Jump to content
House Price Crash Forum
Sign in to follow this  
Buffer Bear

Is This Guy For Real?

Recommended Posts

I URGE you all to go here -- http://www.telegraph.co.uk/money/main.jhtm...3/ccliam123.xml - and read the "comments" under the "article"!!!

IT IS FABULOUSLY FUNNY --- GO ON!!!! HAVE A LAUGH!!!!!!!!!

Well, bloody hell!!! those comments are unrelenting. And pretty agressive too, with a few equally agressive in favour of HPI. It's as if there is a new social divide in the UK based on property ownership. Unbelievable.

Share this post


Link to post
Share on other sites
Guest mSparks
In reply to the post by Donal Lang below, Donal, you’re wrong, and I’ll explain why.

You quote a figure of 0.4% real growth which is indeed a close enough account of growth minus inflation. If however, as you imply, that this is the actual long term growth rate of property prices, then you are dreaming. Property prices have actually grown approximately 6% to 7% annually since the war, with the usual ups and downs.

The first of your list of points claims that your father could buy a house for 3 times his gross salary and you can only buy one for 10 times yours. Fair enough, but your father probably paid income tax of 60% plus under Harold Wilson. You, on the other hand, probably pay an overall tax rate of around 35%, plus your partner probably also works, unlike your housewife mother. Therefore, the ratio of your fathers disposable income to contemporary house price is more or less the same as the ratio of your own family’s disposable income to current house prices.

Next you claim that rent in the UK is around 2-3% and that it is far cheaper to rent than to own. Well I own a number of buy-to-let properties in the north of England and they average 5% rent. As a landlord I had to put up 20% of the price in downpayment which means that even paying BTL interest rates, my income covers my mortgages. A homeowner with a recently acquired 110% mortgage pays a lot more per month than his next door neighbour who is renting. But since when has a 110% mortgage been anything but folly? His next but one neighbour with a 90% mortgage acquired three or more years ago is paying about the same as your mutual renting neighbour. Your claim that house prices are double what they should be is fantasy.

Your third point, that high house prices area product of cheap money is true enough. But you do not explain why you believe that it is inevitable that interest rates will have to rise in a year or two. No two economic commentators can agree with what will happen next month let alone two years from now. What makes you so sure?

Your assesment of a 40% drop in house prices belongs in the same category as the recent deluge of stories about the 1930’s depression. This is scaremongering of the worst kind. You go on to question peoples motives. Journalistic sensationalism has the clear motivation to sell newspapers, what’s your motive? I clearly remember the house price crash in 1991 when interest rates doubled to over 15% practiaclly overnight. Prices dropped by about 30% but by 1996 they had recovered to their pre drop prices. So much for recessions ‘always’ lasting 10 years.

Any property investor with a good credit rating and some cash in the bank will have a field day over the next year or so as the lemmings, who should never have bought property in the first place, pull out of the market in response to the scare stories currently doing the rounds.

I can’t believe you are able to write a comment of an economic column in a respected newspaper without proper knowledge, so I suspect your motives.

best bull quote I've seen in a while, shame he fails to see that hes margined so highly that any price drops will multiply his losses many times over, as long as he isn't forced to sell one of those properties in the next few years he'll be fine, but the fact is that high interest rates or inability to find a couple of tenants for a few months will probably bankrupt him. (especially if he, like many others, used equity in one house to buy another)

WOW

some linked the quoting how they expect the UK to be f'd

http://www.telegraph.co.uk/core/exit.jhtml...hs-04042007.pdf

We continue to believe these fears are exaggerated (see Economics Focus ‘Farewell

to ARMs’, 21 March 2007). Problems in the sub-prime mortgage market should

remain contained, with the rest of the economy proving resilient.

...

Already there are some tentative signs of stabilization in US housing.

