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House Price Crash Forum


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Everything posted by Wad

  1. Are you mad? My Dad is an ex farmer and believe me the news from the coal face is extremely grim. Do not even think about buying farm land. Most of the hype in farm land prices over the last five years has been down to the IHT shelter that farm land afforded the City boys who put their bonuses into it without having a clue what they were doing. Now the City boys have no bonus and very possibly no job and very possibly debts elsewhere you can bet which asset they will try and sell first. Hell at the rate that farm land prices are falling I might even think of going back into it one day - in about 2020
  2. Damn - I missed the bottom. Its turning, I tell you its turning - quick get in fill yer boots!
  3. The really interesting figure is burried away in Section 2: Number of Mortgages approved in the PDF file: http://www.bba.org.uk/content/1/c6/01/53/9...ics_Release.pdf There is value there for average mortgage value for house purchase is £119,200 which is down 22.8% on the previous year. What that reflects is the reduction in willingness of lenders to do 100% LTV. Most are now doing 80% maximum and many are doing less than that. That value is the absolute driver of HPC right now - it defines what people are able to pay and reflects very closely what people are saying about prices being down 25% from the peak.
  4. I firmly believe that the US and UK authorities are already considering this. The banning of short selling and injection of equity to the banking system is a partial step towards it already.
  5. I'm with you there. We put our entire wealth in the UK stock market as it recovered from the low in 2003. There were so many bargains you couldn't miss - I do not feel that way today. We have been doing some pretty intensive UK stock screening in the last month and came up with only 5 real candidates that you could call bargains. Its not low enough yet - however we feel that the last savage leg down started about 2 weeks ago and this significant breaking down below Dow 8000, S&P 800, FTSE 4000 is perhaps teh start of an horrific journey back to multi decade lows in OECD markets and the collpase of emerging stock markets to below 10% of thei r peak. We are mainly in Gilts and doing nicely and short oil and doing very nicely ... compared to stocks. Waiting to short industrial precious metals.
  6. Go to http://futuresource.quote.com/ Click in the white dialog box at top left marked Quote Search left and type: CL and click Go button - which wil give you all the futures prices for WTI (US marker crude) BRN-ICE and click Go button - which will give you all the futures prices for Brent (European market crude) Clicking on the little graph icon to the left of each futures price give you nice graphs. The data is 15 minute delayed I think. Spot prices for prompt delivery are a bit more difficult to get as the are really for professionals only and generally only published at end of day by people like Platts occassionally you see them reported in newspapers but even the FT seems to have stopped doing it now. EDIT: I am targetting $20 / bbl because OPEC will be forced to pump out the maximum posisble to maintain national revenue targets. It wil be impossible to keep the cartel together. As in the past - OPEC works well when prices are already high and falls apart when prices slump as everyone just cheats. Prices could go down to $10 / bbl if demand in the West and Asia and other emerging markets slump this year.
  7. Yeah but if someone is taking that much risk does it not incentivise them to make irrational decisions in order to secure the next bonus regardless of the quality of the earnings and long term profitability of the bank ..... oh hang on a minute I see how it works now! Thanks Bjørn
  8. Call me a coward but if I were (still) working for an investment bank whose earnings and my bonus and indeed my entire job depended on the health of financial markets I would not then go out and borrow more money to buy even more exposure to financial markets via a hedge fund which was in itself is leveraged and was perhaps buying leveraged products with that leverage. That is far too much risk for me and frankly I am amazed Goldman Sachs allowed their staff to enter into such transactions.
  9. I agree. I always send my offer in writing to EA and vendor with SUBJECT TO CONTRACT in bold at the top.
  10. Just had an American friend to visit who works in Dubai. He is going back to the US in 2 months time he says he is going to have lost so much of of the value of his new Landrover Discovery in just two years he will probably have to more or less give it away to a friend.
  11. Remember that Rics members are EAs - and they care aboiut transaction levels more than price. If they are talking about transaction levels going up then that could only mean that sellers are capitulating and selling at lower prices. In current conditions, it cannot be because buyers are all of a sudden willing to go back to 7 x sallary and banks lending at 95% LTV. That just is not going to happen for a good while.
  12. Yes. Went to talk to HSBC. No messing about there. Even though I would be a Premier Customer they do just 3.5 x multiple and no more than 75% LTV to get the best deals. Anything outside those parameters the rate goes up a lot or you do not get a mortgage offer at all. Very strict. Just like it used to be in the good old days.
  13. Absolutley right on Whitley Bay. My wife comes form just down the road from Whitley Bay. It seems pleasant enough place but run down. Tynemouth a bit further along the coast is perhaps the most overpriced location I have ever seen. I know a lot of people with money like to retire there but the prices are so far beyond the means of the local economy that there is no floor under the market at all. Agree with your views on rents in general - madness. Capital values and rental yield on residential property have been strangers to each other for years. I too am slightly involved in commercial property and 50% already off the peak in fire sale cases is not unheard of but not widely published by EAs. There is a surprise.
  14. In effect, it seems Panasonic are paying their staff with their unsold inventory rather than cash. I assume however, the staff will be buying at retail prices and using after tax wages so in effect they are swapping £1500 of wages for £750 worth of inventory.
  15. I would just give notice and start looking for a new place to live leave unless she is going to give you a very substantial rental discount and you can be bothered ot live with the disruption. I usually agree to have viewings in the final month of the tenancy but only at 24 hours email written notice and not before 9.00 .m. or after 5.00 p.m. I know others do not agree but I just do not see the point in having a fight at the end of a tenancy as long as everybody is sensible about it. However, you dp need ot be firm and make it clear that if any sales agent turns up without notice they will be barred from entry.
