Thanks again, Tank, to prompt me to re-read Rothbard's America's Great Depression. The record of intervention by Hoover during 1920-1929 (first as Secretary and later as President) and its aftermath is chilling. He summarizes it with the observation:
"Whenever government intervenes in the market, it aggravates rather than settles the problem it has set out to solve. This is general economic law of government intervention."
Amen. How many economists subscribe to this? Do people really learn from history??
We KNOW what will the govt (USG + Fed) intervention do to the housing and the mortgage market. IT is going to be lot uglier than I have thought earlier.
I think one significant difference between the early 1990s and now in the UK is the level of consumer debt. My understanding is that non-mortgage consumer debt has risen markedly there.
A residential unit is one where the renter tries to illegally live in the unit. We used to see one or two residential units a month, Mr. Reger said. Now Im seeing 6 or 8 or 10. At one facility in D.C. the other day, we had three residentials.
Allen: I think this "problem" is limited to those who were on the edge of solvency. They raided their HELOC or were speculating in CA, AZ, NV, an FL during the run up. The rest of us surely are affected, but not in a catastrophic way.
My comments are intended to moderate the doom and gloom with a little of the reality some of the rest of us are seeing. I didn't gorge myself on debt or RE speculation so I am - so far - unaffected.
There are surely other unrelated issues that threaten my financial health. My employer could continue to downsize, but this is unrelated to the housing problems others face.
Paul, nice to see that there are some that are more then happy to have the inflation being created to bailout a bunch of greedy bankers shoved up their arse. The government is counting on people just like you after all somebody is going to have to pay for this mess.
More precisely, it is the fault of loose money, speculation, overconsumption, and "ownership society" ideology which were promoted by both Bush and friends and their counterparts across the water.
.
At the risk of pissing off the powers that be, this is a repost from the last string which I am still interested in hearing facts on. Hey it's a slow Saturday night and weekend.
.
.
.
ATTENTION REAL ESTATE PROFESSIONALS
What do you think would be a fair bid on one of these 9 auction houses that a builder is auctioning off in Wenatchee, WA.
This is an excellent web site and each new house has a "vitural tour" feature.
TIA
SS
....................
Cobra Driver - I spend 6 years of my life designing the Osprey (V-22) before I moved to Seattle from Boeing helicopter factory in Philly.
.............................
Q. Allen M - What does she do for a living?
A. She sells drugs! Just took a job there as a pharmacist with Wal-Mart starting at $110k with a $30k signing bonus. There is big money in Pharma and these little towns have a very hard time getting anyone qualified to move there.
But hey this ain't about her or me and what you think about drug prices what I want to know is what would you bid on one of those builder auction houses.
If you want the truth! I could buy all 9 of them cash if I wanted to and thought they were a good buy.
If you want the truth! I could buy all 9 of them cash if I wanted to and thought they were a good buy.
Next year you might be able to buy all nine of them and six more and have cash left over.
Or all this could go away & they could got back 10% appreciation per year.
What do you think is more likely?
BTW - pharma is a good gig. I have a bunch of pharma friends living in small towns - I don't know one of them that would want that home by the time they were 30. They can afford a lot more & better easily by then. The question is could the rest of the community afford to buy it so your daughter could move up in say 2-3 years? That is sell without taking a loss?
Meanwhile starting with a $30K signing bonus & large disposable income while renting means she could buy that place for cash in about 3-5 years... or use that savings for a down payment on something a whole lot nicer.
She isn't gonna be priced out forever - that was last year.
SeattleSun- Call a couple local general contractor and ask what the average cost to build is. They'll likely be able to give you a baseline. I'm guessing you might be able to go under, but if money isn't an object (only not over-paying), then bid it as a new build. Only the local guys will know the costs. In SD exclusive of the land, permits, etc. it's 80-100/sqft, down from 120-150 just a few years ago.
Oh and, at the risk of being sloppy sentimental, there is a certain joy in looking back at starting out "poor" and overcoming obstacles as a couple. I know you want the best for your little girl, but she might appreciate the idea she "made" it on her own,...at least her guy wouldn't feel like a gigolo.
paul - "The rest of us surely are affected, but not in a catastrophic way"
So, everything is neatly contained. Paul, have you learned nothing over the last 2 years? Just because you're sitting on a traintrack and you can the train is clearly coming, but you don't feel any pain, doesn't mean you're not going to get squished. Pretty much nothing about credit catastrophes is contained. Nothing.
