The pin that pops the bubble

[Pop321]

On 14/09/2021 at 10:45, TheCountOfNowhere said:

The catch will be, no one wants to buy it at that price.  The people moving out of London with their unearned untaxed £1M can buy a crappy 4 bed house for £1M but they can't pay £1M for a 20,000 and afford to live there.

Absolutely correct. You need cash and ongoing cash flow to own this. It’s a fantastic pile of bricks though. 👍🏻

[Pop321]

On 14/09/2021 at 20:33, dirtysteve said:

Won’t be a single pin but a multitude of things adding up.

When finances are stretched already…
Gas and electricity prices increasing 60%
NI increasing 1.25%
council tax set to increase 5%+

furlough ending

Many sectors seeing redundancies still and no signs of pay rises (eg aviation).

inflation still rising.

And eventually rate rises.

The problem is for non homeowners that any pop might only bring it back to Pre covid levels at best.

 

I am not so sure…..at the moment we have a massive world consensus. Low rates, money pumping without any real concern for where it all ends up in 20 years time. Even countries at loggerheads eg US and China agree this formula needs to remain. 

Something may happen where one country wants (or needs) to gain an advantage and increase rates or sort out their spending. Something we can’t yet predict and that might be the ‘pin’ where the momentum falls away.

Your view could be translated that even the pandemic may be that pin and we have successfully just covered things up for a while by throwing money at it.

Furlough is a great example, many people have felt little or no financial effects yet and when the money stops they will still have money for a while….when that runs out, maybe next year will become interesting with many hoping for another lockdown which will let the government shake the money tree. 

[TheCountOfNowhere]

1 hour ago, Pop321 said:

Absolutely correct. You need cash and ongoing cash flow to own this. It’s a fantastic pile of bricks though. 👍🏻

It is, a proper rich mans house and at 1.25M a veriftable bargain.  Me thinks Rishi over paid for his mansion oop north  

[Bloop]

Another potential pin could be the fall in international students that is projected post Covid and also resulting from Brexshit:
https://www.belfasttelegraph.co.uk/news/uk/uk-cannot-take-attractiveness-as-international-student-destination-for-granted-40832009.html

The BTL market for students has resulted in a glut of student housing in places like Lancaster with a top tier university, with inflated rents being charged to students in multiple occupancy houses that would normally go to local families, like this:
https://www.rightmove.co.uk/properties/111354419#/?channel=STU_LET

https://www.rightmove.co.uk/properties/113043041#/?channel=STU_LET

With just a couple of weeks to go til the start of term, a number of these houses have not yet been filled, and I'm starting to see evidence of student accommodation coming to market for sale where BTL landlords might have given up on getting their house rented out due to lower student numbers:

https://www.rightmove.co.uk/properties/113912315#/?channel=RES_BUY

Hope they get rinsed - next few weeks are going to be interesting.

[winkie]

The best universities or schools are not in the highest rent places....

The rest can study from home.

[petetong]

On 14/09/2021 at 11:31, Gigantic Purple Slug said:

https://www.bbc.co.uk/news/business-58543554

Record number of job vacancies.

Correct me if I am wrong but a large proportion of those vacancies are in the care sector with poor pay and conditions, and zero hour contracts.

[satsuma]

https://www.bbc.co.uk/news/uk-politics-58670355

 

Pins Pins everywhere, round we go and up goes the bubble, bigger they are the harder they fall

[satsuma]

6 hours ago, Bloop said:

Another potential pin could be the fall in international students that is projected post Covid and also resulting from Brexshit:
https://www.belfasttelegraph.co.uk/news/uk/uk-cannot-take-attractiveness-as-international-student-destination-for-granted-40832009.html

The BTL market for students has resulted in a glut of student housing in places like Lancaster with a top tier university, with inflated rents being charged to students in multiple occupancy houses that would normally go to local families, like this:
https://www.rightmove.co.uk/properties/111354419#/?channel=STU_LET

https://www.rightmove.co.uk/properties/113043041#/?channel=STU_LET

With just a couple of weeks to go til the start of term, a number of these houses have not yet been filled, and I'm starting to see evidence of student accommodation coming to market for sale where BTL landlords might have given up on getting their house rented out due to lower student numbers:

https://www.rightmove.co.uk/properties/113912315#/?channel=RES_BUY

Hope they get rinsed - next few weeks are going to be interesting.

