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Posts posted by zzg113

  1. Good sleuthing TPT. Some eye-opening comments there, especially:

    "Echoes of early 90's when vendors took 12 to 18 months to accept a falling market. Going to be a hard year.” Hereford

    The more experienced EA's know what's coming and are battening down the hatches;

    "There are a lot of agents with no experience of this type of market who are listing many but selling few.” - Lancs

    the tail-end Charlies are sailing straight into the eye of the storm.

  2. most young people list home-ownership among their chief ambitions.

    Do they??? In my day young people's chief ambitions were to get drunk, get laid as often as possible and do copious amounts of drugs, often in that order. What the hell happened to everybody??????

    With the future of the market so uncertain, the sensible option might seem to be for new buyers to wait until their salaries improve but, unless they can be confident that a huge pay rise is around the corner, it will only get more difficult to make the leap.

    Underlying this comment is the assumption that house prices will rise forever and ever and ever Amen.


    Our Kirsty, who art in HPI

    Hallowed be thy name.

    Thy Kingdom come, they Will be done,

    On earth as it is in Morecambe.

    Give us this day our daily house price growth,

    And forgive us our trespasses on other people's property,

    As we forgive those who trespass on ours.

    And lead us not into deflation,

    But deliver us from doom-mongers,

    For thine is the Kingdom, the power and the glory,

    For ever and ever, Amen.

    Our plan for the first year is to stick with 30 per cent ownership while we pay off some debts, then we'll look to increase gradually the amount we own. The flat will hopefully go up in value, so when we come to sell our share, we'll have made enough money to put down as a deposit on our next home.

    Has it not occurred to you that your next home will have gone up in price as well? And probably by much more than your undesirable shared-ownership hellhole?

    Such schemes are obviously hugely beneficial

    Only if you're retarded.

    She has recently bought a three-bedroom house in the less desirable area of Moss Side

    LOL!!! That has to be understatement of the year!!! Gang-infested nest of vipers more like.

  3. What a t0sser.

    This has sent my parents mad saying how young people expect everything on a plate and how we should buy a studio flat or something.

    So let me see, it was alright for THEM to live in coucil housing, but not you? What the fvck?????

    irresponsible young ish people (like me )are talking the country into recession.

    This statement is such drivel I don't think I can be bothered to rebutt it. I didn't even realise we WERE going into recession. No more boom and bust, remember? :lol:

  4. Do you mean Walton-on-Thames?


    It is a particularly pricey bit of Surrey stockbroker belt, and no, not everywhere within striking distance of Heathrow has such nosebleed rents and house prices, although your friend's wannabe landlord is still taking the p1ss with a demand for almost 8 months rent upfront.

    Any cheap(er than that)?

    Do you mean "Is there anywhere near Heathrow where it would be cheaper to rent?"

    There is Hounslow, which is cheap but a dump. Feltham ditto.

    What's the maximum distance he is prepared to live from Heathrow?

  5. So everyone is climbing a ladder to that dream home

    The supply of "dream homes" is relatively finite in the UK, so realistically not everyone who is currently climbing this ladder can reach the top rung. What that does mean, however, is that whoever DOES reach the top rung becomes fabulously wealthy, as all the little worker ants who have spent large portions of their working life simply taking on bigger and bigger mortgages, all this borrowing adds up into one huge great capital SPLURT all injected into this one home at the top of the ladder.

    Of course it doesnt make sense as if your starter home increases in price by 10% (10k for a 100k hutch), the next one up will probably also increase in price by 10% (15k for a 150k house/flat).

    Yes, if all houses increase by the same % people seem not to realise that the real cash money gap between the rungs gets bigger and bigger the higher you go up the ladder.

    BTW, in a low-inflation environment THERE IS NO LADDER. It is a trapdoor for those suffering from egregious money illusion.

  6. I was wondering if after he sells it, I could renegotiate the rent with the new landlord?

    Is the new landlord (the neighbour) going to continue to rent it out?

    My Landlord is selling the house that I have just moved into for about 2 months now. So happens that the neighbour is buying it.

    During my time there, I have found that there are a lot of faults with the house.

    If you wanted to sabotage the sale you could tell the neighbour about the faults. He might still buy the house, but maybe not (depending on what the faults are).



  7. We are paid by owners to get as much money as possible for their houses? End of.

    Or another comparison would be EA's are like the "runners" that big drug dealers use to peddle their wares; they too try to get the highest price for their "product". Not on your moral high horse now are you FF?

    to blame them for over-inflated house prices is ridiculous

    EA's tend to give unrealistically high valuations in order to win instructions. This is the fault of the vendor, for going for the EA who "gives" them the highest price, without checking whether this is realistic and achievable. Also there are many vendors who are "kite-flying", not really interested in moving but would sell if they were offered a ridiculously over-the-top price.

    This over-valuation by EA's give people unrealistic ideas about what their house is worth, and this sets off the whole ball rolling (my house is worth more, so I can pay more for my next house, maybe remortgage for a BTL, etc).

