How We Will Beat The Bulls

[Gideon Gono]

Do you seriously not understand the difference between nominal and real?

Christ (and I do not take Her name lightly) the bulls are stupid.

I fully understand. You're the one who doesnt get it. The point I'm making is house prices, over the longer term, will ALWAYS go up. Its the way our society works and until someone comes up with a better idea (which i doubt, especially after what I read in here) thats the way its going to be.

Are you getting paid £1 an hour like you were in 1982 or £25 now??

[HAMISH_MCTAVISH]

1) Sell your house really cheaply

LOL. Financial genius at work, watch out.

2) Show them the charts so they convert

Double LOL. You will show me pretty pictures and I will somehow have the desire to lose money???? NOT.

3) Rent and invest what would be your mortgage payments in an economy where living standards are likely to increase.

So, how are you going to do that, when RENT COSTS MORE THAN A FULL REPAYMENT MORTGAGE??????? Like it does where I live, and in large parts of the country.

Idiot.

Just as an example....

Rent for 3 bed ex council terrace---- £900 per month.

Purchase for ex council 3 bed terrace--- £150K......

Rent for 1 bed flat--- £525 per month.

Purchase for 1 bed flat--- £85K.

Please do explain, oh wise housing Guru..... How does one rent, AND invest the spare change in some other investment, when renting is MORE EXPENSIVE than buying??????

Fool.

Then use your vast wealth to buy a bull's house when he downsizes for retirement, and tell him it's just a little something for your cats.

Yeah, good luck with that.

I suspect the cats have better financial sense than you do. Maybe you can rent from them when you end up bankrupt and pennyless in the future?

[Bloo Loo]

I fully understand. You're the one who doesnt get it. The point I'm making is house prices, over the longer term, will ALWAYS go up. Its the way our society works and until someone comes up with a better idea (which i doubt, especially after what I read in here) thats the way its going to be.

Are you getting paid £1 an hour like you were in 1982 or £25 now??

sure, you buy your first place, it is expensive.

howver, in the boom years from 2000 onwards, it wasnt just expensive, it was VERY Expensive...to get on the ladder, MOST had to see a broker as the lending required was outside the criteria set by official lenders....now the question I asked my self was....why is this the case? how can a broker, who has still to sell a mortgage from a bank, get a better deal...well, the story was....wall of money, the chinese, the arabs...indeed, anything but the truth....securitisation and the moneytisation of debt itself.

the banking system is and will remain busted for some time.

To buy a first place on 6-10 times the main earners income, deposit from parents, share with afriend, IO and other ways to JUST GET A LOAN, were signs of immense stress.

We are in a new paradigm now....and its not the further inflation of housing prises, real or nominal.

[Gideon Gono]

sure, you buy your first place, it is expensive.

howver, in the boom years from 2000 onwards, it wasnt just expensive, it was VERY Expensive...to get on the ladder, MOST had to see a broker as the lending required was outside the criteria set by official lenders....now the question I asked my self was....why is this the case? how can a broker, who has still to sell a mortgage from a bank, get a better deal...well, the story was....wall of money, the chinese, the arabs...indeed, anything but the truth....securitisation and the moneytisation of debt itself.

the banking system is and will remain busted for some time.

To buy a first place on 6-10 times the main earners income, deposit from parents, share with afriend, IO and other ways to JUST GET A LOAN, were signs of immense stress.

We are in a new paradigm now....and its not the further inflation of housing prises, real or nominal.

Ive heard this spouted so many times. I have one mate who got a liar loan (because he was an contractor) who has paid it back in full already.

I know 8 others who tried and couldn't get them in 2004! Most people (this is the reason the world won't fall apart) went to their lenders and asked how much they could borrow. HSBC were ultra prudent with me, I got a 3x salary mortgage and had to put down a 5% deposit. THAT WAS IN 2004.

I couldn't agree more that there is some stress out there. Most of these people will keep their jobs and wont be selling will they? A % will go under selling their places cheap but I'd say you would have to be Johnny on the spot to pick up on these, there aren't going to be many places selling 40 - 50% down. I'm talking London and home counties.

Mark my words as soon as employment picks up (the lay offs are slowing quickly) we will return to a flat/slightly up housing market.

Edited June 7, 2009 by Gideon Gono

[Redcellar]

Ive heard this spouted so many times. I have one mate who got a liar loan (because he was an contractor) who has paid it back in full already.

