Jump to content
House Price Crash Forum


  • Posts

  • Joined

  • Last visited

Everything posted by dryrot

  1. Last year I would have been delighted to buy your sponge - indeed, I would stretch to multiple sponge purchases. My business - renting sponges to young couples starting out on the washing-ladder - was booming. Alas, funding has dried up due to the credit crunch
  2. bring back Global Cooling! http://denisdutton.com/cooling_world.htm
  3. nice one! And the house looks fun. I'd take a punt if i was retiring. (at £120k or so. Which leaves the vendor with a tidy £10k profit, after having lived there as well!)
  4. can't comment on the article, but Bjorn Lomborg;s "Skeptical Environmentalist" is v good on oil. It's a question of price - we are running out of oil that can be extracted at $2 a barrel (Saudi-type deposits) but higher prices mean more can be economicaly extracted - and prospected. At $250 a barrel we can get oil from shale-oil deposits, and there's anough at current use for 5000 years. Of course, $250 a barrel will make air travel and plastics dearer, but with UK petrol the tax is 70% of the cost anyway...
  5. Agree totally. Gardsns are classed as "brownfield" so that the developers can appeal to Prescott and the council planning can't object. It;s destroying what were pleasant suburban streets.
  6. Of course, but the 16% aggregate was never "guaranteed"? Like the "instant equity" garbage from Assetz?
  7. hi more of an anecdotal-type post, but I remember some flats pushed on Assetz (in Sedgefield, for ~£140k) with 1k per annum service charges. And the discussions on Spain triggered a thought wrt the timeshare scams - that is the actual sale cost is immaterial, the owners want the punters to signup for the annual maintenance charge. If' it's £100 pa, and there are 50 flats for 50 weeks, it adds up. The punters can't get out of the agreement unless they sell, which is almost impossible for 2nd hand timeshare, and they have no control over the maintenance costs as they only have 1 or two weeks each out of the ~2500 possible. Hence the bg discounts on purchase - you are buying a cost... I expect you have heard of this? I wonder if new-build flats work on the same premise? At least with a freehold hovel you can't be screwed by the owners...
  8. always supposing u choose the right God... Bit of a bummer if u sacrifice your life for Jesus, or Mohammed, or Buddha etc and the real deal was Joseph Smith... (South Park, series 4, double-episode: "Do the Handicapped Go to Hell" and "Probably".)
  9. hi - could you provide info? I know the block(s), was the site of an old grain silo. V interested in actual sales there! BTW: This from Assetz too: http://investors.assetz.co.uk/blog/?mid=16570 6th Jan blog.. "homebuyer mortgages are more expensive than buy to let mortgages now," words fail me...
  10. http://www.biased-bbc.blogspot.com/
  11. hi good question, 4% seems a lot for cashback. I know they charge retailers a fee, but not 4% (can anyone confirm? Amex is 4% to retailers, but not Visa/MC IIRC. Thats why many don't take Amex) However, it seems to be working. I paid the full amount for our boys ski trip - ~ £500 * 6 and they have credited me with the 4%, as with other purchases during the last 3 months. (then it goes back to 1%) 4% of 3k will be a welcome boost for the trip kitty! (less my handling fee, should be £40... ) I should be able to claim the cashback in february - we'll see Offer still open: http://www.capitalone.co.uk/creditcards/cards.jsf Note that they have segmented the CC offers - for the 4% u need an "excellent credit rating"! Not a problem for HPC'ers I expect. Capital One Cashback with World MasterCardEarn 4% Cashback on purchases in the first 3 months Earn 1% Cashback on purchases after that Free Travel Assistance and Travel Insurance 15.9% APR typical variableApply NowLearn More For people with an excellent credit rating
  12. hi just posted the telegraph link as new post - searched but did not see yours! mods can remove mine of course) link: http://www.telegraph.co.uk/money/main.jhtm...ncolonial10.xml "David Owen, an economist at Dresdner Kleinwort, said the Spanish corporate sector is the Achilles' heel of the system since it has become addicted to foreign funding. "They need to obtain financing equivalent to 10pc of GDP every quarter. Our concern is that the Spanish economy could go past the tipping point if the banks turn off the tap," he said"
  13. but mastercard - via capital one - was giving 4% cashback in the first 3 months, then 1% after. that's 4% off all xmas shopping...
  14. Bit like the ads on HPC? Always promoting dodgy newbuilds, you'd have thought this was the last site to push pump'n'dump property?
