booked_it_packed_it Posted December 18, 2005 Share Posted December 18, 2005 Judging by the logical construct and the strength of the argument I would estimate that the poster is around 13 years of age, and would be better served concentrating on his homework and leaving the discussion of such weighty issues to the grown ups. Limpet or is he the one and only Billy Shears from Sgt Pepper's? Macca in disguise maybe. Either way he is singing out of tune. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted December 18, 2005 Author Share Posted December 18, 2005 I believe BillyShears is a good example of the average person on the street, these people really do believe that houseprices shall simply rise forever!! They believe all the spin fed to them by those with a vested interest. Still he has cheered me up no end, as I realise these poor sods with their bull arguments don't have a leg to stand on. You've got to remember that a large chunk of the population still believes that Girls Aloud, Jordan, and the like are singing live when they appear on television. As many people have noted there is a continuous stream of puff pieces, television shows, etc. supporting the view that house prices can only go up and up. Not everyone believes them, but providing that a significant minority of the population believes it, then they will be prepared to pay more than the true worth of a property, and the prices go up. It's like buying goods on Ebay. You might see something you want, and know what you are prepared to pay for it. But if you are bidding against others, it only takes one person out of thousands who view the auction who is prepared to pay more than the item is worth and you lose. With ebay, there are alternatives, such as buying the item new. With property there is no alternative. And I'll assure you that I have two legs, and they are in fine working order. A bit weary after the christmas shopping, but entirely servicable. BS Quote Link to comment Share on other sites More sharing options...
BillyShears Posted December 18, 2005 Author Share Posted December 18, 2005 (edited) Billy - DO NOT BUY THE BEAR CLAPTRAP! Most professional forcasters can see that Brown will inject money into the housing market via keyworker schemes etc... Housing now represents 50% of all the real wealth of the UK from under 18% not so long ago. The forecasts are by RICS etc.. of 4%-6% HPI in 2006. This is underpinned by massive immigration levels, full employment, and low interest rates. However, I do believe the real economy will continue to collapse as real incentives disappear. If houseprices rose by 10% as you say, thats another few years wages that a worker will have to find from somewhere in rent or mortgage payments, reducing consumption and saving. The key to continuing HPI is, as you say, the injection of government money. If people had to purchase their own houses with their own money, we would already have passed the point where people cannot afford to buy houses, and then house prices would have to fall. However the government has shown that it's prepared to use its own resources to prop up house prices with the key worker scheme. Basically money from our taxes is being used to help purchase houses making them affordable for people on lower incomes. This means that a proportion of our national wealth is being diverted to prop up the housing market. This is very important because as people have noted, to support continuing HPI requires an infinite supply of money over an infinite number of years. However if a proportion of our national wealth is diverted to support high house prices, then the money available IS infinite. And hence HPI can go on forever. The government has already shown that it is prepared to divert money into the housing market, and so the "infinite" supply of money to support continued HPI is already in place. The key worker scheme has other advantages for the government. Key workers such as teachers and nurses are typically on relatively low salaries. Even those on good salaries such as head nurses and senior teachers cannot afford housing in urban areas. So, the government funds part of their house purchase. As HPI continues the government's portion grows. The vital piece of information is that if the key worker moves out of the area, or changes jobs so that they are no longer a key worker, then they must repay the government. Since a nurse or teacher is unlikely to be able to afford the £300,000 or so additional equity in their home, they are locked into the job they have, bar small moves such as a change of job at their current school or hospital or moving to another one in the local area. This effectively makes them serfs of the government. The government can then allow public sector wages to be further eroded by inflation, reducing their costs in that area. The two (lower public sector wages in real terms and the money used to prop up the housing market) will more or less equal out, with any balance being taken up by the taxpayer. With the taxpayer helping fund the property market, you get into a situation like credit cards. Most shops will not charge purchasers extra for using credit cards, but there are costs involved. So they raise prices in general. So everyone ends up paying for credit card usage even if they don't use one. There are benefits to using a credit card, e.g. not having to pay for things until a few weeks later. But only those with credit cards get the benefits. When people realise that a proportion of their taxes are being used to prop up the property market, then they will realise that the only way to win is to be in the property market themselves, leading to a new boom. BS Edited December 18, 2005 by BillyShears Quote Link to comment Share on other sites More sharing options...
