HPC thread of the week

chucknorris

mystic_trev wrote: »

I like this bit....



I'm surprised the bloke can even show his face, yet alone be a Financial advisor! :rotfl:

This is also what astounds me too, can you imagine if he goes to FA seminars and/or gatherings, as he walks past they must be pointing him out to their colleagues and having a good laugh at his expense.

carslet

mystic_trev wrote: »

I like this bit....



I'm surprised the bloke can even show his face, yet alone be a Financial advisor! :rotfl:

I agree, they must like everyone else laugh at him, I feel a bit sorry for him..

Mistermeaner

I'm not sure a weird little niche of internetdom needs so much attention.

Trouble with economics about houses is that they are more than that. They are not fungible commodities the cost of transaction is very high and there are numerous means of acquiring use of one only one of which is buying it yourself

Normal laws of economics do not readily apply (in all aspects)

mwpt

westernpromise wrote: »

Given the fundamentals, not really, no.

1999 to 2008 was quite good for London landlords and 2008 to date has been astonishing. All I ever expected was more of the quite good.

As I've said previously, simply, the greatest transfer of wealth I've known. From non owners to owners and especially to multiple property owners. It's quite astonishing. You have people who have made more than they ever could have dreamed of in a regular career or investing, simply by owning a house or two.

What I do find odd about the crash trolls though is their selective myopia to certain factors that would give more serious people pause for serious thought about the path they are on.

The most obvious is the risk to their rents in the event of a crash. The lesson of 1990 - which is all there in the Bank of England charts they're so keen on - is that when house prices fall, rents rise. Many of them would get a major cash shock from a completely unexpected direction if house prices ever did fall. They are sitting there thinking that because they rent, bad news in the property market can only ever happen to other people; wrong.

You keep repeating this but it has no meaning to me. I had equity enough to buy with a large deposit and if prices had crashed 25% or more in the areas I was interested in, I would have simply obtained a mortgage. My experience of the 2008 crash was no rent increase, no redundancy, and had prices actually fallen decent in the areas I wanted to buy, I would have simply obtained a mortgage and bought.

Whether or not your statement that rents always rise in a crash is true, I don't know. I suspect your datapoint of one crash is not enough for us to extrapolate. But as stated above, it wouldn't matter to people specifically sitting on equity waiting to buy. It's a non argument.

Then there is the fact that., as noted above, nobody sells in a crash unless they need to, and in the last downturn interest rates went down, so almost nobody needed to. Transaction volumes plunge, basically.

Transaction volumes plunge but are a long way above zero. You can buy in a crash, it's another non argument. Exhibit A is chucknorris of this very parish who tells us how he bought in the period when people were handing back the keys.

Exhibit B is the land registry figures, which show us transaction volumes fall but that's it. People were still transacting. Mortgages were still available for people with a decent deposit, which I had.

I keep saying, I would much rather have bought at low asset prices and high interest rates than the other way round. That is self evident. A crash according to you presents this very opportunity.

Probably the main thought failure over there, though, is the abject short termism. They remain dedicated to the idea that they can buy the dips and save money. But considered over the correct timespan for the biggest buy of your lifetime - which is, of course, your lifetime - the buying price before and after a crash are of absolutely trivial economic consequence, Over the last 25 years the average property has inflated by 300%, so a £100k property then is worth £400k now. If you'd mistimed it 25 years ago and paid £120k for that place that you now own mortgage free, how much would you care?

On this I agree with you. The part that really really irks me is that the genuinely decent people over on HPC generally wish someone well who announces they've bought because they couldn't wait longer and found something they considered ok. Then you get people like TheCountOfNowhere who generally wish them ill.

On balance it's quite good that they've stayed out of the market; it's made it slightly cheaper for all the rest of us.

Could you explain this last bit to me? (bear with me, I am trying to make a point)

caronoel

mystic_trev wrote: »

I like this bit....



I'm surprised the bloke can even show his face, yet alone be a Financial advisor! :rotfl:

Jonny Davis posts on HPC as Killer Bunny

Lovely to see him squirm when he is called out on his October 2010 prediction of a 50% fall by 2013:
http://www.housepricecrash.co.uk/forum/index.php?/topic/207784-2016-predictions-thread/?p=1102853532

System

caronoel wrote: »

Jonny Davis posts on HPC as Killer Bunny

Lovely to see him squirm when he is called out on his October 2010 prediction of a 50% fall by 2013:
http://www.housepricecrash.co.uk/forum/index.php?/topic/207784-2016-predictions-thread/?p=1102853532

How is that R K person not banned?