  15. as it's xmas! http://www.huhcorp.com/
  16. I love the name "Friends Provident". So reassuring. Always a good sign of a provident friend is one who takes your money, "invests" it in garbage real estate, then stops you getting it back when your in need...
  17. hi Christopher Fildes, back again, accurate as usual -- http://www.spectator.co.uk/the-magazine/bu...ruly-over.thtml The old ones are the best, so allow me to remind you of Sibley’s Law. Giving capital to a bank (said that worldly banker, Nicholas Sibley) is like giving a gallon of beer to a drunk. You know what will become of it, but you can’t know which wall he will choose. By now we have some of the answers, and if the inundations are extensive, it was, after all, quite a party. At the head of the world’s biggest banking group, Charles ‘Chuck’ Prince was enjoying himself to the end — when his bank, Citigroup, admitted to losses of $11 billion, not counting the mere $42 million that he took with him when he was chucked out. Other banks’ chiefs have followed, and on Canary Wharf, where Citi maintains a 12,000-seat corral, there will soon be empty saddles. Bankers can be heard to complain that their troubles are unprecedented and were unforeseeable. Others might have told them (and did, in fact, tell them) that the banking cycle had not been abolished for a single privileged generation. Last time round, less than two decades ago, Citi had to be shored up with money from Saudi Arabia. This time, the money comes from Abu Dhabi. How short and self-serving a market’s memory can be. When Northern Rock sent up distress signals, we were told that nothing like this had happened to a British bank since Queen Victoria’s day. This would have surprised the lifeboatmen who in the 1970s went out to dozens of foundering banks. The National Westminster had to announce that it was still afloat. Fraud went on to hole Johnson Matthey and sink Barings and the Bank of Cocaine and Colombia. Perhaps all this was before Adam Applegarth’s time, and perhaps since Northern Rock’s shaven-headed boy-wonder never trained as a banker, no one told him, least of all the local worthies on the Rock’s board. Among them was Sir Derek Wanless, who had run NatWest for eight years before his colleagues, trying to fend off a bid, threw him overboard. He then took to writing reports for Gordon Brown saying that the NHS represented a suitable model. No doubt he thought the same about Applegarth’s model. This assumed that the Rock could motor along and top up with money whenever it needed to, with no reserve tank. Soon enough, it had to freewheel to the Threadneedle Street garage. There it was observed on the forecourt and word went around that it had broken down. So indeed it had. A bank that runs out of cash is out of business. The lesson is as old as banking but apparently has to be learned every time. Ten years earlier, another Brown model had set the Financial Services Authority to watch over individual banks, but left the Bank of England to watch over the banking system, with the Treasury at the third corner of the triangle. I asked then which would be the first bank to fall through the hole in the middle. Now we know. In front of the Treasury select committee, Mervyn King, the Bank’s Governor, was asked a simple question: at the critical moment, who was in charge? There could be no one answer to that. Now rancour and recrimination have spread round the triangle, and the Rock’s doors have had to be kept open with public guarantees and public loans. The search is on for a suitable new owner — ideally, no doubt, with unquestioned credit, transparent accounts and an ingrained experience of banking. But since the early running has been made by Sir Richard Branson, I think I may challenge him with a bid of my own. In exchange for free shares, I and some City cronies would take over at the Rock. We would tell the customers that in the changed circumstances, we were passing on the increased cost of money and hoisting the mortgage rate by 4 per cent. To soften the blow, we would waive penalties for early repayment. Our customers would be encouraged to take their business to the Nationwide, which has cash in hand. The repaid mortgage loans would come flooding back into the Rock, we would pay off the Bank of England, and with any luck would have something left over to pay ourselves. At that, we might be pushing our luck. Lending money on mortgage is or was the Rock’s core business, and buying property with borrowed money is not, after all, the sure thing it was supposed to be. The price of commercial property has cracked, and the price of houses is cracking. In a buyers’ market, there will be forced sellers. It has all happened before. This time, we can expect casualties among the punters who borrowed money and bought property to let or to sell or, if all went well, both. They took to buying flats in Mongolia sight unseen, and used Swiss francs to invest in Hungary. Now they will experience the hazards of being an absentee landlord. When the borrowers suffer, their pain is referred to the lenders, and old-fashioned virtues — a strong capital base, ready access to cash — come back into their own. It may now be convenient, says Governor King, that in the last three years our five biggest banks made £100 billion between them. Greedy banks pose him less of a problem than needy banks, such as the Rock. Greed itself may go to something of a discount. For years now, financial markets have produced fabulous returns, enough to keep the banks’ shareholders happy after their dealers and managers have staggered home with their bonuses. Experience tells us that such seams of gold run out, that profits revert to the mean, and we can see now that this seam was laced with fools’ gold. When the wise Dennis Weatherstone ran JP Morgan, he gave his financial engineers three chances to explain their new inventions to him. If they failed that test, the inventions failed, too. More recent bankers have been less selective. They could always try blaming the central bankers who made money so plentiful and inflated the prices of assets all over the world, from Picassos to property and from soya beans to securities. William Martin once defined his job as chairman of the US Federal Reserve Board: ‘I’m the man who takes away the punchbowl when the party’s getting good.’ Alan Greenspan in the Fed’s chair was more concerned to keep the party going. What we have to show for it now is a choice of wet walls.