BillyShears Posted December 18, 2005 Author Share Posted December 18, 2005 or is he the one and only Billy Shears from Sgt Pepper's? Macca in disguise maybe. Either way he is singing out of tune. I like to think of myself more as the Billy Shears from the "Ringo" album. Oh, and some claim that "auto-tune" was used on Macca's vocals from his most recent album, meaning that he was inhumanly in tune. BS Quote Link to comment Share on other sites More sharing options...
Levy process Posted December 18, 2005 Share Posted December 18, 2005 I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers. BS 1) AWOOGA 2) Can we archive the 10% rise prediction somewhere to "discuss" it this time next year 3) What's previous forum name? Quote Link to comment Share on other sites More sharing options...
BillyShears Posted December 18, 2005 Author Share Posted December 18, 2005 1) AWOOGA 2) Can we archive the 10% rise prediction somewhere to "discuss" it this time next year 3) What's previous forum name? I don't see any reasoned argument countering my points. BS Quote Link to comment Share on other sites More sharing options...
Smurf1976 Posted December 18, 2005 Share Posted December 18, 2005 People have an alternative to buying dot.com shares. Alternative investments such as gold, property, shares in other types of companies, collectibles, and the like. Alternative investments. Exactly. When real estate doesn't perform it eventually gets dumped in favour of something else. That's what's happened throughout the history of investment. The public dumps that which doesn't perform. Right now that's real estate. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted December 18, 2005 Author Share Posted December 18, 2005 Alternative investments. Exactly. When real estate doesn't perform it eventually gets dumped in favour of something else. That's what's happened throughout the history of investment. The public dumps that which doesn't perform. Right now that's real estate. But people cannot dump real estate unless they sleep under a bridge. Either they are in the market and have a vested interest, or they rent and are supplying the cash which keeps property a good investment. BS Quote Link to comment Share on other sites More sharing options...
Levy process Posted December 18, 2005 Share Posted December 18, 2005 Most professional forcasters can see that Brown will inject money into the housing market via keyworker schemes etc... I very much doubt that. The last I read about the keyworker scheme said that it would involve about 4000 people a year - way less than SIPPS would have done. And what exactly is the rest of your "etc."? I can't think of any. Wide of the mark this time I think clamps. I don't see any reasoned argument countering my points. BS I think the trouble there is your inability to see it, rather than it not existing. Maybe the strongest arguments appear on other threads - after all this sort of thing has been done to death on the forum. I don't see anything new you're adding yet. Quote Link to comment Share on other sites More sharing options...
BandWagon Posted December 18, 2005 Share Posted December 18, 2005 (edited) The relatives and divorcing couples will sell their houses. But they aren't the types of owners who are driving the market. The houses sold by relatives and divorcing couples will probably be sold to property developers who will then make sure that they get their return on investment. As more and more houses are purchased by professional owners with a profit motive, the more solid the foundations of continuing HPI. This is a very sweeping statement. How do you know they will be sold to property developers? Why would property developers buy property when it yields less than the cost of capital? A property developer doing so is likely to find themselves bankrupt quite soon. I'm renting right now, and will continue to do so for the forseeable future. The rent my landlords receives does not cover his cost of capital and the maintenance he has done on the property while I have lived here. Essentially he is subsidising my lifestyle. I like the guy. As for buying your house... I don't wish to buy random houses for random prices, if I'm going to buy a house I'm going to research it properly and buy at the best price. And when you come to buy, do yourself and buy from a forced seller. Often when people die their estate urgently needs money to pay tax bills, or the kids just want the money to spend. They won't mind dropping the price. We do not live in a free democracy. Please tell me which political party the poor and weak in our society can vote for that BOTH has their interests in heart AND has a realistic chance of achieving power. You have yet to explain why people will be "forced" to buy. As already explained, there are many reasons for forced sale, ie death, divorce, insolvency. Can you give some reasons of similar magnitude why anyone should be forced to buy? Edited December 18, 2005 by BandWagon Quote Link to comment Share on other sites More sharing options...
