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Everything posted by slacker

  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. 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
  4. 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 ...
  5. All my suppositions in 2008, 2009, 2010, 2011, 2012 were wrong.
  6. 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.
  7. 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.
  8. 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.
  9. 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.
  10. 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.
  11. There are still dozens of mechanisms they can engage to scaffold the issue (30yr fixed, MIRAS, stampduty thresholds, negative IR, HTB3, IO, 110% LTV etc.) Outside of London commute distance the rises have been modest - if at all. Flats in Manchester look cheap and are not selling even at those prices. Locally a 20% drop on a price sees it sell that week (based on a survey of one as I've said before). Most under-40s don't have any long-term debt right now. Mortgage Strategy had an article on government looking at how they could enable more borrowing to over-75s ... I'm just not seeing where a 50% fall is coming from without some black-swan event. I can see a 10-20% correction now the market is slowing - and can see a buyer/seller stand-off. So much property is held by "not selling less than it's worth" and some of them I know have had a property listed for 8 years now and still won't move on it. The Labour government socialised support for the most unpopular group of people in the country (when it comes to sympathy for losses) - why would a Tory or coalition not socialise support for 'hardworking families' who have large debt.
  12. At no point have I said anything about protecting people with extreme debt or BLTs. I have said I won't be celebrating a lot of people who have just bought losing every they have worked for. I have said that getting and keeping a home should not be a gamble on timing. I have said that even though you think you'll get your dream home after a 50% correction that: 1) You could still lose it later due to your timing not being as perfect as you think 2) A 50% correction in the market would not be a market you will be able to buy in to - unless you are all cash - you will not get the lending terms you are seeing today, IR will not be where they are today, the pound will not buy what it did yesterday post-50% correction 3) No government is going to allow a 50% correction, there is a precedent for socialising loses (with the banks in 2009), it would be very presentable for the government to socialise supporting mortgages further for 'hardworking families' given how easily they got away with it last time
  13. I remember there being a lot of discussion that this time it is different due to dual-incomes, IO and self-cert etc. As I remember it playing out (we were renting a house that was for sale) in 08 - houses had priced themselves outside of affordability before credit became a problem. There was already a lot of stuff not moving. Even when the credit disappeared most properties didn't come down in price - I know some still for sale at those prices - some others have come back on this year. It was the newly listed that were at lower prices - but in very low volumes - an EA said to me mostly divorce/inheritance related. I'm seeing same thing now - some newly listed are coming on 10-20% lower than they would have been last year (but not all) - very little is completing. Which is why I think most likely scenario is that we'll see another sustained 'top' for a while now - or averages move down 10% on low volumes for a while - until some other external event forces a panic. Another scenario is that the high-end corrects sharply - but BOE relax credit further for the sub-250 regional markets - just to keep transactions moving. Either way - there is a long history of any market intervention having unintended consequences. However, I also think there is some ponzi at work in London where investment companies are buying these properties and using the next higher purchase to revalue the whole portfolio up whilst taking the 'profit' out today somehow now - which could either amplify a correction or hold-off a correction until some margin call or similar causes these to have to raise cash - I sense a lot hinges on how this part of where we are now plays out.
  14. ffs Venger pls stop misrepresenting what I say My reference to 'unfair' was in the context that you want to see people buying now get burned, so you can enter the market - and I was making the point that whether you lose your shirt or not is all about timing - and that you entering the market after a correction could still lead you to get burned if the market drops again or IR go sky-high - and how would you feel in that situation? I'm not some shill for high prices as you keep characterising - I feel strongly that buying a house for your family should not be a game of roulette. I also feel quite sad that new entrants, who have probably saved for years, will lose their shirts in any correction. This is not a society I want to live in. You have a lot of anger at the current prices in the market. Aiming that anger at people who have finally capitulated and bought is wrong. These are not the people that caused the problem. Many old HPCers are not here any more as they bought because they could no longer live in temporary rentals with all the problems that come with that. You can't say that people buying with the facts as they are today deserve to lose everything, but that you have not bought in last 10 years because facts were not favourable - a period where some homes have gone up 3X in value. Regular folk should not have to gamble. Most smart well informed people (including most EAs) would never have predicted what has happened in the last 3 years with property - you didn't buy 3 or even 10 years ago - so I don't understand the view that regular people should get what is coming because they timed it slightly wrong. Everything about that situation is bad.
