1990s saw fewer people being unable to get on the ladder than ever before or since. Which yes is including the 80s or the time since. Which is unsurprising, because homes were affordable.
- Interest rate movements are more likely to be in your favour
- Overpayments have more impact so it's easier to pay off the mortgage sooner
- Higher general inflation means pay rises erode the debt burden
A return to that would see a rise in affordability, like it did then. That decade saw fewer people than ever trapped paying rent instead of able to get on the ladder.
My favourite pint was 98p in 1983 (Old Thumper) so £4.23 today.
When I went to Uni that year, it was possible to get two pints for a quid at the SU bar, admittedly euro fizz lager.
Norwegian media TV2 reported, referring to its sources, that Norway will also provide F-16 fighter jets together with the Netherlands and Denmark.
https://twitter.com/EuromaidanPress/status/1694694353661280292
People who got on the ladder in the 1980s didn't fall off it in the 1990s.
The 1990s meant that people who couldn't get on the ladder in the 1980s, were able to then instead. It was even better than the 80s because it was a step up from what was already a high to an even better high of home ownership.
Instead since then we've had continuous regression.
Its a view I suppose
Winners:
Vivek Ramaswamy. Articulate. Positioned himself well to be the heir of Trump, but not Trump.
Mike Pence. Maybe it was my low expectations, but he was articulate and hit a lot of the right buttons with the audience.
Christie. Very combatative performance designed to pick up the anti-Trump votes.
Losers:
DeSantis. Invisible and inarticulate.
Scott. Invisible.
Hayley. Invisible.
*If* Trump drops out, then Ramaswamy looks in a great position to pick up the Trumpian flame. If he does not, then Trump is clearly the favourite.
Imagine, for a moment, if house prices didn't go up (other than keeping parity with inflation) because we built enough to keep up with demand.
Imagine, for a moment, a world where housing is no longer a speculative asset rigged by successive government interventions to always go up.
Imagine a world where people pay a reasonable proportion of their income on either rent, while they save for an achievable deposit, or a mortgage, which simply pays off their investment with no expectation of profiting from it. A world where a roof over your head is simply a roof over your head.
Imagine a world where all the unproductive capital that's currently locked up in the rentier economy, keeping people miserable while they pay for substandard accommodation where they can't afford to raise a family, suddenly becomes unlocked. A world where people can afford discretionary income, can afford to have kids, can afford a life beyond paying back the landlord, or the bank.
Why is that world so hard to imagine? How did we allow our economy become so fundamentally broken?
People who're already on the property ladder aren't the issue, unless for some reason they can't afford to keep their home, the issue is the ones who aren't.
The figure to look at is how many people can't afford a home. And that was lower in the 1990s than the 1980s or any other time before or since.
Toby Young"
https://www.spectator.co.uk/article/the-appalling-hypocrisy-of-peter-wilby/
This is from a Peter Wilby article about Toby Young:
"And not only was he a pornography user, he was interviewed on TV about it."
https://www.theguardian.com/education/2011/apr/05/toby-young-london-free-school
House deflation has the same effect. To protect their loans lenders require more and more of a margin pricing those without access to a well funded bank of mum and dad out of the market.
It may be beneficial to have house prices deflate in real terms as we have at the moment but those who lived through the early 90s or the period after 2008 know for sure that absolute deflation of house prices is a disaster.
If the price has dropped 30% but the interest rate has doubled, then affordability has not improved.
What happened after the negative equity of the early nineties was a sharp drop in interest rates, creating ideal conditions for affordability.
At the moment we have falling house prices and rising interest rates. Due to the prevalence of 2 year plus fixes those rising rates are on a time delay, but a significant drag on affordability for some time yet, and we probably haven't seen the peak yet.
HOWEVER, there are other things at work here. For a start, high interest rates and falling property prices tend to discourage new house building. Through the 1980s, house building levels rose, reaching 240,000 in 1989.
The early 1990s, which were such a great time to buy, were at least partially such a great time to buy because the recession and property price drop caused building levels to drop dramatically, falling to 170,000 in 1992.
In other words: those high interest rates are great for people who can afford to buy, but if they discourage new building, then they worsen housing availability later.
Unlike the generation that came after you.
If you think its miserable to save a 10% deposit at 2.2x income, just imagine how miserable it is to save a 10% deposit at 6x income.
Which is why fewer people than ever before were unable to afford a home in the 90s. And more and more people have been unable to do so since.
Saving for a deposit at 6x income is far more miserable than doing so at 2.2x income.
