Let's do the HPC time warp again!

[Mikhail Liebenstein]

In a search for oldest threads, I thought this one is very interesting to read.

I do recall the phase where more than a few on this site had studied economics and understood demand and supply. Some of the early discussion were supply and demand based and in those days people wanted more supply, whilst the nimbies were in full resistance mode.

I think since then, prices should have fallen, but printy printy and zirp have got in the way.

I am wondering now if a bit of hyperinflation will now be engineered? 

 

[MonsieurCopperCrutch]

Way back in the day there was a vibrant Peak Oil thread. Quite a few posters lost good money follow some numptys advice. 

[Orb]

When you say hyperinflation, do you mean literal hyper-inflationary collapse, or just very high 70s style inflation? 

 

[swankyman]

He means:

 

And a bit of this

 

Edited October 19, 2020 by swankyman

[Mikhail Liebenstein]

 

When you say hyperinflation, do you mean literal hyper-inflationary collapse, or just very high 70s style inflation? 

 

I was really referring 1970s style rather than Weimar Republic. But always room for a CGNAO style nuking.

[msi]

It w asn't just the money that was inflating

[65243]

Thanks Mikhail, I remember that time! There was a bizarre mix of group-think orthodoxy, paranoia and authoritarian moderation before the site got sold on and became more commercialised. I can't remember what my username was then, but I was variously accused of being an estate agent troll, a BTL muppet, and I think I eventually got booted off for not being sufficiently crashy 😆

[Mikhail Liebenstein]

 

Thanks Mikhail, I remember that time! There was a bizarre mix of group-think orthodoxy, paranoia and authoritarian moderation before the site got sold on and became more commercialised. I can't remember what my username was then, but I was variously accused of being an estate agent troll, a BTL muppet, and I think I eventually got booted off for not being sufficiently crashy 😆

 

I think we all underestimated printy printy!

[MonsieurCopperCrutch]

 

Thanks Mikhail, I remember that time! There was a bizarre mix of group-think orthodoxy, paranoia and authoritarian moderation before the site got sold on and became more commercialised. I can't remember what my username was then, but I was variously accused of being an estate agent troll, a BTL muppet, and I think I eventually got booted off for not being sufficiently crashy 😆

Are you not one of the thin blue line? 

[65243]

 

 

I think we all underestimated printy printy!

The stock response back then to a suggestion that governments wouldn't allow a crash to happen, and would take whatever fiscal and/or monetary steps were needed, was that a housing crash would overwhelm those mechanisms, and that no government had the power to stop it. That was wrong!

[Frugal Git]

 

The stock response back then to a suggestion that governments wouldn't allow a crash to happen, and would take whatever fiscal and/or monetary steps were needed, was that a housing crash would overwhelm those mechanisms, and that no government had the power to stop it. That was wrong!

Was it (wrong)?

Or do we just live in a time of ‘I want it my way, right now’ entitlement - and i include old school, die hard HPCers with bear till I die tattood on my arm in that.

I would definitely agree that everyone here underestimated the scale of the props and the props ability to keep things inflated.

But every day that time passes, the sentiment is changing more and more towards our thinking - that high house prices are a cancer, not a blessing.

18 years ago, you would have been deeply subversive to suggest house price inflation was already out of control- even though they already doubled in the preceeding 5 years. But it was somewhat achievable to get an actual home, not a flat as a FTB still, Phil and Kirsty were still fresh faced. People weren’t yet seeing it as a problem. It was a cause celebre. 

In 2003, a year later us subversive types had evidence for what was going on, thanks to a brilliant program called mortgage madness, self cert and liar loans were exposed as a key driver. At that point, again, we could see this was not a great thing for society, but society continued to get high.

2007/8 came and went. Finally - a drop. Houses were expensive by salaries - we’d had 10 years of very little wage inflation, but things were looking a little bit more realistic.

2013 - market flat for 5 years. We are waiting, watching. Society is starting to get tetchy - kids living at home longer, children being born to people in their late 30s/early 40s increasingly, buy to let rampant. More and more people are thinking - hmmm. Something is wrong here, but very little media saying there is a problem.

Then Help to Buy.

Ever since then, slowly but surely Sentiment has and is continuing to change. It’s no longer oddballs saying housing is too expensive. It’s boomers who have kids and no grandkids, it’s gen X and millennials who are stuck in starter homes with kids. And it’s young people without a house, earning what should be great money saying ‘wtf?’ 
I rarely now see an article properly celebrating house price increases. It’s usually either critical or incredulous. This is an enormous change.

at some point something will give - it might not be this year, next year or even a decade from now. Heck it might be 50 years away. But it will give, and house prices will revert to something approaching sensible. Either through economics, civil war or just blanket passive resistance (rent strikes, refusal to buy). 

