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ItalianV6

House prices aren't just slipping in the UK

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10 minutes ago, ItalianV6 said:

Makes sense. House prices have risen globally (broad generalisation) in line with other asset prices in response  to globally low interest rates and QE money. As rates rise and liquidity is withdrawn then those prices will fall. The central banks will be hoping the majority of the fall will be in real terms rather than nominal, buts let’s see...

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3 minutes ago, SOLZHENITSYN said:

Makes sense. House prices have risen globally (broad generalisation) in line with other asset prices in response  to globally low interest rates and QE money. As rates rise and liquidity is withdrawn then those prices will fall. The central banks will be hoping the majority of the fall will be in real terms rather than nominal, buts let’s see...

Absolutely, a positive to see it written down for public consumption though.

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20 minutes ago, ItalianV6 said:
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an inheritance (although my advice on this latter point is spend the lot, your kids want you to have fun

Good that the article is published, but this guy is still a Keynesian dickwad.

Ed

But to be fair, this is great

Quote

Let’s go back to basics for a moment. You buy property with debt. Usually a fair chunk of it. Property can be very lucrative as an investment precisely because of this debt (or “leverage”).

Put down £25,000 deposit. Buy a £100,000 house, using a £75,000 mortgage. Sell it in two years’ time for £125,000. Pay the £75,000 back to the bank. Pocket £50,000. The price went up by 25%, but you’ve doubled your money. Rinse and repeat until you’re a millionaire.

But what makes prices go up in the first place? The rational value of a property (as opposed to the “bubble” value) is dependent on the expected rental income it will generate, and what other people are willing to pay for that income stream. It’s just like a bond in many ways, only riskier, and with plumbing involved.

So if you can get 5% from your bank account, you’ll want a lot more from your property – say 10%. But if you can only get 1% from your bank account, you’ll take a lower yield on your property – say 5%.

Let’s assume that the annual rental is £10,000 and it stays there. So with interest rates at 5%, you’ll happily pay £100,000 for that rental income. But with rates at 1%, you’ll happily pay £200,000. (I’m keeping the examples simple here).

You see what’s happened? The price of the property is basically contingent on interest rates.

 

Edited by Locke

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The price of property is pretty much contingent on how much mortgage credit buyers can obtain from the banks.  It would seem that nothing deters the lemming like public from taking on as much debt as they can gorge themselves on.

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3 hours ago, Sour Mash said:

The price of property is pretty much contingent on how much mortgage credit buyers can obtain from the banks.  It would seem that nothing deters the lemming like public from taking on as much debt as they can gorge themselves on.

Any kind of credit will do. Secured or unsecured, the Fantasy Islanders don't seem to care.

https://www.independent.co.uk/news/business/comment/consumer-borrowing-bank-of-england-brexit-credit-cards-mortgages-unsecured-lending-financial-a8469731.html

Quote

Britain’s credit card fuelled spending binge continues apace, according to the latest figures from the Bank of England.

Lending via plastic rose by an annualised 9.5 per cent in June, outpacing other forms of unsecured credit (8.5 per cent). Mortgage lending, by contrast, ticked up by a more modest 3.2 per cent.

The release of the figures followed a report by the Office for National Statistics that last week found UK consumers collectively spent more than they earned in 2017, the first time that has happened in almost 30 years.

 

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15 hours ago, zugzwang said:

i decided to apply for a credit card, as i thought i best get myself a decent credit rating as i might want a loan in the future to buy a buisness premises. 

the best i was offered was a 68% rate and a credit limit of £300 we are talking pay day loan territory here and i have no ccjs or anything.i earn 30k+ a year as self employed. it just shows you how people play the game, like some do the benifits system. its all about whats in the files and how you do things to manipulate that. And thats why ive got a poor credit rating and cant get a mortgage while others on less wages down the road think there the dogs ballox. 

 

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1 hour ago, jimmy2x3 said:

i decided to apply for a credit card, as i thought i best get myself a decent credit rating as i might want a loan in the future to buy a buisness premises. 

the best i was offered was a 68% rate and a credit limit of £300 we are talking pay day loan territory here and i have no ccjs or anything.i earn 30k+ a year as self employed. it just shows you how people play the game, like some do the benifits system. its all about whats in the files and how you do things to manipulate that. And thats why ive got a poor credit rating and cant get a mortgage while others on less wages down the road think there the dogs ballox. 

 

jimmy......to build up your credit rating you do not use your credit card for credit.

