Preparedness for when

nuatha

GreyQueen wrote: »

nuatha, I wonder if they put something in the water in the officers' mess because the retired majors seemed to be, to a man, as mad as a box of frogs.

Anyone grow up on the coast, and d'you have retired (and bonkers) sea captains harrumphing around the place?

I think its something to do with retaining the military title on retirement.
An ex girlfriend's father was a naval Commander and followed the expected eccentricities including objecting every time his title wasn't given sufficient prominence - it back fired at one gathering, it was pointed out to him that actually his rank was lieutenant commander, and the people he was addressing all outranked him, if they chose to use their former ranks.

I'm not sure it could be something in the mess water, there's a couple of retired senior officers within the family and I only discovered my grandfather's rank at his funeral. However none of them used ranks after leaving the Service.

Perplexed_Pineapple

GreyQueen wrote: »

....The trouble with villages round this way, including the close-clustered dozen or so where my paternal family have had their roots for centuries, is that they're not proper villages any more. You don't have a village comprised of a majority of farm workers and a minority comprising the vicar, the squire, the odd (very odd, usually ) retired major and the random Arty Person (potter, painter, writer).

Instead, you've got the peasanty priced out and a lot of very opinionated and affluent people who've bought into their piece of Rural Heaven (paying north of a third mill for a former farmworker's cottage) and who want to draw up the drawbridge behind them.

Common folk are priced out of housing and have moved into towns and cities because the modern countryside has very few agricultural jobs and the NIMBYs won't allow any development which might provide alternatives; you can't run a vibrant rural economy on the ye olde crafte shoppe/ tea room/ antique shops and software developers in converted cart sheds.

The incomers clog up the letters pages in the county newspapers and lead campaigns against this and that. Some of them are decent enough people and have rejuvinated some flagging places, but there have co-opted too much of the countryside and are trying to keep it frozen like something made of plastic stuck under a snow-globe. And stalled at some imaginary point no later than the 1950s when everything was so much better than it is now.....

Yes, but it works both ways. About a century ago, my great-grandparents moved from the country to the big city in search of work. We have moved the other way - basically because the big city has become unaffordable to buy a house for a family. Our local city is now the province of singletons and couples with no children who enjoy the city life, but once you want another bedroom for a child, let alone two, you are looking at daft prices for the average earner, whether renting or buying. The people paying a third of a mill for a farmworkers cottage are probably doing that rather than pay half a mill for a one bedroom flat in the metropolis. The housing market in this country is beyond crazy and is just another bubble waiting to burst, but since the bricks and mortar will always be there and people will always need somewhere to live, it's a bit more resistant to bursting than other bubbles we have seen.

charlies-aunt

Along with moaning about the muck spreading, cows moo-ing etc ... our latest batch of our 'incomers' think its awful and unacceptable that riders don't pick up their horses poo off the road.


Similarly they are horrified when their lovely, shiny 4x4s get mud on their tyres!

Frugalsod

Perplexed_Pineapple wrote: »

The housing market in this country is beyond crazy and is just another bubble waiting to burst, but since the bricks and mortar will always be there and people will always need somewhere to live, it's a bit more resistant to bursting than other bubbles we have seen.

There is also very significant levels of self delusion when it comes to property. They hate to think that they fell for buying at the top of the bubble and that property is different because they are not building any more land. There are also many vested interests in keeping any housing bubble going. Estate agents are the first, then mortgage brokers, building societies and banks who will mention how affordable property is with the current low interest rates. Insurance companies who get higher premiums with higher property values. Finally governments who rake in the stamp duty and higher taxes from all the extra sales.

How many have thought they were great property investors who merely rode along on a wave of credit.

moneyistooshorttomention

I wouldn't call it self-delusion re the housing bubble personally. It is a very difficult situation. As someone who only ever paid somewhere between "normal" interest rate levels and sky-high interest rate levels when I had a mortgage - then I look with disbelief at people apparently believing that the current (extremely low) interest rates will stay the same, ie because I don't think that will be the case for that much longer.

On the other hand - people whose houses are in negative equity (eg because of having bought in 2007) are going to do everything they can to get their house back up to high enough value to get out of that negative equity. Add in people who have had to spend a LOT of money on just bringing their house up to normal liveable standards (nothing luxury or ultra-fashionable) and they (I should say - we - as I'm one of them personally) aren't really able to sell our houses on again unless we get at least:
- what we paid
- what we have spent on the place
- an allowance for inflation since we bought the place
(never mind any profit for having to do someone else's "modernise the darn place for them" because they wouldn't for whatever reason.
(to quote my own example - the price I paid for house + renovations alone is about £20,000 higher than I could put it on the market for = it wont be going on the market bar that Lottery Win we all want).

So - right off - that's two categories of people who simply aren't going to sell unless its worth it - bar circumstances absolutely forcing them to do so against their will.

That's why the housing bubble is being so long-lasting imo.

the_cake

charlies-aunt wrote: »

Along with moaning about the muck spreading, cows moo-ing etc ... our latest batch of our 'incomers' think its awful and unacceptable that riders don't pick up their horses poo off the road.


Similarly they are horrified when their lovely, shiny 4x4s get mud on their tyres!

Ha! They should be grateful for the donations our horses make to enrich their gardens ...

GreyQueen

the_cake wrote: »

Ha! They should be grateful for the donations our horses make to enrich their gardens ...

