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UK House prices: News & Views

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http://www.belfastte...k-16254707.html

 

 

 

Factfile

UK towns with biggest falls in average house prices:

Craigavon down 18.4% (to £91,530)

Wishaw 12.5% (£87,410)

Chorley 9.4% (£125,156)

Carlisle 9.3% (£123,100)

Wirral 9.3% (£160,375)

Hamilton 8.9% (£96,478)

Ayr 8.2% (£116,352)

 

Think Arbitrage !

 

Some of these places may be good to live in

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(Coinciding with moving to a new job) I sold my house in 2006 and have rented ever since. But I have now bought again. I don't regret the time renting at all but I do have reasons for buying now:

 

a) prices have fallen substantially in the north of England in both nominal and real terms - 20 to 25% nominal, more in real terms;

B) the money made on selling in 2005 has been invested and has been increased significantly - quite a lot of luck involved there admittedly;

c)although there may be further house price falls to come, now I have retired cash flow is more important. By buying now (in the north where i have always wanted to return) I can be rent and debt free.

 

For many STRs (remember them?) it will still not be the best time to buy. I certainly wouldn't buy as an investment. But as a residence, that depends on a lot of circumstances and for me the buying decision adds up well enough right now. My sense having spent the last few months on the housing market is that there has been a bit of a wave of renters/STRs back into buying.

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I think :

+ SELLING in London, and

+ BUYING at half-price (or less) elsewhere in the UK

 

Can make great sense right now.

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theres a reason they have fallen more than other places

Think toilets !

LOL

Yeah, but you can always add a toilet, and even a sewage system

 

Many (smart) retiring boomers will leave London.

I have friends who are selling in Chiswick to buy a new house at less than half the price

in Chichester. As more and more do that, the price differentials will narrow, I reckon

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Many (smart) retiring boomers will leave London.

I have friends who are selling in Chiswick to buy a new house at less than half the price

in Chichester. As more and more do that, the price differentials will narrow, I reckon

 

Only if you assume no ongoing demand for the family homes they are liberating.

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Its usually the worst areas that are the last to benefit in a boom but the first to be affected by the bust

The last time (80/90s) boom/bust occured it was the rise in interest rates that led to the collapse

This time it started with the inability of banks to keep the lending going at higher and higher multiples of income.

They resorted to self certs and interest only deals and cut rates to the minimum , the bust that had started to unravel

was temporarily reinflated as repos were temporarily put on hold

The cost of everything else however was on the rise and wage settlements didnt make up the difference.

The illusion was that property was still a good investment .

In moneyspeak I think they call it a bulltrap

Last time it needed rates of 15-18% to blow the game and provide lots of real estate to the cash rich

at a 50% reduction ,this time will require a far lower rise . The bubble is far larger this time round and it has

captured the entire nation not just the SE . The people have had years of MEWing and the indebted are everywhere.

When the bankers create booms to profit by they also plan the bust because they profit from that as well

so I expect when it all plays out that nowhere will be left unaffected especially the SE.

The 2008 mini bust came too soon ,the banks had overstretched themselves through greed but the bail outs

which the people unwittingly funded gave them time . I feel the time is now right to start the collapse , as long as the cost of living keeps rising then those mortgages become unserviceable even without a large rise in rates .

London will not escape , in fact when more and more people decide to move out to the more affordable areas it may well hasten the demise

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Its usually the worst areas that are the last to benefit in a boom but the first to be affected by the bust

The last time (80/90s) boom/bust occured it was the rise in interest rates that led to the collapse

This time ... cut rates to the minimum , the bust that had started to unravel

was temporarily reinflated ...

London will not escape , in fact when more and more people decide to move out to the more affordable areas it may well hasten the demise

 

When rates start to rise, I think they will climb much faster than most people think -

and that will trigger the collapse

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The early 90s crash and the current crash are vastly different because of the political will to protect homeowners at all costs, even if it means totally screwing up the rest of the economy.

 

In the 90s, we essentially let the free market sort itself out as far as housing went. The central bank held that Sterling and the ERM membership were of far more political importance than the solvency of homeowners.

 

Now the housing market is the #1 concern, and the extent to which government policies have redirected all the resources of the economy to keep property afloat is totally unprecedented. It is the single largest transfer of wealth - by stealth - that we have ever seen.

 

The means that homeowners are OK, the rest are totally screwed. This is the unhappy state of Britain today - a country of haves and have nots, mainly because any incumbent government knows that to allow a large slide in house prices on their watch is tantamount to politcal suicide. It is the fault, too, of the nation's people - who still see high house prices as a good thing.

