Jump to content
House Price Crash Forum
Sign in to follow this  
tatty

Help Me Demolish This Ifa's Arguments On Another Board...

Recommended Posts

Tatty, I'm an IFA who doesn't advise people to invest in property though I do arrange the odd mortgage for existing clients if they ask.

The reason for the five years relates to any invesment that isn't iron clad. Investments that can fluctuate should always be considered for a period longer than five years, that way, historically you can ride out the waves in the market. Over ten to fifteen years the best performing investments are usually equity based investments followed by property. I think you're being a bit irresponsible banging on about a subject you really don't understand. You have no background in economics you say, well I do. You can't understand the basic business argument that if people will rent instead of buying, the BTL market (and hence property prices) will also remain buoyant. If these people, then decide they're fed up paying sky high rent, then they may as well buy, then the FTB market becomes buoyant. The only time we'll have problems is if inflation goes through the roof. For that to happen, oil must go way beyond 'through the roof', simply because the BOE will be sensible enough to see that raising rates will ****** up the economy and the retail sector. They're not going to do that, just because of an inflation figure totally skewed because of oil prices.

Plus, most economist and oil industry experts do NOT believe we've reached peak oil yet, apart from a few conspiracy theorists selling books.

OPEC has cut the forecast for demand for its oil, plus the US gets two thirds of its oil from Canada anyway and the West has huge reserves. Whilst a terrorist attack would undoubtedly see a surge in the cost per barrel, I doubt anything but prolonged attacks and prolonged high prices would affect interest rates. The BOE have let inflation go above their targets alot within the last two years without over reacting and I doubt they would threaten the economy by raising rates for fun.

You're doomlord predicitions aren't backed up by the facts.

Quote:

When rates go back to 7% (historical norm, unless someone is brave enough to say we'll never rturn to the long-term average) people will be ******ed. Royally.

Actually economists suggest that 5% is about the right interest rates for an economy the size and type of ours. Plus the government is committed to long term low interest rates and low inflation. Boom and bust cycles are longer than ever before and therefore an impending collapse is no longer inevitable the way it used to be even 15 years ago.

Before labour came to power interest rates were set by the chancellor and were used as a political tool to cut before elections, etc this will no longer happen and it's giving the decision instead to the BOE MPC is about the only decent thing Gordon Brown has done.

Finally I would like to say, I have no love for high house prices as I think it also gives an unrealistic opportunity to borrow money on an unsecured and hence unregulated basis. I'm not concerned people will lose evrything in a house price crash, but rather they lend too much without being concerned thinking 'Well, the worst comes to the worst I can remortgage'.

It leads to some ridiculously irresponsible spending.

I'd much rather see them invest it.

Anyway, remember there are people who read these threads who'll believe whatever they read and for whom the consequences may be serious if taking your 'advice'.

You say renting isn't dead money, so say £600 a month rent (£7200 per annum) is money well spent remember this slump has to happen RIGHT NOW, otherwise they'll be spending that much EVERY year. That's £15k in two years, £22k in three years, nearly £30k in four years. There's gonna have to be some crash to see them get that back.

Instead of taking your advice why not think about the logic of buying a pad for say £150k, interest only and keeping it for say eight to ten years? What would the price of their property be worth then, more or less?

If you say less, then I'll think you're mad, but if you say 'more' then why are you advising nobody to buy?

I am pretty certain to say the least that in the next five years we won't see 7% interest rates, you are, I'll happily make a sportsmans bet with you.

I'm sure you're a passionate person who believes what he's saying, but I think it's irresponsible to suggest people never buy property and wait for a crash which may never come.

__________________

Hasta La Victoria, Siempre!

Share this post


Link to post
Share on other sites

LOL. the would-be expert embarrasses himself rather badly IMO...

"LOL. the would-be expert embarrasses himself rather badly "

An amazingly ironic comment, seeing it's coming from a man who's been forecasting a HPC, over on ADVFN.com, since early 2001!

