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spyguy

I Know What's Happening

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It's easy.

The UK is going ex-growth.

For the last 20 years, the UK has been the no-brainer choice fro any investment in Europe.

The real-estate was cheaper than Germany and Switzerland.

The taxes - business and income - were lower.

The regulations were less intrsuive (or less European).

This has now changed.

Investment is going to countries east of Berlin or China.

Labour is very expensive. Witness retail. Whats happening here is complex but is composed of the minimum wage, the internet, and high personal debt.

Small to medium size non-retail business is now getting a kicking.

I follow the news in a number of ares in the North and South. All areas are showing a remarkable similarity: worse business in 20 eyars, lay-offs at companies that have been around for ages. Some of this pension related'; a lot isn't.

Bascially, you can draw a parallel with property to high-growth companies like Rentokill or Tomkins - 15 eyars of of constatnt eanrings growth (hiding the the rise in debt) then the pyramid hits the top and the share price crashes.

Anyhoo, would you really buy an average house at 10+ tiems the average wage when the growth in the economy is looking to be around around 1.5%

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I

Anyhoo, would you really buy an average house at 10+ tiems the average wage when the growth in the economy is looking to be around around 1.5%

With no wage inflation and higher unemployment ...

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High house costs and energy and tax will make the UK very uncompetative in a global economy.

oh damn they already have.

:huh:

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Expanding the topic a wee bit, we need to consider how governments will raise their revenue.

Consider:

You cannot tax labour - you just get higher un-employment and/or flight of the big earners in these days of globalisation! In fact, you'd have to pay some ne to employ a good 30% of the current work force ;-)

You cannot tax capital/business. Look at the flight going on at the moment, or the global accounting that

lets News Internation pay less tax than a granny living off her building society savings - a (slight) joke ;-)

What's left? Well, consumption is one - expect higher VAT and service charges.

And the elephant in the room - housing. Housing is one of least taxed asset classes in the UK. It's a glaring exception. You cannot put a house on the back of a tralier and head of to Switzerland - well you could, but it would cost a lot!

Italy and France are the countries to watch. Both (esp. Italy) are now well past the big tax takes of the past. Both have decling popluations. Both have a large number of foriegn property owners - Christ, could there a more popular tax than taxing the Brits and Germans!

Italy has never looked very good. Its been on a rapid decline since the mid 70s. The decline has picked up pace since China stirred - Italy's business sector is goimg the same way as the UKs in the 70s, but faster.

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Hi,

Marketeer is keeping an eye on reentering the property game on SP;

marketter.jpg

Could house prices continue to rise?

Scenario 1: House prices continue to rise

FTBs priced out

BTL increases

Rent increases to cover increased repayments

Housing underclass created as rents become unnafordable. Slums established

Death duties increased to the point where all homes need to be sold in order to pay IHT

No one able to afford homes for sale.

Prices drop to a level where house can be purchased

This sets price for nearby houses

Trigger established.

Scenario 2: House prices stagnate

Stamp Duty, Legal and Moving fees significant.

People that need to move for work, divorce, or trading up/down lose money

People avoid moving and develop their property - extensions, etc

Shortage of property creates upward pressure on house prices.

Prices Rise

Scenario 3: House Prices Fall

More people rent.

Yields increase

More people move into BTL

Prices Rise

So there you have it. If you wish for a house price rise, then you are wishing for a house price crash.

There you have it, straight from the Bull's mouth.

post-2548-1141595723.jpg

Edited by boom_and_bust

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So marketeer is basically saying: "if prices rise, then they will fall" and "if prices fall, they will rise". In other words, house prices are cyclical.

Eureka!

frugalista

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Italy's economy.

Italy has never looked very good. Its been on a rapid decline since the mid 70s. The decline has picked up pace since China stirred - Italy's business sector is goimg the same way as the UKs in the 70s, but faster. [spyguy]

Italy's problems have been precipitated by joining the ERM and Euro...

'Euro is a disaster for us, says Italy's PM' [July 2005]:

http://www.telegraph.co.uk/money/main.jhtm...29/cnsilv29.xml

Mr Berlusconi blamed Romano Prodi, his chief rival and former EU commission head, for negotiating poor terms for Italy's EMU entry while prime minister in the 1990s. "Prodi's euro has screwed everybody. Italians are facing real difficulties," he said at a rally of his Forza Italia movement.

'Ditching euro 'could benefit Italy'' [July 2005]:

http://business.telegraph.co.uk/money/main...12/cneuro12.xml

HSBC has become the first major bank to warn that Europe's monetary union is working so badly that some countries may actually "benefit" from ditching the euro.

In a new paper entitled "European meltdown?", the world's second biggest bank said Italy, Germany, and Holland had all been damaged by the perverse effect of the one-size-fits-all interest rate policy, and might be tempted to leave.

It said the euro had pushed Germany to the brink of deflationary spiral, while causing a "dramatic boom and bust" in Holland. At the same time, Italy was now trapped in slump with a "truly appalling export performance" and exorbitant unit labour costs.

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Will the UK economy ever grow like it has in the past?. High taxes and cheaper labour elsewhere will prevent foreign investment like in the past and cause more and more UK companies to move production oversees to India, Asia and Eastern Europe. How can we grow in the future when our wealth creating manufacturing sector is so small and contracting further as we suck in more and more cheap Chinese imports?.

YES IT WILL!!!!!!

easy answer.the stuff that's outsourced is still owned by UK/US listed companies.

...the western consumer is fat and overpaid.....and the eastern variety is hungry and outnumber the obese ones!!!!

......western consumers are fooked,but look at the potential in the rest of the world.

.....china and india alone account for 1/3 the global population(2bn),so what's the problem with transferring the wages from about 600m lazy fat moaning honkeys???

...the emerging markets will happily work for 1/10th the amount,and the market for goods is potentially much larger.......if you are in an industry over here where technology and good ideas can give you or your customers better productivity you are safe.....otherwise batten down the hatches!

FTSE will do ok precisely because of this.

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Italy's economy.

Italy has never looked very good. Its been on a rapid decline since the mid 70s. The decline has picked up pace since China stirred - Italy's business sector is goimg the same way as the UKs in the 70s, but faster. [spyguy]

Italy's problems have been precipitated by joining the ERM and Euro...

'Euro is a disaster for us, says Italy's PM' [July 2005]:

http://www.telegraph.co.uk/money/main.jhtm...29/cnsilv29.xml

'Ditching euro 'could benefit Italy'' [July 2005]:

http://business.telegraph.co.uk/money/main...12/cneuro12.xml

The Euro's a 'disaster' for Italy because it means Italy can no longer take the lazy way out and simply devalue to try and increase competitiveness.

I don't know what the Italian Lira exchanged for when they joined the ERM, but it was originally the same amount as the English Pound. (That's why we have an L in LSD, there is a common Latin root.)

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  • 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%



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