Milton Posted December 5, 2011 Share Posted December 5, 2011 (edited) ***It was reported in the FT today, that Lloyds is now recapitalised to the extent that they could survive a 50% fall in the average house price. Lloyds mortgage book accounts for something like 33% of the UK's Mortgages. How much has the government stolen from the taxpayer, and given to Lloyds? *** [source was a comment on a blog. Does anyone have a link to the FT article?] What a disgusting era. The Government steal's money from the taxpayer, to prop up an overinflated asset class, so that the bankers can continue to pay themselves huge bonuses, based upon fake mark to market valuations, instead of writing down losses. Ensuring a slightly younger section of society must work for years for nothing. No Capital. Slaves. To a corrupt banking system, and political class. What a disgusting corporatocracy the UK is. Edited December 5, 2011 by Milton Quote Link to comment Share on other sites More sharing options...
dothemaths Posted December 5, 2011 Share Posted December 5, 2011 Come again??? Where is there deflation in the supermarkets? The portions are getting smaller, the prices are rising, some of the offers are psychological ploys that cost the shopper more. Also see Panorama tonight about supermarket price wars being not what they seem Yes, noticed that too. Sometimes the prepackaged stuff is cheaper (potatoes) and sometimes it's not (bananas). I weigh and compare in the fruit and veg sections these days so as not to get ripped off. Quote Link to comment Share on other sites More sharing options...
easy2012 Posted December 5, 2011 Share Posted December 5, 2011 The official rate of inflation will drop by 1.3% ish in Jan when the VAT rise is stripped out. That will leave us at under 4%. Not deflation, but not rampant inflation either. 1.04 ^ 10 = 1.48. In 10 years, the standard of living will be down by 1/3. It is the compounding that is scary, but wait, that is before QE3... Quote Link to comment Share on other sites More sharing options...
kev-all-in Posted December 5, 2011 Share Posted December 5, 2011 To recycle a good point made by another poster a couple of months ago (sorry can't remember who) - FTBers are generally young and internet savvy. They are comfortable using RM etc, are aware of the dire economic circumstances through having being at work etc. Contrast that with the oldies at the top of the housing pile. News that prices are falling is much slower to reach them. They get updates on house prices by viewing asking numbers in their local rag. They are also, ahem, more set in their ways and stubbornly going to insist that house prices don't go down. Anyone agree with this? yep, I agree with this up to a point - the 50+ boomers are more susceptible to VI spin in the Express / MSM. But I was surprised how little effort or thought 2 under 30's buyers who have recently exchanged put into their recent house purchases. I was chatting to a guy at work who's just completed on the purchase of a (slightly) larger family house, I asked him how long it had been on the market and he had no idea! - it hadn't occured to him to even ask, let alone research it or how it might have a bearing on negotiations!. Another couple managed to sell their house (albeit at a approx 15% loss on purchase price in 2007) and went straight out and offered 95% on a new place and we're very pleased with themselves for getting such a good discount! It was pretty obvious as far as they were concerned anything under asking was a result and would 'pay for' a new kitchen. I think lot of younger people aren't comfortable negotiating / haggling for things, its a bit of an art form that the older generation are much more comfortable and familiar with (ie buying stuff at local markets vs tescos / online), younger people are better at shopping around on the internet for the best price but its not the same as actually negotiating a better deal. Many younger people tend to see the asking price as THE price rather than an opening to negotiations - look at the numpties on LLL 'guided' by krusty and potless phil!! Most people really aren't interested / aware / able to think critically and properly research and analyse the biggest financial decision they'll ever make - a failure of our crap education or deliberate way to make 'sheeple' easier to manipulate?? Quote Link to comment Share on other sites More sharing options...
