BCR approaching 100%

wotsthat

crashy_time wrote: »

aww...hpc thread of the week has closed (surprised this little troll nest is still open actually) so i`ll pop the latest thing to excite the hpc faithful here.......http://www.housepricecrash.co.uk/forum/index.php?/topic/208974-our-17-properties-will-lose-l16000-per-year/page-3#entry1102906914


lot`s of great comedy in the article.

............


130%?

Filo25

Serious question for Crashy here.

Firstly I fully agree that there are more headwinds for the property market in 2016 in London than there have been for a while, it varies a bit by segment of the London property market, but I wouldn't want to be a luxury new build developer at present trying to shift some properties they were banking on being hoovered up by overseas investors.

Moving on from that though the argument seems to be that the changes in the treatment of BTL investors, will lead to forced sales, changes in sentiment and a full scale crash (rather than correction) will follow.

The bit I don't get is ignoring the intent of the recent policy changes.

It would appear to me that the recent changes to BTL taxation, combined with the various HTB schemes, are intended to rebalance the property buying market, to encourage more owner occupied properties and fewer BTLs, the intent of that policy is not to crash the market, merely to change the type of buyers buying, hell the government knows full well that crashing the housing market will do the same to the overall economy (which doesn't tend to be good news for politicians in power at the time it happens)

So my question is that if the market does start to show significant downward moves in the light of the recent changes why wouldn't the government simply perform another U-turn and reverse the changes to BTL treatment, it wouldn't be the first time they have backed down on a policy recently and the stakes would be much higher for them for a full blown house price crash than some of the other climbdowns they have made recently.

cells

Filo25 wrote: »

Serious question for Crashy here.

Firstly I fully agree that there are more headwinds for the property market in 2016 in London than there have been for a while, it varies a bit by segment of the London property market, but I wouldn't want to be a luxury new build developer at present trying to shift some properties they were banking on being hoovered up by overseas investors.

Moving on from that though the argument seems to be that the changes in the treatment of BTL investors, will lead to forced sales, changes in sentiment and a full scale crash (rather than correction) will follow.

The bit I don't get is ignoring the intent of the recent policy changes.

It would appear to me that the recent changes to BTL taxation, combined with the various HTB schemes, are intended to rebalance the property buying market, to encourage more owner occupied properties and fewer BTLs, the intent of that policy is not to crash the market, merely to change the type of buyers buying, hell the government knows full well that crashing the housing market will do the same to the overall economy (which doesn't tend to be good news for politicians in power at the time it happens)

So my question is that if the market does start to show significant downward moves in the light of the recent changes why wouldn't the government simply perform another U-turn and reverse the changes to BTL treatment, it wouldn't be the first time they have backed down on a policy recently and the stakes would be much higher for them for a full blown house price crash than some of the other climbdowns they have made recently.

exactly, house prices dont fall outside of recessions and governments try hard to avoid recessions.

we already had a crash and they missed the boat. We will have another crash in 10-15 years but they will miss that one too.

Crashy_Time

cells wrote: »

exactly, house prices dont fall outside of recessions and governments try hard to avoid recessions.

we already had a crash and they missed the boat. We will have another crash in 10-15 years but they will miss that one too.

:rotfl: Really? Looks like they will just divert or even cancel the coming massive global recession then? What power these guys have, makes you wonder why they even bother with budgets and suchlike.

Crashy_Time

Filo25 wrote: »

Serious question for Crashy here.

Firstly I fully agree that there are more headwinds for the property market in 2016 in London than there have been for a while, it varies a bit by segment of the London property market, but I wouldn't want to be a luxury new build developer at present trying to shift some properties they were banking on being hoovered up by overseas investors.

Moving on from that though the argument seems to be that the changes in the treatment of BTL investors, will lead to forced sales, changes in sentiment and a full scale crash (rather than correction) will follow.

The bit I don't get is ignoring the intent of the recent policy changes.

It would appear to me that the recent changes to BTL taxation, combined with the various HTB schemes, are intended to rebalance the property buying market, to encourage more owner occupied properties and fewer BTLs, the intent of that policy is not to crash the market, merely to change the type of buyers buying, hell the government knows full well that crashing the housing market will do the same to the overall economy (which doesn't tend to be good news for politicians in power at the time it happens)

So my question is that if the market does start to show significant downward moves in the light of the recent changes why wouldn't the government simply perform another U-turn and reverse the changes to BTL treatment, it wouldn't be the first time they have backed down on a policy recently and the stakes would be much higher for them for a full blown house price crash than some of the other climbdowns they have made recently.

Crashing the housing market will do wonders for the economy, it means that the young people who actually go out to work can buy houses and are less likely to just stop contributing. It would be one of the purest forms of "helicopter money" available without actually crediting peoples bank accounts. In fact this will be one of the few levers left when things inevitably go South again, just think of the retail/DIY boom when flats and houses start changing hands more frequently again! Any crash will be blamed on EZ/China anyway, and most members of the government will be unaffected. They know the mood has changed regarding property prices, and this is why they are now brazenly putting obstacles in the way of BTL.

wotsthat

Crashy_Time wrote: »

:rotfl: Really? Looks like they will just divert or even cancel the coming massive global recession then? What power these guys have, makes you wonder why they even bother with budgets and suchlike.

