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Timak

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Everything posted by Timak

  1. I watched The Big Short with a group of people who are all well educated, professional types who read serious newspapers and watch the news every night. Chatting about it afterwards they seemed to think the whole thing was fiction and that of course it wouldn't have worked like that. You can't just cheat and lie and get away with it. The regulators and government would have stopped it. Me: "But it literally happened in real life about 10 years ago. The global financial crisis." Them: "I thought that was because stupid people borrowed too much" Me: "In the film they showed how it worked, you know when the stripper owns 5 houses and when the guys talk about NINJA loans" Them: "But why would a bank make that loan?" Me: "Because they sold off the loans to insurance companies as soon as they made it" Them "Yeah but banks can only lend money that people deposit with them" Me: *internally* AAAARRGGHHHHH how do you know nothing about money! I think we VASTLY overestimate how much people know about this stuff. I'd love all the party leaders to be quizzed on the very basics of what money is, what happened in the financial crisis. Something as simple as "If a government runs a surplus what must happen for the economy to continue to grow?" It would be car crash TV.
  2. If governments reducing spending then if there isn't a compensatory increase in either overseas earnings or private debt increasing then the economy will shrink. Gross Domestic Product = Consumption spending (comes out of savings/wages) + Private Investment (comes from savings or borrowings) + Government Spending + Net balance of trade If Government borrowing goes down (e.g. the deficit shrinks) then private spending has to go up to compensate. This is either done by spending saved money or bank issued credit money. In an unbalanced economy where the rich have lots of savings but the poor little savings we end up with a heavily indebted population and increasing transfer (through interest charges) from poor to rich.
  3. Yes, but more in the sense that they ensured I left uni with minimal debts and gave me £1k towards the moving costs (which otherwise would have gone on the mortgage). That is because when I first bought a house it was relatively affordable. The stupid thing is 15 years later when I looked at moving we were going to have to borrow £100k from them to afford a slightly larger house. We didn't.
  4. Timak

    Cambridge

    Latest sold price for my estate is 335k, substantially less than I would have expected. By a good 25k.
  5. Auction clearance rates (lots of houses are sold by auction in Australia) in Sydney and Melbourne have crashed.
  6. Timak

    Cambridge

    Good stuff @StuartMc My own RM search area ,which is only my suburb, is now up to 74 from lows of around 30. Prices still eye watering though. £600k to live off Coldhams Lane sandwiched between a Toyota showroom and an airport.
  7. Timak

    Cambridge

    It is a 70s council estate so no schemes operating. Mix of council, ex-council RTB older people, rental (used to be rented to families, now by the room @£600 a month each) and people working at ARM/Addenbrookes/Biotech parks. But you need £100k income to buy one now which is just crazy.
  8. Timak