  16. My dad is an ex farmer and I did it until I was 20 before I saw the light. If anyone is thinking of giving up the day job and buying a farm I would just advise you to rip up £2 million and then go back to work. It easier and more lucrative in the long run. Until land prices reach Depression levels it will not be worth thinkng about. The Great Depression of the 1930s of course saw absolutely catastrophic falls in farm land prices. Farm land was derelict in the 1930s on both sides of the Atlantic because no one could borrow any money to farm it and people were starving for lack of food. Same will happen again.
  17. I never take any notice of guide prices at auction. All the ones I have ever seen are always set well below the reserve price. I have never figured out why the auctioneer didnt just announce the reseve first and then have done with it. Perhaps you could ring the auctioneer and ask what the reserve is as you are travelling a long way. What you can also do is just wait for the house to be auctioned and if it fails to make reserve the auctioneer will usually state that it has failed to make reserve and then will usually say that any further offers are invited after the auction is over. That way at least you know where the real market price is and if you want to better it. This auctioneer may take a different approach so may be wise to ask before you go.
  18. Clapham is the kind of place where younger investment bankers buy when they get their first bonuses. It is this lower level set of bankers that are getting sacked and they never had enough of the big bonus to pay off their debts. They still had all the aspirations of course so they just spent everything. Now they are really stuck. Saw it happen in the early 1990s crash. Oh dear!
  19. I am watching on Sky and the journos are giving Mr King a hard time. He was questioned hard about the accuracy of BoE forecasts and another journo suggested he was waffling about what action he planned to take next.
  20. I remember Makro from 30 years ago. Typical cash and carry supplier of lots of small businesses - as I recall they gave credit to small businesses as part of the deal too. Not sure what has caused their decision to close but a lot of ther customers must be hurting badly.
  21. I am just listening to Geitner on Sky annoncing the plan. I honestly do not see what the difference is between what he has just announced and the previous two plans. He is just announcing a new version of TARP as far as I can see and he is still saying the mechanism has yet to be worked out. To be fair he is saying their will be a new set of regulations to stress test bank balance sheets and fairly value toxic assets. The problem is that banks cannot accept a very low price for their toxic assets. It will destroy their balance sheet. What the banks really want is the Govt to buy those assets for much more than fair market value. There is no need for a 'market mechanism' to buy up the assets. A market will spotaneously form if the price is right. Private capital will come in spontaneously. Problem is that no banks can accept a fair market price either one that is set by Govt auditors or by the market. Unfortunately, the market price is 20 cents on the dollar and the banks want the Govt to buy up the assets at 90 cents on the dollar to recapitalise their balance sheets and allow lending to get going again. THAT is the part of the plan that no Govt can admit to otherwise voters would go beserk. Nothing new in this plan - what we need is a proper right down of assets and banks allowed to go bust so we can rebot the system.
  22. Good anecdotal evidence the jac. It has of course been pointed out many time son here and by Roger Bootle a few days ago that desire to buy a house is not the same as demand. The capacity to buy a house for most people depends entirely on them getting a mortgage. What RICs members seem to be misunderstanding is that when people walk through the door of an EA office and ask to view a house thay are only a buyer if they have found a bank willing to lend them money - if not then their desoire to buy is an irrelevance. Lending is not getting back to normal and will not do so until banks are willing to lend at 90% LTV again and at the moment they are not because they fear further falls will leave them with a loan on their books which is for more than the value of the house it is secured against. I went to see major clearing bansk to see what mortgege I could get the other day. They refused to contemplate anything more than 3 x joint earnings and 75% LTV - and I am in their highest customer category.
  23. Feb. 9 (Bloomberg) -- General Motors Corp. and Chrysler LLC may have to be forced into bankruptcy by the U.S. government to assure repayment of $17.4 billion in federal bailout loans, a course of action the automakers claim would destroy them. U.S. taxpayers currently take a backseat to prior creditors, including Citigroup Inc., JPMorgan Chase & Co. and Goldman Sachs Group Inc., according to loan agreements posted on the U.S. Treasury’s Web site. The government has hired a law firm to help establish its place at the front of the line for repayment, two people involved in the work said last week. http://www.bloomberg.com/apps/news?pid=206...&refer=home What a crazy world we live in. The Fed has to bankrupt an industrial firm to stop the bankers getting repaid before the Fed and then I assume the Fed puts more emoney into the banks to recapitalise them after they have suffered losses on the loans they made to firms like - GM and Chrysler! EDIT: Yes I did read that right. That is really what might happen. Madness utter madness.
  24. There is a pool of private capital already available to do this. Its already commited and its already in the banks. What needs to happen is the subordinated debt that has already been issued by the banks needs to be converted to equity by passing a law. That subordinated debt is trading at a massive discount already so the people who own that debt will swap it for equity - once it has been swapped it will be available to write off toxic assets against. The only reaosn it has not been swapped already is because the bond holders obviously prefer to have Govt keep pumping money and guarantees into the system to ensure the banks do not default on the subordinated debt tranches. Thsi is a classic coordination problem - no bank wil offer to force conversion of subordimated debt first. What should happen is on Friday night this week all the bansk should close and then on Monday morning re-open with a Govt mandated law that requires all subordinated bank debt to be converted to equity or the bank loses its licence. That will focus minds. It is so easy to do I am staggered that the Governments around the world have not forced it to happen already.
  25. I am looking at Worcester property and I know exactly which agents you are talking about. What also surprises me is that there are 16 EA shops within a mile radius of Foregate St railway station and I just cannot see how they can all survive. Maybe March/April we will see a cull.
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