I have so far treated Gordon Brown’s green shoots strategy with derision. He has convinced himself that a recovery is going to take root and make the nation realise that they do, in fact, love the Dear Leader. Whereas I first believed his green shoots were a mirage – now, I am not so sure. For the last few weeks, analysts have been revising up their forecasts – ending what seemed to be about 18 solid months of downwards revisions. Take the housing market – which had been expected to bottom out next year. If you look at it on a simple house price to salary ratio, it has a little bit more to fall…
HOUSE PRICE/EARNINGS RATIO, 1983-2009
But factor in mortgage payments and it has even undershot a little bit…
MORTGAGE PAYMENTS ON AVERAGE PRICE HOUSE, RENTS AND AVERAGE EARNINGS, INDEXED TO JAN 1983 =100, 1983-2009
Now, we all know that fixed rates are on the way up – so that second graph may soon be altered.
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