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House Price Crash Forum


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About loafer

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  1. I met with 2 top 10 housebuilder CEOs last week. One was proposing to do a bulk trade into a private rental fund to cut stock and deleverage. The other one confirmed that they had good sales activity because there was no private stock on the market so virtually all buyers needed to buy new. He was bearish going forwards.
  2. An increasing market gilt yield has two impacts. On new issuance, the government has to pay the higher market rate. On issuance already in the market (i.e. sold previously) the government still pays the original rate and the value of the gilts reduces so that someone buying them today get's the same effective rate. This effective rate is a mix of the interest paid by the government and received by the noteholder and the fact that the noteholder would pay, say, 98p in the £ and get back 100p in the £ when the gilt reeems. Thus, when gilt rates increase, they do not immediately increase the existing cashflow cost of the existing government debt, but it does make the new debt more costly to service. For the wider market, higher gilt yields can reflect higher long term interest rates, i.e. an expectation of inflation and therefore higher interest rates coming down the track. On the other hand, they could reflect QE if they are lower or a lack of investor appetite / increased risk of counterparty (HMG) if they are higher. HTH
  3. Here's a second helping... http://www.voxeu.org/index.php?q=node/3421
  4. What have I ever done to you?
  5. I do object to numpties driving small cars at 40mph on both sweeping A roads and in villages. The amount of destructive energy they carry is phenominal.
  6. Hi, Noel. I like your thinking, but they only go down to E220 don't they? Mind you, how about a 6.2l with "Blue Efficiency" badges? Shame the noise would give you away...
  7. Surely HPC is full of contrarians, in which case we should be buying 5 litre 4x4's? That's the way I'm thinking, anyway.
  8. Because the value of the bonds they already own will fall to reflect the higher market yield.
  9. No, you muppet! I'll explain. I met a guy who manages repos for banks. He lets some and sells some, depending upon the strategy of the instructing bank. The disclosed stats in a certain recent month say that all of the banks repoed, say, 1,000 BTLs in one month, yet in the same month he alone was instructed on more than 1,000 properties. This means that, as he is just one of several organisations doing this job, the stats must be underplaying what is going on. Better?
  10. I met a chap today who manages repossessed properties for the banks. He mentioned that recently the number of BTL repossessions was announced by and industry organisation for that month, and that in the very same month he had had more than that passed to him to manage alone...
  11. Gilts pay through their life, and then return the face value at the end. In this case they pay 4.25% on nominal face value. As the prevailing yield is slightly higher than nominal, it means the price is a little below 100p in the £, so if you bought the gilt for 95p, you would receive 4.25p per year, plus 100p in 25 years.
  12. Actually not. The prevailing yield on 25 year 4.25% gilts is c.4.6%, so the price implies c.4.7%.
  13. Yes, I agree with that. The increasing age before people have kids is an interesting one, particularly for higher income brackets. Lots of professional women leaving it until later to have kids.
  14. Certainly this is prime South East, commuting into the City, so your last point is true, subject to the proviso that it is all about affordability for the buyer of that type of property that is the key. Moving on to your main point, I chose 50 as an age because it felt about right, but I concede that 45 might be more like it. Many people nowadays who are 45 have kids sub-10 years old around where I live, so a family house is right, and downsizing only really kicks in post retirement in my view. In any event, the key issue is that even with my assumptions, the house I rent is still c.25% overvalued, and will probably fall 40% p2t.
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