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  1. Hello all My name is Chad Lawson i am writing this little blog/topic here today to explain my thoughts and opinions. I believe that there will be a house price crash in 2021 i am unsure when about in the year but i am very certain, i believe this will be the case due to the corona virus and people are getting let off without paying rent as such and so on due to not being able to work, I think that house prices will slowly start to decline until it hits and crashes in 2021. This will be the best time to buy and invest in a house as after the the crash will happen people are going to try and rework it as fast as they can due to not wanting people to spend less money as it is a power hungry evil plan that landlords do to prevent you from getting the best out of you're money. That is all i wanted to say and just let the people know my thoughts thank you for reading. Love Chad.
  2. "Monetary trends, meanwhile, have weakened further in early 2018, with G7 plus E7 six-month real narrow money growth falling to a nine-year low in February. Real broad money has also continued to decelerate. The emerging economic slowdown, therefore, could extend into late 2018, allowing for the usual lead." http://moneymovesmarkets.com/journal/2018/4/10/a-monetarist-perspective-on-current-equity-markets.html Monetary trends looking similar to 2007/8 for the moment. There is a clear trend. It will be interesting to see if it continues or reverses in coming months. It looks likely there will be a significant economic global economic deceleration over the next 12 months. Australia, Canada and the UK are lagging and coincidently? have the most advanced housing bubbles / private debt problems. The US, China and EU are also very weak. The Euro aggregate conceals that France and Spain are lagging whilst Germany and Italy are holding up better.
  3. As per Economist the most appropriate position for Banks to lend is when House Price to Income Ratio is 3.5 Currently in UK its hovering around 7.5 !!! https://www.theguardian.com/money/2017/mar/17/average-house-price-times-annual-salary-official-figures-ons BUT for the majority of 21 to 35 year olds (largest first time home buying segment) its hovering around 10 for most of the UK, except around 15 for Greater London. This is mainly due to non availability of well paid jobs to young professionals. I know this because I live in London and most 21 to 35 year olds I know make between 25K and 40K, While House prices hover between 400K and 700K in Suburban London from Travel Zone 4 outwards (Zones 1-3 are mostly out of reach unless you are Rich). I know people who are 35, living with their parents and still struggling to save for a Deposit. Seems like a very Risky position for Banks to continue lending when someone owes 15 times their Gross Income, which is essentially 20 times their Net Income. A small economic shock can lead to large number of Defaults, not a good position for Lenders considering uncertainty around Brexit. New Buyers are Lifeblood to keep this Bubble alive, without a continuous Injection of New Buyers the cycle would collapse (or inflate in the wrong direction when BTL sharks take control of the cycle) My opinion is that Bankers are not asleep at the wheel but will intentionally continue to Lend knowing the Risks to keep this Bubble alive to its seams as Fat Cats get big bonuses when they sell more mortgage products (later they know Government will have to come and rescue them from Taxpayers Money) Your Thoughts, Opinions ?
  4. August 2007, bang. Historically, we're "due" another recession. I know I know, it's different this time. But let's look back and remind ourselves of the build up and chaos of the last GFC, almost 10 years ago. What happens this time when rates can't be lowered? Prime London falling on record low 0.25% rates, weak GBP, student debt, massively overpriced stocks, BTL crackdown, stagnant wages, record personal debt (credit cards, cars), Brexit, Corbyn, Trump, China, Qatar, Italian Banks. Ideal time to buy? Property market: Review of 2007 http://www.telegraph.co.uk/finance/property/investment/3360078/Property-market-Review-of-2007.html Anyone got some juicy articles either from the mania or the aftermath of 07/08 they'd like to post to remind ourselves that maybe it isn't so different this time, or is it to be QE to infinity and beyond forever?
  5. The words 'negative' and 'equity' have finally appeared in the ES http://www.homesandproperty.co.uk/property-news/london-firsttime-buyers-95-per-cent-mortgages-combined-with-slowing-property-prices-increase-a110941.html
  6. Have we had a Black Monday thread recently? https://www.rt.com/business/362618-stock-market-severe-fall/
  7. Back onto house prices instead of politics or racism! List what you have seen and see if we can start a snowball rolling.....
