The Masked Tulip Posted April 26, 2014 Share Posted April 26, 2014 In The Times magazine supplement today there is a full page article by a Caitlan Moran which sounds like it could have been written by one of us - the title of the article is what I have posted above as this thread title. The Times also has an excellent article on why BTL is not as good as people think due to rents plateauing, voids, high agency fees and other costs such as damage. The Telegraph also has a big article on the hosuing bubble but I didn't get around to reading it. Quote Link to comment Share on other sites More sharing options...
dances with sheeple Posted April 26, 2014 Share Posted April 26, 2014 Excellent stuff. Sentiment is being manipulated the right way for a change. Quote Link to comment Share on other sites More sharing options...
Wurzel Of Highbridge Posted April 26, 2014 Share Posted April 26, 2014 At last the truth about falling rentis is being told by the MSM Quote Link to comment Share on other sites More sharing options...
TheCountOfNowhere Posted April 26, 2014 Share Posted April 26, 2014 (edited) Th bubbles been bursting for 6 years now, have they only just noticed !!! Maybe's she's talking about the localised london mega-bubbl mania that's sweeping the q.e. backed capital. I can see it in a few years...."Oh, I wish I had taken my chance to sell in 2013 and re-coup by losses, but I thought i'd make more by waiting." , reads as..."I was a greedy c*** and got stung, if it's all to good to be true...then it probably is". Are you afraid you mr sibley...if not, your even thicker than we thought. Edited April 26, 2014 by TheCountOfNowhere Quote Link to comment Share on other sites More sharing options...
Bland Unsight Posted April 26, 2014 Share Posted April 26, 2014 The Telegraph also has a big article on the hosuing bubble but I didn't get around to reading it. Telegraph piece is not particularly bearish - more couched in the terms that MMR will slow down rises. No suggestion in the Telegraph piece that MMR will cause house prices to crash. I'm quite interested regarding what is going to happen next - and when. The 10 year gilt yield has been rock solid in a range between 2.50 and 3.00 since August. The Bank of England's SVR number (the data series IUMTLMV) has been stalled at 4.4% since last November so if there is going to be any pressure on rates then it is most likely to be arise when the end of FLS for residential mortgages bleeds through, (this Mortgage Strategy 31 March 2014 piece - Lenders in scramble for FLS funds before mortgage deadline - suggests that we might have to wait till the end of the year for that to happen!). If rates mortgage rates are going to move up, then it's not going to be spectacular and not soon, by the looks of things right now. However, my intuition is that we're walking off to a precipice in London and the South East. Transactions are only possible if you have a massive slug of bubble equity from the 1997-2008 inflation phase, very substantial income (relative to London median income) which has not been affected by the recession and you have a bullish attitude towards buying at insane prices which you can only afford because of record low interest rates. What happens when London and the South East runs out of people who fit that profile if there is anything else around (e.g. MMR and a modest move in mortgage rates) to give succour to anyone who believes that prices might fall and continue to fall? Quote Link to comment Share on other sites More sharing options...
Executive Sadman Posted April 26, 2014 Share Posted April 26, 2014 Yes, markets rarely if ever go sideways for long. We are near peak unaffordability, and a lot of 2009-2012 buyers are already trying to cash out. Soon the older generation will be wanting to make hay while the sun shines, unleashing a tsunami of supply onto the market. Quote Link to comment Share on other sites More sharing options...
spyguy Posted April 26, 2014 Share Posted April 26, 2014 Telegraph piece is not particularly bearish - more couched in the terms that MMR will slow down rises. No suggestion in the Telegraph piece that MMR will cause house prices to crash. I'm quite interested regarding what is going to happen next - and when. The 10 year gilt yield has been rock solid in a range between 2.50 and 3.00 since August. The Bank of England's SVR number (the data series IUMTLMV) has been stalled at 4.4% since last November so if there is going to be any pressure on rates then it is most likely to be arise when the end of FLS for residential mortgages bleeds through, (this Mortgage Strategy 31 March 2014 piece - Lenders in scramble for FLS funds before mortgage deadline - suggests that we might have to wait till the end of the year for that to happen!). If rates mortgage rates are going to move up, then it's not going to be spectacular and not soon, by the looks of things right now. However, my intuition is that we're walking off to a precipice in London and the South East. Transactions are only possible if you have a massive slug of bubble equity from the 1997-2008 inflation phase, very substantial income (relative to London median income) which has not been affected by the recession and you have a bullish attitude towards buying at insane prices which you can only afford because of record low interest rates. What happens when London and the South East runs out of people who fit that profile if there is anything else around (e.g. MMR and a modest move in mortgage rates) to give succour to anyone who believes that prices might fall and continue to fall? Yep. I cant work it out either. The MMR changes are a killer. I don't think any sane bank will try and circumvent them as they know they'll be left with the sh11ty end of the stick. I'm seeing sod all transaction in the SW. There is more activity but there are not enough sales/money//mortgage capacity to do much. In the North East its dire. B.gger all transaction, probate + repos piling up. Quote Link to comment Share on other sites More sharing options...