  15. I caught that interview - whatever you think of the guy - he is a first class politician and makes Miliband look like a snotty school kid.
  16. I'm saying it's all relative and morally not a lot in it. For instance: - market crashes 40%, you enter market at 3X salary 70% LTV - tough-luck to all the losers who should not have 'overextended' - interest rates rise to 15% due to some currency issue - you can't pay mortgage and lose your deposit (10 years savings) - someone buys your repossessed house that you 'overextended' on My point is that whether you win or lose with property is largely a matter of timing - and most people are unable to do that in any informed way. If timing it was easy / obvious - why didn't you buy a London property in 2009? Even if you do time it right that could just be a temporary position until some other event occurs and all of a sudden your timing has cost you everything. My argument is that buying a house should not be roulette. I'll shut up on it now - unless you post groupthink you get shot down as a troll round here.
  17. All the smart money must be moving in to something else already - neither stock market nor property can have much headroom left now. I suspect it will be commodities - maybe food or oil again.
  18. I did a back-of-envelope on village we live (has banker holiday homes and mostly boomer residents). The bedroom occupancy on a typical weekday is below 20%. The last place we lived was probably below 10%. In both areas our near neighbours were only around for a week or two a year - and there are stacks of boomer couples rattling around in 4-bedders.
  19. I don't think you read any of my comments - you glance at them and add your interpretation. I am not arguing to protect values. You see yourself as a victim and see others as unfair winners that should be punished with a crash. I am arguing that if this happens and you get your perfect house at a perfect price - you will then become an unfair winner and others who did not time so well will be victims. I am arguing that this position is an asset value at a point in time - and you could still lose everything no matter how well you think you timed it. I am arguing that a situation like this should not exist when it comes to buying a regular family home. Free markets and unregulated credit have failed in this context.
  20. But that crash you wish for is just a point in time. There is no certainty that you won't spend all your savings and/or take on life-changing debt at that point - then there be another crash soon after. And circumstances completely outside of your control mean that your family has no home and no savings - due to you not getting the timing right. You may say "well I won't need a mortgage" after such a crash so have no risk - what if you spend all your cash and there is a 50% drop and you have to move to work or other issue forces the sale - and you crystallise the loss - let's say an oil crisis is the cause of this horror and you can't afford to buy another place as your cost of living has also gone sky high. As you lose everything - someone else, who timed it better, got your house, your savings and everything you worked for. You believe there is a some massive injustice that needs to be righted by everyone who bought with better timing than you (for instance in last couple of years) losing all their savings invested in to property. I believe buying a home should not be a gamble down to timing in this way. It makes for a miserable life for most people and it is a decision that even the smartest brains can get completely wrong as it often defies common sense - who in the darkest days of 2009 would have predicted London prices to be where they are today.
  21. The Tories love the past. They want to repeat the heady 80s days they knew as kids - docklands being built, Golf GTIs, champagne parties on the Thames, privatisations and booming markets. H2B is just the 2014 equivalent of Right To Buy. There is no doubt they wanted a bit of HPI but they've got a bit more than they anticipated - and they haven't got as much increase in business investment off the back of it (yet). So they're stuck with a policy that is having unintended consequences - just as with every other decision every other previous chancellor has ever made. The test, for me, is how they recover the issue - and the cap on multiples is a good start - but it's too little too late. However the law of unintended consequences probably means they'll wait a while to see what happens from that before changing anything else. I think they'll hold of pulling back H2B for as long as possible - getting more under 30s on to mortgages is a big thing for Tories - more important than whether the market corrects I suspect.
  22. How has your timing on property been? Have you ridden all the up waves and got out before all the down waves? if you had I think it unlikely you would be posting on here. Have you always been on the best mortgage rate? or are you waiting to time your entry to the point hundreds of thousands of previous property buyers lose their shirts? These should not be considerations when buying a home for your family. Saying people should work it out for themselves is just wrong. 30 year fixed rates, adequate home building and moving taxation from income to wealth/land is what is required to bring stability to these assets.
  23. It is political. It is exactly what Carney and Osborne have been threatening to do to bring down HPI. They have said repeatedly that raising IR risks retarding business investment growth (but they obv. also worry about risk to consumer spending which is already fragile). Constraints on lending growth are a good first move. Rolling back H2B, making BTL less attractive and building more houses would also help. I think the next move will be a big home building announcement before election - maybe some time-restricted tax break to force people sitting on land to build on it or pressuring pension funds to build more.
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