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spyguy

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Everything posted by spyguy

  1. If you left school in 79 the you are a boomer - 1945-1965. In terms if employment, it only went to shit for average Brit from 2000 onwards. The best tears I've known, work n exconomy-wise were 1993 to 2001ish, then it all went nuts, both work becoming more stressful n random, and housing costs shooting up.
  2. Yeah no savvy LL will fall for that barely concealed numberwangery. Canny bizzyness people who 'understand' properdee.
  3. Dont look at the fees n small print....
  4. From ~1999 when CHian fully entered WTO, to ~20015ish, China exported disinflation. The economist and Pols thought it was a 'Good thing!' As China has got a lot richer, they are now putting a lot of demand o goods and commodities and are now exporting inflation. Any comment from the economists and Pols???
  5. Mine too. Noone who bought pre 2007 should gave a problem taking a 30% hit on price paid. Low IRs have allowed them to overpay.
  6. But that's <big number> less than we paid for it!! I see n hear this all the time locally. Someone paying too much, only to find out they have to take a hit several years later. You are going to hear this all the time in London/SE as the area adjust to a lost covid and post large number of finsec jobs.
  7. Well, he also doesnt know how much his flat is worth - hes not tried to sell it. I can see these places going for 0.5 x average wage to someone wanting a small place cheaper than a hotel. So about 15k if hes lucky.
  8. I'm not sure why anyone would buy a flat in boro, even in 2006ish. Houses in good areas - there are a couple in boro- are plentiful n cheap. Flats are for social tenants and people living in very very expensive areas.
  9. You didnt read my post. Mainland Europe faces a different problem to the ones brought on by Brexit. For most European countries, getting a big in EU pays more and offers less hassle/work than national politics. So all the Pols n administrators aim for the EU, leaving the home nation to fall to bits. https://www.bbc.co.uk/news/av/world-europe-58743364
  10. The What happens next .... is going to be a -exit candidate in all future European elections. Populists, animal-lovers and Frexiters vie for the Elysée Macron and Le Pen may lead the polls for now, but French voters like to spring last-minute surprises https://www.ft.com/content/e588869a-ae7c-47c8-bfe2-b5b063ec5419
  11. The most suspicious thing about that graph is that Northern property (Halifaxes stamping ground) has done relative well - at least till it alls come crashing down. Whereas Southern (NW ground) esp, London has done v badly. Massive fabrication going on.
  12. Lies, damned lies, statistics and economists/stats who work for BSes. Seriously, all they do is the pick the most flakey numbers, publish them, then revise down later.
  13. Dont give them ideas .... Raisinh to 18 was just a pointless means of giving more jobs and money to the typical Labour voter. Ditto icnrease in HE.
  14. We need a Tue market in student debt. If someone wants to study Eng Lit at Boltin Uni then no prob. However the cost needs to reflect the likelihood of the debt being paid off.
  15. I wonder if For Sles will go tge same wasy as For Rent. Outside of London, the bigger the house, the less the yield. Typically, a large 5+ bedroom, paddock, etc tend to let for less than twice tg price if Briwn centre 2/3 br house. Just no demand. Further you get from LHA, the less the demand. Mmr ought to cause similar for sales. I see alot of places that have had a 'Sold' in q2 2020 are looking a bit like theyve missed the boat. Maybe facing double whammy 9f no furlough, higher IRs.
  16. A combination of MIRAS and wage inflation 8%+ killed most mortgage debt within 5 years. Even then, endowment mortgages from 85-2000ish had to be bailed out. The scndal behind endowment was not so much it was a scam - hey were. It was the fact they were sold because they offered buyers a change to pay ~50% less monthly repayment compared to a repayment mortgage. Its only now with MMR, which forces people onto a plain vanilla repayment that you see the true cost of a house.
  17. My maternal GPs moved to Leeds to work, then run FnC shops. When they bought their first houses in the 50s they were freakishly exceptional. Mortgages really didnt become mass market until the late 70s.