Edited by mSparks

Share this post


Link to post
Share on other sites

Well I own a number of buy-to-let properties in the north of England and they average 5% rent. As a landlord I had to put up 20% of the price in downpayment which means that even paying BTL interest rates, my income covers my mortgages.

best bull quote I've seen in a while, shame he fails to see that hes margined so highly that any price drops will multiply his losses many times over, as long as he isn't forced to sell one of those properties in the next few years he'll be fine, but the fact is that high interest rates or inability to find a couple of tenants for a few months will probably bankrupt him. (especially if he, like many others, used equity in one house to buy another)

WOW

some linked the quoting how they expect the UK to be f'd

http://www.telegraph.co.uk/core/exit.jhtml...hs-04042007.pdf

I thought his rebuttal was rather superficial and it does rest upon some very large and dubious assumptions:

1. Yes, house prices have risen at 6% or so since the war. That, however, is a somewhat useless statistic as it makes no allowance for the fact that the housing inventory of today is larger and technologically more sophisticated than the pre-war product he is comparing it to. Hell, even a lot of Victorian era homes are worth more due to the refurbishment of the mechanical systems, second (and more) bathrooms, etc.

2. Sure there are many more dual income families than in the post-war generation but is it beneficial that the product of all that extra labour goes to nothing more than increased debt service? This, to me, is what is really so insidious about rising prices and the commensurate debt. As a society we're working harder to stay put. There's something wrong with that.

3. He rightly claims the average rents are higher than 2-3% but neglects to address the fact that current interest rates are about 6.5% and that ownership carries maintenance costs.

4. He touches on the idea of 'cheap money' but fails to grasp that it isn't interest rates that are the issue - the driving force here is a severe restriction in the very availability of credit. And that isn't prognostication - that is current events. Goodbye gifted deposits, 125% mortgages, zero down payments and all the other loopy lending which allowed any moron to bid on a property.

5. I can't believe this guy thinks a 5% return on his BTL empire is prudent? All he needs is a few years of price stagnation (not even declines) coupled with a slight bump in interest rates to give himself a real dog of an 'investment'.

Then he goes on about 40% drops being nothing more than scaremongering? I'm sure there are some Inside Cack investors who can give him some insight into how much things can drop. Again, that isn't prediction but current events.

Clearly he can read the numbers but he really can't seem to connect the dots.

Share this post


Link to post
Share on other sites
All these people posting on here, wishing for a house price crash as mentioned are jealous. What makes them think that a price crash will give them a property at a lower price. Who will give them a mortgage? The whole point of this credit crunch is that lenders are running out of money like a car runs out of petrol, banks will not lend on a property that is going to fall in value unless you put a bigger deposit down (25%) but there again most people will not be able to afford 25% deposit. Its a catch 22 situation, banks are reluntant to lend on a falling market so people cant buy, meanwhile as all these buy to let landlords come off their cheap fixed rates ... they will put the rents up ,

Posted by arkie on March 25, 2008 9:22 AM

A lot of people seem to take the attitude that "it couldn't happen because I and everyone I know would be stuffed" It doesn't occur to them that there are people who didn't get seduced by cheap money and who are well-placed to take advantage of a downturn.

Share this post


Link to post
Share on other sites

"This is perhaps the silliest piece Liam has ever

published. So silly, in fact, I think I will cancel my

subscription. After all, I read the 'graph for

considered, unbiased reporting. Not feverish

desperate opinion kite flying by amateur landlords

in negative equity hell."

Posted by Property Guru on March 23, 2008 8:39 AM

:lol::lol::lol::lol:

Share this post


Link to post
Share on other sites
Guest DissipatedYouthIsValuable

In my opinion, the writer is a sucker of Satan's hen.

Share this post


Link to post
Share on other sites

"Dear Liam

You are of course writing and spinning utter tosh. Shameful for the fact that this is a "serious" paper and shocking that you are getting paid for it. Wake up, read, listen and learn. May I suggest you visit housepricecrash.co.uk and enlighten yourself at no cost.

Posted by Alexander on March 24, 2008 4:52 PM"

Classic!

Share this post


Link to post
Share on other sites
"Dear Liam

You are of course writing and spinning utter tosh. Shameful for the fact that this is a "serious" paper and shocking that you are getting paid for it. Wake up, read, listen and learn. May I suggest you visit housepricecrash.co.uk and enlighten yourself at no cost.

Posted by Alexander on March 24, 2008 4:52 PM"

Classic!

