Housing market teetering on the brink - All NuLabcur did was put off the day of reckoning
Robert Henderson
A quarter of home owners live on 'financial precipice' The recession may
be officially over, but more than a quarter of home owners risk losing
their homes after admitting they are still living on a “financial
precipice”.
By Myra Butterworth, Personal Finance Correspondent
Published: 7:00AM GMT 12 Mar 2010
Latest research suggested 26 per cent of borrowers aged between 35 and
44 would be unable to meet their mortgage repayments if they saw a £300
drop in their monthly income. And one in eight adults in this age range
has deliberately over-inflated their income to secure a larger loan,
according to the YouGov research, commissioned credit reference agency
Callcredit.
Note: The government moves to prop up the economy have merely been
putting off the day of reckoning. The first time buyers market is
collapsing - see second article down - new mortgage have reduced
dramatically since the ending of the stamp duty holiday, existing
mortgagees who need to re-mortgage after the initial "come-on" low
interest rate period expires are unable to do so at favourable rates,
house prices are dropping and a quarter of home owners are on the
financial brink.
It is important to understand that it isn't only those who have
purchased a property or who own it outright who are effected. If only a
fifth of those struggling to pay their mortgages lose their homes that
will be hundreds of thousands of people in need of rented accommodation
on top of the hundreds of thousands who are already on council and
Housing Association waiting lists. Such an influx will not only
increase competition for social housing, it will push up private rents.
The other major effect of reducing house prices will be fewer and fewer
new build houses.
The prudent have been subsidising the imprudent since the beginning of
this crash. Those without mortgages, both those who own outright and
those who rent, are paying through depressed wages, lower benefits,
reduced public services and the long term debt caused by the excesses of
the past 12 years. Those who are being subsidised are the people who
took out massive mortgages, often by the straightforward fraud of
exaggerating their incomes, and/or ran up vast debts by drawing on the
equity in their homes. The heaviest losers are those who have never
owned a house outright or had a mortgage. They have gained nothing
during the property boom and have had every rising rents inflicted upon
them as property prices inflated unconscionably. RH
--
Robert Henderson
Personal website: http://www.anywhere.demon.co.uk
Andy Walker
> [...] If only a
> will be hundreds of thousands of people in need of rented accommodation
> on top of the hundreds of thousands who are already on council and
> Housing Association waiting lists.
True. But on the bright side, there will be hundreds of
thousands of empty houses being snapped up by "the prudent" [who
are otherwise not being well catered for these days] as BTLs and
made available to people who need rented accommodation.
--
Andy Walker
Nottingham
Hotblack Desiato
"Andy Walker" <ne...@cuboid.co.uk> wrote in message
news:FX9on.5740$1w4....@newsfe29.ams2...
That sounds very similar to the horse-shit which led us here ..
Andy Walker
True. But there is a big difference between people who have no
money borrowing it in order to speculate in the housing market, inc on
BTLs*, and people [and pensions funds] with money using it to buy up
cheap property. Further, Robert is v slow on the uptake on all matters
of logic and numeracy, and needs to have it pointed out to him that if
a family loses their home, that is a personal tragedy for them, but it
does not result in any change in the overall housing stock.
* For some reason, my fingers want to type "BLTs" ....
--
Andy Walker
Nottingham
sutartsorric
I think that a lot of people would be in deep shit if their monthly
income dropped by £300.
But, sadly, the arrogant tossers who read the Telegraph would probably
see that as pin money, so dont expect any help from them or their
supporters when their savage spending cuts bring the country to its
knees.
abelard
<sutart...@googlemail.com> wrote:
>On 17 Mar, 20:08, Andy Walker <n...@cuboid.co.uk> wrote:
>> Hotblack Desiato wrote:
>> > "Andy Walker" <n...@cuboid.co.uk> wrote in message
>> >news:FX9on.5740$1w4....@newsfe29.ams2...
>> >> Robert Henderson wrote:
>> >>> [...] If only a fifth of those struggling to pay their mortgages lose
>> >>> their homes that will be hundreds of thousands of people in need of
>> >>> rented accommodation on top of the hundreds of thousands who are
>> >>> already on council and Housing Association waiting lists.
