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5 Years On Hpc - Some Thoughts

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I found HPC in 2006 (started posing in 2009 after finally discovering the forum, I just used to read the blog) by typing house price crash into google, because this is what I wanted to see. Having lived in Asia for the best part of half a decade I could not believe the prices I was seeing. I lived in a 2 bed flat in the East Mids, 600 quid rent a month which the landlord put on the market for 140k. He had bought it for about 125k a year earlier if memory serves. The way I saw it, with wages ultimately underpinning house prices, no-one could seriously afford the flat. I mean who in the name of all that is holy is going to buy it with typical wages around there being the 20k mark. This was a clear FTB property.

The crash came and went, prices moved from ludicrous to merely overpriced. I started as a 50% real peak to falls bear but gradually I became of the opinion that the transfer of wealth from the poor to the rich is permanent. The rent seekers have won. I had the money to buy due to savings and inheritance, but I didn't want to hand over that cash to arseholes. I left for Japan (where the wife is from).

Life out here isn't always a barrel of laughs. Positives: the food, climate, everything just works, excellent customer service, clean and safe streets, low tax, it is easy to save. I don't miss being surrounded by fat tattooed *****ers smoking weed on the bus. Negatives: workaholic culture, no safety net and little sympathy for any personal misfortune. Anything that goes wrong can never be put down to luck, you clearly weren't working hard enough. Got food poisoning on a business trip? Your fault for not looking after yourself. People didn't turn up for a meeting in Bangkok due to floods? You should have had a contingency plan (clearly we should have rowed out to the fecking airport personally). Got the norovirus and missed a meeting? Not acceptable.

There's many on here who praise capitalism red in tooth and claw despite posting frequently during working hours. I wonder how they'd really cope with it. Three 20 hour days back to back anybody? Don't wave your hands in the air all at once.

However I have security of tenure - 2 year contracts, which I can break with 2 months notice, but they cannot. I have never met my landlord. Inspections are unheard of. Problems are rare and get dealt with inside 24 hours typically.

The system may still reset in the UK but I don't think so. If we have learnt anything in the last 5 years it is at the governments are in control. The EU has absorbed 50% youth unemployment and has kept going. Everyone seems happy with HTB. The best thing that can happen at this point will be some sort of rinsing of the amateur BTLs with pension companies stepping in to replace and creating secure tenancies. If I was to give advice to anyone it would be to leave the UK. Certainly no young person has any business being the UK. Your country hates you. Get some sellable skills, a foreign language and go.

Edited by FaFa!

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You are drunk, or joking, right? I have been in flats in the UK for seven years without an inspection, it is down to the personality of the landlord IMO, nothing to do with culture or one country being better or worse. If you think the EZ is going to "absorb" 50% youth unemployment and keep rolling you are seriously deluded I think. The recent turn at the polls will just be the start.

Edited by dances with sheeple

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The crash came and went, prices moved from ludicrous to merely overpriced. I started as a 50% real peak to falls bear but gradually I became of the opinion that the transfer of wealth from the poor to the rich is permanent. The rent seekers have won.

+1

Good post.

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Well something happened in 2008 and it wasn't a 90s-style crash. The government is determined to 'lock in' 2007 prices, while keeping wages down. So I think FaFa has a point - so far the winners have managed to hold onto their gains. And it's been about a decade since houses were affordable for ordinary families. On the timescale of jobs and kids and politics, that may as well be forever. We are already living in the neo-feudal future.

As for emigrating, the problem that UK youngsters face is that they are somewhat trapped by the success of English. Many European children are exposed to English from a young age due to Anglophone media and the internet. And unfortunately everywhere that speaks English has followed very similar policies to the UK - Canada and Australia also have massively unaffordable housing. The US is very difficult to emigrate to, lacks decent healthcare and social support systems, and also - despite most areas crashing - has massively unaffordable housing in its London-style 'global cities' where the white-collar jobs are concentrated.

Perhaps Ireland? Or maybe I should take another stab at German - French was completely beyond me.

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Morning FF

I am bleary, and thanks for your thoughts, but I would disagree the financial crash came and went...I think it came, it saw, it conquered and is still occupying those in control...defeat for it is yet to come.

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Nothing has changed and nothign has been fixed.

