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House Price Crash Forum


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Everything posted by cells

  1. Interestingly back in 2007 you would pay about 6% on a 15 year fixed and say $300,000 for a house. Now you pay 3.14% and $200,000 for the same house. So if you bought in 2007 you will be paying $2575 every month for 15 years And if you bought today you would be paying $1410 So you are more than a thousand dollars in pocket better off after the crash PER MONTH for 15 years.
  2. Why would that mean they have cheaper mortgages? If anything that risk would make them more expensive
  3. Average rate on 30-year fixed mortgage down to record 3.87 pct.; 15-year falls to 3.14 pct http://www.washingtonpost.com/business/average-rate-on-30-year-fixed-mortgage-down-to-record-387-pct-15-year-falls-to-314-pct/2012/02/02/gIQAgaYOkQ_story.html http://www.csmonitor.com/Business/Paper-Economy/2012/0208/Mortgage-rates-How-low-can-they-go Why are we paying so much more when both UK and USA government debt is trading at similar levels? 3.14% fixed for 15 years sounds very good and I suspect would make the biggest bear think about buying. Closest we have is 4.99% fixed for 10 years (which is 60% more expensive) Even forgetting the rate why are no 30 and 15 year FIXED mortgages available here, aparantly it is the most common mortgage type in the USA. Seems very logical and safe Instead here in the UK, every 2 years the banks rape the customers for another £1-2k in fees....but dont worry...you can add it to the mortgage!
  4. Firstly there is plenty of space very close to London which would be very suitable for building homes and the related infrastructure. Within a 3 minute drive of London there is enough land to build 6.4 million homes at 20 an acre which is enough to house 15 to 20 million people. Remember that is JUST WITHIN A THREE MINUTE DRIVE OF THE M25!!! So everyone, PLEASE please please stop saying there isn’t enough space or land!! As for all the other problems you state they come around EXACTLY BECUASE of planning rules. You put an artificial limit on the size of a city and allow the population to increase by 470,000 a yr and you will get ghettos springing up. And what you describe, of big houses turned into flats is happening at a very fast pace in London. Even very modest homes are being turned into two tiny flats! Again this is because of the planning laws and you know what be thankful that they allow that because if that wasn’t permitted prices/rents would be even MORE unaffordable. If the central planner nut jobs really cant give up the pretend that easy planning rules will result in the "destruction of the countryside"* then why not have a compromise. Allow very lax residential planning within 4 miles of the M25. I very much doubt anyone will be that heart broken that you need to drive just THREE more minutes to hit intensively chemically farmed land. But those 3 minutes of land will allow London to house itself without having to pay jack off scum who produced NOTHING to charge £1,500 PER MONTH for a modest roof to sleep under!
  5. Housing has become a financial instrument, an investment with a yield Most parts of the country are yielding around 5-6% with prime central London a lot less but everywhere else that rule holds So if you want housing prices to be cheaper you either need other investments to yeild more than housing (another way of saying interest rates need to rise) or you need rents to fall. To that end, everywhere but especially in London the discussion should no longer be prices but rent. What rents do is what prices will do And im sad to say, with 470,000 extra people in the country (last years increase) and less than 100,000 new homes to put them in rents really only have one way to go.
  6. Lots of people never get on the merry go round In a very simplistic world gandma dies aged 75 and passes the house onto grandson aged 25. The house has been paid off generations ago and neither grandma ever paid a mortgage nor will grandson aged 25. Very simplistic but property wealth is distributed amounts living airs at death. More than half the houses in the country are either owned outright or with a very small mortgage. So more than half the population never joined the ponzi and never will. About a quarter are in council homes or on housing benefits and never feel the market forces So perhaps 3 out of 4 people in the uk are not in this ponzi only a quarter of us are maybe even less I bet a lot of us on HPC are this 1 in 4 No relatives with housing wealth on the horizon Not on major benefits that cover housing costs Not in council homes We are the few, not the many
  7. They probably don't see this new demand that would warrant investing billions Plus were did they get this figure of 750B in cash savings at companies. Near enough all the company accounts I have gone through show big debts.