>> >> True. But on the bright side, there will be hundreds of
>> >> thousands of empty houses being snapped up by "the prudent" [who
>> >> are otherwise not being well catered for these days] as BTLs and
>> >> made available to people who need rented accommodation.
>> > That sounds very similar to the horse-shit which led us here ..
>>
>> True. But there is a big difference between people who have no
>> money borrowing it in order to speculate in the housing market, inc on
>> BTLs*, and people [and pensions funds] with money using it to buy up
>> cheap property. Further, Robert is v slow on the uptake on all matters
>> of logic and numeracy, and needs to have it pointed out to him that if
>> a family loses their home, that is a personal tragedy for them, but it
>> does not result in any change in the overall housing stock.
>>
>> * For some reason, my fingers want to type "BLTs" ....
>I think that a lot of people would be in deep shit if their monthly
>income dropped by £300.
>
>But, sadly, the arrogant tossers who read the Telegraph would probably
>see that as pin money, so dont expect any help from them or their
>supporters when their savage spending cuts bring the country to its
>knees.
another of your innumerate claims??
why do you expect *nominal* wages(income?) to fall???
--
web site at www.abelard.org - news comment service, logic, economics
energy, education, politics, etc over 1 million document calls in year past
--------------------------------------------------------------------------------
all that is necessary for [] walk quietly and carry
the triumph of evil is that [] a big stick.
good people do nothing [] trust actions not words
only when it's funny -- roger rabbit
--------------------------------------------------------------------------------
abelard
<phi...@anywhere.demon.co.uk> wrote:
>Telegraph
>
>A quarter of home owners live on 'financial precipice' The recession may
>be officially over, but more than a quarter of home owners risk losing
>their homes after admitting they are still living on a “financial
>precipice”.
>
>
>
>
>By Myra Butterworth, Personal Finance Correspondent
>Published: 7:00AM GMT 12 Mar 2010
>
>Latest research suggested 26 per cent of borrowers aged between 35 and
>44 would be unable to meet their mortgage repayments if they saw a £300
>drop in their monthly income. And one in eight adults in this age range
>has deliberately over-inflated their income to secure a larger loan,
>according to the YouGov research, commissioned credit reference agency
>Callcredit.
you mean they made fraudulent representations...just like madelclot
>Note: The government moves to prop up the economy have merely been
>putting off the day of reckoning.
why do you believe that is all that it will do?
> The first time buyers market is
>collapsing
so what?
what is your definition of 'collapsing'?
> - see second article down - new mortgage have reduced
>dramatically since the ending of the stamp duty holiday, existing
>mortgagees who need to re-mortgage after the initial "come-on" low
>interest rate period expires are unable to do so at favourable rates,
>house prices are dropping and a quarter of home owners are on the
>financial brink.
which ones? the liars?
what else did you expect from socialist 'new' labour 'policies'?
as modified to maximise tax while fraudulently manipulating
indices prior to an election?
shame they are as innumerate as yourself eh!
>It is important to understand that it isn't only those who have
>purchased a property or who own it outright who are effected. If only a
>fifth of those struggling to pay their mortgages lose their homes that
>will be hundreds of thousands of people in need of rented accommodation
>on top of the hundreds of thousands who are already on council and
>Housing Association waiting lists. Such an influx will not only
>increase competition for social housing, it will push up private rents.
so what?...as anw has hinted to you
>The other major effect of reducing house prices will be fewer and fewer
>new build houses.
a squeeze has already been underway for a year or two...
certainly since the clown 'promised' to increase housing stocks...
and then of course there is the control freak 'planning' 'laws
...and the open borders 'policy'
>The prudent have been subsidising the imprudent since the beginning of
>this crash.
that's what socialism is all about
> Those without mortgages, both those who own outright and
>those who rent, are paying through depressed wages, lower benefits,
>reduced public services and the long term debt caused by the excesses of
>the past 12 years.