Malinvestment rules, market manipulation abounds. China is still growing and getting better all the time across the board in terms of quliaty and competitiveness. We will lose a hell of a lot more as a result of the last few years of outright fraud in terms of monetary policy. Wars have bee stoked across the world to flush cash into the west and rate dropped to as near zero as dammit, this is a trick that can only be played once for it to have the effect it has had.

We will have generations to pay for this short termism and it will not be beneficial in the long run.

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The system may still reset in the UK but I don't think so. If we have learnt anything in the last 5 years it is at the governments are in control. The EU has absorbed 50% youth unemployment and has kept going. Everyone seems happy with HTB. The best thing that can happen at this point will be some sort of rinsing of the amateur BTLs with pension companies stepping in to replace and creating secure tenancies. If I was to give advice to anyone it would be to leave the UK. Certainly no young person has any business being the UK. Your country hates you. Get some sellable skills, a foreign language and go.

Governments are in control until they aren't in control any more. I know that sounds facetious but that's the reality. The UK government are "in control" because they've been able to lower interest rates to 0.5% and print with no bond selloff due to the fact that everybody else is doing the same. Simple game theory means that at some point some other central bank is going to find it advantageous to stop devaluing, and at that point, the UK government are no longer in control.

I admit it, I have been amazed at how "well" the BoE and UK govt seem to have walked a tightrope in the midst of a gale. But they're only half way across, and the wind is picking up again.

Everyone seems happy with HTB? Can't agree with you at all on that. It's a Tory policy, therefore universally hated.

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+1

Good post.

Can you explain how the rent seekers have won? From my perspective rent is only £50 p.m higher than it was 17 years ago, the block of flats I am currently in is half empty, and people have had houses on the market for years, they are eventually going to have to capitulate on price. Are we seeing different things?

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Well something happened in 2008 and it wasn't a 90s-style crash. The government is determined to 'lock in' 2007 prices, while keeping wages down. So I think FaFa has a point - so far the winners have managed to hold onto their gains. And it's been about a decade since houses were affordable for ordinary families. On the timescale of jobs and kids and politics, that may as well be forever. We are already living in the neo-feudal future.

As for emigrating, the problem that UK youngsters face is that they are somewhat trapped by the success of English. Many European children are exposed to English from a young age due to Anglophone media and the internet. And unfortunately everywhere that speaks English has followed very similar policies to the UK - Canada and Australia also have massively unaffordable housing. The US is very difficult to emigrate to, lacks decent healthcare and social support systems, and also - despite most areas crashing - has massively unaffordable housing in its London-style 'global cities' where the white-collar jobs are concentrated.

Perhaps Ireland? Or maybe I should take another stab at German - French was completely beyond me.

The problem is cashing in the "gains", the casino is now gushing smoke, and people have been leaving by the back doors for a while, plus if you took credit from the casino (Liar I.O loans and MEW) there are no gains, just bankruptcy or a lifetime of debt servitude. When the fire really starts the rush for the escape doors will make the finale of Carrie look like the Teddy Bears Picnic (well the Bears will be having a picnic :D)

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I also found house price crash in 2006 and similarly typed that into google. At the time it was obvious that a correction was coming and it did....about -35% in real terms to 2012 against my then forecast of -37.5%.

I don't believe we will see a further correction on that scale. For one thing it is a wealth game now not an income game. Highlighted by the fact that I am now within spitting distance of my original 2006 STR fund and share an unmortgaged property with my partner. That has come about not through employment income, my self employed earning are a joke, but wealth accumulation off the back of investment income. Unlike other boomers I don't see the need to collect houses with excess wealth, just one house per family.

The 100,000 housing units built each year must easily be absorbed by wealth accumulations. Not even enough to satsfy the Bollinger Bolsheviks like Milibot and Meacher imo.

If the greed didn't exist then property wouldn't be unaffordable, but hoarders afraid of paper money makes this unlikely.

Getting asked for advice from octogenarian final salaried pensioners wanting to put their cash mountains into houses sums up the state of play.

Edited by crashmonitor

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Human beings are very bad at thinking about timescales. They overestimate the importance of the present and the recent past and underestimate the importance of the future. The OP looks like an example of this: 'Governments have managed to keep the plates spinning for 5 years, therefore we are now living in a permanent rentier victory.' Seriously? Even on the short scale of a human lifetime 5 years is not much. I will still be alive in 40 or 50 years, and I fully expect to see some pretty crazy things happen in that time. Governments are burning through capital at an incredible rate to maintain the illusion of stability. The system will fail when a critical mass of people can no longer be bothered to maintain it. The number of people with no love for the system is growing all the time.

