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House Price Crash Forum


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Everything posted by abharrisson

  1. People love simplicity don't they... interest rates are going to go up, therefore housing is going to crash, or whatever..... in the same way you agree that housing may well go through a down phase in the next six months you don't ask why do you ?..... and any reason you give would probably have been true last month or the month before or the month before that but the housing market didn't move then did it, in fact it went the other way if anything.... predicting the ebbs and flows of the housing market is not straight forward as I have said many many times. lets look at why housing could turn the other way after six months of falls. 1/ After a 10% drop confidence returns and people think its another buying opportunity ( it happened in 2009 after all) 2/ Interest rates could remain low so affordability will have improved dramatically. 3/ Competition in the mortgage market may have pushed rates even lower making affordability even better. 4/ The current ebb in the financial markets may be replaced with more positive news. 5/ Consumer confidence may be on the up bolstered by continued growth ( albeit tiny) rather than a return to recession. 6/ The return of QE. 7/ The extension of action to help troubled mortgaged owners either legally or through direct support. I could go on and on and on................ but as you can no doubt see for a host of reasons to assume that once prices start falling again they will continue at full crash speed until the bitter end is only one possible outcome and one which in my view is very very unlikely.... I reamin convinced we'll see falls followed by rises over the next 12-18 months and beyond. Anyone hoping to cash in on a market going through a fundemental crash will I think be disappointed as will anyone hoping for the bottom to come anytime soon... your moniker of "tired of waiting".. is I expect going to further tested, you may well be so tired you have gone to sleep by the time the bottom actually arrives.
  2. Oh I'd agree with you in many ways... and I do think the graphs will turn negative soon, I am equally sure that many HPC sheeple will believe this is the start of the road to the promised land... only to be left scratching their heads when the indices turn again .... in my view this cycle of falls and rises will be sustainted for quite some considerable time... but as you say we'll see. If prices fall another 10% from here over the next six months it wouldn't surprise me.. I'd then expect to rise again over the ensuing say 6 to 12 months to where they are today ( nominally) ... there'll be six months of excitment for the crash brigade followed by much frowning and blaming of VI's etc etc.... until the third leg down commences... to be replaced by another bounce etc etc to be repeated maybe for five years or so.
  3. I think with current spate of bad news its very easy ( and not necessarilly wrong) to be in the "batten down the hatches the end is nigh" camp... euro probs, no growth in the states, chinese shenanigans, BP issues, IMF credibility gap, stock market corrections, housing still in bubble territory as are other asset clases etc etc ...... BUT despite all the temptations to strap on the tin hat and kiss my **** goodbye I am still clinging onto the belief that having had the world's biggest financial earthquake in 2007/2008 these are aftershocks and they will continue for quite some considerable time, but aftershocks remains to me the best characterisation of them and as each passes so the future gets just a little bit brighter.
  4. Hasn't there been a fairly crucial change here though in the way that housing benefit is paid... in the past a lot of it was surely paid by the local council directly to landlords.. then they changed it so the money was paid as an allowance to people to then spend with landlords.... so whilst landlords might well lose out in the end its tenants who will lose out to start with as they need to give notice and brideg the gap in the meantime... and if they leave one place under a cloud they may well find it difficult to get into another even if they can find someone to take the lower rent the govt are now paying..... so in my view this will be a difficult transition for BOTH tenants and landlords, and for some tenants who don't have the ability to drive a harder bargain it may prove very difficult indeed.
  5. And yet... apparently prices are rising in roughly four times as many areas as they are falling in.. go figure... maybe the increased availibility of housing for sale will take longer to feed through into a picture of more solid falls.... mid-way through a year when many predicted falls would recommence early on.. and so far nothing.. no real falls at all and in my view the longer substantial falls are put off the less likely we are to see a classic second leg of the crash with swift big falls month after month.... for me the balance of probabilities has now turned properly in the direction of this correction being spread over a much much longer period with perhaps most if not all of the falls being made up by inflationary adjustments rather than nominal corrections.
  6. I don't doubt for one minute that he does have some power.. its the same power that has forced the tube line to close for countless days in past years sometimes over the rightfull firing of one man. meanwhile tube drivers are now on ludicrous salaries and he has succeeded in creating a closed shop whereby you have to "serve your time" on the platform before getting a shot at the "driver" position ( no steering required). What I find most odd about those who try to defend Crowe and his ilk is that they fail to see if they had their way it would all have ended in tears far sooner... even if you sat him down in a darkened room with some right thinking individuals with baseball bats he apparently is incapable of understanding that not everyine can earn as much as the top man, that pay shouldn't ever rise faster than inflation for the same job, that productivity gains are a fact of life and paying for them through increased wages for ever is self-defeating, that there are literally millions of public servants who shouldnever have been employed by labour, that public sector benefits have to be cut. he does the working class no favours at all, in fact he is counter productive and I can firmly predict if he does induce some form of strike by his memebers then it will be very very ill advised, in fact its likely to be his scargill moment... this country simply won't survive unless it cuts its public service bill and if he chooses to satnd in the way of that then he effectively becomes the enemy and he and his membership are likely to suffer even more than they would have done by simply rolling over. Personally I'd love to see him try as I'd love to see the little ant squashed and his membership derided for their actions.