Doesn't Commute Anymore Posted December 5, 2011 Share Posted December 5, 2011 Have been pondering this recently. If the numbers of years down equals the number of years up (rough guide), then we are four years into an 11 year bear market. In short, we aint seen nothing yet. The last third of that might see prices dip below 3.5 times salary - that might begin around 2015. The bottom in real terms would then be 2018, at which point nominal prices would be circa £130 - £140K (so 50% down since 2007 in real terms). Courtesy of the madness in sustaining the boom on the way up, the current HP cycle is going to be the dominant factor in the working lives of Gen X IMO. Always appreciate your index updates and analysis, rantnrave. Yes, I think the nominal low is a long way off, probably towards the end of the decade, that sort of timeframe. I think for most of Gen-X'ers the aim will not be to get in at the bottom - life keeps marching onwards, and at some point a family will come along, or a tiring of renting and its possible insecurities. That for me is certainly a reality (I'm mid-30s) I'm thinking : : the main plan is to emmigrate, made easier for me as the Mrs comes from afar - although it'll be a culture shock and I will have to start again as a trainee in my field in that part of the world. Despite being a third world country, all the kids can read and rite and rithmatic, as well as get free uni education if smart enough (top 15%). This fact shows how cr@ppy a future the UK faces IMHO. : if I stay in the UK, I have a target LTV to buy at in a good state school catchment area, at which point me and the Mrs can pay down a mortgage early. A couple more years of lacklustre house prices may make that a reality, with some minor compromise, for us. At that point, further falls or stagnation until 2020 would be kind of irrelevant as theres a simple target to get mortgage free. Quote Link to comment Share on other sites More sharing options...
dothemaths Posted December 5, 2011 Share Posted December 5, 2011 Patience. There is true stalemate across the country between buyer and seller, except Northern Ireland (big drops following mass sillyness), isolated aspirational pockets (lack of alternative choice for good schools/lifestyle keeping it up?) and London (foreign money keeping it up, with a bit of immigration thrown in) The problem is last time it took 6-7 years for house prices to move from peak to bottom. This time, due to ZIRP and other government policy, its going to be more. Thats a lot of days, when you check a daily opinion forum regularly expecting progress. Chill out, enjoy Xmas, and see what the new year has to offer ! Good summary of the current situation. "Ye cannae change the laws of physics." Diversify, spread your assets, take it easy and wait. Quote Link to comment Share on other sites More sharing options...
RufflesTheGuineaPig Posted December 5, 2011 Share Posted December 5, 2011 They've all based their entire financial future on the FACT (to their minds) that house prices always rise, so of course they're reluctant to admit otherwise. But that's all they've ever been told, by the press, the tv shows, the mortgage lender, their own egos, and one another. House prices do always go up. Provided you look at it over a long enough time-span. If you bought in 2007 and can afford the payements, in 20-30 years your house will be worth more than you paid for it. The question will be "will a loaf of bread cost more than you paid for it". Quote Link to comment Share on other sites More sharing options...
Bruce Banner Posted December 5, 2011 Share Posted December 5, 2011 House prices do always go up. Provided you look at it over a long enough time-span. If you bought in 2007 and can afford the payements, in 20-30 years your house will be worth more than you paid for it. The question will be "will a loaf of bread cost more than you paid for it". And it looks like those mortgages are really taking their toll, even at today's rates of interest. We're in Spain for a month and had breakfast in a nice little beach side cafe this morning. I was chatting with the, English, owner and he said that this year has been dreadful for business "No one can afford holidays these days, the place was empty all summer, I've been here for sixteen years and I've never seen anything like it". Quote Link to comment Share on other sites More sharing options...