Lawyerliz says: "I had no idea pharmacists were paid that well."
In order to dispense prescription drugs there has to be a pharmist on site in everone of these neighborhood drug stores.
85% of the profit in your local Walgreens comes from prescription drugs. All the other crap in those stores only accounts for 15% of the profit.
My only problem with this "drug cartel" is the nation can't/wouldn't be able to afford it at some point and the "rules" will be changed to bring down the price of drugs for medicare and the boomers.
As for signing bonus I have seen these kids out of college get Mercedes!
Anyway enought off topic stuff and thanks guys for some quality answers once I stated the question better.
Paul, glad to hear that you're unaffected. You must be wise enough not to depend on your house as a source of wealth. And on top of that, you are apparently impervious to the massive price increases in energy, food, healthcare and education.
In short, you are not the typical American.
Sure there will be some that prosper in this downturn. But you have to be delusional to think that most are unaffected.
"Sure there will be some that prosper in this downturn."
Surely the young first time homebuyer is going to "prosper" or at least get a "fair deal" compared to a few years ago. Of course you need to job in a segment of the economy not too directly effected by housing like: energy, ag, healthcare, exporters, etc.
Or am I just being too optismtic? Is the whole boat going to sink?
Or am I just being too optismtic? Is the whole boat going to sink?
Too soon to tell. We'll know a lot more by election time - if the TAF is still rolling & credit still tightening (in spite of those fed injections) then it probably doesn't look good.
As long as that first time homebuyer is patient, and doesn't assume that right now is a good time to buy. It still isn't in most places. Drops of 15-20% can be enticing, but prices still have far to fall to come back in line with incomes and rents.
Also, first-time homebuyers tend to stretch to get into a home. Stretching right now is not a good move, what with the coming job losses and all.
A good indicator on that question is how often you hear government officials (and bank executives) assuring you that the economy and our banking system is solid.
I've been hearing lots of reassurances lately, which is very disturbing.
I have a question regarding the ORIGINAL TOPIC (UK 'Repossessions')... are there regional distributions as severe as we are seeing? Do they have the equivalent of S Cal & Florida & Michigan? I'd guess the SE near London is pretty bubblicious & feeling pain... but the rest of the country? Anyone know?
i dont know why are these British people so upset.
in the us there is "Walk away", in UK it is "Buy to let", to let the bank take it back
anyway news from bubblicious eastern european Slovakia, the prices are currently in "stagnation" and i see first signs of lower prices and of course if i would be in the market i could start dictate prices -10% if i want.
there are 5 times more sellers compared to last spring when the bubble went up 150% in first 6 months of year.
since june 100% mortgages should be a history. you still can get 100% in some other banks but only if the payment is under 25% of your aftertax income. but since prices are too high there wont be many buyers.
and for those saying that people who work in uk or ireland will come home and buy here, are all in denial. most people there spend most of their mney and even if not they forget to change it to our local currency. libra lost 28% against our currency since last year, so those who forgot to change it can really jump out of window, since 28% uff thats a lot.
luckily Slovakia will become on 1.1.2009 for now the last member of Eurozone and when the SHTF and capital run will start from emerging markets including eastern europe Slovakia will be ok since we will have already euro while other eastern european country currencies will fall
Paul writes: Good! London was getting too expensive to visit anyway.
They did not give any indication in the article as to where this is happening but I am pretty sure this is not widespread in London. I seem to recall the problem is worse up north, which may as well be another country. London, like Manhattan, has been somewhat insulated by City money. Not to say it won't be hit eventually, especially if a lot of City jobs go, but right now, to the average Londoner, this is a big nothingburger designed to alarm and sell newspapers.
a colleagues friend went to london cca half year ago. he studied quant models on economic university in budapest, has prax and is fluent in english. sent out over 700 CV, not one interview. it must be tough in London for quite some time
The UK is at the beginning of the bursting of the greatest bubble (property) since the South Sea Bubble of 1620. Anticipate 45-50% reduction in housing prices within 2 years.
i guess losing coworkers doesnt affect you Paul. I guess if you want to get a football pool going or get everyone to pitch in for the bosses xmas gift you might only feel a small pinch. true compassion.
Mortgages in the UK are all "recourse" even after the home owner gets reposessed (foreclosed) the bank can go after them so "walking away" is not an option.
Also, there are no fixed 30 year mortgages, most are either variable rates or fixed only for a short period like 2 years.