that is the sane behaviour of those finding themselves in a situation
where the government is deliberately debauching the currency
>Those who are being subsidised are the people who
>took out massive mortgages, often by the straightforward fraud of
>exaggerating their incomes, and/or ran up vast debts by drawing on the
>equity in their homes.
and of course lived in those houses for years...
they'll likely come out rather well, all things considered
> The heaviest losers are those who have never
>owned a house outright or had a mortgage. They have gained nothing
>during the property boom and have had every rising rents inflicted upon
>them as property prices inflated unconscionably. RH
inflation always damages the poor disproportionaly....
socialism always damages the poor and the weak....
regards
Robert Henderson
<ne...@cuboid.co.uk> writes
You are assuming the money is there to make the investment. Commercial
investors need mortgages too. Mortgage providers will be very chary
about lending in a falling market. RH
William Black
"Robert Henderson" <phi...@anywhere.demon.co.uk> wrote in message
news:U1ZkjiA5...@anywhere.demon.co.uk...
> You are assuming the money is there to make the investment. Commercial
> investors need mortgages too. Mortgage providers will be very chary about
> lending in a falling market. RH
Why should they be?
Experience shows that even if they make complete cock of it the government
will use our money cover all their debts and then to pay them shed loads of
cash as bonuses.
It's the ultimate 'no risk' business.
--
William Black
I've seen things you people wouldn't believe.
Barbeques on fire by the chalets past the castle headland
I watched the gift shops glitter in the darkness off the Newborough gate
All these moments will be lost in time, like icecream on the beach
Time for tea.
Maria
Recalling my life in the 1970's and 80's, the lack of rented
accommodation was a serious, serious problem. I had to split from my
family to get somewhere to live as I could not afford to buy in that
area, so the social support from them was gone. When we lost our jobs,
we could not sell and move to rented to prevent us falling into arrears,
because there was no rented.
I know that people like to think that Thatcher is responsible for the
decline of council housing, but I needed a place in 1978, and the
council waiting list then was 16 years for a married couple, and about 5
years if you had children.
If I could have stayed where I was, I would never had had to tolerate
years of poverty with no support because I had a large family that could
have helped. There was little or no mobility, which may be why so many
people were upset when Tebbit made his on yer bike comment.
Perhaps simply there has always been a lack of rented accommodation -
it's lovely that so many people could buy houses, but not everyone
could, and there have never been enough council places for those who
couldn't really afford to buy. A change was needed, and that has now come.
The only mystery to me now is how anybody can get a BTL now and make
money on it on the low rents we have - a house the same as mine (big 3
storey vic terrace) is available down the street for £450/month and it's
been empty for 3 months. It would cost £110k or so to buy it - how much
would that mortgage repayment be?
Maria
Robert Henderson
<ne...@cuboid.co.uk> writes
>
> True. But there is a big difference between people who have no
>money borrowing it in order to speculate in the housing market, inc on
>BTLs*, and people [and pensions funds] with money using it to buy up
>cheap property. Further, Robert is v slow on the uptake on all matters
>of logic and numeracy,
Oh, the irony... RH
>and needs to have it pointed out to him that if
>a family loses their home, that is a personal tragedy for them, but it
>does not result in any change in the overall housing stock.
Dear oh dear, the limitations of the extreme bounded mind cruelly
exposed yet again. The housing stock is not a static entity, there is
no zero-some game. Just because a property is vacated does not mean
that it will then be occupied by the same number of people who
previously occupied it or occupied at all - there are hundreds of
thousands of unoccupied properties and hundreds of thousands of second
homes/holiday lets. Unoccupied properties quickly deteriorate and
become uninhabitable. There is also the point I raised in a previous
post, commercial mortgages are difficult to get at present - many of the
inner-city flat developments started before the slump remain unsold even
where prices have been reduced by a half or even more in some cases.
