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Optobear

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Everything posted by Optobear

  1. Can they charge different rates according to first name (regardless of sex?). So if it turns out that based on the data of previous accidents, that Sharons, Claires, Louises and Karens have lower accident rates than Davids, Marks and Pauls, then they can just charge the premium according to risk based on first name? That doesn't discriminate against men or women, if you are a 17 year old young man called Victoria then you too can have cheap insurance. Similarly 45 year old women named Shane will be looking at big rises in premium. Sorted.
  2. Yes, but are you a Landlord? It is only Landlords that qualify for a share of this cash...
  3. Surely all of it is fake? I looked at a note recently and it talked about "I promise to pay the bearer on demand the sum of ...". Just a lie, so if all the notes are intrinsically fraudulent, then I'd say it is all forged... although can you forge a fraud? Is it fraudulent to fake fraudulent money?
  4. Are you saying that in Britain it isn't appropriate to have a tax that everyone has to pay, and its sole purpose is to transfer £30bn or so to landlords? Surely landlords as a group are the most deserving sector of the populace?
  5. Isn't there a phrase "The crash won't happen until the last bear turns bull?" I'd have seen you as very much likely to be one the very "last bears". So cue a bigger fall? But it sounds as though you've got a decent price, and you may be right that waiting two years would give another 10% improvement, but having the certainty of where to live is quite attractive too. As for me, I am thoroughly enjoying being STR since December - someone else comes along and mends the leaking plumbing! The main concern is how to avoid too much of the inflation?
  6. So if this legislation broke that protection, then the banks would be able to get their hands on everyone's future pensions in the event of a major HPC. Nice result for the banks if they can pull it off... another good reason not to jump back in to property having gone STR!
  7. Does anyone know the legal situation with pensions at present? If you are repossessed, and then declared bankrupt - do you lose the pension, or is it protected?
  8. Here http://www.bbc.co.uk/news/uk-12590039 Sinister line is:
  9. Fantastically bearish story in the US press (although a couple of weeks old, so apols if already seen) http://www.businessinsider.com/worst-housing-collapse-in-us-history-2011-2# It was linked from the detroit homes story, but worth a separate billing I reckon. Headline is 11% of US homes empty Optobear
  10. I would like to know more about the attitudes towards housing in the 1930s, it seems to me that lots of houses were built between 1890 and 1910 that were large villas in South-London (for example), and they very much fell into disrepair by the 1950s and 1960s. Now the slaughter of the two world wars may have had an effect, but I think also the growth of modernism, the ending of having servants, the establishment of the welfare state, all had an impact. It is very hard to go back too far and draw lessons about the trough, in the 1930s there was no welfare state, most people didn't own their own houses, mortgages were very hard to get, we were still on the gold standard, women mostly didn't work, etc. All of which could mean that instead of x1 times earnings it ought to x3 earning, or x5 earnings, or whatever...
  11. It makes sense that they should ask, but should be satisfied with either earnings or piles of savings. I was surprised too that agents were so keen to check - I guess that if a landlord has tenants who default on the rent then they lose money, while if banks have mortgage holders who default on the payments then the bankers have the government to fall back on to safegaurd their bonuses.
  12. Another important thing to realise is that many of the previous dips were no where near so large in actual price changes as the graph shows. Let me explain... they look large because for a period the prices stagnated or fell (but only slightly), and inflation eroded away the "real price" of the homes in terms of sterling / earnings. From the graph you can end up thinking that transaction prices fell very considerably, but the data doesn't actually show that so strongly... So to be specific, the graph "corrected data" shows prices at £122,904 in Q2 1989 falling to £76,981 in Q4 1995. A drop of 37% but the actual average prices were: £62,244 in Q2 1989 and dropped to £50,930 which is only a 19% drop in actual transaction prices. If you go back to the dip before, eg 1979 to 1982 the prices actually rose over that period and the drop was entirely in the inflation corrected data. The data is on the nationwide site, linked off the graph page of hpc. As Benjamin reputedly said "there's lies, damned lies, and statistics"
  13. I've sold to rent and am paying the landlord a yield of 2.8% gross, out of which they have to pay costs like fees for the agent, repairs, servicing of heating, etc. I figure I must be quids in! (just hope they're not reading this because I want to stay a long time and to renew the lease).
  14. I can't see that we can draw very much from history in this. i) 0.5% interest rates aren't an interest rate at all, they indicate the banking system is still on life-support. ii) real interest rates are decoupling from the BoE 0.5% official rate - even the government are having to pay 2.5% to get gilts away. iii) house prices rose enormously on securitisation which made enormous amounts of money available, that process is stopped, and there isn't enough money in existence to support the current levels (which is why volumes have fallen so far). This isn't regular economic cycle territory. When the FED raises rates we'll find the UK has to do so too, and then heaven help anyone with a large mortgage.