This bubble has been in the making, encouraged by the BoE and Gordon Brown, for almost a decade now and many people have been warning about this for ages. Prices per sq foot in areas of London make the SF Bay Area sound affordable.
So....Record foreclosures in the UK: hoocoodanode!?!!
Paul. Your employer needs customers. If you're employer is a business to business operation, then your customers need consumers. Everyone needs consumers. When consumers hurt, everyone hurts, one way or another. Builders, govt. workers, tradesmen, retailers, all hurting, layoffs abound.
Supply side economics is fantasy. Demand side economics is the reality.
So this week I learned why this "walk away" trend is being hyped, thanks to Tanta. The lenders and wall streeters are trying to obfuscate the issues by diverting attention to buyers walking away.
Krugman said this week it's quite possible that in the long run, nothing will be done to regulate the securities industry. If lenders emerge from the credit crunch after a while and the law still allows them to write loans to sell off, with no thought about re-payment, this scam will just bubble up again in a few years.
It's a real threat to America, it's not just Arab terrorists people should be afraid of, it's our own oligarchic securities industry who is a real threat to our national security.
"I have a question regarding the ORIGINAL TOPIC (UK 'Repossessions')... are there regional distributions as severe as we are seeing? Do they have the equivalent of S Cal & Florida & Michigan? I'd guess the SE near London is pretty bubblicious & feeling pain... but the rest of the country? Anyone know?"
In a word, no. There are a lot of similarities between the US and the UK (the big ones are the huge increase in consumer debt over the last two decades and a fairly large subprime market), but there are several important dissimilarities. Most important is that we haven't had the same construction boom as the US, because there simply isn't the space and planning restrictions are quite tight. There's a massive shortage of housing in this country, especially in the south where prices have been rising fastest. It's possible that Kent (particularly the area known as the Thames Gateway) will see a relatively severe regional downturn, as that's where a lot of the new development has been (and there have been several documented cases of fraud, although it doesn't seem to have been anything like as widespread as in the US).
While buy-to-let has taken off in the UK, the vast majority of people do actually rent out those properties. Flipping doesn't seem to be very common. There's a legal requirement for lenders and brokers to assess the affordability of a loan, which may discourage such practices, although regulatory checks have shown a worrying lack of documentation of affordability checks in many instances.
Checkered flag.
Dude,
where is my Recession?
Good! London was getting too expensive to visit anyway.
--
OT...
Thanks again, Tank, to prompt me to re-read Rothbard's America's Great Depression. The record of intervention by Hoover during 1920-1929 (first as Secretary and later as President) and its aftermath is chilling. He summarizes it with the observation:
"Whenever government intervenes in the market, it aggravates rather than settles the problem it has set out to solve. This is general economic law of government intervention."
Amen. How many economists subscribe to this? Do people really learn from history??
We KNOW what will the govt (USG + Fed) intervention do to the housing and the mortgage market. IT is going to be lot uglier than I have thought earlier.
Jas
--
"where is my Recession?"
DH,
It is right under your nose!
Jas
This is all George Bush's fault, too.
Their coming real estate disaster may end up helping the dollar in the long run, which may hurt commodities (just a "tea" bit).
So this is good news, no?
"Their coming real estate disaster may end up helping the dollar in the long run, which may hurt commodities (just a "tea" bit)."
The demand is coming from the BRIC's and emerging markets not the British and they don't need no more stinking dollars.
Jas - I am not having a recession. I'm sorry you are, but this does not affect me - yet.
OT
Looks like I've been banned from Ritholtz Big Picture.
Don't know exactly why. Anyone mind me hanging out here? I promise not to jest about the Sith Lord...
Anyway, "The Old Lady Of Threadneedle Street" has nationalized the peasants hovels. Some day the House Of Lords votes will actually count.
Paul, you seem quite secure and smug, no shadows of doubt.
I hope you can continue to maintain that attitude over the next year.
There have been many optimist who have graced these pages since I first posted, some have now been converted to the dark side.
So pardon our cynicism, because hard experience has shown it to be well founded.
Someday this war's gonna end...
I bet they have walk away's in England. Maybe it is just an urban legend there as well. I need to listen to the BBC more.
I think one significant difference between the early 1990s and now in the UK is the level of consumer debt. My understanding is that non-mortgage consumer debt has risen markedly there.