Share this post


Link to post
Share on other sites
Guest wrongmove

We’d also point to the latest numbers from Hometrack

Dr Bubb, how do Hometrack formulate their figures? On HPC, Hometrack is the most popular index (I wonder why :) ), but noone seems to know how they arrive at these figures. Not a good basis for making an important descision.

Looking at Hometrack figures for property type in my area, they are way off. East Midlands semis, average under 100k according to Hometrack - these are fantasy figures (compare this with LR figures). The cheapest semis in the grottiest locations go for more than this.

Hometrack figures have zero credibility IMHO.

Edited by wrongmove

Share this post


Link to post
Share on other sites

The bears constantly ignore the supply/demand argument.

A NET 160,000 immigrants are (officially) entering the UK each year. They, and other demographic changes, have soaked up the excess housing capacity that once existed. In almost all areas, with reasonable employment prospects, there is little or no excess housing of the type that people actually wish to live in.

Edited by ILikeBigBoobs

Share this post


Link to post
Share on other sites

The bears constantly ignore the supply/demand argument.

OK.

So do you think that all of a sudden there was a lack of supply in 1989 - which ended 1990 through 1996. Then all of a sudden there was this frightening lack of supply again, this tapered off in 2001 and then up up and away...... Never built enough houses since. All those blocks of empty new build flats are just waiting to soak up all the dillusional "pent up demand"... Oh dear oh dear oh dear....

The supply/ demand argument has been squashed time and time again. Yet it won't quite die will it? Same inappropriate arguments get wheeled out again and again by the bulls.

:rolleyes::rolleyes::rolleyes:

Edit: God my avatar is making feel sick. Must change it!

Edited by Badlad1967

Share this post


Link to post
Share on other sites
Guest wrongmove

OK.

So do you think that all of a sudden there was a lack of supply in 1989 - which ended 1990 through 1996. Then all of a sudden there was this frightening lack of supply again, this tapered off in 2001 and then up up and away...... Never built enough houses since. All those blocks of empty new build flats are just waiting to soak up all the dillusional "pent up demand"... Oh dear oh dear oh dear....

The supply/ demand argument has been squashed time and time again. Yet it won't quite die will it? Same inappropriate arguments get wheeled out again and again by the bulls.

:rolleyes::rolleyes::rolleyes:

Edit: God my avatar is making feel sick. Must change it!

I agree with you about the avatar! :)

However, what happened in 1990 was a sudden lack of demand. IRs hit 15% !!! Job losses all over the place. A big recession and rampant pessimism about the future put most buyers off completely. Add in the amount of forced sellers due to rising rates and job losses, and prices fell - even nominal prices, which really hadn't happened since the 30s depression.

Yes, new build flats look very oversupplied at the moment. Sensible investors and even some lenders wouldn't touch them with a bargepole at the moment. But semis and terraces in decent areas are not on the increase.

Share this post


Link to post
Share on other sites

It is true that you do not need anything like perfect timing when you are in it for the long term.

However:

- you can still find very bad times to buy or sell (I think it took to the 1960s for the US markets to recover in nominal terms to the peak in the 1920s - but I'm not going to substantiate this)

- you can still get stuck with the wrong asset (e.g. Marconi was a blue chip, buying a 2 bed newbuild flat now...)

If you think this is the top of the market, it is bad to buy whether you have a 3 month or 30 year view. In fact the 3 month view is then the more logical as a 'greater fool' bet.

Share this post


Link to post
Share on other sites

I agree with you about the avatar! :)

However, what happened in 1990 was a sudden lack of demand. IRs hit 15% !!! Job losses all over the place. A big recession and rampant pessimism about the future put most buyers off completely. Add in the amount of forced sellers due to rising rates and job losses, and prices fell - even nominal prices, which really hadn't happened since the 30s depression.

