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fru-gal

"Will Britain ever wean itself off 'housing heroin'? MYRA BUTTERWORTH suggests a solution"

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Jees! What a heap of waffle.  It could have been abbreviated into 4 simple sentences:

The housing market is broken surviving only by ever greater doses of government subsidy to overstretched buyers, (She makes a good analogy of the heroin junkie)

Industry shills would prefer government to keep the money tap open but reluctantly accept it can't be permanent.

So industry need to matey up with private equity and banks to create a new source of funding to subvert lending limits and keep the junkies from going cold turkey.

Under no circumstances should anybody suggest that the real long term solution might involve house price drops until affordability is reestablished.  That would just be silly and naive. (And to help keep that idea in its box, lets all keep referring to the housing ladder).

 

 

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^

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It is clear that the private sector needs to step in with a new innovative mortgage product to help buyers, but at this stage it remains to be seen exactly what that would look like.

Yeah it's clear :rolleyes:

It'll look just like all the other dodgy "innovative" schemes they've been pushing for decades now.

It's only a short while ago there was an article about a couple who had bought a house using an "innovative" product and were complaining that when they came to sell on retirement the lender wanted a huge cut of the proceeds - they didn't know it was in the contract that they signed and the newspaper was giving them a helpful platform to air their complaint. 

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What this article says to me is that the governbankment got their desired result of hammering btl demand and are now stuck with no one being able to buy on the bottom rung and therefore are looking to the banks and private money to come up with a way to funnel money into the bottom without running foul of bank regulations. What could go wrong?

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40 minutes ago, Agentimmo said:

Crash can't be far away now if stories like this are becoming mainstream.

Yeah, the position of the CML is that having ramped prices so high that there is less and less chance of FTB getting on the ladder they want the taxpayer to gift them a deposit. This won't help second steppers, they'll also need help. Where will this end?

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5 hours ago, fru-gal said:

I learned the first paragraph, last paragraph rule from Byron. The rule is, unsurprisingly, that all you need to read on an article like this is the first paragraph and the last paragraph.

Here's the last paragraph (emphasis added).

Quote

It is clear that the private sector needs to step in with a new innovative mortgage product to help buyers, but at this stage it remains to be seen exactly what that would look like.

I can't see how you can honestly beat self-certified interest-only mortgages if you want is to pay telephone numbers for a shit house, but that would be an old mortgage product. You could innovate by giving the old product a catchy new name - maybe mañana mortgages? "You ever going to pay down the capital on your mortgage?", "Not right away - maybe later", "But given how you inflated your earnings, you can barely cover the interest?" "Yeah, but maybe soon I'll get a better job?" "You applying for anything?" "Not right now, but, y'know, I definitely going to, one day"

tenor.gif

 

 

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1 hour ago, Bland Unsight said:

 

tenor.gif

 

 

Dickie Dyson's Alice tax becomes the Annie tax...

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Crash can't be far away now if stories like this are becoming mainstream.

I just watched Nationwide's new TV ad featuring a middle aged woman waffling on about how she replaced her son with a cardboard cutout. After a genuine WTF??? moment I realised that the point of this bizarre concoction was to plug the Nationwides latest debt ramping scheme in which the son's mortgage is underwritten by his parents, presumably by putting their own property up as security? ( The ad was so obscure that the details of the scheme were not immediately obvious to me).

There is an air of desperation about the whole thing-a last gasp attempt to keep the bubble inflating. Maybe Brexit is the pin?

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1 hour ago, Maynardgravy said:

The Gladiator mortgage. Two interest-only 'owners' fight each other to the death at term maturity. The winner gets to sell the other's house to pay off their principal.

This is an excellent idea. Genuine innovation, and captures the dog eat dog spirit of the UK property. Hats off!

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26 minutes ago, Bland Unsight said:

This is an excellent idea. Genuine innovation, and captures the dog eat dog spirit of the UK property. Hats off!

Thanks, I will have to patent it. It also has the added bonus of going some way to solving the UK pension crisis.... win, win.