Story on Nytimes now:
Losing a Home, Then Losing All Out of Storage
Losing a Home, Then Losing All In Self-Storage - NY Times
A residential unit is one where the renter tries to illegally live in the unit. We used to see one or two residential units a month, Mr. Reger said. Now Im seeing 6 or 8 or 10. At one facility in D.C. the other day, we had three residentials.
Allen: I think this "problem" is limited to those who were on the edge of solvency. They raided their HELOC or were speculating in CA, AZ, NV, an FL during the run up. The rest of us surely are affected, but not in a catastrophic way.
My comments are intended to moderate the doom and gloom with a little of the reality some of the rest of us are seeing. I didn't gorge myself on debt or RE speculation so I am - so far - unaffected.
There are surely other unrelated issues that threaten my financial health. My employer could continue to downsize, but this is unrelated to the housing problems others face.
Disaster faces estate agents as housing crashes
1,800 firms may go to the wall as banks are accused of 'squeezing the life out of the market' amid fears of a decade-long slump
Disaster faces estate agents as housing crashes -
Business News, Business - The Independent
From Mr Buy-to-Let to Mr Die-in-Debt: the door to riches opened for Jim Moore and then it slammed in his face
From Mr Buy-to-Let to Mr Die-in-Debt: the door to riches opened for Jim Moore and then it slammed in his face -
Business Analysis & Features, Business - The Independent
Paul, nice to see that there are some that are more then happy to have the inflation being created to bailout a bunch of greedy bankers shoved up their arse. The government is counting on people just like you after all somebody is going to have to pay for this mess.
This is all George Bush's fault, too.
More precisely, it is the fault of loose money, speculation, overconsumption, and "ownership society" ideology which were promoted by both Bush and friends and their counterparts across the water.
I think this "problem" is limited to those who were on the edge of solvency.
And those of us who have been unable to find work for a year.
.
At the risk of pissing off the powers that be, this is a repost from the last string which I am still interested in hearing facts on. Hey it's a slow Saturday night and weekend.
.
.
.
ATTENTION REAL ESTATE PROFESSIONALS
What do you think would be a fair bid on one of these 9 auction houses that a builder is auctioning off in Wenatchee, WA.
Northwest Auctions - Builder Liquidation
I am thinking $/sq ft.
This is an excellent web site and each new house has a "vitural tour" feature.
TIA
SS
....................
Cobra Driver - I spend 6 years of my life designing the Osprey (V-22) before I moved to Seattle from Boeing helicopter factory in Philly.
.............................
Q. Allen M - What does she do for a living?
A. She sells drugs! Just took a job there as a pharmacist with Wal-Mart starting at $110k with a $30k signing bonus. There is big money in Pharma and these little towns have a very hard time getting anyone qualified to move there.
But hey this ain't about her or me and what you think about drug prices what I want to know is what would you bid on one of those builder auction houses.
If you want the truth! I could buy all 9 of them cash if I wanted to and thought they were a good buy.
SS
With all that money, she could use
her bonus for a downpayment and get a
15 year fixed, and pay extra, and have it paid off in no time.
I had no idea pharmacists were paid that well.
Paul--you may not be having a recession, but my clients and I are.
Well, I'm still making some money, but I'm not doing what I like.
Paul, you seem quite secure and smug, no shadows of doubt.
I hope you can continue to maintain that attitude over the next year.
There have been many optimist who have graced these pages since I first posted, some have now been converted to the dark side.
At least he isn't farting through silk.
My comments are intended to moderate the doom and gloom with a little of the reality some of the rest of us are seeing.
Reality, delusion - fine line there a lot of times. That line moves too.
All, I'm doing the layout update tonight, so the blog will be down for a little while.
Best to all.
If you want the truth! I could buy all 9 of them cash if I wanted to and thought they were a good buy.
Next year you might be able to buy all nine of them and six more and have cash left over.
Or all this could go away & they could got back 10% appreciation per year.
What do you think is more likely?
BTW - pharma is a good gig. I have a bunch of pharma friends living in small towns - I don't know one of them that would want that home by the time they were 30. They can afford a lot more & better easily by then. The question is could the rest of the community afford to buy it so your daughter could move up in say 2-3 years? That is sell without taking a loss?
Meanwhile starting with a $30K signing bonus & large disposable income while renting means she could buy that place for cash in about 3-5 years... or use that savings for a down payment on something a whole lot nicer.
She isn't gonna be priced out forever - that was last year.
All, I'm doing the layout update tonight, so the blog will be down for a little while.