    Bit like shareholders of Tesco "employ" (invest in) the directors of Tesco to sell baked beans for as much as they can.

    Well they can't be doing a very good job of it, because I can buy a tin of baked beans for 7p (or some ridiculously low amount) at my local Tesco's.

  8. http://forums.ft.com/2/OpenTopic?a=tpc&s=6...01561#650101561

    Holding may not be an option

    by George  12 Jun 2005  12:38 PM

    Dave - you may be in a position where you can hold.

    I also live in Lincolnshire and the market is just not moving at all. I need to move due to work and considered renting out my house, as it doesn't seem like it is going to sell.

    My estate agent has warned me that there are too many people trying to rent properties out at the moment. Apparently lots of people in the area have purchased houses over the last five years with the intention of renting them out to students (Lincoln having a new University)

    However over the last couple of years the University has had a huge amount of its own student accommodation purpose built.

    So the rental market has disappeared, now there are too many properties chasing too few tenants and properties put on the market to sell are not moving.

    If I can't get tenants for my property I may have to slash the price to get some interest. If I do manage to get tenants the rent is not likely to cover the mortgage payments, as I need to be competitive with the rent.

    You may be able to ride it out or you may find yourself in a worse position in a few years time.

    Perhaps my agent has painted a bleak picture as he is going to benefit more from a sale rather than letting a property. If what he says is accurate I now understand what catch 22 means.

  9. My understanding is that only 1.4m quid can be held in a pension fund

    The lifetime allowance is set to gradually increase to £1.8m by 2010.


    Given that most portfolio planners would be loath to hold much more than 30% in real estate

    Surely the person who decides what goes in a SIPP is the beneficiary themselves? Otherwise that defeats the point of a SELF-invested personal pension.

    1) It doesn't make property 40% cheaper.

    It does for new acquisitions. If the maximum you are allowed to contribute is 100% of taxable earnings, and you get 40% tax relief on those contributions if you are a higher-rate taxpayer, how is that not a 40% "discount" paid for by government money?

    many people sitting on a huge gain on non PPR properties don't want to sell due to CGT implications. But now, I can sell, take the profit, and if the amount is less than my annual salary, throw it into a SIPP and avoid CGT

    How have you avoided CGT? Only properties already INSIDE a SIPP are free from CGT. If you are selling a property that is outside a SIPP, the gain is still chargeable, no matter what you are intending to do with the proceeds.

  10. Your own pension is doing the same (which is why in UK most office buildings etc are owned by pension funds, because they pay lower taxes than other investors)

    A ) I don't have a pension.

    B ) I have no problem with commercial property being held in pension funds. However, what I DO object to is a Labour government heaping EVEN MORE tax preferential treatment on residential housing (as well as CGT exemptions, tax relief on mortgage interest + expenses for BTLers) FOR THE RICH (which is who these new SIPP rules will benefit most) in a desperate attempt to shore up an increasingly precarious housing market.

    in most cases a SIPP holder would be stupid to buy property

    Do property prices in the UK currently imply to you that the population of this country is smart? Just because they would ill-advised to do it doesn't mean they aren't going to.

  11. I can't believe it would be that simple for Italy to "do an Argentina". Aren't large numbers of Italian sovereign debt holders Italian citizens? So if he (Berlusconi) defaults on the debt he may well be voted out of power, never mind the interminable lawsuits brought by bondholders which would no doubt ensue.

  12. Interesting link from this page about Warren Buffetts view on the value of the pound. If he's right how is that going to affect interest rates here?

    Personally I think he's wrong about the pound, especially against the dollar. His forex bets don't seem to have been going too well recently:


    Buffett may be good with shares and companies, but he's no George Soros when it comes to foreign exchange.

  13. if you put in your lump sum into a SIPP with a view to using it to buy a BTL, you get tax break on that too.

    The maximum you can contribute to a SIPP in any one tax year is limited to your total gross annual salary.



    Any income from rent is then paid tax free into a pension. Increases in the value of property are free of capital gains tax and there is 40 percent tax relief on Sipp contributions for higher rate taxpayers.



    The real impact of the new SIPP rules will be delayed – they do not come into effect until April 2006 – but they are particularly attractive to capital-rich higher-rate tax payers (i.e.,City bonus recipients). They allow full tax relief on property bought via a SIPP and the SIPP itself can borrow up to 50% of the total value of the fund (not just the property). So a high earner with, say, £120,000 to spare could claim tax relief of £80,000 and borrow a further £100,000 to buy a property for £300,000.

    Over half of all Jackson-Stops offices nationwide have investment clients who have already said that they wish to take advantage of the new tax breaks. Predictably, the greatest levels of interest have been shown in central London (and, yes, Cheshire). And whilst the overall market impact of residential SIPPs is likely to be more muted than many commentators expect (because those without a large cash sum are effectively barred from participating),



    Investors should bear in mind, however, that if the rental income stream comes to an end, and no new tenants can be found, the SIPP will have to find the funds to continue the loan repayments.