Venger Posted April 26, 2014 Share Posted April 26, 2014 (edited) I've just read it. Good intro below, going into a pint of milk would now cost £10 against HPI of last 30 years, to other stuff including Bishops Ave. You cannot escape the madness of sweating property fever in London and the South. It's a palpable heat, now. The market is tinder dry. Everything is starting to smoulder. Some people like the smoke - they get high on it - but most people know is means that, soon, it will all ignite. Don't buy a house in London, or the South. You know this in your guts. I say this to you as a friend. You know this "never-ending bubble" is a tautology - no bubble lasts for ever. That's why we call them bubbles. They are made of mesmeric, rainbow soap and hot air. Puff. All bubbles are at their biggest before they pop. Edited April 26, 2014 by Venger Quote Link to comment Share on other sites More sharing options...
Bear Necessities Posted April 26, 2014 Share Posted April 26, 2014 Does anyone have a link to this or is it paywalled? Quote Link to comment Share on other sites More sharing options...
Bear Necessities Posted April 26, 2014 Share Posted April 26, 2014 I ask mainly because I'd like to read it without paying, but also, if it is only available behind the paywall then there is a good chance that hardly anyone will see it. :/ Quote Link to comment Share on other sites More sharing options...
Venger Posted April 26, 2014 Share Posted April 26, 2014 I ask mainly because I'd like to read it without paying, but also, if it is only available behind the paywall then there is a good chance that hardly anyone will see it. :/ It makes little difference. Only the brunt of economic necessity, into the crash itself, changes sentiment. >An existing paradigm is seldom dispelled by evidence alone. Such systems of belief possess a resilience which makes them virtually immune to external argument.< The Caitlin Moran 'Columnist of the year' article is not weighty with any data. She does despair at the sums paid for jumbo ugly houses built during the boom, and still today - knowing we can build beautiful houses if we wanted to. If perhaps we were able to. Sick sums of money and appealing to such tastes in charge for the moment. how bleak and depressing the new, monstrous, finished houses are. Their façades have all the impassive menace of a dobermann pinscher staring at you from behind a chain-mail fence. Often, when driving past the crews on these sites, I feel like stopping - to defend Britain. Quote Link to comment Share on other sites More sharing options...
Bear Necessities Posted April 26, 2014 Share Posted April 26, 2014 (edited) would still like to read it though (though not enough to want to pay the Murdoch beast!) I'm so hungry for bear food! regardless of whether or not it makes any difference! Edited April 26, 2014 by Bear Necessities Quote Link to comment Share on other sites More sharing options...
Venger Posted April 26, 2014 Share Posted April 26, 2014 Took a photo but I don't know how to crop with the software (first time tried Gimp) on this Linux pc. Attached, for a while. Again it's just columnist really. Quote Link to comment Share on other sites More sharing options...
zugzwang Posted April 27, 2014 Share Posted April 27, 2014 Yep. I cant work it out either. The MMR changes are a killer. I don't think any sane bank will try and circumvent them as they know they'll be left with the sh11ty end of the stick. I'm seeing sod all transaction in the SW. There is more activity but there are not enough sales/money//mortgage capacity to do much. In the North East its dire. B.gger all transaction, probate + repos piling up. I'm not convinced that MMR brings much that's new to the table. Why would the commercial lenders seek to involve themselves in high-risk, subprime activities again when Osborne and the BoE have been doing it on their behalf for four years? HtB2 was introduced explicitly to goose the London/SE market in time for the GE and would have succeeded spectacularly had it not been brought forward to counteract Milibean's polling successes over energy costs. Now it appears that London prices are once again running up against the affordability ceiling with all that implies for UK economic growth in the second half of 2014 and beyond, not to mention Tory election prospects in 2015. How easy would it be for Osborne to cite MMR as the probable cause of a slowdown, and simultaneously use it to advertise his determination to crack down on incipient housing bubbles? Moreover, he could then claim that while MMR succeeded in holding back London it had inadvertently depressed demand everywhere else, depriving hard working would-be homeowners who might benefit from a regional housebuilding program (read, additional affordability subsidy) all of their own. HtB1 has been extended nationwide to 2020. A similar extension of HtB2 (ex-London) in the Autumn budget with the taxpayer on the hook rather than the banks? All given bogus legitimacy by MMR (and perhaps a little macro-pru). Quote Link to comment Share on other sites More sharing options...