Best to all.
Calculated Risk | Homepage | 05.10.08 - 11:57 pm | #
Jeez, I'm already starting to go through withdrawal.
Jas Jain writes: IT is going to be lot uglier than I have thought earlier.
WTF? Is that possible? I thought you were one of the doomsday predictors,...
sdtfs-
Loading the rss page might help in the meantime...
Calculated Risk
ahhh, nevermind it's back!
SeattleSun- Call a couple local general contractor and ask what the average cost to build is. They'll likely be able to give you a baseline. I'm guessing you might be able to go under, but if money isn't an object (only not over-paying), then bid it as a new build. Only the local guys will know the costs. In SD exclusive of the land, permits, etc. it's 80-100/sqft, down from 120-150 just a few years ago.
Oh and, at the risk of being sloppy sentimental, there is a certain joy in looking back at starting out "poor" and overcoming obstacles as a couple. I know you want the best for your little girl, but she might appreciate the idea she "made" it on her own,...at least her guy wouldn't feel like a gigolo.
paul - "The rest of us surely are affected, but not in a catastrophic way"
So, everything is neatly contained. Paul, have you learned nothing over the last 2 years? Just because you're sitting on a traintrack and you can the train is clearly coming, but you don't feel any pain, doesn't mean you're not going to get squished. Pretty much nothing about credit catastrophes is contained. Nothing.
Lawyerliz says: "I had no idea pharmacists were paid that well."
In order to dispense prescription drugs there has to be a pharmist on site in everone of these neighborhood drug stores.
85% of the profit in your local Walgreens comes from prescription drugs. All the other crap in those stores only accounts for 15% of the profit.
My only problem with this "drug cartel" is the nation can't/wouldn't be able to afford it at some point and the "rules" will be changed to bring down the price of drugs for medicare and the boomers.
As for signing bonus I have seen these kids out of college get Mercedes!
Anyway enought off topic stuff and thanks guys for some quality answers once I stated the question better.
SS
Paul, glad to hear that you're unaffected. You must be wise enough not to depend on your house as a source of wealth. And on top of that, you are apparently impervious to the massive price increases in energy, food, healthcare and education.
In short, you are not the typical American.
Sure there will be some that prosper in this downturn. But you have to be delusional to think that most are unaffected.
Sorry Paul, I see that you did admit that you are somewhat affected.
The thing is, how can you not see how severely affected so many people are (already) and will be in the next few years?
"Sure there will be some that prosper in this downturn."
Surely the young first time homebuyer is going to "prosper" or at least get a "fair deal" compared to a few years ago. Of course you need to job in a segment of the economy not too directly effected by housing like: energy, ag, healthcare, exporters, etc.
Or am I just being too optismtic? Is the whole boat going to sink?
SS
Or am I just being too optismtic? Is the whole boat going to sink?
Too soon to tell. We'll know a lot more by election time - if the TAF is still rolling & credit still tightening (in spite of those fed injections) then it probably doesn't look good.
SeattleSun,
As long as that first time homebuyer is patient, and doesn't assume that right now is a good time to buy. It still isn't in most places. Drops of 15-20% can be enticing, but prices still have far to fall to come back in line with incomes and rents.
Also, first-time homebuyers tend to stretch to get into a home. Stretching right now is not a good move, what with the coming job losses and all.
Re: Is the whole boat going to sink?
A good indicator on that question is how often you hear government officials (and bank executives) assuring you that the economy and our banking system is solid.
I've been hearing lots of reassurances lately, which is very disturbing.
I have a question regarding the ORIGINAL TOPIC (UK 'Repossessions')... are there regional distributions as severe as we are seeing? Do they have the equivalent of S Cal & Florida & Michigan? I'd guess the SE near London is pretty bubblicious & feeling pain... but the rest of the country? Anyone know?
i dont know why are these British people so upset.
in the us there is "Walk away", in UK it is "Buy to let", to let the bank take it back
anyway news from bubblicious eastern european Slovakia, the prices are currently in "stagnation" and i see first signs of lower prices and of course if i would be in the market i could start dictate prices -10% if i want.
there are 5 times more sellers compared to last spring when the bubble went up 150% in first 6 months of year.
since june 100% mortgages should be a history. you still can get 100% in some other banks but only if the payment is under 25% of your aftertax income. but since prices are too high there wont be many buyers.
and for those saying that people who work in uk or ireland will come home and buy here, are all in denial. most people there spend most of their mney and even if not they forget to change it to our local currency. libra lost 28% against our currency since last year, so those who forgot to change it can really jump out of window, since 28% uff thats a lot.
luckily Slovakia will become on 1.1.2009 for now the last member of Eurozone and when the SHTF and capital run will start from emerging markets including eastern europe Slovakia will be ok since we will have already euro while other eastern european country currencies will fall
Paul writes: Good! London was getting too expensive to visit anyway.