  8. They may be more concerned about a country converting their euro holdings to some new currency which would be worth much less and they couldn't do anything about it If they put it into the UK there is no risk of that. Plus you would much rather have your cash in a big bank with lots of depositors as in the event that the shit hit the fan the government is more likely to back it up What would be fun is if a big cash generating company like say Apple or Microsoft or Google says that they are getting rid of their cash and buying physical gold and putting it in a safe they own in various nations. That could quickly collapse all paper money if just a fraction of people/companies followed
  9. IMO prices are now linked to the rent you can extract from the house for the vast majority of the country. So increasing the deposit required or salery multiple caps will not have a huge impact. There are lots of pension funds, rich companies, rich individuals, and other entities who would love to purchase houses at £100k becuase then the yeild would be over 10% inflation linked! which is FAR larger yeild than the other big assets of government debt and stocks. IMO just charge 2% of the pricec of the house per year as a tax payable by the owner. Scrap council tax and put the 0% income tax level from the current £7.5k to £15k Average home owner would be no worse off The wilsons with 1000 houses would be £3.2 million pa worse off The Ultra rich with their £50m houses will have to pay £1m per year property tax rather than £3k council tax
  10. It was a general response you cheer leader you dont need to use veg oil directly, you could for instance displace heating oil in homes with veg oil and use the heating oil for diesel. And there are lots of homes heated with oil in the world. Also lots of power stations around the world but esp Japan and Saudi were oil is burnt which could be displaced by coal/gas/nuclear/wood/veg oil whatever
  11. the government needs to build 200,000 council homes like it did for decaades Each council house built saves the government over £400,000 in rent payments to private landlords (its actually over £3m over 50 years but that works out to about £400k in todays money)
  12. Manufacturing can pay very good wages because wages are a tiny fraction of the final goods price. It of course depends on what you are making but the 3 manufacturers I have worked for all had labour costs of around 10% and they all also had fairly good pay and terms like final salary pensions and retirement at 60 So the same company located in a country with one third the wages could only cut costs 6% and that is assuming that all else is equal. If that said 3rd or 2nd world country has shit infrastructure or more costly energy/transport/security whatever you will quickly eat into that modest 6% saving. Manufacturing is more about investing into your base than cheap labour. As I said, here we balk at spending on anything that needs more than a 2 year payback while the Germans will look at least 10 years ahead and probably more. So we don’t invest and the Germans do, in two years time they are more competitive than us because they were happy to invest in something with a pay back of 2 years and 1 day while we were not
  13. I can’t say I am that concerned about oil there are many things which kick in to add supply and many things which kick in to reduce demand as prices increase. Also many things will happen no matter what the oil price is such as older cars getting scrapped and replaced by the new very efficient diesels/petrol. Also the west could take a very logical view and ban or heavily tax polluting cars at the point of manufacture. For instance it would be very easy for the west and china to only allow the most efficient cars to be produced. Say 80g/km or less And since we scrap about 50 million cars a year and replace them with 50 million new ones you can see that would be a VERY QUICK way to reduce oil demand. That simple law which would cost NOTHING would reduce oil demand by about 200TWh in the first year rising to about 2,000 TWh a year in the 10th year. Compare that to your wind mills. Like I keep saying, the green energy movement is just big business scamming the public for free money and its cheer leaders go on cheering them along like they are there to help them.
  14. It is all ******** my friend You grow an apple in the UK and it shows up as $1 to your manufacturing base You grow an apple in china and it shows up as 10 cents to your manufacturing base the same apple, same size, same taste, same everything but we "manufactured" 10x more The UK maybe is not declining much in manufacturing (IMO it is) but what concerns most is what they see looking down the line. That is relative to other countries we are sinking more and more. And TRUST ME in manufacturing once you lose the base it is VERY hard to get it back. Even if you become just as competitive as china or Germany they will already have top of the range factories/plants/equipment/experience in place and paid off while we will have jack shit. I guess everything is ok while the world thinks the British are better than them at looking after their own money. Reminds me all of the closing ceremony of the Olympics. China put on a blinder with thousands of people. The UK has a few fools prancing around in some “cool” cloths and dance and looked at the Chinese as the fools because they were not as cool. We are still prancing around and convincing others we are better than them. When that ends, we drop 10 points down the world league table.
  15. I am not sure that France or Italy manufacture much more than us but vs Germany we suck because we are greedy I used to work for one company who had a view that it was a bad idea if it didn’t pay back in less than 2 years. So got a great idea that pays back in 3 years? ****** off Of course that might be ok for software or the service sector but its not how you maintain a manufacturing business were you might need to invest for 10-20 years payback times. The SAME company operating in Germany had a rule that was closer to 10 year payback for investments. Plus having manufacturers helps your other manufacturers due to scale and technology/ideas being useable across different fields.
  16. Not really I doubt many would object to allowing residential building within 2 miles of the M25 That is more than 200,000 acres of empty land which could be used to build 4 million homes (enough for 10 million people) I doubt London will ever become a 18 million population city but it just goes to show you there there is PLENTY of land available even close to our biggest city. I would say it is absurd that millions of people commute many many miles to London to work every day. If you built something like 3 million homes within or just outside the M25 that would greatly help the massive shortage in London but it would allow lots of commuters to move closer to where they work so saving valuable space on trains. It would also mean people are happier as they don’t need to commute 3h a day and maybe only 1h a day. Plus it would help push rents/prices lower not just in London but the commuter towns/cities and even further afield. Instead what we are doing is converting family homes into shit poky flats becuase we dont have enough homes in london. That is what the current planning system is doing!