    Cambridge

    Not posted on here for ages.....but thought I'd share some anecdotes. Prices in Cambridge have been steady over the last 2 years. I live in an estate of around 100 identical houses. The sold prices for these properties is now around £350k on average and in the range £330-£375k depending on extensions/decoration. Up until 2 months ago they were flying off the shelves with <1 month being the typical time on the market. It is an unusual market here as we have a lot of foreign buyers and demand from them has collapsed in the last 8 weeks. Spanish friends are selling and are asking a fairly sensible price (compared to previous sales) yet have had zero viewings and zero interest in the 3 weeks they've been on the market. Literally zero. This morning I heard that a French couple also Brexiting had the same issue. They had the house on the market 2 years ago and had 10 viewings the day it came onto the market. This time no viewings at all. Might be a temporary blip given the current situation with EU nationals. But could be the start of the downward trend.
  9. I'm now entering my second year of effective "withdrawal" from work/consume society. I will go back to work, but family circumstances meant this has been the best option for us. I do feel a slight guilt about my lack of income tax contribution this year but I've paid in a lot over the last decade. Effectively I'm living off money I've saved in my business (£6k a year salary) and investment income (£2k a year). My wife works part time and bring home about £10k for a 2 day week. Only claim child benefit. With a paid off house that still allows us 2 x decent holidays a year and all our living expenses for a very comfortable life style for a family of 4. From now on work will be things that interest me. From past experience I know I'll be happier and healthier earning £10k in a part time job I enjoy than £50k in one I find boring and takes all my time.
  10. I mean if you ignore all the available evidence on grammar schools then you might have a point.
  11. Headline in the Cambridge Evening News in 2005 "City's first £1m house" I've just counted and there are 70 £1m+ houses on the market. Cheapest house now over £300k. Average family house £750k. People in their twenties look at my ex-council, mid-terrace as some kind of dream home. When I bought it I thought it was a dump. The madness started in the early 2000s. Yet when I look at prices outside the SE bubble they look to cost less than rebuild costs.
  12. There are currently 70 houses on the market within Cambridge (plus 3 miles) for in excess of £1m.
  13. Barnard Marcus auction on at the moment. Poor quality lots (a lot of repeat lots) but it is bad news for sellers. So many lots not meeting reserve....but when I look them up reserve must be at peak value. Sellers will need to be a lot more realistic. As an example the Swan Medical Centre in Buckingham High Street has appeared in loads of auctions with "available post auction" prices of £550k, then £500k and today sold for £460k. Chasing the market down.
  14. How often do people wash their bins out? I think I've done mine about twice in 10 years when they developed a stink in a heatwave. But they are bins not dining plates. We do have those bin cleaning services around here but I'd guess about 1 in 30 houses uses them.
  15. Yep. So many of the "it is only an extra £10k" generation had their entire mortgage debt written off by wage inflation. Since then they've also had their house massively appreciate through asset price inflation. For them it was a one way bet. Meanwhile I know someone who has no spare money despite a decent salary AND a house that has massively increased in value because they still have to service that £300k mortgage each and every month for the next 30 years.
  16. Two houses on my road up for sale. This time last year they were selling in weeks. They are priced at about 5k more than 12 months ago (about 1.5% more)
  17. General problem with the way debt is treated. It is the BTL model but for business. Buy it up, borrow against future earnings. Use the money you've taken out of future earnings to pay yourselves a fortune (or to buy more businesses and repeat) As long as the profits cover the interest it works. When it doesn't the whole thing collapses. The staff lose their jobs, the banks lose the money they've lent. A new PE group* buys back the business for pennies in the £ and repeats. *made up of people who run up the debt first time around.
  18. Crazy how it has gone. Wife's family is from neighbouring village, worked in factories/cleaning jobs, owned small house. When it was sold after they died it went for over £400k and would be £550k+ now. You could have the same house for £150k where I grew up.
  19. Just watched a Cheffins auction (Cambs) - only about 50% sold. Unrealistically priced development plots just aren't selling. Even the poet Rupert Brookes' old house in prime Grantchester didn't sell. £900k top bid but priced at over £1m. Problem with it is you have a massively touristy tea room at the end of your garden and Jeffrey Archer as a next door neighbour.
  20. http://www.barnardmarcusauctions.co.uk/Auction-Results.html Massacre yesterday (maybe a bit hyperbolic but this is HPC) but this was hopefully a wake up call to a lot of people. London stuff is not selling without a big discount to 2017 values (still way higher than it should be) and "investment" houses in places like Cornwall and Northants seem to be 20-50% less than they sold for as new builds 10 years ago. https://auctioneertemplates.eigroup.co.uk/LotDetails.aspx?LotID=905355&a=5&c=brn sold for £142k new - now £85k I see the same houses coming up again and again chasing the market down - this one looks a lot of house for the money now but I've seen the "buy it now" drop by £200k over the last few months and still no takers. https://auctioneertemplates.eigroup.co.uk/LotDetails.aspx?LotID=905152&a=5&c=brn Extra 3% stamp duty and changes to BTL seem to be working, at least in auctions.
  21. Well done to you but it isn't always possible. I've had two relatives in care. My grandad made "provision" but when he could no longer walk he had to go into care. His brain was sharp until the end (95) but the body was worn out by his late 80s. In the end he lived 7 years after moving in. All the money from his savings went, plus all his pensions but it still would have cost £600 a week to the tax payer. Probably nearer £1000 a week for the last year. Other relative had dementia, she was looked after by relatives until the second time she set fire to her house. Then a privately funded care home at £1000 a week for 6 months before she died. End of life care is massively expensive. There is always a cost, it can either be paid for by the individual, by the relatives (time), or by the state.
  22. You pay about £90 a year to have you bin collected, all your recycling processed and your waste landfilled. The vast majority of your council tax is spent on social care - mainly the elderly. It costs about £650 for every person living in a care home each week. As for why London is cheaper - Hammersmith and Fulham is 16km2, Derbyshire 2500km2. For a forum full of "critical thinkers" who are all bitcoin millionaires and saw every financial crash coming - even the 546464 they predicted that haven't - the subject of council tax always brings the same tired cliches. People are expensive to look after even with contracted out staff on minimum wage.
  23. Central government payments to local government are down 40%. If you don't think local authorities have massively reduced costs/headcount/investment then you aren't looking. The IT systems are no longer fit for purpose but there is literally no money left. Meanwhile central government is peeing away hundreds of millions on vanity projects. As an example schools used to be managed by local authorities. Gove set up academy trusts - and we now have an entirely new layer of management. One chain - Harris - has 20 staff on more than £150k and a CEO on half a million a year. Oh and academy results are no better than local authority results. We now, literally, have a transfer market with schools and new £40m school buildings sitting empty because "competition" was required rather than planning for schools based on the number of children in the area.
  24. My friend owns a chain of Italian cafe/restaurants. He was saying that he needs to turn over £100 an hour per member of staff to break even. The profit margin on pizza/ice cream/coffee is very high, and a lot of the prep work can be done off site so they can rent smaller premises. Something like a steak restaurant needs a full kitchen, expensive product and waiting staff - they must be nearer £200 turnover per employee to break even.
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