Friday, May 08, 2015

Not just houses, Britain is full steam ahead

Planning Magazine: Planning applications for factories double in 2014

As stated in the previous post, we are at the beginning of a boom that will last until 2026-2028. Any recession / depression commencing then will likely be over 2030 to 2032, but we will have Crossrail 2, HS2 and a new runway somewhere by then along with a vastly altered economy with probably 70 to 80 million residents, or maybe far more if we remain strong alongside a weak EU with a porous border. Frankly, if you do not own the roof under your head in the next year or two, you will have to wait for inheritance, but there are always shoe boxes available for those who will make a compromise, and yet that is the problem with whinging renters. They refuse to compromise on size, quality and location, whereas first time buyers make that sacrifice that they seek to resolve in their second home.

Posted by libertas @ 10:41 PM (4780 views)
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1. mister ed said...

Sorry Libreritus,

Most people can't afford to buy.

Do have a wonderful weekend.

Friday, May 8, 2015 10:54PM Report Comment

2. Mr Ponzi said...

gotta love an estate agent with a dry sense of humour

Saturday, May 9, 2015 12:12AM Report Comment

3. Anned said...

Understanding how capital moves is absolutely imperative to surviving the future. If you cannot grasp this aspect, you will lose everything by 2020 – and that is no joke. The US Federal Reserve has pulled the trigger on the nonsense of QE and has cautioned that rates will rise. The Fed will have no choice as the stock market rallies they will be criticized for QE creating inflation. Of course this will not be true since the dollar is being absorbed globally. You cannot simply add QE to domestic economic conditions and expect inflation. The dollar is the RESERVE currency and it is a global money supply – not purely domestic.
We will see not just Russia in economic chaos as commodities must decline into the end of 2015 including energy as the dollar rises, but all emerging markets must now brace for their ordeal by fire. Domestic analysts focus purely on domestic issues never looking around the globe to comprehend the real trend at hand. Emerging markets have collectively borrowed $5.7 trillion actually in US dollars. This presents a repeat of Greece. The Greek financial crisis was caused NOT by simply unrestricted spending, but the conversion of their debt to euros and then the euro rose in value more than doubling the “real money” they had to repay. This became like strip-mining taking the wealth of Greece and exporting it to the bond holders. It was such a great deal for the buyers of government debt like money from heaven, and the worst of all worlds for the Greek people.
Now we will see this VERY SAME trend hit the emerging markets like a hammer. The emerging markets have issued debt in dollars which is a currency they cannot print and do not control. This hard-currency debt has tripled in the last decade and is split between $3.1 trillion in bank loans and $2.6 trillion in bonds. This will ripple through the banks causing massive new losses just as the Cyprus banks held Greek debt. This time, it will be the debt of all emerging markets. We are looking at a drastic scale of the biggest cross-border lending sprees of the past two centuries.
A large portion of this emerging market debt was taken out at real interest rates of 1% on the implicit assumption that the Fed would continue to flood the world with liquidity for years to come. This has made the emerging markets vast borrowers dollars so in a trading position they are “short dollars”. This is the greatest short-position on a currency on the boards and when the dollar RISES, they will face the margin call from Hell itself. This will set off another banking crisis for bankers always buy the high and sell the low. They have NEVER learned even once from any economic crisis.
The Fed dashed all lingering hopes for continued dollar leniency. The pledge to keep QE-stimulus for a “considerable time” has vanished into the sunset. The developing countries may be just as vulnerable to a dollar shock. The Russian Rouble crash is just the beginning. Furthermore, the commodity bulls have found every possible excuse to convince themselves that China would continue to drive a commodity supercycle. That has proven to be dead wrong for a unbiased glance at their share markets there clearly demonstrate a decline has been in motion since 2007.
These false assumptions have blown up hedge funds and traders around the globe as results for 2014 have proven to be the worst year perhaps ever. Russia’s Vladimir Putin may be brilliant, but his timing is way off for his country suggesting that the hard times ahead will be even harder.
The collapse in energy also threatens to create massive economic readjustments throughout the Middle East. Additionally, this economic chaos is spreading beyond Russia reaching also Nigeria, Venezuela and other petro-states.
The coming meltdown in Emerging Market debt can be seen in Pimco’s Emerging Market Corporate Bond Fund, which suffered a loss of $237m in November, and the pain is unlikely to stop as clients discover that 24% of its portfolio is in Russia. We are facing a very serious crisis for BIG BANG. Now remind me again how banks insure other banks' debts. Who will be lending for mortgages, loan money will dry up ,use your imagination on how this is going to play out.

Saturday, May 9, 2015 06:19AM Report Comment

4. libertas said...

Not true. Those saying this cannot be arsed to look in the poor side of town, or are too posh to try.

You can still get flats in zone 5, London at around £150k. For that you need £15k for a deposit. If you cannot gather that, you are probably having too many pints, takeaways or holidays for your own good. We bought a house but only after not going on holiday for four years to save up. Now that we own, we are looking at going on holiday soon.