Levy process Posted December 18, 2005 Share Posted December 18, 2005 (edited) But people cannot dump real estate unless they sleep under a bridge. Either they are in the market and have a vested interest, or they rent and are supplying the cash which keeps property a good investment. BS This is very simple minded stuff you're coming out with IMO. There are lots of investors in property who own more than one, and so wouldn't have to "sleep under a bridge" if they sold some of their investment. Secondly, the most important thing in these sort of issues is the relative size of different forces, not just simply being able to point at one and say "therefore - my argument follows"; of course renters are supplying money which supports property investment, but what matters is if that amount is big enough. (You wouldn't argue that we don't need streetlights when the moon is above the horizon, because it is a bit like the sun and is a light in the sky would you - the thing that matters is its relative brightness). Lastly, this idea that people will hold onto investments in property if they would make a loss by selling is just absurd (given my point that many such investments are not the investor's home). You could apply that argument to any type of investment, and it clearly doesn't work for shares etc. People will sell an investment if they can make a better return by using it to buy a different one. They will also sell it if something happens which means they need the money, no matter whether it involves losing money in terms of the notional value it once had. Let's hear some reasoned argument from you, since you seem to be setting yourself up as the judge of what is and isn't. You're not exactly Bertrand Russell yourself you know... Edited December 18, 2005 by Levy process Quote Link to comment Share on other sites More sharing options...
BandWagon Posted December 18, 2005 Share Posted December 18, 2005 But people cannot dump real estate unless they sleep under a bridge. Either they are in the market and have a vested interest, or they rent and are supplying the cash which keeps property a good investment. BS As another poster has said, all these arguments you're making have been done to death. There is an alternative to buying, it's called renting, and right now it makes far more sense than buying. Imagine having a complete stranger subsidising you to stay in their property? Well right now it's happening all over the country. Buying property at this stage of the economic cycle is for fools. Quote Link to comment Share on other sites More sharing options...
Ferret Posted December 18, 2005 Share Posted December 18, 2005 However if a proportion of our national wealth is diverted to support high house prices, then the money available IS infinite. And hence HPI can go on forever. The government has already shown that it is prepared to divert money into the housing market, and so the "infinite" supply of money to support continued HPI is already in place. I bet the IMF are happy that you`re not the Chancellor. You would give them nightmares. Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted December 18, 2005 Share Posted December 18, 2005 buyers at 'the mercy' and 'forced to buy' were not the kind of words i was expecting in a free democracy. and with this attitude - it just makes you want to avoid paying tax wherever you can. however small the claim. We do not live in a free democracy. Please tell me which political party the poor and weak in our society can vote for that BOTH has their interests in heart AND has a realistic chance of achieving power. BS Billy 1 Fred 0 Quote Link to comment Share on other sites More sharing options...
djchewmacca Posted December 18, 2005 Share Posted December 18, 2005 I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers. BS It's not like I choose to boycott the market. I haven't got a choice. We simply cannot afford to buy at the moment. Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted December 18, 2005 Share Posted December 18, 2005 It's not like I choose to boycott the market. I haven't got a choice. We simply cannot afford to buy at the moment. At the moment if I had free choice to boycott I would exercise it. But as Billy says, we don't live in a home owning democracy. Is a boycott a boycott when you don't have a choice? Quote Link to comment Share on other sites More sharing options...