More pins, ye gods how can this Ponzi scheme still be going 

[Si1]

17 hours ago, petetong said:

Correct me if I am wrong but a large proportion of those vacancies are in the care sector with poor pay and conditions, and zero hour contracts.

Old people voted for brexit. Old people got no cheap Eastern Europeans to care for them anymore. They'll just have to liquidate old people's wealth to pay higher care wages now won't they.

[Flat Bear]

16 hours ago, satsuma said:

https://www.bbc.co.uk/news/uk-politics-58670355

 

Pins Pins everywhere, round we go and up goes the bubble, bigger they are the harder they fall

There are too many pins to choose from and there are more appearing every day. It will be a multiple pin bubble pop. And when we think its all over it will get worse again.

[bearishonhouses]

22 hours ago, Bloop said:

Another potential pin could be the fall in international students that is projected post Covid and also resulting from Brexshit:
https://www.belfasttelegraph.co.uk/news/uk/uk-cannot-take-attractiveness-as-international-student-destination-for-granted-40832009.html

A completely separate point about this link is the ability to block all sorts of cookies - including from their 'partners'. I normally block all non-necessary cookies from websites (other than banks etc) but I have never been given the opportunity to block them from 3rd parties before. And there are more than 800 'partners' listed. I suspect they are not ALL active, but gadzooks - that is a lot of privacy invading. Are other websites that don't ask for this level of detail similar?

 

 

ps totally agree about student let LL. Their burning (metaphorical of course) cannot come too soon. 

[Roman Roady]

17 hours ago, satsuma said:

https://www.bbc.co.uk/news/uk-politics-58670355

 

Pins Pins everywhere, round we go and up goes the bubble, bigger they are the harder they fall

 

17 hours ago, satsuma said:

More pins, ye gods how can this Ponzi scheme still be going 

 

47 minutes ago, Flat Bear said:

There are too many pins to choose from and there are more appearing every day. It will be a multiple pin bubble pop. And when we think its all over it will get worse again.

Death by a thousand pricks it is then!

[msi]

10 minutes ago, Roman Roady said:

 

 

Death by a thousand pricks it is then!

Nah, the Tories have them all

[winkie]

On 14/09/2021 at 12:42, Fromage Frais said:

I feel that it has already popped.

The sweet spot for prices with all the low rates, savings and stamp duty cuts was and still is 300/350,000£ there is a nice graph on here that shows that demand falls once you go passed this level.

I still fee that the market wants to fall and is almost totally on the hook of low availability and low rates.

Any of those two elements change and its going down big time very fast and thats without any logical impact of covid of which we have yet to feel proper.

You can have one Orange in the supermarket and some rich fool may by it but that does make a healthy market for oranges and once you take into account the silly long chains, folk stuck in unsellable flats who have lost their rung on the "ladder" etc etc its looking really bad.

I got the auction details for a lovely historic shopping arcade in Norwich bang in in the middle of the city.

https://www.acuitus.co.uk/property/4251/

sold 2009 for 8 million

renovated 1990s for 3 million

for sale in the auction 1.2 million with a rental income of 280,000.....

Except that almost every unit that is there (quite a few empty) is due for renewal over the next year or so.  Its not unbelievable to envisage it may near empty soon

I am not saying they are paying or not either and evictions cannot start until March.

So 1.25 million is a no from me how can you justify it as it will never make enough money to pay for the next (now 4/5 million) renovation in a few years.

Repeat this around the country and you have a commercial crash that will take money out of the system and bleed into residential.

Every deadline simply makes the problems worse as zombies hold on and then the government becomes the cause in peoples eyes which makes them worry which causes more deadlines and causes more problems.

How many local bank branches have decided not to renew their lease...... quite a few, on the high street everywhere is a thing of the past......how many shops and even takeaways are self-service, no humans to help and assist.....you are on your own now......that is what we wanted.

[satsuma]

8 hours ago, Flat Bear said:

There are too many pins to choose from and there are more appearing every day. It will be a multiple pin bubble pop. And when we think its all over it will get worse again.

