Jump to content
House Price Crash Forum

qejunkie

New Members
  • Content Count

    69
  • Joined

  • Last visited

About qejunkie

  • Rank
    HPC Poster

Recent Profile Visitors

The recent visitors block is disabled and is not being shown to other users.

  1. qejunkie

    London Is Cheap...

    Yeah still here obersiving; but I don't post anymore. I think I laid out a pretty clear thesis back then that for the last 2.5 years played out; 1) rental yields WERE juicy 2) mortgage spreads WOULD come in 3) underlying rates WERE low, and would stay that way 4) government support WAS very evident (Carney talking about protecting house prices/HTB in full swing) 5) investors/foreign buyers WERE still coming in Every single leg of my bull thesis has now been blown away....apart from maybe 3 - but I don't think they are going to cut to negative before the crash I think it will be during or after. So gravity will drag this market down, the question is how much of the =40% since 2013 will get eaten way, a 30% draw down would only get us back to 2013 levels now. Will we see more than 30% draw down, of course we should but then everything depends on policy repsonse, what bailouts happen, whether we get negative rates this time etc etc.
  2. qejunkie

    London Is Cheap...

    Go try and rent somewhere, I mean somewhere vaguely appropriate for a functioning member of society and you'll see there is no downward pressure on rents. Every now as again you'll get a 50+ block of BTL new build crop up which might dampen the odd neighbourhood but supply and demand is tight anywhere liveable. Why look at SVR? This is a penalty rate for people too lazy to re-fi. We might as well look at Wonga loans for our interest rate. So what you presented is an example with an interest rate about 250-300bps too high. If mortgage rates move that much then yes I agree it doesn't work BUT that isn't the current environment.
  3. qejunkie

    Boil My Head, Now.

    Oh and by the way folks I don't have a vested interest in house price inflation. I would love that 50% correction to pick up my dream house. I just try and tell it like it is.
  4. qejunkie

    Boil My Head, Now.

    Are you kidding? US government started backing mortgages when they "invented" Fannie Mae back in 1938. And capital requirements are getting stricter for banks!!
  5. qejunkie

    Boil My Head, Now.

    Well sorry for getting you going. Those comments were made after making 2 clear points about circumstance i.e. being in a good finacial position and having an improvement in accomodation. So there were positive things to focus on. Clearly the maths of paying 50% more for a repayment mortgage vs. renting is not comparing like with like. Please prove to me I'm wrong on that front?
  6. qejunkie

    Boil My Head, Now.

    Please qualify the above statement with something factual. What are the worse things that may be triggered in non UK markets, which would then have an impact on The UK? And forward guidance is a waste of time, everyone knows this especially the bond market. But the real reason for that fanfare was just so he could add 50bps to the inflation target which everyone seemed to miss. Again, not the bond market since they've demanded a bit more yield. And what is the evidence that QE is reaching its limit? The limit of what? Look at the Japanese example, those boys are showing you the limits of QE and until that sucker blows Carney and his cronies will be sleeping pretty easily.
  7. qejunkie

    Boil My Head, Now.

    Lol - lots of sarcasm peppered trough that post that was highlighting some funny asking prices 30% ahead of where they should be in my little corner of the world.
  8. qejunkie

    Boil My Head, Now.

    Nah I'm not a HPI forever kind of person. (My position is 3 years of real gains, then we get a real correction, nominal I'm less sure). My bugbear is when people write incorrect things about policy and rates. Like your statement saying that recent market moves of interest rates mean less room for manoeuvre on QE. That actually gives them MORE licence to print. Especially if it starts to impact lending in a negative way.
  9. qejunkie

    Boil My Head, Now.