Venger Posted April 27, 2014 Share Posted April 27, 2014 How easy would it be for Osborne to cite MMR as the probable cause of a slowdown, and simultaneously use it to advertise his determination to crack down on incipient housing bubbles? Moreover, he could then claim that while MMR succeeded in holding back London it had inadvertently depressed demand everywhere else, depriving hard working would-be homeowners who might benefit from a regional housebuilding program (read, additional affordability subsidy) all of their own. HtB1 has been extended nationwide to 2020. A similar extension of HtB2 (ex-London) in the Autumn budget with the taxpayer on the hook rather than the banks? All given bogus legitimacy by MMR (and perhaps a little macro-pru). Osborne citing that. Taxpayer on hook rather than the banks? Maybe so. It seems to me there's a lot of misdirection going on, encouraging savers and wealth and equity rich to tap their reserves for malinvesting at high prices, probable unloading of assets at high prices, against supply held off market from complacent owners in bubble 2.0. Main bank credit itself perhaps not particularly fuelling the market and the rises - except limited (insignificant tens of millions per month to victims) at the margin. What credit boom? Bank lending & the recovery 27 Feb 2014, by Duncan Weldon in Economics As the Bank of England have acknowledged, the current recovery has been associated with a decline in the household savings ratio (the percentage of their income that households save in aggregate). http://webcache.googleusercontent.com/search?q=cache:lheEdIg9EisJ:touchstoneblog.org.uk/2014/02/what-credit-boom-bank-lending-the-recovery/+&cd=44&hl=en&ct=clnk&gl=uk BoE's (April 2014) Trends in Lending. [PDF] http://www.bankofengland.co.uk/publications/Documents/other/monetary/trendsapril14.pdf Quote Link to comment Share on other sites More sharing options...
JustYield Posted April 27, 2014 Share Posted April 27, 2014 Meanwhile over at the pink paper, Kate Allen conveys an EA's view: Prime London property consultant Charles McDowell, who specialises in buying and selling homes in Knightsbridge, Chelsea, Belgravia and Kensington, says there is a particular “vacuum” around the £10m-£15m price bracket, which he says is the “bankers’ sweet spot”. So get in and snap up those bargains while the bankers' are out of the market! [bTW, if they complain about this fair-use quote in the context of a wider discussion about London prices, then I contend that this article was not an example of quality journalism that needs to be paid for.] Quote Link to comment Share on other sites More sharing options...
Guest Posted April 27, 2014 Share Posted April 27, 2014 I'm not convinced that MMR brings much that's new to the table. Is there a standard set of MMR questions that should be asked to check affordability, or someone's strategy for repayment for an IO mortgage? Also will the FCA be doing spot checks of mortgages to ensure the right questions have been asked? Quote Link to comment Share on other sites More sharing options...