You would have felt very comfortable in times when mercantilist thinking
dominated. RH
abelard
ok....but then one needs several numbers...
how many of those can't get another job....at similar or better
nominal wages....
how many are at a level where they have taken out a high mortgage...
will unemployment...whatever that is....continue to rise?
what is (and will) happen to nominal house prices
having said that much....do *you* expect nominal wages of those
having mortgages to fall? on average?
what do you expect from house prices?
and remember the poster is making wild claims about 'bringing the
country to it knees' if the 'print money and squander it' doesn't
continue ....
and 'a lot of people'(unspecified) had 'income drops of £300 a month'
(why should that happen? what is 'a lot of people'?
regards
abelard
<falli...@holeinshoe.co.uk> wrote:
>Hotblack Desiato wrote:
>>
>>
>> "Andy Walker" <ne...@cuboid.co.uk> wrote in message
>> news:FX9on.5740$1w4....@newsfe29.ams2...
>>> Robert Henderson wrote:
>>>> [...] If only a fifth of those struggling to pay their mortgages lose
>>>> their homes that will be hundreds of thousands of people in need of
>>>> rented accommodation on top of the hundreds of thousands who are
>>>> already on council and Housing Association waiting lists.
>>>
>>> True. But on the bright side, there will be hundreds of
>>> thousands of empty houses being snapped up by "the prudent" [who
>>> are otherwise not being well catered for these days] as BTLs and
>>> made available to people who need rented accommodation.
>>
>> That sounds very similar to the horse-shit which led us here ..
>
>Recalling my life in the 1970's and 80's, the lack of rented
>accommodation was a serious, serious problem. I had to split from my
>family to get somewhere to live as I could not afford to buy in that
>area, so the social support from them was gone. When we lost our jobs,
>we could not sell and move to rented to prevent us falling into arrears,
>because there was no rented.
due to socialist rent controls?
>I know that people like to think that Thatcher is responsible for the
>decline of council housing, but I needed a place in 1978, and the
>council waiting list then was 16 years for a married couple, and about 5
>years if you had children.
>If I could have stayed where I was, I would never had had to tolerate
>years of poverty with no support because I had a large family that could
>have helped. There was little or no mobility, which may be why so many
>people were upset when Tebbit made his on yer bike comment.
i think most of those 'upset' were outraged at the idea that
*they* should take responsibility
>Perhaps simply there has always been a lack of rented accommodation -
>it's lovely that so many people could buy houses, but not everyone
>could, and there have never been enough council places for those who
>couldn't really afford to buy.
many more units have come about by splitting lager houses...
many more households have been formed as divorce and single
living has become ever more 'popular'
> A change was needed, and that has now come.
>The only mystery to me now is how anybody can get a BTL now and make
>money on it on the low rents we have - a house the same as mine (big 3
>storey vic terrace) is available down the street for £450/month and it's
>been empty for 3 months. It would cost £110k or so to buy it - how much
>would that mortgage repayment be?
regards
abelard
<willia...@hotmail.co.uk> wrote:
>
>"Robert Henderson" <phi...@anywhere.demon.co.uk> wrote in message
>news:U1ZkjiA5...@anywhere.demon.co.uk...
>
>> You are assuming the money is there to make the investment. Commercial
>> investors need mortgages too. Mortgage providers will be very chary about
>> lending in a falling market. RH
>
>Why should they be?
more to the point....with a falling market...why not wait and
watch it fall
>Experience shows that even if they make complete cock of it the government
>will use our money cover all their debts and then to pay them shed loads of
>cash as bonuses.
>
>It's the ultimate 'no risk' business.
--
Harry Merrick
Nobody answered you about the cost of mortgage, so I will have a stab at it.
Over 25 years, it would be around £458 per month. So, as usual, far better
to buy than to rent. However, you do have to find the mortage first and
today you will need a deposit. Also, of course, you would be responsible for
upkeep and repairs. In a Victorian terrace that has been empty for 3 months
you may find damp and such.
--
Harry Merrick.
Robert Henderson
<falli...@holeinshoe.co.uk> writes
>If I could have stayed where I was, I would never had had to tolerate
>years of poverty with no support because I had a large family that
>could have helped. There was little or no mobility, which may be why so
>many people were upset when Tebbit made his on yer bike comment.
>Perhaps simply there has always been a lack of rented accommodation -
>it's lovely that so many people could buy houses, but not everyone
>could, and there have never been enough council places for those who
>couldn't really afford to buy. A change was needed, and that has now come.