They did not give any indication in the article as to where this is happening but I am pretty sure this is not widespread in London. I seem to recall the problem is worse up north, which may as well be another country. London, like Manhattan, has been somewhat insulated by City money. Not to say it won't be hit eventually, especially if a lot of City jobs go, but right now, to the average Londoner, this is a big nothingburger designed to alarm and sell newspapers.
a colleagues friend went to london cca half year ago. he studied quant models on economic university in budapest, has prax and is fluent in english. sent out over 700 CV, not one interview. it must be tough in London for quite some time
Larry Kudlow is unmentionable. But somebody gotta do it.
The UK is at the beginning of the bursting of the greatest bubble (property) since the South Sea Bubble of 1620. Anticipate 45-50% reduction in housing prices within 2 years.
It is uncanny how, after several years of cool, sane reportage here, we continue to read the same fallacies brought into the comments repeatedly.
Never mind.
My employer could continue to downsize, but this is unrelated to the housing problems others face.
HAHAHAHAHAHAHA!
Paul, the thigh bone's connected/ to the hip bone...
Ratfin, I think you are talking tulips in Rotterdam. The South Sea Bubble and/or The Mississippi Bubble was in 1730.
i guess losing coworkers doesnt affect you Paul. I guess if you want to get a football pool going or get everyone to pitch in for the bosses xmas gift you might only feel a small pinch. true compassion.
Yeah, I think it will be worse than 1991. I dont see this getting any better.
Mortgages in the UK are all "recourse" even after the home owner gets reposessed (foreclosed) the bank can go after them so "walking away" is not an option.
Also, there are no fixed 30 year mortgages, most are either variable rates or fixed only for a short period like 2 years.
This bubble has been in the making, encouraged by the BoE and Gordon Brown, for almost a decade now and many people have been warning about this for ages. Prices per sq foot in areas of London make the SF Bay Area sound affordable.
So....Record foreclosures in the UK: hoocoodanode!?!!
Paul. Your employer needs customers. If you're employer is a business to business operation, then your customers need consumers. Everyone needs consumers. When consumers hurt, everyone hurts, one way or another. Builders, govt. workers, tradesmen, retailers, all hurting, layoffs abound.
Supply side economics is fantasy. Demand side economics is the reality.
So this week I learned why this "walk away" trend is being hyped, thanks to Tanta. The lenders and wall streeters are trying to obfuscate the issues by diverting attention to buyers walking away.
Krugman said this week it's quite possible that in the long run, nothing will be done to regulate the securities industry. If lenders emerge from the credit crunch after a while and the law still allows them to write loans to sell off, with no thought about re-payment, this scam will just bubble up again in a few years.
It's a real threat to America, it's not just Arab terrorists people should be afraid of, it's our own oligarchic securities industry who is a real threat to our national security.
"I have a question regarding the ORIGINAL TOPIC (UK 'Repossessions')... are there regional distributions as severe as we are seeing? Do they have the equivalent of S Cal & Florida & Michigan? I'd guess the SE near London is pretty bubblicious & feeling pain... but the rest of the country? Anyone know?"
In a word, no. There are a lot of similarities between the US and the UK (the big ones are the huge increase in consumer debt over the last two decades and a fairly large subprime market), but there are several important dissimilarities. Most important is that we haven't had the same construction boom as the US, because there simply isn't the space and planning restrictions are quite tight. There's a massive shortage of housing in this country, especially in the south where prices have been rising fastest. It's possible that Kent (particularly the area known as the Thames Gateway) will see a relatively severe regional downturn, as that's where a lot of the new development has been (and there have been several documented cases of fraud, although it doesn't seem to have been anything like as widespread as in the US).
While buy-to-let has taken off in the UK, the vast majority of people do actually rent out those properties. Flipping doesn't seem to be very common. There's a legal requirement for lenders and brokers to assess the affordability of a loan, which may discourage such practices, although regulatory checks have shown a worrying lack of documentation of affordability checks in many instances.