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Let's Take Turns On Being A Bull For A Day

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A lot of posts here recently have talked about the lack of bulls to "debate" with.

Let's practise our debating skills by taking an opposite view to our usual and see how good a fight we can put up!

I'll start off:

[bull hat on]

Although prices have risen (unfairly) in the past few years, this does not guarantee a crash will follow. Many of the arguments posted here predicting a crash are based on the assumption that free-market forces apply. We are not living in a truely free market because the government is always meddling and vested interests are always confusing people's expectations of house prices. In the end, it is down to what a house is sold for that dictates its price and, if people (on average) still refuse to sell for lower prices the prices will not drop.

An alternative ending to the current scenario is that we may end up in a new (old) paradigm where most housing is owned by landlords and very few properties are bought or sold (and hence value is much more abstract a concept).

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A lot of posts here recently have talked about the lack of bulls to "debate" with.

Let's practise our debating skills by taking an opposite view to our usual and see how good a fight we can put up!

I'll start off:

[bull hat on]

Although prices have risen (unfairly) in the past few years, this does not guarantee a crash will follow. Many of the arguments posted here predicting a crash are based on the assumption that free-market forces apply. We are not living in a truely free market because the government is always meddling and vested interests are always confusing people's expectations of house prices. In the end, it is down to what a house is sold for that dictates its price and, if people (on average) still refuse to sell for lower prices the prices will not drop.

An alternative ending to the current scenario is that we may end up in a new (old) paradigm where most housing is owned by landlords and very few properties are bought or sold (and hence value is much more abstract a concept).

Brainclamp has been saying that since the begining of time :)

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Brainclamp has been saying that since the begining of time :)

Which bit, the debating part or the pseudo-bull logic?

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Which bit, the debating part or the pseudo-bull logic?

That the socio-economic climate of today will lead us into a rentier society.

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That the socio-economic climate of today will lead us into a rentier society.

Ahh, OK. So, bears out there, tell us why it can't/won't happen.

I've just had a thought: if I'm pretending to be a bull for the sack of debate, does that make me debatabull!

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Guest rigsby II

An alternative ending to the current scenario is that we may end up in a new (old) paradigm where most housing is owned by landlords and very few properties are bought or sold (and hence value is much more abstract a concept).

I'm seeing vast majority of sub £100K traditional FTB houses still being hoovered up by BTL.

Viewers of my house have been approx 50% BTL, 30% divorcees, 10% move sidewayers, 10% FTB

Brainclamps hypothesis is certainly coming true for FTB round our way - catch22 cant afford to buy have to rent, can never afford to buy.

Whilst I've lived on my small street 2/3 years, 4 houses in a row of about 15 have become rented.

It might be 5 soon <_<

So the bull BTL argument still applies in my area, like it or not.

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OK here's my carefully considered bull argument:

'House prices won't go down. They can't go down. There's too much demand. I bought another BTL last year and the agent told me prices would keep going up. How dare you tell me that my house will lose value - it's my pension, my castle, my status symbol. It will not go down in value. It can't! Oh, please, don't let my house lose value, please! etc... (repeat till repossessed).'

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This is a brilliant idea and will no doubt show us the error in the ways of our thinking.

We must be crazy to think house prices can ever fall, what is this madness! I mean its an ever increasing pile of bricks that i can draw more and more cash from, its just like a cash point but theyre all free to use!

Rent for 30 years and own nothing but hefty savings a high quality of life and no debt, Pay interest only mortgage for 30 years and the bank owns a 1 bed flat. Winner!

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I can certainly see how Brainclamp's hyptheses could roll out over a short period of time, in fact to certain degree they already have.

Medium / long term though I think that such a situation would cripple consumer spending and maybe bring about social collapse and mass emigration.

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I'm seeing vast majority of sub £100K traditional FTB houses still being hoovered up by BTL.

Viewers of my house have been approx 50% BTL, 30% divorcees, 10% move sidewayers, 10% FTB

Brainclamps hypothesis is certainly coming true for FTB round our way - catch22 cant afford to buy have to rent, can never afford to buy.

Whilst I've lived on my small street 2/3 years, 4 houses in a row of about 15 have become rented.

It might be 5 soon <_<

So the bull BTL argument still applies in my area, like it or not.

I concede that it is possible for a short term but it is not a new paradigm. The nuBTL of today are doing exactly what you suggest, they are hoovering up any property - it doesnt matter if its a good investment propery or not because until very recently they are relying on capital gain. You hear comments like "im in it for the long run, so my negative rental yield doesnt matter". You cannot say to the bank when the demand payment "dont worry i wont pay you this quarter, maybe next quarter when yeilds have increased, dont worry im in it for the long run" . The bank will quite simply say "Not with my money your not".