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Can you explain how the rent seekers have won? From my perspective rent is only £50 p.m higher than it was 17 years ago, the block of flats I am currently in is half empty, and people have had houses on the market for years, they are eventually going to have to capitulate on price. Are we seeing different things?

Good to hear you have had no problems with your landlord. Sadly I moved 4 times in my 5 years in the UK. Inspections were a continual bugbear. I am glad that you have a good relationship with your landlord, I know there are some people with a proper professional attitude, but I haven't personally met one. My point is in the UK you are, in contractual terms, at the mercy of your landlord. In Japan, I am not. He can be a ****** if he wants, but he cannot get me out without pain on his part.

Regarding your above points, I'd argue that if people have had their houses on the market for years that means they can keep it that way. If they were distressed they'd sell, but clearly this is not the case. The EU is a good point, but my argument would be that if it comes apart, then that would be downward pressure on interest rates in the UK.

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Human beings are very bad at thinking about timescales. They overestimate the importance of the present and the recent past and underestimate the importance of the future. The OP looks like an example of this: 'Governments have managed to keep the plates spinning for 5 years, therefore we are now living in a permanent rentier victory.' Seriously? Even on the short scale of a human lifetime 5 years is not much. I will still be alive in 40 or 50 years, and I fully expect to see some pretty crazy things happen in that time. Governments are burning through capital at an incredible rate to maintain the illusion of stability. The system will fail when a critical mass of people can no longer be bothered to maintain it. The number of people with no love for the system is growing all the time.

Many countries exist in a stable manner despite massive gaps between the rich and the poor, with the poor living a hand to mouth existence. The UK did for hundreds of years.

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Many countries exist in a stable manner despite massive gaps between the rich and the poor, with the poor living a hand to mouth existence. The UK did for hundreds of years.

If we're going to take lessons from history, by far the dominant form of human society for the last 100,000 years has been bands of 100 or so hunter-gatherers with almost no income or wealth inequality. Inequality is the exception, not the rule.

Edited by Dorkins

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I'll agree that the Government has played a blinder in walking the tightrope of doom. Absolutely unprecedented crisis and yet some how we haven't been bankrupted, starved, revolted, lost our slave boxes or even our jobs. Many of us are slowly getting poorer relatively speaking though.

Do I think the rentiers have won permanently? Nah, not a chance. It might even take a while, but it certainly isn't permanent.

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Of course prices can keep rising for ever and wages really are going up faster than living costs etc..

Rents in the UK are really affordable.. Etc

Help to buy had helped thousands of ftbs earning 80k etc..

Oh and manufacturing is growing leading to a rebalancing of the economy, ..

Only nothing has changed except the deficit has not been eliminated, the debt is huge and loads of cuts have been made.

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Getting asked for advice from octogenarian final salaried pensioners wanting to put their cash mountains into houses sums up the state of play.

I trust you're helping them buy at your massively overvalued crashed-North prices.

Always more stock coming to market from older owners attrition topping up SMI, probate/care-home fees, sliding rents and all the hassle and laws.

I will watch your older owners cry and beg others to buy their homes at crashed prices, and see them regret their 'investment' properties.

London agent the other day, re discussion on slow/non-paying tenants: "98% of London tenants are rubbish."

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If the greed didn't exist then property wouldn't be unaffordable, but hoarders afraid of paper money makes this unlikely.

Getting asked for advice from octogenarian final salaried pensioners wanting to put their cash mountains into houses sums up the state of play.

They're going down. Let them waste valuable money, run it down, on overvalued housing assets.

At some point we'll see how unlikely a massive crash is, and your intransigence of 2007 being the value measure of everything, with some houses in dog-end areas still below that, whilst so many areas massively reflated to new peaks.

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If we're going to take lessons from history, by far the dominant form of human society for the last 100,000 years has been bands of 100 or so hunter-gatherers with almost no income or wealth inequality. Inequality is the exception, not the rule.

How do Australian aborigines fit with your concept of hunter-gatherers being by far the dominant form of human society?

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If we're going to take lessons from history, by far the dominant form of human society for the last 100,000 years has been bands of 100 or so hunter-gatherers with almost no income or wealth inequality. Inequality is the exception, not the rule.

They had few possessions you'd want. Inequality? Everyone was poor in their own way.