  8. http://www.msn.com/en-gb/money/homes-propertysection/britains-property-market-is-going-to-implode-as-housing-nears-peak-affordability/ar-BBsgGgO?li=BBoPOOl&ocid=mailsignoutmd apologies if its been posted already. hohoho
  9. Guest

    The Tide Is Turning

    Boomer - "House prices have tripled because of all the demand, especially those Syrians that turn up and buy houses, its chaos. Get in quick and buy somewhere before you miss out" We - "hmmm, the housing stock to population ratio has stayed constant in that time, maybe something else is to blame?" Boomer - "that's just what happens with houses, they always go up!" Us - "maybe the introduction of BTL mortgages in 1996 kicked off a boom?" Boomer - "naah, its just houses .... can't go wrong with bricks n mortar" Us - "London was long a poster child for the House price boom, but that was fuelled by russia and china.... they've all done a runner!" Boomer - "i doubt it - 80% of the london new builds are sold!" Us - "actually 80% of the flats had been reserved by chinese and russians - they've done a runner and sacrificed their small deposit" Boomer - "i don't like your tone young man. You're just bitter because you spent all your deposit money on ipods and drugs" Us - "a lot of new builds are worth less than when they were bought. Aberdeen crashing, SW8 oversupplied, BTL landlords being leant on by the tax man (and becoming a social pariah .... the tide is turning" Boomer - "get off my property" Us - "actually the bank owns most of it remember - you took out equity to build a BTL empire!"
  10. Last month, I posted a video about black Wednesday on a thread. I can't remember which one so I'll repost here: I'm too lazy to explain what black Wednesday was, so this excerpt from wikipedia will have to do. What I worry about is the possibility of another black Wednesday type event (does not necessarily have to be on Wednesday). There are several reasons that I believe this could happen, many of which the members of this forum know quite well, starting with an obvious giant housing bubble, but also including Very low interest rates Brexit fears Trade imbalances Unemployment, high cost of welfare, other high costs George Osborne's failed attempt to significantly decrease the debt/deficit I'm not going to go into detail of the above, there are plenty of threads about these subjects. Given the similarities between where we find ourselves now, and the last black Wednesday, I am willing to take the leap that if another one does occur, the government will try to use the same thing to shore up the pound. First, the government will Attempt to reassure everyone that everything is ok, which will fail as everyone will now panic Buy back pounds by using the nations foreign currency reserves (and maybe gold), this will also fail Raise interest rates brutally, which may or may not work, and lastly Now you may think at that this is good, as we can see full HPC as well as good saving rates at the bank, enabling us to finally own our own homes but, the government may use the last trick in their arsenal to prevent the pound from plummeting DEVALUATIONWhat I wanted to focus for the rest of this thread is, how do we best protect ourselves from all of the above? I have some half cooked ideas but they need some scrutiny. Changing pounds to another currency which is deemed safer Buying precious metals Savings accounts Buying stocks or assets (not housing assets) None of the above are perfect ideas. Changing pounds to another currency will cost some money if you use the post office, so there will be some loss there. I found an online service called transferwise, which is an international money transfer system, created by the same people as PayPal, that works like the bank but with way better rates than conventional currency exchanges. For example, as I wrote this post, the exchange rate from the GBP to the USD was 1: 1.415. Tranferwise gives you 1: 1.4084. I did a calculation and this works out to be 0.99533% efficient. The problem is, this service is a money transfer service, which means you need a bank account at the other end if you are going to transfer to yourself. In this case I would need a bank account in USD if I wanted to change pounds to dollars with this method. Another method, which is 100% efficient without fee's or charges, but probably a pain in the **** to use, is oxchange. A peer to peer exchange, where you log in with your facebook, and place an order to buy another currency for a certain amount, and the program matches you with someone who wants to sell their currency for the amount proposed. I see this working in London with tech savy tourists in a startbucks. This won't be very good up in the sticks though. However, changing pounds to another currency wont protect the value of that currency in the long term, as all fiat devaluates over time (unless there is deflation). Which brings me to the next option. Buying precious metals. This has been discussed to death, there is a mega thread pinned at the top of the forum. Gold has historically been used as money. The government can't print gold so it can be a useful tool to store value, except its very very expensive, doesn't yield dividends and gold sellers sell at slightly over spot. Another thing against gold, is that it's price fluctuates like it's a roller coaster. If we head down towards a black Wednesday, gold inventories aimed towards small investors will run dry pretty quick. If I wanted to buy a small gold coin, which is the best service available? Silver, is much cheaper than gold, and by some accounts is way under valued. Unfortunately silver is taxed with VAT. I've seen some websites, and just looking at the tax puts me off buying. However, after a bit of digging, I found that Estonia does not place VAT on silver, which allows one to buy silver at just slightly over spot. PROBLEM is, you have to get the silver from Estonia, meaning you loose out on shipping. So maybe metals are not the way to go. Savings accounts are not a good option with very low IR. Also, if the government devaluates the currency, it will do so by far more than the best HTB ISA. (4%) Buying stocks or assets could be an option, provided they are very good quality stocks which pay dividends, this may be a way to make extra money. Trouble is finding those stocks, whilst massive QE and low IR has pushed almost all of them up into the stratosphere AND George Osborne, not one to miss a trick, has implemented a new tax on dividends, the son of a bitch. So I'm out of ideas, and very tired, have to sleep. Thoughts?