Saturday, May 9, 2015 08:07AM Report Comment

5. novice pete said...

All togever nah sing...... My ol mans a banka, e wears a
banka's hat, ees driven araaund in big rolls royce, an ee owns ten blocks of flats oi!

Saturday, May 9, 2015 09:11AM Report Comment

6. khards said...

"that is the problem with whinging renters. They refuse to compromise on size, quality and location, "

Many of these first time buyers in their 30's are last time buyers and will never be able to afford to move again. Too right they should picky.

Why compromise just to pay for a building that you could otherwise rent? At the end of the mortgage your going to die anyway, that's if you make it that long.

There is little to no gain at buying in London at these over-inflated prices plus looking at the recent reductions you could well lose £50k to £100k by the time you have completed buying.

Saturday, May 9, 2015 09:43AM Report Comment

7. khards said...

"that is the problem with whinging renters. They refuse to compromise on size, quality and location, "

Many of these first time buyers in their 30's are last time buyers and will never be able to afford to move again. Too right they should picky.

Why compromise just to pay for a building that you could otherwise rent? At the end of the mortgage your going to die anyway, that's if you make it that long.

There is little to no gain at buying in London at these over-inflated prices plus looking at the recent reductions you could well lose £50k to £100k by the time you have completed buying.

Saturday, May 9, 2015 09:44AM Report Comment

8. cyril said...

I couldn't see the bit about railways, booming economy and population growth. The article I read was about planning applications but I suppose you can read between the lines. For me, the subtext was more about the loss of scrub land in the East Midlands.

Saturday, May 9, 2015 09:44AM Report Comment

9. pete green said...

Are these whinging first time buyers desperate to get others to buy to ensure the housing ponzi does not crash. Desperate to acquire income without work.

Pathetic selfishness at its highest - you should be ashamed of yourself,

Saturday, May 9, 2015 10:42AM Report Comment

10. mister ed said...


Oh yes, my dear Librariantas, a flat in the poor side of town.

Unfortunately there are several major problems with that.

1. You can't live in a small flat if you have children. They're too small. The flat, I mean, not the children. :-)

2. You can't live in a small flat even if you just plan to have children. The reason is that selling a place can be difficult — often very difficult, as I’ve found from personal experience. I'm seeing that now with places in my area (a very decent area), with some places having been on the market for almost a year. And the last thing you want is to end up stuck in a place you can't sell with a baby you don't have room for. This is even worse if one of the parents stops work to look after the child, and you then have to service a high mortgage on one salary (along with the costs of looking after the child) and you then find you can’t afford the mortgage repayments. This is an especial danger if interest rates rise. If you rent, you can often get housing benefit and other benefits, and you can stay where you are. If you have a mortgage you’re out on your ear, losing your house, your deposit (usually) plus all the costs of solicitor’s fees, survey fees, stamp duty etc.

3. Poor areas have terrible schools. Again, not a problem if you're childless, but no sensible parent would condemn their child to a sink-school education just so that they can get on a housing ladder which may well turn out to be no ladder at all.

So, yes, for young childless couples who never plan to have children (perhaps you are one of that sterile group), buying a small flat in a slum might be worth a punt. But not for anyone with a sensible bone in their body.

In my case I have a large deposit, and in two years time I might be able to buy a house in cash. But given that prices are falling in my area, I can't see the rush.

As you can see, your ideas are, as usual, ill thought-out and the advice irresponsible.

But do have a glorious day feeling superior to the hoi polloi because you have parents who could afford to give you the deposit to buy a house. One does need to have something in one's life to make oneself feel special, especially when one works in a dull taxpayer-funded job.

Let them eat cake, I say.

Saturday, May 9, 2015 11:08AM Report Comment

11. enuii said...

@8, well written and logically thought out response.

Saturday, May 9, 2015 11:43AM Report Comment

12. Alan Lubin said...

I'm a whinging renter but right now I just can't see that buying the house I live in makes sense. The house next door but one just sold for £1.4m and the guy who bought it has put it on the rental market for £3,000 per month (including council tax of £2k pa). Obviously thats a stupid amount of rent to pay for a 2 bed terrace - but does that rent even cover the cost of buying somewhere like that? Genuine question.

Saturday, May 9, 2015 02:54PM Report Comment

13. reticent said...

"Frankly, if you do not own the ROOF UNDER YOUR HEAD in the next year or two, you will have to wait for inheritance, but there are always shoe boxes available for those who will make a compromise"

If your roof isn't high enough to go over your head, you've probably compromised on size more than most people are willing to.


Hear, hear.

Saturday, May 9, 2015 05:07PM Report Comment

14. Dharmin said...

@2 , just over 2yrs ago I sold my 1st floor , 2 bed flat in zone 6 for £165k , now same flat is for MIN. 230k .

Saturday, May 9, 2015 11:23PM Report Comment

15. libertas said...

