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Fromage Frais

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Everything posted by Fromage Frais

  1. There is no such thing as cant and/or wont. You are correct that that at this time our economy is a housing market with some other bits attached to it. However as we have seen with Corona strange things can and continue to happen. We are entering a new phase with China and the US faces a decision do they risk their reserve currency status and that will either be 1) No then rates will stay low and debts get larger and larger and other parties will seek alternatives to avoid their destruction by debt or 2) Yes and rates will rise and then our shortly after. It could take ages or next week the getting ahead of price rises is the rational behind the Minsky moment type approach that by making something "stable" and "cannot happen" we sow the seeds of its instability. Essentially when people say the government wont let it happen the real meaning is that the government will threaten its own exisitance trying to keep a housing bubble going. Just consider that wars and death have been spent protecting our nation......and the government would possibly consider a collapse of it all..... to keep houses from being affordable in a free market.
  2. Yep The power of rising prices begets rising prices that 400k house why risk giving it away so put it on for 525 and wait for the market to catch up. In a falling market you either want to sell or you do not so why the hell waste your time with overpricing or holding on for a gradual deflation. This is the core issue of having a stupid credit juiced casino housing market its either all fear or all greed. Once capital appreciation/missing out/last one for sale syndrome is not there where is the support.... rental yields pah crap, build cost (maybe at the rate suff is inflating) ... or wages? The only logic for vast swathes of the SE and honeypot locations is as a store of value once that goes utilitarian value may be some way off.
  3. Hmmm. I guess that depends on how many people are buying for a home as opposed to get rich, flip or buy now so they don't miss out. Once prices fall the urgency is off and if everything is the same as say just before covid - tax increases and cost of living then why should property be the 20/30 percent more expensive it is now? Lower rates maybe but can they get cheaper
  4. Fast to rise slow to come down is a very true statement around here (North Norfolk). Things have definitely slowed again but I am always posting that as the market around here pulses slow slow boom slow. There are no jobs that allow you to compete with incomers here and the prices are directly linked to sale prices in places where they have jobs over 40K. It has however paused again as the simple minded greed has taken over what was 450 could easily be sold for 550 today .... but nope 600/700 and even 1 million for meh locations is tried on. The property market like the economy needs motivated sellers/probates and auctions these anchor the market and prevent folk from just sitting there with paper profits in their minds. Its actually quite scary as if you believe the prices will rise in London/Home counties then prices will rise here also as you need one of them to buy..... However regardless of wages if those markets even stay the same price its stale here as you need the differential. But at present its not looking clever but with the house I was about to SSTC on at 450 the week of the SD cut being "worth" 550/600 now its very depressing needing a 20% fall just to claw back the increases whilst my business was mandated to lock down.
  5. True but then at the end of the day whats the difference between......when it comes to property. greedy selfish tory capitalists who want government to subsidise and not tax their assets and Wonderful kind hearted labour civil servants and celebs who live in London and have their property as their pension and the primary way they are going to price out Locals when they move to the shires? None really so that is why LVT does not stand a chance until we have already had a crash.
  6. This has a chance of happening once the crash has happened. I also think Labour as it stands have no choice but to go for it as at the moment what are they offering? So once the economy goes down the shitter and price crash. Conservatives boosted debt and house prices for their donors. So many people have lost their homes we the labour party want to make sure that this does not happen. So we saw the problem before it happened and proposed a LVT to make sure that families are not forced to compete with speculators from all over the world happy to leave homes empty. and there you go. Labour have no chance winning at the moment they dont have the centre ground so best to throw the dice and bet that events will come to their way of thinking. We are on HPC the majority view on this forum is that houses are to expensive and have been manipulated to dangerous levels. If we are wrong and prices keep going to to moon forever labour will be out forever if we are right and its about to blow as soon as rates go up Labour are better taking the hit now on policies that capitalise when that happens.
  7. Logically yes As posted many times on here we in Norfolk (touristy bit) have been v busy but the lack of staff has meant turning some custom away. Many of my competitors have also chosen to close a few days a week to avoid burnout and some have even not opened as they could not get staff to carry out functions etc. In a normal year they would be completely full anyhow-if the weather was ok so they have not been able to take advantage of the staycation bonanza like others have been able to do (air bnb/campsites/accommodation etc). September see the end of furlough and with all the supply chain, staffing, rental and covid issues so many people are going to throw in the towel I would be pleasantly surprised if hospitality is not a bloodbath though retail definitely will be. Put it this way summer is done and you may have got through it by working 100+ hours a week and burning out a couple of loyal staff..... how can you face next year? 2022 in hospitality is going to be more down to operators ability to source staff than operate as one cannot be done without the other. That is either going to need recession and unemployment > reallocation of staff...... or the ability to recruit staff from abroad using the visa system xK per staff member + accommodation + management level wages (fair enough). That pretty much kills off many 500,000-1m turnover independent places where the owner/family cannot do it all.
