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The rats are jumping ship...SELL SELL SELL

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1 hour ago, UnconventionalWisdom said:

This is the question on all our lips. I have been on this forum a little longer than half a year and initially looked at buying a flat in 2014 before seeing what I could afford with an above average salary was crap. My guess would be that the housing market is looking the worst since 2008, its just a question of whether insane policies will be passed to continue this madness. 

I started here in 2006 before returning from overseas and did not buy for a long time given this forum but also how out of step the UK was with Europe on house prices and the supporting credit.  I still remember pop ups at a European airport trying to sell people credit cards and the look of distaste on people's faces, and then arriving in the UK and getting offers, looking just like blank cheques, in the post.  Bad idea not to buy back then though!  Not so sure now but I hope so.  It was insane but bearable when I came back and now it's beyond utter rubbish.  At least back then, mostly before QE, I could save up to buy and the interest helped pay the rent.  None of that now with zero rates and a blow off in house prices.  I ended up buying a renovation hovel so more sweat on my part but then I never asked for anything nor expected something for nothing, just a fair chance.  

So I've watched and learnt just how more insane things can become before - more insanity?  As a renter I saw it way back as a form of intergenerational robbery which clearly could not end well for those BTL types.  I wish houses were about as exciting as the bins outside them.  This housing obsession (for those with homes) is all very tacky and mostly pointless.  Anyway I'm a snob - it's not proper investing (unless you're a corrupt inside trader, QE beneficiary, City type).  May house prices collapse and you can all buy a home.  I really want you all to have the choice, at low risk.  A home, a family, a great future, a stake in society.  That's how it's meant to work and society fiddles with that at its peril.  Fine by me - I've worked and saved hard and treated houses with the contempt they deserve.  My hovel is a place to live, that's all, so I don't care about the price.  Indeed I'll be far happier if they could take any gain (if any and along with everyone else's of course) and build a family a home.

It really is that obvious.

Edited by Fence

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2 minutes ago, UnconventionalWisdom said:

Meant to add- maybe posters who have been on this site for years can say whether this actually feels like the tide is turning or whether it's just another false dawn 

There is the old saying that markets (including banks) can stay irrational longer than a pundit has money but the cheap sources of money for banks do seem to be drying up

Equally I suspect the Persimmon's bonus row means that while HTB can't be killed early it won't be extended beyond 2020...

So I suspect things are coming to their inevitable conclusion - its now just a matter of timing things correctly so those who take the blame are out of the firing line.

 

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14 minutes ago, Houdini said:

The great thing about how Hammond has structured his budgets is that he can only do things once a year in November as shown by how little was in today's spring statement.

I suspect by the time November comes around it may be too late to do anything as the rot will have set in. 

Edit to add - I suspect a crash is the actual plan now with Brexit to take the blame....

He's promised to review expenditure and a whole number of things before the Budget (oh, but how's that old promised land banking review coming along Mr Hammond?).  Plus, we have the review on planning due for completion before then.  Keeping his powder dry and setting things up for some shock and awe.  Cut through the hype though and it'll be another fake, and hence missed, opportunity (except if you're part of the elite) though.  Kind of like Trump's tax cuts and how much Trump's scr*wed supporters seem so keen to take it up where it don't shine!    

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27 minutes ago, disenfranchised said:

Shall we craft a petition to remove the 20% relief as well? 

What's that one?  If it's property related, burn them all!  Just control the banking system to control credit so house prices become and remain sane.  Then, if that's not enough (hell, do it anyway), build social houses for real deserving cases (like those struggling and working hard for a living).  Finance the build by bonds in an ethical manner which ethical boomers will want to buy and the rest won't be able to resist.  A form of war bonds paying a sensible return which would have low risk, just what they need in retirement.  Everyone's a winner except the politicians and their "man in the middle" City banking pals, shame!  Let the City boys and girls see just how good they are making investments in things that aren't a one way bet.  Once that's ticking along, even think about trains, water, gas, electric, etc.  The Conservatives could have started this by now and would be sitting rock solid and proud to be adhering to their core principles (assuming those in the Party still have them).  But then they're a moribund lot, wallowing in their short sighted "greed"(?) and stupidity.

BTW, very nice avatar of yours - maybe the two of us will create a bit of a...."meme"....ooh, I've always wanted to use that word (if a bit late to the party!).   

