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Sonic the Hedge Fund

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Everything posted by Sonic the Hedge Fund

  1. This We are already well past the point where ever higher house prices became a political liability. The Tory attack on BTL is arguably a political calculation - priced out & tenants outnumber landlords by a large margin, so there are simply more potential votes by favoring the former. The election result can only push all of the main parties even further in that direction.
  2. Thanks for that FH - this one change totaly tips the supply/demand balance in certain sectors: 25-35 age will be motivated to stay at home; or co-habit so they can get their 'own' place together - reduces demand for single ocupier homes Landlords will be motivated to convert larger houses to HMO (because rents for larger houses have been squeezed most by 30th percentile rule, while demand for single rooms for 25-35 will grow) - this very quickly increases supply of housing units because one house can become 3 or 4 homes in just a few weeks Incidently having seen a number of homes ocupied by 25-35 year old LHA claiments (think 8 tiny deathtrap flats jammed into a 3 story town house with absolutley no regard for safety, sanitation or buliding regs) I would say many would be better off in a properly regulated HMO! Of course their existing scumlords are now screwed....couldn't happen to a nicer bunch
  3. West Herts, I only saw prices going up too....until yesterday!
  4. Just noticed on Rightmove rents in my area have PLUMETED since new year (been checking recently cos LL is pushing for an increase) Before Christmas could find no decent 3 beds in my area on for under £1200PCM, but now they start at £825, even very nice four bedders on for just a grand....loads of big reductions and cheap new listings showing on the Bee So what's happened since yesterday? LHA was cut! In my area the LHA cut on 3&4 bedders seems to amount to about 20% in cash terms. Wishing my Landlord a happy new year, and good luck with that rent hike....
  5. Apologies if already posted but I caught this little gem on late night cable TV It's a hilarious parody of property shows, tongue in cheekily extolling the 'virtues' of various sh1tholes
  6. Fair points - but these are western retailer domestic business issues not producer inputs As per you last point the selling price is what the market will bear; more influenced by the state of domestic demand than offshore production costs. What's likely given recent trends is that the step rise in cost of essential commodities (driven by Chinese inflation) will squeeze discretionary spending and hence retailers will have pressures from both ends of the equation. The far east margin multiplier is coming to an end it seems. For a country with an economy based on Housing and Shopping I guess we are looking pretty f*cked
  7. I agree People seem to have forgotten about the enormous post-securitisation funding gap that was temporarily filled by SLS that cannot now be renewed due to rising inflation The BoE have painted themselves into a corner
  8. Surely the impact should be minimal, since the producer's wage cost is such a minuscule input to the retail price in a western shop? I guess the figures vary, but for example a 10% rise in a 10% price component (producer wages) is a mere 1% on the overall price, and TBH I would be surprised if the producer's wages were as much as 10% of that
  9. If this is the impact of mere expectation of rate rises, just imagine the carnage an actual rate rise will bring..... ....proof, if it's needed that ultra low rates have propped up an unsustainable market.
  10. The problem is welfare not pay levels A welfare system that started out as a 'safety net' based on humanitarian goals has become 'net equality' based on socialist ideals Welfare equalisation has removed much of the incentive to train and work hard; those who prosper in this new world do so for the most part by trampling on others (e.g. bankers). Developing economies such as China and India don't have this problem (because they don't have any welfare) hence they are building a hugely skilled and motivated workforce. This book explains the problem rather well.