I know 8 others who tried and couldn't get them in 2004! Most people (this is the reason the world won't fall apart) went to their lenders and asked how much they could borrow. HSBC were ultra prudent with me, I got a 3x salary mortgage and had to put down a 5% deposit. THAT WAS IN 2004.

I couldn't agree more that there is some stress out there. Most of these people will keep their jobs and wont be selling will they? A % will go under selling their places cheap but I'd say you would have to be Johnny on the spot to pick up on these, there aren't going to be many places selling 40 - 50% down. I'm talking London and home counties.

Mark my words as soon as employment picks up (the lay offs are slowing quickly) we will return to a flat/slightly up housing market.

You're living in a dreamworld. Bloo Loo was right about the last ten years. In fact they were unique. Securitisation was a new invention that flooded the markets with cash for mortgages amongst other things. That meant people could see a broker and did not need to provide a proof of income (some of which were liar loans). Basically people committed to expenditure they could never maintain but the markets loaned the cash anyway (in a lack of understanding about what they were investing in). Comparing with your fathers and grand fathers experiences is daft. You can't, the financial markets were completely different as explained above. And before you ask, I know about this because I work in the business for one of the worlds largest lenders.

Securitisation as was, is dead and will never rise again. The excesses we saw in the last ten years will not happen in the same way ever again, unless some other brain dead moron invents another Ponzi esq scheme.

Edited June 7, 2009 by Redcellar

[Kazuya]

You beat the bulls by waiting. Time is on our side. Gordon Brown is on his way out and the Tories will give the UK the bitter medicine it needs to recover.

Soon, this will be the reaction of bulls:

[pppeter]

LOL. Financial genius at work, watch out.

Double LOL. You will show me pretty pictures and I will somehow have the desire to lose money???? NOT.

So, how are you going to do that, when RENT COSTS MORE THAN A FULL REPAYMENT MORTGAGE??????? Like it does where I live, and in large parts of the country.

Idiot.

Just as an example....

Rent for 3 bed ex council terrace---- £900 per month.

Purchase for ex council 3 bed terrace--- £150K......

Rent for 1 bed flat--- £525 per month.

Purchase for 1 bed flat--- £85K.

Please do explain, oh wise housing Guru..... How does one rent, AND invest the spare change in some other investment, when renting is MORE EXPENSIVE than buying??????

Fool.

Yeah, good luck with that.

I suspect the cats have better financial sense than you do. Maybe you can rent from them when you end up bankrupt and pennyless in the future?

I'm glad you saw the humour in the first bit, because to be honest you're a bit of a moron and you might have seized on the opportunity for insult and uneducated ranting. It's people like you that made me leave the site for better pastures. I just came back to see how bad it had got!

Anyway, moving on to your insults and uneducated ranting...

How much have you looked at the charts? In the last 2 crashes the bottom was below the previous 2 peaks in real terms, which would mean going below £110,000 in today's money if it follows through this time. The economy isn't looking like it will do anything different so far. Price/Income ratios for FTBs are still above the last peak and to get a decent fixed rate you need at least a 25% deposit. Low interest rates are the only thing bulls have to cling to, but low interest rates have only 1 way to go. Did you notice in the US last week when rates went up in an hour by an amount which was the equivalent of a 15% reduction in home values? To say that won't happen here is like saying the London market won't crash.

You're getting ripped off on rents.

The point you and Osborne don't get is that even if prices go up they're unlikely ever to regain their relationship with average earnings and UK average earnings are unlikely to buy the same standard of living in the future. You're spending good money on a UK property which in 25 years' time could be worth what a Polish property is today, in terms of the quality of life you could get by downsizing or whatever you want to do. An alternative use for your money would be to buy into Indian standards of living whilst they're still relatively low, because they won't be soon. If you can't beat the bulls by renting then beat them by buying only as much property as you need. If you'll need an extra bedroom sometime in the future then don't buy it today - use the money wisely. Property always goes up, they say...in the long run. Yes, but so does bread. Which will move faster?

[babesagainstmachines]

The Government wants HPI, so HPI it will be. That's why they took over the banks, then gave them lorries full of your taxpayer cash.

Face it bears, if you don't buy a house, bulls will buy them all supported by YOUR taxes, and YOU will be paying their mortgages while you are stuck renting off them. And it's YOUR saving the banks are lending.

Lovely jubbly, I'll have me a Thamesmead block please!

