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House Price Crash Forum


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Everything posted by loafer

  1. Mortgages Some 37% of landlords have tenants who are in arrears with their rent according to the National Landlords Association. Over the last six months, 44% of landlords have experienced rental arrears, which accounts for the significant rise in repossessions and why a growing number of landlords are having problems meeting their mortgage repayments. When faced with arrears, only half of landlords attempted to recover the loss of earnings through the courts. Landlords generally found the court system straight forward but many reported waiting times of over three months before their case w
  2. As usual, EDM hits the nail on the head. MtM has been corrosive in amplifying this crash. The reason why these instruments have been written down is a combination of overly cautious expected loss assumptions and massive return requirements, with most of the effect being the latter. Imagine you do a safe deal which pays Libor+1% per annum in return, and you fund it for it's 25 year life. Job done by 2pm, off to the golf course. Imagine the market crashes one year later. Your original deal is still funded for it's life. It's still safe. But if you did it now, someone would want 3% instead?
  3. Tar sands are only just viable at current oil prices, but the longer term prospects for commodity backed currencies are good. The only problem with Canada is that it's economy is tied inextricably to the US.
  4. True, they are, but the volumes and external stresses are such that the market will revert to fair value, with all of the implications that has.
  5. Correct. Land is an inherently geared asset, so rises quicker and falls faster than the market for the things built on it.
  6. My view is that we are heading for higher interest rates quicker than expected. We are not Japan - we import inflation and don't have the savings to keep a strong currency (thankfully), so the markets will force interest rates up. Think about it - if you are a bond investor, why would you buy UK gilts when inflation is higher than the prevailing return?
  7. Very interesting - thanks. I think your prediction is about right, if possibly a little bullish on the downstroke. If you look at HPI derivative pricing, and the Japanese 1970's/80's experience, we will probably drop a little faster and further. I don't agree with your prediction for another big jump in prices in the medium term - this experience will loom large in the memory of regulators and bankers for decades to come - the only thing that will see a quick recovery in prices will be big inflation IMHO.
  8. Peston is just relaying the words of his client, Gordon Brown (aka Winky McF***nut).
  9. That sentence makes no sense at all. What are you trying to say?
  10. Watch out, as they will fall when QE stops. Happened in Japan when they did the same.
  11. Given Labour seems so keen on the "court of public opinion", I hope they will take their own mandate to it in the form of an immediate General Election. Otherwise they are just a bunch of two-faced twunts.
  12. Liquidity and mark to market. Partly down to fewer trades and slower deals meaning values lag real life. Lack of regular valuations mean realism takes a long time - look at commercial real estate - regular valuations and already down 25-30%.
  13. This is proof of the cash purchasers which have given the resi market a boost since the New Year. On corporate bonds, the yield might look OK, but watch the increasing default rates...
  14. You will come to regret that statement, and probably in the next few months.
  15. Firstly you are not "feeling ominous". You might possibly feel anxious, but you can't "feel ominous". Secondly, I agree that we have the potential for a major crash in stock markets and that FX markets may well be hugely volatile - I think the Euro has a long way to fall. I don't agree that this means financial armageddon, however, and 3x unemployment. It would probably ignite a further move down in house prices, though.
  16. Interestingly, my Best Man has just had a cash offer on his old flat too at £265k. As I say, these are cash deals, so the buyers are not worried about negative equity, but about a place to live. Once they've gone, hold tight.
  17. As an opportunity cost of capital equation, you are right, but people buy houses to live in, and if they buy now at 20% below peak they can justify the relative value - like taking some winnings, and not risking it all for the "Grand Prize". I know. I'm in this situation, and it is a tough call to wait it out.
  18. In which case we agree on one more thing. I'm starting to worry that I'm schizophrenic...
  19. Difficult to do as an individual. Best way would be an out of the money long term cap to hedge against major movements, but keep the cost down.
  20. What we are currently seeing is a shake out of cash rich buyers who are no longer receiving any material income from cash deposits and so are moving it into property. Once these are shaken out, we are back to terminal velocity, as there is a paucity of debt to allow other potential buyers in, no matter how much they want to.
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