Aardvark

The Japanese saw their house values halve. It's fine by me if it happens here.

With the collapse of the major builders - Bovis have dumped 40% of their staff, Persimmon have sacked 1200, Wimpey 900, Barratt 1200 etc. - the building sites are going to be very quiet. The job cuts that are announced are the firms own employees. The sub-contractors that make up the bulk of the workforce are going to be squeezed even further. Looks like we're staring at 20,000 redundancies in the building industry in the next few weeks. The temporary migrant workers will be off in quick time as the work dries up.

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When in Woking do as the Wokes do.

"I do not wish to form my opinions by thoughtlessly quoting others; I wish others to support their opinions by sensibly quoting me." Paul Wesson (Aardvark) 13th April 2008

brian pearson

So get out there and buy some buy to let flats.....sorry apartments.

Who are they trying to kid?

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The Bear

The Japaneesehousing bubble was differently financed than our has been.

For us apart from a hell of a lot of people facing negative equity worse is that a whole lot of finance houses and banks suddenly are finding their equity gone down the plughole, since what they were holding as security and on which they were borrowing has lost value.

The result? It’s obvious and it IS Brown’s fault.

As Chancellor he could and SHOULD have taken steps to limit the credit bubble that came up. The reasons he did not? I’m torn between deciding if it was incompetence or chicanery and suspect it was both.

Then there’s the little matter of what happens when a family has its mortgage foreclosed. If it can be shown that it was not their fault, as it usually will not have been, then they have to be housed and guess who pays? The poor bloody taxpayer, that’s who.


Or will they? If work is short where they came from and the government hand outs are better here than where they come from they would be idiots to leave.

It’s not just the guys on the sites that are in trouble. It’s the whole industry that provides to the building industry that will be clobbered. Travis Perkins and The Builder Center … look out!

Not just them, the firms that supply the other materials, the bricks, the “dust”, in short the whole “food chain”

There is one little matter that’s been quietly forgotten by the Government and Brown in particular and that’s the desperately needed 2,5 million new “homes”.

Putting to one side how these would ever have been funded, if they were needed a few weeks ago then they must still be needed now.

Yet not a word is being said.

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I am an old man. I have eaten much salt.

Little Englander (sour)

Persimmon have just asked their subbies to take a 15% cut in their prices. I well remember the "last lot" as a subbie for a well known Scottish developer, when the prices were rocketing we were not asked to submit higher prices to reflect the changing circumstances but, when the downturn started we were asked to shoulder our "fair" share of the losses.

No wonder they got rid of directly employed tradesmen.

Just wait, the same trend will occur over the next 10 to 15 years and when the present day children are of the house buying age ...

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Little Englander (bigoted)

Aardvark

Brian, The guy at the Express keeps writing upbeat articles based on a misinterpretation of the information. As he points out at the end of the item prices have fallen by 1% in the last month, yet the item predicts a fall of only 2% in the whole of next year when we haven't even got stuck into the recession yet. I reckon he has a house or flat he can't sell and will point potential buyers at the article as proof that the price is reasonable.

Thus far every prediction for the last few months has turned out to be wildly wrong. The year started with people predicting a levelling off and slow increase towards the end of 2008. Then they said there might be a fall of 1 or 2 %. Last prediction was 9% fall over the whole year, but we're there already on some indicators and the year is only half way through. The truth is that none of the pundits writing in the papers have any idea whatsoever.

Job losses are increasing across the board and the government has lost control of the economy. The chairs on the Titanic are being shuffled and permissions for new housing developments are coming through thick and fast even though the big builders can't fund any big developments. By the time the builders start building again the millions of houses that are 'needed' will be even more desperately needed. Part of the lack of supply will be taken up by the forced sales of second homes - near me a lot of holiday cottages have come onto the market and I am sure it will be the same elsewhere.

I watch with fascination as more and more pundits and experts are proved wrong. I still think there will be a 50% drop in house prices as credit becomes inaccessible.

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When in Woking do as the Wokes do.

"I do not wish to form my opinions by thoughtlessly quoting others; I wish others to support their opinions by sensibly quoting me." Paul Wesson (Aardvark) 13th April 2008

Wowbanger TIP

They were needed to house an immigrant workforce which is now unlikely ever to arrive.