Edited June 7, 2009 by dazednconfused

[simpleton]

They are importantly different, but you have dig slightly to see why because the difference is well camouflaged by our political class.

First understand that a rise in house prices is actualy a rise in land (location) prices. The price of houses did not rise because roofing tiles or timber became more expensive but because locations themselves (land) became more expensive.

A rise in stock prices does not exact an extra toll on the productive; it makes no difference to a producer that stock exchanges for this price or that, his costs remain the same in any case. A rise in land price DOES extract an increased toll on the productive; all production relies on access to locations / land and so a rise in land price directly exacts a toll on all productive endeavor while supplying nothing extra in return.

In the case of commodities such as say iron, oil etc, a rise in price sends a signal to producers to raise production and so deal with the perceived shortage, this acts to balance price between the twin forces of the demand for it and the costs involved in production; no such equilibrium can exist with land price. Because land is not produced, a rise in price can only act as a signal to hold onto or hoard land for future price rises thus exacerbating the price rise further. This is why again and again the economy is destroyed by what amounts to supply locks in land; a rise in the price of land only signals people to engage in behavior that further raises the price of land, and so land price spirals higher, higher and higher until the productive portion of the economy can no longer bear the cost.

The third difference is even more fundamental. In all exchanges in trade, the person receiving payment for a benefit is in some way, though maybe indirectly, actually supplying that benefit to the buyer (which is morally why the buyer is paying him); this simply is not the case with land. In fact, the problems with the land market are directly attributable to the fact that the seller of land is not himself supplying anything at all to the buyer, if he were then land would be produced or gathered from nature and a rise in the price would signal others to to do the work needed to produce or gather more land from nature to deal with the supply shortage.

Why morally should the owners of land be enabled to charge people a fee for access to employment opportunity, which they are not supplying?

Well.... There it is. The reason why we have house price booms. The reason why it all comes tumbling down again.

Any one with any common sense understands these facts intuitively, even if they couldn't put it quite so concisely as this.

Our resident bulls/trolls remind me of five year olds at a tea party. Running around full of glee, with their faces smeared with chocolate and jelly. Noisy, (and let's be honest) annoying, and with about the same amount of common sense.

Look... In my neck of the woods (Somerset) - the price of starter homes roughly doubled in just over two years. Were any of you adults during the last crash? Did any alarm bells start ringing?

If the price of accomadation were to rise (relative to earnings) by this amount over a period of a couple of decades, then one would be forced to conclude that it was being driven by a combination of some deep rooted organic economic and demographic factors.

But - going back to what we've seen recently - do you know why it felt and looked like a bubble?

Because it was one.

[Tim Miller]

Sorry to kick you in the goolies HPC gang but here's more good news.

http://www.express.co.uk/posts/view/105763...little-for-sale

Come on. It's time to put your hands up. You're all done. Finished.

The house I was watching in Maidstone that went up for sale 3 weeks ago has sold for mental money. If you need the details I'll give them to you.

Don't speak about green shoots. HPI is back thank god.

'Don't speak about green shoots. HPI is back thank god'

Why Sibley is HPI good?

You are a simpleton!

[Tim Miller]

I take it you do realise HPI is no different to stock market rises, or gold price rises, or commodity price rises??????

No. Clearly you don't.

Houses are a limited commodity, just like anything else of value. If you want them to get cheaper over the long term, build more and get supply to exceed demand, in places where people want to live, and where there is employment to support them.

Until and unless that happens, the underlying trend will always be up, no matter what the short term fluctuations do.

Well bu@@er me Hamish, we agree on something, yes more houses need to be built in certain areas, the South East is a prime example.

This is a quote from the village idiot Sibley

'Don't speak about green shoots. HPI is back thank god'.

Now this is what I can't stand to read, why would anyone think HPI is good? It's not good for any kids growing up is it.

[Harry Monk]

I have a property I want to sell. If I put it on the market now I might have to take 10-20% off the 2007 value. That would be around £50,000 leaving me only £50,000 in equity.

I want to see a profit of £100,000 on that place. Now they are going up it's going to be sooner rather than later. I promise you it will feel great sitting in my bank account.

I would suggest you offload it now because there won't be any equity at all in it this time next year.

[Tim Miller]

I have a property I want to sell. If I put it on the market now I might have to take 10-20% off the 2007 value. That would be around £50,000 leaving me only £50,000 in equity.