TheeMaskedTurnip

So Jonnie Davis bought yet posts online encouraging the gullible HPC RFL goons to continue renting? That's scandalous.

westernpromise

mwpt wrote: »

As I've said previously, simply, the greatest transfer of wealth I've known. From non owners to owners and especially to multiple property owners.

More precisely, from later buyers to earlier buyers who sell, if anything.

You keep repeating this but it has no meaning to me. I had equity enough to buy with a large deposit and if prices had crashed 25% or more in the areas I was interested in, I would have simply obtained a mortgage.

This makes you one of those well placed to take advantage, as I have noted before; people with decades of equity would do fine (assuming they could find anything they want to buy). People with shedloads of equity can still get a mortgage. My point is that those without that - FTBs, most notably - will actually find buying harder not easier, because no equity = no deposit = no mortgage offer.

My experience of the 2008 crash was no rent increase, no redundancy, and had prices actually fallen decent in the areas I wanted to buy, I would have simply obtained a mortgage and bought.

Anecdote isn't data. Looking at the wider picture, rents went up in both 1990 and 2008 as house prices fell. See, for example, the BoE's last quarterly report of 2015 (http://www.bankofengland.co.uk/publications/Documents/quarterlybulletin/2015/q4.pdf).

I'm looking at charts 4 and 6 on page 45, "Measures of financial distress for mortgagors" and "..renters" respectively. The charts go back to 1990; note how the pain curve is the same shape for both owners and renters back then, reflecting what I have been saying; that rents go up when house prices fall. But from 2008 on, the two curves differ. Low mortgage rates made life easier for owners, but renters' distress increased. That's falling house prices for you: buy the depreciating asset, or pay up not to; costs are quite similar.

Whether or not your statement that rents always rise in a crash is true, I don't know. I suspect your datapoint of one crash is not enough for us to extrapolate.

It's not one, it's several; it's also supported intellectually.

Transaction volumes plunge but are a long way above zero.

Sure, but what matters is what stops being sold. It tends to be quality and it tends to be discretionary sales; nobody sells up cheap unless they have to, mostly.

I keep saying, I would much rather have bought at low asset prices and high interest rates than the other way round. That is self evident. A crash according to you presents this very opportunity.

But not to FTBs and HPC short speculators, unfortunately. And to those who'd recently bought, the 1990 crash stranded them for a decade because at those rates you couldn't make much of a dent in the loan by repaying it. At 3% you most certainly can.

Then you get people like TheCountOfNowhere who generally wish them ill.

I get the impression he wishes ill on anyone who has something he doesn't: a good job, a nice car, an ISA, a house.

Could you explain this last bit to me? (bear with me, I am trying to make a point)

If people speculate against housing by not buying, they place no bid in the market, so there are fewer bids per property. This on balance will tend to lower selling prices - if there is one fewer bid then the house for sale that attracted one bid now attracts none; the house that attracted two attracts one, so no multiple buyer to play off against each other; etc.

MFW_ASAP

westernpromise wrote: »

If people speculate against housing by not buying, they place no bid in the market, so there are fewer bids per property. This on balance will tend to lower selling prices - if there is one fewer bid then the house for sale that attracted one bid now attracts none; the house that attracted two attracts one, so no multiple buyer to play off against each other; etc.

Totally agree with this. I made the same point on HPC, adding that if one person was stoutly holding out for 30% drops while 'competitors' in the same market were happy to buy at 20% drops, then the 30% drop may never happen and the holdout would keep missing out. The point I was trying to get across was not to just focus on the cost price in an area hitting a certain percentage drop, but to view each property on an individual basis. looking for other value (such as potential for extension, any local transport plans in the offing such as a new tube stop, good schools, etc.

I got banned from HPC for that post.

westernpromise

MFW_ASAP wrote: »

Totally agree with this. I made the same point on HPC, adding that if one person was stoutly holding out for 30% drops while 'competitors' in the same market were happy to buy at 20% drops, then the 30% drop may never happen and the holdout would keep missing out. The point I was trying to get across was not to just focus on the cost price in an area hitting a certain percentage drop, but to view each property on an individual basis. looking for other value (such as potential for extension, any local transport plans in the offing such as a new tube stop, good schools, etc.

I got banned from HPC for that post.

Which is why I find the claims about what a great quality of debate they have over there so funny. If you argue with them and you're patently right they ban you so as not to have to hear it. It's a safe space for property nutters.