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House Price Crash Forum


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Everything posted by dgul

  1. He is quite a capable economist (some say brilliant). Certainly left-wing / socialist(ish)*. Possibly (I'd say certainly) better than anyone else in the Labour party. Likely better than anyone in the Conservatives (but certainly more capable than Osborne - but they'll have different goals). He is tarred with the brush of Greece's economic failure, but he didn't actually create the mess they were (and are) in - you might argue that his approach only made things worse, but difficult to really know. If the Labour party followed his advice (presumably a variety of debt jubilee) the UK might get crippled by the international finance community, but given JC that would probably happen anyway - so we're really arguing about how bad, for how long, and how good (bad) would the economy be afterwards. * I'm not sure what he is - certainly Post-Keynesian, probably not coordinate-socialist. Probably not Austrian ether. I think he calls himself a libertarian Marxist, whatever that means.
  2. And what is fascinating here is who own them. Back in 2008 the owners who'd get a margin call were (mainly?) in the UK - so TPTB could buy up the banks and extend some relief to the indebted, and lower interest rates. But If the current investors in BPS are overseas then it will be difficult to intervene in a margin call.
  3. Do we know who is selling? AFAIK the developers sold it all off-plan - so presumably these are being sold by investors. In which case, what was the purchase price - I have a feeling 1 bedrooms were £500k - so after taxes/costs they might be just breaking even at £550. Presumably there is the potential for some serious action (margin calls) if the prices drop any further...
  4. I'd imagine that the next set of 'proper leg up' will happen just before the next election, or on the event of a financial crisis which threatens house prices - whichever comes sooner. Not sure that it is actually what you want, though. I'd add that I think that there is a risk of a house price correction (at least) in the UK, and probably in the not too distant future - just that TPTB will try everything possible to keep prices elevated.
  5. Just to kind of threw a positive spin: TPTB could possibly have kept the plates spinning with kind of stable-but-insane prices, with perhaps a little upwards bias - but this type of inflation is very unhealthy and may foretell (or even precipitate) a crash coming.
  6. I disagree with the current situation as much as you do, but it doesn't change facts. By and large people forced to 'rent hovels even though their parents managed to buy spacious detached houses'* don't end up cross, they stubbornly (stupidly) keep on aspiring for the stars, keep on believing that if they play straight and work hard then the rewards will come. But if you take something away from someone who has it (eg, housing wealth) they won't stop thinking that they've been cheated, won't stop being depressed about how life is unfair. This is why they've chosen this way - you don't lose votes for not giving somebody something they never had, but you do lose votes by taking away something that they have had. It is crazy and stupid and will result in problems down the line, but that is where we have gotten to. * you might, but most people aren't you.
  7. They're not equal. People who have wealth and then lose it (through lowered house prices) are much much crosser than people who kind of just get some wealth (by house prices decreasing allowing greater disposable income). This results in different voting and saving behaviours. Anyway, I think we've changed general behaviours/expectations so that the renters would spend buying houses - so propping up house prices. The only way forwards is for houses to cost less, people with houses to pay more (interest or tax) and people without houses to have less to spend on houses (interest or tax). Ie, We'd need to have a generation who can't buy even at low prices to kill the cycle. Or a generation who can't buy because of high prices, taxes and/or interest while inflation gradually kills the value of houses. And while people who invested in a state sponsored savings plan (ie, housing) gradually lose value (without noticing). And also while renters are placated though silly schemes such as HTB which only make things worse for them. I think TPTB have chosen the latter option. The trouble is there are significant side-effects. I'm not sure how it'll all pan out.
  8. If the smart money was pulling out we'd have higher transactions at lower prices. This is surely the prior stage, where the smart money has stopped looking for new safe places to park.
  9. They've completely broken the system. Houses in the UK aren't accommodation, they're a state sponsored savings plan. If prices fell then everyone with a house would have lower savings*. They could have avoided this with intelligent policy, but instead they fuelled it. Now we've got a situation where there is no solution - 1/2 (say) of people want lower prices, 1/2 need them to be higher, and they try to invent policy to make everybody happy. Can't be done. I've no idea how things will pan out, but we'll probably end up with a compromise 'worse for everybody'** - that is what usually happens when intervention goes mad *this is a bad thing for the economy even if you don't like wealthy boomers having all the assets. **well, maybe a few people might be better off. Not likely to be you or me though.
