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House Price Crash Forum


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  1. Have Labour said anything about the level of rent caps lately? The last I heard was the Diane Abbot idea of levying 50% taxes on rents in excess of 50% of annual council tax per month, but that was 5 years ago. Rent caps and passing the bill to landlords might curtail the ability of landlords to pass on costs of the "new progressive council tax" to tenants if that would exceed the rent cap.
  2. Quantity demanded will fall but not necessarily total expenditure on imports. Eg If quantity imported falls 8% but prices rise 10% we spend 1.2% more on imports (0.92 * 1.10 = 1.012)
  3. See pages 57 and 60 for the OBR's depressing comparison of forecast disposable household income against house price inflation up to 2020. http://cdn.budgetresponsibility.independent.gov.uk/July-2015-EFO-234224.pdf
  4. You're missing David's point there though, "There are those who think it’s unfair on private renters, who don’t get these discounts. But we’re offering them help through schemes such as shared ownership and Help to Buy." See, by borrowing taxpayer backed loans and using increased leverage anybody can be a debt burdened home-owner. That said, I'm still trying to figure out how a massive discount on market price equates to the option to compete against the added demand and increased prices created by H2B.
  5. Selected quotes from Conservative party Facebook page article by David Cameron below "Of course, there will be opponents of much of the above. We are determined to take them on." "First, the opponents of Right to Buy..........We’re proud that it’s the Conservatives who are giving them some hope, and if anyone wants to argue with us on that, we say bring it on." ---------- "At a time of uncertainty abroad, here at home we will be delivering a budget next week with economic stability at its heart, offering security for working people. Encouraging home ownership is central to that. Having your own place is an important stake in our economy. It’s also one of the best expressions of the aspirational country we want to build, where hard work is rewarded. It’s also about social justice. We don’t want this to be a country where if you’re rich you can buy a home, but if you’re less well off you can’t. We want it to be One Nation, where whoever you are, you can get on in life. In the past five years, we got builders building, lenders lending, and government-backed schemes alone helped more than 200,000 people on to the property ladder. The next five will be about going much further. We will help people to reach their dreams by keeping Help to Buy until 2020 and extending the Right to Buy to 1.3 million housing association tenants. They will get a discount of up to 70 per cent to buy their own home, and we will open a register of interest so that thousands can sign up in the first year. And once you’ve got your home, you’ll be able to pass it on. As we promised in our manifesto, we’ll take the family home out of inheritance tax for all but the richest — and it’s a promise we will keep. As we said we would, we’ll pay for this reform by limiting the pension tax relief to those who are earning more than £150,000. It can only be right that when you’ve worked hard to own your own home, it will go to your family and not the taxman. We will also boost supply. We will build 200,000 starter homes by 2020, sold at below market rate and for first-time buyers under the age of 40. To deliver on this commitment, we will ensure every reasonably sized housing site includes a proportion of these homes for young people. We will also say to local councils: you must give land with planning permission to people who want to build or commission their own homes. Custom-built homes account for 60 per cent of all of Germany’s new housing stock, and our plans will double the number in our country. We will also undertake a massive programme of regeneration around our train stations, as part of a wider drive to release public sector land for 150,000 homes. We will also make the planning system more effective. We will set out more detail next week, as part of our productivity plan. It is unacceptable, for example, that many councils are still not close to having a plan for delivering the homes their communities need. We will take action, in consultation with local communities, to deliver the plans for those areas which have failed to do so. Of course, there will be opponents of much of the above. We are determined to take them on. First, the opponents of Right to Buy. There are those who think it’s unfair on private renters, who don’t get these discounts. But we’re offering them help through schemes such as shared ownership and Help to Buy. Let’s now help others, some of whom are the least well-off in our country. We’re proud that it’s the Conservatives who are giving them some hope, and if anyone wants to argue with us on that, we say bring it on. Then there are those who oppose Right to Buy because they think it won’t work, and will reduce housing stock. But the system right now doesn’t work. One of the main ways to encourage housing associations to build more homes is to increase their revenue. That means increasing social rents. And that means increasing housing benefit — which comes from either taxing or borrowing more. This is another of the Labour-inspired merry-go-rounds we need to get off. Housing benefit already costs us £24 billion a year, two thirds of what we spend on defence. That figure needs to come down. And despite housing benefit revenue doubling in the past 13 years, some housing associations aren’t building enough homes — indeed, some aren’t building at all. We have a better model. By helping people to own their own home, through Right to Buy, we can turn tenants into homeowners and reduce housing benefit bills. And by selling off the most expensive council houses when they become vacant we can replace every home we sell — whether an expensive council house or one through Right to Buy. And we will do so quicker than the current three-year rule requires. So we will transform Britain: from a lower-home-ownership, higher-tax, higher-housing-benefit country to one that encourages home ownership, reduces taxes, lowers housing benefit bills and builds more homes. Second, there will be the opponents of planning reform. We will always protect the green belt and make sure planning decisions are made by local people. But the fact is that just 10 per cent of England is developed. There is capacity for 400,000 homes on brownfield land — we need to get building. And as we do, we will make sure the homes look good. We have already given local people the power to create neighbourhood plans; more than 1,000 are well under way. This gives local people an even greater ability to decide where new homes go and what they look like. And we will go further in the coming months. But that all requires planning reform. It’s simple: you are either pro-reform, or not; for building homes, or not; on the side of young people, or not. We know our position. As a One Nation government, we will always be squarely on the side of those who want to get on." https://www.facebook.com/conservatives?fref=ts
  6. Cheers for the link Spyguy. The view from FTAlphaville http://ftalphaville.ft.com/2015/06/08/2131096/banks-businesses-or-the-bust-deeper-into-the-uk-productivity-puzzle/
  7. OK, tell me more. Do they use some kind of shadow pricing and see what an "equivalent" worker would contribute to productivity in the private sector? I did get the feeling that we were being taught a simple version of this in my economics courses at uni.