FedupTeddiBear Posted December 5, 2011 Share Posted December 5, 2011 Ah the faux bears come out to play. You evidently don't live in the South East / London. I would be jumping for joy if prices fell round here but I'm very much afraid that DD is right for this area. Quote Link to comment Share on other sites More sharing options...
billybong Posted December 5, 2011 Share Posted December 5, 2011 Nailed it! Numerous temporary supports for a failing market. They dont solve the problem. They delay the pain. Some politician on the radio today admitted as much. That is they were "kicking the can down the road to buy enough time to solve the problems". At least they're admitting that they're just kicking the can down the road. Buying time to solve the problems . Quote Link to comment Share on other sites More sharing options...
bmf Posted December 5, 2011 Share Posted December 5, 2011 House prices do always go up. Provided you look at it over a long enough time-span. If you bought in 2007 and can afford the payements, in 20-30 years your house will be worth more than you paid for it. The question will be "will a loaf of bread cost more than you paid for it". I think on a forum that has better than average debate one should always assume "in real terms". Quote Link to comment Share on other sites More sharing options...
righttoleech Posted December 5, 2011 Share Posted December 5, 2011 A question for two of the above posters Which is the correct spelling to describe the paying occupants of a landlord's premises...? A Tennants B Tennents C Tenants Anecdote - the two houses I offered on in Northants - neither are sold months later, but no AP reduction either. EA told me they have a better offer and are negotiating with another party. Well, that was BS. However, ALL the 4 or 5 2-bed flats I offered on - sold or under offer inside of 3 weeks although one may be withdrawn or with ten...oh you can't catch me out I used to think it was C Tenants, but I may be wrong as no-one else on here spells it that way. Quote Link to comment Share on other sites More sharing options...
billybong Posted December 5, 2011 Share Posted December 5, 2011 I thought that the only reason to get into BTL was for the capital appreciation and that the rent is just a bit of icing on the cake. I can't see capital appreciating very much against inflation for the next few years and unemployment is going to rise whilst LHA is going to fall which puts a squeeze on the amount of rent a landlord can charge. Also, if the percentage of households which rent their property increases, this also increases the amount of political leverage that tenants have to urge the Politburo for increased tenants' rights such as more secure tenancies, rent controls, better quality safeguards against poor quality accommodation etc. As a non-sequitur, I have a PT job delivering pizzas in the evenings and I have noticed that the people living in new-build "executive" flats tip the least and order cheaper pizzas than any other neighbourhood. There are always plenty of cars with cardboard "for-sale" signs in the windows parked outside too. Interesting that you should say that. Before the big boom it was the exact opposite. The rent was the reason to get into BTL and any capital appreciation was the icing on the cake. Quote Link to comment Share on other sites More sharing options...
bmf Posted December 5, 2011 Share Posted December 5, 2011 Interesting that you should say that. Before the big boom it was the exact opposite. The rent was the reason to get into BTL and any capital appreciation was the icing on the cake. Many are on interest only precisely because you can just sit and let the capital appreciation do the work. Might not end well :-o Quote Link to comment Share on other sites More sharing options...
rantnrave Posted December 6, 2011 Author Share Posted December 6, 2011 : the main plan is to emmigrate, made easier for me as the Mrs comes from afar - although it'll be a culture shock and I will have to start again as a trainee in my field in that part of the world. Despite being a third world country, all the kids can read and rite and rithmatic, as well as get free uni education if smart enough (top 15%). Where is she from, if you don't mind me asking - have been to a far few third world countries and am generally interested. Quote Link to comment Share on other sites More sharing options...
inflating Posted December 6, 2011 Share Posted December 6, 2011 Definitely, but I think the supermarkets (alright, just the Tesco I usually go to) have found the upper limit on what people can pay. Prices on certain things are cheaper now than they were 6 months ago. Not cheaper than 12-24 months ago mind, but still every little helps. It may just be a ruse to lure people in over Christmas though, I guess I'll have to see what happens in the new year. Panorama last night with Sophie Raworth - supermarket oncreased the prices for 2 months and then dropped them back to where they were in June or May, and called it a good deal. Another supermarket had a "wow" promotion - the wow actually was that the price was higher than before but the ad artwork suggested it was less. Yet another supermarket chain slapped "Now £2" on fabric softener on its promotion as if it were a discount - previous price was £1.65 They are all making great profits - they are having a laugh with our money. I spend more in the local market these days - I get free range eggs for 70p and veg for less too Quote Link to comment Share on other sites More sharing options...
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