Understood about the child thing, but then that is an argument for buying earlier on. Obviously, you should have purchased 10 years ago so that you could move to a good school area in time. By holding back now, you will have a pitiful retirement, paying appreciating rents with a fixed income with nothing to inherit to your children.

Sunday, May 10, 2015 01:50AM Report Comment

16. Robbo said...

@11 Obviously you don't have kids then. In my case childcare costs and mmr (which didn't exist 2 years ago let alone 10) have put owning out of reach until kids are in school.

Sunday, May 10, 2015 02:29AM Report Comment

17. reticent said...


Did it occur to you how insensitive your comment would be to somebody who already has kids but has not yet bought?

A year ago, I was renting and hadn't saved a penny in the year since becoming a father. It was quite a scary time. If somebody had told me that the solution to my problem was to have bought 10 years earlier, I'd have been more than rude to them.

Sunday, May 10, 2015 08:30AM Report Comment

18. mister ed said...


Sorry, Libriantusk, I don’t think you get anything at all. Your thinking is miles out again, as usual.

1. People can’t buy “ten years earlier” because they need that ten years to build up a suitable deposit (unless of course they have rich parents like yourself who can furnish the deposit). They can buy only when they can afford to buy, and no sooner, and to suggest otherwise is simply moronic.

2. Buying in a “bad school area” (a poor area) and then moving to a “good school area” is usually impossible, because prices in “good school areas” always rise much faster, and so by buying a place in a poor area you’re stuck there with no hope of ever getting out, unless your salary rises by a huge amount, which is very unlikely. Your child is then condemned to a terrible education and lowered life chances. If you ever have children (unlikely by the sounds of it), this is something you will learn to your anguish when it comes to getting your child into a school.

Granted, if the housing crisis is not resolved millions of people will be unable to pay rents when they are older. But then the government will be forced to do something about it, either through house building or subsidising rents, which means higher taxes for those still in work. You pay for it some way.

The overall picture of the UK is one of national decline. We have a huge amount of debt, a deficit we can’t bring under control, a low-wage, low-productivity economy, and an unsustainable housing bubble.

My plan is to move abroad once my children have finished school (and they go to very good schools, too, in the area in which I rent). I have enough money, and rather than spend it on buying a shabby semi in some drab suburb, I’ll probably head off to the sun.

My advice to anyone young enough to do so is to emigrate. Every day 400 skilled workers leave the UK for a better life, and you might as well join them. (Sorry, Liberturiask, there isn’t much call for local government pen pushers.)

But do have a wonderful day living in your alternate reality, where everyone has parents rich enough to give them a deposit, and excellent schools are always available for the children of those who take a chance to buy a shoebox in the poor part of town.

Sunday, May 10, 2015 12:47PM Report Comment

19. clockslinger said...

Tory majority so expect a hammering of the public sector. Fake, zero hours, part time jobs will replace those lost in line with the laissez faire economics as the "invisible hand" (the same invisible hand that will be increasingly busy toying with your civil liberties as things get tougher) shapes an economy near you.
Libertas and Walayat are right that prices will rise dramatically BTL from big landlords and foreign investors looking for yield in a ZIRP world being the main drivers in London and the proximate south east. The extent of price increases in the latter will depend crucially on the variable quality of fraying transport links provided by taxpayer subsidised corporate entities, so I agree on the Crossrail factor, too, but with a limit to prices on the south coast due to the utterly sh*te quality of commuting infrastructure in that direction there, despite what your average Brighton EA will tell you.
If you live in the north east, Wales et al, then sadly it is already too late. Things are about to get much worse unless you happen to own a few thousand acres of grouse moor or farmland and enough cash to do things like send out to London for hand made shirts and shooting attire. After all the William Wallace tumescence subsides away next winter, Scotland will also be having a WTF moment, especially after the inevitable self financing elephant in the room speaks up.

Wednesday, May 13, 2015 05:50PM Report Comment

20. libertas said...

Mister Ed. The Government will do f-all for pensioners who rent. You will be expected to move to a cheaper EU country to spend your Sterling. Free movement of labour and pensioners.

You are wrong about owners not being able to move to better places. They soon amass a vastly improved deposit as they pay down their mortgage and get capital gains. They then have a choice, move to a bigger place in the same neighbourhood, or remain in a similar or maybe smaller place in another neighbourhood.

Wednesday, May 13, 2015 10:36PM Report Comment

21. mister ed said...

@ 20

LOL, that's funny. Mass deportation of pensioners against the wishes of their families. I can really see a government pushing that one through.

And the vastly improved deposit is anything but. The other house in a better area also has capital gains, which puts it out of reach. And if you have children, moving to a smaller place in a better area isn't feasible.

More twaddle, Libriturusky.

Oh, and by the way, I'm not one of those who will be expected to move to a cheaper country. I already have enough capital to buy outright, but I'll probably move anyway, because I don't think the UK will be a particularly nice place to live in the coming years. High house prices do not equate to a high quality of life.

Wednesday, May 13, 2015 11:15PM Report Comment

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