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About Horseradish

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  1. A lot of people are suggesting buying index tracked funds, but is nobody even a little bit worried that this has (a) been the longest run in history with no recession, (b) the yield curve has inverted, and (c) so much QE money has been pumped into various companies that there is very probably a *lot* to get cleaned out come said recession? I'm not sure that an index tracker is a great idea for weathering the storm.
  2. Well, yes. And no. Ian Mulheirn works there now, but this is hardly some rhetoric that they've come up with. The chap who wrote it has been saying the same for years, and long before he worked there. He was a policy wonk in the treasury, and also worked for a consultancy called Oxford Economics, so he's been around. Please refer to his blog and twitter and you will see quite clearly that this is the case: https://medium.com/@ian.mulheirn https://twitter.com/ianmulheirn He's been building up the thesis for a long time, and this report I think is the culmination of that work. As he has written various articles (which are of course orthodox on there, but rather heterodox and provoking to mainstream commentators - from academia to the private sector to government) and then written subsequent articles which essentially serve as rebuttals to the critiques that people (important people, people who influence policy) bring up. I hope that the report gets read widely and digested fully. So much of housing policy seems to be based on various fallacies, or in some cases just a lack of solid information. And what you should also understand is that there are a lot of people who have made academic careers out of the various orthodox stances in wider society, and there are also number of influential people who have written reports for the government, who still do the rounds at various conferences and are also highly motivated to defend their work, and dismiss the ideas in this report. So, while it's definitely, as stated, the orthodox opinion on HPC, squarely nobody who sets policy in government gives two craps about some random forum on the internet (sadly! 🙁). However, they might just listen to a thorough study written by someone with this man's credentials, and thus it might just actually affect some positive change.
  3. https://institute.global/insight/renewing-centre/tackling-uk-housing-crisis By the venerable Ian Mulheirn (https://twitter.com/ianmulheirn). He's been arguing this for a long time via his blog and twitter, but this is a rather more comprehensive take on the subject.
  4. Entirely right. The problem is low interest rates, which have pushed up the value of housing as people can afford to borrow more (and the bank creates the money when they loan it to you - perverse, but true). And Quantitative Easing (or more accurately: printing money) has caused the low interest rates. So the government's own stimulus program has caused a massive distortion in the market. It is then trying to correct that distortion by printing even more money and giving (well, loaning, but on very very favourable terms) that money to the people on the other side of the equation - the poor buyers who can't afford the houses. Of course there are other effects, like buy-to-let distortions, foreign buyer distortions (at least in London). But you're indeed right that it's the deposit which is hard to save for and has been locking so many people out.
  5. Or, as per the article, invest the difference (what you pay towards the principal) in a diverse set of assets elsewhere. The yield on those would pay the rent. So it's no different, except your main asset is undiversified.
  6. You realise that this is anecdotal evidence and thus meaningless, right? Well, this is kind of the point. You've undone your own argument here. It probably won't be.
  7. I advise anyone (especially the OP) reading your reply to actually read the article itself to see for themselves. @Si1 has already pasted the relevant section, but essentially: the author directly addresses the things you raise in a section entitled "What about capital gain and leverage?" - perhaps you didn't read the whole article? I think the (very common, and rather old) aphorism that "Past Performance Is No Guarantee of Future Results" is really what's at the core here. You're suggesting that you know housing returns will be as disproportionate in the next 35 years as they were in the last 35; nobody can know that, it's pure speculation. So essentially your argument is "Housing is absolutely a one way bet, and anyone who doesn't believe that is a complete, total, and utter idiot", which is a bit of a strange, and rather monochromatic and narrow opinion on a forum called "House Price Crash"...
  8. To bring things back to your original question; I highly recommend the following article where Ian Mulheirn (used to be in the Treasury) makes a very compelling case that buying and renting are, in the long-run, roughly equivalent in cost: https://medium.com/@ian.mulheirn/is-owning-a-house-cheaper-than-renting-it-ff5754c4f7f5
  9. See also: https://uk.reuters.com/article/uk-markets-capital-flows-deutsche-idUKKBN0M61FM20150310
  10. Point. But she's not got much else in the way of new policy going on this at the moment. Interest rates are out of the government's hands though, so I guess we just have to wait for it to sort itself out.
  11. https://www.thetimes.co.uk/edition/home/shared-ownership-scandal-dbl3bfj8f Raises all the problems: Opaque charges, Poor build quality, Lack of maintenance, No transparency, and more. And the whole "you own nothing" aspect. Such a con.
  12. Yes ,it's a problem. But the point is that this policy is a lowbrow electorate-pleasing non-solution.
  13. Came to post the same. It's time to blame it on the foreigners, I guess. Roll on the interest rate increases to show the real cause.
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