Edited by Fence

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25 minutes ago, UnconventionalWisdom said:

Meant to add- maybe posters who have been on this site for years can say whether this actually feels like the tide is turning or whether it's just another false dawn 

I have not been on this site for years, was on Motley Fool for a good while before it closed down, but I have been around the block. After doing some basic maths nearly a decade  ago I was 100% convinced that this housing madness just could not continue, I can sit down today and go over all the numbers again and facts will point even more to a property correction/crash yet I am only 50 50% certain of it happening.

I suppose that's the nature of the beast, it can make you doubt yourself even though logic tells you that you are right. I look at some really high achieving friends that I have, I look at them, one, two, a dozen, a few hundred, all great jobs and great pay and yet few of them under 40 have their own home, and if they cannot do it how on earth is Mr Mrs Average managing.

Yes things feel a little different at the moment, but I remember the financial crisis, Gordon Brown leaving office, Brexit, nothing seems to be able to tip that snowball on top of that mountain

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41 minutes ago, Fence said:

What's that one?  If it's property related, burn them all!  

I'm referring to the relief interest paying landlords receive. Originally they could deduct all interest payments from their taxable income. Eventually they will only be able to deduct it up to the higher rate tax threshold.

If they are campaigning for S24 to be scrapped perhaps we should be campaigning for it to be extended!

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49 minutes ago, inbruges said:

Yes things feel a little different at the moment, but I remember the financial crisis, Gordon Brown leaving office, Brexit, nothing seems to be able to tip that snowball on top of that mountain

A total crash seems a bit far fetched but there are a few helpful background trends.

One thing I'd point to that is often overlooked is the budget surplus. An decrease in the amount of outstanding government debt is actually a form of monetary tightening - similar to an IR rise - and its always been my view that persistent government deficits are one of the secular under-pinnings of HPI everywhere. This is good because the long term growth and inflation outlook is hardly pointing at soaring interest rates. 

There is also a lot less political capital in supporting the housing market now so I think hands are to some extent tied there.

In any case, a period of prolonged price stagnation or minor falls and continued anti-landlord sentiment should shake a good number of middle-class BTLs and foreign investors out of the tree.

So there are lots of things in our favour. Longer term, one major thing that could go wrong is a Labour government that makes significant increases to the deficit, or a Brexit induced major increase in government borrowing by any party to offset short/medium term brexit slowdown.

Edited by scepticus
spelling

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41 minutes ago, disenfranchised said:

I'm referring to the relief interest paying landlords receive. Originally they could deduct all interest payments from their taxable income. Eventually they will only be able to deduct it up to the higher rate tax threshold.

If they are campaigning for S24 to be scrapped perhaps we should be campaigning for it to be extended!

There are a lot of economic arguments why loan interest should not be tax deductible - the most obvious one being that any tax deduction is an unfair subsidy to a BTLer when they are competing for property against an owner occupier.

I'm sure I've seen a proper economic paper or 3 with similar arguments - I will see if I can find one.

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1 hour ago, inbruges said:

I have not been on this site for years, was on Motley Fool for a good while before it closed down, but I have been around the block. After doing some basic maths nearly a decade  ago I was 100% convinced that this housing madness just could not continue, I can sit down today and go over all the numbers again and facts will point even more to a property correction/crash yet I am only 50 50% certain of it happening.

I suppose that's the nature of the beast, it can make you doubt yourself even though logic tells you that you are right. I look at some really high achieving friends that I have, I look at them, one, two, a dozen, a few hundred, all great jobs and great pay and yet few of them under 40 have their own home, and if they cannot do it how on earth is Mr Mrs Average managing.

Yes things feel a little different at the moment, but I remember the financial crisis, Gordon Brown leaving office, Brexit, nothing seems to be able to tip that snowball on top of that mountain

In terms of high achieving what kind of jobs/salaries are we talking, its sad really folks getting towards 40 years old and cannot get a home. Agree its all gone nuts

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30 minutes ago, scepticus said:

One thing I'd point to that is often overlooked is the budget surplus. An decrease in the amount of outstanding government debt is actually a form of monetary tightening - similar to an IR rise - and its always been my view that persistent government deficits are one of the secular under-pinnings of HPI everywhere. This is good because the long term growth and inflation outlook is hardly pointing at soaring interest rates. 

 

You've lost me there - firstly as we don't have a budget surplus and won't have one until at least 2019/20 and secondly a decrease in government debt means money has been repaid to banks / lenders and so needs to be either lent elsewhere or spent.

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1 minute ago, Houdini said:

You've lost me there - firstly as we don't have a budget surplus and won't have one until at least 2019/20 and secondly a decrease in government debt means money has been repaid to banks / lenders and so needs to be either lent elsewhere or spent.