  18. Most people esp. Pols are pretty innumerate. Youd need to look at monthly cost, then the return at the end of it. However, what most people dont grasp is that unless you have 1+ houses you are very unlikely to make any money with houses. Most people with mortgages 25+ are going to be bled dry in interest costs. A few years back, I went thru 25y of mortgage statements with someone whod pay off their houses and thorough theyd made 100k. Theyd actually lost 50k - and thats with pricing equivalent rent. People are bad at compound interest. Thats why so many IO mortgages were sold 2002-2010ish and why IO BTL is so popular.
  19. No. If you are goign to fk up then fk up when the rest of the world is US subprime et all, EU debt crisis. Labour were very very lucky. Cons less so, as they had to deal with a lot more other sh1t. However as things return to normal - and they will - the UK, and the EU face some very painful adjustments. The US sort of doenst, as it gets a pas as the world reserve currency. If that changes - and theres no sign it will - then things change.
  20. The only number thats matter are HPs versus wages, with IR cos taken into account. In the mid 90s you could buy a 3 br in London for ~3 times average income. Today you are looking at more than 15x If mortgage costs - note, not base rates - returns to a fraction of the average of 40 years than housing will crash. However ..... mortgages has become a rapidly shrinking activity. The number of houses with outstanding finance is small -less than 30%. The number carrying a lot of debt is tiny. The future of HPI is dire as there are just ot the number of house buyers with access to finance.
  21. https://www.ft.com/content/241733ea-317b-3256-ba63-bb3571e0a1f4 Ill risk it and od most of the article. It is from 2014 too. So, mortgages are more affordable because interest rates are low, right? Pick your chart provider and timespan of choice, but it is a well worn argument in favour of higher house prices: afford bigger mortgage, buy bigger more expensive house. Not so fast. There is a case to be made that basing the analysis on the size of the initial payment is a form of mass delusion. You see, the logic of affordability has its roots in the 1970s, but it is the reverse effect of something most people will have to fish out of the intellectual dustbin where the Taylor Rule and other inflation related analysis now molder: money illusion. In short, consumer price inflation has a tendency to disappear from the conversation once house prices barge in. At its simplest, once the effect of inflation is captured, long run property prices — be they in New York, the US, the UK or a particular piece of canal-side prime territory in Amsterdam — tend to track or very slightly exceed consumer prices. That makes sense, the whole thrust of Professor Shiller’s argument about irrational exuberance is that housing values in one place or market cannot grow faster than the economy for long without valuations becoming absurd. So while nominal UK houseprices have rocketed: (Smoothing fail from Google’s chart function at pixel time), the inflation adjusted slope is far less steep. From Monevator, click to enlarge: So there have been decade long periods when house values did not move in real terms one bit. Between 1975, when the data starts, and 1983 for instance there was no overall gain for house prices, even though they rose 50 per cent in nominal terms between 1978 and 1980. Homeowners probably felt a lot richer, however, even though their house was only worth the same amount of goods and services as before. That feeling, when applied to income in periods of rising inflation is known as money illusion. It can feel good (for a while at least) to have a rising wage even if inflation is at the same time destroying the purchasing power of that wage. But for someone who owned a house, they did get richer in the sense that their mortgage payment quickly shrinks as a proportion of their fast growing pay packet. This is where the analysis of affordability on the basis of initial mortgage payments, rather than over the life of a 25 year, is fundamentally flawed. Grandemotte has laid it all out before (H/T @sakhalinsk in the comments on our piece on London property values): The distinction between affordability and cashflow is crucial. It is this difference that confuses many people into thinking a ‘70s mortgage is harder to pay than a modern one. Paying the 1st years payments on a 20% loan will take a large percentage of your pay during that year. The cashflow will be tight and most of your money will go towards paying your mortgage. However, once you have your first pay increase, which in a high inflation world will be substantial, it will become a lot easier. The cashflow eases, and becomes easier still after two years, and even easier after