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House Price Crash Forum

Mickey

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Everything posted by Mickey

  1. This has happened in my neck of the woods (North) with bottom end properties bid up from £25k to £100k. They are now back below £40k. In a crash these old terraced miners cottages always fall off the bottom of the market. What I don't understand is why this wave of bottom end value collapses is not wiping out investors. Our house values stayed stubbornly low compared to the South East right up to 2002. Values doubled from 2002 to 2004 and then coasted along with small rises. House values are now below 2005 levels and gently dropping. Why are we not hearing about investors that have been wiped out by Northern house price drops?
  2. When I was a kid in the 1970s we used to stay with my Grandparents for 2 weeks every summer in rural worcestershire. The local farmer grew gooseberries over 2 fields which were picked in August. Every year the whole village pitched in over a single weekend to do the harvest (farmer included). I helped a couple of times myself. It was hard work but no actual cash changed hands. It was a community occasion with a lot of chatting and laughing, a picnic provided by the farmer and a few punnets of free gooseberries thrown in. I am not suggesting this as a model for any modern business but this is how it must have been for many many years.
  3. The usual misinformation about the cost of cleaning up Sellafield ... The total figure of £67.5Bn is un-discounted. The government 'spends' £1.5Bn each year on Sellafield from one department but the 'income' from commercial activities at Sellafield goes to a different department. There is indeed an annual deficit which is born by the taxpayer but the annual shortfall is why BNFL was wound up. A large chunk of the overall clean up cost is military in origin. Another chunk is due to the ponds that were heavily contaminated in the 1970s and 1980s during successive miner's strikes. The UK's nuclear reactors were being run flat out to keep the lights on and the fuel could not be reprocessed at Sellafield fast enough. Some Magnox fuel was left too long in the ponds. What happened to BNFL's 12.5bn decommissioning fund and its offshore funds? What happened to the CEGB's decommissioning fund? What happened to the decommissioning money paid by Nuclear Electric and Magnox Electric to the government? What happened to the money from the sale of the Magnox reactor design to two countries and of excess Pu to the Americans in the 1960s? What happened to the profits from Urenco over the years or the cash released from selling off the nuclear industry's land? Oh yeah ... I forgot the Government of the day spent all the money and left the future to look after itself (just like they always do !). Nobody is saying nuclear power is cheap. However, uranium is the most concentrated source of energy on the planet so it could be cheap. We simply choose as a society to regulate nuclear heavily and require a risk premium. I agree with these extra costs given the nature of the hazard. I would rather have slightly more expensive electricity and a secure supply than have rolling blackouts (which is where we are heading). Decommissioning is expensive since money is not a good store of value over time due to accelerating devaluation of fiat (i.e. the same reason that people cannot save enough for their pensions). In theory, decommissioning represents only around 10% of the cost of operating a reactor but somehow there is never enough money. I am beginning to think it is not economic to build anything at the moment (not just nuclear) due to the money situation. No private company could afford to risk the capital expenditure for any high cost capital intensive project. Also, the failure of the UK to build an underground repository means the cost of surface storage of radioactive waste at Sellafield for an indefinite time has to be met by the UK taxpayer.
  4. I think there will be plenty of over 50s with teenagers or young adults living at home. My own kids won't be independent until we are retiring. Women who have spent their whole life on benefits might consider having another baby in their early forties to see them through. We need to downsize twice - once when we are in our 60s from the family home to a good sized bungalow and once again when coming up to 80ish to something truly dinky and easy to look after. Upshot is it depends on each family's circumstances.
  5. This sort of thing really gets my goat. What happened to the CEGB's decommissioning fund? What about British Energy's before privatisation? What about BNFL's £12.5 billion decommissioning fund? What about BNFL's off-shore funds? What about the proceeds from the sale of the Magnox reactor design to two foreign nations? What about the money from sale of excess Pu to the US in the 1960s (according to CND)? There was plenty of cash to pay for liabilities but the Government of the day has spent it. Uranium is the most concentrated source of energy on the planet. If you can't make sufficient money from selling electricity from nuclear power then you are doing something wrong. It is more expensive than gas but that is because heavy regulation and engineering is necessary in the interests of public safety. If course the real reason it is hard to pay for nuclear decommissioning is accelerated devaluation of the money supply. It is the same reason that pensions (both private and public) don't really work.
  6. I do not understand the thinking of planning officials on such bungalows myself. We live on a 1970s estate and the local planners will not permit the 2 bed detached bungalows to be extended upwards. They are all on good size plots and the walls are strong enough. The estate is a mixture of single and two storey houses anyway - some detached and some semi-detached. The only thing I can think is that the planners want these bungalows to remain smaller 2 bed properties because the town has an ageing demographic. However, it is younger families and couples who have been buying these bungalows when they come up for sale because 1970s properties are unpopular and relatively cheap for the available space. We now have families stuck in 2 bed accommodation who cannot afford to move to a larger home and who are being prevented from creating an extra bedroom [alongside retired neighbours in four bed detached houses bought in 1974].
  7. I am amused at the comparison of the charming historic market town of Cockermouth to a nuclear fuel reprocessing plant. Keswick is nice indeed but always hideously busy.
