HPC thread of the week

wotsthat

Crashy_Time wrote: »

Well lets watch this theory in action in Aberdeen first, because that is looking like the first proper HPC (since the blip in 2008, quickly plastered over by a panicking PTB) then lets see how many ex-BTL`s get "snapped up" , and at what price, and finally, for the main event, lets watch how China, oil, EZ banking problems etc. affect banks and general credit, plus of course the sacred London market. Should be interesting

I'm interested in how you invest in tracker funds to ensure you follow this mother all the way down the pan.

Your actions betray your real thoughts on the future.

cells

mwpt wrote: »

Re-introducing self cert will not get any more houses built and will drive prices up as more effective demand is created. This is not what is keeping people from owning homes, high houses prices are.

why not extend that logic?

lets put a requirement of 50% as a deposit or no mortgages

Lets extend MMR so it stress tests borrowers at 20% interest rates

Lets only allow people who have been in a stable job with a stable or increasing wage for the last 5 years to apply.


By your logic house prices would be cheap as chips and just as many people could buy.

By my logic, the rich would step in an buy homes well before they fell to two shillings and the proportion of renters will rise as would be owners could not get the finance to buy


which do you think more likely?

cells

Crashy_Time wrote: »

Important to you and your HPI dreams maybe, but nobody else gives a stuff, certainly not the government?

you may be correct that the government is too stupid to see the impact of its regulations on real peoples lives.

If that is the case, then the 10% displaced from buying via a self cert mortgage will instead have to rent. So the rental sector will need to expand by 3 million or thereabouts to accommodate them.

Guess what? The rental sector has gone from about 2.5 million households when self cert was around, to now over 5.5 million households between 2005-2015 and growing rapidly (by 440,000 units last year for instance!)


Why and how did the rental sector grow so much, and most of the time that growing was in the crash side of 2005-2015

regulations have played no part?
people just love to rent now?
maybe you have convinced them to enjoy the ride

cells

Crashy_Time wrote: »

Important to you and your HPI dreams maybe, but nobody else gives a stuff, certainly not the government?

that made me smile, my 'dreams' have mostly come true. Your dreams of an epic hpc where houses will be two for a shilling......

mwpt

cells wrote: »

Why and how did the rental sector grow so much, and most of the time that growing was in the crash side of 2005-2015

Because government set the narrative that BTL would be bailed out by slashing rates and then not applying the same restrictive lending to the BTL sector. Of course it's going to be an attractive investment if you believe you know the outcome and there is not much other yield going around.

Why would you think this wouldn't happen?

mwpt

cells wrote: »

why not extend that logic?

lets put a requirement of 50% as a deposit or no mortgages

Lets extend MMR so it stress tests borrowers at 20% interest rates

Lets only allow people who have been in a stable job with a stable or increasing wage for the last 5 years to apply.


By your logic house prices would be cheap as chips and just as many people could buy.

By my logic, the rich would step in an buy homes well before they fell to two shillings and the proportion of renters will rise as would be owners could not get the finance to buy


which do you think more likely?

I've asked you the question before a few times but no answer. What is your plan when the easier credit pushes prices higher and the next lot of people are priced out? Do we ease credit further? Where do we end, what is your goal here?

In the scenario you present above, of course such restrictive lending will result in much fewer buyers but why do you get to decide that the lending criteria of today is too restrictive? You're looking at this through the eyes of a landlord who has access to more credit than an OO would. So why not regulate credit to BTL.

Price are only as high as they are because of credit, not some fundamental law that prices must be high.

We can guess there is a floor somewhere because a rich landlord will buy a property for cash at around 5 or 6% yield. So why isn't that the correct price rather than the price that allows BTL landlords to use credit to obtain this yield?

westernpromise

Crashy_Time wrote: »

When Mathew Wright is on air sounding like a HPC`er, there is little chance that your opinions on here are going to have much effect on mass sentiment, because that is what we are talking about, sentiment, not de-constructing graphs and stats to suit a pet narrative. How many purchases have you made BTW?

Who's Mathew Wright?

westernpromise

cells wrote: »

If in two years prices are no lower will you at least put your hand up and say you were wrong.

Short of a mass house building programs doubling the number of new builds or a crash in population growth from the +500,000 a year towards one third of that, there wont be a house price crash.

There could be (and have always been) regional adjustments where something happens that means there are too many houses in the wrong place.

If Trident were cancelled that would presumably knacker the Faslane housing market. If we stopped building Apaches under licence that would cost BAe jobs in Yeovilton and trash that market.

Arguably we've seen the opposite in London.

westernpromise

cells wrote: »

regulations have played no part?

In my experience, government regulatory initiatives always assume regulatory change is riskless. That is, while they may publish a consultation paper that includes a risk assessment, the risk assessment will not usually enumerate any actual risks. The default setting is that nothing bad ever comes of changing the rules.

I am pretty sure that almost nobody, certainly not George Osborne, appreciates that more OOs and more OO properties do not exactly cancel out the concomitant fewer renters and fewer rentals. I reckon he reckons that renters can be converted by tax and HTB into OOs at a one-for-one rate. The truth is that it is more like a four-for-three rate meaning there will be fewer renters but fewer rentals still. Even in a market where rental demand was static it would soon be heading into imbalance, but it wasn't static.

TheeMaskedTurnip

cells wrote: »

that made me smile, my 'dreams' have mostly come true. Your dreams of an epic hpc where houses will be two for a shilling......

It's worst than that. His dreams of seeing good honest hard working families thrown to the wolves in the street just so he can get a dream house for buttons.