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2 hours ago, Maynardgravy said:

The Gladiator mortgage. Two interest-only 'owners' fight each other to the death at term maturity. The winner gets to sell the other's house to pay off their principal.

Would Fergus win every match owing to the principles of Sumo?

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14 hours ago, Agentimmo said:

Crash can't be far away now if stories like this are becoming mainstream.

How many such articles have there been down the years...    help the young... solution is more debt.... foreverHPI. 

Although I really didn't need to see a drug stuff pic association.   And the best answer their side is more of the same...?

8 hours ago, nothernsoul said:

This article is basically admitting the housing market is a ponzi  scheme and then suggesting we need to think up more innovative ways to keep it going. 

Market is full of proud HPIers very protective of their HPI, who want more HPI.   Far from all owners hoping for lower house prices.   

My side takes a position against these house prices and rents.  

Everyone has to take their own sovereign choice market decision over housing against these prices.  Buy, rent, hold, sell (and then all of the BTLers as well).

Same journo suggests we have higher rents ahead, due to any letting fee changes, and other measures coming in against LLs.   BTLers certainly made their choices along the way, and in the comments.

http://www.dailymail.co.uk/property/article-3963920/MYRA-BUTTERWORTH-Letting-fees-ban-won-t-lower-costs-renters-better-solution.html

Edited by Venger

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This is all soooo simple. 

Inflation is government policy & government issues the currency. 

If you want to buy a house & aren't constrained by credit then you buy shortly after a recession (hence why prices have subsequently risen. It's only a surprise to people like Venger who refuse to believe in this reality)

Everything else is, I'm sorry to have to tell you, a waste of breath, time & energy. 

This is the simple reason you cannot buy a house at 2009 nominal prices, let alone 1960 prices and never will. 'Pushing back' against this is simply delusional. Little wonder those who do are in the situation they're in. 

 

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19 minutes ago, Little Frank said:

This is all soooo simple. 

Inflation is government policy & government issues the currency. 

If you want to buy a house & aren't constrained by credit then you buy shortly after a recession (hence why prices have subsequently risen. It's only a surprise to people like Venger who refuse to believe in this reality)

Everything else is, I'm sorry to have to tell you, a waste of breath, time & energy. 

This is the simple reason you cannot buy a house at 2009 nominal prices, let alone 1960 prices and never will. 'Pushing back' against this is simply delusional. Little wonder those who do are in the situation they're in. 

 

Venger is right to be suspicious of the inflationist argument. If creating inflation were simple then the UK would have escaped its debt trap years ago (as would the Japanese). As it is, even though the national finances continue to deteriorate under the burden of runaway govt borrowing, there has been no household deleveraging since 2007. Now you can either regard this situation as acutely unsustainable, or merely profound and manageable (temporarily), but what you can't do is wish it away. A second correction of a similar magnitude to 2009 is inevitable.

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20 minutes ago, zugzwang said:

Venger is right to be suspicious of the inflationist argument. If creating inflation were simple then the UK would have escaped its debt trap years ago (as would the Japanese). As it is, even though the national finances continue to deteriorate under the burden of runaway govt borrowing, there has been no household deleveraging since 2007. Now you can either regard this situation as acutely unsustainable, or merely profound and manageable (temporarily), but what you can't do is wish it away. A second correction of a similar magnitude to 2009 is inevitable.

Show me your empirical evidence that UK hasn't created inflation over the long run. In fact show me the evidence for short run deflation. 

Here's the HPI data which apparently you believe hasn't happened. This is so laughable I find it incredible you even bother to try and pretend it's true.

https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/housepriceindexmonthlyquarterlytables1to19

 UK has a debt to GDP ratio of c. 63% (after you account for the £425bn which has been monetised to help ensure ongoing +ve inflation). Obviously it helps the austerians to pretend the £425bn somehow hasn't happened. 

I'm not wishing anything away. I've interested in the empirical evidence. I've given you the HPI dataset. I'll even give you the RPI dataset so everyone else can see your post is ridiculous

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/chaw/mm23

For some reason few people (perhaps you're one of them) would contend that nominal house prices will somehow magically revert to 1930 or something but at the same time hold the notion that if they 'push back' they WILL revert to 1950 or 1960 or maybe 1980 or.....well 1990 would be good. Oh well, how about 2003 or 2009. Ok let's settle for 2011.......that's how inflation works. Slowly........