Tl;dr I made a financial mistake not buying. But I wouldn’t change it for the world. If you don’t stick to your principles, and don’t act in accordance to your own world view - even if it’s wrong for the time, you don’t have integrity.

[Social Justice League]

'Scum' need to be wasted and bankrupt and the 'scum' are the aspiring middle classes.

They are the cannon fodder and will all be shown the door...................to western (bent) capitalism.

[65243]

Well Frugal Git, that's a great retrospective of twenty years of HPI!

If covid, brexit, mass unemployment, the biggest recession in history and the reimposition of stamp duty next year don't bring it all crashing down, I think we just have to dig in and wait for Jesus to return 😆

Edited October 20, 2020 by 65243

[BufferBear Bitcoin Bull]

 

In a search for oldest threads, I thought this one is very interesting to read.

I do recall the phase where more than a few on this site had studied economics and understood demand and supply. Some of the early discussion were supply and demand based and in those days people wanted more supply, whilst the nimbies were in full resistance mode.

I think since then, prices should have fallen, but printy printy and zirp have got in the way.

I am wondering now if a bit of hyperinflation will now be engineered? 

 

Whatever happened to RJG18? 

[MonsieurCopperCrutch]

 

Whatever happened to RJG18? 

Sadly he passed away. 

[msi]

 

They are the cannon fodder and will all be shown the door...................to western (bent) capitalism.

Even 10 years ago, you  could argue the only political - economic system that gave people stability and a shot at bettering themselves was Western Democratic capitalism.  Everyone wanted to come over.

Now look at autocratic China - getting a grip on COVID.  Russia providing stability compared to the nutjobs in the White House and Downing Street.  The Mid East cracking down on religious dissent.  It's almost as if someone is undermining our way of life.

[Pop321]

 

Was it (wrong)?

Or do we just live in a time of ‘I want it my way, right now’ entitlement - and i include old school, die hard HPCers with bear till I die tattood on my arm in that.

I would definitely agree that everyone here underestimated the scale of the props and the props ability to keep things inflated.

But every day that time passes, the sentiment is changing more and more towards our thinking - that high house prices are a cancer, not a blessing.

18 years ago, you would have been deeply subversive to suggest house price inflation was already out of control- even though they already doubled in the preceeding 5 years. But it was somewhat achievable to get an actual home, not a flat as a FTB still, Phil and Kirsty were still fresh faced. People weren’t yet seeing it as a problem. It was a cause celebre. 

In 2003, a year later us subversive types had evidence for what was going on, thanks to a brilliant program called mortgage madness, self cert and liar loans were exposed as a key driver. At that point, again, we could see this was not a great thing for society, but society continued to get high.

2007/8 came and went. Finally - a drop. Houses were expensive by salaries - we’d had 10 years of very little wage inflation, but things were looking a little bit more realistic.

2013 - market flat for 5 years. We are waiting, watching. Society is starting to get tetchy - kids living at home longer, children being born to people in their late 30s/early 40s increasingly, buy to let rampant. More and more people are thinking - hmmm. Something is wrong here, but very little media saying there is a problem.

Then Help to Buy.

Ever since then, slowly but surely Sentiment has and is continuing to change. It’s no longer oddballs saying housing is too expensive. It’s boomers who have kids and no grandkids, it’s gen X and millennials who are stuck in starter homes with kids. And it’s young people without a house, earning what should be great money saying ‘wtf?’ 
I rarely now see an article properly celebrating house price increases. It’s usually either critical or incredulous. This is an enormous change.

at some point something will give - it might not be this year, next year or even a decade from now. Heck it might be 50 years away. But it will give, and house prices will revert to something approaching sensible. Either through economics, civil war or just blanket passive resistance (rent strikes, refusal to buy). 

Tl;dr I made a financial mistake not buying. But I wouldn’t change it for the world. If you don’t stick to your principles, and don’t act in accordance to your own world view - even if it’s wrong for the time, you don’t have integrity.

Just a theory but the thing to be wary of is waiting for a large scale reported crash with indices showing 20/30/40 or 50% falls. It might be that for the next 5/10/50 years those days have gone. Hopefully not....but with props who knows. However the fall may happen but it could be hidden by some strong sales in an overall weak market.  

An example was the last house I bought was during that ‘flat period’ in 2013. I paid £210k for a large terrace which was ‘fairly basic but tenanted’ and replaced the roof and made good some electrics for £10k so £220k. Houses just weren’t selling well. However the neighbouring house (same footprint) was nicely painted out in the latest ‘greys’ and nice kitchen sold for £410k. Not even nearly worth it  

Appreciate this sounds like a Mumsnet brag but the point wasn’t my purchase rather the neighbouring purchase. Houses were taking 6/12 months to sell but when they did they still seem to still go for silly prices. Someone set their heart of a renovated house in a particular area and assumed because they were asking £420k then £410k was a good buy...it wasn’t. I can only assume valuers then worked on the principal that houses are worth what someone is prepared to pay for it....and hey, they were prepared to pay £410k. 