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Politicians work for the bankers

The bankers will want the bust for profit and to complete the cycle

In 20 yrs time once this generation have moved on then the new generation

will go through the boom and bust of property ownership once again just as this generation

did after the 90s

There is no money left to be made in supporting the bubble but theres

plenty of profit to be made from a collapse .

 

The asset transfer of the real estate at bust prices to the elite gives them

the building blocks to rinse and repeat . This is part of the long term game

Politicians will come and go -they will do what needs to be done and move on to

a more lucrative career in eh banking perhaps . The boom wasnt about making the peasants wealthy

The wealth they assumed they had in bricks and mortar was an illusion ,what they really aquired was debt

and bucket loads of it . Conservative and Labour are the ying and yang , they are not there to give us wealth and freedom

but to deprive us of it .The end game is to keep us enslaved . The carrot and the stick may be carried by 2 different hands

but the hands belong to 1 body .

Nothing in politics happens by accident -it is all planned ,it is only by seeing the plan that you can act to avoid the damage

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Politicians work for the bankers

. . .

There is no money left to be made in supporting the bubble but theres

plenty of profit to be made from a collapse .

 

The asset transfer of the real estate at bust prices to the elite gives them

the building blocks to rinse and repeat . This is part of the long term game

 

I think they will wait until there is NO CHOICE, but to let the Property market drop.

Then it will happen FAST

That day may be fast approaching.

The smart way to play it is to downsize, and raise cash IMHO.

The Leaving-London-Arb may work well, if your job does not require being there

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When rates start to rise, I think they will climb much faster than most people think -

and that will trigger the collapse

 

Why would rates rise? BOJ has managed to keep rates below 2% for 20 years, and below 0.5% for about 15 years.

See post-236-0-33257100-1356960090_thumb.png and post-236-0-93013800-1356960098_thumb.png (sorry - don't know how to inline pictures properyly)

That was on the back of an epic property bubble.

 

Now, we have the added bonus of an epic government debt bubble thanks to QE & bailouts.

Politically, interest rates must stay down or goverments won't be able to roll over debt and service the interest.

The new BOE governor has already signalled he's not going to be hung up on inflation targeting and more focussed on growth.

AFAIK keeping rates low is the way to go if that's the intent..

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Why would rates rise? BOJ has managed to keep rates below 2% for 20 years, and below 0.5% for about 15 years.

See post-236-0-33257100-1356960090_thumb.png and post-236-0-93013800-1356960098_thumb.png (sorry - don't know how to inline pictures properyly)

That was on the back of an epic property bubble.

 

Now, we have the added bonus of an epic government debt bubble thanks to QE & bailouts.

Politically, interest rates must stay down or goverments won't be able to roll over debt and service the interest.

The new BOE governor has already signalled he's not going to be hung up on inflation targeting and more focussed on growth.

AFAIK keeping rates low is the way to go if that's the intent..

 

The markets will eventually force reality upon the BoE and UK Government.

 

There is no way we will be given the rope that Japan has been given. Our economy is fundamentally much weaker - we have no savings, and we consume more than we produce. I find it hilarious when anyone comes out and says "our policy is growth" as if this was not the overriding function of all economic systems. The BoE chairman can say what he damn well pleases, but we all know that excessive debt cripples future growth.

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Why would rates rise? BOJ has managed to keep rates below 2% for 20 years, and below 0.5% for about 15 years.

See boj_low.png and boj_long.png (sorry - don't know how to inline pictures properyly)

That was on the back of an epic property bubble.

 

Now, we have the added bonus of an epic government debt bubble thanks to QE & bailouts.

Politically, interest rates must stay down or goverments won't be able to roll over debt and service the interest.

The new BOE governor has already signalled he's not going to be hung up on inflation targeting and more focussed on growth.

AFAIK keeping rates low is the way to go if that's the intent..

OK.

Watch Japan. Things may unravel there first, and a sliding currency may eventually trigger a jump in rates

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OK.

Watch Japan. Things may unravel there first, and a sliding currency may eventually trigger a jump in rates

 

If Kyle Bass (the hedgie that runs Hayman Capital) is to be believed, Japan will pop in about 2-3 years. See https://www.youtube.com/watch?v=HtEw2FdVe_0 (8mins) and more in depth, if you have the hour to spare. https://www.youtube.com/watch?v=JUc8-GUC1hY

Let's assume his scenario happens and Japan pops by 2015. Markets get spooked, Japan (partially) defaults, Yen turns into Argentinian peso.

Does this trigger a new debt crisis affecting UK rates through contagion or will the markets shrug it off and carry on as usual?