  18. hi Eoss Clark is a favourite columnist - from http://www.spectator.co.uk/the-magazine/ -- dryrot There is one thing I have never understood about the property developers of 1930s Atlantic City. How come — at least to judge from the game they inspired, Monopoly — they never borrowed so much as a dime? Few provincial towns these days are considered so inconsequential that they have not spawned a special edition of the Monopoly board, featuring their own street names. But there is one version of the game you won’t find in the shops: the ‘Gordon Brown’s Britain’ edition. This is a game in which, unlike the original, you can borrow money — lots and lots of it. Until, that is, property prices collapse and you’re left in a credit crunch. Here’s how you play. All you need is an ordinary Monopoly set and a calculator. After deciding who is going to be the banker, you take it turns to throw the dice and move around the board in the normal way. The difference is that each player starts with just £100. He may, however, borrow money. He may take out an unsecured loan for £200, for which he must pay interest at 20 per cent each time he passes Go. On top of this he may take out a mortgage on which he must pay interest at 5 per cent each time he passes Go. The mortgage may be for up to seven times his income — which is made up of the £200 salary he collects each time he passes Go plus the stated rental income on the title deeds of any property he owns. He may not, however, take out a mortgage for more than the total capital value of the property he owns. For example, a player who owns Pall Mall, Fenchurch Street Station and Mayfair could take out a mortgage for £740, the full capital value of his property, not £1,995, which would be seven times his income (including rent). In this version of Monopoly, however, property prices can rise or fall in line with the House Price Index — which is where it starts to get interesting. At the beginning of the game all property is deemed to be worth its face value — the House Price Index is 100. However, say a player lands on Euston Road (face value £100) and declines to buy it at that price. It is then auctioned, and sells for £120. As a result of this sale the House Price Index rises to 120 per cent and everyone’s property is then deemed to be worth 120 per cent of its face value. Each player may then increase his mortgage accordingly. Conversely, if a player lands on Vine Street (face value £200) but lets it go to auction and it only fetches £160, the House Price Index falls to 80 per cent, and the value of all property falls accordingly. Result? Players with excessive mortgages will be thrown into negative equity. And a credit crunch ensues. To make life more exciting, interest rates will rise by 1 per cent every time someone throws a double six, and fall by 1 per cent every time someone throws a double one. As in the real property market, so long as prices are rising everything goes swimmingly. Players sit on large paper fortunes. The moment they start to fall, however, it’s easy to find your property empire collapsing upon you. Say you pick up a Chance card which tells you to pay £150 in school fees, but you hold no cash and already have an unsecured loan for £180. The only way you can survive is to auction any property you own — at fire-sale prices. Yet if you are in negative equity, the bank will want the proceeds of the sale. That’s the joy of the game: players with the largest property empires can suddenly crumble when faced with a piffling £15 Chance-card speeding fine. If you are a highly leveraged investor in the buy-to-let market, this is probably not a game you will want to play this Christmas. But for everyone else, it offers hours of fun and practical education. The winner, of course, is the player who manages to hang on longest. Happy playing. But if you don’t get the chance to have a go at the ‘Gordon Brown’s Britain’ edition of Monopoly this Christmas, don’t worry. You’ll have a chance to play it next year — for real
  19. agree. i imagine it to be like skating on a pond - cruising easily, then the ice breaks and you are struggling in the freezing water. The line between "success" and "failure" is that thin, and the impact that sudden. Especially if you are leveraged in debt...
  20. oh no not this again. I'm still lying awake worrying abut global cooling... http://www.denisdutton.com/cooling_world.htm still, I hope the eco-freaks had a nice time in Bali - on expenses, of course
  21. You seem to be on the right path. Getting the debt down, and being sensible enough for allowing time/funds for fun relaxation with friends! in some ways, what more has life to offer than the latter?
