Jump to content
House Price Crash Forum
Sign in to follow this  
slinky

The City Bonus

Recommended Posts

Here is something which is puzzling me. Papers keep going on about how its going to be an amazing year for city bonuses. How house prices in London will surge once again.

1) Can anyone explain why its such a good year for city bonuses when its not such a great year generally for everyone else?

2) Is it true?

3) Is there really a London House Price surge concern here - do city workers really fly out of their offices and pay more for houses because they get a bonus.

I'm really interested to hear your views.

Slinky

Share this post


Link to post
Share on other sites

Its true..

You get a large bonus and you rush up to a vendor and offer more money then they were asking..

Hell its christmas, you have a windfall.. share it..

The writer of the piece is chuckling that we have paid any attention to this one..

Quality..

Share this post


Link to post
Share on other sites

Its true..

You get a large bonus and you rush up to a vendor and offer more money then they were asking..

Hell its christmas, you have a windfall.. share it..

The writer of the piece is chuckling that we have paid any attention to this one..

Quality..

Yep and it doesn't matter how many houses you already have. A city bonus will make you want to buy another one.

Share this post


Link to post
Share on other sites

Here is something which is puzzling me. Papers keep going on about how its going to be an amazing year for city bonuses. How house prices in London will surge once again.

1) Can anyone explain why its such a good year for city bonuses when its not such a great year generally for everyone else?

2) Is it true?

3) Is there really a London House Price surge concern here - do city workers really fly out of their offices and pay more for houses because they get a bonus.

I'm really interested to hear your views.

Slinky

Surging stock markets=big bonuses for some bankers, analysts, traders... Not sure it means a surge in house prices really as most City folk should have more sense at current valuations. More likely just an EA wet dream...

Share this post


Link to post
Share on other sites

Sounds like someone's trying to use the so-called "ripple down effect" to justify why they think these bonuses will increase prices in general. As everyone's said, faster and more eloquently than me, they're not going to buy additional properties when they can see the market's gone pear-shaped. They may try to move up the ladder to a more expensive main residence, which may increase prices slightly at their rarified level, but since everyone below them on the "ladder" can't afford to move up (no bonuses you see - quite the opposite in fact!) it'll presumably make no difference at all to lower priced shacks.

Share this post


Link to post
Share on other sites

Very good year in the city. Affects central london mainly and the traditional stock broker belt. Yes, some will be putting them into property including BTL's.

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp
The Bank of England yesterday issued a stark warning it would raise interest rate if workers won inflation-busting pay rises to offset the surge in energy costs.

Mervyn King, the Bank's Governor, told MPs the Monetary Policy Committee would monitor both wage levels and oil and gas prices over the coming months.

His warning came a day after Gordon Brown, the Chancellor of the Exchequer, wrote to public sector pay review bodies urging them to anchor any deals around the official 2 per cent pay target.

Looks as if many will not be getting any bonus, could there be a `Spring of Discontent` ?

Share this post


Link to post
Share on other sites
Can anyone explain why its such a good year for city bonuses when its not such a great year generally for everyone else?

Well, the stock market is up, and loan income will be up due to higher interest rates on that 1,200,000,000,000 pound of debt. So I'd guess that banks are rolling in money right now.

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp

Surely if they are not allowed to get more than 2% on basic - then their bonus would go up?

Also, do Public sector workers normally get a bonus?

I always classed an inflation busting payrise a bonus when I was employed in the 70s.

Well I don`t think Mervyn would not see what was going on in answer to your first question.

Share this post


Link to post
Share on other sites

I always classed an inflation busting payrise a bonus when I was employed in the 70s.

Well I don`t think Mervyn would not see what was going on in answer to your first question.

Wow have you bee retired since the 70's?

Re the Mervyn thing - i don't think a bonus is included in basic pay - isnt that why they paid allthe bomuses in coffe & gold to avoid NI?

Wow have you bee retired since the 70's?

Re the Mervyn thing - i don't think a bonus is included in basic pay - isnt that why they paid allthe bomuses in coffe & gold to avoid NI?