And whats never mentioned in the MSM is the near £4 Trillion public and personal debt spread equally

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1 hour ago, UnconventionalWisdom said:

Perfect excuse, I suspect it's now or never. 

Its possible, but I can't understand why the conservative party would do that.   Yes they could blame it on brexit but brexit is 100% their baby which means they still carry the can.   The only real politically safe time for them to have let the bubble go was at the very beginning of their take over of power from Brown, when they could have rightly pinned it all on him and Blair.   Now, even though the working masses are rebelling, they would still get slaughtered at the polls if they let the bubble pop.   The HPI loving boomers would turn on them in an instant as would everyone else angry at the general economic fallout of the bursting bubble.  

They've nailed themselves too firmly to the HPI mast to wrest themselves off it I'm afraid.    Their only choice now is to ride it to the end and go down with their burning ship.

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11 minutes ago, Talking Monkey said:

In terms of high achieving what kind of jobs/salaries are we talking, its sad really folks getting towards 40 years old and cannot get a home. Agree its all gone nuts

Aye.   I used to think it was just me.   But there's a hell of a lot of us out there now that have been priced out.   Now we just need to wield the power those numbers give us to bring an end to the madness.

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34 minutes ago, Houdini said:

You've lost me there - firstly as we don't have a budget surplus and won't have one until at least 2019/20 and secondly a decrease in government debt means money has been repaid to banks / lenders and so needs to be either lent elsewhere or spent.

Sorry badly worded. Any decrease in issuance of govt debt has somewhat similar effects to monetary tightening, regardless whether its still a deficit or is in fact now in surplus.

Once debt is paid down it is gone, whether its private or public. In the case of private debt you are right that the base money that was lent in the first place remains, but there is nothing to say it must be lent out again. During the GFC much of it wasn't - hence the "excess reserves" (although this was also a result of QE). 

All public debt is part of the 'wealth' of the private sector and can be used as collateral against new private lending. Less govt debt, less collateral, means less lending and/or lending at higher rates.

 

So when the government debt exists - both the bond AND the base money are in the system. Once the debt is gone, then just the base money remains. And that bond was an asset so some private sector entity, who doesn't have it any more. 

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2 hours ago, Houdini said:

Yes Tokyo 2007 onwards - I use it as an example as prices dropped even though Tokyo's population has continued to rise.

Tokyo isn't cheap. I don't know why that myth persists.

Anyway, on topic, I saw this on another thread over at propertytribes. 

Quote

There are reckoned to be about 1.5 million people housed by 300000 Accidental LL.

So if 75% of LL sell up there will be many millions of homeless tenants.

Why is it that such a disproportionately high ratio of landlords reason like imbeciles? Presumably they don't think that these landlords selling up will be selling to existing renters looking to buy, because that would mean that a new rental property is available on the market once those renters move into their own home, and presumably they don't think the landlords will sell to other landlords, because of course, the property would still be available to rent.

So we're back to the mystery of vanishing houses. Millions of them apparently.

/facepalm

 

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1 hour ago, TonyJ said:

The housing market, like other markets, works in cycles, although these may be superimposed on a bigger trend of increasing prices as the currency has been debased over centuries and decades, which has been particularly pronounced since we came off the gold standard earlier in the 20th century. Cyclical upturns are inevitably followed by cyclical downturns, even if government policies manage to distort them. I think the current cyclical peak, followed by a downturn, is just a natural characteristic of any market. To argue otherwise is to argue that winter does not inevitably follow summer.

I think there is more to it than that. Since the war the real price of housing has increased steadily. If it was just currency debasement, then the nominal price would have increased but not the inflation adjusted, real price.

Edited by scepticus
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29 minutes ago, dugsbody said:

Tokyo isn't cheap. I don't know why that myth persists.

Anyway, on topic, I saw this on another thread over at propertytribes. 

Why is it that such a disproportionately high ratio of landlords reason like imbeciles? Presumably they don't think that these landlords selling up will be selling to existing renters looking to buy, because that would mean that a new rental property is available on the market once those renters move into their own home, and presumably they don't think the landlords will sell to other landlords, because of course, the property would still be available to rent.

So we're back to the mystery of vanishing houses. Millions of them apparently.

/facepalm

 

That's 5 people in every accidental landlords house. Given that on average a house has 2.x residents how on earth has every landlord accidentally let out 2 properties.