 

If the latter, then perhaps we're looking at another decade or even longer of kicking the can down the road.

If the former, then we've got a double if condition that needs to be met. Say Japan Pops and Contagion each have a 75% chance of happening, then there's only 50% chance it goes POP over here. I don't know what the odds are, but it's a lot of ifs.

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"Watch Japan. Things may unravel there first, and a sliding currency may eventually trigger a global jump in rates"

If Kyle Bass (the hedgie that runs Hayman Capital) is to be believed, Japan will pop in about 2-3 years. See https://www.youtube....h?v=HtEw2FdVe_0 (8mins) and more in depth, if you have the hour to spare. https://www.youtube....h?v=JUc8-GUC1hY

Let's assume his scenario happens and Japan pops by 2015. Markets get spooked, Japan (partially) defaults, Yen turns into Argentinian peso.

Does this trigger a new debt crisis affecting UK rates through contagion or will the markets shrug it off and carry on as usual?

 

If the latter, then perhaps we're looking at another decade or even longer of kicking the can down the road.

If the former, then we've got a double if condition that needs to be met. Say Japan Pops and Contagion each have a 75% chance of happening, then there's only 50% chance it goes POP over here. I don't know what the odds are, but it's a lot of ifs.

 

It might happen sooner than 2015

 

Weak close to the year for the Yen...

 

FXY: 113.03 -0.90

Open: 113.61 / High: 113.66 / Low: 112.98

Volume: 257,000

Percent Change: -0.79%

 

Inverse: 113.03 + 2.30 = 115.33, then 10,000 x 1/115.33 = USD : Yen 86.71

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Still on target...

 

 

 

And a Happy New Year to you, too!

 

I think we may get there (target area) sooner than later. Maybe time to start posting the silver chart/UK house prices, too.

 

Any update on the silver gold ratio?

 

Thanks for posting. And is there a chart for inflation adjusted gold in Yen on approx? I cant find one.

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New thread, so the charts are easier to find:

 

Measured in Gold / Charts by G0ldfinger:

http://www.greenenergyinvestors.com/index.php?showtopic=17200

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Why would rates rise? ...

 

 

If the market manipulation stopped then we might see an increase. Rates were starting to rise (in fact SVR and Lifetime trackers still seem to be rising, albeit at glacial speeds) before Funding for Lending strated forcing Fixed Rate Mortgages south again. Full details here with chart describing what I'm on about:

130101-2.jpg

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And a Happy New Year to you, too!

 

I think we may get there (target area) sooner than later. Maybe time to start posting the silver chart/UK house prices, too.

 

Any update on the silver gold ratio?

 

Thanks for posting. And is there a chart for inflation adjusted gold in Yen on approx? I cant find one.

 

 

No infl.adj. for Yen, sorry. Here is the rest:

 

http://gold.approximity.com/since1930/UK_House_Prices_in_Silver_LOG.html

 

UK_House_Prices_in_Silver_LOG.png

http://gold.approximity.com/since1971/Gold_JPY_LOG.html

Gold_JPY_LOG.png

http://gold.approximity.com/gold-silver_watch.html

 

Gold-Silver-Ratio_GUESS.png

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If the market manipulation stopped then we might see an increase. Rates were starting to rise (in fact SVR and Lifetime trackers still seem to be rising, albeit at glacial speeds) before Funding for Lending strated forcing Fixed Rate Mortgages south again. Full details here with chart describing what I'm on about:

 

 

 

 

Agreed. However, I can't see why the debt-crack-addicts in charge would or even can stop with low rates. It's just too damaging and unaffordable. Only if forced by the markets, rates will go up.

As long as there's a way to manipulate the market, the can will be kicked down the road.

Japan seems to be running out of options, but I don't understand why the UK can't or wouldn't pull the same tricks for decades.

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BARRATT is starting the new year well...

 

BDEV : BDEV : 211.60 +4.00 / +1.93% / BDEV-chart

 

bdev.gif

 

Struggling to get through resistance around 200-212p or so

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Agreed. However, I can't see why the debt-crack-addicts in charge would or even can stop with low rates. It's just too damaging and unaffordable. Only if forced by the markets, rates will go up.

As long as there's a way to manipulate the market, the can will be kicked down the road.

Japan seems to be running out of options, but I don't understand why the UK can't or wouldn't pull the same tricks for decades.

 

I don't think the UK has the luxury, or cushion, Japan has had with all her savings. So I don't see the UK being able to " pull the same tricks for decades". How long can QE continue to make a difference? What happens when QE comes to a halt? This is when I expect London house prices to unwind, and with it the UK as a whole. When? Probably within 3 years. It's a timebomb.

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