slacker

Who writes this shite. What possible meaning can be read in to a survey that started 3 years ago when these things have 10+ year cycles.

It doesn't change the fact that it's a gamble, all it does is move the probability of a good outcome more in favour of those looking to get in to the game. The problem is structural. High BTL ownership is mostly a symptom of a dysfunctional savings market. I've seen friends blow all of an inheritance on a BTL days after getting it - they considered no other options. Years ago people would have banked it and supplemented their income with the interest, paid of their own mortgage or they would have started a small business. You don't hear people doing any of those options now.

deleted as don't fancy arguing on a sunny afternoon like today.

Another 9% drop locally (East) today for a 500K+ 4 bed house, also another one came back on at a lower price but couldn't find original. Also I mentioned a 400K+ that sold in a week recently, that's back on market too but at same price. I think this is EAs feeling out the top of market. They must be starting to put pressure on sellers as low transaction volumes doesn't help them one bit.

There is no need to be so venomous. Many regular people who have had an unexpected gain have put it straight in to a property as they would have been earning negative interest in a bank - and society has conditioned last couple of generations house prices always go up (London going up £700 a day on avg at moment I see today). You may feel like a victim now - but hoping someone else becomes a victim later serves no purpose. It's like boroughs that alternate between Labour and Tory and neglect each others roads/parks when they get in. Nobody wins. The real problem is that for regular folk there are usually no easy/safe ways to save above inflation, invest in a guaranteed pension or buy a family home. It's all a gamble where there are winners/losers, and not a +/-5% gamble - you gamble most of what you're going to earn over your life. Regular working folk should not have to deep research and ultimately take a complete flyer when it comes to basic financial commitments. We've got endless regulations/interference on driving or eating but absolutely nothing when it comes putting a roof over your head or saving for retirement. Many of these people, whilst making the problem worse right now, don't really have a choice - and will likely lose most of the windfall if they bought within 2 years of a crash - or worse lose 5 years of savings.

The economy as a whole isn't even close to ready for rate rises. Esp. when EU is talking about starting QE soon. Our export gains will disappear overnight. They have plenty of tools outside of IR to keep a lid on HPI. The most recent lending constraints may have already topped the market. BOE have already said when the do start raising it will be in 0.1% increments. 2YR yields are still at 0.8% Savers won't be voting Labour - so there is little electoral benefit from doing it now. Not until there is a massive consumer boom and there are bidding wars for new hires again will IR start properly reverting to normal.

As much as we bitch in EU about meddling and laws - when you look at US situation it starts to make more sense. He could wake up tomorrow with no job and little social security to help. Everything is a cost - even an ambulance. We've got a generation or two with no aspiration and years of debt ahead with no assets to show for it (unless you consider education an asset). The old industries have gone with nothing to replace them. The only sectors growing seem to be based on selling services to boomers. It's entirely possible we're going to have generation that just rejects it all - stops using internet, currency etc. and goes back to 1965. It might be happening right now - would we even notice it? Edit: I can't help but think of the Lorde Royals video when I think about this -

I do, but the discussions on here (and there are some real quality ones occasionally), help me triangulate my thoughts on it all. I read some of those other forums too - to further my understanding (interesting article on Mortgage Strategy today about some banks applying and getting exemptions to MMR). A lot of people in those other forums are not VIs, just regular people trying to put a roof over their heads and not miss out on the main investment so many other people used to gain huge advantage in last 50 years. We live in a world where schools don't teach any of this stuff - but every decision you make will have life altering impact later. Timing of when to buy a house is very hard - even for insiders. The irony is that it's usually best to buy when everyone else is running in the other direction - but that is also the time when it's hardest to get funding - or the time you least want to risk blowing all your savings on one asset. The time when you feel most comfortable in making that decision is usually one of the worst periods to buy. It shouldn't be like this for something so fundamental to our existence and happiness, but it is and we shouldn't be too critical of others who ultimately just want the same things as everyone else but have a different view on the timing.

This site does have a habit of talking itself in to groupthink - and can be quite hostile to any view counter to "50% HPC tomorrow". We are in a period now where it is very difficult to make any accurate predictions of what comes next as there are so many massive unknowns involved. It's taken for granted here that there is a bubble right now, but I'm not seeing that so much. I'm seeing some areas of London with rampant HPI, but outside of that I'm mostly just seeing house prices rising on RM but few actual transactions. In fact, I've seen a few asking price 10% drops lately. Strong arguments could be made that we are not in a broad bubble right now, that a plateau or buyer/seller stand-off situation has been reached and can be sustained until some other external event occurs. Neither is it a slam-dunk that IR will rise parabolically after election. It is entirely possible we'll see 2 or 3 years of sustained investment/export driven GDP growth and salary improvements that close the gap with the plateaued house prices. It's right to have people on here giving other opinions.

