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Atma

Panic now the hosing bull turning bearish

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3 hours ago, Atma said:

Speculative. The country is living through uncertain times, dependent on consumers willingness to splurge. If they are not then, prices drop to attract them. If that doesn't work, either scale down the operation or close up shop.

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.

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A year ago, a small group of investors, including myself, approached investment banks with a substantial sum. We wanted to buy a short on any leading UK residential house-price index – in other words, we wanted to bet on house prices falling.

...

...

Yet although the banks had many put options available on foreign-property indices, none would touch our offer in the UK market.

Why wait a year before publishing the fact or maybe they did publish it then.

Edited by billybong

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28 minutes ago, billybong said:

.

Why wait a year before publishing the fact or maybe they did publish it then.

Because 12 months ago it wasn't certain.

Now it is.

They can probably show paperwork to back up their claim, with the bubble collapsing in front of our eyes they might as well declare themselves geniuses.

 

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I didn't understand what they were trying to pay for in the article.what does the terms.. Buy a short etc mean. I don't have any experience in the world of investment.

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7 hours ago, TheCountOfNowhere said:

Because 12 months ago it wasn't certain.

Now it is.

They can probably show paperwork to back up their claim, with the bubble collapsing in front of our eyes they might as well declare themselves geniuses.

 

Quite likely although even now is it actually 100% guaranteed or certain or a sure bet even if it would be a very good thing for the UK's real economy.  One would like to think so.

It was certain to them to the extent that they were prepared to bet on it and the fact that there seems to be no means of betting against the UK bubble (except by staying out of the market or selling any property holdings) would have been and still is of interest.

Edited by billybong

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5 minutes ago, billybong said:

Quite likely although even now is it actually 100% guaranteed or certain or a sure bet even if it would be a very good thing for the UK's real economy.  One would like to think so.

It was certain to them them to the extent that they were prepared to bet on it and the fact that there seems to be no means of betting against the UK bubble (except by staying out of the market or selling any property holdings) would have been and still is of interest.

Prices are extreme

They that counts have been bailed out and i'd expect are long gone from the property bubble.

Sales now being funded by made up QE money via 1% mortgages from a man desperate to save his reputation

US raising IRs

BrExit

Plebs getting angry, very angry

Things are turning nasty and the only way to placate one group of angry young people will be to take off the prosperous old people and hand it to them.

This magical bubble on bubble action was always going to be short lived and I might be cynical but most likely done to allow banks to get off the hook before they hammer down the prices.


All those 50% deposit deals for a 1% mortgage were fantastic deals.  I wonder how many people will loose their savings on that 1.

What is it they say....if a deals too good to be true....

Edited by TheCountOfNowhere

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Good article, restored my faith in economics. Thanks for posting. I guess everything in it has been covered on here and by anyone with any basic common sense, but it did provide a nice summary of everything the average HPCer has been trying to state on here and to anyone who will actually listen. I can send this to my wife to help explain why I don't want her Mother to waste money on a house at the top of the market (cash buyer, what a rarity!)

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16 minutes ago, wsn03 said:

Good article, restored my faith in economics. Thanks for posting. I guess everything in it has been covered on here and by anyone with any basic common sense, but it did provide a nice summary of everything the average HPCer has been trying to state on here and to anyone who will actually listen. I can send this to my wife to help explain why I don't want her Mother to waste money on a house at the top of the market (cash buyer, what a rarity!)

I wouldn't bother, no one wants to here it.  You can't loose on bwicks and mortar, it's has been shown yet again.  Sure, billions of printed money and 0% IRs for a decade were needed but you can still make 100/200/300/400/500K in 2 years buying a house.  Sure, the country is in turmoil, in massive debt and looks like it might fall over a cliff edge but really, you can't loose on bwicks and mortar.  

We, on here, were 100% wrong. We should all have bought houses in London and 6 BTLs in Manchester.

F**K them, they are adults let them learn the hard way.

Edited by TheCountOfNowhere

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9 hours ago, Atma said:

I didn't understand what they were trying to pay for in the article.what does the terms.. Buy a short etc mean. I don't have any experience in the world of investment.

The language is being used informally.

For houses you can't practically take a short position or buy a put option.  However, a financial institution might be prepared to offer you a derivative which is in its essential character a spread bet on one of the house price indices which pays out if house prices go down, and you could call that 'buying a short'.

Products like this have been readily available in the past. I had a pal who was (is) a City asset manager. He sold-to-rent in London in 2003 (because he thought a crash was imminent, as did so many others) but he bought an option which went into the money if house prices rose. He was effectively taking insurance on house prices moving against him by going up. These chaps want something similar which will pay out if house prices go down.

Edited by Bland Unsight

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13 hours ago, TheCountOfNowhere said:

I wouldn't bother, no one wants to here it.  You can't loose on bwicks and mortar, it's has been shown yet again.  Sure, billions of printed money and 0% IRs for a decade were needed but you can still make 100/200/300/400/500K in 2 years buying a house.  Sure, the country is in turmoil, in massive debt and looks like it might fall over a cliff edge but really, you can't loose on bwicks and mortar.  

We, on here, were 100% wrong. We should all have bought houses in London and 6 BTLs in Manchester.

F**K them, they are adults let them learn the hard way.

You're absolutely right

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2 minutes ago, fru-gal said:

Wouldn't the banks be doing this themselves (i.e. betting against HPI) if that is what they believe will happen?

I don't think there's anyone willing to take the other side of the trade

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While globalisation and London’s recovery as a major financial centre drew in many foreigners, the overall immigrant “flood” story is more nuanced. Initially it was small: according to a 2017 report by the Mayor of London, in 1994 about 5,000 people net (ie, after emigration from London), rising to an average of about 35,000 net between 2005 and 2015, with a surge to 68,000 in 2016. Of these migrants, about half came from elsewhere in the UK. This has been hugely effective economically. London attracts young people who contribute significantly to state coffers, and then spread into the regions when they start families. The data shows this in action. In 2015, about 35,000 people in their twenties (UK-born and foreigners) moved to London. But 20,000 people in their thirties left – UK citizens with dependants seeking greater, cheaper space further away and some foreign-born migrants going home.

I've read elsewhere that London's population is falling if you don't include births (most of which are born to non-British born mothers). Will be interesting to see the effects of Brexit on immigration (and births) over the next 5-10 years. 

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4 hours ago, fru-gal said:

I've read elsewhere that London's population is falling if you don't include births (most of which are born to non-British born mothers). Will be interesting to see the effects of Brexit on immigration (and births) over the next 5-10 years. 

The cut of benefits to 2 kids will probably have a amplification on that and local births also.

one of the key ways of getting a decent house will have ended.... until prices fall or social house building increases

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Got own money would you buy it? Got borrowed money would you buy it?.......first own money has fears and reservations buying it, then even borrowed money declines to risk buying it.;)

 

 

Edited by winkie

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