Sunday, 31 July 2011
RICS Housing Market Survey
The latest RICS survey shows that while house prices are continuing to fall they remain stable in London, with some evidence of a small increase in prices in certain areas. Activity Levels and buyer inquiries remain low across the country as a result of the uncertain economic conditions.
The full report can be found here.
On the Possibility of a US Default
After having seen the possibility of a Greek default deferred for a few months, we are now confronted by the more interesting, and altogether more unexpected, possibility of a US default. Not, as in the Greek case, because they do not have an ability to pay without outside assistance, but rather because of petty squabbling among politicians who either cannot see the damage a US default would do, or are simply engaging in brinkmanship.
What is certain is the the US must do something about it's budget deficit. It is not sustainable in the long term, and despite the fact their economy is not growing strongly, and their property market is now in decline, they must cut government expenditure. If they do, and manage to avoid default, they still face a downgrade by S&P, which will have consequences for investors and the economy.
The biggest message from the US debt crisis we have been witnessing this week, is the narcissism of elected politicians. When confronted by an crucial issue for the country, the US politicians have managed to think of their own political careers first, and the good of the nation second. It is inconceivable that the US should default on their debt; the consequences of this for the world economy are unthinkable, but the politicians are able to overlook this to get in some political point scoring.
Back in the UK our politicians have less substantial matters to deal with, but we should always be aware, I think, that, like their US counterparts, most British politicians today are political careerists who will put their own career first, over and above the national interest. There are exceptions, but generally speaking the quality of the people we elect to represent us seems to be increasingly mediocre; as evidenced by the expenses scandal, which showed us the real character of many of our MPs.
We should remember that politicians are our representatives, and we entrust them to run the country for the benefit of the populace as a whole, and not for the benefit of themselves. Their own personal interests must always come in second place, behind the national interest. We should not tolerate politicians who think otherwise, in case we find ourselves in the same position as the US electorate does today.
What is certain is the the US must do something about it's budget deficit. It is not sustainable in the long term, and despite the fact their economy is not growing strongly, and their property market is now in decline, they must cut government expenditure. If they do, and manage to avoid default, they still face a downgrade by S&P, which will have consequences for investors and the economy.
The biggest message from the US debt crisis we have been witnessing this week, is the narcissism of elected politicians. When confronted by an crucial issue for the country, the US politicians have managed to think of their own political careers first, and the good of the nation second. It is inconceivable that the US should default on their debt; the consequences of this for the world economy are unthinkable, but the politicians are able to overlook this to get in some political point scoring.
Back in the UK our politicians have less substantial matters to deal with, but we should always be aware, I think, that, like their US counterparts, most British politicians today are political careerists who will put their own career first, over and above the national interest. There are exceptions, but generally speaking the quality of the people we elect to represent us seems to be increasingly mediocre; as evidenced by the expenses scandal, which showed us the real character of many of our MPs.
We should remember that politicians are our representatives, and we entrust them to run the country for the benefit of the populace as a whole, and not for the benefit of themselves. Their own personal interests must always come in second place, behind the national interest. We should not tolerate politicians who think otherwise, in case we find ourselves in the same position as the US electorate does today.
Sunday, 24 July 2011
Why are house prices not collapsing?
The BBC news website published an interesting article today about house prices (http://www.bbc.co.uk/news/business-14020457). This has made me think a little about what exactly is going on in the property market, and why, amid perpetual warnings of collapse, property prices have remained stable. The article hints at various possibilities, but to me it seems clear that while the prices remain stable the depth of the market has collapsed considerably. Many of those who would like to sell cannot because their current property value will not cover their existing mortgage, or cannot get a mortgage on a new property. Similarly many would be buyers cannot obtain funding for their purchase. What we are left with then is the tips of two ice-bergs. On one hand the sellers, still with memories of 2007 and the values their properties reached, and not wanting to accept much below that now. On the other hand the much reduced collection of buyers who can obtain funding, and are therefore willing to buy at current prices. So, while the prices have remained stable it is at the cost of volume and market depth. If you are lucky and you're prepared to wait you might sell your property at a good price, but should you need to sell in a hurry, don't expect a flurry of buyers at your door looking to view.
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