They also had no concept of private property - whatsoever. Kept little in surpluses, a couple of hours work per day collecting food, and when required to work harder, anthropologists believe they often took next few days off to talk and relax.

Of course the Agricultural Revolution then came - (not everywhere). From which written language germinated, taxes require records, arithmetic, calendars to guide in planting. The first proper scale reasons for violence in society, to protect what is yours (land ownership), and above bandits (early Royalty/Gov) coming looting and pillaging, before they settled down and took smaller tribute from those they reached in their realms.

Edited by Venger

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I found HPC in 2006 (started posing in 2009 after finally discovering the forum, I just used to read the blog) by typing house price crash into google, because this is what I wanted to see. Having lived in Asia for the best part of half a decade I could not believe the prices I was seeing. I lived in a 2 bed flat in the East Mids, 600 quid rent a month which the landlord put on the market for 140k. He had bought it for about 125k a year earlier if memory serves. The way I saw it, with wages ultimately underpinning house prices, no-one could seriously afford the flat. I mean who in the name of all that is holy is going to buy it with typical wages around there being the 20k mark. This was a clear FTB property.

The crash came and went, prices moved from ludicrous to merely overpriced. I started as a 50% real peak to falls bear but gradually I became of the opinion that the transfer of wealth from the poor to the rich is permanent. The rent seekers have won. I had the money to buy due to savings and inheritance, but I didn't want to hand over that cash to arseholes. I left for Japan (where the wife is from).

Life out here isn't always a barrel of laughs. Positives: the food, climate, everything just works, excellent customer service, clean and safe streets, low tax, it is easy to save. I don't miss being surrounded by fat tattooed *****ers smoking weed on the bus. Negatives: workaholic culture, no safety net and little sympathy for any personal misfortune. Anything that goes wrong can never be put down to luck, you clearly weren't working hard enough. Got food poisoning on a business trip? Your fault for not looking after yourself. People didn't turn up for a meeting in Bangkok due to floods? You should have had a contingency plan (clearly we should have rowed out to the fecking airport personally). Got the norovirus and missed a meeting? Not acceptable.

There's many on here who praise capitalism red in tooth and claw despite posting frequently during working hours. I wonder how they'd really cope with it. Three 20 hour days back to back anybody? Don't wave your hands in the air all at once.

However I have security of tenure - 2 year contracts, which I can break with 2 months notice, but they cannot. I have never met my landlord. Inspections are unheard of. Problems are rare and get dealt with inside 24 hours typically.

The system may still reset in the UK but I don't think so. If we have learnt anything in the last 5 years it is at the governments are in control. The EU has absorbed 50% youth unemployment and has kept going. Everyone seems happy with HTB. The best thing that can happen at this point will be some sort of rinsing of the amateur BTLs with pension companies stepping in to replace and creating secure tenancies. If I was to give advice to anyone it would be to leave the UK. Certainly no young person has any business being the UK. Your country hates you. Get some sellable skills, a foreign language and go.

We have more in common than I thought. How refreshing and depressing in equal measures. ;-)

I have been here since 2005 or 6 too. I lived in Japan for a while and my wife hails from north Tokyo. I sometimes think about going back there. But my Japanese is a little rusty (no, I won't hug your teddy!) and I bought a modest place in zone 3 a couple of years back. Fear of giving up what I've scraped together keeps me in the UK but I can well understand why you live in Japan. While your quality of life declines a little there, your living standards are generally much higher than the UK.

I'm usually in Tokyo in October or November. PM me if you want to meet up for an early evening beer.

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Good to hear you have had no problems with your landlord. Sadly I moved 4 times in my 5 years in the UK. Inspections were a continual bugbear. I am glad that you have a good relationship with your landlord, I know there are some people with a proper professional attitude, but I haven't personally met one. My point is in the UK you are, in contractual terms, at the mercy of your landlord. In Japan, I am not. He can be a ****** if he wants, but he cannot get me out without pain on his part.

Regarding your above points, I'd argue that if people have had their houses on the market for years that means they can keep it that way. If they were distressed they'd sell, but clearly this is not the case. The EU is a good point, but my argument would be that if it comes apart, then that would be downward pressure on interest rates in the UK.

I was thinking rates moving up as countries move back to their own currencies and banks try to attract savers/investors money? Good to hear you are contractually protected there, I have heard the stories about a*reshole landlords, but have never actually met one, and I have had many landlords.

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