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1 hour ago, Lurkerbelow said:

Its possible, but I can't understand why the conservative party would do that.   Yes they could blame it on brexit but brexit is 100% their baby which means they still carry the can.   The only real politically safe time for them to have let the bubble go was at the very beginning of their take over of power from Brown, when they could have rightly pinned it all on him and Blair.   Now, even though the working masses are rebelling, they would still get slaughtered at the polls if they let the bubble pop.   The HPI loving boomers would turn on them in an instant as would everyone else angry at the general economic fallout of the bursting bubble.  

They've nailed themselves too firmly to the HPI mast to wrest themselves off it I'm afraid.    Their only choice now is to ride it to the end and go down with their burning ship.

I think the tories need to have HPC, they only get votes if enough people think the system is working for them. The have-nots will be creeping into their 40sby the next election. Too many people thinking this system is screwing them over. As for brexit as an excuse, they can say we told you house prices would suffer on a leave vote and you voted for it. Perfect way to shift the blame. 

On top of that, I can't see boomers disgruntled by a possible reduction in house prices voting for corbyn.

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3 hours ago, Fence said:

A home, a family, a great future, a stake in society.  That's how it's meant to work and society fiddles with that at its peril.  Fine by me - I've worked and saved hard and treated houses with the contempt they deserve.  My hovel is a place to live, that's all, so I don't care about the price.  Indeed I'll be far happier if they could take any gain (if any and along with everyone else's of course) and build a family a home.

It really is that obvious.

It really has gone beyond Ricardo's iron law- wages tending to the lowest workers are able to sustain themselves and provide a family for the next generation of workers. I'm in my early 30s and whilst most of my friends are well educated and have good jobs, only a couple have had kids. I fear for the future because of this crazy experiment. 

It sounds like you've not gone much into debt to get a decent set up- that's what we're all aiming for! 

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29 minutes ago, UnconventionalWisdom said:

I think the tories need to have HPC, they only get votes if enough people think the system is working for them. The have-nots will be creeping into their 40sby the next election. Too many people thinking this system is screwing them over. As for brexit as an excuse, they can say we told you house prices would suffer on a leave vote and you voted for it. Perfect way to shift the blame. 

On top of that, I can't see boomers disgruntled by a possible reduction in house prices voting for corbyn.

Too many times I have seen education, hard work, the art of using contraception fail people who are increasingly watching lazy, non working breeding females get the BTL rental for nothing who then move the equally lazy boyfriend in,  a property that should be in the hands of taxpaying workers.

 

PS ... Just picked a random year from the past, in 1970 the average yearly wage was £1700 and average property £4900, the UK is broken.

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39 minutes ago, UnconventionalWisdom said:

I'm in my early 30s and whilst most of my friends are well educated and have good jobs, only a couple have had kids.

No surprise when the cost of housing is so high. The Pro EU main stream media haven't been telling us anything about what's going on in Greece, which seems to have the most severe drop in birth rates.

https://www.express.co.uk/news/world/798318/Greece-birth-rate-dying-economy-austerity-EU-debt-population-crisis

"In order to maintain the population Greece needs a birth rate of 2.1 per woman, but this has dipped to between 1.1 and 1.3"

It's good and needed. Having too many children than can be sustained would make the situation worse.

Edited by Arpeggio

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20 minutes ago, Arpeggio said:

No surprise when the cost of housing is so high. The Pro EU main stream media haven't been telling us anything about what's going on in Greece, which seems to have the most severe drop in birth rates.

https://www.express.co.uk/news/world/798318/Greece-birth-rate-dying-economy-austerity-EU-debt-population-crisis

"In order to maintain the population Greece needs a birth rate of 2.1 per woman, but this has dipped to between 1.1 and 1.3"

It's good and needed. Having too many children than can be sustained would make the situation worse.

They need tax slavers... to continue the max tax,

minimum wage structure ?

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Some nice posts from our friend paul, I think this is a big announcement from him?!?

 

Quote

https://www.propertytribes.com/markets-are-moving-as-they-say-all-change-t-127633505.html#gid327479

paul_barrett 15 hours ago
 
 

Unfortunately  due to S24 etc London or SE LL may not survive just small waves.

Better to get out now while the going is good.

Yes the big wave will return but not quick enough to prevent SE LL being put out of business

Which is why I'm getting out.

My business  simply could not survive normal IR and S24

So I intend to go before that situation hits.

There is a time to leave a market and to return.

S24 has radically changed the market

Leaving now from the SE market would be wise.

Or rather leaving the leveraged market would be wise unless a corporate.

Then you can ride the waves

A sole trader can't

If I was a corporate LL I would never sell up.

I would be in it for the long term so wouldn't be concerned about waves

S24 and higher IR make the proposition no longer worth it.

Time to exit stage left!

 

 

Edited by mrtickle

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