Fees are trivial compared to what you *will* lose on deposit when you move next time.

We've been in 2 houses that have been up for sale when being rented out - what a hassle that is ... LLs expecting to have people round any time for viewings. The renter voting block is growing by the day. I saw yesterday that DC is talking about putting in place long term agreements now. They can't ignore these voters any more now - especially as they will be a real force in the city/suburb marginal seats. I think we're only a year or so away from some tightning of BTL legislation or taxation too. When people have 2 or 3 houses you've got 1 or 2 voters deprived of a property to keep one 1 voter happy. It's not a sustainable position in a democracy.

I'm split on this one. I am becoming more sympathetic to inefficient industries keeping going if they are big employers, but every time I have to hand over 10 or 20 pound notes for modest taxi trips it pains me. And as per previous poster - the times I've been in central London and had black cabbies refuse longish trips to suburbs late at night have been quite distressing. So probably more on side of Uber causing some disruption on this one.

I'm afraid I'm still seeing a plateau (with some scaffolding) as the most likely near-term situation too now. Regions growing over next 2 years - catching up to London salary multiples. IR rises are going to be very gradual and don't see them causing much downward pressure anyway. An energy or commodity crisis could change this but the concept of a crash / cliff coming is unlikely for a long time now. If Tories get back in they may withdraw some support but they're unlikely to let a major correction happen without some socialisation of the issue. A more likely scenario now is that Tories will come up with some scheme to support the plateau without raising it and give FTBs more help to take on those debt levels 'safely' - like 30 years fixes. The property range most at risk is the £400K+ market as there are stacks of these around in all areas and few people with incomes high enough to get mortgages on them - but that has only happened because of the loose lending and leveraging equity from previous sales. I can see these properties having to revert to lower pricing if they want to sell.

It's TBTF so therefore backstopped by income tax payers. Not only do asset wealthy not have to contribute to these support mechanisms - they usually end up benefitting from lower lending rates available to people with assets/wealth, allowing them to leverage existing assets to accumulate more. The whole banker thing was a distraction - bankers are mostly just income slaves like everyone else but usually earn more obv - however most of the ones making a lot of dosh do in fact work quite hard in my experience and had to sacrifice quite a bit to get there (being away from families during week, late nights, early mornings, working weekends etc.) It was all a distraction away from asset holders. The problem we have is wealth and asset distribution, and that it is largely untaxed - not the fact that some people have higher incomes than others. Yes bankers got paid bonuses out of tax income etc. but the amounts were trivial compared to how much of the state is supported by income related taxes vs wealth tax. All that really happened was it became more difficult for anyone working for an income to accumulate wealth over time - even bankers getting massive taxpayer funded bonuses. The "owning things that appreciate in value" club keeps getting harder to get in to - and all the income tax payers are running around fighting with each other. At some point the largest voting demographic will be people who don't own things.

Booms on the side of those without assets against those with assets are exceedingly rare. The last time was around 1789 somewhere near Paris.

It's an indication of how many people are prevented from borrowing because of deposit more than the monthly repayment costs. To continue my argument from other threads you can see how we can get to stage where HPI tops at a max salary multiple and more methods of lending are brought in to enable more people to borrow (30yr, 100% LTV etc.) but keeping a bit of sanity by tightening the salary multiple criteria.

I'm not arguing that is not the case. All I'm saying is that broader business investment is starting to happen again - in part because of HPI. It is unbalanced to argue the BOE and Osborne are mindlessly stoking HPI for sake of HPI, their actions so far are compatible with just using it as a lever to get other parts of the economy moving again. http://www.theguardian.com/business/2014/may/01/uk-manufacturing-growth-five-month-high The test is whether they start to cool overheating parts of market and enforce more sustainable levels of personal debt - and the recent media noise over stress tests etc. would indicate this is in progress. They can't pull the IR lever yet without regressing the investment they've kicked off - and that matters far more to future GDP sustainability than HPI. My current thinking, which changes by the week at the moment, is that they will top the market in London then let the regions catch up to similar local salary multiples - if a correction happens they'll put more scaffolding in place to support peak valuations coupled to constraints that prevent ceiling outpacing salaries further. So we end up in a partially state supported max earnings multiple property asset value period until demographics change.

