B O M A D In Crisis!

[wherebee]

On a personal note, I recently got a promotion and am now earning double the National Average Wage. However, rather than being able to afford the equivalent house I currently rent, I am having to look to the sticks for an acceptable (to me) home for myself, Wife and baby (On the Way). She is getting itchy feet as you can imagine and I really do not want to rent forever. I have worked my T1ts off in a skilled job for a long time and seethe when I see lazy, unskilled people in far better positions than myself, simply because they were born before I was or they took unsustainable (At the time) risks.

This is f@cking torturous, like Japanese water torture.

True words, well written.

Re the OP - my sister is lining up to 'help her kids' with deposits over the next few years. In her dreams, by my reckoning. She goes mental every time I suggest to one of them that they would be better off looking overseas for a career and a life. I daren't actually try to get her to work out how much she will have to give them each to afford a shitehole near her in the south east, and then calculate how much that compares to her savings and earnings (clue: outweighs her net savings by about 10-1).

She would have a brain burst if I made her do the sums.

[neon tetra]

Except many aren't rent-seeking, they're left empty. Only there to launder dodgy money from China

I haven't posted for a few months, as I was in the process of moving to China. And what should I find in my mailbox the other day? "Buy a luxury apartment in London - you can see the London Eye, Tate Modern, etc etc etc from here".

Thought I could escape it, but no...

[Executive Sadman]

Even more sensational is Guido not accepting comments on that piece. That Blog is out of control (In a great way) with outrageous and slanderous comments at the best of times.

Yes. A bit like zerohedge before they banned the 'I blame the joos' comments.

[South Lorne]

Sensational.

and

http://order-order.com/2014/09/16/banking-on-mum-dad/

From the MOST influential political blog in the UK (fact).

...why pat=y

Sensational.

and

http://order-order.com/2014/09/16/banking-on-mum-dad/

From the MOST influential political blog in the UK (fact).

Sensational.

and

http://order-order.com/2014/09/16/banking-on-mum-dad/

From the MOST influential political blog in the UK (fact).

..why pay to get your children into a financial mess .....strange people about...

[Sour Mash]

The young took the opportunity for hpc to upsize to nice homes at much lower prices (except for those who had been sucked in to the bubble) - overriding the complacent older owners, who lost the most value given they held the higher end homes at the time. I know people in their 50s who say the 90s HPC was the best thing that happened for their families.. including a lovely woman in London.. gave them opportunity to upsize.

Ironically, those young buyers taking advantage of the HPC in the 90s are of course comprising a lot of the older set of owners now resisting it from the late 00s onwards to today. So it's not like they took too much on board, other than their own self interest. Which is how >90% of the electorate think, I would say.

The problem is that not too many people seem to understand that HPI isn't in their self interest. There's clearly a hardwired instinct to buy at all costs, their elders are telling them how it worked for them - 'prices only ever go up, you can't lose with bricks and mortar' etc. and on top of that the media take every opportunity to reinforce that belief. Not to mention that all the stops were pulled out in 2008 (and maintained since then) to avert a housing crash.

A housing crash will only happen when market events force a rise in interest rates or unemployment (or there's a massive crisis of some kind) ... or it's in the interests of the elite to see it happen. The current situation of HPI suits those at the top very well indeed. The wealthy sit on huge piles of housing asset wealth, the banks get their loans secured with a 'can't lose' proposition - so I don't see the elite wanting a crash to happen any time soon. As long as they can con the public into thinking that high and rising prices are a good thing, they'll keep doing it (until external events force a change).

[Venger]

?? This is nonsense Sancho. Surprised at you.

You seriously believe there isn't a problem with the supply side of housing in the UK?

Build 1-2 million additional homes, including for rent managed by responsible prof. landlords, and let's see whether it's credit or supply.

My money's on the insane, broken, land market.

EDIT: If you don't believe it's supply rather than credit that's the issue you only have to look at the oversupply of 2 bed exec flats in Northern cities in particular. Prices fell 50%, more in some cases. Why? They got built resulting in over supply. Ditto Spain. Ditto Ireland. Ditto US. The problem is self-evidently supply of new housing particularly in areas of high demand.

It was a credit issue, in places like Manchester. When credit got restricted, prices and buyer sentiment fell. Not oversupply. Friend bought a repo in 2009 at 1/3rd off what an investor who had bought 5 in the same block had paid. Credit in such cities, malstructured supply in rural Ireland maybe.

Remember Laurejon.. 2004, before he turned back into a raging HPI bull in 2010-12 (as I remember it)... talking of his plans for Australia property, and HPI mad again.

