Drink deeply from the well of nothingless Limey scum

[renewable]

Re: Drink deeply from the well of nothingless Limey scum

What's different this time please?

- House prices are falling
- Potential for wage inflation. People in the 70s could (and did) react to inflation by demanding higher wages
- Income multiples. "London average house prices 4.8 times income (2006), against 2.6 times in 1970."
- Now the North Sea is past peak, the UK is a net energy importer. This may well set a limit on sterling devaluation.

[Mega]

Re: Drink deeply from the well of nothingless Limey scum

Employment was much better, most worked NOT lived on benfits.
Mike

[Chris]

Re: Drink deeply from the well of nothingless Limey scum

The average Londoner in 2011 isn't the person pushing up the average London house price. The metric doesn't say very much at all.

[llanlad2]

Re: Drink deeply from the well of nothingless Limey scum

- House prices are falling -

Falling yes.Crashing no.

- Potential for wage inflation. People in the 70s could (and did) react to inflation by demanding higher wages

Why won't they again? Wage inflation ran high back then despite rising unemployment. Britain is still public sector overweight. This sector is still unionised and will vote in the party that promises them pay increases at the next election.

- Income multiples. "London average house prices 4.8 times income (2006), against 2.6 times in 1970."

As Chris says the average Londoner isn't the driver. Nor is London the average anyway. All the "funny money" sees to that.

Just to clarify I am not a fan of housing as an "investment" and believe that future rises won't keep pace with inflation.
Also I am not sure how relevant income multiples are present day with 2 income earners in a family. Rental cost vs Mortgage cost is a more important dynamic. Rents are rising across many parts of Britain on average. Anecdotally I know several people who have bought recently and reduced their outgoings in terms of rent/mortgage. (people never account for annual maintenance)

UK average rent of 3 bedroomed property
Average Rental Prices for May 2011: £1305
Average Rental Prices for May 2010: £1060
Average Rental Prices for May 2009: £754
Average Rental Prices for May 2008: £852
Average Rental Prices for May 2007: £872

- Now the North Sea is past peak, the UK is a net energy importer. This may well set a limit on sterling devaluation.

Please explain how. Won't it make devaluation more likely?

Overall a fall but no crash in my opinion. A rise approaching next election as the pols start to bribe the electorate.

[Starving Steve]

Re: Drink deeply from the well of nothingless Limey scum

Ever thought about running the landed-gentry off of their estates and building homes on their estates? Ever thought about running the farmers off of their land, and building subdivisions of homes? Ever thought about a 60 front-foot minimum for all homes in order to keep land prices down? Ever thought about servicing more land, like everywhere, in all directions? Ever thought about firing your city and regional planners? Ever thought about five-minute and five-pound building permits?

Running low on oil in the North Sea? DRILL DEEPER AND DRILL SIDE-A-WAYS. Fracture your rocks. If nothing else happens, you just might find a natural gas bonanza. And you can up-grade your bitumen, if worse comes to worse.

You have coal beds, so why not make synthetic oil? How about expanding your nuclear? Build nukes everywhere. Flood the market with energy, and drive the cost of living in the United Kingdom DOWN. Why not?

[llanlad2]

Re: Drink deeply from the well of nothingless Limey scum

Ever thought about firing your city and regional planners? Ever thought about five-minute and five-pound building permits?

The planners are all landowners and multiple house owners themselves. It's a total stitch up. You're right planning is a nightmare. And huge swathes of land are still owned anmd controlled by a small percentage of the population. However they are very good at convincing everyone that every acre of it "needs conserving" and "managing". Except of course when they apply for planning, then it's passed with no objections.
As for your energy solutions, even if possible they are nowhere near sufficient enough to cover the rate of decline of our gas/oilfields.

[Chris Coles]

Re: Drink deeply from the well of nothingless Limey scum

Ever thought about running the landed-gentry off of their estates and building homes on their estates? Ever thought about running the farmers off of their land, and building subdivisions of homes?

A very real "Catch 22"; This nation is a very green and pleasant land and is why so many, from other nations, try every way possible to get here to stay. You have to live here to understand why we leave it the way it is.


http://www.youtube.com/watch?v=UQ0oC...eature=related

This version has better sound, but less emotion.

http://www.youtube.com/watch?v=qg7KsemZGIc

[renewable]

Re: Drink deeply from the well of nothingless Limey scum

Falling yes.Crashing no.

Falling now, with high inflation, and IRs at centuries low. This suggests that something is different to the 70s - when they rose with high inflation and even high IRs.

Why won't they again? Wage inflation ran high back then despite rising unemployment. Britain is still public sector overweight. This sector is still unionised and will vote in the party that promises them pay increases at the next election.

