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Robert Peston's: Tory Party Conference 2017

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3 hours ago, suresh786 said:

Why the govt. not reversing the act 1996 to discourage BTL.

Sorry being naive what is act

The act in part allowed no fault evictions of tenants. At that point the BTL mortgage was invented by banks, as easier to kick out tenants in order to sell property if needed. As mtg repayments were based on rent not salary, BTL landlords could outbid FTBs. The rest is history... Exacerbated by low IRs from 09 onwards.

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3 hours ago, Grab_Some_Popcorn said:

The primary cause is housing act 1996 allowing BTL to become attractive, thus property became investments.

Lack of building and low IR/QE are secondary. IMHO.

Nope.

Its dumb fux banks allowing individuals to borrow money with an non armotiising loan for a commercial investment. And then charing the same IR as an OO repayment mortgage FFS.

Offsetting IR payments on a BTL loan against rent should have never been allowed for an individual. Full stop.

IO BTL should be charged for the type of loan it is -  a commercial bridging loan, so 10%+.

Fix those two and its sorted.

 

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8 hours ago, rantnrave said:

Given how out of touch she is, a massive announcement on housing sounds terrifying.

Couldn't agree more. What's to stop her from "doing a Mario" with HTB and declaring that she will pump in unlimited funds "whatever it takes". Housebuilding shares will go into orbit. 

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Jeeze May's speech a bit of a car crash, can't speak, keeps coughing. Conference helping her out with long applause for recovery hoping she can get to the end.

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3 hours ago, DrBuyToLeech said:

Free-markets

I can't tell you how troubling I find it that enough people take this mental Labour idea seriously enough in a supposedly well educated and developed country that the Tories feel the need to adopt it. 

Ultimately you can't blame the govt you have to blame the electorate. Policies are tailored to those who vote. Since homeowners are more likely to vote than tenants we have the mental house price situation we find ourselves in. 

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1 hour ago, spyguy said:

Nope.

Its dumb fux banks allowing individuals to borrow money with an non armotiising loan for a commercial investment. And then charing the same IR as an OO repayment mortgage FFS.

Offsetting IR payments on a BTL loan against rent should have never been allowed for an individual. Full stop.

IO BTL should be charged for the type of loan it is -  a commercial bridging loan, so 10%+.

Fix those two and its sorted.

 

Sure it's dumb, but that was an inevitable and intended outcome of the various acts. 

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2 hours ago, nayth said:

That's an interesting point. If the Tory's are free market advocates, they should want to see house building track house prices (i.e. prices go up, building becomes more profitable, more houses built, supply increases, upward pressure on house price reduces, prices go down etc.)

 

Take with a pinch of salt, it's my memory of some numbers posted by someone else a year or so ago. 

Building never tracks prices because land supply is fixed, that's the fundamental feature of the housing market.

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4 hours ago, DrBuyToLeech said:

Interest rates are a critical factor, lack of building is barely a factor at all.

As I understand it, house building tracks sales volume, basically.

No I don't agree.  Without conditions of scarcity and competitive bidding there is no mechanism for inflation.  shortage of supply relative to demand is an issue...not the whole cause because cheap credit is needed to achieve the sky high prices but scarcity is needed to achieve and maintain high prices regardless of the other factors..

To say "lack of building is barely a factor at all" - is very odd.  Do you think if we demolished 10 millions homes that would barely be a factor with HPI??  What if we have 10 million immigrants in one year - would that not be a factor either?

Scarcity IS an issue and housing supply is needed.

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33 minutes ago, adarmo said:

Ultimately you can't blame the govt you have to blame the electorate. Policies are tailored to those who vote. Since homeowners are more likely to vote than tenants we have the mental house price situation we find ourselves in. 

Tyranny of the majority...a flaw at the heart of democracy that was known about from the very beginning of modern democracy but rarely gets a mention today but is the root cause of many of our ills  - including very high housing costs and national debt.

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2 minutes ago, Wayward said:

No I don't agree.  Without conditions of scarcity and competitive bidding there is no mechanism for inflation.  shortage of supply relative to demand is an issue...not the whole cause because cheap credit is needed to achieve the sky high prices but scarcity is needed to achieve and maintain high prices regardless of the other factors..

To say "lack of building is barely a factor at all" - is very odd.  Do you think if we demolished 10 millions homes that would barely be a factor with HPI??  What if we have 10 million immigrants in one year - would that not be a factor either?

Scarcity IS an issue and housing supply is needed.

35 Romanians paying £250 a month to sleep on the floor of a 3 bedroom house in North London suggests that scarcity is very much an issue.

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6 minutes ago, Wayward said:

Tyranny of the majority...a flaw at the heart of democracy that was known about from the very beginning of modern democracy but rarely gets a mention today but is the root cause of many of our ills  - including very high housing costs and national debt.

Absolutely. I can't see that changing anytime soon. Old people vote themselves free crap at the expense of the young. Homeowners wont tend to vote for lower prices (even though many would be better off, or at the very least no worse off).

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One of the things that left me most dismayed about the 2015 election result was that the demographic factors we all knew on this site were coming to the fore would be sidelined for another five years. The 2017 election has however shaved three years off having these issues properly discussed.