  17. This type of argument is very stupid. How many immigrants do you think research the cost of renting or buying a house before they board the train/ship/boat/truck?? Seriously, out of 100 how many? And besides, you cant punish those already living here with higher rents by putting an artificial limit on housing. Would be as absurd as putting a low artificial limit on food production.
  18. Plus long term how will it help the country as a whole when it costs a worker £1000 pcm to rent a 80sq meter house while his german counterpart can rent a 150 sq meter house for 500 euro?? Everything else equal the german can undercut us by nearly £6k a year all while living in a bigger house too Many countries had a building boom along with their housing boom, we did not We need more houses for our children and our future 400,000 a yr would make sense and it would create over a million jobs and put us in a better position going foward
  19. Not sure if you are joking but this is absurd if you believe lax planning would result in bad housing. We already have bad housing being built IMHO and that is precisely because of section 106 and planning laws. I took a look at the financial results of Taylor wimpy one of the biggest builders in the country about a year back and they spend £60k for the plot of land £40k for section 106 £70k build cost £10k profit Sale price £180k They have to build shit rabbit hutches because as you see of the £180k sale price (which itself is unaffordable imo) they need to spend £100k bribing the UK planning system and its pals. If we lad lax PP the cost of land would be MUCH lower, section 106 should not exist for reasons I already mentioned. Then a builder can spend £170k on building a house instead of £70k. It could then build it TWICE the size using better materials and sell it for a lower price and still make a reasonable profit. In German labour costs MORE materials cost the same, yet they can build nice houses twice the size for much less money. Simply because the planning system doesn’t Burdon their house builders with £100k bribes before a brick is laid. The planning system restricting housing will one day come and really ****** us up as a country. It already has had lots of consequences (like delaying having kids until your in your 40s) but more bad will come of it. How will a British worker compete when his German cousin pays 400 euro rent and he needs to fork out 1200 pounds for a house half the size?????
  20. There is enough land full stop. Just within 10 miles of the M25 there is over 1 million acres of empty land. At a typical 20 homes an acre new build that is 20 million homes just within 10 miles of the M25 Of course we dont need 20 million homes in the whole country but it just shows you we have enough space within minutes of london to build all we will need let alone the space over the country
  21. $30 gas $100 oil $ 120 electricity $ 20 coal For 1700kWh which is about 1 barrel worth What suprises me is that you can buy big wholesale sunflow or vegitable oil for about 50p a litre which is near enough diesel and works out to $120 a barrel. If oil sustains >150 dollars a barrel we may see massive new farms dedicated to growing oil crops.
  22. One more note, oil is NOT really getting more expensive. Nor is gold, or coal, or iron ore, or any of the booming commodities. What is happening is that the productivity of many other nations is increasing to match us so we have to share the worlds goods. Might sound counter intuitive but put it this way, if you were Chinese a decade ago you could only afford 1m barrels of oil a day. Today you can afford 5 million a day. It costs you less hours of labour to buy a barrel of oil. It has gotten cheaper for you!
  23. I used to think electric cars were a good idea too but didn’t consider how far diesel engines could advance. New diesel car engines apparently get 40-45% efficiency, with the best ones achieving 50% Its not hard to imagine in 10 years time 50 PLUS % efficiency for nearly all new diesel engines. Hell we could have 55% (some big low RPM boat diesel engines already get nearly 55%) Electric cars can not compete with that. At very best you can generate electricity with top range CCGT at 60%, pass it down the grid at 11% loss to your home, 5% charge, 5% discharge and you are at 48% efficient. So at optimum conditions you are using 5% more energy. At a more realistic example were you generate the power with marginal coal like we certainly would in the uk you get overall efficiency at about 29%. So in that more realistic case an electric car will use 70% more energy than its oil cousin. I’m sorry to say it but electric cars will use more energy not less. Of course they have the big benefit of not causing any pollution at the back which might be worth it energy if they use more energy.
  24. Section 106 should be abolished. We should not place the burdon of schools/hospitals/lesbian hamater habitation relocation programs onto house builders. These are things that are/should be paid for out of general taxation over time from the general population who love in houses! A house doesn't use hospitals the people living in it do! If we had no section 106 and lax planning laws we would be building more than 400,000 homes per year and they would be half the price and twice the size. Not to mention the huge benifit of some 1 million additional people in employment and the lower cost of social protection payments for the government going forward.
  25. There is nothing wrong with London becoming a megacity, the problem is that since the government has near enough banned house building it means more people in the same space paying ever higher rents/prices London can EASILY become a 10 or even 20 million population city if we were permitted to build the home and associated infrastructure. Just within 5 miles of the M25 there is enough empty space to build 8 million homes at a density of 20 an acre. Of course we don’t need 8 million new homes in/around London (enough for 15 million people!!!) but it just goes to show you there is plenty of land that we could build on even in London
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