Cherubium
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Posts posted by Cherubium
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Isn't the problem with spread betting that they bet has to have a fairly short closing date.
Or can you take out a bet and not close it for 10 years?
tim
As far as I can tell, this is the problem with companies like IG index. I want to hedge against falls over 10 years rather than 1.
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In common with most people on here, I like the idea of living in a nice house but suspect that long term it's a terrible investment.
So, my question is, can I buy the home I'm looking for but limit the downside with some kind of futures contract that pays out if the property market drops?
I thought of this while reading Michael Lewis' The Big Short. I know that a lot of these exotic financial products exist, but is there a way that ordinary people can buy them?
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Couldn't agree more really.
I'm searching in the same area (more N3/N10/N8 really), though at between 1.2 and 1.8 million.
Houses that would have been on for 1.3 before christmas are going on for 1.5. The odd thing is, an awful lot of stuff has been sitting on the market at stupid prices for ages.
Anything well priced seems to sell in a month or two, but an amazing number of people seem content to let houses sit at prices 10-25% over the odds.
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I was looking at houses in my area NW London in 2007.The same houses coming back on +50k!!
still won't buy one.
BS
You're not wrong. But you can get a distorted picture by flipping through Rightmove simply because overpriced stuff sits while well priced properties often sell in days or weeks.
For instance, there's a road where I live in N19 and a house that's been on and off the market for almost 2 years. First at 1.15m and now at 995k, but in the meantime, three other houses in that street have been marketed and sold (as far as I can tell) with asking prices 750k, 825k and 950k (this one a much bigger house).
But 90% of people looking on Rightmove in the past year would only have seen the overpriced one. You also get this all the time when you see prices on Rightmove, but then look at sold prices and see that they're way above what anyone has ever paid in that street.
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Funnily enough, we are thinking of moving to the area and I enquired about one of those on the list as I noticed it had been on the market for 2 years via PropertyBee. I told the EA I didn't want to trouble him for a viewing if the vendors weren't prepared to discount heavily for a buyer currently renting with mortgage pre-agreed etc. At those prices it would be right at the top end of our budget and clearly at that price the potential exposure is large should we get some decent falls after the election. I was surprised to be told that prices and transaction volumes in Berkhamsted are not far off 2007 levels and there were any number of chain-free buyers like me out there ready to buy and showing interest in the property. I therefore told him that I wasn't interested in getting involved and would phone back in three months to see if the vendor had started to get the fear yet. I must admit, having called his bluff I was expecting a call from him this week - but nothing. Either he is useless or all those cash rich buyers are having a spendathon.
Probably just means he knows the buyers aren't ready to accept less. He's got nothing to gain by calling you under those circumstances.
I put in a low bid on a new house in North London a while back. The EA rang me back telling me to up my bid because the whole development was about to be snapped up by a Russian Consortium! Oddly, the entire development is still on the market two months later!
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Pretty meaningless graph over such a short timescale.
I'd like to see a 5 year version.
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I love the way that falls are always attributed to some one off factor like weather or an election, but rises reflect underlying strength in the market!
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I seem to know quite a few people who are happy living in their new builds.
That Times article seems to be based on a 17 year old house that needed an £800 roof repair. You have to wonder just how dramatic this collapse could have been!
As I type this, there's an electrician and a plumber downstairs charging me £1600 for rewiring and replacing an old shower unit in this 150 year old house. It's about the 4th job of this magnitude I've had done in the last few years.
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In the last few weeks I've also noticed agents adding new listings for houses as 'SOLD by'.
Some of these are properties I've never seen before, so they must be made up of have sold years ago. Presumably this is to attract sellers who are trawling Rightmove for their new house, but it hardly makes the index more accurate!
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Hmm, it is interesting how they haven't shut shops the way they did in the 80s.
Possible reasons:
(1) These people know property. They probably have decent value leases or own their shops and aren't paying silly rents. (Although you have to wonder about some of the bling agencies you see on London high streets!).
(2) Biggest cost is staff. But EA staff are paid on commission and can be shed easily.
(3) They presumably made a lot of money during the boom, and have reserves if they're prudently managed.
(4) A lot of dross agents went under in the late 80s and early 90s.
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on another thread there were houses at auctions with guide prices of 60-70 k that went fot 120k!!!
These 'guide' prices are completely meaningless except as a way to draw people into the auction room. If you want evidence, go to a property auction and watch as houses easily reach the guide price, but fail to meet the reserve.
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So what you're saying is that prices of all things will not rise uniformly.
Stunning, truly stunning.
And don't get me started on people who say things like, 'You can't put prices of Blu Ray players in the inflation basket because technology prices always go down.' A mixed basket of everything is what an index is for gawds sake...
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I'm heartily sick of the amount of tax I have to pay.
We need some sort of brutal benefits cull.
The NHS is a waste of time, I can't think of anybody worth speaking of who even uses it except for accident and emergency.
We should also jettison Wales, Scotland, Northern Ireland because they're subsidised ridiculously.
And don't even get me started on why we pay billions sending kids to do university degrees in media studies or history. If they want an education they should bloody well pay for it, then they might study something that gives them a commercial return.
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Say that you're offering 220k with a 7 day deadline.
Drop dark hints that you'll force the landlord to evict you. It takes months.
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I rather like new builds ATM for the simple reason that developers have to sell stock.
