February 2, 2015 at 10:21 pm #72001
@Mrs Crewe 18455 wrote:
Whilst there is merit in your point, it fails to take into account the situation in which many people find themselves in today, negative equity. The inability to sell ones house and be able to pay off the mortgage can lead to desperation for many….
Yes a crash in house prices would indeed be disastrous for some, yet sadly it’s a very real possibility as highlighted in another thread. Not everyone is sitting on property that only owes them a fraction of today’s current market prices, some of us bought in the last 5 years or so and have to work damn hard to keep up the repayments on our family homes.February 3, 2015 at 10:28 pm #72005
It’s more than a very real possibility I’m afraid. And I say this as someone who also bought in the last 5 years. The mother of all property bubbles started in 2000, deliberately stoked by government policy of low interest rates in order to disguise the economic problems at the time.
As with every single bubble in history, it popped in 2008, and would have gone the way of Ireland, the US, (>75% wiped off average prices), but the government managed to stick a plaster on it by implementing 300 year low emergency interest rates, and printing vast amounts of money (Hmm, what could go wrong with that?). However, at some point, either by choice or out of necessity, the government will have to raise rates back to normal levels, 3-5%, and will have to stop printing money. This could be next month, next year, or in 5 years, but once the props are removed, the housing market bubble will pop. It’s not question of if, but when. All the current measures (QE, negative interest rates, Help to Buy), are merely kicking the can down the road, delaying the inevitable. That is why the markets throw a wobbler every time the government mentions raising rates and stopping the money printing. The US has already started to taper their QE, which is one of the reasons why oil has dropped off a cliff, because QE on such a massive scale causes bubbles in all asset classes and commodities. Once the US raise their rates, my guess would be that not long afterwards the UK will be forced to do similar.
The only other likely outcome I guess, is that we go the way of Japan, and suffer a two decade long collapse in house prices. In Japan, house prices no longer rise, people don’t really save, their economy has been stagnant for two decades.February 3, 2015 at 10:34 pm #72017
And their fish is undercooked!February 3, 2015 at 10:58 pm #72006
@alunh 18462 wrote:
High house prices in Wrexham would be a welcome sign that things were on the move. Low house prices exist in, say, Merthyr because there is little economic activity. Conversely, where there are pressures on house prices brought about by lots of jobs in an area, demand will increase. As Mrs Crewe has argued, it is not all rosy, but the fact of positive capital stock in a town is better than none, especially to beat back the scourge of negative equity.
I agree Alun, that at local/regional level, there will always be variations in house prices. Certain areas, will have higher demand, and higher than average prices. I understand the laws of supply and demand very well. Areas of economic activity will always command a higher than average price.
However, I am talking about the average house price. The cost of housing overall. If house prices crashed, prime areas would still be more expensive etc.
Over the last century or so, house prices have always been sustainable at around 3 x average income. There have been bubbles, and then crashes, but the price always comes back to the long term sustainable trend. Since the bubble began in 2000, prices now equal 5-7 x average salary, even higher in some areas. Wages have remained still, yet people think house prices can magically continue to rise forever? If you know anything about economics, you will now that by definition, an asset bubble is unsustainable, and therefore must collapse at some point, although it’s impossible to predict the timing. The 2008 collapse was surprisingly well predicted, and all signs pointed to a collapse, it was just the timing could not be predicted.
As said in an earlier post, this bubble did indeed pop in 2008, but was fixed with a sticking plaster. Now, absolutely nothing has changed since 2008. In fact, all of the economic signs at the moment are frighteningly similar to those leading up to 2008 i.e house prices reaching ridiculous highs, stock markets at historic highs. The only thing supporting house prices (because as mentioned, wages haven’t really moved since 2000), are the government’s props of QE, and low interest rates and help to buy.February 3, 2015 at 11:01 pm #72018
Why you no mention the FISH. Have they not got a voice?February 3, 2015 at 11:12 pm #72007
@maureen Gray 18490 wrote:
Why you no mention the FISH. Have they not got a voice?
Have you been watching too much ‘Finding Nemo’ Maureen?February 3, 2015 at 11:25 pm #72008
@metalhead 18463 wrote:
Yes a crash in house prices would indeed be disastrous for some, yet sadly it’s a very real possibility as highlighted in another thread. Not everyone is sitting on property that only owes them a fraction of today’s current market prices, some of us bought in the last 5 years or so and have to work damn hard to keep up the repayments on our family homes.
I feel your pain here and I am in the same boat more or less. But, if we weren’t in the middle of the largest house price bubble in history, if house prices were at the long term average of 3 x average wage, we wouldn’t have had to overstretch just to provide a modest family home.
The only people who defend high house prices are economically illiterate people, people who think that just because the BBC says high house prices are great, that must be true, and people who had the benefit of buying outside the bubble, before 2000. They naturally don’t want to lose any of their unearned paper profit, as they are vested interests, and that unfortunately includes most of the media, and politicians are all in BTL up to their noses.
Again though, is it sustainable for house prices to continually rise (have they discovered perpetual motion too?), when wages haven’t budged since mid nineties? Not for one minute, and the only thing holding them up high are artificially government props, which cannot remain in place forever.February 8, 2015 at 8:06 pm #72009
@Born Acorn 18422 wrote:
This prison is designed to hold over 2000 inmates. For comparison, Shrewsbury held 305.
It’s going to take a lot more than people already in the prison industry to fill jobs at Wrexham.
Prisons across the country are due for planned closure. Staff will follow the transferred inmates. Staff ie prison officers rarely live on the doorstep of the prison in which they work, for obvious reasons. Figure it out!February 8, 2015 at 10:05 pm #71993
@The Monitor 18605 wrote:
Prisons across the country are due for planned closure. Staff will follow the transferred inmates. Staff ie prison officers rarely live on the doorstep of the prison in which they work, for obvious reasons. Figure it out!
Sorry being a bit of a ding bat here. What are the obvious reasons for not living close to where they work/February 9, 2015 at 1:17 pm #72013
I don’t think you are a dingbat, again only going by my own experience of living in a city (Winchester) with a large category A prison, lots of the staff working there lived in and around Winchester.
It’s not like being police officer who used to be advised not to live in the same town in which they worked. I think a lot of people are having a real knee jerk reaction to the thought of having a prison here and typically only seeing the negative.
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