Yes, new build flats look very oversupplied at the moment. Sensible investors and even some lenders wouldn't touch them with a bargepole at the moment. But semis and terraces in decent areas are not on the increase.

Yes... to a point. IR's were high (compared to now) before they reached 15% - but prices kept on dropping when IR's become more reasonable...

I'm pretty convinced what is going to happen - but the proof is in the pudding and if the US keeps raising rates we're gong to have to raise ours SOONER OR LATER.... Even if our rates remained the same - the £1.1 trillion of personal debt will force a correction. (all IMPO)

Share this post


Link to post
Share on other sites

how do Hometrack formulate their figures? On HPC, Hometrack is the most popular index (I wonder why :)

Yeah! Much better to rely on statistics compiled by mortgage lenders, surveyors and estate agents.

They have no axe to grind!

Edited by geneer

Share this post


Link to post
Share on other sites

And 350,000 people are leaving each year.

On average a NET 166,000 immigrants each year - NET !! That's the ammount left over after you've deducted the Britsh nationals that leave.

From the Independant just this morning;

More than 350,000 men and women are emigrating every year....... While the outflow of people was offset by 582,000 foreigners coming to live in the UK in 2004

http://news.independent.co.uk/uk/this_brit...ticle346218.ece

You PC bears make me laugh - you complain because you can't afford a home but are happy to encourage mass immigration - being completely blind to any link between the two.

Share this post


Link to post
Share on other sites
Guest wrongmove
Yeah! Much better to rely on statistics compiled by mortgage lenders, surveyors and estate agents.

They have no axe to grind!

I prefer to rely on statistics that seem to reflect reality, and have a history of reliability. Look at Hometrack's average prices for your area, and then report back on how accurate they seem to you.

(http://www.hometrack.co.uk/ and click on news)

Share this post


Link to post
Share on other sites

OK.

So do you think that all of a sudden there was a lack of supply in 1989 - which ended 1990 through 1996. Then all of a sudden there was this frightening lack of supply again, this tapered off in 2001 and then up up and away...... Never built enough houses since. All those blocks of empty new build flats are just waiting to soak up all the dillusional "pent up demand"... Oh dear oh dear oh dear....

The supply/ demand argument has been squashed time and time again. Yet it won't quite die will it? Same inappropriate arguments get wheeled out again and again by the bulls.

:rolleyes::rolleyes::rolleyes:

Edit: God my avatar is making feel sick. Must change it!

No, certainly in my own area there was not a shortage of property in 1989 however there is now.

Over the last 28 years I've bought a series of old, vacant and often semi-derelict, properties to 'improve' so I do have some idea of what was, is and isn't available! There was plenty, there isn't anymore!

Share this post


Link to post
Share on other sites
On average a NET 166,000 immigrants each year - NET !! That's the ammount left over after you've deducted the Britsh nationals that leave.

Yawn.

Why not go read the roughly eleventy billion previous threads demolishing this argument rather than start another?

Share this post


Link to post
Share on other sites

Yawn.

Why not go read the roughly eleventy billion previous threads demolishing this argument rather than start another?

Because, as I said, the PC bears are blind to the obvious link between mass, uncontrolled immigration and a rise in house prices - Rather ironic isn't it?

Share this post


Link to post
Share on other sites

No, certainly in my own area there was not a shortage of property in 1989 however there is now.

Over the last 28 years I've bought a series of old, vacant and often semi-derelict, properties to 'improve' so I do have some idea of what was, is and isn't available! There was plenty, there isn't anymore!

So have we passed 'Peak House'? :blink:

I think all the property programmes that started in the late eighties encouraged people to take on renovations, I did it (twice) and we have several friends that have also done it plus every builder, plumber, carpenter and even tiler in Leeds became a 'property developer'.