I have bought several plots of land over the years for development.

I purchased an old shack with no permission on the south coast for 40K in 1989 and gained permission for a pair of semi-detached chalet bungalows.

15months later having completed that project and sold them on and made a tidy sum I purchased a very similar plot same size but with outline for 115,000 and used the same drawings for th detailed application that was passed immediately using the other sites permission as a precedence.

The recession hit, and the bank revalued the site I had paid 115,000 for at 25,000

During the recession, you could not give a plot of land away, it would cost more to build a house than the house was worth on the open market, and that did not include the land prices.

Therefore land was essentially worthless.

Tommy Walsh.. DIY guy... credit tightened up and he had to sell that self-build in 2008, for less than it cost to build. Fewer buyers able to afford/qualify for credit. Probably went to auction for that very reason - get rid quick with whatever liquidity/sentiment, out there. Restrict the credit.. not waste fortunes taxpayer money on VI developers, who want top whack for land, iffy houses, and painfully high HTB asking prices for these 'affordable homes'.

Tommy Walsh sees his eco dream crash home make just £115,000 at auction.

"The whole project including decor, fitted kitchen, landscaping, etc. cost over £175,000 to build," he said.

http://www.wisbechstandard.co.uk/news/march_tommy_walsh_sees_his_eco_dream_crash_home_make_just_115_000_at_auction_1_386984

Edited September 16, 2014 by Venger

[Venger]

Ironically, those young buyers taking advantage of the HPC in the 90s are of course comprising a lot of the older set of owners now resisting it from the late 00s onwards to today. So it's not like they took too much on board, other than their own self interest. Which is how >90% of the electorate think, I would say.

David Cameron also being one of those then buyers. Him 29, her 24... 1995 ... http://www.dailymail.co.uk/news/election/article-1278248/David-Samantha-Cameron-unseen-Notting-Hill-pictures-1995.html

Many of those owners resisting, playing dumb, talking forever HPI, know the truth inside, but override it, to their own self-interest.... like they haven't had enough hpi wealth gain yet !?

There's not much that can be done for those who accept the older VI's positions. If they buy that has to be their own decision. It's a market, and we each have to try and process knowledge and information. Too often we're sacrificied for 20+ year olds (MSE) wanting to get on "the property ladder as soon as possible" ... thread after thread. If they rush into paying very high prices, don't shudder at asking prices.. what can you do? Even mobfant was talking how he expects HPI on a £500,000 flat purchase (looking for first property), to help him better afford a house in the future. And with the claim we're likely to be wrong waiting, and he'll be well ahead. It's a competitive market, and I've had enough of others being bailout out or sympathised for, when rushing to outbid others. The bailout has reinforced the forever hpi Gov backing as you say, but I refuse to pay these prices in bubble 2.0... if others wish to, their own decisions. They're not on forums trying to make my life any easier, or worrying at all for non-owners. In my experience, they're counting their HPI and considering themselves super intelligent, after 12 months/2 more years of storming HPI.

Partly agree.. but I think interests of the banks will overrride all. Fresh lending in volume on all that equity rich housing, during and after HPC.

[winkie]

Not to worry, more liquidity for BOMAD will be provided by the pension changes that come into effect in April ..... just in time for the election.

That won't last five minutes..... Let alone enough to live on till death.....no or low income no debt or pension day loan debt.....house or no house.

Enjoy spending your home equity at megga interest rate.....when it is gone it is gone...puff and the house disappears.

Edited September 16, 2014 by winkie

[evetsm]

?? This is nonsense Sancho. Surprised at you.

You seriously believe there isn't a problem with the supply side of housing in the UK?

Build 1-2 million additional homes, including for rent managed by responsible prof. landlords, and let's see whether it's credit or supply.

My money's on the insane, broken, land market.

EDIT: If you don't believe it's supply rather than credit that's the issue you only have to look at the oversupply of 2 bed exec flats in Northern cities in particular. Prices fell 50%, more in some cases. Why? They got built resulting in over supply. Ditto Spain. Ditto Ireland. Ditto US. The problem is self-evidently supply of new housing particularly in areas of high demand.

wake up! when prices are rigged by manipulating the price of money, it is impossible to decern what component of commodity prices are pure demand and supply. This is self evident, and don't give me that you can use govt stats to make it clear.

This is the entire premise of the Austrian Business Cycle, and as Hazlitt eloquently said, it turns the economy into a casino.

This is going to end very badly.

[R K]

This is the entire premise of the Austrian Business Cycle,

Fail.