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Natural_born_pessimist

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About Natural_born_pessimist

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  1. Totally agree. Am in the similar situation.
  2. That's exactly right. I don't know why this simple comparison is not used more... My LL bought at the end of 2008 and is loosing money every month. It's so dumb.
  3. Make sure your deposit is in the tenant protection scheme thing... Or make an offer to buy your house at from the LL!
  4. Many thanks for your reply Kagiso. I was not of economically productive age in the early 1990s so having to do all my research from ONS data etc rather than memory! Good to know that ratio is relevant across decades. Yes, agreed on analysis of current HP spike. Nationwide also have a data set showing proportion of post tax income spent on housing costs by area, it is still in excess of 90% in most areas! So unless there is a lot of subsistance farming going on, most mortgages must be lent to two income households Also agree on excess capacity in the economy leading to higher unemployment and further residential and corporate debt write offs for banks, which is presumably partly why they are hoarding capital. Apart from the massive liquidity injections (!) into the banking system, not sure I see mega inflation in the near term as the velocity of money has fallen by c50% and asset writte-offs are deflationary. Although it can turn on a coin and it's worth having a decent hedge for this scenario. PMs are looking over priced though don't you think? For a personal investor, better to just buy NSI index linked bonds (30k max) in a month or two when the index might be at a low? If you want an inflation hedge, better to make it explicit through an index linked product rather than a pm?
  5. I have some sympathy with BigBobJoylove's point, most couples are working - so the relevant wage for the ratio now should probably be close to 1.5x average wage. Applying 3.5x to the joint wage, we are probably not far off right now... How much will wages fall over the next 3 years, 10% max? Arguments have to rely on potential increases in interest rates, credit availability and unemployment rather than price/earnings ratios. I can't see unemployment alone doing this. The UK has to psycologically admit defeat on housing too, something we are long way from seeing...
  6. Apologies all, my last comment totally mised the point. Please ignore....
  7. Thanks for the anlysis, it's very useful. Do you think the Nationwide data uplifts 35% to account for an additional member of the household's earnings? Possibly a part time worker or lower paid member of the household. Given the increase in two income households over recent years - in part induced by increasing house prices - maybe that is the correct wage level to use. I am a bear, but have my doubts that there is that much more of the fall to go, although I can't see a take off in prices any time soon.
  8. Can we continue to have an HPC in spite of an economic recovery? Employment situation aside, house prices appear dependant on the supply and price of credit. On supply, I guess banks will be hesitant to lend large income multiples for a while, even if the level of debt default subsides. It is not clear they have the capacity to either, even if they wanted to... On price, I guess BoE rates would have to increase to stoke of potential inflation which would hurt base rate tracker mortgages... Other mortgage types may be impacted by increasing gilt yields - increasing because of higher supply and investors switching from gilts to other more cyclical assets. Is this wrong? Are non base rate tracker mortgages in fact priced by reference to the prevailing risk free rate?
  9. Miss Madam – I echo your views of the Oxford area - many of the local factories are cutting hours. Of course, this doesn’t impact employment statistics, as they reflect headcount rather than full time equivalents. Although, things are not as miserable as the media might make out, but they need something to write about. The employment situation in Wales is unsustainable. Private sector tax revenue plus government borrowing cannot support bloated government departments anymore. At some point this system will collapse. I appreciate that much of Wales was an unfortunate victim of the UK economy’s restructuring, but the solution should not have been to over extend the public sector in the area. Undoubtedly there was some sense in relocating certain departments there (e.g. ONS and Companies House), but allowing the departments to grow to such inefficient levels (e.g. DVLA) has to end in tears. A proper policy response would have been to help people get new skills or aid relocation to areas of the UK where vacancies existed. After all, the hard working immigrants who our economy has benefited from showed that these jobs (in many cases not poorly paid) did exist and the public sector didn’t (directly) pay a penny. I feel terrible guilt for writing something so anti-social. After all, it’s sad when people have to leave their roots and start a new life. But that’s how a lot of these mining and industrial towns started remember. As someone who has moved around a lot for the sake of work, I have been at the sharp end of labour mobility and appreciate that it is a real burden. But ultimately people have to take responsibility for themselves. Oh no, there I go again, sounding like a right wing g1t…
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