So the International Monetary Fund has 'warned' that Britain may be facing a fall in house prices similar to that currently being endured in the US. I always wonder why the media pre-supposes that this is a bad thing for everyone. About time too, say I and a lot of my friends.
I'm glad I haven't put any predictions of a housing market crash down in writing, because I've been expecting a fall for several years now, in which time prices have been bid ever higher. One person who has done so is Roger Bootle. Despite this, he's done it again in this Monday's Telegraph. Bootle's article prompted an interesting discussion on the Motley Fool Property Market and Trends forum.
I find myself in strong agreement with one poster who explains why his (and my) expectations of a correction have been wrong:
"I would just like to applaud many of the resident uber Bulls on this board for seeing what was coming post 2005 in the property market, I (and Roger Bootle and many others) failed to see...
1. That lenders would loan a nurse for example, on £25,000 wages a year, £500,000
2. That 55 year olds who have no wages coming in and who are on welfare and also handicapped given huge mortgages
3. That you could apply for a mortgage with some of the British sub-prime lenders and using self-cert create your own pay slip (15 x not uncommon).
4. Estate Agents actively and in large numbers guiding buyers into how to get a mortgage in the 2000s, from getting fake passports (the first Panorama mortgage scandal) to downloading fake pay slips.
5. FSA releasing mis-leading information (I won't risk posting what I really want to say), ie repossession figures higher than what they release, their excuse being they do not submit the sub prime.
6. A substained and constant barage of property porn on TV and the media that even Adolf Hitlers propaganda machime would have been proud of.
7. And a Labour (LABOUR) Government whose active policy was to NOT build houses and NOT release land
8. 750,000 official (some would argue far more) Eastern Europeans allowed to swamp an already over-populated country without a backlash from the more deprived areas of the UK who have to take most of the pain.
No Guys, I would never of guessed that any of this would be allowed to stand in the UK, but you got it right, I take my hat off to you."
Add in the favourable tax treatment of non-domiciled foreign millionaires and that pretty much says it all.