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Orange Boy

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  1. [yawn] You're missing the point quite spectacularly, but full marks for obfuscation by randomly throwing around "aren't I clever?" factoids. Think about what message Nationwide are trying to give us by presenting their 2.9% figure. They're saying "house price inflation, in real terms, has been 2.9% over the longer term". Let's phrase that slightly differently, in case you still don't get it: they're saying "in order to get to their current level, house prices have been rising, on average, by 2.9% per year over the longer term." To come up with that figure, you take the price at the starting point of the period you're looking at and work out the annual percentage increase needed to get to the current price - no regression in sight, other than yours.
  2. There's confusion here about what a trend line is. A trend line simply gives you the average rise (or fall) per time unit that you need to get from point A to point B. In other words, it always starts on data point A and ends on data point B and presents a smooth line in between. In fact, it is defined entirely by points A and B and ignores any of the data in between. You can then look at the data between points A and B and say whether they were above or below the trend line. When you add new data beyond point B, the end of the line shifts accordingly because it always sits on the last data point. The last data point can't fall below the trend line because it defines the end point of the trend line. What the Nationwide graph purports to show is actually a line of best fit, which is an entirely different beast because, unlike a trend line, it is influenced by every point on the line, not just by the end points. You can calculate lines of best fit in many different ways - linear, logarithmic etc. Lines of best fit do show a trend but are not, technically, the trend line. I haven't taken the trouble to work out whether the line shown on Nationwide's graph is indeed a correctly calculated 2.9% per annum line of best fit, but it's definitely not a 2.9% per annum trend line. Either way, the 2.9% figure (or whatever it is) will go down over the coming months and probably years.
  3. The trend line is indeed wrong. The figure of 2.9% per annum was taken from Nationwide's graph of historical data for the period Q1 1975-Q4 2008. In Q4 2008 their average house price figure was £156,828, or 2.1546 times that in Q1 1975 (£72,787). That gives a simple trend of 2.3% per annum over the intervening 33.75 years, not the 2.9% they quote. For the graph shown above, the trend is different because the starting point (£70,863 in Q4 1978) is different, giving a trend of just under 2.7% per annum over the intervening 30 years.
  4. Good call renterbob; bungalow 2 had a "sold" sign in the garden for a month or so, but is now for sale again...at £165,000 . Any bets on when bungalow 1 (currently still at £179,950) will follow?
  5. Given that the Icesave website is basically still working (you can see your balance etc., you just can't deposit or withdraw), I wonder why they don't just reactivate the withdrawal facility on the site and tell us all to get on with it. Why go through the bother of setting up a separate electronic claims process ?
  6. ...and in the latest development, Bungalow 1's price has now been dropped from £212,500 to match Bungalow 2's price of £179,950. A 15% drop to keep up (or keep down, rather ) with the Joneses. And still neither of them is shifting...
  7. I suspect it wasn't a BTL and it's a case of trying to cover the mortgage payments, not of getting a proper return on the capital. If they bought it say five years ago then the mortgage is probably a lot less than the £1.5M they think it's worth. If they tried to get anywhere near a decent return on their valuation, say 8% gross, they'd have to find someone prepared to fork out £10k per month - good luck with that, guys! A nice illustration of the desperation that is spreading through even the upper reaches of the market
  8. Isn't it simply the next logical step in the creation of the nanny state ?
  9. Not sure you'd hit 6%. It's true that several banks/BSs offer around 6.5% but you'd need 20 independent places to put it if you don't want to exceed the £35k guarantee in each case, which would probably push the average return to below 6%. Still, the 7.9% return will be less in practice because of repairs, maintenance, buildings insurance, letting agents fees (if used) and the inevitable voids over the medium/long term. Whoever buys this lot will be lucky to get the average net yield above 6% and, as you say, the only thing guaranteed is the drop in the value of the equity !
  10. A "reasonable July 2007 price"?? Prices were utterly unreasonable in July 2007 by any reasonable standard. If I was feeling extremely charitable I'd say that it was presumably bought by someone who really liked the property and didn't care if its value went down. Luckily I'm not feeling very charitable today and I'll just say it was bought by an idiot with vastly more money than sense.
  11. Is it me or has our Caroline dropped from view? Stamp duty tinkerings, money for insulating houses, shouldn't the Minister for Housing have had some kind of visible involvement in those initiatives? Is she on extended holiday? Gardening leave? Working three jobs to pay the mortgage ? Pat on the back for anyone who spots her.
  12. I had a laugh today: the following two bungalows are almost right next to each other - check the specs and prices: www.rightmove.co.uk/viewdetails-21633416.rsp?pa_n=1&tr_t=buy&mam_disp=true www.rightmove.co.uk/viewdetails-10893429.rsp?pa_n=1&tr_t=buy&mam_disp=true The first one has been on the market for four or five months (from memory) and the bottom one came on the market about a month ago. I always thought the first one was grossly overpriced. Today I checked the asking price of the second, expecting it to be about the same because they're virtually identical bungalows twenty paces apart... This one may be worth watching...
  13. To the tune of "Knees up Mother Brown" I'd like to sing: Game's up Gordon Brown Game's up Gordon Brown Out of office you must go Ee-aye, Ee-aye, Ee-aye-oh If I catch you staying, I'll saw your legs right off, Game's up, Game's up Your no-claim's up, Game's up Gordon Brown!
  14. I rent and got a letter from the letting agents last week saying that the landlords had decided to manage the property themselves. My guess is they're saving something like 15% of the rental income that way. I wonder if this might become a trend: BTLs ditching their letting agents in a desperate attempt to salvage some kind of return from their rapidly depreciating asset. If so, then that's the last lifeline of the EAs slipping away...my heart breaks
  15. Forgive me if there's been a post-April thread that picks up on this topic, but has there been any evidence recently that margin calls are actually being exercised? The general view seemed to be that it could happen in many BTL cases, but opinions were divided between "they will" and "they won't". Have they/are they?
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