To think another great Depression is coming?

[littleblackdress04]

Spoke to a surveyor friend yesterday - he said they can’t value houses at the moment as they think they could lose up to 50% of their value. Also read an article about how another Great Depression is coming.

Is it the re-set we need as a world? The end of billionaires when millions have no food? What will the societal impact be?

I personally hope it’s a fairer, kinder society where everyone gets their basic needs met

mum's house used to be worth x, now it's only worth y, let's hang on to it until prices go back up again
That’s just common sense. You sell assets at the top of the market not at the bottom. If it doesn’t cost you anything to hang on to it then why wouldn’t you?

God I hope not. We’re relying on selling our house and emigrating in 12-18months and can’t do it if it’s not worth anything.

Sometimes you don't get a choice when to sell. My mum's house was sold to pay for care home fees, and I'm glad she got what she did and not half the amount.

For me and DH house prices make no odds, we own outright and aren't leaving any time soon.

But for our young adult children a drop would be good. Swings and roundabouts.

I really believe that all this is a bit orchestrated in order to get us closer to the new society. Universal basic income is a very probable outcome. Perhaps not immediately but in a few years. Most developed countries already spend a lot of money on subsidies, UBI would be a much better way to motivate people to work and improve themselves. I have always believed there's been a think tank behind the world's events at least since the second world war, so it doesn't ever happen again.
These "events" can seem cruel sometimes but all is done in order to get us closer to a better more organized and more pacific society.
Or at least this is what I say to myself to try and make some sense of all this chaos.

Petiolaris - or alternatively, “wow, now we can move into our own home,”/“sell gran’s house and afford a home of our own with the cash while houses in general are cheap“/“what a hassle, having a large house standing empty miles away - all that insurance, risk of squatters, general hassle, no-one who can afford the rent, tenants who can’t be trusted. Let’s sell up and have some money to get our business up and running again.” Some people hold onto houses as assets, some live in them, some don’t want or can’t afford to have money tied up in an immovable asset while they wait for the economic situation to improve. Obviously, the real problem with the housing market is the obsession with homes being assets on which profit must be made.

Universal Basic Income is not just around the corner. It has never been further out of sight. The treasury cannot possibly afford it while even Universal Credit is a difficult ask.

There has been a recent experiment with UBI (Finland?) and it just wasn’t popular. Taxpayers just didn’t think that people should get money for nothing, and it just wasn’t popular.

Not the reset you are looking for.

The rich will get richer, the poor poorer, and the comfortable working class will just be poor.

Many businesses already won’t re-open. A lot of damage has already been done. The longer this goes on, the worse it will get as confidence seeps away. The economy isn’t going to snap back. The government will have to run large deficits for years to stimulate the economy through fiscal stimulus. The Bank of England can’t fix this one for us. Money will have to be pumped into public sector spending and infrastructure projects to create a baseline amount of reliable income for a tranche of workers that the rest of us can grow off of.

The Shock Doctrine: The Rise of Disaster Capitalism, Kindle Edition
by Naomi Klein (Author)

Originally published 2008.

Currently available for 99p.

www.amazon.co.uk/Shock-Doctrine-Rise-Disaster-Capitalism/dp/0312427999?tag=mumsnetforu03-21

Yep. What the world needs now is Naomi Klein. On a Kindle. For 99p.

Wehttam

It isnt about what I want or think is right, I'm telling you it wont happen. It isn't economically viable. It would be less catastrophic to let the virus just spread willy nilly than it would to have a solid lockdown for 18 months.

Yep worked well in 1920s Germany, hyper inflation seen as a benefit? the whole world has gone crazy.

Hyper inflation not needed. The UK experienced around 6x inflation between 1960-1980 and the debt ratios fell a lot while salaries and house prices soared. We can do the same this decade. The main losers will be people holding cash.

Personally I think the government will let inflation run for a bit to cancel out the debt. We have had historically low inflation (except for house prices) for decades now. It's not a solution to the problem but it would mask it.

I think a recession is likely. I also think many people are deluded about how awful the economic state of the country is going to be.

But I think things will be Lionel prosperous again relatively quickly.

There is nothing to stop universal basic income from working except ideology.

If it's set at the right amount and truly universal it would cost less than universal credit and crap schemes run by the likes of crapita.

If the government are willing to waste money since 2016 on tanking the UK economy with Brexit and things like expensive bridges and hs2 there is enough money.

Not means testing saves a shit load in money, hmrc already have the means to give all people under a certain income funds. They have the information as they have national insurance nos etc. It's a case of identifying what a universal basic income will cover, the amount and giving it out.

Ie all people in the UK with under £? k income will recieve £1050 per month each over the age of 18.