The nuBTL of today dont seem to have any stability in thier pyramids, Slap 10K on a credit card to lay down the deposit to your first BTL, MEW on that BTL to buy your next, MEW and buy another ect. All with with yields that dont cover the mortgage let alone give a livable income stream. Now the nuBTL thinks well yea but im worth a million, they are worth a million of debt. When they hit financial distress they can sell a property? Sure, but who to, they have hooverd up all the council dives which they have paid well over odds for. Who will they sell it to?

Most normal homeowners buy a property under the assumption that they are "in it for the long run", its a wonder that people get repossessed, dont the banks know they are in it for the long run?

EDITED:

By the time i wrote this OnlyMe has managed to say it in a couple of words ha

Edited by theChuz

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ok, bull hat on too: I'm a bull!

We say we're in it for the long term, so let's look long term.

Our wealth is growing, and will continue to growth. Historically we have been able to put surplus cash to good use by investing in emerging companies/technologies/countries who were in need of our capital. Our money grew, and justly so.

As time goes by these areas for investment diminish as the world becomes more and more developed, and our cash returns are diminished by the ever smaller increments in standard of living attained for these investments.

At the same time the demand for inflation-proof investments will grow as the demographics require individuals to save for their own retirement rather than relying on the younger generation to provide for them.

Housing in itself should never depart from it's utility value as indicated by the rental market, but in a world with few investment opportunities, and heightened investment demand, the money needs be parked somewhere.

Couple these factors with the very likey increase in transport costs as the era of cheap oil draws to a close, and we have an interesting situation. Yes, you can build a house in the middle of nowhere, but who will want it? How do I get to the hypermarket?

Instead of houses being constrained by the size of our country, (which is almost limitless if you were allowed to build on fields), it will be contrained by the size of settlements than are practical to live in without driving large distances. With excess liquidity there will be a land-grab of the most central desirable areas. Too much money after too few assets. This will be the true limited supply / excess demand market. Invest now if you don't want to miss out. Opportunity of lifetime!

~

how was that? :)

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I can certainly see how Brainclamp's hyptheses could roll out over a short period of time, in fact to certain degree they already have.

Medium / long term though I think that such a situation would cripple consumer spending and maybe bring about social collapse and mass emigration.

That's EXACTLY what the Illuminati are guiding us into / have engineered!

They will then offer the UK population - the "New Way" on how we live out our lives .............. :unsure:

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Guest rigsby II

I concede that it is possible for a short term but it is not a new paradigm.

You are right - those that have shakey foundations may come a cropper - they always will whatever they do - and they will get shaken out of the tree.

But what about professional landlords, property funds, or mom-and-pop BTL who have one or maybe two properties for their retirement.

It can all add up to a lot of BTL taking traditional FTB properties out of the market.

And mom-and-pop can rely on it rather than the promise of a maybe we'll get a pension, maybe we won't -and they can pass it on to their kids.

You can't flame all BTL as non-starters.

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Person A buys a damp 1930's semi for £350K, at 4 times salary during the lowest period of interest rates in decades.

Person B doesnt and foolishly rents a similar property for £1100 a month

25 years later person A has a thriving multi million pound business empire

Person B dies a sad and emBittered old man in a damp bedsit in Tooting

ctrl A - Ctrl C - Ctrl V ad infinitum

Hope that helps

LOL

Edited by Who Knows

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I will play TTRTR.

I have 600000 properties and put the rent up by 50% every year and my tenants thank me for it.

Property prices will not fall because I will prop them up with my big willy

Interest rates don’t affect me because I have a magic gun.

TTRTR

How did i do? it was the best i could come up with

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Guest rigsby II

Person A buys a damp 1930's semi for £350K, at 4 times salary during the lowest period of interest rates in decades.

Person B doesnt and foolishly rents a similar property for £1100 a month

25 years later person A has a thriving multi million pound business empire

Person B dies a sad and emBittered old man in a damp bedsit in Tooting

ctrl A - Ctrl C - Ctrl X ad infinitum

Hope that helps

LOL

Or even...

Person B doesnt and foolishly rents a similar property for £1100 a month - At todays prices.

In another 10 years...

Person B doesnt and foolishly rents a similar property for £2100 a month

(Whilst repayments stay roughly the same)

But I like your style

:D

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Or even...

Person B doesnt and foolishly rents a similar property for £1100 a month - At todays prices.

In another 10 years...

Person B doesnt and foolishly rents a similar property for £2100 a month

(Whilst repayments stay roughly the same)

But I like your style

:D

Or even Person B waits 5 years and buys person A's repo semi for £280K .....

Edited by Who Knows

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Guest Bart of Darkness

You can't flame all BTL as non-starters.

I'd agree. I do think a lot of amateur BTL's, especially those who jumped on the bandwagon late, are going to run into problems, if they aren't already doing so.

Anyway, my turn to be a bull:

Ha ha, you pathetic losers, buy now or miss the boat forever, prices only ever go up.... SIPPS explosion... rent is dead money.... stop paying someone else's mortgage... get on the ladder.... grow some balls and buy now.... it's always been a struggle to buy.... Labour won't allow a crash to occur..... buy now.... ladder.... boat.... look how rich I am because I bought in 2001.... ladder.... boat.... SIPPS.... dead money.... ladder....

