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recession coming-worst for 60 years

What with Alistair Darling scaring the horses and Mervyn King in his last inflation statement saying "It might still ... just.. be summer but there is a feeling of chill in the economic air", has anyone got any guess just how bad this is going to get?.... also predictions for inflation. Does inflation rise as it is doing now then as the economic chill hits the economy and businesses go under and unemployment bites does inflation then fall?... and over what time scale do we reckon on this cycle...7 years? Furthermore in the last recession interest rates dropped right down to unsurpassed low rates... will that be the expected outcome this time around?

Reply to
BigGirlsBlouse
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But Gordon has told Darling off for this scaremongering and continues along with his plans to try and avoid the bust that follows boom.

Reply to
mogga

And if I read my Sunday Times correctly buy-to-letters are still piling in, taking advantage of an *even more advantageous* situation:

1) House prices down. 2) Rents higher than ever. 3) Mortgages available for anyone who can put up 15%.

Maybe there'll be one last "up" on the rollercoaster before the

*proper* crash.

Re London:

In the 70's the squatter movement was able to absorb the empty council housing in London to alleviate the homelessness of people evicted and jobless; this time round there are only empty BTL's. Don't leave them empty for long!

We have the Olympics coming so all is well :)

Reply to
Troy Steadman

This seems to partly contractdict what was stated in another thread in this ng in which claims were made that rents have been static for years.

In addition mortgages are much more expensive that they were two years ago.

Reply to
Mark

Yeah, but I had it pegged as the worst for 70 years...

60 really is an odd number for him to pick. Is he warning us that it will be like the 1930's or not?

FoFP

Reply to
M Holmes

Perhaps it's still 1997 in his head.

Reply to
Sam Nelson

Rents have indeed been static for years. Some people seem to be trying to talk the rental market up, which is pretty futile, because you don't rush out to rent a property in the hope that rent will go up in the same way that you might do with shares or gold coins.

The figures that are coming out appear to indicate that demand for rental properties is up about 20%, and supply is up about 30%, so rents may well go down rather than up.

Reply to
Jonathan Bryce

Indeed. As a data point, my rent hasn't moved in five years. People who have moved house have commented that they got more house for less rent by being choosy.

That would be normal in a debt-deflation. I can see a few factors which could drive rents down:

  1. Immigrants want to make money to send home. In a recession they'll go to a country in which they can still make money. Empty flats mean lower rents.
  2. People in trouble will rent their houses/flats and move in with relatives. Increase of supply means lower rents.
  3. Debt-deflationary recessions are precisely the situations which reduce families splitting up etc. People are less willing to struggle on with things if they can afford to do otherwise. When the converse applies, demand for housing will fall.
  4. Debt-deflations increase unemployment and drive down real wages for those still in employment. Landlords can only get what people can afford, or have the place empty.

FoFP

Reply to
M Holmes

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