Venger Posted May 4, 2014 Share Posted May 4, 2014 (edited) So Cowie went from Telegraph to the Times.... Sunday Times. 04.05.2014 Iain Cowie - Money - Why house prices are actually cheap | p3 Then main article argues it against gold's standards.... "house prices 1/3rd below long term gold average".. and.. "house prices would have to rise 50% to bring them into line with their long-term mean value against gold". and "that's good news for millions of homeowners who might feel vexed by endless television and tabloid headlines screaming: House prices set to plunge." (! it's the opposite away around, perhaps they just secretly know in their heads house prices so prone to it.) Full of contradiction for me... money values debased by printing/QE against gold ect. Now, as if to demonstrate there is no situation so bad that official intervention cannot make it worse, regulators are restricting access to mortgages. Less credit means more people who start their working lives with nothing will end with nothing. As someone who bought his first flat with a 100% mortgage, I have always felt there is a lot to be said for what is now called irresponsible lending. Yes, I recall his 2010 article (below) - woooo - but he's wrong... with his advancing journo career he could still have bought both flat, then later house in Highgate, just both of them at lower prices, if credit had been restricted, and dunderheaded borrowers blocked. Except maybe some of his long money-finance journo career is another mistake of the long-wave boom, given his views towards younger people loading up on ever more debt? Then he tempers it with, 'perhaps surprising' quite a few parents of his generation would not mind if house prices were to halve, to help adult children escape clutches of landlords/renting, and... In the unlikely event that prices fell by 75%, those of us who were lucky enough to buy in London more than 25 years ago could still console ourselves with the thought that, even at 25% of today's prices, we would effectively have enjoyed a quarter of a century of rent-free accommodation. Then goes into wishful thinking doesn't make it happen... and increasing demand fuelled by people wanting to live here, meets limited supply, planning reg = prices tend to rise. (In his opinion... we forgotten credit crunches???????) Goes on about Keynes.. "irrational longer than you can remain solvent" but does at least offer some caution for younger people buying now... saying most older owners can comfortably take value falls, and pointing out could be tick up in interest rates after election. _______________ I only mentioned 70% last night too on the forum.... in defence, after I'd been told to stop complaining so much about the boomer house price unfairness... against claims how hard it had been for them with repayments for 2 or 3 years back in the 1970s... vs non-owners/renter-saver positions now, outbid for years by the 'victims'. Any now we have people suggesting it's "theft" if they lose some of their gains, on house prices currently worth mega-fortunes, if we get a much needed market correction - grrrr. Boomers can eat a 70% house price crash to make it fair, and be happy about it. Those who haven't been reckless should be able to withstand it. Ian Cowie joined The Daily Telegraph in 1986 and has been personal finance editor since 1989. Why 'irresponsible lending' helped me and millions of others June 16th, 2010 Self-interest is the one motivation you can always rely on and my personal experience of the property ladder was shared by many others in my generation. One of the best financial decisions I ever took was a 100pc mortgage – yes, that's right 100pc - for about five times my salary 25 years ago. No such loans are available today. Without such 'irresponsible lending', I might still be renting a bedsit in Kilburn rather than owning a home in Highgate. ..That's not intended to sound like bragging but to demonstrate why people who fail to understand the importance of credit – and, dare I say it, house price inflation – in the creation of wealth are either very naive or perhaps living under hedges on a diet of roots and berries. They have certainly missed one of the simplest ways to accumulate tax-free gains available in our lifetime – at least until now. Edited May 4, 2014 by Venger Quote Link to comment Share on other sites More sharing options...
Venger Posted May 4, 2014 Share Posted May 4, 2014 (edited) Sunday Times - Money - 04.05.2014. Back page: Cambridge University's Ha-Joon-Chang. PhD (50) / teacher-economist and author [sold 1.3m books] (answers questions) Apparently a critic of Western free-market economics and development policies (for how long?). Just collected a £110,000 advance on his latest book, with his academic salary 'not even close to that.' Soft-Hpcer. Not fully exposed as he's a landlord now, renting out his own flat he bought around 2004, whilst now renting a larger home for his own family. Fame & Fortune Cambridge University's Ha-Joon-Chang I'm counting on a crash in house prices. ... Do you own a property? I own a three-bedroom flat in Cambridge but my family has outgrown it, so I am letting it and renting a house nearby. I bought the flat about a decade ago. It is quite modern, built about 20 years ago. The house we are renting is an 18th-century-building, so quite draughty and with little insulation, but it has enough room. When will you buy? Timing is difficult, but I think we are approaching bubble territory and a correction is due. I am waiting for this to happen before buying. I am not selling the flat, however, because Cambridge is a good commuter town from London and is likely to maintain its value more than some other areas. During market corrections, larger properties tend to fall in value by more than flats anyway. Edited May 4, 2014 by Venger Quote Link to comment Share on other sites More sharing options...
RentingForever Posted May 4, 2014 Share Posted May 4, 2014 Meanwhile in the ST Eleanor Mills is getting excited about how high house prices are "raising a million boats" (of boomers). And an article about how Carney is likely to start applying the brakes on mortgage lending in the SE in June. Frankly, the Sunday Times is all over the place on this issue. Quote Link to comment Share on other sites More sharing options...