brainclamp Posted December 18, 2005 Share Posted December 18, 2005 I think this snobby dismissive long winded explanation with little interest of the facts (as we are going to see a crash lol) is typical of the Bears valium posts here. LP - It is not 'only 4000 keyworkers' who will take up the scheme - or varoius schemes - you have not got any real chance have you if you don't even bother to keep up with developments! GB's latest wheese is 200-300,000 shared buyer schemes - reducing mortgage costs by 30-40%, paid for by the taxpayer - what about them? Suddenly a £200,000 home is the starter level. You have been wrong for years - if that doesn't teach you to be humble in the face of the house price monster (like it has me) then you will be just where GB wants you - working for nothing as your real wages are inflated away by the house price monster. This is very simple minded stuff you're coming out with IMO. There are lots of investors in property who own more than one, and so wouldn't have to "sleep under a bridge" if they sold some of their investment. Secondly, the most important thing in these sort of issues is the relative size of different forces, not just simply being able to point at one and say "therefore - my argument follows"; of course renters are supplying money which supports property investment, but what matters is if that amount is big enough. (You wouldn't argue that we don't need streetlights when the moon is above the horizon, because it is a bit like the sun and is a light in the sky would you - the thing that matters is its relative brightness). Lastly, this idea that people will hold onto investments in property if they would make a loss by selling is just absurd (given my point that many such investments are not the investor's home). You could apply that argument to any type of investment, and it clearly doesn't work for shares etc. People will sell an investment if they can make a better return by using it to buy a different one. They will also sell it if something happens which means they need the money, no matter whether it involves losing money in terms of the notional value it once had. Let's hear some reasoned argument from you, since you seem to be setting yourself up as the judge of what is and isn't. You're not exactly Bertrand Russell yourself you know... Quote Link to comment Share on other sites More sharing options...
Elizabeth Posted December 18, 2005 Share Posted December 18, 2005 GB's latest wheese is 200-300,000 shared buyer schemes - reducing mortgage costs by 30-40%, paid for by the taxpayer - what about them? Suddenly a £200,000 home is the starter level. Gordon Browns latest wheeze cost the government 15% of the buy but it is capital expenditure and also involves the government getting 15% of any value that has been added by the homeowner if it is sold. And they can also write the asset to give themselves a better credit rating. They have also given the banks a greenlight to do the same. The "homeowner" for want of a better word will no doubt have to carry all the maintenance costs. I am not sure how many people are THAT stupid. Quote Link to comment Share on other sites More sharing options...
apom Posted December 18, 2005 Share Posted December 18, 2005 There are too many vested interests who rely on the housing market continuing to grow. People and organisations have learnt their errors from the previous house crash, and will make sure that the same does not happen again. Banks and building societies have already shown that any amount of house price inflation can be supported by simply increasing the multiples of income allowed for mortgages. There is no reason why this policy cannot be extended indefinitely to support continuing house price inflation in real terms. BS HE IS WINDING YOU ALL UP... bless.. I know its been a long time since any bulls posted anything.. but this is a bear.. a regular who has created a new logon to wind you all up.. duh.. I was about to post the my old chesnut of "if prices remain where they are the debt burden required to keep the market up to the required level of transactions would cause a recession within 2 years, I would then point out that this is economic fact and suggest the bull tries to explain where we all go from this point now." but that would have been biting.. bless Quote Link to comment Share on other sites More sharing options...
foxytrader Posted December 18, 2005 Share Posted December 18, 2005 I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers. BS Billy lad - have you just bought a house? I really don't want to sound patronising but I don't get the impression you were around or at least not walking around 1988-94. People were obliged to sell houses because they were unable to afford to keep up the mortgage payments. Prior to that they could simply raise equity from the property. As prices fell as they are now that option no longer existed. "will insist on prices that will give them a good return on their investment" and what will they do if they don't get them? Take their ball home? Get "Economics for Dummies" read it and then start. Good luck The Fox Quote Link to comment Share on other sites More sharing options...
