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House Price Crash Forum


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About Toast

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  1. To be fair, that sounds like a decent attitude: I was half expecting him to say "I assume the deposit is the letting agent's responsibility" and/or "should I sue the tenant for the missing rent?".
  2. Toast

    Brexit - Have you changed your mind?

    As a "remain" voter in 2016, I have to say that those options don't make sense to me. The last referendum was between remain (the best "remain" that Cameron could negotiate), and leave. Remain lost. I don't think that option should be revisited now, for at least a generation; otherwise, logically, we'd have to re-run the vote every two years*. Although I think the members of parliament should decide what kind of "leave" we have, if they are unable to come to a decision, I could see the sense in a referendum choosing between "exit on WTO terms" and "whatever May has managed to negotiate". Basically, at a pinch, I could support a "people's vote", provided remain was not an option. * I have the same attitude to Scottish independence: even though, as an Englishman, I might have been tempted to vote for separation had I been given the chance, I think the question should now be off the table for another generation.
  3. Toast

    How the poor are fuelling the booming U.S. economy

    Scary that it's not possible for an OK full-time job to support a basic lifestyle, including a very cheap (by UK standards!) place to live. Absolutely agree with this: she is not "feckless" by any stretch of the imagination. In addition to keeping down a decent job and (by the sounds of it) supporting other people, she also managed to save $10k ... albeit that's now draining away. As "Durrhamborn" used to say: if a full-time worker cannot afford a basic house, then it's the government that is the problem.
  4. Absolutely agree: they want as much turnover as possible. I think the dynamic is that during a mania, everyone wants to buy a house, and so the estate agents are competing with each other for the sellers. They compete by suggesting higher and higher listing prices. In a crash, the EAs are competing with each other for the scarce buyers, and so will try as hard as possible to talk down the sellers' expectations for prices. It's a bit asymmetrical, because they are the sellers' agent, not the buyers, and their clients are more welcoming of the idea of high prices. However, I think that mostly their effect is to magnify changes in prices, while the direction is set by credit availability and sentiment. Yes, but they don't see that fourfold increase in a single transaction: the EA is faced with a choice between a certain sale at 100k and a less certain sale at 105k. I think the volume argument is much the stronger motive in each individual transaction. Yes, I guess London will be hit disproportionately by a Brexit deal that makes us less welcoming to finance companies. However, I can see financial institutions shrinking anyway, and all the back-office jobs moving overseas, regardless of Brexit. I would think a 50% fall in grotty parts of London could just be the start irrespective of what Mrs May manages to achieve.
  5. Toast

    It all depends

    Thank you ceo: interesting story! The way I read it, is that over the last 10+ years, the market has been irrational in two different ways: the prices are too high (compared to salaries, rental yields or whatever), and prices were rising very quickly. If we consider just those people who don't look at fundamentals, and only look at the rising prices, that second aspect led to a "buy whatever you can, before you miss the boat" mentality. Now, as price rises cease, and before they (hopefully) start to actually go down, we have what looks to those people specifically, like a normal market: there is no rush to buy out of fear; no immediate future equity gains to drool over. The usual dynamics of a properly functioning market start to take hold: people shop around, compare prices, and get picky. This is only true, though, for that small set of people who can still buy, and who aren't looking at fundamentals. In that sense, it's a little false island of real market dynamics: circumscribed in numbers, because not many people can buy, and (hopefully) circumscribed in time, as we are briefly at the top of the arc and so temporarily prices are static. If the trajectory of prices carries on over the top and starts to accelerate downwards, then we'll see this false little market for what it is: the quiet eye of the storm, a little pocket of spring in a sheltered cleft of the mountain. That happy pool of buyers with no awareness of the fundamentals will dry up: they'll be shocked into thinking about underlying values. Even more, they are precisely the people who care about momentum, so they will be aware of the falls, and will want to pull back and wait. Then there will be no sales. Then, gradually, the first of the desperate sellers will have to reach down, a long way, to find the floor of the real market. Maybe.
  6. Toast

    The Bank Of England Clueless Thread

    You may be right; but to me, it looks like Frogstar B out there, only with nail-bars.
  7. Toast