GRRRRRR please can I edit???

It should say:

Wow have you been retired since the 70's?

Re the Mervyn thing - i don't think a bonus is included in basic pay - isn't that why they paid all the bonuses in coffee & gold to avoid NI?

Share this post


Link to post
Share on other sites
Guest Charlie The Tramp
Wow have you bee retired since the 70's?

Sadly not, went on to run a very successfull business eventually retiring five years early.

Re the Mervyn thing - i don't think a bonus is included in basic pay - isnt that why they paid allthe bomuses in coffe & gold to avoid NI?

Gordon the pickpocket will eventually do some pocket picking there.

Share this post


Link to post
Share on other sites

Here is something which is puzzling me. Papers keep going on about how its going to be an amazing year for city bonuses. How house prices in London will surge once again.

1) Can anyone explain why its such a good year for city bonuses when its not such a great year generally for everyone else?

2) Is it true?

3) Is there really a London House Price surge concern here - do city workers really fly out of their offices and pay more for houses because they get a bonus.

I'm really interested to hear your views.

Slinky

Will the best year for bankers since 2000.

Lots of M&A activity, lots of IPOs, lots of weird ass derivative and securitisation transactions. Those banks with a commercial and consumer side have also done well from credit cards and mortgage jiggery-pokery so all planets are therefore aligned.

So, should be a good one. 100 - 140% of salary for the young ones (up to associate ie aged 23-30) on a 70k base, multiples for VPs and up. Some banks are accruing such large bonus reserves that it's seriously affecting earnings and is having to be explained to the market. They have no choice at the moment because the market for talent is very thin.

Add to that the "tax efficient" structures being used by some o/seas banks and hedge funds management companies and the Notting Hill estate agents may see 10,000 cashed up city (and St James') boys looking to buy.

Share this post


Link to post
Share on other sites

Minimal bonuses at my work I think. Has been an up and down year, but think we took the wrong position on Copper and get humped. Ah well. Better luck tossing the coin next year.

Share this post


Link to post
Share on other sites

I can remember it happening in the late eighties too, big bonuses, a lot of ferrari testers, and lambo countachs being bought, was covered in the media and on tv, as the rest of the country was starting to feel the pinch.

Shortly after the stock market crashed.

its almost as if there's a time lag on the feel good factor in london for city workers, but somehow you know this will be the last of the big bonuses for a while with the direction this economy is going..

Share this post


Link to post
Share on other sites

I can remember it happening in the late eighties too, big bonuses, a lot of ferrari testers, and lambo countachs being bought, was covered in the media and on tv, as the rest of the country was starting to feel the pinch.

Shortly after the stock market crashed.

its almost as if there's a time lag on the feel good factor in london for city workers, but somehow you know this will be the last of the big bonuses for a while with the direction this economy is going..

weird, i've suddenly had a premonition that the stock market is going to crash.....

with a feeling of early 2006

this feels so similar to last time, its freeky

Share this post


Link to post
Share on other sites

I can remember it happening in the late eighties too, big bonuses, a lot of ferrari testers, and lambo countachs being bought, was covered in the media and on tv, as the rest of the country was starting to feel the pinch.

Shortly after the stock market crashed.

its almost as if there's a time lag on the feel good factor in london for city workers, but somehow you know this will be the last of the big bonuses for a while with the direction this economy is going..

Not sure about that, Mr Crash. The bonuses for the last few years have been quite poor and business was slow so this is may be the first of the big bonuses (or not - who knows). The reason people are being paid well now is that most banks had a hiring freeze until last year and now the banks are busy, hence big rentention payments, sign ons, etc. Any lag seems to be the I banks lagging behind the public sector growth of the last few years rather than vice versa.

Share this post


Link to post
Share on other sites

Surely if they are not allowed to get more than 2% on basic - then their bonus would go up?

Also, do Public sector workers normally get a bonus?

They can - my fiancee got a whopping 100 quid bonus recently. She's thinking of investing it in a BTL on a doghouse for me to move into.