If you take any London suburban street at random, you will see countless examples like this one, and you can see from the 2020 listing that the property didn't have any work done on it:
Sold in 1995 for £220,000
Sold in 2020 for £1,620,000
https://www.zoopla.co.uk/property/uprn/202066688/
https://www.zoopla.co.uk/property-history/94-mount-pleasant-road/london/nw10-3ej/54022745/
EDIT: Actually, the ONS publish time series data and this carrots are quite a bit cheaper now than in 2001, when there was a bit of a spike for whatever reason.
This had several deleterious effects, one of which was asset inflation greatly enriching the wealthiest at the cost of everyone else. But governments focus on the short term and were anxious to avoid a recession on their watch. This drives policy to this day. I don’t believe for a moment that a change of government will change this.
This all stems from your inability to read data and thinking that an increasae in absolute numbers is the same as an increase in the rate. It is the debt/deficit argument in a different form.
You are absolutely right there is an issue with falling home ownership at present. But your 'solution' won't work. It will just make matters worse.
If you want to be radical (and a bit communist) then get the Government to pass a law that house prices cannot increase by any more than 1% below the rate of wage inflation. The housing market won't suddenly dry up but houses will get cheaper for first time buyers relative to their pay.
Perhaps Monopoly games qualify, at least the prices on the box - not in the box: haven't th elatter been static since the 1950s?
But you said: "Some markets should see a slow unnewsworthy rise over many many decades and no falls. Eg carrots."
The first part of that is broadly correct but the "and no falls" isn't, and you've picked a poor example because agricultural products are quite variable.
A better example would be something fairly labour intensive like haircuts, as wages do tend to rise and rarely fall in nominal terms (but not necessarily real terms). As soon as you look at commodities, or areas with a lot of technological change, not so much.
It was based on the idea that when you first buy you buy small because that is what you can afford. Then as earnings improve and you pay off more of your mortgage you have capital to buy a bigger place to cope with a larger family. The house price boom actually works against the ladder because with everything going up at a similar percentage, the jumps between houses become more and more difficult.
But as I say I agree it would be great if house prices never rose - or only did so at around the rate of inflation. Thios was the norm for much of the 20th century when houses were seen as homes rather than investments.
Even though I do say so myself, it looks an absolute f***ing mess. It's at the stage where I don't go now out of pure embarrassment.
For example, single unmarried households under the age of 60. They used to be almost unknown, as people went from their parent's home to marriage. Now there are lots of single person households. If all those people were married (and therefore sharing a home), it would make a massive difference to overall housing demand.
Or divorce.
The rise in the number of divorces since the 1960s has created lots of demand for new housing. Now mum and dad both need a home. And you need kids bedrooms in both places.
Jeremy and Rishi, your hour to be heroes has come. If it helps, I'll campaign for a statue in your memory.
That got me out of a huge betting hole.
I think I went into debt laying Trump for the nomination at one point.
Hmm.
I say unlikely because I think he has a pretty firm view that he is the most electable Republican and therefore his best route to a pardon is personally to get elected.
This also makes it less likely he'd stand as an Independent. If he lets Biden back in that way, he's shot himself badly in the foot. Biden may actually pardon him on federal convictions, but it's less likely and more humiliating than De Santis or Ramaswarmy.
Back in the 1970s there wasn't really any distinction between the 2. It was in the 1980s that they started to decouple, with the stock market boom (and various busts) in the late 80s and then in particular the 1990s post-cold war deflationary boom that allowed spending to rise in the West without consumer prices going up, as China massively expanded its capacity while the former Soviet bloc reduced its commodity consumption.
UK monetary policy evolved to this new orthodoxy. In October 1992 after Black Wednesday Norman Lamont introduced a formal inflation targeting policy. In the following 5 years he and then Ken Clarke started to work more closely with the Bank of England in setting interest rates. The target remained at 2.5% from 1992 to 2003, when it went down to 2%.
Brown's decision to give the BoE independence was both a continuation of the trend of taking it out of the hands of the government, but also intended to be a prudent measure to prevent governments keeping rates artificially low. At the same time as the announcement the rate was increased by 0.25%. It didn't really change the monetary regime, it just changed the governance around it. Arguably we might have seen even more aggressive cuts during recessions if politicians retained control.
Expect Trump to likely be in the next debate if Ramaswamy cuts his primaries poll lead
He is a billionaire who has already been President anyway
That'd be great.
https://www.bbc.co.uk/news/uk-england-birmingham-66608279
Once he goes comedy personal on Ramaswamy (which he will, and what his base are waiting for) he will go the same way as DeSantis.
Trump agrees as long as she means 2026