  14. People who previously had no chance of buying a flat will be able to do it easily

    If someone can't afford to buy a BTL outside of a SIPP, they DEFINITELY can't afford to buy one with a SIPP even after the new rules are introduced next year. The reason? Outside a SIPP you are allowed 85% gearing on your BTL (ie 85% loan to value, sometime even 90% if you go to a dodgy lender). Under the new SIPP rules you will only be allowed 50% gearing, so if you have £100K in your fund the MOST you can afford to pay for a property to put in your SIPP would be £150K. That doesn't get you very much in today's market.

    Oh, and if you were planning to live in a property held in the SIPP there will be a tax charge to pay on the imputed rent.

  15. http://news.ft.com/cms/s/d90bf12c-dc40-11d...000e2511c8.html

    GLG Partners, Europe's largest hedge fund manager, has admitted that flaws in its trading models were partly to blame for a 14.5 per cent drop last month in the value of its Credit Fund.

    In particular, it has acknowledged that the mathematical model it used to price complex credit derivative products  failed to foresee market swings after last month's ratings downgrades of General Motors and Ford.

    In a private letter to investors, a copy of which has been obtained by the Financial Times, the hedge fund argues that it has now rejigged these trading models. The admission is significant because other banks and hedge funds appear to have been using similar trading models, meaning that they may also have suffered big derivatives losses.

    GLG warns that conditions in the credit market could remain difficult for some time because banks and hedge funds are trying to get out of loss-making derivatives positions all at the same time.

    “Segments of the hedge fund community and a substantial number of investment banks are nursing material losses in structured credit trades as a result of recent market conditions,” the letter says.

    GLG has 15 other funds, which have not suffered heavy losses. The damage to the Credit Fund, which trades products related to corporate bonds and convertible instruments, arose in part because the fund incorrectly predicted how vehicle makers' debt would react to the GM and Ford downgrades.

    However, GLG also failed to anticipate a sharp drop in the price of risky tranches of collateralised debt obligations (CDO's). These are bundles of debt instruments.

    The GLG model implied that the type of price swing that occurred last month was so unlikely that it was a so-called “eight standard deviation move”, an event so rare it could be generally ignored.

    This is in spite of the fact that GM's downgrade was widely anticipated and policymakers have repeatedly warned that a market jolt could cause liquidity in the CDO market to dry up.

    GLG blamed the model's shortcoming on the fact that this CDO market had only traded since last year, and that “consequently any risk simulations based on historic data would not have identified this move”. However, some observers argue that the episode shows the dangers of relying excessively on models.

    Many bankers argue that a recovery is now under way in CDO prices, which may help to ease the pain for hedge funds. Guy Cornelius, head of European fixed income at UBS, said: “Market nerves have calmed [in CDO trading].”

    However, the real impact of May's credit price swings on the sector has yet to emerge, since it remains unclear whether investors are withdrawing money from hedge funds.


    The credit derivatives market briefly failed to function properly in the wake of Standard & Poor’s credit downgrade of Ford and General Motors last month, according to the Bank for International Settlements.

    Improved risk management and lower hedge fund leverage helped avoid a repeat of the crisis that led to the near-collapse of Long-Term Capital Management in 1998, the BIS said in its quarterly review on Monday.

    The bank said the “circle of deterioration” in the credit derivatives market last month was similar to events after Russia’s debt default seven years ago, but on a smaller scale. This time volatility in one market was not contagious. “Spillovers from credit derivatives markets to other markets were limited,” the BIS said.

    Credit market jitters began in mid-March after GM, one of the largest corporate borrowers, slashed its profit forecast for the year. Both carmakers’ bond spreads – the risk premium over US Treasury interest rates demanded by investors to own the bonds – increased sharply.

    S&P’s downgrade of the carmakers on May 5 triggered market turmoil. While the cash market for corporate bonds adjusted in what the BIS call an “orderly” way, the credit derivatives market suffered from unexpected price movements and poor liquidity.

    The BIS said many leveraged investors – those that borrow to fund their market bets, including hedge funds – had similar positions in the credit derivatives market, including trades involving relatively new and untested derivative products.

    Many of these trades lost money when credit problems hit companies, such as Ford and GM, rather than the market as a whole. Faced with paper losses, some fund managers rushed to unwind their positions, exacerbating market movements.

    The BIS said: “As of early June, there was little evidence of any counterparties experiencing severe financing difficulties.”

    Separately, the BIS highlighted the investment risks involved in complex structured credit products such as collateralised debt obligations – leveraged packages of bonds or other debt instruments that can be parcelled out in slices with different levels of risk.

    These products can serve to distribute credit risk more broadly than would otherwise be possible, said the BIS. But the bank said some investors in structured products could be relying too heavily on credit ratings and on the complex computer models used to create them.

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