  7. If you'd heard him on the radio struggling to come up with alternatives to public service cuts and struggling to justify their benefits you certainly wouldn't have called him intelligent.... even if you don't agree he is a moron then I think most can agree his arguments are moronic as he seeks to defend the indefensible.
  8. Well for a start 1300 acres is a pretty peachy asset... if you look at the roll call of assets the house itself is probably of minimal cast within the whole .... it could work out something like this... Farmland 1300 acres ( could be as high as £10,000 an acre, knock it back to £6,000 to allow for less god land/ lower cost of woodland etc)- £7,800,000 12 cottages ( I think thats what it said, some look like small cottages, others like larger farmhouses. In that area I'd be surprised if any are worth less than £250,000)- £3,000,000 Sporting rights ( not fishing) - these will be something like £100,000 Fishing rights-Perhaps £50,000 That gets you to somehting like £11,000,000. This is probably reduced a little by the farms being tenanted ( depending on the type of tenancy) so say £9,000,000, which means the house as a seperate element with a bit of parkland might be somewhere in the region of £3,000,000. There's probably a story behind the asking price otherwise I would argue it might well be much too low..... attracting numerous bidders, main house and cottages needing heavy investment, old tenancies on the bulk of the farmland and houses etc etc.... I would have otherwise expected an estate of this size with that many cottages which hadn't been starved of investment and was all in hand rather than tenanted to go for something closer to £15- £20m
  9. Makes me laugh.. he gets a bigger salary rise than many of his "workers", his pension contributions are higher than the national average wage alone, his expenses are staggeringly high ( and probably first class) and all funded out of the pockets of the workforce he claims to represent...
  10. Whether or not your 3.5 times rule of thumb is right or not ( I don't think it is) I think the generalisations you make a way off the mark.... there are plenty of people who but second homes, holiday homes or whatever and their principal motivation is not speculation ( of course any person would do what they do when they buy their own home, which is try and make sure they don't pay too much for it and try and think about what might happen to it financially in the future)....buy to let is clearly speculation first but second homes, holiday homes etc I think are anpother matter and I think you might have become a little detached from the real world if you think speculation is peoples primary motivation ( its about as primary as sepculation is in the purchase of the first home). And finally of course your statement that their are no victims of sepculation is of course way wide of the mark.
  11. I have no hesitation in agreeing that Bob Crow is utter , utter moron... listening to him on radio yesterday was like comedy hour. As an alternative to cutting staf or pay or conditions of HIS workers... he proposed higher rate taxes beyond 50% ( what an idiot, clearly he has no economic understanding whatsoever), when told this he then said there are other things that could be cut.. he claimed cutting trident would save £70bn ( until of course it was pointed out to him that the yearly cost is something like £3bn) so finally he ummed and ahhed and came up with cutting ID cards ( already cut). In other words he had absolutely no workable ideas at all on what could be cut to replace the cuts to public sector workers yet he was still intending to lead us into a strike which would further damage the coutnry and lead to even further cuts to his precious members. Apart from anything there seemed to be absolutely no acceptance that if Labour had properly managed its public expenditure budgets over the last ten years or so then many of his precious members shouldn't actually have been employed in the first place, as we couldn't afford it, or shouldn't have afforded it during labours damaging period in office.
  12. Trouble with all these "news" stories is that they aren't what they appear to be... and this is typical. It does a very good job of corralling all the bad news into one area and delivering the resulting negative prediction BUT... it fails to recognise that there are some contrary factors ( QE is still having an effect, interest rates are still rock bottom and will remain so, mortgage rates are getting lower if anything, the CGT rise wasn't as bad as everyone thought, volumes while lower than before are not falling and are a good 30% up on the bottom, various sectors have already fallen about as far as they reallistically can already, unemployment hasn't yet risen to the levels people feared it might by this stage, govt borrowing is down on forecast , etc etc) While personally I think the logic is very strong for prices to go through a corrective period ( which we are in currently), to say its going to be a crash , its going to be soon and thats the only thing that can happen is just plain stupid... of course we might get a crash, but we could just as easily go through a long and slow period of correction which is what I personally think we'll see. Whether I am proved right or wrong hardly matters as regards this post... the key point is that the so called "independent" has delivered an article which is hoplessly one sided and illconsidered.