  8. We traded up in 2009 and the house we sold never showed up on the land registry. Cash buyers and I think they may have done their own conveyancing. Perhaps they just didn't fill in the correct forms.
  9. The following article at WNN from yesterday tea time gives an excellent summary of the challenges faced by the operators at Fukushima Daiichi so far. http://www.world-nuclear-news.org/RS_Insight_to_Fukushima_engineering_challenges_1803112.html (I work in the nuclear sector) Regards
  10. Problem is that depending on the area, £160k might not be unreasonable. I think that in large swathes of Northern England house prices were undervalued in 1999 when prices in London and the South were racing away. I bought a 1930s 3 bed semi for £61k in 1999 and sold for £140k to trade up to a detached in 2009. I first bought as a singleton so you could argue that prices were too low in 1999 after the recession. IMO fair value for the house was around £120k. Having lived in the North since 1995, I think we are more likely to see a stagnation or drift downwards by another 10-15% than a mega crash. A couple can buy a 4 bed terrace on lowish salaries - although not in the best areas.
  11. 37 and earning £30k for a 3 day working week. Full time salary equivalent would be around £52k. I bought a 1930s 3 bed semi for £61,500 as a FTB in 1999. Husband to be then moved in with me. Started reading HPC in 2005 after we were married and looking to buy a larger home. Finally traded up in 2009 at 15% off peak to a 5 bed detached - £305k. We felt that with interest rates so low, there was no longer any point saving. Sold for £140k and plowed all our savings except a £20k warchest into the new house. Have a big mortgage but it is affordable on our income and we have no other debts. Looking to start paying off mortgage faster after kids start school. Currently shelling out £800 per month in nursery fees. I think we are lucky in that we didn't pay through the nose for our Uni education. I find it amazing how much a woman needs to earn before it is economic to work with kids under school age. It is hardly worth it for me and I am on a good salary. I still want house prices to drop 30% so we can buy a holiday let to provide some equity for the kids when they start out as FTBers.
  12. Definitely a cultural difference. When my near relatives (Brits) were renting in a suburb of Dallas and they hung washing in the back garden, two different sets of neighbours came round to tell them that this was simply not done and that only Hispanics did that sort of thing. They were also told in no uncertain terms that they had to fly the flag on Independence Day.
  13. Bear with me a bit .... Strikes me that the UK is going to be in no position for a number of years to invest in major infrastructure projects. Also, private institutions like banks are starved of capital. During the second world war the general public were given the opportunity to purchase war bonds with their savings for a modest but guaranteed return. Why not fund desperately needed large scale infrastructure development through a similar route? One of the reasons why the early nuclear reactors were so profitable for the UK was that they were built by borrowing the capital from the government at a relatively modest discount rate - around 5-6%. If replacement reactors were funded privately, the banks etc. would probably expect 10% return or more. Personally, I would be quite happy to invest half my savings in a new nuclear reactor at a rate of return of around 5-6%. The return might be over 20 years with your investment tied up during the first 5 year construction phase but that would be OK with me. The only disadvantage I can see is that a body would be needed to manage the investment fund. The capital cost of a nuclear power station is enormous (1.5-2.0 billion) so I can't imagine many banks leaving such a fund alone without wanting to 'invest' it. Don't get hung up on the fact I have chosen a nuclear reactor as an example. I appreciate that some people don't like them. It could be the new high speed rail link or the M6 toll motorway or the Severn barrage or a new airport runway. I just want to know if all you clever people can see any downside to allowing the general public to invest directly in revenue generating infrastructure projects that they might want to support. The long timescales and having your money tied up are a problem. However, given the way I feel about the banks at the moment, I would be up for an infrastructure bond. It would have to be a specified project however and not another general slush fund for the government to dip into.
  14. I sometimes think we expect too much from politics. The central purpose of having a voting democracy at all is to avoid other forms of government - more specifically dictatorships. This seems to have worked reasonably well in the UK. Although you could argue that a long stint in power like both the Tories and New Labour have had since the 70s is a mini-dictatorship. It doesn't matter what I vote since our constituency has been labour since the late 19th century and I am happy with my local MP. I will not be voting at the next general election. I don't particularly like party politics in Westminster. Doesn't seem to me that it is working for the majority of the electorate. Nevertheless, lets not forget that it is possible for a 'normal' person to become an MP. You just need to get involved in local party activism in your early twenties and be reasonably bright. Start off in local government.
  15. This thread illustrates why BTL is so popular - income from rent is effectively index linked to wages and hence prices in the real economy rather than any projected growth in equities. My Dad's final salary pension scheme which he paid into for most of his career in the seventies, eighties and nineties will pay out less than a 10th of what it was supposed to originally. By far the best investments he has are the properties he bought outright in the last 6 years. These were paid for with a payout from an insurance policy. A lifetime of pension saving and the majority of his income in retirement will come from his properties. I think highly leveraged BTL is silly but if you have the spare cash then buying outright makes sense.
