John Doe

The price rises in the bad areas were way bigger than the good areas. "Nice" people started moving into the previously not so nice areas as prices rose and new shops/cafes/estate agencies moved into the areas. The opposite effect is happening now, as the "not so nice" areas are going down the pan with shops/cafes/ea's closing, and prices falling hard. Perhaps that partially explains the "flight to quality" where good areas are still doing quite well? As someone told me in the depths of recession in the 80's "remember, even with 15% unemployment, 85% are still working". (Yes I know they fiddle the figures, but the point remains)

Totally agree, if looking at the worst case scenario, just trying to put the fiddle figures in context. The poor are an easy target. Also agree with BAB, in as much as the gloom here is totally overdone. It's bad, but it's not the end of the world. We have been through worse and we will again.

Wow, that's a bit harsh. No one likes a sponger, but with the system we have at present, you can't blame people for not taking a job if they would be worse off. That's daft. I do agree something should be done mind, like the US states that make you work for benefits and the moves being made now to make it pay to work. I heard some interesting figures the other day. Benefit fraud ~£1B Tax Fraud by the rich and multinationals ~£30B Tax avoidance (slightly different) ~£100B The tax avoidance is not illegal, yet, if you are unemployed and dispose of assets so you qualify for full aid, that is illegal and you will be imprisoned. When a company does the exact same thing, it is called tax avoidance and is perfectly legal. Puts things in a little more context, dont you think?.

Not necessarily, it could be argued that it was the Tories plan to eliminate the deficit thereby keeping the markets happy and rates low. If Brown had stayed, the markets would probably be crucifying us with high rates as he kept on spending. Not saying it would be like that, just trying to cheer you up

Watched it last night. Made me think of this http://www.housepricecrash.co.uk/forum/ind...howtopic=155881 Brilliant

Agree.

Yep, that’s the problem I referred to as the Genie. The public sector are scared at the moment, but they are also starting to realise that their wages are falling in real terms. They will eventually strike for higher pay. When the public see their demands as fair (and start to support the strikes), the unions can be very strong. Of course, this helps no-one as it leads to more inflation, but that's what can happen, eventually. How the gov finds money for that is another question. They have done it before, and will again if they have to. EG they might look at slowing down the deficit reduction plan if desperate. Remember, with inflation at 3%, the deficit will be halved by the end of the present parliament, so actually, that could pay towards any wage rises. That said, I agree that wages won't keep up if inflation stays high (relatively high that is). That's grim. The UK is different in many ways, not least with our benefits system, but also, on the whole, we don't have the "fend for yourself" veiw that's prevalent in the US. We can't just walk away from our mortgage either. (Unless declaring full bankruptcy, which is still taboo here). I thought a lot about how you said you knew London very well. I found it interesting as the majority of people in the UK see London as a totally different country. Having lived in several parts of the UK, including London for a while, I think they’re right. Generally, the attitude of Londoners varies massively with most of the country. I know it’s quite a sweeping statement, but, on the whole, people outside London seem to care about other people a lot more. Yes, I suppose it is now

I don't want to say as it could spoil it for everyone else.

Start! I was blasting that out from my office just before heading to the pub Friday night! A friend then came in and told me about comments Weller made about the rest of the Jam when they split, and put me right off it. Wish he hadn't told me now

Yes, I could have put it better. I think over time these effects will likely take place. However, most of the time such large changes can take many many years, though sometimes with large jumps in-between stable periods. We might be having (or just had) one of these jumps at present, but these thing rarely go in a straight line and can indeed sometimes reverse (Like in the Asian crisis 1997, or more recently when Russia was put on its backside when oil fell to $33). China could well have a significant crash soon as could the other Brics. When I was younger and Japan was growing, we were all told we’d be speaking Japanese and working for them by 2000. As it happened events didn’t go as expected. So I like to explore the possible scenarios raised by posters here so that I (hopefully quite quickly) am able to react if facts on the ground change markedly. At this point in time, I still think we might have a few years yet with low rates and inflation (albeit CPI) of between 3 and 5%, eroding debt, reducing the deficit and with real house prices falling, but in nominal terms flat(ish). There was a piece on the fool today stating real house prices back to 2003 levels already. Agree on the inflation to deflation crash. That would wrong foot many and hurt almost everyone.

