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Civil Servant

Too Many Mindless Bears On This Site

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Having observed this site at length over the last 18 months but contributed only sparsely, it has struck me that the quality of Bear argument has deteriorated sharply of late. Now don't get me wrong, I'm probably as 'bearish' as the rest of those grizzlies out there (although I'm concerned that a couple of interest rate cuts in August and November might raise confidence enough, albeit without much good reason - still a lot of folk eager to be parted with their money out there - to keep the housing market going longer than my family circumstances will let us continue with our STR experiment), but I don't think that the torrents of abuse hurled at TTRTR and the like either (a) add anything to the debate or (b.) help us learn and make informed choices.

One of the great things about this site is that, compared to the 1980s, people of a contrarian mentality can be much better informed than before. I just read an excellent thread where folk from all regions of the country were citing examples of falling rents - not exactly a scientific survey, but surely a better quality of anecdotal evidence than was available 16 years ago. The downside, however, is the 'Groupthink' mentality that seems to be dominating now that this site has been firmly taken over by the bears. Anyone who dares to think differently gets shot down.

Now, I'm as convinced as anyone here that any middle aged investor with a string of plush 2 bed buy to lets in Docklands is going to get their well-jewelled fingers well and truly burnt in the coming period of turbulence in the market. But I don't want to live in a 2 bed BTL-stylee place and so am a bit more concerned about what is happening in detail.

I sold by 2-bed flat 3 years ago at a price that hasn't been matched before or after in the block where I sold. In that sense I STR'd at just the right time. But there is no doubt in my mind that I did go wrong in not loading up and buying the 4 bed London terrace I had been looking at in the grottier part of SW17: these have gone up substantially since 2002 (in contrast to their SW12 cousins in a 'better' area which peaked earlier). And, although they appear to have now plateaued (sp?) I'm not sure they'll come down anything like as fast as 2-bed BTL-land. I'm convinced that whilst some property types will shortly be heading south faster than a swallow in Autumn, others will simply stagnate.

Whilst seeing BTL champs getting their fingers burnt might give me a slight frisson of pleasure (although it seems to be the main source of delight for a few on this site), I'm much more interested in how to navigate the turbulent waters ahead and ensure I get the best deal possible for my family and house them somewhere decent without dragging us all down in debt.

I think it was Dr Bubb that suggested we all state where we live on our atavar (?), its a good start in terms of ensuring we get a bit more specific in terms of the discussion and don't resort to mindless 'crash/not crash' discussions. Rant over.

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I don't think that the torrents of abuse hurled at TTRTR and the like either (a) add anything to the debate or (b.) help us learn and make informed choices.

What is there to debate with bulls anymore? The only arguments I've seen them make recently are:

'SIPPS, Yay!'

'3% interest rates, Yay!'

'Rate cut in August, Yay!'

I don't remember a single argument of substance from bulls as to why SIPPS will make a difference, why a 0.25% interest rate cut would make a difference or why even Brown would sacrifice the pound and the rest of the economy with 3% rates to prop up the housing bubble.

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Having observed this site at length over the last 18 months but contributed only sparsely, it has struck me that the quality of Bear argument has deteriorated sharply of late.

Any forum or newsgroup has a spread of contributions and moods. I think anyone observing calmly can work out which voices represent good value for money in a fluctuating market place :-)

Andrew McP

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I put it down to boredom as to be honest the arguments have been made and won.

The case for the crash is closed in my view as it's unravelling as I type.

All we are doing now is sitting it out.

Anyone who buys a property at this stage in the cycle is beyond redemption!

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I'm much more interested in how to navigate the turbulent waters ahead and ensure I get the best deal possible for my family and house them somewhere decent without dragging us all down in debt. 
Amen to that.

Anyone who dares to think differently gets shot down.

I disagree. Only the muppets get it in the neck. Father Fred, for example, is a respected opponent.
I just read an excellent thread where folk from all regions of the country were citing examples of falling rents - not exactly a scientific survey
No, not exactly "scientific" I agree, but what about the professional polls that show the economy booming and busting at the same time? They claim to be "scientific" too.
I'm convinced that whilst some property types will shortly be heading south faster than a swallow in Autumn, others will simply stagnate.
This is a calm, level-headed, intelligent analysis of the situation. This is what should happen but I believe the market runs on sentiment. It overshot on the way up I believe it will overshoot on the way down.

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I completely agree that the quality of some of the argument has gone down on the site but then with a name like "house price crash" there is a very good chance that the people who come across it will be bears (and I'll be honest I fall into that camp). As for your views on houses further up the chain I believe they will also come down in price as they are still quite unafordable in my mind. The whole house price pyramid system that we have and had in the past was partially a consequence of the way high inflation ate debt were. If we are to believe that our grasp of economics has improved and that capital will be used to repay debt then we must rethink the market/the market must adjust. Take for example an average house, imagine who would live in such a house, and then ask yourself if they will clear enough capital of after tax money to pay off that property in their working life. Yes there is additional equity in the chain from earlier gains but a reasonable bit of that has been spent proping up the retailing sector. When I have tried this I came up with the conclusion that debt repayment was taking up far too small percentage of the morgage and the problem is more severe on larger houses.