  16. This is spot on. House prices in Cumbria doubled from 2002 to 2004. We had a two speed housing market in the UK for a while with stagnant prices in the north and galloping increases in the south and London. I think that houses were undervalued in the north to a certain extent. Price rises swept up the country and I think investors from down south had a lot to do with it. What I don't know is how much of the increase is sustainable. In my part of the world, house prices have only increased by 3-5% each year from 2005 and any attempt to increase the price of the big detached houses by more than 5% each spring ultimately fails. Desirable houses are still selling at peak 2007 prices. The dross just sits on the market for yet another year.
  17. Our ageing gas reactors can't really be refurbished. The amount of graphite loss in the core and the general health of the concrete pressure vessel will limit the operating life. Site selection for the new reactors in the UK is happening right now. Unfortunately this will just be the start of a long process.
  18. EDF has the cheapest electricity generating price in Western Europe because France is so heavily reliant on nuclear. Our ageing nuclear reactors also supply the cheapest electricity in the UK to the National Grid. This is because the reactors are old and costs associated with building them are long since sunk. You pay a huge mark up for electricity on a domestic bill. The decommissioning costs are another matter but that is largely because the money the industry has set aside has never been ring fenced within government/treasury (a bit like an unfunded public sector pension). Personally I think the 12.5bn paid by EDF for British Energy was over expensive. Only going to be worth it with extended lifetimes for the ageing reactors. They wanted the sites for new nuclear reactors however and several of British Energy's sites are very promising indeed.
  19. No - I don't personally believe that my family will be faced with having to survive through the decline of western civilisation or that we will see useful monetary reform. I do however agree that global monetary reform would be a more useful tool in tackling environmental degradation than any emission schemes etc. I was just trying to raise the point that ownership of land or property would be moot. Suspect that your best bet would be to be part of the local agricultural community and as previous posters have said, skills in farming and manufacturing would be most important. I have often thought that one of the best things to have in the event of oil supplies collapsing would be an agricultural museum packed full of ploughs and a stud farm for shire horses.
  20. In some of the more extreme scenarios there would be no machinery of the state to enforce land (or indeed any form of property) ownership. Not sure that stockpiling land is therefore the way to go. No point in having prime agricultural land if the local militia just chuck you off it at the first sign of trouble. Even if you stockpile weapons you would be outnumbered by the other millions of city dwellers who require access to your land/food/wood. Best buy yourself a tiny island off the coast of Scotland and become a proper hermit. Also, I wouldn't let the prospect of monetary reform prevent you from having a mortgage. I suspect that if society breaks down, paying the mortgage will not be an issue.
  21. Not from this thread so apologies but I have been reading this site since Dec 2004 and made a sweeping generalisation
  22. This is the sort of thread on HPC that makes me eternally glad that I am already married and don't have to play the field anymore Marriage is about a lot of things - love, sex, partnership, companionship, friendship and commitment - but primarily about the raising of children. I am not religious at all but as a sensible and intelligent professional woman, I would never have considered having kids with a man without being married. Child support payments are no substitute for having a loving father around 24/7 who is devoting his time to the bringing up of the kids and the maintenance of the family home. Marriage works best between people of similar personal wealth, outlook on life, values, goals and (crucially) intelligence. I am lucky to have found a sci-fi fan as well. It is only possible to have separate finances and ring fence income and assets until kiddies come into the picture. At this point the pair bond becomes a single financial unit to raise the next generation. Clearly this always presents problems if the partnership splits. Many male posters on here talk about 'my house' or 'my income' even though they may be married with children. My husband now earns more than me because I work part time and my career has taken a hit from having babies (had to refuse more than one promotion over the years !). However, all our assets are jointly owned and his savings are in my name for tax reasons. I look after the family finances (hence member of HPC). I hope I would never screw him over if we split up because he is the father of my children and I think I am a fundamentally reasonable and fair minded person. I think that a messy divorce is a sign that you have chosen badly in the first place. People get sucked in very early on in relationships; for example, if your current partner was cheating on their ex to meet you, then it is a fair bet they will cheat on you in the future.
  23. Science and/or engineering grads from good Universities with at least a 2(i) will usually find something. Our graduates (usually physics, chemistry, maths or chemical engineering) are paid £25k + with rapid progression on completion of 2-3 years of on the job training.
  24. Thing is we are talking about economic damage rather than loss of life or a company affecting public health through negligence. I expect there simply is no legislation or possible civil or criminal offense to charge any of the banks with. Consider safety cases for the oil/gas/nuclear sectors where preventative measures to avoid accidents and 'events' are built in to operating practises. The banks have no similar legislative equirement to mitigate against downside risks arising from their business operations. This despite their vital central role in what passes for our global economy.
  25. I think one of the previous posters raised a good point regarding what else does one do with the spare cash? I am risk averse and bought prudently in 1999, borrowing twice my income as a FTB. My partner moved in with me when we married. We have recently moved to a larger house rather than pay off the outstanding mortgage. We came to the conclusion that there was no point having any extra savings in the bank so we may as well start paying off a big mortgage. I know there are lots of wonderful things to spend money on but when you have two pre-school kiddies you can't spend it anyway. It is lovely to just have the extra space and a big garden for the little ones.
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