three. So whilst the initial cashflow is tough, the affordability over the lifetime of the mortgage is actually very good. The experience of the 1970s has even affected our culture. Most people who have started out in the housing market since the year 2000, or are hoping to start out today, have parents who bought their homes in the ‘70s. High inflation and high interest rates during this period meant that many home buyers of the time will remember that they had to make significant sacrifices and experienced very tight finances for the first few years of their mortgage. If you are borrowing money at 15% per year you can only borrow a relatively small amount if you want to have a chance of making the first year’s payments – the initial cashflow. But as shown, if your wages are rising significantly every year then it gets easier quite quickly. This is exactly what happened during the ‘70s. People took out mortgages with challenging cashflows in their initial years, meaning that they felt poor, but inflation and wage increases rapidly improved their lot. This meant that after a few years their debt was actually a very manageable percentage of their salary and their cashflow had considerably eased. At this stage they could choose to trade up to a larger property or simply have more money to spend. The concept of a housing ladder was born. The housing ladder also worked because it was (is?) a way to cash in the leveraged bet on housing. Even if house prices only track inflation, the effect on the equity value of a house (its price minus the value of any debt) is magnified. If you buy a £100,000 house with £20,000 down, 5 per cent price inflation has made you 20 per cent richer if you cash out the bet right then (ignoring the cost side of the equation, as is traditional). Our putative seller still needs somewhere to live, but as described above homeowners could trade up and get a bigger mortgage with their higher nominal salary. The key principle here is that of real interest rates, the difference between the borrowing cost and inflation. If the real interest rate is -2 per cent, repayments as a proportion of salary will be the same over the life of a 25 year mortgage regardless of whether the headline borrowing cost is 2 per cent, 6 per cent or 20 per cent (assuming that the salary keeps pace with inflation). Here is Grandmotte’s example chart, click to go to the larger original: In the slightly extreme example where the buyer commits more than half of their salary to mortgage payments to begin with, the initial interest payment on a £100,000 repayment loan at a 15 per cent interest rate is the same as that for a £300,000 loan at 2 per cent. Taken as a share of 25 years worth of salary, total payments for three £100,000 loans are the same as when real interest rates are minus 2 per cent, it is just the distribution that changes. In a low inflation world then, money illusion is that a mortgage is cheap when its initial payment is low. Without higher earnings growth, repaying the total debt will consume a far greater share of career earnings. With that pattern repeated across the economy, the question for a housing led recovery is similar to that facing buyers – are today’s mortgages short term cheap but long term expensive?
  22. Iirc it was some sort of public health stat rather than pension/actuary thing. Closest I can find, quickly - https://en.m.wikipedia.org/wiki/Life_expectancy Because of this sensitivity to infant mortality, LEB can be subjected to gross misinterpretation, leading one to believe that a population with a low LEB will necessarily have a small proportion of older people.[4] Another measure, such as life expectancy at age 5 (e5), can be used to exclude the effect of infant mortality to provide a simple measure of overall mortality rates other than in early childhood; in the hypothetical population above, life expectancy at 5 would be another 65. https://www.researchgate.net/figure/Life-expectancy-at-age-5-years-e-5-for-each-German-state-left-panels-and-the_fig1_338824082
  23. All MPC members ready to raise UK rates this year if needed, says Bailey BoE governor says the bank would act to prevent higher inflation becoming persistent https://www.ft.com/content/b3e403a3-a408-4d84-b71e-8857b677bbea Hes needs to get his skates on and get ahead of the FED.
  24. US is slightly more complex than the UK. Studying a worthwhile degree at a top Uni isnt as expensive as tge UK. The colleges also have lots of grants and scholarship too, throw in being an instate student and it can be pretty cheap. What the US has are a large number of scamming Unis and trade schools (equiv to FE colleges) overselling useless courses. Theres a lit in tge US who double down on pointless courses, going for a 2 year masters in Jane Austen studies
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