  15. Kilham, that graph is very interesting. It predicts a lowest price as of £70-80k.... for the bottom of a trough! Is it inflation linked? If you look at Nationwide and look at their data on an uncorrected basis you see that house prices have reason nearly 80 fold since 1952, but that is mostly inflation, with the rate of HPI somewhere between 2%pa an 3% pa above inflation over 58 years. The serious (recent) madness was 2002-2004, where increases happened without any inflation (thanks to cheap chinese imports). You've never had it so good!
  16. The Nationwide trend line is a simple exponenential (it says), and I'd guess it is a simple least mean squares fit to the data in excel. The funny thing is that if you go back to say 2002, and look at Nationwide's press releases it has 1.9% and is all doom and gloom about the prospects for prices rising! It is very admirable that they keep an archive of all their previous predictions. Optobear
  17. Interesting that in 2005, http://www.nationwide.co.uk/hpi/historical/MPR0512.pdf The nationwide graph shown on third page, fits with a trend of 2.5% pa it is now 2.9% pa So not only is this exponential growth, but it is accelerating exponential growth, with rate of growth increasing year on year! Even faster than exponential - now how common is that in real systems? It is convincing me that property is seriously undervalued based on the latest graph.
  18. Looking at the main graph: http://www.housepricecrash.co.uk/graphs-average-house-price.php Which I think is direct from Nationwide - why does the trend line go wobbly in the recent quarters? I thought it was a simple exponential fit? Also, why fit through the points half-way up? Why not fit the troughs? If you fit the troughs then it looks seriously overvalued still, but the line shown, also reported in the press, http://www.thisismoney.co.uk/property-prices makes it look as though house prices are undervalued... this graph matters, and it looks to me as though it is a little distorted. Optobear
  19. Now we're on track. What about the effort typing this post? That ought to count? What about time spent on the lavatory - is that imputable?
  20. Isn't google great? I just found out that imputed rent is part of GDP! That means that if you've paid off your mortgage - and live rent free - then the value of the rent you'd pay (the imputed rent) is estimated by government statisticians and added to the UK accounts for Gross Domestic Product. Optobear
  21. The point is "who is they"? It is the FED (my suggestion), in which case why do they care if they raise rates in the US to suit the US economy and a side-effect is the destruction of UK housing values? I think that will be the trigger - not rising UK rates (which will be just a correlation) but rising US rates.
  22. Yes that is true, but the government aren't benefitting from the 0,5% rate at the moment, my thought is that the only beneficiaries of the 0.5% are the banks and it allows them to make ridiculously large profits, which in turns offsets their losses and allows them to boost their regulatory capital. So the point of the low rate is to provide a way to transfer money from government to banks without the public realising. If that is right, then the government only need to do that until the banks are re-established with cash, (like filling a petrol tank to full), and then the government can stop the pump (and raise rates back to historical 4-6% levels). My hypothesis is that the UK rates will just follow the US rates, so it is a question of when the FED feel they've pumped sufficient government money into the US banks to fill them with enough money to be credible - then rates will pop up almost immediately. When that happens the UK will need to do the same. I'd sugggest that the banks in the US that need that support aren't the big ones (the GS and JPM types), more the local banks and national savings banks. So how bad are those banks, and quickly can they turn off the pump?
  23. I take the point, but the government still need to borrow money, and they need to issue gilts if you look at the Debt Management Office http://www.dmo.gov.uk/reportView.aspx?rptCode=D2.1prof7&rptName=77111048&reportpage=Summary_of_results you'll see that they are having to pay well above 0.5% to get the debt away. So the 0.5% isn't really even the base rate that the Government have to pay at the moment. Furthermore, the yield curve, and the prices of the longer dated gilts at issuance are close to 4-5% (ie long term trend), so it has to revert? What do people think is the point of the 0.5% base rate if even the government can't borrow at that rate?
  24. However much I wish for the great house price decline, I can't see it happening until interest rates move back up to levels that are at least around the long term average, so that people start to feel the pain from their overextended borrowings. So the question is when will that happen? My hypothesis is that it won't happen until the FED raise rates in the US? If you look back at UK and US base rates it is almost always the case that UK rates are a little higher than US base rates, sometimes they've been much higher, only very rarely lower. So what will trigger a rise in US rates? That will (by my hypothesis) be what it takes for us to raise rates in the UK back to the historical average - and that is when the fun begins! My hypothesis also means that our base rates have nothing at all to do with the muppets in Bank of England MPC!. Thoughts? Optobear
  25. Death of the owner. Old people, big houses, die or go into a home, death duties need to be paid, inheritors want to get their hands on the money. They need to sell, they must drop the price to get a sale, that in turn feeds down the chain... So there we are: DEATH!!! Pestilence, plague, war, any of them in fact!!!
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