I saw other deals going through with similar discounts by investors and owner occupiers. So watching for those outlier sales (prices achieved) on the scruffier houses with motivated sellers.....or even auctions....might be the better way to gauge what and when to buy. 

I guess I am saying that flat 2013 may have been was a opportunity for a fall of 30/40% purchase but hidden in EA shop window asking prices and the main stream buyers compliance to sticking to the norm. Not a criticism of those overpaying or not buying but I wonder whether we will ever see open and honest drops in asking prices. 

Perhaps the next crash is unavoidable but a concerted effort by EA, sellers and government may try to hide it. 
 

footnote: although seeing some of the real asking price falls in London mention by posters...my theory may of course be rubbish 😆😆

Edited October 21, 2020 by Pop321

[ForGreatLager...]

 

Was it (wrong)?

Or do we just live in a time of ‘I want it my way, right now’ entitlement - and i include old school, die hard HPCers with bear till I die tattood on my arm in that.

I would definitely agree that everyone here underestimated the scale of the props and the props ability to keep things inflated.

But every day that time passes, the sentiment is changing more and more towards our thinking - that high house prices are a cancer, not a blessing.

18 years ago, you would have been deeply subversive to suggest house price inflation was already out of control- even though they already doubled in the preceeding 5 years. But it was somewhat achievable to get an actual home, not a flat as a FTB still, Phil and Kirsty were still fresh faced. People weren’t yet seeing it as a problem. It was a cause celebre. 

In 2003, a year later us subversive types had evidence for what was going on, thanks to a brilliant program called mortgage madness, self cert and liar loans were exposed as a key driver. At that point, again, we could see this was not a great thing for society, but society continued to get high.

2007/8 came and went. Finally - a drop. Houses were expensive by salaries - we’d had 10 years of very little wage inflation, but things were looking a little bit more realistic.

2013 - market flat for 5 years. We are waiting, watching. Society is starting to get tetchy - kids living at home longer, children being born to people in their late 30s/early 40s increasingly, buy to let rampant. More and more people are thinking - hmmm. Something is wrong here, but very little media saying there is a problem.

Then Help to Buy.

Ever since then, slowly but surely Sentiment has and is continuing to change. It’s no longer oddballs saying housing is too expensive. It’s boomers who have kids and no grandkids, it’s gen X and millennials who are stuck in starter homes with kids. And it’s young people without a house, earning what should be great money saying ‘wtf?’ 
I rarely now see an article properly celebrating house price increases. It’s usually either critical or incredulous. This is an enormous change.

at some point something will give - it might not be this year, next year or even a decade from now. Heck it might be 50 years away. But it will give, and house prices will revert to something approaching sensible. Either through economics, civil war or just blanket passive resistance (rent strikes, refusal to buy). 

Tl;dr I made a financial mistake not buying. But I wouldn’t change it for the world. If you don’t stick to your principles, and don’t act in accordance to your own world view - even if it’s wrong for the time, you don’t have integrity.

Totally agree. We will know very soon if there’s to be any sort of crash. If a global pandemic and the end of a 40 year relationship with the EU doesn’t cause prices to drop, nothing will. 

[jiltedjen]

 

 

2013 was a good buying opportunity, at the time i had been watching prices drop over the previous 4 years

it was starting to feel like my deposit savings (while renting) was about to meet the price i could afford through house price falls, then out of nowhere it all reversed pretty quickly and everything started selling soon afterwards. 

that's when i realised i had to pull out the big guns, move in with parents, commute 2-3 hours a day, then 5 years later i managed to buy a place. Its a shame i couldn't live with my parents from 2011 onwards as i could of taken advantage of the 2013 lows.

and your right, there were plenty of sellers who were just asking way too much back then, the good stuff was still selling, but most sellers were gradually lowering their price, perhaps at the time it was at the rate they could stomach the negative equity via their own savings

2013 was a real pivotal year for the HPC site. its not been the same again. Even i thought a crash would happen, both in the stock markets and the housing market, laying the foundations for a brighter future for the young (an effective wealth transfer), i stuck to this idea until maybe 2015/2016, instead the money printing madness and policies just got worse and worse, i even remember the price of apples suddenly going up almost overnight, and the £ lost a lot of purchasing power

now its assets or broke. And its very hard for someone starting out to save in assets, especially as not much outperforms HPI. 