  13. I really can see what you mean..... the ciy is vibrant and theres no reason at all to belive it won't continue to be a strong financial centre, probably the strongest in Europe for many years to come ( in world terms though China/hong Kong will become the big new chief).... didn't they just make a new discovery in the north sea, aren't they also looking at all these north sea rim developments like nuclear and wind and haven't they just struck a new big field off the coast of eastern scotland.... equally if we still have an army to defned it theres the potential gushers in the flaklands to reap benefits from.. and if we get a look in some of the supposed mineral jackpots in afghanistan..... plus of course the devlopment of new techniques such as burning seams of coal under the north sea to produce powere ( like they do in australia)..... of course it won't all come off but things are cenrtainly not as dark as you make them out to be.
  14. I have seen this articel spun to death by all sides... one group of HPC sheeple were trumpeting that prices are only rising in 11% of areas ( cue loads of fellow sheeple appluading the begining of the ice age in house price terms)... the article actually goes on to say that prices are falling in only 3% of areas... ( I imagine its flat in others)... so you could quite easilly see prices rising in nearly four times as many areas as its falling... in other words the completely opposite spin. On this particular thread we have " supply rising three times faster than demand"... is it indicative of anything I wonder.. seasonality in some parts I am sure, I was surprised that demand was rising by 5% ( I would have thought if all the headlines about the financial armageddon were right demand would be falling regardless of supply)... and even though supply is rising appraently three times faster than demand, prices are still rising in foru times as many areas as they are falling in.... go figure. My advice would be to ignore the headlines , ignore the spin from mags and newspapers and fellow HPC'ers ( who are amongst the worst culprits) and amke your own minds up... mine is already made up... A) the figures wherever they are from need to be treated with a healthy dose of scepticism Interest rates will not be raised before the economy is clearly into solid recovery mode C) Until interest rates are raised mortgage borrowing will get cheaper and cheaper. D) The most likely outcome for house prices is a long slow decline lasting many years.
  15. I shouldn't think any owner of a million pound property is quaking at the prospect of their dss tenants leaving.. I'm sure theres the odd example but I've not seen too many central prime london 2/3 bed flats which are typically valued at that sort of level being available to rent for those with housing support nor have I come across too many councils willing to fund rental costs of circa £30,000 per annum for a two bedroom flat ( which is rouhgly how the numbers will work out for a 2 bed in prime central london which is valued at around £1miilion) If you'd said that there may be some trickle up effect with rent controls effectively bringing down rental in outlying areas which then has an effect on greater london which then has a knock on effect on prime central london then I would have agreed with you.
  16. Doubt it , just a way station along the route of weakness characterised by a series of falls followed by rises etc which I suspect we'll be seeing for the next few years.
  17. I suppose the restult for high street retail/commercial bansk could be that they become a little more like utilities.... only small levels of growt being delivered, sinking vast sums into infrastructure ( in their language capital cushions) and delivering a decent yield though with uninspring growth... might actually be where they should be... solid, uninspiring, reliable.
  18. Equally I hope the HPC sheeple aren't being overly optimistic about the prospects of the return of crash speed.. otherwise many I fear are going to feel a little let down when they don't get their clear,can't lose buying opportunity.
  19. Whether soemthing at this end of the scale would work I doubt.... for instance there are genuinely diabled people who we wouldn't be able to find work for, there are people who are genuinely incapacitated for whom it might be difficutl to work, and lets not forget you have to find the work for them to do, which doesn't grow on trees and sacking current govt employees to provide the slots clearly is a non-starter etc ect..... but I do think there is a role for saying people should work ( at min wage) for their benefits as a principle and then see which sections it can be made to work for... the something for nothing culture ( as opposed to the genuine support for those in need cuture) is definately somehting that needs to change
  20. I'd agree that certain things will need to happen before the bank raises rates.... a norrowing of the LIBOR vs BOE might well be one of them and as you say that might well indicate balance sheets have stabilised and an appetitie to lend has returned etc. Generally I'd make the following comments. 1/ I reckon those who say rates will rise when the VAT changes drive inflation up ( which they will) are dead wrong as I think the bank these days looks at the casues of inflation not just the figure. They will argue this is a blip not a trend ( which it is) and rasing interest rates would be a crazy thing to do as a result. 2/ I really don't think the bank will even seriously consider rate changes until a recovery is properly underway. In fact I think it might well delay them beyond what most people think is the mark or raise them much more slowly than people have thought even when they decide the time is right. Raising rates too early is more of a risk than raising them too late currently in terms of economic recovery. In all I cannot see any material change to rasie happening this year ( maybe a 0.25% rise or two would be at the extreme end but I don't think they'll move at all really). I certainly cannot see rate rises happening quickly, I think it will be 0.25% chunks maybe every two or three months but a lot has to ahppen before that process is reached and I think 2011 is more likely for the rises to start in that regard . This obviously has a knock on effect on the housing market....mid-2011 we'll be 4 years into the correction, it'll be clear by then that it hasn't taken the track most have assumed it would and if we are then in an environment where the economy is growing ( albeit weakly) and signs of a second dip recession have long since faded then I think the only route for a correction in the housing market will be the long and slow approach. And I think this is especially going to be the case becasue I firmly believe interest rate rises will be dealt with very cautiously..... mid-2011, weak growth, low but not slipping confidence levels, continued low interest rates..... it's not a receipe for a party but neither is it a receipe for a crash in the housing sector...... carry that on for a couple more years and from here to there you might well have seen a real terms reduction in house prices of something like 9% but nominal prices might well be flat vs now..... in other words the charts might well show a correction is happening but at that pace and with wages being controlled as well it's not going to feel like a correction.... we'll then in mid-2013 be something like six years into the correction and prices in real terms might have corrected by somehting like 18% ............. I have for a long time said it'll be long ,slow shallow rather than fast and deep but have been thinking maybe 30% real terms falls.... I am now thinking 20% overlal might be much closer to the mark. It's still a significant correction but I wonder whether many will feel the true benefit of it or will feel it was worth waiting seven years or so for.......... post 2013 it wouldn't surprise me if interest rates remained low, growth slow, and house prices subdued as a result.