Venger Posted May 4, 2014 Share Posted May 4, 2014 Meanwhile in the ST Eleanor Mills is getting excited about how high house prices are "raising a million boats" (of boomers). Frankly, the Sunday Times is all over the place on this issue. Just read it... doesn't surprise me. Views are always going to be different, something many HPCers really struggle with, expecting most people want lower values, and offering excuses for those who want higher prices and big mortgage debtors. Admit it, your're getting richer too We may gasp at the record £140m an east European reportedly paid for a London flat last week but the forces behind such a price are making our own dreams possible So.. all the stamp duty from properties sold at £140m, making UK PLC much much richer... and fuelling many owners dreams (HPI HPI HPI)... bonanza indeed. ...unfair and true that many young people feel excluded from the party.. but there are 'programmes' to help them, inc HTB. Is it just one vast Ponzi scheme? The experts think not. London compared to 12 other global cities seen lower price inflation. To buyers from Shanghai, Hong Kong, and even Mumbai, London prices are a bargain. ...Many sales for cash. Now that we've been freed of annuity straitjacket, many more of us can invest our retirement nest eggs in property. Citi analysts put it in their latest research: "In our view current housing trends look far more like 1996-98 (ie a long housing boom is just getting going) than the end of a cycle of excesses such as 1988-89 or 2006-08." Of course there is an element of luck in all of this, but to a certain extent it is luck that we make ourselves. We don't have to leverage ourselves to the hilt and invest in bricks and mortar - we choose to. (Goes on could invest stocks but property is in the British psyche that likes to speculate to accumulate, and do that, with our very own castle, so much the better.) Finishes how we should be all grateful to £140m flat purchases, making us all richer. Seriously, you big mortgage debt total apologists, I've really had it with you now. Buyers choose, it's a market, different opinions. Still HPI lusters and new boom about to begin hopers and believers out there. They don't waste time worrying about non-owners. Can only hope Citi, and others is herding up your happy smart HPI debt victims for the slaughter. Quote Link to comment Share on other sites More sharing options...
Caius Posted May 4, 2014 Share Posted May 4, 2014 More fools found? http://www.uob.com.sg/personal/loans/property/uob_international_home_loan_london.html Own your dream investment property in London with UOB International Home Loan’s attractive financing scheme, conveniently arranged for you in Singapore Quote Link to comment Share on other sites More sharing options...
hirop Posted May 4, 2014 Share Posted May 4, 2014 (edited) Very little sold in March in the area I look at outside Glasgow in Scotland. It would be false to claim that there was not a burst of activity October onward, but the stock has not been replaced, nowhwere near infact. I'm calling it capitulation of enabled buyers and willing sellers. In Glasgow itself, lots on market now but way more than demand, local wages absolutey limit the 250-350K market to a select subset of buyers and not of the first time variety. It's that demand thing again, there is only so much of it, you can bring it forward, but new entrants are hard to find to take up the slack. Will it crash immently as a result, I don't see it myself, not without outside influence? But if you can tough it out, hell yeah, this sucker's going down - how long - depends on outside factors but I wouldn't pin my hopes on a anything sensible and controlled happening. Too much skin in the game for a strategic solution. A generational shift is the best hope for a strategic and controlled policy to defuse this shit sandwich. Edited May 4, 2014 by hirop Quote Link to comment Share on other sites More sharing options...
R K Posted May 4, 2014 Share Posted May 4, 2014 I've just read it. Good intro below, going into a pint of milk would now cost £10 against HPI of last 30 years, to other stuff including Bishops Ave. Long cows. Quote Link to comment Share on other sites More sharing options...
billybong Posted May 4, 2014 Share Posted May 4, 2014 (edited) ...Many sales for cash. Now that we've been freed of annuity straitjacket, many more of us can invest our retirement nest eggs in property. Don't be half hearted about it. It's such a cert sell everything (apart from your property of course) stocks, shares, jewellry, car, ask BOMAD for some more. Maybe there are some other relatives with some spare cash and stuff. Ask the next door neighbour - even the whole street. Claim the PPI compensation. Maybe some of the call centre people who ring you every day 10 times a day along with friends and relatives will join up in a house share. Get it all into the housing market. ---------------- Disclaimer This is not investment advice (Just in case) Edited May 5, 2014 by billybong Quote Link to comment Share on other sites More sharing options...
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