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Too Many Mindless Bears On This Site, Yah Boo Sucks to You

Way to go. What a constructive way to start a thread.

it has struck me that the quality of Bear argument has deteriorated sharply of late.

OK, if you got good bull arguments, let's hear 'em!

Edited by zzg113

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I don't think that the torrents of abuse hurled at TTRTR and the like either (a) add anything to the debate or (b.) help us learn and make informed choices. 

I agree. Best to ignore the abuse and sift through to find useful info.

B.

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Guest consa

Massive rise in local house prices

By Naomi Wright

HOUSE prices in Newham have tripled in the past ten years, according to new figures.

Average costs in the borough have rocketed from £48,380 in 1995 to £194,979 this year, a rise of 303 per cent, research commissioned by the County Homesearch Company has shown.

The information which lists all the increases in house prices within all the London boroughs is based on official Land Registry figures.

The statistics show that out of all London boroughs, Newham has seen the biggest increase in house prices, followed by Hackney, Tower Hamlets and Waltham Forest.

http://www.thisislocallondon.co.uk/news/he...ouse_prices.php

:ph34r:

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I was the originator of a "Yah Boo sucks" post (the Yah boo was for EA's who continually talk the market up against overwhelming evidence). I do not consider that mindless and most of my posts do attempt to apply some intellectual rigour to bear arguments which I espouse.

However occasionally, in my frustration with "mindless" EA's who con naive FTB's into thinking that now is a good time to buy, I think the occasional school boy rant is a desirable way to let off steam.

Do forgive.

VP

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Er... whats to argue?

prices are falling.

The turn formed last year, and anyone with eyes to look could see it happen.

Once it turns, it runs - momentum will not be denied on a market as massive and illiquid as this, as even a cursory glance at the last 75 years of data would tell you.

All we can do now is wait till it gets back to near the mean - there are only 2 ways this can happen - short term massive wage rises, or short term massive price falls.

Do you really mean to say you think that there can be any real argument between those 2 possibilities???

Or are you simply trying to get someone to say...

AWOOGA!

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OK, :), lets try some Bull arguments out:

- SIPPS - These are not going to have one iota of impact on the prices of most family houses, but it is quite plausible that they may have some role in propping up the 2-Bed BTL flats that, otherwise, would be the very weakest part of the market during any period of turbulence. You'd have to have an extraordinarily large pension pot to be able to SIPP anything other than one of these BTL properties (though as a Civil Servant, ho, ho ho!). I can quite imagine that Mdme Millard et al. will use SIPPs to convince themselves into staying in BTL just a bit longer - even if it ultimately dooms their pension pots as well - and thus putting a bit of a floor beneath smaller flats come the new year;

- Interest rate cuts - The prevailing attitude on this site is that 'Rates go up: weh-hey all homeowners are shafted as they'll never afford their mortgage!' and 'Rates go up: wey-hey all homeowners are shafted as the economy is obviously about to hit the rocks'. This heads-I-win-tails-you-lose attitude has its corollary amongst the bulls: rates go up? Weh-hey the economy must be doing fine! rates go down? Up go the profits on my BTLs and up go prices in the housing market as all those FTBs come back in. Listen to my family talk and I'm reasonably sure that a couple of rate cuts may bring a few more muppets back into the market and put some floor under prices;

- Supply - Nobody doubts that there are gazillions of 2-bed flats out there with wafer thin walls. But the number of genuine family homes doesn't appear to be expanding as rapidly - if anything it is falling as decent old housing stock in cities gets carved up into flats. A turn in sentiment will no doubt hit hardest in the speculative BTL market not least since these are the sort of flats that will be suitable for a couple for X years but become pretty small once you have kids. Larger houses occupied by folk with children are never going to see such churning - not the need to move. Although the value of their loans will only erode slowly in a low interest rate environment, I'm not convinced a killer 'shock' is out there that will force many people to actually sell up. People will sit tight, eat out a bit less, and supply in the market may simply dry up.

OK, its not easy to be a bull. But I can certainly see a situation where the 'average' house price in the UK falls considerably as a result of a 2-bed BTL meltdown but most of the readers on this forum feel shortchanged as the price of family homes remains stubbornly high. But please, don't get me wrong, I'd love to be wrong!

BTW - the yah-boo-sucks-to-you was supposed to be ironic!

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The bears have little rational arguement and have been wrong year on year on year, and refuse to rationally discuss any issue which upsets thier belief system.