  11. If you're going to dig out a basement best be careful about it http://www.bbc.co.uk/news/uk-england-london-34935821 Luckily Duffy sold it before it collapsed
  12. I don't see any references to this fascinating research piece from Deutsche Bank so decided to post it. http://uk.businessinsider.com/deutsche-bank-calls-the-top-on-londons-insane-property-bubble-2015-10?r=US&IR=T It's in a PDF here on page 29 http://www.dbresearch.com/PROD/DBR_INTERNET_EN-PROD/PROD0000000000368569/Konzept_Issue_06.pdf Deutsche Bank has called the top of London's runaway housing market in a blisteringly pessimistic note sent to clients on Thursday. In the bank's sixth "Konzepts" paper, Sahil Mahtani argues that a combination of rising interest rates, the Bank of England's tinkering with the market, and the increasing "politicisation of the housing issue" means London's insane price rises can't continue — and price falls could be likely. What's more, Mahtani argues there are "multiple catalysts to suggest that 2015 is the turning point" and concludes ominously: "London’s property is unlikely to enjoy the next thirty years as it did the last." The riseMahtani begins by illustrating just how spectacular the rally in London property prices has been over the last few years, with some stunning facts: Every £1 invested in London property in 1990 is now worth £5, double the performance of the FTSE 100. In the last sixty years, London house prices have only fallen 3 times: during the Volcker recession of the early-1980s; the sterling crisis of 1992; and the 2009 financial crash. Conservative estimates put average London house prices at 13 times average gross incomes. London residential mortgage debt amounts to a quarter of the country’s total. London's housing market is huge, expensive, and hot. It's not hard to find stories of property insanity in the capital and popular opinion holds that its a flood of foreign investors buying up homes and leaving them empty to accumulate value that has sparked the boom. Mahtani says it's simple supply and demand — the supply of homes has failed to keep pace with demand from buyers, be they foreign or otherwise. But crucially Mahtani sees a second, overlooked factor for spiraling prices — buyers believe house prices will keep going up. People are willing to pay silly prices on the expectation prices will keep rising and they can cash in themselves later. That in turn bids up prices. The fallBut the second cause is a worryingly self-fulfilling practice that isn't sustainable. What's more, Mahtani thinks economists are underestimating just how much perception effects prices. He points to the Hong Kong property crash of 1997, when prices dropped 40% in just over a year, as evidence for what happens when the wind changes direction on public opinion. Here's Mahtani: A shift in expectations about future supply was much more instrumental in bringing about the downturn. The post-handover government had made it known that it would welcome a decline in property prices and would increase supply by 85,000 units a year. In retrospect, at no point during the next five years did housing completions reach 35,000 annually. Yet because the decision had credibility, it changed expectations and the 85,000 figure is still cited today as a reason for the market decline. The government announcement precipitated a change in psychology that diminished the speculative increment in the market. It didn't matter that supply increased nowhere near as much as promised — the "psychology" had changed and that was enough to send buyers running. Interest rates are bound to rise soon in the UK which will take out a lot of the momentum in the property sector. But Mahtani believes something similar to Hong Kong could also happen in the UK, caused by state and Bank of England intervention. Mahtani says the Bank of England is beginning to see housing "more like a utility and less like a financial asset," because Governor Mark Carney sees mortgage lending as a key component of bank stability and the wider financial system. That makes it more likely the Bank will put in place more measures to rein in certain lending and buying practices. This will likely have an outsized impact on London because of its huge weighting in UK property debt. Here's Mahtani: The most advanced practitioners of macroprudential policy are Hong Kong and Singapore where loan-to-values for buy-to-let properties are capped at 50 per cent, foreign purchases of property are hit with 15 per cent stamp duty and second and third home buyers face differentiated, punitive treatment. In this approach, housing becomes more like a utility and less like a financial asset. The Bank of England appears to be moving in this direction. Secondly, and perhaps most importantly, housing is growing issue for both the left and the right. Only 40% of today’s 25- to 34-year-olds own homes, compared with two-thirds in 1991, and Mahtani says both parties are trying to address this in a bid to win over the next generation of voters. flickr: muddyclayThe