I once tried to get an acquaintance to bring her horse to my allotment. I had some excellent lush grass at the time and the manure is always welcome. She retorted that she wasn't riding it round the ring-road for anyone......... bah.:rotfl:

charlies-aunt, they probably think that horses should wear nappies when out on the road. A proper country person would be out there with a shovel after that manure. I know I would. The gypsies down on the common where I get my horse manure from their tethered ponies occasionally drive around the city with a pony and trap and grumble that people complain if the horse dumps a load on the road. They can't believe gardeners won't just be happy to scoop it up.

Frugalsod

moneyistooshorttomention wrote: »

I wouldn't call it self-delusion re the housing bubble personally. It is a very difficult situation. As someone who only ever paid somewhere between "normal" interest rate levels and sky-high interest rate levels when I had a mortgage - then I look with disbelief at people apparently believing that the current (extremely low) interest rates will stay the same, ie because I don't think that will be the case for that much longer.

I agree that the current interest rates are completely false and unsustainable but I do not see them rising soon, even if central banks want to normalise interest rates. If governments and central banks could they would keep them at this level until the economy really recovers. Though considering the Japanese have had low rates for decades I cannot see things improving unless there is a crisis. So I do not see central banks raising them anywhere. There will be problems in the bond markets and it could be soon. At the moment the government is selling bonds redeemable at par of £100 for sums well above that but if you hold on to a bond until redemption you are guaranteed a capital loss. So the real issue is when do you sell and leave the income stream to someone else and the guaranteed capital loss as well. That might happen soon as people realise the eventual outcome.

Though should there be a problem in the bond market as things get disorderly then you would see interest rates rise quite rapidly and for many who switch mortgages regularly they might get hit with the new rates.

moneyistooshorttomention wrote: »

On the other hand - people whose houses are in negative equity (eg because of having bought in 2007) are going to do everything they can to get their house back up to high enough value to get out of that negative equity. Add in people who have had to spend a LOT of money on just bringing their house up to normal liveable standards (nothing luxury or ultra-fashionable) and they (I should say - we - as I'm one of them personally) aren't really able to sell our houses on again unless we get at least:
- what we paid
- what we have spent on the place
- an allowance for inflation since we bought the place
(never mind any profit for having to do someone else's "modernise the darn place for them" because they wouldn't for whatever reason.
(to quote my own example - the price I paid for house + renovations alone is about £20,000 higher than I could put it on the market for = it wont be going on the market bar that Lottery Win we all want).

What you have identified is that many people are still in negative equity, even worse if you add inflation, and that housing as such is a depreciating asset not an appreciating one as most think. If you do nothing it will need updating and repairs. This costs money. These can be substantial and if you add in the costs of a new kitchen etc you are barely keeping up. The fact that house prices can get higher because of a bubble masks the fact that if you add in the cost of that kitchen the possible financing costs and then moving costs you might not be that much better off.

moneyistooshorttomention wrote: »

So - right off - that's two categories of people who simply aren't going to sell unless its worth it - bar circumstances absolutely forcing them to do so against their will.

That's why the housing bubble is being so long-lasting imo.

First of all you do not need to have many sellers to keep a bubble going. You only need buyers, at the moment it will be foreign buyers who are the big buyers and at the is mainly Asian buyers who want new homes, so they are not really buying existing homes. If they keep buying they keep the illusion of rising prices continues.

Once the buyers disappear then your £3 million terrace house might not be worth anywhere near as much. Lets use Greece or Cyprus as an example. Many people bought holiday homes there but they are falling in value still. The fact that capital controls have been brought in has meant that sellers are stuck with properties that might be worth considerably less than they paid for them and possibly have outstanding. The very least they have fallen at least 30% in value and I suspect that they could continue to fall for some time. I had a look for property listings for Cyprus and what stuck out for me was how many have been on sale since 2012, with no buyers in sight. Cyprus with capital controls requires a buyer from outside to buy there and effectively lock their money in the country. Now if that happened here would we have any one buying a property here if they could not sell it and get the money out? If they thought that there was going to be capital controls they would sell to get their money out and they might take any price to get out. So when prices are based on the very few sales then the whole market could collapse 30% overnight but you may not see that as sellers hold on to their target price for year after year just like the Cypriots have done.

http://www.cyprusrealestateagent.com


http://epihirimatiki.com/attachments/May%202014/RICS%20Index_Q1%202015_ENG.pdf

So it still remains mass self delusion of home owners. Add in that many are renting because they cannot sell and those rents are only covering 2% of the mortgage. The prices are still too high for the rents that they can generate and would be a fraction once normal rates return.

moneyistooshorttomention

That's now got me thinking about capital controls and they are starting to sound rather desirable FrugalSod - as in discouraging foreign buyers from buying our housing stock up as an investment.

Do you think they are likely? Under what sort of circumstances do you think they might happen?

BTW - I think a lot of us might be wondering by now - but do you have a blog? If you do - it would have to be put listed on your home page for people to click through to (as MSE has a rule against people mentioning their own blogs - which is sometimes enforced/sometimes not).

greenbee

moneyistooshorttomention wrote: »

That's now got me thinking about capital controls and they are starting to sound rather desirable FrugalSod - as in discouraging foreign buyers from buying our housing stock up as an investment.

Do you think they are likely? Under what sort of circumstances do you think they might happen?

I don't think the government would see it that way. Think of the tax revenue they'd miss out on if house prices dropped and people moved less frequently. Plus they want people to buy our houses and to have money coming into the country.

If you're interested in the topic, there's a whole board dedicated to debate about house prices and the economy.