And right now, looking at the world, both Brexit, Covid, national debt etc, we are 100% going to see negative rates, which until now seemed just like talk, but now its actually seems quite an obvious route, the recent HPI boom cannot be allowed to pop, never before has the £ looked like its going to be thrown to the wolves. 

equally the debt load of soo high that they will want to (and will) inflate it away. 

we have not really build quality houses on mass since maybe the 1980's and quality got a lot worse since then, so its not just housing required, and in huge demand, but white hot demand for 'good' housing. 

People need more space than they ever have done before, and there less space than has ever been available. 

[Frugal Git]

 

2013 was a real pivotal year for the HPC site. 

Yep (btw great post) - but to add, yes 2013 really was the turning point all round for me. Straight after HTB was announced when I went full on hardcore ‘opt out’ mode. I made it my mission to not participate in this economic model if I can avoid doing so.

I myself started by whacking everything I can into my pension, ‘looking out for my future self’ which just so happened to have the lovely side effect of minimising my contribution to tax receipts. Yes, this might be foolish if rules change, but that doesn’t matter. It’s the principle (Madge) as Harold Bishop used to say.

if I buy something (of value), I now at least have a good go at buying it second hand, no VAT from me wherever possible.

I also stopped critizing people on benefits, and instead applauded them for making the rational choice. No point in striving when the system will take very decent care of you if you learn how it works. 

7 years later, honestly everything has changed. I was chatting to a young guy at work yesterday about life and he mentioned explicitly he was waiting to see what happens now to house prices - and that they have got to drop. This was unprompted by me. 

Day before yesterday. my very pleasant, but pretty clueless normally boomer neighbour was chatting about COVID stuff - and he mentioned ‘housing is really bonkers now, I fear for what’s coming if people can’t afford a place’. Again, I didn’t even start the topic!

Nearly every single radio phone I’ve heard recently had mentioned house prices as a problem - even when the topic started of on football 😂

The snowball has become very, very large. Why on earth the powers that be chose this path I have no idea. Surely the consequences were obvious?!

[jiltedjen]

i think the powers that be understand how disastrous brexit will be, especially during covid, thus they need to 'pump the gas pedal' on the parts of the economy which are in control (housing market) as it will need to become a bigger part of the economy as the general economy rots away under brexit.

this way the banks, DIY stores, house builders, insurance products etc etc, will become a much bigger part of the general spend.

house prices will never be allowed to drop in £ terms (but maybe in real terms) but instead they will just offer more and more 'help' schemes, maybe even crank up the 'your a failure for living at home' adverts, even more 'boomer can do a helping hand' mortgage type thing

I wanted to opt out of the insanity, but seeing that shelter is a basic human need its a bit like having a gun to your head as you have to live somewhere.

I just made sure i how have a 30-40% deposit so i could pay as little in interests as possible on a mortgage, and getting to that point has damaged my health with long commutes, constant stress etc. 

now my plan is to overpay and get to being mortgage free as quick as possible for this nightmare to be over and be 'free' of the housing madness once and for all. 

i think most of the young will just end up with HTB properties, and inflating house prices. It will mean any decent well built houses will become rarer and rarer as a % of the total housing stock (as more and more shoddy new builds are thrown up), but the magic money printing tree will sort the situation out, and the old dynamic of 'buy as much as you can afford it will all inflate away' will work wonders.

i think given the current an medium term future situation in the UK, that this bubble has not even got started yet, its policy. 

the trick is that they need to get enough young people to accept it and not question it, which i actually think is the case anyway. 
 

[btd1981]

 

I myself started by whacking everything I can into my pension, ‘looking out for my future self’ which just so happened to have the lovely side effect of minimising my contribution to tax receipts. Yes, this might be foolish if rules change, but that doesn’t matter. It’s the principle (Madge) as Harold Bishop used to say.

Careful now... Surely taking responsibility for yourself is the worst thing you can do in this day and age. Say goodbye to any means tested assistance once you do retire!! 

[longgone]

 

 

if I buy something (of value), I now at least have a good go at buying it second hand, no VAT from me wherever possible.

 

😂 or china and pay no duty then sell it again at a profit

[Frugal Git]

 

😂 or china and pay no duty then sell it again at a profit

I would, but every time I order something from AliExpress recently the bloody Royal Mail takes an £8 handling fee for the £3.12 in vat due (on a $20 marked item). I think they still think the £ is worth something against the buck, but $20 is over £15 these days 😤😂

[Locke]

4 hours ago, jiltedjen said:

as the general economy rots away under brexit.

Is that always a bad thing? Inventing the steam engine means some people become unemployed as the labour market for some tasks "rots away", but that doesn't mean an economic shift is de facto bad.

Leaving the EU cartel might (and I would argue, almost certainly will) improve things for the average person in the long run.