People who want more money than this and need more money would always be motivated by the market to work. In fact most people would still choose to work. But the people at the bottom would be guaranteed an income with none of the current bureaucracy, that costs money.

The hardest part is setting it a level that takes people out of poverty (unlike universal credit) and also ensuring that any area to area subsidies like help with high rents and council tax were fair. Because people often have no choice over which geographical area they live in and this really varies across the UK.

However universal credit scraps lots of benefits, imagine universal income that covers all of that and not just for unemployed, sick/disabled/caring criteria.

If house prices drop massively people at the bottom of the chain may have negative equity and be unable to sell. This would stall the housing market and benefit no one.

Little black dress
"It is from a professor in the US".
And? They are worthy of taking advice lol

@PersonaNonGarter Looks like you just picked up on one sentence!?

IF we returned to council housing, so building millions of more housing over time, rents would be controlled & far cheaper, allowing those able to save for a mortgage to do so, if private landlords were removed from the market, this would release millions more houses onto the market, as they'd be forced to sell, as their tenants move to social housing, lowering prices....win win!!!

The UK experienced around 6x inflation between 1960-1980 and the debt ratios fell a lot while salaries and house prices soared. We can do the same this decade. The main losers will be people holding cash

...and what would be the benefit of that exactly?

You want salaries (from a very low starting point) to "soar" asset prices to increase too, meaning that inequality would increase, as the salary increases would be small compared to asset increases.

for your idea to work, you'd need asset and interest rates to stay low or fall, only wages to soar.

Aside, non of this will happen, the Tories will still be in charge and they will introduce austerity Mk2, the rich will be unaffected and the poor will be hit harder still, the MC's will tut "this borrowing has to be paid for, we all have to live within our means" and we will slip further away from a european social model and towards a US style economy of ever greater inequality....
.....because after all, if you are poor, it's YOUR fault.

If it helps, wages rose steeply and people started spending much more money after the Black Death...

Not necessarily relevant, but just goes to show you can never tell what will happen when you are in "unprecedented" territory. Nothing like this worldwide lockdown has ever happened before, so nobody can accurately model what will happen next.

The end of billionaires when millions have no food

Thus won't happen.
The cash rich will get richer taking advantage of lack of cash flow.
Folks with "high" household incomes, I'm talking 100-250k gross with standard/high outgoings ie mortgages nursery fees etc. (mostly SE and londoner) will be utterly buggered along with everyone else.

There are many entrepreneurs who will already be planning their business ventures around the depression which will hit us.
My teenage daughter is fascinated by the Steinbeck novels and has been reminding me of this. Hopefully the state help provided will act as some sort of buffer but I believe we have very poor times ahead

Article from John Macdonnell today- a new society must come out of this crisis- www.theguardian.com/commentisfree/2020/apr/03/coronavirus-crisis-new-society

@Mumsie43 well David Blanchflower is quite a well known professor of economics who used to sit on the bank of England’s monetary policy team 🙄 So he kind of does have some experience- he helped the uk through the 2008 financial crisis

@PersonaNonGarter

*Whenever I see posts like this I think they will he people hoping millionaires feel the hit while they, the impoverished poster, somehow escapes any impact on their standard of living and is now able to buy a nice house.

It doesn’t work like that. A downturn will affect almost all of us - the rich the least, the poor the most. And no, a house price crash will not benefit those at the bottom. It will come about because those at the bottom and in the middle cannot afford mortgages.*

Perfectly put. When people say ‘a house price crash would be a good thing, we’d be able to afford a house!’ I think they’re imagining going on Rightmove with a 50% off discount code. It doesn’t work like that. House price crashes don’t happen in a vacuum. They’re accompanied by mass unemployment, wage reduction, and unwilling mortgage lenders.

There was a serious house price crash in Ireland 10 years ago. What happened was ...

Wages slumped
Vendors stopped selling
Banks stopped lending
It was virtually impossible for anyone to buy a house
Pressure on the private rental sector increased
Rents sky rocketed
Homelessness increased significantly

Fixing the housing problem is about increasing supply. A crash helps no one but cash rich investors.

OP, John McDonnell was roundly rejected by the electorate for good reason. Linking to his world view (‘We were right - here are exactly no details’) is not really supportive. And, actually, in all of this I have heard exactly no-one calling for free broadband to be added to the Treasury spend.

The Conservative government is behaving this way in a severe crisis. Not out of ideology but out of wartime-like emergency. They are able to do it exactly because the country can see the need and believes that the wage support is necessary.

UBI would not have worked in this case because it would not have supported businesses In retaining their staff.

@jasjas1973 There are not enough homes physically. Getting rid of private landlords (not going to happen because it goes against principals of human rights, but that’s another story) does not add more property. We need to build.