  22. hi, perhaps not directly on-topic, but struck a chord - the stench of decaying "high society", the bullsh*t lifestyle, easy money - all so fin-de-siecle. Poor Katy. http://news.bbc.co.uk/1/hi/northern_ireland/7130574.stmOne of Ireland's top models has died in hospital after taking ill at a party last weekend. Katy French, 24, took ill at a house in Ashbourne, County Meath, in the early hours of Sunday morning. She is believed to have suffered heart failure and remained in a coma at Our Lady's Hospital in Navan until she died on Thursday afternoon. A statement from her family said she died in the arms of her sister Jill with her mother and father alongside. Thanking the hospital staff, they said they were overwhelmed by the messages of support and prayer. Only a week ago, Katy celebrated her birthday in Dublin with customary extensive tabloid newspaper coverage. In the space of less than two years, she had become one of Ireland's best-known models and socialites. Cocaine Recently, Ms French admitted she had used cocaine, but said she no longer did and warned young people of its dangers. Gardai are investigating her death, but would not comment on speculation of a drugs link before a post-mortem examination. Whatever the cause, her death will fuel debate on increasing drug abuse in the Republic, which the Taoiseach, Bertie Ahern, said last week for the first time is widespread.
  23. hi for amusement only! dryrot http://investors.assetz.co.uk/blog/?mid=15677 Managing Director's blog on property investment December 4, 2007 The Truth About The Property Market and House Prices Today As Warren Buffett (the world's acknowledged most successful investor) said : "Be greedy when others are fearful and be fearful when others are greedy". Quite clearly there is so much talk in the press at the moment about there being a property market problem that people are actually beginning to believe it and are fearful, but professional property investors should ask themselves the following questions : * Are property prices likely to go up or down in 10 to 15 years time? Reasonable people expect good growth over this longer timeframe and professional investors generally take this length of investment view - short-term price wobbles are meaningless over this timeframe. * Are house prices going up or down in the short term? Average house price growth across all of the indices is between 8% and 9% over the last 12 months. Even the rather volatile monthly figures announced by mortgage lenders and other indices over the last few months still average around 5% growth per annum annualised. With buy-to-let investors only having to put 15% deposit in, even 5% growth is a 33% return on equity. Consider all the other factors below and you will struggle to find any valid reason for house prices to lower even in the short term, but there will always be deals to do and forced sellers during these few months of uncertainty - act before this period draws to a close and vendors become more confident again. * Are interest rates going up or down? Everybody close to the market fully expects bank base rate reductions of around 0.75% over the next 12 months - professional investors using base rate tracker mortgages can expect substantial mortgage cost reductions over coming months and payable rates of around 5% are likely. I've heard bank base rates may drop but mortgage lenders won't drop their loan costs? This could well be true on variable rate mortgages and unsecured loans and credit cards. However if you're on a base rate tracker or selecting a fixed rate mortgage, there is still plenty of competition in the marketplace and this will increase dramatically in the spring, keeping mortgage rates very competitive. Base rate trackers will drop exactly in line with Bank of England rate drops, just don't leave yourself on a variable rate mortgage. It is true that some lenders, like Northern Rock and Paragon, relied heavily on LIBOR interbank lending and this rate is quite a bit above Bank of England rate, but only a few percent of all mortgages are based on LIBOR so when Bank of England rates drop you will see reducing mortgage costs. * Are buy-to-let investors a better bet for the banks than homebuyers? Clearly they are as buy-to-let mortgages are now around 0.3% cheaper than comparable homebuyer mortgages - this is a result of buy-to-let investors having a lower default rate and being more financially stable according to the banks and their lending data. * Are rents likely to go up? In fact they already are according to the RICS, ARLA and Paragon surveys - RICS went as far as to say rents on flats are likely to grow more than any other property type over the next year or more. London rents are already at 15% and, as usual, this is likely to be preceding significant growth in the rest of the UK regions and is a sign of things to come. * What fundamentals are driving rental growth? First-time buyers have dropped from over 20% of the market to less than 10%. At the same time, homebuyers are buying in less volume but still at a greater rate than property coming on the market. This represents a substantial number of people switching from buying to renting with a disproportionate number of smaller households in the form of frustrated first-time buyers and this is leading to substantial growth in rents in the smaller property market like flats and terraced property. * Is there undersupply of property or oversupply of property? Clearly it can't be both yet press headlines talk about both daily. There are local variations and also there is a difference between homebuyer products and rental product. The government clearly thinks we are massively undersupplied at 180,000 houses a year approximately being delivered where as they have a target of 240,000 a year, and an influential lobby