OK, not much in the way of reasoned argument there but hey, what did you expect? The only bull "arguments" I hear are from this site and they're pretty much all there.

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You are right - those that have shakey foundations may come a cropper - they always will whatever they do - and they will get shaken out of the tree.

But what about professional landlords, property funds, or mom-and-pop BTL who have one or maybe two properties for their retirement.

It can all add up to a lot of BTL taking traditional FTB properties out of the market.

And mom-and-pop can rely on it rather than the promise of a maybe we'll get a pension, maybe we won't -and they can pass it on to their kids.

You can't flame all BTL as non-starters.

I try to differentiate between differnt BTL'rs, we need decent landlords who know what they are doing for society to function, i do not question that.

When i refer to nuBTL'rs i mean the band-wagon brigade that have piled into it in the last few years without knowing what they are doing. That includes mom-and-pop who just want it as a pension, they have to hold onto it long enough and then sell it when they retire.

Alot of the nuBTL are not getting enough in rent to cover the mortgage, even mom-and-pop, so they need to pay for people to stay in thier BTL's. They only have capital apreciation to draw on as a pension, which means they need to sell it and pay thier 40% capital gains on the profits, not much of a pension. They need to sell it for more than what it cost them + what it has cost them to supliment tenants + 3% p.a they could get of a bank in interest. If they have bought at the peak of the biggest assest bubble in UK history then it maybe sometime after the bubble pops before the price gets anywhere near what they paid for it.

Of course theres SIPPS but i think we've torn that a new ring piece more than enough.

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Hi,

I do look for bull arguments. The way I normally look for info is to find a range of sources - investment groups, banks, research institues, universities, economics groups, etc., people who have time to spend days, months, years out in the field researching, consider their fews and contrast them with other views to reach something that seems plausible to me.

When bull arguments come on the airwaves, particularly on the media, they are very flimsy, not really backed up by anything much plausible. Fair play to TTRTR, he comes on with some plausible thoughts, linkes to some palusible news item (sometimes) and puts some figures down to scrutiny. The general VI - EA stuff that is a few one liners, backed maybe by a bit of flimsy research undertaken by a PR firm employed by an EA, doesn't cut the ice usually.

Now, that current idea that is going round the media - commisioned by an EA group - that more people wish

to live single and hence their is more demand for property in the future, mostly the stuff that is difficult to shift now, studios, 1 and two bedroom flats. Well, that kind of could make sense, but there was no detail given, none of the assumptions of the enquiry layed bare, the research methods etc., And when I sat and thought about it closley, and I thought about the size-price ration of modern build appartments in cities, well, that doesn't seem to make a great deal of sense. The number of heads per area of land rises expotentially in this scenario, where one two or thre preople lived, now 8-16 live, at least. And if you times that by several thousands, suddenly there is a deluge of property on the market compared to now, which would suggest a fall in prices. That is the basis of high density living, it is much cheaper. The report doesn't give any consideration to that. That is the problem with the bull argument at the moment. I will dismiss some bear arguments as well if they don't really make too much sense to me. At the moment, the quality of bull arguments is very weak and very similar to the stuff the media pumped out during the last correction (you notice how around 1988 there was meant to be a severe shortage of housing, five years later there wasn't).

So, my next question is that I am having trouble finding good sources of Bull analysis, particulalry from anyone independent - someone not involved with buying and selling houses for a living. Some pointers please and I will go away and do some extra homework. I am just not seeing it at the moment.

Boomer

Edited by boom_and_bust

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Ok,my turn at being bull!!!

I've listened to all you doom mongers for the last 4 years saying there would be a crash and there hasnt.

I even put off buying a house because of 9/11,SARS,The pope dying....and STILL the prices go up.

now I've decided to take the plunge and buy 4 properties(I've managed to gain the funds for the purchases and offset them against the equity in my parents house they have bequeathed me in their will.....they ain't dead yet,both are about to retire though.)

the bank were very helpful and lent me 600k.....I will be a millionaire this time next year!READ IT AND WEEP LOSERS!

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I will be a millionaire this time next year!READ IT AND WEEP LOSERS!

Oracle, are you sure that you haven't spent too long on singing pig... I KNOW, your really marketeer :o very clever... very tricky

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Lenders need to lend.

Their employees from the top down rely on more lending for their salaries, bonuses, meeting targets etc.

Many large companies are cash rich and do not need large borrowings.

SME sector, who knows, but I suspect lenders are being very cautious there.

So lend on housing, the more the better and there is always the property to take back from the unlucky ones.

Of course as HPI occurs people will then MEW so lenders get even more benefit. Then in old age borrow against the house again.

Everybody's happy, lenders and borrowers.

This is the New Economic Model for much of the West.

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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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