HPC are having a mass breakdown

GreatApe

The underlying problems with the site is that what they consider the average is not the average

I used to be a member there and the idea was roughly that.
A single man should be able to buy a decent 3 bedroom property with 3x income.
They then defined a single man as someone earning 'the average £26,000 income'
So they used to think prices should be £26k x 3 + 20% deposit = £97,500 in today's money.

Prices have gone up so much that they hardly talk about 3x single mans income anymore


However that's all wrong.
The £26,000 wage includes part time work and children.
And most people couple up to buy housing
If you look at the average couple working full time in their 30s their combined income is close to £55k and house prices are indeed 3 x joint income + deposit in most the country. In fact in most the country house prices are close to 2 x joint income + deposit so very affordable

westernpromise

GreatApe wrote: »

The underlying problems with the site is that what they consider the average is not the average

I used to be a member there and the idea was roughly that.
A single man should be able to buy a decent 3 bedroom property with 3x income.
They then defined a single man as someone earning 'the average £26,000 income'
So they used to think prices should be £26k x 3 + 20% deposit = £97,500 in today's money.

Prices have gone up so much that they hardly talk about 3x single mans income anymore


However that's all wrong.
The £26,000 wage includes part time work and children.
And most people couple up to buy housing
If you look at the average couple working full time in their 30s their combined income is close to £55k and house prices are indeed 3 x joint income + deposit in most the country. In fact in most the country house prices are close to 2 x joint income + deposit so very affordable

They miss two crucial things. One is where the 3.5x one salary historical multiplier comes from - it dates from the 60s, when working wives had no personal allowance and their earnings were added to their husbands' and taxed at his marginal rate. This meant they lost so much to tax that their salary was, rightly, simply discounted by lenders. This tax treatment changed 30 years ago so why it should determine prices now is a mystery.

The other thing they miss is that homeowners have a large amount of equity. In 2015, for excample, the UK housing stock was worth £5 trillion and mortgage debt was £1.3 trillion, so the average owner has 74% equity. Of course one would need to process out all those with no debt at all, but last time I looked, the average mortgaged owner had 45% equity.

Taking the latter figure, your £200k average house is actually owned on the basis of £90k equity, £110k mortgage. That's affordable even on one average salary never mind two.

triathlon

Sibley wrote: »

The worst thing HPC ever did was to ban all the Bulls.
Really it was the kiss of death. An interesting site needs a mix of people and views.
I've seen it on Facebook with all these groups. An elitist admin team delete everyone who disagrees with the group message. You end up with a small membership of people all agreeing with everyone. The end.

There were some serious issues in the housing market when HPC gang were in full swing. I was even thinking prices were going to crash. Thing was, the MP's and people in power had invested in property. They were never going to lose their dough all the time they could change the rules. Once they did that, any chance of a HPC was over.

I liked the site but I had insider trading. One of the admins worked with me at the airport. He was a proper knob. Always leaving any newspaper with crash headlines laying on the coffee table strategically placed so he could dominate the tea break conversations.

The problem was. He actually had no money. No deposit or anything. He used to post all this crap like Bruce Spanner about how much he was saving and renting is great.
In reality. He needed prices to crash 60% or more just to afford a place. Not saying that is good just a fact.

I used to be in a holiday group/forum that was mega popular on the internet. Loads of members and super active.
Facebook has totally killed it. There are about 50 members now who are asked to donate to keep it going. HPC will end up same way I guess.

It's just a secretive cult now where they have zero support in the real world. Most of my tenants now know me well enough to keep the sort of views aired on that repulsive site to themselves or they will soon be looking for another home.

triathlon

I see HPC have totally ignored yesterdays Rightmove data that showed huge property rises in the whole of the UK for 2nd month in a row on a website that never usually misses one bit of property related articles.
They are also doing a poll by count(I would;leave the o out normally) with a loaded question asking " how much will prices fall in the worst area" LOL LOL LOL

They are now pinning their hopes on one little over priced area in London with about 0.001% of the UK population where prices were massively inflated and had nowhere else to go.

GreatApe

triathlon wrote: »

It's just a secretive cult now where they have zero support in the real world. Most of my tenants now know me well enough to keep the sort of views aired on that repulsive site to themselves or they will soon be looking for another home.

You come across as a caricature of what a renter thinks a landlord is.

westernpromise

Meanwhile, a headline to sink HPCers and other crashtrolls into gloom:

https://www.telegraph.co.uk/business/2018/03/20/cooling-inflation-expected-ease-strain-uk-households/
Inflation down again hence the prospect of "normal" (what they?) interest rates recedes again.

The state meanwhile has become even more dependent than before on a tiny handful of taxpayers for its income tax receipts:
https://www.telegraph.co.uk/tax/income-tax/top-tenth-taxpayers-paid-60pc-income-tax-last-year-find-salary/?li_source=LI&li_medium=li-recommendation-widget
The top 10% pay 60% and the top 1% now pay 28% of all income tax. That's going to end well.

economic

westernpromise wrote: »

Meanwhile, a headline to sink HPCers and other crashtrolls into gloom:

https://www.telegraph.co.uk/business/2018/03/20/cooling-inflation-expected-ease-strain-uk-households/
Inflation down again hence the prospect of "normal" (what they?) interest rates recedes again.

The state meanwhile has become even more dependent than before on a tiny handful of taxpayers for its income tax receipts:
https://www.telegraph.co.uk/tax/income-tax/top-tenth-taxpayers-paid-60pc-income-tax-last-year-find-salary/?li_source=LI&li_medium=li-recommendation-widget
The top 10% pay 60% and the top 1% now pay 28% of all income tax. That's going to end well.

The UK treasury are cornered and cant do anything:
- rising debt levels
- growing unfunded liabilities
- dependent on tax take from so few
- interest rates that cant get much lower

They have to be very careful in changing tax laws as otherwise they scare of people who are the only ones contributing to the tax take.

Clearly the present course is unsustainable and something has to give. We are not crisis levels yet but on current trajectory we will be eventually.

Lets hope tech/AI saves the day.

economic

Expanding on unfunded liabilities - it is in my opinion that the next major crisis will be related to pensions.

We had large pension surpluses into the 90s. We now have very large deficits mainly driven by lower rates and expectations of people living longer.

We have never gotten it right when it comes to pensions. Easy to see why - just too many uncertain variables. You have uncertain:
- longevity rates
- inflation
- asset returns
- nominal interest rates

They got the pensions wrong in the 90s as they went into heavy surplus and now they are getting it wrong with heavy deficits.

My feeling is that state pensions will be means tested. The government will default on state pensions and the population who worked hard, saved and invested will be the ones heavily penalized.

triathlon

GreatApe wrote: »

You come across as a caricature of what a renter thinks a landlord is.

That's exactly what I said to you a while back, how odd you should fire that back at me, or not. Your fire and brimstone posts don't fool me and your hankering for Dickensian London and evil LL's

westernpromise

economic wrote: »

My feeling is that state pensions will be means tested. The government will default on state pensions and the population who worked hard, saved and invested will be the ones heavily penalized.

Agree. I do not expect to receive a penny in state pension. I've been robbed by the state all my life; why would that stop?