Share this post


Link to post
Share on other sites

Not sure about that, Mr Crash. The bonuses for the last few years have been quite poor and business was slow so this is may be the first of the big bonuses (or not - who knows). The reason people are being paid well now is that most banks had a hiring freeze until last year and now the banks are busy, hence big rentention payments, sign ons, etc. Any lag seems to be the I banks lagging behind the public sector growth of the last few years rather than vice versa.

Many people in investments banks, especially those working in equities saw their total remuneration fall by 75% from 2000 to 2003. The bonus increases over the last two years should be seen in the context of this. The average bonus accrual for the large investment banks is anywhere from 15-25% up on last year, although headcount is also up, so probably average bonuses will be 10 to 20% higher.

House prices in the nicest bits of London are rising which partly reflects bonus expectations, but also greater job security after all the firings over 01 to 03. Also, remember that house prices in these areas have been flat since 2001. I'm not talking about the distant suburbs, but about Notting Hill, Chelsea, Hampstead etc.

Share this post


Link to post
Share on other sites

Round here, what they do is trade up with their bonus & rent out their old house/flat - thus....instant BTL

Yeah right - awful lot of City Masters of the Universe doing BTL properties in Park Royal.

Why do you think these guys earn their cash? By buying high selling low and getting less than the bank base rate as a yield? Er no.

Share this post


Link to post
Share on other sites

Many people in investments banks, especially those working in equities saw their total remuneration fall by 75% from 2000 to 2003. The bonus increases over the last two years should be seen in the context of this. The average bonus accrual for the large investment banks is anywhere from 15-25% up on last year, although headcount is also up, so probably average bonuses will be 10 to 20% higher.

House prices in the nicest bits of London are rising which partly reflects bonus expectations, but also greater job security after all the firings over 01 to 03. Also, remember that house prices in these areas have been flat since 2001. I'm not talking about the distant suburbs, but about Notting Hill, Chelsea, Hampstead etc.

The decision whether to purchase a freehold Eaton Square property for £6.5m or £5.5m by a hedge fund manager has as much effect on the housing market as my decision to grow potatoes in my vegetable garden will have on agricultural prices.

The 1000s of young couples trying to buy semis in Hounslow and Hemel Hempstead and Crawley will be as affected if these guys bought property on the moon.

Share this post


Link to post
Share on other sites

The decision whether to purchase a freehold Eaton Square property for £6.5m or £5.5m by a hedge fund manager has as much effect on the housing market as my decision to grow potatoes in my vegetable garden will have on agricultural prices.

The 1000s of young couples trying to buy semis in Hounslow and Hemel Hempstead and Crawley will be as affected if these guys bought property on the moon.

Of slightly more significance is that a couple of thousand junior associates will make 150k bonus this year against 120 last year and that they think they will make 200 next year rather than get a p45.

But, I agree with your point. Financial services and media, two very important bits of the London economy went through a massive recession in 01 to 03, yet prices in outer London kept rising. Now that the city is healthy again, I dont see that it will have any more influence of the suburbs.

Share this post


Link to post
Share on other sites

Very good year in the city. Affects central london mainly and the traditional stock broker belt. Yes, some will be putting them into property including BTL's.

:lol::lol::lol:

Round here, what they do is trade up with their bonus & rent out their old house/flat - thus....instant BTL

:lol::lol::lol::lol::lol:

mercsl, London Landlady, how many investment bankers do you know?

Massive country house in Hampshire, yes. Villa in Marbella, yes. Flat in Aspen, yes. Sports car, yes. Investment in mate's new venture, yes. BTL in London? NO WAY.

The decision whether to purchase a freehold Eaton Square property for £6.5m or £5.5m by a hedge fund manager has as much effect on the housing market as my decision to grow potatoes in my vegetable garden will have on agricultural prices.

The 1000s of young couples trying to buy semis in Hounslow and Hemel Hempstead and Crawley will be as affected if these guys bought property on the moon.

100% right. Nothing to add.

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.