redevelopment of Battersea Power Station is one of the most high-profile residential developments in London. The Conservatives have already moved to increase stamp duty at the top of the market and cut tax benefits for buy-to-let landlords, which has taken some of the air out of the top of the market. This could be just the start. Mahtani argues that the more house prices rise out of step with earnings, the more it will "sow the seeds of its own correction" by increasing resentment and discontent amongst would-be home owners. He says: "The fate of house prices may well be decided in the political face-off between younger voters and the elderly harnessing their political power to prevent price declines to their house-cum-pensions." Ultimately, Mahtani says, we may have reached a point where "policy intervention will favour stabilising or reducing prices." The aftermathIf you're a would-be buyer, all this is great news. But for people who have recently bought it's another story. As in Hong Kong, Mahtani thinks that even if policy intervention is only meant to put a lid on things, it could end up sending prices into reverse. He says: "Again, all that needs to happen is for investors to think price outcomes are asymmetric, with low upside and large downside." In this way a self-fulfilling cycle in the opposite price direction could emerge. Homeowners would then find themselves in negative equity, freezing much of the market as people sit on their property until the price gets above water again. Another issue is interest-only mortgages. Mahtani writes: "Over a third of those with mortgages have interest-only loans, with the first sizeable wave of principal repayments due in 2017-2018." That could lead to a wave of repossessed homes, again driving prices down. Mahtani says that ultimately it's "a losing battle to call an end to the froth in this market. But perhaps we are close to the turning point." In short, either prepare for more afforadability or brace for impact because London's property market is heading for a big shake-up, according to Deutsche Bank.
  13. i like to start another working day with a quick browse on property-bee/rightmove to see whats been reduced in the last 24 hours can anyone beat this? http://www.rightmove.co.uk/property-for-sale/property-45743786.html nice little £100k off the original £650k asking price
  14. http://blogs.economictimes.indiatimes.com/LettersfromLondon/entry/clear-and-present-danger-to-uk-property
  15. biggest faller of the week thus far: http://www.rightmove.co.uk/property-for-sale/property-44042254.html £100k off the asking price in just over a month can anyone find a bigger cut?
  16. Today's quotes from the bank on Sky ("We could limit amounts of certain types of mortgages that banks could undertake, we could provide advice. The chancellor has asked us if we would provide advice on changing the terms of Help to Buy.") and the government on the BBC ("I think if he says that we need to pare back on some of the government schemes like Help to Buy, then I think we should do so.") suggest conscious signalling that some kind of intervention is afoot . If scaling back support for the market is announced, I see two things as inevitable: (1) rapid retreat by the smart money as the market is spooked that this is just the start of it and (2) a MIRAS-style last hurrah as the not-so-smart money rushes to borrow to the hilt before the restrictions come in. Suddenly demand falls off a cliff and we know what comes after that. What's the alternative that I can't see, that following meteoric rises engineers a miraculous soft landing with, happily ever after, house prices ambling along in step with wages? Wouldn't the people in charge better serve their own interests by sitting back, letting the bubble become even bigger before bursting and then blaming everyone else?
  17. i've seen a lot of price reductions in the last month but this one is the biggest thus far: http://www.rightmove.co.uk/property-for-sale/property-46170395.html# 13/05/2014 Price changed: from '£360,000' to '£300,000' 03/05/2014 Initial entry found. a one off or the start of something big??
  18. Making tea. Absolute 80s on. There's a new FCA advert - Can you afford your mortgage????? There's new lending rules coming in end of this month. Don't forget about council tax etc etc etc. Makes a change after listening to countless 'Your money is safe with the FCA looking on'. http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review 'In the past, some people were allowed to take out a mortgage they could not afford. This led to some of them falling behind with their payments or losing their home.' You don't say . . . Here's the rules: http://www.fca.org.uk/consumers/financial-services-products/mortgages/mortgage-market-review/affording-a-mortgage Christ. Nevermind whether you can afford the mortgage or not, just filling in the form will kill the market. I call Pop! end of this week, 26th April, when these rules come in.
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