  21. Not on message I am sure but Banks might decide that its better to focus on BTL lending than residential... greater margin and now apparently greater security !
  22. Well if they are USA charts which then it will explain why the difference I referred to. Moving on though, lets deal with your sarcasm in the spirit it deserves. Public sector budgets are indeed about to be cut ( how observant of you)... but this has been in the offing for simply ages and ages and in any event no substantive cuts have yet been made, and in fact in the budget the 25% cut was announced as a consultation exercise, with no firm detail on where or when . if you believe the cuts when they surely will come will trigger a crash, then you must also believe the crash won't come until the cuts come.... now of course you must also have thought about the threshold... will the sudden crash you seem convinced of come on the announcement of what the actual cuts are, or when the first 5% have come in , or when the second five have come in, when they reach 15% maybe, or is it only when they reach the magic 25% that you very well thought out view indictaes a crash will occur... now of course those 25% cuts are in real terms over the course of a full parliament so are we saying oh great predictor that there won't now be a crash for five years, or maybe that as the 25% magic figure won't actually be reached in nominal terms that maybe this changes the terms of things altogether. Oh yes apprarently according to you their has been a shift towards interest rate rises in the MPC.... of course there has ... and as you drew it specifically as a reason boy oh boy it must have been significant... oops only one of the MPC voted for a rise last time out and the last person to vote for a change upwards was when ?.... change upwards will come of course but do you think it'll be in full 1% leaps or do you think it will be very very cautious... bearing in mind the recovery promises to be very very weak... 0.25% every three months sounds about right... hardly the painful dose to set off crash surely... or amybe you have been smoking something. Ah yes what next the Eurozone falling apart... well I suppose it might have a macro effect on banks and therefore on lending and therefore on house prices here outside the euro zone but you'd have to be a very good and expert pundit to actually tie the two together into some sort of cogent predicition of upward pressure on house prices... now what is it about your poorly thought through "ideas" is that makes me think you are neither good or expert. And finally we have stock markets falling 10% in a month... well so what.. you could just as easilly say they have recently risen 5% off the bottom or are 70% of the way back to being as fully valued as they were pre-crash... its an utter nonsense. House prices are overvalued we can agree on that but to try and make a pathetic, sarcastic attempt to try and pretend there is only one future way prices will correct is utter utter madeness of the very worst HPC sheeple type... to only see one possible future is idiotic, as I am sure you can now see.
  23. While I am sure most will argue the market remains overvalued generally, I certainly don't share the view that this correction has any similarity to the last one... conditions are very very diffierent so I think the shape of it will be very very different too. I remain convinced its going to long and slow , not quick and deep as many such as yourself believe.. the only test will be to see how it turns out in reallity.
  24. I probbaly wouldn't paint quite the same picture but yes thats the side I meant.
  25. Doesn't really matter whether its up or down to me for three reasons 1/ Its unlikely to apply to my locality anyway whatever the result ( or to anyones for that matter)... people still don't seem to get this. 2/ I really couldn't be any further away from believing that the market is going to go into some huge new crash phase with the result being some lovely overcorrection and buying opportunities for all as a result..... sure it needs some more correction to get back with the realms of reallity but I firmly believe any such correction will be long and slow and won't be characterised by an overcorrection or anything like. 3/ With sample sizes still being very very low the national figures are unlikely to have any real relevance and the local/regional figures even less so..... at the level of chnage you are anticipating I doubt thats even at the rounding error level of the stats.
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