So come on - I've showed the forum mine, now you show the forum your empirical evidence for long run (or even short run) deflation. Put up or stop wasting everyone's time

 

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8 minutes ago, Little Frank said:

Show me your empirical evidence that UK hasn't created inflation over the long run. In fact show me the evidence for short run deflation. 

Here's the HPI data which apparently you believe hasn't happened. This is so laughable I find it incredible you even bother to try and pretend it's true.

https://www.ons.gov.uk/economy/inflationandpriceindices/datasets/housepriceindexmonthlyquarterlytables1to19

 UK has a debt to GDP ratio of c. 63% (after you account for the £425bn which has been monetised to help ensure ongoing +ve inflation). Obviously it helps the austerians to pretend the £425bn somehow hasn't happened. 

I'm not wishing anything away. I've interested in the empirical evidence. I've given you the HPI dataset. I'll even give you the RPI dataset so everyone else can see your post is ridiculous

https://www.ons.gov.uk/economy/inflationandpriceindices/timeseries/chaw/mm23

For some reason few people (perhaps you're one of them) would contend that nominal house prices will somehow magically revert to 1930 or something but at the same time hold the notion that if they 'push back' they WILL revert to 1950 or 1960 or maybe 1980 or.....well 1990 would be good. Oh well, how about 2003 or 2009. Ok let's settle for 2011.......that's how inflation works. Slowly........

So come on - I've showed the forum mine, now you show the forum your empirical evidence for long run (or even short run) deflation. Put up or stop wasting everyone's time

 

Why are you judging the future by the past? 

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22 hours ago, ElPapasito said:

Jees! What a heap of waffle.  It could have been abbreviated into 4 simple sentences:

The housing market is broken surviving only by ever greater doses of government subsidy to overstretched buyers, (She makes a good analogy of the heroin junkie)

Industry shills would prefer government to keep the money tap open but reluctantly accept it can't be permanent.

So industry need to matey up with private equity and banks to create a new source of funding to subvert lending limits and keep the junkies from going cold turkey.

Under no circumstances should anybody suggest that the real long term solution might involve house price drops until affordability is reestablished.  That would just be silly and naive. (And to help keep that idea in its box, lets all keep referring to the housing ladder).

 

 

A perfect analysis.  10/10.

And let's not forget:  The housing "market" ponzi scam has been fueled by PREDATORY LIAR LOANS for the last 15+ years:  PREDATORY LIAR LOANS have been the tool which got us here.  They have been the equivalent to Nuclear Weapons on our lives.  Their destructive power is incalculable.

Edited by eric pebble

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12 hours ago, nothernsoul said:

This article is basically admitting the housing market is a ponzi  scheme and then suggesting we need to think up more innovative ways to keep it going. 

Perfect analysis. Perfect conclusion in one line.

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.

Quote

One option would be for non-banks - such as private equity firms - to enter the frame, although people may be concerned if the organisations are unregulated.

An alternative would be for developers and lenders to work more closely together

Goldman Sachs includes private equity so for sure they could help - even better it could all be off-balance sheet.  It worked with the Greek accounts - for a while.

It would be interesting how they might expect "developers and lenders to work more closely together" as many builders already have links to lenders and mortgage brokers etc.  Unless they mean that the developers become direct lenders as well as having all the other close ties - but why should they take that risk as they aren't like proper banks apparently creating money out of thin air etc which makes lending profitable for them but less profitable for those who can't do that - not unless they charge a massive interest rate which would tend to defeat the purpose - and it's not as if they could justify a bailout similar to the real banks.

If it was such a good idea they would be doing it already.  So it must imply surreptitious (or not so surreptitious) government/taxpayer subsidy - again, but this time through the route of the builder.  Probably off-balance sheet?- and the private equity firms could likely help with that as well.

Edited by billybong

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