  10. I know most people eventually want a nice home to bring up their family, but I'd have been more than happy with a unit like these in my 20s. I am surprised that we haven't seen more of this sort of thing - well, actually, tiny apartments made in China to standard container dimensions and shipped over complete. £30k is nonsense - you could make them for $3k over the container + shipping. The main costs would be the seemingly very slow & expensive transportation and installation in the UK. (and of course the land - but you could easily make them temporary + leasehold the land, so that shouldn't be a massive problem outside of central London). [i'd note that they wouldn't be perfect - container dimensions aren't ideal for the average apartment, and materials are wrong (too much metal, insulation not trivial to sort out, that sort of thing) - but seeing as the building industry in the UK is incapable of providing that sort of value, container apartments is what we should get] The fact that they aren't everywhere shows that the housing shortage in the UK isn't simply cost + effort - there is a concerted effort to keep things as much as they currently are as possible - mainly through planning rules and customer inertia.
  11. Funny report - very clear early on that it is because of the strength of the pound and weak global demand - then later in the article mentions that Germany has had record exports for the same period. sounds like it is weak global demand for products manufactured in the UK, which is more like a UK problem... [and the pound is strong - but it could be weakened in an instant. lots of ways to make investors think that their money isn't so safe... Tax, threat of freezing, etc - but they won't because that isn't their plan]
  12. I hadn't realised RR car sales up by 5 fold in 6 years. With scary growth comes risk... Anyway, China is their 2nd largest market, so while they say they're 'not scared' I'm sure internally they're worried.
  13. Well, I like Shetland, so don't want to put it down too much - but I'd more or less agree with your brutal assessment.
  14. Hmm - so he wants to go to Shetland. There are lots of disabled people in Shetland - more than you'd imagine given the population. It has been said that the oil money has built up a fairly good social services - but I've not seen the thick end there so I don't know. Shetland is mostly a great place to live for about 4 months of the year, mostly pretty brutal the other 8. Anyway, good luck to him and I hope the climate agrees with him. Funny vocation though - why does God want him in Shetland...?
  15. Dividends still better, but not so much in it. You definitely have to take your 10k or so paye and 5k dividend tax-free. Then: Base rate - paye marginal tax rate = 41%, dividend marginal tax rate (inc CT) = 26% (was 20%) higher rate - paye marginal tax rate = 50%, dividend marginal tax rate (inc CT) = 46% (was 40%)
  16. sorry to be picky - surely 32.5% dividend tax for higher rate taxpayer. Still, tax at 46% is high enough I think they've got an 'entitled' mindset. They've been getting away with it for years - and in some regards will continue to do so. Most people who have an income iro £70k will have a marginal rate of tax of well over 40%, so why is 44% or 53% so onerous. The problem is they think that debt interest should be tax-deductable, whereas for most individuals debt interest is paid after tax. This is an old loophole from the days of Miras which should be plugged. In fact, they shouldn't get any tax relief, just as I don't get tax relief if I take out a personal loan and buy shares. (or they should reintroduce Miras, which IMO may well come in in 2018 or 19 - just in time for the next election). [the other problem is BTL has created a huge structural problem for the British economy* - it should never have been allowed to get to this state, and they're probably doing too little now - but they do want to get re-elected in 2020 so they can't do too much more] *BTLs are much more exposed to both interest rates and the state of the economy than OOs.
  17. I run a limited co. with enough profit to keep the family going - why do you want to punish me? Why is it okay for M&S to be a company, but not a small trader? The reporting requirements are quite exacting for a company, and not to be sniffed at. I wouldn't like to say that everything is fine for the current set up, but I've no idea why your idea of a solution is to crucify the small institution while hardly hitting the larger player.
