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House Price Crash Forum


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About slacker

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    HPC Regular
  1. I think there should be: - 30 year fixed rates - Mansion / land tax - Hard limits on borrowing multiples of salary - Tighter regulation of BTL (H&S compliance) - Increased taxation of BTL - Tightening of BTL CGT avoidance - Forcing of supermarkets to not sit on brownfield sites - PFIs to build new housing - Easing of planning permission for extensions etc. Edit: by putting these controls in place you index link property values to salaries (with the 30yr fix + hard limit on multiples), push boomers to downsize with land tax and you make BTL less convenient as a savings account, whilst increasing housing availability with population growth / immigration.
  2. The take-out for me on these cases is the "who could have predicted" aspect. Where people are hoping for 30-50% correction so they can get in for "what it's worth" / "safe 3x earnings mortgage" - there is absolutely no certainty were that to happen that what happens next would be good news for them. It's roulette.
  3. slacker

    Btl And Pensions

    You've also got the baked-in mindset that property is best investment over longterm even if it is going through a bad patch. When you talk to boomers they can't see past this - and hammer their kids with it - and right now the stats are on their side. 6 years ago I was talking to a boomer who was selling a 650K house - asking why he didn't drop it to 580K given things were looking ropey. He was 100% not for moving on it - even though he knew the market was likely going down - he was prepared to wait until values returned to "get what it is worth". It's still on RM at same price but now they pay for the 'featured' listing too. (I later found out they've another house for sale for £950K down the road which they've been letting out - and they live most of the time in Canada where they bought a place but can only live 6 months a year due to immigration restrictions) It will take a long time for that mindset to shift in this country.
  4. slacker

    Bank Bail-Ins Question

    Everyone piles back in to property, art and gold.
  5. Venger - I really don't care if people do or don't. I long ago gave up advising anyone after looking daft for all the advice I gave in 08, 09 etc. I do care that buying a home should not be a massive gamble I do care that most under-40s have been the victim of massive intergenerational theft I do care that families in this village live in pokey 2 bed hutches whilst boomers rattle around in 4 bed family homes I do care that a couple of married surgeons in London can't afford more than an ex-LA flat on 6X earnings I do care that FTBs are paying 5%+ IR whilst boomers can MEW at 1.5% I do care those FTBs are the ones that will lose most in any correction
  6. slacker

    Bank Bail-Ins Question

    The idea is that they recap the banks using the funds (which are bank assets once you've deposited them) and you get shares back. It will depend on the level of mess - it's 85K at moment - but I suspect that would change. Another aspect to this is mortgage margin calls - which started to get talked about in 2009. IIRC there are clauses in mortgages that if the value of the property goes below the deposit you paid they can ask you to pay more deposit so the house is not in negative equity - I don't have a mortgage so can't check - but there was much discussion on it at the time. Either of these can have massive unintended consequences.
  7. The theme on here is that recent FTBers are the worst offenders (despite many of the old HPC faces going off to do exactly that). The people that grew tired of moving every 2 years, not having a proper boiler working, not being able to decorate or replace carpets, not being in a good catchment for schools and getting stuffed with 12% rent rises out of the blue who finally capitulated after sitting on sidelines for years saving and hoping prices would drop - those people deserve to lose it all for propping the ponzi up for another day ...
  8. All my suppositions in 2008, 2009, 2010, 2011, 2012 were wrong.
  9. My view is that the UK banks are far more on the hook if valuations retreat than they are admitting. I strongly believe investment funds backed off to UK banks and pension funds are more involved in the London ramping than is visible and are more leveraged on it than is visible. I believe the 'cash buyer' situation that keeps being mentioned is not 'cash' in the sense you or I think of it as cash - it is just not traditional mortgages.
  10. My view on this is that Osborne/Carney want to scaffold a top for while. Prices in London are above the top they want and they are below the top in the regions. We are seeing tighter controls come in on 500K+ loans whilst at the same time state support for below 600K via HTB. If they can hold this position, get more under-40s taking on debt, whilst boomers exit - long enough for business investment to provide the required GDP forecasts - they can start to intervene less. There is every chance 110% LTV can come back just like 95% LTV has come back in last few months - for the brackets they want to push. As I often say these things have unintended consequences - but I believe they have enough fuel available that they can hold this position for longer than we imagine.
  11. In a normal world yes - but we do not live in normal times. That 30% of value has probably been rehypothecated 95X over - and triggers a bunch of unintended consequences. You don't have a 30% drop - but all the other things like mortgage rates, LTV etc. remain the same. Which is why the government and BOE will throw the book at it not happening.
  12. Did wageslaveX14 break the forum rules by mentioning some alternative scenario than the 50% correction that is coming tomorrow. It would be cool if people on here were a bit more objective and didn't knock every post that is against the groupthink. In 2009 the absolute opposite of what every sane person thought would happen happened. Yet anyone mentioning anything other a 50% correction tomorrow gets slaughtered.
  13. While I'm 'shilling' - I'll bite on the BTL thing too. If the scenario of a +30% correction happens, we get in to bank bail-in territory as the banks become insolvent and the IMF plan they trialled in Cyprus kicks-in (e.g. any deposit over £85K gets converted in to bank shares). So we end up with a similar perversity to 2009, where all the smart people think the property should tank - but the opposite happens - a correction big enough to trigger a bail-in causes: 1) Cash to flood back in to bricks/mortar 2) Mortgages ramp to insane levels (15%+) to recover from solvency and price in risk from further falls 3) Savings rates go very negative against inflation So even though on the face of it BTL is unprofitable - it could still be a safer option for preserving principal and hedging against the negative savings rates. Especially if FTSE tanking which it likely would in this situation.

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