group is trying to get this raised to 270,000 a year. The reason for this is there is a genuine massive undersupply of property in the UK. The talk of oversupply has referred mainly to rented flats in city centres and what is becoming clear, with rents rising and letting agent saying they don't have enough property, is that this oversupply was extremely minor and due to the sudden reduction in property buyers generally and first-time buyers in particular, it would appear the country is relatively quickly swinging into undersupply of even city centre flats following a relatively minor increase in rental demand so far boding well for rental growth in the future. If it has not happened in your town yet it will soon, or perhaps your letting agent hasn't tried or you haven't asked. Try it and see what happens. * Is inflation under control? The Bank of England targets inflation (of 2%) with interest rates and if inflation rises substantially above 2% interest rates may rise. Tesco announced this week that food price inflation is overstated and competition between the supermarkets will keep this under control, oil prices are now dropping and inflation average for the last three months is bang on target at just below 2%. Clearly interest rates can now lower following a sharp fall in inflation over the last few months and this is what is forecast to happen as soon as this week. * Is population growth, fed significantly by immigration, likely to continue and hence support house prices and house price growth? Government figures suggest the population will grow by 4.4 million by 2014 - that represents an enormous extra demand for housing when there is already a shortage/backlog. We all know how accurate government figures are on immigration recently and this estimate is likely to be an understatement. More demand equals higher rents and higher house prices. Recent estimates suggested that the UK population could grow from 60 million up to 90 million over the next few decades and there is little chance of keeping up with housing supply if this turned out to be the case. Talk of reducing immigration by politicians is merely election spin as they fully know the benefit of immigration to the UK economy - also look around and see how the majority of immigrants are from Europe (versus the rest of the world) and it's pretty clear that considering we cannot really stem immigration from Europe (under EU Law) that any immigration controls won't really affect things very much. * Are developers increasing the supply of property or reducing it? This may seem like a strange question but the credit crunch has made developer finance harder to achieve and a slowdown in numbers of purchasers combined with this has resulted in many developers mothballing schemes and planning to come back to them in a few years' time. Far from government hopes that house supply will increase, it would appear that it is actually going to be decreasing over the next few years, again supporting rents and house prices - unless the Bank of England savagely cuts interest rates and introduces more liquidity into the banking system. Any developers in the middle of the scheme are beginning to offer exceptional but temporary discounts and it will be necessary to move quickly to capitalise on these. * Do we actually need house price growth in the short term to make property returns? Normal homeowners who do not need to move home will just sit put, however developers need monthly cash flow and their banks will apply pressure to make sure they achieve it. This is going to result in substantial discounts available from developers below current market valuations, meaning a buyer is already making money without the need for the property to go up in the short term. In addition, some homeowners need to move house and may need to do deals, plus some long-established landlords use property sales to generate their retirement income and will be doing deals. Clearly with all the above factors you are unlikely to lose much money in the short term and next to no chance in the medium term. * Should I be buying with all the bad news in the press? Now that you've asked, and had answered, all of the above questions, can you think what the bad news people talk about actually is ?Is there indeed any real bad news or is it just bad sentiment ? Or indeed is it, in fact, good news for property investors and new homeowners alike? Rents are rising and a short-term opportunity exists to be "greedy while others are fearful" and buy at much better prices than has been possible for a couple of years or so from forced sellers (some developers and people who need to move house very quickly). Buying cheaply in a strong rental market will significantly enhance yields for buy-to-let investors and allow mortgage costs to be covered relatively easily and relatively quickly. So think on, what are your answers to the above questions and can you think of any genuine negative factors? Let me know if you can, please. Professional investors in any market act against the crowd. If, like most people, you've ever bought and sold shares, you probably found yourself buying near the top and selling near the bottom - unfortunately it is natural human nature of buying when you feel good and selling when you feel most despondent. The real money is made when you sell when you feel good and most optimistic and buy when you feel pessimistic but it isn't natural human nature. This is your chance to think like a professional investor and buy at the (temporary) bottom with a 10 to 15 year view of selling near the top and, what's more, rents will pretty much cover your mortgage straightaway making this a 'free carry trade' as the city boys would say. Happy investing ! Stuart Law CEO Assetz plc
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.