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1 hour ago, rantnrave said:

One of the things that left me most dismayed about the 2015 election result was that the demographic factors we all knew on this site were coming to the fore would be sidelined for another five years. The 2017 election has however shaved three years off having these issues properly discussed.

That was an enormous shock to tptb

Edited by Si1

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16 hours ago, oatbake said:

 

Robert Peston's take on the conservative party conference, from his Facebook page. Some very interesting inside views from Tory members:

This isn't rocket science. More than anything else Tory members want to see an ambitious programme of housebuilding - with the homes going exclusively to those on lower incomes (and not foreign investors).

 

Uh-oh.... why say "foreign investors" instead of just "investors"? I hope the BTL S24 lobbying hasn't worked. 

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2 hours ago, Shrink Proof said:

Maybe things aren't that bad after all. Watching May's conference speech it didn't look as though the writing was on the wall for her any more...

Good one Brilliant Shrink Proof!  Tough to beat.  Anyone else want to win the "caption of the week" award (amuse me, just cancelled my TV licence so no Mock The Week for many years, until on Dave!).

The-wording-on-a-slogan-is-changed-after-letters-fell-away-from-the-backdrop-as-Britains-Prime-Mini.jpg

Edited by Fence

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ITV’s Robert Peston has written a Facebook post about the speech. Here is an excerpt.

Frustratingly for her it is not her “British Dream” which will lodge in the public consciousness – but the chaotic theatre, which also involved letters tumbling from the campaign slogan stuck on the wall behind her (“Building a country that works for everyone”, though apparently with insipid adhesive).

I am told that after she left the stage, the prime minister hugged her husband and wept. No one would blame her.

PS Downing Street insists “her crying is a total lie, 100% untrue”. I am obviously happy to report that.

 

https://www.theguardian.com/politics/blog/live/2017/oct/04/conservative-conference-2017-theresa-may-to-announce-council-house-building-programme-politics-live

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This is just excruciating, but I have a suspicion that it will provoke a sympathetic response that will actually help her popularity.

I don't think it is a bad thing at all.

 

 

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6 hours ago, Wayward said:

No I don't agree.  Without conditions of scarcity and competitive bidding there is no mechanism for inflation.  shortage of supply relative to demand is an issue...not the whole cause because cheap credit is needed to achieve the sky high prices but scarcity is needed to achieve and maintain high prices regardless of the other factors..

To say "lack of building is barely a factor at all" - is very odd.  Do you think if we demolished 10 millions homes that would barely be a factor with HPI??  What if we have 10 million immigrants in one year - would that not be a factor either?

Scarcity IS an issue and housing supply is needed.

Yes, scarcity is an issue.    

Not scarcity of houses though, scarcity of land, and land is always scarce.

The land supply cannot increase in response to increasing prices.  

This is the key feature of housing markets, and it means that prices are set entirely by demand. 

If we demolished 10,000,000 houses,  the price of houses would rise - in the short term (10M is a bit unrealistic, it's half of all houses, if that happened the short term would be years).  The price of land would fall - you've just created 10M plots.

Builders would quickly replace the houses to exploit this profit opportunity. Long-term, there would be no change in prices.  

So housing supply is essentially irrelevant because it is essentially fixed.

Moreover, and this is the really key point, housing supply more than kept pace with population growth during the first phase of the bubble and is still higher than it was in the 90s.  

Even if shortages could cause a problem, there haven't been any shortages.  Average household size has shrunk.  

You don't need to examine the statistics to see this (although I have). There are now millions of people who own two, three, four, a hundred houses.  

What the hell kind of shortage is that?

 

 

Edited by DrBuyToLeech

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2 hours ago, Errol said:

but the chaotic theatre, which also involved letters tumbling from the campaign slogan stuck on the wall behind her (“Building a country that works for everyone”, though apparently with insipid adhesive).

Same glue we use to build all dem houses don't you know!

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3 hours ago, Errol said:

ITV’s Robert Peston has written a Facebook post about the speech. Here is an excerpt.

Frustratingly for her it is not her “British Dream” which will lodge in the public consciousness – but the chaotic theatre, which also involved letters tumbling from the campaign slogan stuck on the wall behind her (“Building a country that works for everyone”, though apparently with insipid adhesive).

I am told that after she left the stage, the prime minister hugged her husband and wept. No one would blame her.

PS Downing Street insists “her crying is a total lie, 100% untrue”. I am obviously happy to report that.

 

https://www.theguardian.com/politics/blog/live/2017/oct/04/conservative-conference-2017-theresa-may-to-announce-council-house-building-programme-politics-live

the letters tumbling are a bit random,and don't really suggest much.

 

Janet yellen's next speech at the "feral" reserve might be a bit funnier...now take that one as an act of god!

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13 hours ago, TheCountOfNowhere said:

eh ?

Have you missed something ?

Haven't ever heard a single mention of lack of choice, the one and only complaint is price. There are no builders advocating that they could build full size family homes at half the current price. The meme we can build our way to lower prices to go unchecked has only allowed the problem to deepen.

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