I don't know why you're bothered. You're hardly saving up for the big house, enjoy your current lifestyle and probably won't buy anyway. You'll save a few pounds on a rent which you consider to be peanuts.

westernpromise

I can remember the 1989-95 price crash and it was, frankly, horrific. It was the calibrating experience of my life. To this day, I use it to measure what economic despair without end in sight feels like. Whenever things have felt really bad moneywise, I have always been able to cheer myself up these last 25 years by asking myself, Are things as bad as 1990? and the answer has always been Nowhere near. I've spent the last 20 years insulating myself financially from having to care about another such episode.

The idea that millions of people stranded in negative equity and unabel to move for 10 years will somehow mean "flats and houses start changing hands more frequently again" is one so Corbynesque, so naive, that one doesn't really know where to start. The two really nasty shocks awaiting crash trolls, though, are when their rent goes up because renting's suddenly become desirable, and when their purchasing power - even if they keep their job - falls by more than house prices do, making houses less affordable after the crash than they were before. They tend to go into denial when either of these awkward facts is pointed out.

Crashy's BCR is above 100%, so of course he has to tell himself he doesn't want to buy. He needs the house to be free, with a pile of cash thrown in, in order for his decison to rent to pay off. And it is all about pay off, and it is all about other people's money, otherwise he wouldn't care what other people's house prices do.

Filo25

Crashy_Time wrote: »

Crashing the housing market will do wonders for the economy, it means that the young people who actually go out to work can buy houses and are less likely to just stop contributing. It would be one of the purest forms of "helicopter money" available without actually crediting peoples bank accounts. In fact this will be one of the few levers left when things inevitably go South again, just think of the retail/DIY boom when flats and houses start changing hands more frequently again! Any crash will be blamed on EZ/China anyway, and most members of the government will be unaffected. They know the mood has changed regarding property prices, and this is why they are now brazenly putting obstacles in the way of BTL.

If that was the case then why are they pushing projects like Help to Buy?

I would say its pretty obvious to anyone they aren't trying to crash property prices, just rebalance the makeup of buyers, more FTBs, fewer BTLs (makes sense politically for them as well).

Also its wishful thinking if you imagine falling prices will lead to higher volumes, it certainly didn't in the past in London, unless you have forced sellers people will just sit it out, rates aren't going up anytime soon, and if the economy slows further we're just going to see more QE thrown around, which is hardly disastrous for housing, its the obvious policy lever the government still has left.

If you think there is a clear demand for a house price crash from core Conservative voters then you are likely to be very disappointed.

mwpt

Filo25 wrote: »

If that was the case then why are they pushing projects like Help to Buy?

I would say its pretty obvious to anyone they aren't trying to crash property prices, just rebalance the makeup of buyers, more FTBs, fewer BTLs (makes sense politically for them as well).

Also its wishful thinking if you imagine falling prices will lead to higher volumes, it certainly didn't in the past in London, unless you have forced sellers people will just sit it out, rates aren't going up anytime soon, and if the economy slows further we're just going to see more QE thrown around, which is hardly disastrous for housing, its the obvious policy level the government still has left.

If you think there is a clear demand for a house price crash from core Conservative voters then I think you are likely to be very disappointed.

As much as I'd quite like a decent crash so I could buy a better house, I largely agree with you. The government offering an interest free equity loan on which they lose money if prices drop doesn't send the message that they're trying to crash the market. I note pages and pages over at HPC dedicated to the attacks on BTL being a message to the market and the chaps over there are able to read the tea leaves that BTLers can't. Fair enough, I do think politically, BTL is an easy horse to flog and I'd be very nervous about expanding in leveraged BTL at the moment, but they're largely keeping quiet about the OO demand side props.

To add, I do agree about interest rates but there is potential for a market event there. I don't know that the central banks can retain control as much as we believe.

Crashy_Time

westernpromise wrote: »

I can remember the 1989-95 price crash and it was, frankly, horrific. It was the calibrating experience of my life. To this day, I use it to measure what economic despair without end in sight feels like. Whenever things have felt really bad moneywise, I have always been able to cheer myself up these last 25 years by asking myself, Are things as bad as 1990? and the answer has always been Nowhere near. I've spent the last 20 years insulating myself financially from having to care about another such episode.

The idea that millions of people stranded in negative equity and unabel to move for 10 years will somehow mean "flats and houses start changing hands more frequently again" is one so Corbynesque, so naive, that one doesn't really know where to start. The two really nasty shocks awaiting crash trolls, though, are when their rent goes up because renting's suddenly become desirable, and when their purchasing power - even if they keep their job - falls by more than house prices do, making houses less affordable after the crash than they were before. They tend to go into denial when either of these awkward facts is pointed out.

Crashy's BCR is above 100%, so of course he has to tell himself he doesn't want to buy. He needs the house to be free, with a pile of cash thrown in, in order for his decison to rent to pay off. And it is all about pay off, and it is all about other people's money, otherwise he wouldn't care what other people's house prices do.

I`m really not sure that the central banks and even quite smart commentators on Bloomberg etc. understand what the next crash will look like, but I`m pretty sure you don`t have a clue
:rotfl: you just have a certain narrative that you feel compelled to repeat like a mantra over and over again. The fact that you were badly burned in the 80`s/90`s crash explains a lot actually. House prices are made at the margins in a crash, those who must sell, and there is more to a market than idiots who ran willingly towards negative equity.