    7 Year Itch, your current predicament sounds horrendous and has been an uncomfortable read. However, if you don't mind me asking..... If you are borrowing at 2.8% at around 4x your salary then your repayment mortgage should be around 15% of your salary? This seems like a reasonably comfortable level of housing cost to put through your monthly budget. And if a repayment mortgage is 50% more than you pay on rent then you either live in Kensington (since yields are 2.5%) or you are buying a house which is "worth" more than what you rent (note use of quotation marks there). Either way it seems like you have a sound financial position and will be moving into a better accomodation. For your own well being you should look at those (and other) near term positives and not worry about what could happen. Also perhaps spending time on this site might not help your mental state once you are commited to the purchase!
  10. qejunkie

    Boil My Head, Now.

    A few points on this one..... 1) US is as bust as the UK and has very similar structural problems. It also has the ticking time bomb of much higher income/wealth divide which might accelerate the collapse of Rome dooms day scenario. But on the plus side has a paper currency that people still want, which is good if you like to print more and more. 2) US mortgage rates, when the US 10 year hit 1.5%, were at about 3.5% for a 30 year fix. At the same time gilts hit the same level and with 25% down you could borrow at 2.8% 5 year fixed in the UK. The market interest rate in the US feeds directly into the economy, over here it doesn't. 3) US 10 year (and UK gilt) hit 3% and US 30 year mortgage has gone from 3.5 to 4.5. What has happened to UK mortgage rates.....nothing. So US got a bigger boost as the treasury bubble peaked and now is getting a little drag as it deflates. 4) The taper could be happening, what if the fed come out and say we've bought no treasuries since August? Yields have doubled dont forget - a big move for a risk free asset. 5) 3% yield on US ten year when US inflation is "always" 2.5% seems like a good price - loads of investors have piled in every time the US 10 year hit 3%. 6) US mortgage re-financing, available homes for sale have all tracked down as mortgage rates move up. Not rocket science. The data in the US firmly points to the fact that the housing recovery IS NOT self sustaining and is a product of cheap money. When UK policy makers (who's primary aim is to keep house bubble inflated) see that, they will likely do more expansionary monetary policy not less.
  11. qejunkie

    Boil My Head, Now.

    Seriously you need to take a look at lending rates because this would be just the wrong side of 3% on a 5 year fix. Secondly lending rates are at higher spreads above policy rate (50bps) and market rates (300 bps on 10 year gilt) so the argument would really be that spreads should come in as bank balance sheets are repaired and then policy rates can move upwards. The net effect of both could be limited on overall mortgage lending rates BUT you might see improved savings rates. Thirdly interest rates blew out because the government was trying to save the currency from a big devaluation. Exactly what is happening in Turkey, India and Indonesia recently. This is because these countries rely on foreign capital AND use cheap money in USD to fund investment in local assets. We don't have the same vunerability anymore so I would expect a higher chance of a Yen style de-val in favour of the domestic ponzi scheme continuing. Lastly if you add up all of the debt in the UK (all that lovely off balance sheet stuff) then we are at 9x GDP. So if we pay 10% on that then 90% of GDP will service debt. That is like a household where there interest only mortgage is 90% of earnings. We are fully insolvent in that scenario so best have some gold and foreign assets as pound will fall 80%-90% or so. So you will of avoided a house price crash but if you kept money in the UK banking system it is unlikely you would be able to feed your family in any case. In reality 10% interest rates of yesteryear are equivalent to 3-4% in today's world thanks to higher debt burdens.
  12. Yeah they could rent to youg people with a combined 60k household income if they cut their prices but they don't need to because there is ample demand and no supply. This article is very bullish, probably sponsored by RICS, Savills, Foxtons and co.
  13. Yes in lots of place were nobody really wants to live or nobody wants to really be a landlord....structural issue there. Not sure the hot money has been chasing those prize assets.
  14. With credit expansion it depends which half of society you are looking at? Lots of debt free 20 and 30 something's. You mean tax people when they graduate? Sounds like a great idea since people should pay appropriately for their education.
  15. I'm talking household budget not national budget. Less home owning aspiration leads to lower savings ratio and higher discretionary spend. This money can easily find its way into rents. This has nothing to do with age inequality. Lets start a new thread to discuss that one!
×

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.