Share this post


Link to post
Share on other sites

It's quite simple, they assume rents and house prices have been rising in lock-step, which of course is far from reality, rents have been static or falling in many places over recent years, over the same period of time some smaller properties have doubled in value. The more speculation and HPI meant BTL which has resulted in excess supply. So for BTL to remain viable rents will have to practically double or house prices prices half in some areas in order to achieve a positive yield.

Share this post


Link to post
Share on other sites

The Question is WHY do we have Mass Economic Immigration?

I don't think it is because the UK is some wonder country, IMO it is because we have had a boom on the back of Debt and therefore plenty of Jobs that Economic Immigrants can fill. They get paid far more than they could in there own country which has not seen the same level of economic growth.

This is OK while the economy is doing well and we are generating wealth (the 1.1 Trillion of Debt has to go somewhere) however, the tide has turned and we are slipping in to a recession.

This will in-turn mean that the Jobs that they were here to fill will also be lost along with a large proportion of the non immigrant jobs.

This will be what turns the tide of immigration and therefore the requirements for Housing.

In addition the UK will not be able to support the Social Security infrastructure due to less tax revenue, so immigrants will not be able to sign on with the current level of benefits. This will mean that they will move to the next country that has a growing economy and a lack of labour.

Share this post


Link to post
Share on other sites

You PC bears make me laugh - you complain because you can't afford a home but are happy to encourage mass immigration - being completely blind to any link between the two.

Many are dirt poor and live 10 to a room, most are not what you would call 'actively participants' in the market. Ultimately this is good news as it will put the misanthropic tree huggers in a spin, whilst the rest of the left will debate the merits ploughing through the previous little of the remaining 94% of the land classified as countryside. An ever expanding greenbelt and ever expanding mass immigration don't mix.

The debate will be framed in the context of selfishly preserving vast tracks of empty and useless scrub land at the expense of being nasty to foreigners by packing them into the inner cities like sardines. Especially as other Western European countries open their borders and our gracious government will worry that their new inflation busting workforce will move to somewhere a little more accommodative, somewhere with decent housing and better standards of living. If that happened businesses face the prospect of having to pay a decent wage, they will not allow this to happen and government will not allow anything to spoil their economic mirage.

The UK will just be a choice amongst many, and the truth will dawn that we're not actually special or uniquely appealing. If you're from Poland I would say a ride over the border to Germany will seem a little more appealing than a cramped and inhospitable London. There again, if you're from a country with poor housing and crumbling infrastructure you should feel right at home in the UK, but I thought these people moved because they wanted something better?

Edited by BuyingBear

Share this post


Link to post
Share on other sites

You PC bears make me laugh - you complain because you can't afford a home but are happy to encourage mass immigration - being completely blind to any link between the two.

I am in the fortunate enough position to be able to quite easily afford my own house, thank you.

I have chosen not to follow the crowd blindly and get myself up to my eyes in debt. The market is clearly no longer rising and has already started to drop off the edge. The momentum will gather and gather. And when eloquent people like yourself start to tell me "Never buy property - it'll all end in tears...." That will be the time I buy a house.

It's all in the timing. Buy high, sell low.

As for your piont about immigration - it has been gone over again and again and YET ANOTHER time it has resurfaced.

Buyingbear puts it quite nicely above.

Now behave or my avatar will give you a big wet slopping kiss! :lol:

Share this post


Link to post
Share on other sites

Join the conversation

You can post now and register later. If you have an account, sign in now to post with your account.

Guest
Reply to this topic...

×   Pasted as rich text.   Paste as plain text instead

  Only 75 emoji are allowed.

×   Your link has been automatically embedded.   Display as a link instead

×   Your previous content has been restored.   Clear editor

×   You cannot paste images directly. Upload or insert images from URL.

Loading...
Sign in to follow this  

  • Recently Browsing   0 members

    No registered users viewing this page.

  • 302 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%



×
×
  • Create New...

Important Information

We have placed cookies on your device to help make this website better. You can adjust your cookie settings, otherwise we'll assume you're okay to continue.