I want to see a profit of £100,000 on that place. Now they are going up it's going to be sooner rather than later. I promise you it will feel great sitting in my bank account.

Understand why HPI is good now?

You are so thick! Are you going to live in a shelter then? Or are you going to buy another property at an inflated price because of HPI? If buying again HPI works against you.

[Bloo Loo]

You are so thick! Are you going to live in a shelter then? Or are you going to buy another property at an inflated price because of HPI? If buying again HPI works against you.

Indeed, if the rungs of the ladder are subject to HPI, because HPI is 99% fueled by debt, then the target house also rises, only if YOUR house has gone up by 10%, Lets say it WAS 100K, you can sell for 110K, the target house, now being NOT 200K but 220K...then the amount you need to borrow to conclude the deal has also risen...by 10% from 100K to 110K.

course, the opposite true in a HPC.

and, as borrowing is tight, the rungs must close.

simples.

[simpleton]

I have a property I want to sell. If I put it on the market now I might have to take 10-20% off the 2007 value. That would be around £50,000 leaving me only £50,000 in equity.

I want to see a profit of £100,000 on that place. Now they are going up it's going to be sooner rather than later. I promise you it will feel great sitting in my bank account.

Understand why HPI is good now?

Jesus wept. Is that it? C'mon. Honestly?

That's the most sensible argument you can come up with?

Aren't you capable of making any interesting points, or actually trying to construct a debate?

Dear Lord. Didn't the standard of debate used to be just a little bit better than this on HPC?

Edited to add : Sibbers me old son - you strike me as being so shallow that you would probably be out of your depth in a puddle. You are a waste of oxygen.

Edited June 7, 2009 by simpleton

[Tim Miller]

Indeed, if the rungs of the ladder are subject to HPI, because HPI is 99% fueled by debt, then the target house also rises, only if YOUR house has gone up by 10%, Lets say it WAS 100K, you can sell for 110K, the target house, now being NOT 200K but 220K...then the amount you need to borrow to conclude the deal has also risen...by 10% from 100K to 110K.

course, the opposite true in a HPC.

and, as borrowing is tight, the rungs must close.

simples.

Not to mention that one has all manor of taxes and costs each time you buy / sell, it's like roulette, the "House" takes a big cut every time. HPI only is beneficial if one owns more than one. That's where BTL came in and did further damage. We all ended up having to pay more, more of our cash and bigger mortgages, but sibley thinks this is good! That man is a moron! I have asked him why HPI is good, he can't answer that question apart from the moronic answer of having more money in the bank! The fact he now has to pay more for the next purchase is beyond his comprehension!

[Tim Miller]

Jesus wept. Is that it? C'mon. Honestly?

That's the most sensible argument you can come up with?

Aren't you capable of making any interesting points, or actually trying to construct a debate?

Dear Lord. Didn't the standard of debate used to be just a little bit better than this on HPC?

Edited to add : Sibbers me old son - you strike me as being so shallow that you would probably be out of your depth in a puddle. You are a waste of oxygen.

Simpleton,

My sincere apologies for calling Sibley a simpleton. He is in fact a moron.

[Bloo Loo]

Not to mention that one has all manor of taxes and costs each time you buy / sell, it's like roulette, the "House" takes a big cut every time. HPI only is beneficial if one owns more than one. That's where BTL came in and did further damage. We all ended up having to pay more, more of our cash and bigger mortgages, but sibley thinks this is good! That man is a moron! I have asked him why HPI is good, he can't answer that question apart from the moronic answer of having more money in the bank! The fact he now has to pay more for the next purchase is beyond his comprehension!

Its no good asking any of the bulls that question.

there is a personal answer, which is, its good because I can sell and make a profit for buying at the right time.

there is the national answer, which is, its good because banks can lend more money at cheaper rates based on a secure asset.

the correct answer, is both the above cause prices to rise, cause a false view of wealth in the economy, and lead to property bubbles as greedy bankers suckle on the bonuses to be made.

sadly, the scheme also leads to a shortage of means of exhange...as we have seen, and the cure is to let the bubble reset.

Printing is NO cure. It might give the illusion of a temporary cure, but it is temporary.

[simpleton]

Not to mention that one has all manor of taxes and costs each time you buy / sell, it's like roulette, the "House" takes a big cut every time. HPI only is beneficial if one owns more than one. That's where BTL came in and did further damage. We all ended up having to pay more, more of our cash and bigger mortgages, but sibley thinks this is good! That man is a moron! I have asked him why HPI is good, he can't answer that question apart from the moronic answer of having more money in the bank! The fact he now has to pay more for the next purchase is beyond his comprehension!

