Bank idiots blame government idiots…

[sasguru]

OK, but why did the indigenous flipwits borrow too much?

Because property prices kept rising, due to demand stimulated in large part by mass immigration, and because they could borrow too much (as Governments had relaxed the rules).

I'm not saying a lot of borrowers weren't greedy and stupid. But it's not unreasonable to want to get on the property ladder if rents are sky high and the ladder is rapidly being hoiked up out of your reach.

Utter nonsense.
I don't see a mass exodus of immigrants out of London, yet prices are plummeting. So what happened to this excess demand they supposedly caused?

[OwlHoot]

Utter nonsense.
I don't see a mass exodus of immigrants out of London, yet prices are plummeting. So what happened to this excess demand they supposedly caused?

Just because prices are falling doesn't mean the pent up demand isn't still there and even increasing all the time. But if people can't get loans, or daren't because of their precarious jobs, there will be few buyers until prices are reduced sufficiently by desperate sellers.

But falling prices or a deflationary spiral also discourages buyers, because obviously having purchased a property there's the prospect of getting into negative equity if the price falls even further.

Also, quite a few people *are* leaving the UK, including some immigrants such as Poles. Not sure what the net immigration figure is, but if negative then that also tends to support my argument.

But I'd be the first to agree it's not cut and dried, and there are loads of factors.

[sasguru]

Just because prices are falling doesn't mean the pent up demand isn't still there and even increasing all the time. But if people can't get loans, or daren't because of their precarious jobs, there will be few buyers until prices are reduced sufficiently by desperate sellers.

But falling prices or a deflationary spiral also discourages buyers, because obviously having purchased a property there's the prospect of getting into negative equity if the price falls even further.

Also, quite a few people *are* leaving the UK, including some immigrants such as Poles. Not sure what the net immigration figure is, but if negative then that also tends to support my argument.

But I'd be the first to agree it's not cut and dried, and there are loads of factors.

I will go so far as to state that immigrants have nothing to do with it at all.
I "do" data for a living and we say "correlation doesn't imply causation". In this case there's no correlation let alone causation.
Whatever caused the housing boom of 1987-1989, it certainly wasn't immigration which was negligible at the time.
And in the last year hundreds of thousands of immigrants have entered and yet prices have fallen 10-15%.

Falling prices imply people aren't buying for whatever reason. That means they don't need to buy to live somewhere. And that in turn implies that buying a property is an artificial demand, stoked up by cultural factors rather than anything else. Basically we had a pyramid scheme whereby prices rose and everyone wanted in because it was seen as "free money". That creates a self-perpetuating cycle.

I strongly recommend you read one of the many good histories of financial booms and busts to understand this one. Doing so in the 90s certainly helped me profit from it.

[minestrone]

The government let the banks get away with it when everyone knew what was going to happen.

To me it's no different than someone who gets bitten by a dog they failed to control, don't blame the dog.

[Bagpuss]

The government let the banks get away with it when everyone knew what was going to happen.

To me it's no different than someone who gets bitten by a dog they failed to control, don't blame the dog.

That logic implies politicians are more inteligent than businessmen, who are somehow retarded in comparison