oracle Posted December 18, 2005 Share Posted December 18, 2005 I'm new to this forum. The predictions of a house price crash are crazy. People who predict a crash forget that many houses are bought as investments, and these homeowners are just not going to sell at a loss. Buyers can boycott the market for a while, but they must eventually return. And when they do sellers will have them at their mercy, and will insist on prices that give them a good return on their investment. I predict a 10% rise in house prices next year, and higher rises in subsequent years as buyers are forced to return to the market at the mercy of sellers. BS erm,yes they will sell. they did last time, they did with jap shares in the 90's they did with dotcoms they will do so again. you need to do your research a bit more thoroughly.They will hold only until it is blindingly obvious they won't reach their old value(most sheeple recognise this at about the 2/3 of way through a bear market)...then they will panic sell sending prices tumbling at stupidly large rates. if you think 1% per month forecasts are bearish,then wait until we hit bottom,then you will be seeing 3-5% PER MONTH DROPS. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted December 18, 2005 Author Share Posted December 18, 2005 It's not like I choose to boycott the market. I haven't got a choice. We simply cannot afford to buy at the moment. But if you rent, you're still in the HPI game. You just have a different role. BS erm,yes they will sell. they did last time, they did with jap shares in the 90's they did with dotcoms they will do so again. you need to do your research a bit more thoroughly.They will hold only until it is blindingly obvious they won't reach their old value(most sheeple recognise this at about the 2/3 of way through a bear market)...then they will panic sell sending prices tumbling at stupidly large rates. if you think 1% per month forecasts are bearish,then wait until we hit bottom,then you will be seeing 3-5% PER MONTH DROPS. But we hear this story year after year and it never happens. Prices are largely due to the opinions of buyers and sellers as to what an asset is worth and require the buyer and seller to come to an agreement. The predictions of a house price crash have been proved wrong year after year. Buyers are never going to believe that prices are falling, and hence will not sell a house for a price that, in their opinion, undervalues it. The market may come to a halt, and we're seeing that now. But the buyers will eventually have to return, and return to a market with higher buyer expectations. BS I really don't want to sound patronising but I don't get the impression you were around or at least not walking around 1988-94. People were obliged to sell houses because they were unable to afford to keep up the mortgage payments. Prior to that they could simply raise equity from the property. As prices fell as they are now that option no longer existed. See the RCI figures concerning whether house prices dropped last year or are likely to drop this year. I consider it far more relevant to consider what has happened over the last five or six years than to talk of what happened 17-11 years ago. BS Quote Link to comment Share on other sites More sharing options...
brainclamp Posted December 18, 2005 Share Posted December 18, 2005 (edited) But if you rent, you're still in the HPI game. You just have a different role. BS You can't accuse these bears of being condesending, overwinded and short sighted dismissive windbags can you? If they really knew what was in store they would simply pull out of real work and get the state to provide housing and other services while they look for a go-through-the-motions job. Tune in, drop out and, most important - UNIONISE - you own energy and productivity is being used against you. Your wages will never keep pace. Checkmate. Edited December 18, 2005 by brainclamp Quote Link to comment Share on other sites More sharing options...
right_freds_dead Posted December 18, 2005 Share Posted December 18, 2005 true,. but its funny, though as i think we have a shortage of houses. there isnt an under supply. just a lot of people holding onto 2-3 properties while other dont have any. its a mexican sweat standoff. they have sunk their pounds into the plan. we have not sunk our pounds into their plans. the tv tells us to do it all the time. but we havent so far because something stinks. if it didnt, we would have already bought. as it is, we have the options. they have none. Quote Link to comment Share on other sites More sharing options...
BillyShears Posted December 18, 2005 Author Share Posted December 18, 2005 If they really knew what was in store they would simply pull out of real work and get the state to provide housing and other services while they look for a go-through-the-motions job. Tune in, drop out and, most important - UNIONISE - you own energy and productivity is being used against you. Your wages will never keep pace. Checkmate. And if more people rely on the state for housing, then the state needs to buy more property. And once again HPI is boosted by more government money flowing into the market. If more people unonise, then they demand to have better living conditions. Including housing. So, more key worker schemes, more government money into housing. People have got me quite wrong. I don't believe that HPI is a good thing or want it to happen. It's just that society, business (including finance) and government are now irrevocably committed to ensuring that HPI continues indefinitely. BS Quote Link to comment Share on other sites More sharing options...
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