People who put forward different views simply get screamed at with abuse, and driven out.

Many here do not realise the dangers of the period they are living under, of which real rates under nominal GDP and exploding houseprices and other capital prices are only the first part.

The next stage is a deep and creeping erosion of liberties: Complusory saving at negative rates of return. Existance tax, ID cards, and an emerging large class of people who are forced to rent forever.

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Good points cs. All mechanisms to control a gentle slowdown. If all goes to plan there will be no big shock and the sheep wont scamper away.

But there is another wheel touching... How much of the economy was funded by the rampant house price inflation? I dunno, but Im guessing its a lot going by the news coming out of the many affected sectors. The middle class homeowners sitting tight, will starve the economy that pays their next door neighbour. And the government will skim much less to pay itself.

I think a lot of peoples equity is tied up in their homes. Which made sense when hpi made nonsense of other investments. But what if they need to break open the singing piggy-bank? Downsize to unlock capital? I think the bar is higher than you may have perceived.

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BRAINCLAMP WRITES: "an emerging large class of people who are forced to rent forever"

If you look at many other Northern European Countries, vast numbers of people willingly rent for a long time and are happy to do so. But then they have reasonable security of tenure, while we have yo-yo'd between immovable tenants prior to Thatcher and then zero security (6 months short hold) after.

Result is that whereas in France, Germany, Holland and Belgium, tenants are considered normal civilised people paying for a service, here they are considered "low life" and landlords are considered BTL freeloaders.

Only in the UK do we possess this snobbery about renting. What happened to the glorious mobile, flexible population which was predicted in the 80's. We have become property owning obsessives.

VP

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OK, :), lets try some Bull arguments out:

- SIPPS - These are not going to have one iota of impact on the prices of most family houses, but it is quite plausible that they may have some role in propping up the 2-Bed BTL flats that, otherwise, would be the very weakest part of the market during any period of turbulence.  You'd have to have an extraordinarily large pension pot to be able to SIPP anything other than one of these BTL properties (though as a Civil Servant, ho, ho ho!).  I can quite imagine that Mdme Millard et al. will use SIPPs to convince themselves into staying in BTL just a bit longer - even if it ultimately dooms their pension pots as well - and thus putting a bit of a floor beneath smaller flats come the new year;

- Interest rate cuts - The prevailing attitude on this site is that 'Rates go up: weh-hey all homeowners are shafted as they'll never afford their mortgage!' and 'Rates go up: wey-hey all homeowners are shafted as the economy is obviously about to hit the rocks'.   This heads-I-win-tails-you-lose attitude has its corollary amongst the bulls: rates go up? Weh-hey the economy must be doing fine!  rates go down?  Up go the profits on my BTLs and up go prices in the housing market as all those FTBs come back in.    Listen to my family talk and I'm reasonably sure that a couple of rate cuts may bring a few more muppets back into the market and put some floor under prices;

- Supply - Nobody doubts that there are gazillions of 2-bed flats out there with wafer thin walls.  But the number of genuine family homes doesn't appear to be expanding as rapidly - if anything it is falling as decent old housing stock in cities gets carved up into flats.   A turn in sentiment will no doubt hit hardest in the speculative BTL market not least since these are the sort of flats that will be suitable for a couple for X years but become pretty small once you have kids.  Larger houses occupied by folk with children are never going to see such churning - not the need to move.  Although the value of their loans will only erode slowly in a low interest rate environment, I'm not convinced a killer 'shock' is out there that will force many people to actually sell up.  People will sit tight, eat out a bit less, and supply in the market may simply dry up.   

OK, its not easy to be a bull.  But I can certainly see a situation where the 'average' house price in the UK falls considerably as a result of a 2-bed BTL meltdown but most of the readers on this forum feel shortchanged as the price of family homes remains stubbornly high.  But please, don't get me wrong, I'd love to be wrong!

BTW - the yah-boo-sucks-to-you was supposed to be ironic!

You seem very interested in "family" homes. No doubt you have one yourself but actually an enormous number of people do cram themselves and their whole families into these wafer thin objects called flats and they do describe them as a "home", dreadful though it must be for them. How they cope I really don't know!

But aside from teasing you for your interest in "proper" homes, I don't see the logic of your proposal that "family" homes are any less immune from a price drop just because they appear to be made of a few more bricks and have a sloping roof. Indeed it is these very buildings which seem to be the most outrageously overpriced of the lot, especially in so-called "premium" areas in Surrey, Kent, Sussex and the commuting zone around London.

As for the merits of discussions here, it is worth saying that not only do many posters here feel that prices are going to crash, they also as a matter of philosophy want them to do so. I think that is the fundamental and combined purpose of this site. Yet I honestly have rarely seen any reasonable argument against the possibility gratuitously trashed...and the only hounding has been towards those who post clearly in order to wind up those they consider the "opposition".