  8. I agree with just about all of the above. Just thought I'd add another couple of factors. People acquire skills over time. The baby boomers entering retirement are also retiring their highly productive skills to be replaced by young immigrants who, despite often having degrees find themselves working in low productivity employment. Arguably as more of these oldies retire the services they demand are geared to the personal services side of things and will weigh of future productivity too. As far as I'm aware the productivity of the public sector is measured by their wages as there isn't a market price for their services. Public sector job losses in the early coalition period led to productivity gains as the former civil servants found themselves entering private sector work where a productivity mark-up was added to their wage bill in the form of a sales price for services rendered. As austerity has slowed and the public sector workforce has become more stable this productivity boost has disappeared and has been compounded by public sector pay freezes which don't match inflation. There's also the zombie company argument that low interest rates have enabled low productivity companies to hang in there that in a more realistic interest rate environment would have gone bust, thus raising average productivity per hour. With unemployment now being so low it makes intuitive sense that the marginal new employee will be less productive than those already in employment and will drag the average down. As the governments plans to meet deficit targets involve higher levels of personal debt to create demand in the economy I'm guessing we'll see more expansion in low pay/low productivity consumer tat retail and other consumer services. In the Economist article I found the focus on car manufacturing interesting given the slowdown in that sectors growth just announced. Reasons for this suggested have included people running out of PPI money and the recession causing a fall in new car sales and a corresponding scarcity of second hand cars a few years later meaning high second hand prices so new cars were bought instead. I found an article from last August to the effect that 80%+ of new car sales are now on credit. Car manufacture really is just a set of big financial institutions with production divisions.
  9. What a brilliant scheme. Use of leverage on say a 10% deposit will make the extra £3000 but £30,000 worth of house.
  10. Yup, it's all about managing the expectations channel, not about changing policy in the run up to a vital election.
  11. Another thing I've always let landlords be aware of that I have a list of up to 20 properties that I'm considering. Realistically I'll only give up to 3 a second visit to haggle over and go for the best. There is lots of rentals round here. Make them feel like it's a renters market. Also, as this is a student area I try to time moves just into the start of the academic year and emphasize that if the rental doesn't go to me there's a good chance of a long void. The influx of immigrants has made this less realistic than it used to be but it's worth a try.
  12. I feed at the bottom end of the market with amateur landlords who are most unlikely to pay tax etc and I have become very good over the years. When a weekly rent has been advertised I've been able to exploit the common assumption that there are 4 weeks in a month to get a discount. Me '£100 per week, 4 weeks per month, hmm, so that's £400 per month then?' Lld 'Erm, yes.' Then negotiate that down to say £375. Pull out a roll of notes and suggest £350 per month if you pay 3 months in advance straight away. The sight of a lump of hard cash is sometimes enough to clinch a final discount. I wouldn't like to go beyond 3 months in advance in my market. I never pay the final months rent as that guarantees return of deposit.
  13. Yes, I spotted that on their Facebook page and got as far as seeing they wanted an email address and backed away.
  14. I'd just spotted this one and thought I'd throw it in as a point of interest. 'Apple ended quarter (Q2 2014) with $156 billion in cash.' http://appleinsider.com/articles/14/04/23/notes-of-interest-from-apples-q2-2014-conference-call
  15. On the bright side at least we can now buy up all the Romanian farmland. http://www.eubusiness.com/news-eu/romania-agriculture.rkj
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