Too true, most, like 99.999 % miss it 

[satsuma]

7 hours ago, msi said:

Nah, the Tories have them all

Ha, ha, ha, fall down laughing, yes the tories are all pricks 

[steve99]

20 hours ago, Si1 said:

Old people voted for brexit. Old people got no cheap Eastern Europeans to care for them anymore. They'll just have to liquidate old people's wealth to pay higher care wages now won't they.

The counter to that and same for the general election. Young people did not vote, which then always defaults to tory and in this case brexit. ie the worst possible option because nasty, aggressive, self serving, scummy people with an axe to grind will always go out of their way to make it happen.  This is why the tories are going out of the way to discourage the poorest section of the population from voting. 

[Flat Bear]

The pin that pops the bubble

This time it will be political.

Firstly, it is not a bubble it is bubbles and a lot of them. There are many that we still do not recognise as a bubble. Until they pop, they cannot be seen.

At the end of September, the cost of paying a large percentage of the UK population to do nothing will have to be faced. It will be the amount of Fraud in this and in the numerous loan schemes that will hit the headlines and cause political mayhem. But although this will have consequences here it is the massive global bubbles that will cause the big crashes.

Evergrande will have an impact but again this is entirely down to the Chinese government. A closer look at their balance sheet shows that much of the debts are against real assets such as land and properties and totals some $88 billion much of which is domestic. It is likely that Beijing will let Evergrande default but step in and sell off assets to the many other developers and guarantee all the deposits of homebuyers. This will be a very easy thing for Beijing to do and as long as they feel it is in the interest of Chinese social cohesion and stability, they will do it. They have the deepest pockets in the world. They may decide to treat any overseas investors differently and these will either lose all or if holding bonds will get a heavy haircut. I understand this only amounts to $30 billion which is a very small amount of money and will not affect any markets significantly except symbolically.

At a total guess I would say the big bubble made up of lots of smaller bubble will pop when Beijing decides it will. They hold all the cards, but they are also very very patient so they may decide to let it go on for some time yet.

[satsuma]

7 hours ago, Flat Bear said:

The pin that pops the bubble

This time it will be political.

Firstly, it is not a bubble it is bubbles and a lot of them. There are many that we still do not recognise as a bubble. Until they pop, they cannot be seen.

At the end of September, the cost of paying a large percentage of the UK population to do nothing will have to be faced. It will be the amount of Fraud in this and in the numerous loan schemes that will hit the headlines and cause political mayhem. But although this will have consequences here it is the massive global bubbles that will cause the big crashes.

Evergrande will have an impact but again this is entirely down to the Chinese government. A closer look at their balance sheet shows that much of the debts are against real assets such as land and properties and totals some $88 billion much of which is domestic. It is likely that Beijing will let Evergrande default but step in and sell off assets to the many other developers and guarantee all the deposits of homebuyers. This will be a very easy thing for Beijing to do and as long as they feel it is in the interest of Chinese social cohesion and stability, they will do it. They have the deepest pockets in the world. They may decide to treat any overseas investors differently and these will either lose all or if holding bonds will get a heavy haircut. I understand this only amounts to $30 billion which is a very small amount of money and will not affect any markets significantly except symbolically.

At a total guess I would say the big bubble made up of lots of smaller bubble will pop when Beijing decides it will. They hold all the cards, but they are also very very patient so they may decide to let it go on for some time yet.

Cost of paying people to do nothings is a massive things and more so that all the bullets in the Arsenal are spent, not so for China that comes out of the Pandemic with plenty of bullets left to bail Evergrande or let them founder and then sell the carcass.  One thing that is a fact is that the UK will be poorer and weaker at the end if this.  

[sPinwheel]

On 24/09/2021 at 11:46, Si1 said:

Old people voted for brexit. Old people got no cheap Eastern Europeans to care for them anymore. They'll just have to liquidate old people's wealth to pay higher care wages now won't they.

Nah just raise taxes on the younger working population instead....maybe do something with NI or something....

[msi]

3 hours ago, sPinwheel said:

Nah just raise taxes on the younger working population instead....maybe do something with NI or something....

..and wait for the change in Power of Attorney / Euthanasia laws...