Next recession?

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    Next recession?

    So, I would be interested to hear what / when the next recession might be. There are a lot of professionals predicting one. They say there’s been one every 17 years, making the next one around 2025.
    we have just taken out rent guarantee on half of our properties that we consider to be risky with their current tenants.

    #2
    It depends what you mean by recession.
    If you mean two successive quarters of economic shrink, the earliest it could be is autumn - so I'm going for then.

    If you mean people cutting back on everything, the same.
    People can turn heating off about now without too much cost, skipping a holiday won't be difficult after 2 years of Covid.
    But, come autumn, when, normally the heating goes back on, and food prices start to bite, plus petrol continuing to be very expensive, people are going to feel much poorer.

    We're probably due a global economic "reset" as well, but that's harder to predict (and really tends to affect the rich and pensioners most).
    When I post, I am expressing an opinion - feel free to disagree, I have been wrong before.
    Please don't act on my suggestions without checking with a grown-up (ideally some kind of expert).

    Comment


      #3
      There is no doubt that the sharp and unprecedented costs for electricity, gas, oil, diesel and petrol will affect us ALL

      most people will need to make adjustments to their spending, to focus on essentials and not luxuries

      my crystal ball sees HM Govermemt making changes to taxes on fuel in the autumn

      what frustrates me is that Europe has become too dependent on imported fuel, when we have more than enough that we could choose to exploit

      power security has to be centre stage for the good of UK plc

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        #4
        Ditto food security but we don't seem to have cottoned on to that one yet.

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          #5
          Strange times at the moment. Food, energy and raw materials costs rising more than wages but the stock market is still ridiculously high, house prices at record highs and classic car and motorbike prices ridiculously high.
          The 18 year property cycle (if you believe in it) takes us through to 2026 before a house price crash is expected but it’s anyones guess whats going to happen and when.

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            #6
            Cost of leaving is, according to the FT, challenging...

            .
            Attached Files
            I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

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              #7
              The last price crash occurred in 2008 when many mortgage companies and banks stopped lending. After 2008, we have been kept too long at near zero interest rates by BOE to help the high street banks recover. The Government "help to buy scheme" to first time buyer , offering 20% loan for 5 years at Nil interest has helped lift prices for new properties and sent profits soaring to new heights for developers. The next house price crash is forecast in 2026 being 18 years on from 2008, but bank interest rates are starting to rise this year due to retail price inflation which has risen to over 7% from last year.

              This time round in the 18 year property price cycle , the house price crash may come early, if mortgage interest rates rise too quickly. Also the rates charged for gas and electric consumption have been allowed to rise by 54% from April 2022, due to rapid increase in wholesale prices. Its going to be hard life for most persons, relying on their job income .

              Comment


                #8
                Originally posted by Gordon999 View Post

                This time round in the 18 year property price cycle , the house price crash may come early, if mortgage interest rates rise too quickly. Also the rates charged for gas and electric consumption have been allowed to rise by 54% from April 2022, due to rapid increase in wholesale prices. Its going to be hard life for most persons, relying on their job income .
                Gordon999 makes fair comment relating to the current mortgage situation.
                Whilst not wholesale within the lending sector but focusing on the Homeownership element , the increase in the overall costs of living , the predictions that these will increase significantly over the next two three months which in turn will affect the stats from the OFS , a feature much used by lenders within their Affordability Calculations will make future lending more conservative, combine this with the much anticipated increases in BoE base rates will take the much vaunted hot property market into reverse and whilst I do not anticipate significant falls in property prices much will ultimately depend on how the level of personal debt is being managed, any significant increase in defaults could indeed bring about a reduction akin to 2008.

                All of the above could prove groundless if the economic indicators begin to show the green shoots of recovery but this will be true for Europe and other parts of the world so in the meantime let’s keep our fingers and toes crossed.

                Comment


                  #9
                  Apologies for repeating myself, but I had a large mortgage on 15th November 1979 under Thatcher when BoE base rate hit 17%. See
                  https://www.bankofengland.co.uk/boea.../Bank-Rate.asp


                  That was painful, even with two salaries coming in. I was lucky: My building society only increased interest rates to 15%....

                  It will, or something similar, happen again!

                  Hope I'm wrong, but I doubt it....
                  I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                  Comment


                    #10
                    It wouldn’t surprise me if most of the developed world suffers set backs over the next 2 to 3 years .

                    Putin has a lot to answer for imho

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                      #11
                      He will soon reach 70 in Oct 2022 . The russian state pension starts from age 60 ( seems to be low compared to age 65 in UK).

                      He should have retired 10 years ago and should be living off his russian state pension of £160 / month.

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                        #12
                        Baby Boomers living in europe ( born between 1946-1964, aged 58 -75 ) would be living with memories of WW11 and 50 years of cold war , and witnessing the soviet empire fade away in 1997-1998 .

                        Millennials living in europe ( born between 1981- to 1996 ) would experience the start of computer age and witness the formation of European Union , introduction of VAT , adoption of euro common currency and establishment of Russian Federation .

                        Gen Z living in europe ( born between 1997 - 2012 ) would see homes with desktop computing, and enjoying holiday travel across 20+ countries within the EU without showing passport. Expects the government to value the lives of their citizens, and have no personal ambition to wage war against another country

                        The President will reach 70 this Oct 2022 but his advisors have not informed him that Gen Z citizens in Russia have no wish to sacrifice their lives to rebuild the old soviet empire, and see their families live under another dictator.

                        Comment


                          #13
                          Yes, in Europe, born 1947
                          I am legally unqualified: If you need to rely on advice check it with a suitable authority - eg a solicitor specialising in landlord/tenant law...

                          Comment


                            #14
                            I would be interested to hear what / when the next recession might be. There are a lot of professionals predicting one.

                            I have learned a few things, we need to stop listening to economic experts. It is n't a science. They are as accurate as horoscopes. There is a standing joke. A stopped clock is right twice a day.

                            The 2008 recession, was n't caused by the UK, but by massive sub-prime fraud in the US.

                            Are we in the same boat as the 1970s? Where we had oil crisis?

                            We are debt laden, the country would find it hard to raise interest rates. We have been addicted to cheap credit....





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                              #15
                              I remember the run up to the 2008 crash. I graduated in 2007 and just as I was ready to buy the mortgage lenders started pulling their products left, right and center. Prior to graduating I worked in bank's call center (inbound calls only, no sales) to earn some money whilst studying and you had the sense the wheels were eventually going to come off. Customers bank balances returning to zero on pay day was the norm as people lived in their overdrafts. Credit card debt "paid off" with a consolidation loan, credit cards run up again, another loan and so the death spiral continued until the only companies willing to lend money to those customers were the likes of First Plus that had the adverts that went a long the lines of, "have you got defaults and CCJ? Are you generally bad at borrowing money and being able to pay it back? Why don't you secure all that debt to your home?"

                              I finally bought my first property in 2009 and I remember my mum saying that interests won't remain this low for long. Ha!

                              I haven't worked in banking since then so I don't have as much insight into the everyday person's bank account. I imagine a lot of people are living pay cheque to pay cheque though even those who earn enough that they should be putting something away for a rainy day. With rent increases, interest rate rises, energy and fuel costs rising, food getting more expensive I imagine we will start to see more and more people starting to default.

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