  11. IIRC mortgage approvals are offers, not completions, so I wonder how many previously agreed sales will fall through as a result of withdrawn mortgage deals? e.g. buyer has to pull out because they can no longer get the mortgage deal they expected Lowest ever approvals minus plenty of deals falling through must equal the worst possible conditions on record for the property market
  12. By contrast as renter scum we have thrice been able to move rapidly to secure the schools of choice for our two children (primary and secondary) We live in a delightful location (scenic but very close to schools and all amenities) in a house at least twice the size of that we previously owned, with a spare room where previously the children had to share, not to mention spare cash for luxuries such as holidays. So I think it's fair to say that our accidental STR has significantly enhanced my offspring's childhood experience and future prospects Family and friends often comment on how comfortable a situation we have, then fail to see the irony in following this by asking when we will settle down by buying a house. You can't reason with such illogical bigots - my wife's friend recently asked why we were 'wasting money buying new carpets for our landlord'. I pointed out that we couldn't afford new carpets when we had a mortgage. I think people just confuse the relative utility of possession and ownership - many now see leasing a car as a smart option (against buying) but seem unable to extend this logic to housing
  13. Makes perfect sense for the retailer, note the phrase 'product cycle' King Gilette (inventor of the disposable razor) said (I paraprase) 'if you make a product that wears out quickly, then the customer has to buy another, and another'
  14. I know... Whichever routes governments choose (Inflation, taxation or cuts) will disproportionately impact pensioners in real terms, making it harder to hang onto their oversized homes. Care costs are another issue rapidly rearing it's head - the state simply does not have the means to care for a rapidly rising elderly population. Radical solutions will be borne of necessity; however distasteful politicly.
  15. Births V Deaths is much more significant, population alone does not correlate directly with household demand Births do not produce any significant instantaneous household demand because kids tend to live with their parents until at least their late teens. The most significant group for household formation is aged 25+, numbers for which are just at the top of small peak preceding a steep decline lasting over 10 years (i.e. there are about 25% less people in the UK aged 15 than age 25) Deaths do however reduce household demand, although at a rate somewhat less than 100% due to surviving partners. Crudely if we take 50% of the current 570k deaths P/A that's 285k less households per year; in reality the proportion will increase over time due to the increasing number of divorcees (already in single households) as we move down the age range
  16. I think this could qucikly become a social comment issue - with the older generation painted as pariahs blocking their children's future. We have heard a few rumblings of this already, and today's youth are mightily p1ssed off with their lack of prospects in just about everything. Bottom line the situation cannot persist indefinitely, at some point in the not too distant future the empty nesters will simply become too old or too poor to hang on to their homes.
  17. Ah, my pet issue The easy way to spot areas with severe under occupation is to look for school closures, because empty nests don't have any kids left to educate; schools get paid per pupil so are not viable without sufficient numbers More than 1300 schools have been closed in the UK in the last 10 years, that's a shed load of under occupation.
  18. Maggie was a mega socialist Right to Buy was the biggest government handout in history
  19. Just like with house prices few seem to see this elephant in the room Student debt is but a symptom of a system that has grown way beyond it's economic use. If people want to do Mickey Mouse degrees then that's up to them - just don't expect me (or other taxpayers) to pay for it.
  20. Still possible to get CEng without a degree, or even A-levels, which I guess makes going to university even more pointless
  21. What if the banks don't actualy want to lend? Perhaps CML fully expect another crash and are just looking for somone else to blame for the mortgage drought Remeber that before the ConDems came in the governement line was always 'if we can only get the banks to lend again' so it's not supprising that the CML are promoting an alternate scapegoat (FSA) for this time round.
  22. I'm inclined to think this may lead to a quicker second leg down Think about it: LHA is 40% of London rental market, so a rapid cut to 30th percentile guarantees that rents must fall, at least to the point where paying tenants can take up the slack. Not forgetting that for many inner city areas areas cut to 30th percentile will be a big drop in cash terms, due to the wide range between the cheapest and most expensive rentals in these areas i.e. the steepness of the curve
  23. Hang on...isn't this a master stroke? Surely this is great news for everyone apart from landlords? Faster, deeper cuts to NEW claims will have an IMMEDIATE downward effect on achievable rents for new tenancies EXISTING tenants on LHA may then find that they are able to move somewhere better, for less rent. Even if they want to stay put after one year, they will undoubtedly be able to negotiate a big discount in a falling rental market..... But slum-lords will be screwed - unable to bail until their tenancies end, while the rental market crumbles....
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