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Yesssssssssssssssssssssssssssss,Keep on with the good news!!!2 years from now I will be able to buy a home.For uncensored news please bookmark:www.wsws.org
1 and a half years of gains are wiped out not 2.Still with each reduction in house prices, more people go into negative equity which deepens the economic gloom.
Andyrich29 - that is embarrassing. Thanks for pointing out my appalling arithmetic. I will correct it.Alice
If you look at Nationwide's inflation adjusted figures, we are back to mid-2004 levels!
I am a house owner.I am glad.The housing 'boom' has been bad for Britain in so many ways. Not least as a distraction from Nu Lab's dismantling of our country.I value young professionals staying here rather than seeking affordable lifestyles abroad far more than my personal wealth.Without them we have no wealth... nor a future.
An estate agent friend, "Expect to have to drop 20% on last year's prices and that's just to get viewings through the door."Start gathering your deposits, folks. This has a long way to run.I'd still emigrate if I could though.
Inflation adjusted figures for the housing bubble are only really meaningful if the inflation measure is inflation in the average income of mortgage debtors.
In otherwords, until wage inflation takes off, the nominal drop is going to have to be a lot bigger before the fundamental relationship between what homes cost and want people earn is restored. Assuming that this ratio (and thus healthy lending conditiongs) will come back just because bread and petrol cost a lot more whilst people's wages aren't keeping up seems bizarre to me. This kind of inflation only benefits people who have significant liquid investments in commodities, which of course does not represent the majority of people buying real estate with a mortgage. The government's request that we refrain from asking for higher wages whilst daily necessities inflate seems even more bizarre.
Dear Alice,Can you tell us what this 7.9 procent decrease means in Euro terms?Thank you in advance.
The European Central Bank has given every signal that they intend to push the Euro up with inflation-fighting interest rate moves. However, this does not tell us directly what the housing market's progress an it's bottom will be. Historically, this has always been about the relationship between what the average person earns, and what a house costs. Distortions from a ratio of about 3.5 occur when credit becomes more available. If inflows to the UK from the Eurozone are expected to distort this, we need to see a mechanism beyond simply 'pound is cheap relative to the Euro'.This boom got started well before 2005, prices looked heady relative to average earnings in 2002, when the Euro had been through a period of weakness. It would take concerted ECB intervention to deliberately make credit artificially cheap again.
The point about the boom being due to Euro-funded securitisation may well be true. However, for it to be true again, we have to assume on or both of the following will happen:-1) The ECB delibaretly pushes money into the UK at a loss to prop up our nominal real estate prices. (shrugs)or 2) The ECB or an allied body fund wage inflation (possibly doing so publicly to garner support in countries like Ireland or the UK).No2 would be a massive vote-winner, and especially appealing to Europhiles with substantial resources at their disposal at the present time.Would they consider the cost worth it?(shrugs)
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