Always arrange a direct debit to repay the balance IN FULL every month......credit for a month so no interest to pay = NO CREDIT = NO INTEREST TO PAY.;)

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2 hours ago, winkie said:

jimmy......to build up your credit rating you do not use your credit card for credit.

Always arrange a direct debit to repay the balance IN FULL every month......credit for a month so no interest to pay = NO CREDIT = NO INTEREST TO PAY.;)

Not 100% sure of how lenders calculate credit-worthiness but I've heard it said that the absolute best way to build a 'good borrower' profile quickly is to make sure you meet the minimum payment every month but carry over a balance that attracts interest.  Apparently paying it all off in full doesn't make you an appealing prospect for more credit.

 

I think that in decades of using credit cards must have paid less than £100 total interest and that was due to 'forgetting' payments due to an annoying mixup with statement dates and due dates where I ended up being 'late' for three months on the trot until I noticed I was being hit by charges.

The amount of people who (seemingly) happily carry large amounts of money forward on a seemingly perpetual basis is amazing,  they only seem to care that they can make their minimum payments and the credit providers happily extend even more credit with higher limits.

 

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10 minutes ago, Sour Mash said:

Not 100% sure of how lenders calculate credit-worthiness but I've heard it said that the absolute best way to build a 'good borrower' profile quickly is to make sure you meet the minimum payment every month but carry over a balance that attracts interest.  Apparently paying it all off in full doesn't make you an appealing prospect for more credit.

I make the minimum payment each month, and my Noddle rating / credit score is dropping month-on-month.

Being on the electoral register is a good move too.

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Probably best to clear it then ... 'credit card credit' is horrendously expensive.

They do have some sneaky teasers to get you into large amounts of debt on the card though - one of mine is constantly offering 'interest free' credit balance transfers for a relatively low one-off fee  (2.99%) for up to a year and a half.  The thing is, if you subsequently use the card for anything else, adding to the balance,  you end up being liable for interest on the whole outstanding balance until you pay it off.

If you are disciplined though, you could use it to clear off another card you were carrying a balance on and then work at paying it down in the interest free period.

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On 31/07/2018 at 16:05, rantnrave said:

I make the minimum payment each month, and my Noddle rating / credit score is dropping month-on-month.

Being on the electoral register is a good move too.

It's recorded that you are only making the minimum though and therefore a negative to do so... add an extra fiver a month and you'll be looked upon more favourably 

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Summary of where we are including Sydney, Beijing, Toronto, New York and London:

The End of the Global Housing Boom

After a years-long surge in global capitals, property prices are starting to head lower. From Sydney to Toronto, here’s a look at what’s ahead. 

https://www.bloomberg.com/news/articles/2018-07-31/are-house-prices-falling-from-sydney-to-new-york

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On 30/07/2018 at 14:55, Locke said:

Good that the article is published, but this guy is still a Keynesian dickwad.

Ed

But to be fair, this is great

 

You're very insulting Locke towards people who don't agree with your monomaniacal, fundamentalist worldview ('libshits', 'Keynesian dickwad' etc.).

People who are brainwashed - like you are - into cemented, dogmatic, illogical ways of thinking tend to be that way...

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14 hours ago, zilly said:

You're very insulting Locke towards people who don't agree with your monomaniacal, fundamentalist worldview

No, I'm polite up until the point they stick to the trite non-arguments which I dismantle for them. At that point, it's clear they are an NPC drone, hence my contempt.

14 hours ago, zilly said:

People who are brainwashed - like you are - into cemented, dogmatic, illogical ways of thinking

My point of view is this- it is evil to initiate force and fraud.

If you disagree with me, that means you think it is moral to attack peaceful people, which makes you subhuman pond scum. That is the bottom line.

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On 30/07/2018 at 14:48, SOLZHENITSYN said:

Makes sense. House prices have risen globally (broad generalisation) in line with other asset prices in response  to globally low interest rates and QE money. As rates rise and liquidity is withdrawn then those prices will fall. The central banks will be hoping the majority of the fall will be in real terms rather than nominal, buts let’s see...

Impossible. I'm told it is because Romanian plumbers are pushing prices up.... globally.

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  • 152 Brexit, House prices and Summer 2020

    1. 1. Including the effects Brexit, where do you think average UK house prices will be relative to now in June 2020?


      • down 5% +
      • down 2.5%
      • Even
      • up 2.5%
      • up 5%



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