  18. Funny way to put it - the corporation can offset all costs against income and only pays CT on the profit (at 20%). eg, income £1M mortgage £900k corp pays CT on £100k, so pays £20k tax - person with same income/mortgage pays income tax on £1M (say £450k for ease of calc), but will (in 2020) only get a relief of %20 of mortage costs (£180k) so will have a tax bill of over £200k. [this exclemplar person is, of course, screwed, as their tax bill will be >> than their income - but they might be able to sell or transfer into the co. structure if they haven't been too stupid with debt on the way in]
  19. A limited company is a stand-alone legal entity - a bit like a person really. The only exception I can think of is the IR35 rules (about employment) - but even this is more about the employment/employer rather than the company (that is, it is the employer's fault, not that of the limited company). I suppose if HMRC wanted to they could encourage a change in tax rules, but this would affect many other companies so might be complicated.
  20. Well, sort of, but not all the facts there... I think the situation is (happy to be proven wrong): The maximum you can earn before the credits are slowly removed is moving from £6420 to £3850. So someone on £5.6k would currently get the full tax credits, but with the changes the individual might now earn £6k, but will have some of that £400 taken away in reduced benefit (as they are above the new threshold) - this would be a reduction of about £1k (as far as I can tell, but I don't really understand the TC rules). So the impact of the changes will be a reduction in total money coming in.
  21. Presumably it isn't being marketed at you... It is a bit like that Versace block of flats proposed for London - there will be a very small % of the UK population who will think it is nice, let alone perfect for living in - but there are plenty of populations around the world who would generally like that sort of thing - and funnily enough they tend to be in the countries with lots of money sloshing around looking for safety. I know it is Windlesham, but £20M for a new-build is bonkers - you could buy a proper old-money mansion for significantly less than that. The whole Windlesham / Sunningdale / Virginia Water thing is overstated - nice place to live if you work in London, but these £20M homes aren't for people who work - the £20M house people will (should?) be travelling by helicopter, so could have a nice estate anywhere really (say, Marlborough, which seems to have lots and lots of houses owned via Panama etc)
  22. That is all very lovely, but I do agree with EK's assessment: You had an engineering degree. That can provide some some benefit to the world - I don't know the discipline, but say to sort out the bridge structure so it doesn't fall down, design the electronic circuit for the lower power radio, get the car's suspension working more effectively - all useful things. In fact, so useful that I'd be happy to part fund that education as a taxpayer. Then you train as a chartered accountant. Sort of useful to society. It is kind of a made-up useful though in that a large part of it's usefulness is dependent on a made-up tax system. Still, we need to ensure that people understand what is happening to money for all sorts of reasons. Shame that I part funded your three years of learning about engineering for no benefit to the country, society or me though. And it is a shame that we had 3 years of no contribution to the country's wealth while you were studying. Still, people are allowed to make mistakes - I accept that you didn't understand at 18 that your passion was to be an accountant. But then you decide to be a letting-agent. Something which requires pretty much none of your skills as an engineer or a chartered accountant (I appreciate that you'll have to be 'good with money', but any numpty can be that, and certainly anything more than your average management accountant would be wasted). It is only useful in that it allows dim-people and/or people-without-enough-time to invest in an asset class that normally requires some effort, and which is only a sensible investment because finance costs for that very specific asset have been given an implicit subsidy. Without letting-agents the property would continue to exist, would continue to provide all the benefit (ie, shelter for a person/family). There is no real benefit to society. This isn't a dig at you - you've followed the money. Certainly, chartered accountant will offer a better standard of living than most engineers, and letting agent has been 'where it's at' for the last 10 years or so. But you can see that it is madness - society will eventually fall apart if 'letting-agent' is a more fruitful enterprise than engineer. [sounds a bit like hyperbole, but it probably is serious - time will tell]
  23. This demonstrates the nonsense of the whole thing. Thermal solar was a good enough return without subsidy, so they didn't offer one. Solar PV didn't make sense without a subsidy so they offered one. They should have been pushing solar thermal all along. Note that if you buy a solar thermal panel even now, and shove it up yourself you have to pay VAT. So they're happy to tax you for your efforts. Madness.
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