It is all incredibly funny isn't it!

Share this post


Link to post
Share on other sites

I liked this one......polite but scathing.

Dear Daily Telegraph,

Please may I have a job as your economics correspondent? I appear to know more about the difference between demand driven by easy credit terms and 'real' needed housing demand. It also appears Mr Halligan has not seen the parallels between the Japanese housing slump and the UK's current housing market. Mr Halligan repeatedly misses the true state of the nations economy if he believes house prices never fall. So in a nutshell; just for the intellectually challenged Mr Halligan here is a basic primer into how nations generate income, the nation in question has to manufacture things that other countries want to buy. This in turn creates wealth, which creates liquidity. The UK has become a net importer thanks to Gordon Brown's miracle economy; that borrowed heavily to feed it's consumer boom. As the US still has a large varied, capital manufacturing base (just like the worlds leading exporter Germany) then it is now better placed to sell it's way out of a recession than the UK. The UK on the other hand has pandered to media, law, accounting and other hot air industries and will soon once again become the poor man of Europe. UK banks hold mortgages which in optimistic circles are worth 60% of their value, these banks are now all borrowing 'emergency funds' which means the BofE is effectively printing more money. If the BofE prints more money; the money in circulation becomes of less value. As this value lessens, then the cost of our imports rises. As our imports rise the cost of essentials (not iPods and Muffins currently in the CPI basket) rises. This means less disposable income. Which means people want smaller mortgages (can you see where this heads to Mr Halligan), so they may purchase food more easily.

PS if you want, anyone on housepricecrash.co.uk will happily show you lots of graphs which proves the disparity between average income and average house prices.

Share this post


Link to post
Share on other sites

The first comment on the telegraph article. Fantastic! :lol:

Due to ever rising food bills, my mortgage rate about to be hiked up to the hilt by my mortgage provider a.k.a greedy guts high street bank, one child at university and another to follow next year, the cost of a ticket to see Arsenal ( on a very occasional basis ), a wife who thinks credit card limits replace zero bonuses and zero pay rises, the fact it now costs over 80 sheets to fill the car up with petroleum, the fact that all services to my humble abode are esculating out of control, I am finding it fairly difficult to get out to my local alehouse and sink a couple of pints. I have just read this character's housing market report and was wondering what on earth he is drinking. If it is under three pounds ten pence put me down for a pint of it. Cheers Liam.

P.S. We still manage to scramble the funds together to subscribe to our local newsagents for my youngest child who likes to read the Dandy. Ever thought of transferring your skills to this publication and let the younger generations enjoy your undoubted hilarious and indeed hysterical articles. My sides would normally split but the loss of my fixed rate mortgage facility has left me slightly bilous and I won't howl out with laughter at the moment if you don't mind. Trust me its all going to get very messy in the UK.

Share this post


Link to post
Share on other sites

Here's another one which, I think, explains the 90K approvals 'crash territory' idea.

The problem is that the approvals for new mortgages are running at levels that previously ensured falling prices. Now if those approval levels jump then you will be right, if not, as I expect, then house prices will fall to a point where the available lending can support them.

This is the nub of the matter, without the available lending prices cannot be supported, the usual turn over of property due to death, divorce, etc. that forces properties onto the market will be too much, which is why the approvals figures are so important, if the approvals figures are lower than the death, divorce, repossession numbers then estate agent books get fatter and fatter and fatter, meaning buyers can afford to get more and more picky.

So why are approvals levels now so low? well this is due to our now old friend the credit crunch. The big question is can the banks recommence lending at the volumes of the last few years?.. well to do that they will need to start issuing new MBS products. This is the key, who would buy a new MBS? Trust has gone and even if the FED,ECB,BOE bought up all the sub/near prime toxic waste you still have a problem of trust. How would anyone know the banks aren't just doing the same trick all over again, and so you get 'once bitten twice shy'.

So no significant new MBS, so lending amounts fall, you get mortgage rationing, by either quality, value or both. This means insufficient lending at current house prices to get the approvals levels back to stabilise the market. If approvals are 20% of what's needed then prices should fall by 20% or so, then there can be 20% more mortgages at 20% less value per mortgage. Agents books stop growing and houses start selling.