  8. There is no logical reason not to end it. There are low/easy to get skilled jobs now paying well over 30k if you work 40 hours and the employers are desperate. With so many of my competitors locally closing completely or a couple of days a week thats more than a 10% reduction in trade so if it carries on businesses are going to reduce capacity to adjust to the reality. Ergo it should have been stopped already.
  9. I feel that it has already popped. The sweet spot for prices with all the low rates, savings and stamp duty cuts was and still is 300/350,000£ there is a nice graph on here that shows that demand falls once you go passed this level. I still fee that the market wants to fall and is almost totally on the hook of low availability and low rates. Any of those two elements change and its going down big time very fast and thats without any logical impact of covid of which we have yet to feel proper. You can have one Orange in the supermarket and some rich fool may by it but that does make a healthy market for oranges and once you take into account the silly long chains, folk stuck in unsellable flats who have lost their rung on the "ladder" etc etc its looking really bad. I got the auction details for a lovely historic shopping arcade in Norwich bang in in the middle of the city. https://www.acuitus.co.uk/property/4251/ sold 2009 for 8 million renovated 1990s for 3 million for sale in the auction 1.2 million with a rental income of 280,000..... Except that almost every unit that is there (quite a few empty) is due for renewal over the next year or so. Its not unbelievable to envisage it may near empty soon I am not saying they are paying or not either and evictions cannot start until March. So 1.25 million is a no from me how can you justify it as it will never make enough money to pay for the next (now 4/5 million) renovation in a few years. Repeat this around the country and you have a commercial crash that will take money out of the system and bleed into residential. Every deadline simply makes the problems worse as zombies hold on and then the government becomes the cause in peoples eyes which makes them worry which causes more deadlines and causes more problems.
  10. Yep but sadly many more did not. Thats the issue with forcing places to close at X time if you are a summer place yey if a winter venue or Christmas/weddings = disaster. Also its not all money this has been a busy summer but a busy summer of horrible staff shortages and other problems caused by being forced to close..... a lot of folk are at their wits end. My business is always full in summer the benefit for me is more the travel bans rather than rishis largess.
  11. Can anyone find videos where a political figure recently has either directly or indirectly said houses prices have to come down on way or another directly? There are a few videos where JC is complaining about prices but nothing suggesting prices need to come down nor what he would do to get them down. Has John McDonnell actually come out and said on TV lets do a LTV> I see Lucas also in print a bit https://www.john-mcdonnell.net/land-value-tax-heather-wetzel/ https://www.greenparty.org.uk/news/2012/11/09/‘fair-and-progressive’-land-value-tax-would-help-stabilise-property-market/ Only one I can find in the news is everyones favourite....
  12. We are heading for such a fall. The demands of people are higher The money coming in is lower A toxic combination hence the NI stuff its not for the NHS its the only desperate tax increase they can get away with do to NHS love. That is a good rationale for the recent Chinese action of bulling the money to the centre as they know debtors have the threat of default and its coming down the road.
  13. This is yet another sop at the housing market..... But is this extra money a bit less applicants can use to borrow on their mortgage applications? Add the spiking energy and general.inflation it's looking at £500 plus a year for 40k+ earners. Ergo if rates have reached a low and money is less for the applicant what is going to keep these prices rising? Also this is a move that is going to eat a lot of political capital a tax rise for business, a tax on jobs/employees and a broken promise.... With furlough just about to end etc and the pandemic not yet over things must be really really bad.
  14. Just a nice % of value tax .5 -1% per year on properties excluding the first 100/150,000 which is 2% if it is a second home with the 1% going towards local services.
  15. Its unsustainable and a demographic time bomb. Immigration in a way is human cheap money and in itself is a Ponzi scheme as they themselves will become old. Maybe the better way is to be like Dubai and say to folk come here earn more and then once you reach x age you have to return no ifs no buts unless you can pay your own way/medical insurance. Maybe even give them a tax free allowance to say thanks when they go home. How long will the young put up living in a country where they are working to pay for x times more older people.
  16. If you speak Arabic like my wife and hang about Edgware road and even towns like Eastbourne/Brighton for a few days you will reach the conclusion that there is a vast illegal overstaying/smuggled population of workers out there. Undercutting legal workers and treated badly bad for everyone.
  17. Its actually even worse than that. Many wealthy folk i know are both rich and mega in debt. Being rich means access to even cheaper IO debt which in turn means you can buy assets for a better return which then feeds back. When you have 1 million you want ten million, when you have 100 you want to be a billionaire. You will have a private banker who will be giving you lots of love and constantly selling you products and instruments to make you more money and avoid tax. Buy > borrow > revalue > buy > borrow Why pay tax when you can borrow money for next to nothing tax deduct it and buy some more stuff. This is why the prudent will be shafted as soon as the rates go up to say 3% (if they ever do) then this wealth creating machine will go into reverse. All the money for the NHS and refugees folk are wanting ....... just wont be there it will be all sucked into a black hole and the government will agin be in the same position as before needing to bail out the casino. The folks picking up the tab will be mugs like us with savings trying to play catchup and buy a house.