Ahhh.... Yes - but, you see, there is a missing piece in the Sibley jigsaw puzzle...

Sibbers wants some poor mug to give him full 2007 boom price for his gaffe so he can bugger off abroad to sunnier climes.

See? Now it makes sense.

Yup. I know. Pass the sick bag.

[Tim Miller]

Ahhh.... Yes - but, you see, there is a missing piece in the Sibley jigsaw puzzle...

Sibbers wants some poor mug to give him full 2007 boom price for his gaffe so he can bugger off abroad to sunnier climes.

See? Now it makes sense.

Yup. I know. Pass the sick bag.

So there is good news, Sibber's is going to move abroad, was it a whip round for a one way ticket, I think I missed that, if it's still being collected put me down for a fiver.............sod it.....................make it a tenner!

[Aidan Ap Word]

I have a property I want to sell. If I put it on the market now I might have to take 10-20% off the 2007 value. That would be around £50,000 leaving me only £50,000 in equity.

I want to see a profit of £100,000 on that place. Now they are going up it's going to be sooner rather than later. I promise you it will feel great sitting in my bank account.

Understand why HPI is good now?

And just what would that extra 50k mean for you? Do you plan on burning it all on holidays/cars/luxuries/champagne as you celebrate a fictional thing?

*if* you don't convert the *PAPER* "profit" (???) you 'make' on the house into cash deposits then HPI is irrelevant to you. Leaves you doing nothing else than glorying in the pain every other reasonable person saving for their future ...

*if* you DO convert the *PAPER* "profit" (???) you 'make' on the house into cash deposits then you lose the house (because you sold it). The result of that: the HPI you are so desperately advocating continues (which, if it is to have any meaning it must) then you end up further behind with every ongoing month thereafter ... why would you want that?

If this is all about you having 'done the right thing' not to have sold up before the bubble burst in 2007 because you can 'make' (???) an even bigger profit in the months and years ahead of us today ... then the *best* thing that can be said of your attitude is: greed, greed, greed. Do you suggest that the bubble hasn't burst but you are going to continue to make bigger paper profits and then live like an MP-on-expenses-muppet when you sell up and it does?

Perhaps you are (and I am just raising the question) the greedy little blighter that such behaviour would imply????

Aidanapword

[Aidan Ap Word]

So there is good news, Sibber's is going to move abroad, was it a whip round for a one way ticket, I think I missed that, if it's still being collected put me down for a fiver.............sod it.....................make it a tenner!

I am in for a tenner too. Paypal?

Aidanapword

[Tim Miller]

Its no good asking any of the bulls that question.

there is a personal answer, which is, its good because I can sell and make a profit for buying at the right time.

there is the national answer, which is, its good because banks can lend more money at cheaper rates based on a secure asset.

the correct answer, is both the above cause prices to rise, cause a false view of wealth in the economy, and lead to property bubbles as greedy bankers suckle on the bonuses to be made.

sadly, the scheme also leads to a shortage of means of exhange...as we have seen, and the cure is to let the bubble reset.

Printing is NO cure. It might give the illusion of a temporary cure, but it is temporary.

I am a big bear, my back ground is property but I can't stand selfishness. I did not need HPI to make a profit, albeit I was more in commercial than resi. The big picture is HPI is extremely harmful to the people, I do not have kids, but I pity them as what future do they have to look forward to? The UK is second in debt in external debt per ca pita, the average person has too little left to spend enjoying life. Why oh why do some people not realise this!

[simpleton]

I am in for a tenner too. Paypal?

Aidanapword

Tell you what, I'm feeling generous. Put me down for a monkey.

Poor old Sibbers. I bet they have to tell him to come indoors when it's raining.

Edited June 7, 2009 by simpleton

[andykn]

Do you seriously not understand the difference between nominal and real?

Christ (and I do not take Her name lightly) the bulls are stupid.

Do you seriously not understand that buying at 12k and selling 22 years later for 180k represents a real gain, even if not of 168k?

If you really want to show us what the real gain was just subtract the rent from the mortgage payments and invest the difference on the stock market for 22 years, do the same with the 25% deposit, then subtract the total of those investments from 180k, adjust for inflation, then tell us what you think the real gain would have been.