Globalisation. In the 70s the only real competition adults had for wealth was other 1st world adults - 10% of the population? Now working people have to compete with everyone else on the planet.

As Chris says the average Londoner isn't the driver. Nor is London the average anyway. All the "funny money" sees to that.

It's not just London. Income multiples must be far higher in the whole of the UK now than they were in the 70s. House prices are starting from a much higher income multiple base.

Please explain how. Won't it make devaluation more likely?

I think that it may put a limit on devaluation before people riot over pump prices.

[renewable]

Re: Drink deeply from the well of nothingless Limey scum

Ever thought about running the landed-gentry off of their estates and building homes on their estates? Ever thought about running the farmers off of their land, and building subdivisions of homes? Ever thought about a 60 front-foot minimum for all homes in order to keep land prices down? Ever thought about servicing more land, like everywhere, in all directions? Ever thought about firing your city and regional planners? Ever thought about five-minute and five-pound building permits?

http://www.who-owns-britain.com/

Review from http://www.amazon.co.uk/Owns-Britain...5188652&sr=8-1

For Britain, Cahill analyses this landownership, showing how a tiny minority exploits British society. 160,000 families, 0.3% of the population, own 37 million acres, two thirds of Britain, 230 acres each. Just 1,252 of them own 57% of Scotland. They pay no land tax. Instead every government gives them £2.3 billion a year and the EU gives them a further £2 billion. Each family gets £26,875.

By contrast, 57.5 million of us pay £10 billion a year in council tax, a land tax, £550 per household. We live in 24 million homes on about four million acres. 65% of homes are privately owned, so 16 million of us own just 2.8 million acres, an average 0.18 acres each.

[renewable]

Re: Drink deeply from the well of nothingless Limey scum

Coincidentally, in the news today:

http://www.bbc.co.uk/news/business-13384857

Household incomes in UK 'may return to 2004 levels'

Households in the UK may be facing the biggest drop in income for 30 years, a leading economic think tank has warned.

Average income could fall 3% this year, the steepest drop since 1981 and taking households back to 2004-5 levels.

The comments echo those of Bank of England governor Mervyn King who has repeatedly warned households that they face a significant cut in their spending power.

[llanlad2]

Re: Drink deeply from the well of nothingless Limey scum

Coincidentally, in the news today:

http://www.bbc.co.uk/news/business-13384857

Inflation could go higher if workers demand pay increases, Mervyn King warns

Do you really believe workers even in a tight job market won't start demanding pay rises? Inflation reported at 4.5% and now even Governor King is warning of a wage price spiral. The public are finally recognising that deflation is a scare story that isn't coming to a shop near them.

[renewable]

Re: Drink deeply from the well of nothingless Limey scum

Do you really believe workers even in a tight job market won't start demanding pay rises?

They can demand what they want. I'd guess that - en masse - they won't get pay rises over - or near - inflation.

They haven't so far:

UK inflation: http://www.statistics.gov.uk/cci/nugget.asp?id=19

UK wages: http://www.statistics.gov.uk/cci/nugget.asp?id=10

Why do you think that this is going to change?

Inflation reported at 4.5% and now even Governor King is warning of a wage price spiral.

He's warning that a wage price spiral will result in increased IRs - which would cause a house price crash.

[Mega]

Re: Drink deeply from the well of nothingless Limey scum

Wages will get eaten up, this will NOT be like 70's..........
Can't come soon enough!
Peek oil, where art thou?

[renewable]

Re: Drink deeply from the well of nothingless Limey scum

Buy to let purchases have actually increased as rental values have held up due to first time buyers being denied access to the market because of tougher lending requirements.

Do you have a reference for this? The crash in both the number of mortgage approvals and the number of transactions suggests otherwise. Or did you mean 'the proportion of buy to let purchases...', rather than the total number?

[llanlad2]

Re: Drink deeply from the well of nothingless Limey scum

Buy to let has increased in terms of products available, relaxation of lending requirements, amount of loans and value of loans. I found a good article on it here.

http://www.guardian.co.uk/money/2011...t-bounces-back

As for the questions.



The public sector will demand wage increases by the time of the next election. Whichever party (probably Labour) bribes them with higher wages will get in.

If interest rates rise with no rise in wages then yes I agree there will be a crash.

However if they rise in tandem then there won't be a crash as first time buyers will be able to afford houses even at higher interest rates as they will be able to save faster for larger deposits which will in fact keep their costs down despite higher interest rates.
Wage demands will start kicking in by the end of the year in my opinion unless there is an unexpected fall in inflation.