  18. The elephant in the room there is PRR. A key buyer around here is small builders who are v busy working on their own side projects which is logical. They are willing to pay more as they can bag a tax free profit and list for more speculative asking prices. Why do 200 work when you can buy a meh bungalow for 275 and tart it up with some high roof windows and list it for 1 million £. Potentially (unlikely here) 500k+ tax free profit. https://www.rightmove.co.uk/properties/112721969#/?channel=RES_BUY There are now so many of these hanging about maybe not as extreme as this example which is silly as you can still get a nice big house for a million in Norwich in a better location. Around here if that loophole is closed then the market would be much healthier.
  19. Yep Prices would fall outside secure enclaves and we would have societal breakdown. Take a good look at the houses we have in this country they are not secure we also park nice cars on the streets and a good portion of the outside space is well maintained and cleanish. That would all be gone We pay millions for houses in the countryside as its safe flip that on the head in many developing nations thats not how such homes are viewed as they are sitting targets for thieves and desperados. All the lovely people living in areas which are so expensive it creates a barrier where they do not encounter the refugees they save will get a rude awakening. I would then expect racism to get very bad very fast (actual racism not I disagree with you racism) as people desperately start to loose money in the areas where private security cannot buy safety. The irony will then be that the very same kind decent people who looked down on the poor for being "racist" and lamenting social cohesion loss.......will be cutting their losses and moving abroad and the country will head further downhill. It wont happen anyhow as soon as the economy rolls over with higher rates and benefits/NHS are cut the pull wont be there and folk will not want to pay £x000 to be smuggled to a place where they wont see a return on investment.
  20. Harking back to the recent begbies traynor telegraph article. 2019 looking like bumper year for them Covid came and looked like a bloodbath Sunak steps in very few customers and pipeline dried up a bit So in effect the government have propped up... 1 Businesses that could have carried on 2 Businesses that would have been fine but the government closed them 3 Crap businesses that where about to go bust It is in the interest of number 3 type businesses to simply not pay the bills and keep the furlough flowing until its cut off. You then have the next deadline which is you can keep going until the landlord can kick you out. My money is October/November for a big surge of folk throwing in the towel Furlough ends + Season ends = no point waiting to be kicked out till march
  21. I was describing selling your main residence to a limited company yes you would have to lend the new entity the 25% deposit and the 3% stamp duty. But you would be able to then have the x to go buy another property in the sticks. This is not breaking the rules as you are not renting the companies property you would rent it out to another party. The same principle of incorporating existing own name BTL into a limited company. This was what the section 24 and higher rate stamp duty implemented to try and discourage... which was then rolled back with the tax cut somwhat. I dont see how this is bending any rules its not great but then if you want to max your gains and retain your old house and buy another house and the tax is cut its a route to chain free.
  22. You would think that BTL will see the largest drop off. furlough saving/bounce-back loan + only extra property stamp to pay made it look like a time limited opportunity to add sub 500k properties to the portfolio and importantly BTL the home and then use the money to got get a house... the "accidental landlord". I am stuck in a flat and been looking for years but going from 200 ish (110m2) to 500/600k (160m2) is such a leap. I did at one point consider forming a ltd company lending it cash from my business and then selling my home to it and then using that money to try and get hold of a house. In my mind that explains a lot of the sales and the low stock levels as some with more valuable flats may have found doing this at 3.4% BTL IO loans easier than say selling a London flat for 500k. Of course now that the stamp duty is nearly back that route is not as attractive. Eg Ordinary Joe in London 450 flat no sales really low demand recently (assume its coming back a bit now) Want a house outside M25 and have saved 15k on furlough money. Go to broker and get a 75% ltv mortgage at 3.2% so circa 900 a month Start BTL co and then sell the house to that BTL co 450k before stamp cut 2 + 5% but at that time 3% so 13,500 So with the covid saving that owner could form and move the house over to a limited company under 20,000. They then have equity and the limited company renting the house out. They also can now save buying the next property as in effect the stamp duty saving on the 650k house in Norfolk has almost paid for the tamp duty on moving the old flat into a limited co structure. Most importantly no chain and no need to bring your old house to market and either test the market or decrease prices via lots of folk using the same route. If you have another company it could be even more useful as the company could loan a bounce-back loan via intra company loan/holding > subsidiary to your new BTL company. The stamp duty holiday should never have included investment property to do so was the pretty much guarantee that incorporation would be turbocharged and stimulus would exit real work and end up in rent seeking.
  23. Easier to build on a field than demolish > decontaminate and then build. Also the big win is always farmland > planning permission > then alter planning permission later to get even more on and less facilities.
  24. It will when it starts to fall ....to cover the other inflation items most likely
  25. Agreed If you are paying 700k for a house round here atm you have to come straight from the big smoke. These London flats are Norfolk house deposits Another 30/40 percent and I would consider a pied a terre. Incidentally in the 80/90s my relative same job/same size business had one. Imagine that regional boy done good being able to have a house and a flat in London now it’s the other way around…. With the exception being the folk from London often have decent normal salaries and the flat earned more than them.
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