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Fairies Wear Boots

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Posts posted by Fairies Wear Boots

  1. I think Ruth Lea knows what she is talking about. I want her to get run over by a double decker bus, but you can't fault what she is saying.

    QE has saved the property market. Hallelujah!

    I'll paraphrase her basic premise, QE might be fcking over old peoples pensions and yes it's saving the over stretched borrowers, but hey can you imagine what would have happened if we hadn't of done it? The housing market would have crashed in spectacular style. (and I guess all that goes with that, like our banks being even more insolvent than they already are).

    Don't we fking know it luv. Unfortunately though, our housing market crashing is something I would love to happen. And she should be shot for suggesting the pitiful amounts of interest I get on my savings, and the damage to pensioners annuities is acceptable.

  2. Krusty is as thick as pig sh*t.

    In a debate about rich people pricing locals out she mentions that the place she bought and renovated in the country hadn't been lived in for 33 years.

    So that's the solution, will ALL rich townies moving to the country please make sure you buy properties that haven't been lived in for thirty years. Not only will you stop pricing locals out, you will provide jobs for local tradesmen too.

  3. It's taken THIS long for the negative side of QE to get some publicity. Wow.

    That jokers pension went from 1100 a month to 600. How come this isn't happening to lots of people? If it is I would have expected much more outrage.

    I wish when the QE is good woman stated that it has 'saved our housing market', that someone had pointed out that it's turned it into a stagnant mess. Rather than a good old fashion crash from which we can have recovery.

  4. Your post presupposes an almost static website, which Facebook certainly isn't. It has evolved a great deal since its inception and will continue to evolve; that is the secret of its success. Saying that Facebook will barely be around in ten year's time is like saying that people will become bored of posting videos on youtube. The only thing that might kill Facebook is a failure to evolve and innovate. If it doesn't, someone else will jump into the breach, and that's not going to happen while Marky is around.

    I feel you are sort of right in that facebook does try and move with the times. Though whether it will be able to do so is another matter. Who knows what the next 'big thing' will look like and who will provide it. I notice that approximately six months ago Zuckerberg announced that email was dead. Errm yeah.

    You could have said...

    Saying that Facebook will barely be around in ten year's time is like saying that people will become bored of posting stuff on myspace.

  5. Build council homes!

    Currently the government pays upto £400 per week for a social tenant to rent a house.

    Over 50 years with rent inflation @ 4% that works out to a sum of

    £3,175,475

    If the government built a council home it would have a net cost of £30,000.

    Add maintenance and inflation and the cost of the bond yield the council house over 50 years costs.

    £152,081

    So for each council house the government builds it will save us £3,023,394

    which is a (£425,429) saving in today’s money

    /

    So the government pays private enterprise to house the unemployed, low paid and disabled/sick and it ends up costing the taxpayer absolutely shedloads. Who ever would have thought it?

    That's really surprised me. I might have to go have a lie down.

  6. The Economist argues that there are two fundamental ways of measuring house prices, relative to earnings and relative to rents. Of the two they prefer relative to rents, as that automatically takes into account a rising population or an undersupply of property.

    And The Economists' conclusion is that British property is 22% overvalued against incomes and 28% overvalued against rents.

    However, none of this means nominal prices have to fall. The slow grind of inflation could do most if not all of the heavy lifting from here.

    Personally, I think the answer's somewhere in the middle. I think we'll see about 10 points of the correction come from nominal falls spread over the next three or four years. But essentially we're a few years into a fifteen year stagnation, and ultra low interest rates and bouts of QE stretching far into the future will mean no more than 10 points of nominal falls to go.

    /

    Is that 22 and 28 percent overvaluation based on interest rates? i.e. if they rose, then properties would be more overvalued?

    It's taught me to know an asset bubble when I see one though.

    As for generalisation, you say that rents are going up, well I've just agreed another year at the same price.

    It's an asset bubble. Doesn't seem to be going down that much in some places and this ZIRP policy seems to be holding them up well. Weren't all the other crashes in times of sky rocketing inflation rates? I don't see how you can look at other crashes and be confident that's going to happen this time.

  7. 3. The BOE's chief economist Spencer Dale admitted that the scale of the first round of QE contributed to the inflationary overshoot. The BOE claims to know how to deal with its enormous and growing balance sheet. But I think this claim is as feeble as the one it made when it argued that it was acceptible for the U.K. to pile on debt because the BOE's brilliance at controlling inflation meant household balance sheets could handle the borrowings. And, oh, if anything went wrong, they had a cunning plan…

    How come if they admit to inflationary overshoot, did they launch QEII?