    Posh areas going downhill

    I'm pretty sure there are serious (and well-studied) psychological benefits from being in contact with and seeing the natural world regularly, so good work for putting in the effort, and having the patience to get through any discomfort. However, your blood will have the right positive/negative electron balance even if you were in a prison cell. You can tell this from the fact your hair doesn't stand on end every time you go near an earthed surface. I'm also not aware there's any evidence that having a slightly unbalanced charge (e.g. from rubbing balloons to put them on the ceiling for your small niece's entertainment) has any bad medical consequences. The paper you cite is from one of the Hindawi journals, where you pay a couple of grand to have it published, and it goes through a "peer review" process (to be distinguished from peer review), where it has been alleged they basically tell you that if your money is good, you can get your paper in the scientific literature. There have been a number of scandals around unscrupulous open access publishers, but the clearest evidence is probably from reading some of the papers (this one being a case in point)*. I think you're spot-on with the observation that renters, who don't have a long-term stake in the community (or may have it taken away from them), and can be looked down upon by home-owners, may be more likely not to take care of the external appearance of their homes. * Sorry for being a bit of a jerk: the scientific literature ought to be the best place to go for information about topics under current research, but it's getting polluted by financialisation, as is everything else these days. That's not to say even the respected scientific literature is always right: the primary literature is precisely the place where debate happens and new understanding is forged and improved (with many dead-ends and mistakes). For established science, you're better off with a review article in a good journal, or a text-book, or (ultimately) an encyclopaedia.
  8. Yes, I agree: EA's and LA's are businesses that flow from the "mother of all monopolies", so won't be much missed. In fact, my experience of the "personal touch" offered by LA's is that the world would be a much better place were they all replaced by packet switches. By the way, sorry for the dig, if it came across that way: I didn't intend to be rude, nor to imply that I actually know what you do (other than that you do it in Haskell). I think the elimination of clerical and administrative roles really does fall under "creating destruction." The problem though, is that it's happening much too fast for society to absorb the numbers of the unemployed, or for people to retrain, or even to think of what they might do. If the process were happening more slowly, the culture of high employment working class (or "middle class" as we like to call ourselves) could survive unchanged, with a general sense of purpose and work-ethic intact. With too large a number of unemployed being created in certain areas, or arriving too quickly, you can get something like a phase change in society, to where dependency on benefits is seen as the norm, and not something to avoid. In certain places, it looks like another of those "eternal September" phenomena.
  9. Good post, and welcome to the forum! If you are Venger, then that's a very good thing: we need you back here, and you have been sorely missed. If you're not Venger, then just take it as high praise that you've been mistaken for him, and your thoughts will be appreciated in their own right.
  10. These (examples) are all good points, but I think you're making the same argument: whether it's 30 or 300 people, it's a heck of a lot less than the 3x16000 estate agents they'll ultimately replace. Internet companies grow so fast because they need order(s) of magnitude fewer people than doing it the conventional way. Several of my friends (and I'm guessing Spyguy as well) have made their money by destroying jobs. I'm putting that in a nasty way, and you can rightly say that it's inevitable, and it's Schumpeter's creative destruction ... but it sometimes feels pretty depressing. I say that because it's not clear to me that they (my friends) are increasing production by much: they are certainly increasing productivity, by shrinking the denominator, but it's not clear that the leaner businesses are actually making much more, and it's also not clear that the "creative" part of "creative desctruction" - the freedom of those released from previous employment to create the next generation of enterprises - is really happening. In my darker moments, I feel that output is unaffected, and the only creation going on is a class of benefit recipients.
  11. I think it's a gamble on a future monopoly: because the internet makes competition in these kinds of things so frictionless, there's likely to be one massive winner. It might not be Zoopla, but they're still in with a chance. There are 25 million homes in the UK. Say you have 80% market share, and a home is sold every 20 years, that's 1 million transactions a year. If you charge £50 to list each property (I have no idea if that's anything like the going rate), then a £50 million turnover company might be worth 10 times that amount. If you turn yourself eventually into an estate agent as well, and can charge £500 for each transaction, like Purple Bricks, that's £500 million in revenue, so the valuation might not be absolutely crazy. Of course, that's a lot of if's: they might not get that monopoly position in the home advertising sphere, and even if they do, there's no guarantee they can leverage that into a monopoly in estate agency. On the other hand, maybe they can expand geographically, making £2.2 billion a bargain. I'm not saying I'd put my own money there, but that's what I'm guessing is the logic. What's driving it is the observation that in other sectors, internetization has led to near monopoly enterprises, with huge profits, and also that there is a lot of hot money looking to make a big gamble. It's that last bit that makes this deal feel like a "last 20 minutes of the Roman empire" thing to me (as Thorn and TJHooker noted above).
  12. Interesting. At first I thought the chap was moaning about some group of HPC people who had put up a poster to frighten landlords into selling because of higher taxes. It was a little while before I realised the P118'er had paid for the scare-board himself.
  13. Anyone who pays taxes and is proud & public spirited enough not to want to take money unnecessarily from the state (or rather from their fellow taxpayers).
  14. It's not that bad: there would still be many landlords competing. Only if a large majority of the stock were owned by a single landlord or company would it be a monopoly. I think in most places, rents are not rising by much more than inflation, so we're still a long way from what would happen in a true monopoly situation.
  15. The slight irony is that I would ordinarily have read this article in the print edition ... except the Telegraph here is distributed by Central, who are owned by Bargain Booze ... so no deliveries this week.

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