Nothing is inevitable, but if inflation stays high, then there will be increasing pressure for (and eventually will be) higher wages. The PTB would have a hard job keeping them in check if the genie is let out. Possibly, but then again, IIRC the problems in the 70's started off with commodities going sky high (mid east and far east wars -oil shock - gold at $800), and with inflation rising rapidly. At first there were no real wage rises, then the wage rises began and it all went crazy. Though not the same, there are similarities. While that would appear a likely outcome, there is still very low inflation in the US and EU and Japan (at the moment). If that stays the same (or even reduces as the deflationists believe) then there might not be such a reduction of expendable income in the West. (just here )

I would counter that most people with mortgages got them before the drop in rates, so for a while now they have actually been better off with greater spending power. I would agree about households that might have lost a wage earner though. The inflation will have an effect on their spending power, (and most definitely lower the cost of housing in real terms) but, unless it falls back in the next year, there will come a time when people start saying enough is enough and the wage demands increase. This is already happening in the private sector where pay awards are increasing (I think its up past 1.8% Av now, from practically nothing a year or two back). Fair point, in certain circumstances. I guess you don't miss what you've never had.

Quite right. The key is IR's. Until there is a shock and they rise rapidly, the crash may not happen, just a scenario as you describe. Of course, the shock might not come. That can and does change with a family on board. But the point is correct. After we STR'd (for the second time) we rented OK places, but they were not ours and were not designed/kitted out as we wanted. After we got ours in the dip in 2009, we made it just as we wanted. That has a value that is sometimes left out of the sums.

It was more the comments than the chart (wasn't too sure about the chart myself).

Where abouts are you van? Also, what did make of the new "leading indicator" they have on page 10? After their mainly negative comments, I thought this a little contradictory?

Quite possibly. Yep, & Berkeley are doing the same (moving to rental market).

No offence Dr B, and please don't take this the wrong way, but this really shows your lack of understanding of the UK market. Meanwhile, more news to dampen the falls. Lowest number of new homes built since 1923. http://uk.finance.yahoo.com/news/Number-ne...763836.html?x=0

Zoopla do a good breakdown.

Indeed And perhaps even save in the good times, build up a reserve. Start living on the interest! It could actually work........ Second thoughts, nah, it'll never catch on unless you are lucky enough to have oil, like Norway who used it to build up a sov wealth fund etc. I wish we had oil.......

Perhaps I didn’t put it clearly. My point was everyone will be paying back for years, not just those that took the big mortgages. Hell, my daughter never took on any loans, yet she will be paying higher taxes for less services for years. She's 4.

My point was everyone will be paying back for years, not just those that took the big mortgages. Hell, my daughter never took on any loans, yet she will be paying higher taxes for less services for years. She's 4.

The vast majority are actually the poorest. These are going to be paying back for years, with no obvious benefit. Remeber, only 13% of the population earn over the average wage.

It used to be that people remortgaged at the end of their fixed or tracker rate deal so they could get a new deal (which was less than the SVR they had moved on to). Who needs to remortgage when the SVR rates they now get moved on to are so low? Of course, before, a lot also looked at the new value of their house and decided to take a bigger new mortgage.

Never been a better time to buy.......to let http://www.lovemoney.com/news/property-and...?source=1000550 Thats the point. So do many others and as long as that is the case, you can forget the 50% (nominal) drop some hope for.

I always thought it would have been far better to give everyone in the country an interest free loan (or very very low IR) of about £20,000 to be paid back over 20 years (maybe through the tax system). Some would have spent it, helping the economy. Some would have put it in the bank, helping recapitalise and enable lending. Either way, we would have benefitted from the loan, not the banksters, as they have, while we still have to pay back the debt!