    The other question I have from reading your post is why do we need rampant building for it to be a bubble? To me, half of the idea of this bubble is they aren't making any more land. And with the planning laws as they are, they are quite right. Also, we had building companies paying shed loads for anything that you could build on, and an army of people, backed up by T.V. programs who would buy a three bed, create an extra room in the loft and charge 100K extra for a 4 bed, and those who chopped nice big houses into "units".

    Are you saying that if supply goes down, then price rises aren't "a bubble" they're a product of the supply/demand equilibrium?

  8. Well done and good luck for the future. I had a first viewing today on a similar sounding house, 3 beds, parking, front and rear garden (south facing) large kitchen etc. On for a little over 3x salary. Going to have another look on the weekend, if I can get it for around 10% off asking I'll be all over it.

    BeJesus. I've been sceptical of anymore decent nominal falls happening (in London). But if all you bears keep buying, it looks like it'll happen quite soon!

  9. Asset bubble( and everyone knows this) + Financial meltdown (biggest ever) = massive fall in asset value (eventually)

    The affects of the financial situation haven't hit yet most of us YET.

    How 'bout base rate whacked down to near zero means high cost of houses worth it. BTL is apparently making a come back.

    A massive fall in asset value (eventually). When is this going to materialize?

  10. Actually, that's why they didn't want to agree to it. If they agree, the insurance doesn't pay out, but if it is forced on them it does. I can understand why people who have paid insurance premiums would want to benefit from the cover they paid for.

    Yep. The agreement is that the banks take the hit. I suspect that's because the insurance companies aren't big enough to handle the loss. But that's just my guess. You could read the Big FAT Greek thread for more info. All 156 pages!

  11. At the start of this thread there were calls for our front page graph to be linked to wage inflation, if that happened the "crash" wouldn't look as good, as falls have been less when measured against wages. It's only rampant inflation that is making the "crash" look good.

    I just don't get the comparison to the Japanese slow down

    Two vastly different economies, vastly different cultures. The Japanese never had a "property market" and never will, it's just not classed as part of the overall picture in Japan. Believe me, if Japan were to tap into that little game our markets would know about it.

    Land however, is another story. You think we are taxed heavily in the UK?...

    Remember, people in Japan have massive personal wealth compared to the average westerner, this is never accounted for, Japanese debt is only Japanese debt...

    Barking up the wrong tree to compare us with Japan.

    I thought house prices in Japan went absolutely sky high in a "not making any more land" bubble. Some problem with the economy ensued, base rate was cut in 1993 to below 2 percent and has remained there since. No rampant inflation ensued and IIRC someone on here saying house prices have been falling for 17 years.

  12. It would be great if it did but I fear there's a cunning government plan for propping up London prices - extortionate rail fares which are rising above inflation YOY.

    One girl interviewed who commuted from Reading said: "If they go up any more, I will have to find a job locally or move to London." She was renting with her partner for £800 a month in Reading, the train fare costs them >£400 a month each.

    They can rent something given up by the benefit claimants that are moving out of London!

  13. Shit, its true.

    I wonder what he is playing at.....

    Is it?! I always thought labours policy from the beggining of crisis was, spend hand over fist, get to election, promise people it's not as bad as conservatives make out, conservatives take over, labour spend next five years saying tories cutting too hard and too deep, get re-elected.

    Given the conservatives didn't even win the election, labours policy of "it's not as bad as all that" worked a treat. If they had a leader that didn't look like a petulant school kid, I thought they'd walk the next election.

  14. I think there is a real disconnect at the moment between what mortgages buyers can actually get, and EA/vendor valuations -- the penny does not seem to have dropped that the credit is just not there anymore.

    Isn't that because the general population can do the maths (use a mortgage calculator), work out how much a house will cost them with the base rate where it is, and then be annoyed that a bank won't lend them the amount, because they can afford the repayments?

    I think 6 Higher Mortgage rates will be good for downward pressure. Though this seems a bit weird with them not lifting the base rate. This means the banks will still be giving out the same stingy interest rates to savers and charging borrowers even more. How does that work? Or does it mean they'll be offering better rates for our money? And the base rate becomes irrelevant? Madness!

    The economic outlook has looked dire and only going to get worse for four years, (except for people with rose tinted bull glasses on) and yet London has rallied. So I'll keep me fingers crossed for falls!

  15. No the council will pay, bad headlines to have kids living in cardboard boxes on the street. No evictions, the taxpayer will keep paying. Have the tenants received an s21? if they had they would be waving this at the media, no because the tenant and the LL know the council will pay.

    Really? They can't just ignore central policy can they? Anyway, wouldn't labour run councils eagerly enforce the law, and then blame the tories?

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