Many regular sellers just withdraw homes and wait for boom times to return, but developers either have to sell properties or rent them out.
If you can find the right development and negotiate hard, there are still good deals to be had.
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I have just got a letter from HMRC stating that VAT returns for UK businesses to go online from March.
I have not read all the buff yet - per usual the civil service they have sent me a small set of books to read - but there is some bold text on the first page warning that this is important, that you must do it, that you will be locked up in the Tower if you don't, etc, etc.
I had no idea they were moving towards this - not read it anywhere - and am pretty amazed that they are intending to introduce this now of all economic times. It is bound to be a c*ck-up surely?
I've been doing my VAT online for years. It takes about two minutes to fill in a return and I've not had a problem.
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Yes I think this is a response to Primelocation which has been listing price cuts with new listings for a while now.
It certainly cuts down the time you have to spend trawling listings for price cuts and I guess the EAs like it too because everyone knows when a price is cut.
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I suspect the figures for French GDP have as much to do with the current strength of the Euro as anything.
To get a valid asessment, you'd need figures at purchasing power parity.
If these are government figures, you'd also need to be sure that the hours worked are compiled using the same statistical technique. For instance, UKs unemployment figures are calculated on a very conservative basis (remember how the tories rejigged the figures constantly down in the 80s). If the USA used the same basis as Britain their unemployment would be 3% not 10% because in most stats we count 'out of work and claiming benefits,' and in the USA the benefits system is much less generous.
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Ironically you could argue that these big increases are good for bears in the medium 6-12 month term.
Price falls can only happen if there's excess stock on the market. If 20% more houses are now coming on the market, there better be a lot more buyers coming from somewhere or this stock will build up.
I now see two possible scenarios:
(1) This high priced stock gets snapped up and prices go on rising.
(2) New stock doesn't sell, sellers withdraw properties or it sits on the market until they accept lower offers.
My money is on no 2 because I don't see a credible source for the wealth that's required for No1.
The one scenario I find unlikely is stability. It's the nature of economics that people predict stability and trending to average, but it almost never happens.
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It's a bit of a myth that recessions affect people evenly.
It may seem counter intuitive, but recessions typically have large effects on certain groups. IE, primarily who lose their jobs, those who can't get jobs.
If you keep your job in a recession, the chances are that you'll actually be better off because of lower interest rates, lower prices etc, provided you don't suffer large pay cuts. At the moment this covers a huge chunk of the population, especially in the public sector.
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Actually ive put a smallish wager on exactly that, i think it would be absolutely poetic and one of those legendary strange coincidences that the markets will have their bear rally peak (housing/equities) and start the second and main phase down that will be the greatest financial collapse in 200 years with the UK worst placed in the western world pretty much as euphoria and confidence peaks just after a world Cup win for blighty, id watch this space
It's not commonly understood that income tax rises have a greater affect on incomes than people think.
For instance, tax going up from 40% to 50% obviously means you pay an extra 10p in every £100 you earn. However, the amount you take home goes from 60p to 50p, which is actually a much larger 16.7% drop.
I know most people don't pay 50% tax, I just used these numbers for illustration. However, those little tax tweaks and NI raises are going to have similarly disproportionate effects on the spending power of people all down the income scale.
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If you're interested in the big picture The Economist is great. I prefer it to a newspaper, because it sits around the house all week and I can read a few pages at a time. It also has articles about places like South America and Asia which nothing else seems to cover.
It might also be worth reading a couple of popular economics books (someone else can probably reccomend some good ones), because by their very nature periodicals follow the latest news without giving a good grounding.
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Pop stars earn less from record sales than you'd expect.
Suppose you've been around for 10 years, released 3 albums and sold a total of 4 million albums for an average of £6 (to do this, all three albums would have to go top ten in the UK and do pretty well in Europe and the US.
That's retail revenue of £16m
With a 50% retail markup you get £8m
Assuming you signed a three album deal as an unknown, your average royalty will be around 6% net receipts (10% max, lower for discounted CDs, lower still for export markets, so this is an average) total: £480000
Your management company takes 20% leaving you with £384000
Over ten years that's £38,000 per year, for a solo artist (minus all those pop star expenses!)
Bad news if you're in a band because you're splitting this with three other bandmates for a whopping £9,500 per annum per bandmember (minus income tax of course). And remember, all three of your albums sold over a million copies!
The good news is, an established band will earn a lot more through publishing, radio play, endorsements and most importantly of all going on tour where you can make more in one night than you'll make all year from your record sales.
However, someone who just won a TV talent show and hasn't been on a major solo tour probably hasn't made much more than a low six figure sum. So the idea that you become a millionaire just because you have a couple of small hits is utter tosh.
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It has nothing to do with a savings glut. Do they really think all those mortgages and commercial loans are backed by another man having that sum in savings? It has everything to do with leverage and fractional reserve. One man deposits a pound which is lent out 20x, each of those pounds comes back in as a deposit and is lent out 20 fold again. From a single deposited pound you can create infinite credit.
Yeah, but fractional reserve is still based upon a reserve of something.
I don't think the idea that huge Chinese savings funded the credit boom is being seriously debated by anyone in economic circles.
Left Leaning The Economist Supports Tories
in House prices and the economy
Posted
I subscribe to The Economist.
On the whole, it tends to be fiscally Conservative, but socially liberal. It's long standing support of legalising drugs being a prime example.