This confusion is what you would expect if a top had been reached. The rise was always going to be contained by income multiples (even if a lot of it is 'cash' in London) at some point - if we weren't there already I think the new restrictions have put a cap on it for transactions that need debt anyway. It's entirely possible we'll find that the HPI boom was mostly from Rightmove listings and other noise like equity releasing, remortgaging - not real transactions. 10% increase in properties listed locally in last 7 days. 30% of properties listed are STC or under offer (using RM filter). It's a rural county and 15% of properties listed are over 500K but only 0.5% of STC are over 500K.

That's a fair argument, although I don't see how else he could have created enough confidence for businesses to start to consider expanding. Relaxing business tax etc. without some economic activity would have just mean more cash hoarding. We are seeing now a return to businesses looking outwards again - so the end kind of justifies the means so long as they start to taper the HPI now - which is what I think we're seeing with the recent headlines on BOE stress tests etc.

It really isn't my intention to troll - just trying to be pragmatic / objective. There is a real group-think on the forum where everyone talks themselves in to thinking next month we're going to see the big one - and that every action from anyone at BOE or in government is part of some massive plan to send houseprices to the moon. Whilst there is undoubtably some of that going on - I don't think it's that simple and when I watch the Carney press conferences I see a guy who genuinely sees an issue and appears to be trying to do something about it. It's not a binary `just put IR up` situation. I also don't see in Osborne someone who is mindlessly trying to inflate property prices, he wants GDP through business investment and doesn't have many levers to pull to make that happen.

Only if you think HTB was purely for election. I think it had more to do with being the only lever they had to prime business investment again. The election benefit was a bonus. The proof will be if they tighten on the property bubble in London now - and all the press briefings seem to be in that direction. Business investment is starting to happen so it may still turn out to have been the right thing to do - even if it impacts me personally. It's in Osborne's interest for modest sustainable growth - he doesn't want to labelled in the way Gordon Brown has been for leaving things in a mess. Osborne has a long game - he wants to be PM not the Chancellor who broke the economy again - so will be working to a personal 10 year plan not an 18 month electoral one. It may even be in his favour for Tories to lose next one - and have people screaming for a prudent safe pair of hands in 6 years time with Osborne as Conservative leader - and country in a state after Balls has emptied to the coffers again. Osborne has shown remarkable prudence in last 2 budgets which have not been the large scale give-aways they could have been against a backdrop of an improving economy.

It's all rigged to stop post-boomer generations accumulating any wealth. Which is why even high-earners (by historic measures) are bitching. The weight of tax is on income and there is very little on wealth itself. So anyone who has accumulated wealth can live at relatively low expense (£1500 council tax etc.) even though their assets are in the millions. Assets become ever more expensive to buy, whilst the after-tax income of most is going in the opposite direction. It's a special club and you're not invited.

I probably overthink these things but I wonder if there isn't more to the current political situation than is obvious. With Telegraph, Spectator etc. running a lot of anti-HPI pieces in last 12 months - maybe Gove or similar is heavily pushing behind the scenes for some sanity on it - and these right-wing press reports are just part of that offensive. As I've said before, these guys are going to be at dinner parties weekly where senior medical/legal professionals are beating them up over cost of London property. A married couple of very senior professionals can't afford more than an ex-LA near a good school right now.

Full article, comments interesting too: Politicians have jilted a generation – it’s wrong to say that young people have never had it so good The Spectator, even though largely supportive of the government, has increasingly become a critical voice on HPI and the effect it is having on under 40s. Fraser Nelson in particular as written some very aggressive pieces (Is George Osborne’s ‘Help to Buy’ the equivalent of Bush’s sub-prime loans?).

I will reserve judgement until I see the results of the tests - but this is not the action of someone who wants to stoke up HPI indefinitely. We are also a year out from elections and you have to give some credit to Carney/Osborne for even raising this right now. I'm sceptical it will uncover the full risk of property used as security for other borrowing or residential property bought by investment companies / BTLs. Maybe it will be used to withdraw HTB2 in some parts of the country before they planned or further increase the mortgage qualifications. Either way it is a dog whistle - as have many recent statements been - that risks are high if you are buying when valuations are at all-time high with interest rates at an all-time low. Carney continues to grow on me - especially when I watch his press conferences.