I think what you may see is a bit of passion here and desire for something which many feel is, as a matter of urgency, a long overdue necessity. Yet most intelligent posters here, I believe, are not incapable of admitting defeat if prices stabilised or even rose in the coming months. But the evidence and conditions do to me seem overwhelmingly in their favour.

Neither do I think there is a prevailing attitude here about interest rates as you propose. There are huge numbers of posts here which actually are discounting interest rate influences in favour of the argument that the CAPITAL costs of housing are simply too high.

Finally, and I promise I am not trying to give you too hard a time, but making an early post with a general statement that there are too many "mindless" bears on this site is a bit of a risky thing to do! I don't think the occasional use of words like "corollary" lifts you particularly out of the mindless pit from which you clearly feel you have risen, and many posts here with far less pedantry than yours or mine have expressed some pretty convincing arguments with greater elegance.

So let's not get too superior, or we'll all have to qualify for a post by living in "genuine family" homes only. No harm intended I assure you. Just a gentle "rib".

VP

Edited by VacantPossession

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Having observed this site at length over the last 18 months but contributed only sparsely, it has struck me that the quality of Bear argument has deteriorated sharply of late.  Now don't get me wrong, I'm probably as 'bearish' as the rest of those grizzlies out there (although I'm concerned that a couple of interest rate cuts in August and November might raise confidence enough, albeit without much good reason - still a lot of folk eager to be parted with their money out there - to keep the housing market going longer than my family circumstances will let us continue with our STR experiment), but I don't think that the torrents of abuse hurled at TTRTR and the like either (a) add anything to the debate or (b.) help us learn and make informed choices. 

Good post, CS.

I've also noticed the tendency to round on anyone who dares to express an even slightly different view, playground-bully style. Doesn't do this site any favours.

Another thing that annoys me is the constant use of the term VI (took me ages to work out that meant Vested Interest) as a term of abuse for anyone who doesn't believe in an imminent and drastic crash. The truth is, a lot of people on this site (STR and FTB) have a massive vested interest in seeing prices crash.

I enjoy this site for the economics education and the discussion and debate - when there is any.

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Every so often someone complains that this is a biased site because it is heavily focused on pro-crash views.

So what? The reason alternative media outlets spring up is because the mainstream media fails to present a range of views.

Does the BBC give equal time, or any real time at all, to pro-crash arguments?

HPC, in its small but significant way, fills the gap.

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You seem very interested in "family" homes. No doubt you have one yourself but actually an enormous number of people do cram themselves and their whole families into these wafer thin objects called flats and they do describe them as a "home", dreadful though it must be for them. How they cope I really don't know!

But aside from teasing you for your interest in "proper" homes, I don't see the logic of your proposal that "family" homes are any less immune from a price drop just because they appear to be made of a few more bricks and have a sloping roof. Indeed it is these very buildings which seem to be the most outrageously overpriced of the lot, especially in so-called "premium" areas in Surrey, Kent, Sussex and the commuting zone around London.

As for the merits of discussions here, it is worth saying that not only do many posters here feel that prices are going to crash, they also as a matter of philosophy want them to do so. I think that is the fundamental and combined purpose of this site. Yet I honestly have rarely seen any reasonable argument against the possibility gratuitously trashed...and the only hounding has been towards those who post clearly in order to wind up those they consider the "opposition".

I think what you may see is a bit of passion here and desire for something which many feel is, as a matter of urgency, a long overdue necessity. Yet most intelligent posters here, I believe, are not incapable of admitting defeat if prices stabilised or even rose in the coming months. But the evidence and conditions do to me seem overwhelmingly in their favour.

Neither do I think there is a prevailing attitude here about interest rates as you propose. There are huge numbers of posts here which actually are discounting interest rate influences in favour of the argument that the CAPITAL costs of housing are simply too high.

Finally, and I promise I am not trying to give you too hard a time, but making an early post with a general statement that there are too many "mindless" bears on this site is a bit of a risky thing to do! I don't think the occasional use of words like "corollary" lifts you particularly out of the mindless pit from which you clearly feel you have risen, and many posts here with far less pedantry than yours or mine have expressed some pretty convincing arguments with greater elegance.

So let's not get too superior, or we'll all have to qualify for a post by living in "genuine family" homes only. No harm intended I assure you. Just a gentle "rib".

VP

Fair points, well made. Its a fair cop. Sorry, wasn't meaning to be a pedant, just to try and stir up some views on where things were likely to go for different classes of property as and if HPC materialises.

Fully aware how lucky I am. Wasn't meaning to be a git.

And I'll try not to use the word corollary again :rolleyes:

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As for the merits of discussions here, it is worth saying that not only do many posters here feel that prices are going to crash, they also as a matter of philosophy want them to do so. I think that is the fundamental and combined purpose of this site.

Which philosophy would that be, then?

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  • 301 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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