So how low are the approvals figures?

Break even is roughly 90k and they are roughly 74k, that would mean a fall of 18% to break even.... assuming we then don't get a 'run' on property.

Share this post


Link to post
Share on other sites

And heres one from a BULL! :o

you’re wrong, and I’ll explain why.

You quote a figure of 0.4% real growth which is indeed a close enough account of growth minus inflation. If however, as you imply, that this is the actual long term growth rate of property prices, then you are dreaming. Property prices have actually grown approximately 6% to 7% annually since the war, with the usual ups and downs.

The first of your list of points claims that your father could buy a house for 3 times his gross salary and you can only buy one for 10 times yours. Fair enough, but your father probably paid income tax of 60% plus under Harold Wilson. You, on the other hand, probably pay an overall tax rate of around 35%, plus your partner probably also works, unlike your housewife mother. Therefore, the ratio of your fathers disposable income to contemporary house price is more or less the same as the ratio of your own family’s disposable income to current house prices.

Next you claim that rent in the UK is around 2-3% and that it is far cheaper to rent than to own. Well I own a number of buy-to-let properties in the north of England and they average 5% rent. As a landlord I had to put up 20% of the price in downpayment which means that even paying BTL interest rates, my income covers my mortgages. A homeowner with a recently acquired 110% mortgage pays a lot more per month than his next door neighbour who is renting. But since when has a 110% mortgage been anything but folly? His next but one neighbour with a 90% mortgage acquired three or more years ago is paying about the same as your mutual renting neighbour. Your claim that house prices are double what they should be is fantasy.

Your third point, that high house prices area product of cheap money is true enough. But you do not explain why you believe that it is inevitable that interest rates will have to rise in a year or two. No two economic commentators can agree with what will happen next month let alone two years from now. What makes you so sure?

Your assesment of a 40% drop in house prices belongs in the same category as the recent deluge of stories about the 1930’s depression. This is scaremongering of the worst kind. You go on to question peoples motives. Journalistic sensationalism has the clear motivation to sell newspapers, what’s your motive? I clearly remember the house price crash in 1991 when interest rates doubled to over 15% practiaclly overnight. Prices dropped by about 30% but by 1996 they had recovered to their pre drop prices. So much for recessions ‘always’ lasting 10 years.

Any property investor with a good credit rating and some cash in the bank will have a field day over the next year or so as the lemmings, who should never have bought property in the first place, pull out of the market in response to the scare stories currently doing the rounds.

I can’t believe you are able to write a comment of an economic column in a respected newspaper without proper knowledge, so I suspect your motives.

Share this post


Link to post
Share on other sites

Liam Halligan flew a complete wobbly in July 2007 when they raised rates,not surprising really when he is young and heavily indebted .Yet paradoxically he is the last interest rate hawk standing this year on the quality press,even Hamish McRae on the Independent has gone all dovish.Halligan isn't being altruistic he thinks if they allow inflation to get out of control now rates will really hit him in the nuts in 2009.

Share this post


Link to post
Share on other sites
Liam Halligan flew a complete wobbly in July 2007 when they raised rates,not surprising really when he is young and heavily indebted .Yet paradoxically he is the last interest rate hawk standing this year on the quality press,even Hamish McRae on the Independent has gone all dovish.Halligan isn't being altruistic he thinks if they allow inflation to get out of control now rates will really hit him in the nuts in 2009.

All goes to show how the meedja has been responsible for heavily biased bullsh1t for the last 10-12 years.... It's a scandal.

Share this post


Link to post
Share on other sites
All goes to show how the meedja has been responsible for heavily biased bullsh1t for the last 10-12 years.... It's a scandal.

most people are now waking up from this hypnotic state.....though the damage is done.

When was it nu labour got in?... :blink:

Share this post


Link to post
Share on other sites
I liked this one......polite but scathing.

Amazing how so many people are so angry -- At last the tide seems to have turned. However - I still think the VI's are going to pull out some massive secret weapons in the not too distant future... Watch out!

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.

  • 295 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.