If I were an immigrant or a decedent of an immigrant I would be seriously thinking of a spot of "profit taking" and heading off into the sunset with a suitcase full of cash. The alternative being to hanging about here to see how "tolerant" the British really are when push comes to shove comes to allocating the last bag of rice in Tescos by trial by battle.

Gordon Brown is about to deliver what Nick Griffin failed to do, and therefore becomes the most successful ethno-nationalist of all time. Although at a cost which I doubt even the most ardent BNP fan would have been prepared to pay.

The likelihood is that the trend is going to be towards higher densities of inhabitation from here on out. It will be far more cost effective to heat a house containing an extended family than a DINKY couple or aged individual. The trend will be massively catalyzed by the enormous amount of people about to be banged out on the pavement on their ****.

Large sections of our cities will probably be uninhabited a few years from now. This has been a feature of American cities and Northern British cities for decades. There is a strong possibilty that this will be the prelude to a dramatic decline in population which will result in some British cities being twinned with Machu Picchu.

The Bear

If an enormous number of people were “banged out on the pavement” it would be bad enough but what in reality happens is that they are at once re-housed (provided that it can be shown they did not deliberately make themselves homeless).

The re-housing will more and more be in houses that have been bought by private individuals in auction following foreclosures of mortgages and then leased to local councils in order for them to meet their statuary duty towards the homeless.

No prizes for guessing who ends up paying the rents, and no prizes for guessing who will probably have bought those houses at knock down prices, and still no prizes for guessing where the tax payers money will eventually be found to have ended up if anyone followed the money trail.

The alternative will be for Brown to underwrite these defaulted mortgages with government tradable bonds, and there are indications that’s exactly what he’s up to.

In such a case the effect is precisely the same as what it is in the US … a devaluation of the pound and yet more hundreds of billions of foreign debt to the holders of these and other bonds.

Is there an alternative? Only for The Government to buy properties under foreclosure at a price established by some form of adjudicator using the auction price guide to establish the price and then put them under council control as a new council housing stock.
Would they do it? Nah. The “problem” and its true owners would be far too obvious if such a step were taken.

Much better to once more use some variation of The Brown Shuffle involving sleight of hand worthy of any Mississippi Steamboat Card Sharp, a modus-opperendi that he has adopted since day one.

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I am an old man. I have eaten much salt.

Aardvark

I note that the pressure for mortgage underwriting is being led by the mortgage companies themselves so that they can sell more useless mortgages and make more profit. It is strange how during the boom the banks were calling for less regulation and government interference, but now need the taxpayer to fund their excesses.

I would agree to taxpayer funding of mortgages if I didn't think the banks directors weren't going to be the first ones to benefit. It should be made clear that the directors will not be allowed to top up their pension pots (as the MG Rover directors did) and increase their bonuses. It is sickening that the flash businessman Applegarth should walk away with millions in bonuses and pay offs from NR having already cashed most of his shares in when they were at a high.

I'll bet the people demanding a taxpayer funded bail out would shut up if told that directors pay was to be cut to reflect their inability to run a profitable business in difficult times. They'd also be upset if told that there would be no pension pot payments until they made a non-taxpayer funded profit and no bonuses on the same basis. That would test their sincerity to the limits.

Brown will fund a bail out once Labour Party funding and cheap loans are guaranteed as he can't afford to fight an election at present.

__________________
When in Woking do as the Wokes do.

"I do not wish to form my opinions by thoughtlessly quoting others; I wish others to support their opinions by sensibly quoting me." Paul Wesson (Aardvark) 13th April 2008

Little Englander (sour)

This latest "answer" to the mortgage problem will mean that those living in rented accomodation and paying income tax, will be in the ironic position of paying for the landlords mortgage, through rent payments and first time buyers mortgages through BoE bale-outs.

You could not make it up.

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Little Englander (bigoted)

brian pearson

I wonder if overnight the supply of mortgages returned to 2007 levels along with the virtual acceptance of any application the property market would be any healthier ?

I don't buy the 'mortgage supply' issue is the only cause. I think people realise that houses are way overpriced. I also think that the economy problems are starting to hit home.

The more I look at it 50% falls look possible.

The governments finances look worse by the day and I cannot see how they can possibly embark on a huge social housing project.