>The only mystery to me now is how anybody can get a BTL now and make
>money on it on the low rents we have - a house the same as mine (big 3
>storey vic terrace) is available down the street for �450/month and
>it's been empty for 3 months. It would cost �110k or so to buy it - how
>much would that mortgage repayment be?
You would probably need a 20% desposit as a minimum. That would bring
you mortgage down to �88k. On that you might get a relatively favourable
two year rate before reverting to the lender's standard rate. If not,
you would probably be paying around 5-7% for a repayment mortgage which
would be in the region I estimate of �380 to �530.
However, as a home owner you would have additional costs such as
buildings insurance, the maintenance of the property (including in flats
and non-detatched houses, the maintenance of the building generally) ,
the renovation of the property and depending on what you rental
included, perhaps additional things such as water rates, energy bills
and caretaking which you previously paid for as part of your rent. RH
Andy Walker
> The only mystery to me now is how anybody can get a BTL now and make
> money on it on the low rents we have - a house the same as mine (big 3
> storey vic terrace) is available down the street for £450/month and it's
> been empty for 3 months. It would cost £110k or so to buy it - how much
> would that mortgage repayment be?
Wrong question. If someone *has* #110K that needs a good home
[pension fund, redundancy money, whatever -- *you* have been grumbling
about your local top council bods getting payoffs much larger than that],
what to do with it? Building societies and banks aren't paying interest.
Shares are a bit volatile. Well, there *are* other things to do, but
*one* of them is to buy the house down your street. If it's not sold,
and the owners need the cash, they would probably take #100K or #90K for
it. Do it up cheaply but nicely, and let it.
In ten years time, it will still be worth about the same in real
terms [perhaps 15% up or down?], and meanwhile it's bringing in, as long
as you can let it, #450x12 == #5.4 Kpa, call it 5%. OK, that's before
tax, maintenance and other expenses, and down time -- but whatever you
do make on it is real-terms gain, to be compared with around 2% real-
terms gain even in good years with ISAs and building societies. Small
wonder that quite a lot of professional people without company pension
schemes see a property portfolio as a good way to invest what would
otherwise be their superann, and thereby of funding their retirement --
meanwhile, pretty much keeping gov't's sticky mitts off. [You can't
yet directly invest a SIPP into residential property, so there are tax
implications.] [You would have to be very unlucky for the return when
you retire not to be significantly higher than a public-sector defined-
benefit ("final salary") pension based on the same input, which is why
I don't regard those pensions as "generous".]
The daft notion is *speculating* in BTL. There are more fun
ways to gamble. But *investing* in BTL is another matter -- *esp*
when the housing market is depressed and there are bargains to be had.
You need to have the money first ....
--
Andy Walker
Nottingham
Andy Walker
> You are assuming the money is there to make the investment. Commercial
> investors need mortgages too. Mortgage providers will be very chary
> about lending in a falling market. RH
You're thinking too conventionally. The money *is* there,
for two convergent reasons:
(a) Re-possessions are often/usually sold off at auction, "as
is", with vacant possession and with the bank simply wanting to
recover its money. So there are lots of bargains to be had, esp
for those with the know-how to do them up cheaply and get them back
on the market quickly. IOW, you don't need as much money as when
buying your next family home.
(b) Lots of people have quite large sums of money looking for
a good home. Pension pots, tax-free lump sums, redundancy money,
payoffs, .... In the past, this money would often have gone to a
bank or building society; but there is currently no point, as the
interest is negligible. #100K or so may not buy much more than your
flat in London, but it [allegedly] buys a nice 3-bed Victorian house
in Kettering near to Maria, or a couple of re-possessed and somewhat
tatty houses, or even a whole street in slum clearance areas. Or a
pair of shops with flats/offices over.
--
Andy Walker
Nottingham
Robert Henderson
<abel...@abelard.org> writes
>>
>>Latest research suggested 26 per cent of borrowers aged between 35 and
>>44 would be unable to meet their mortgage repayments if they saw a £300
>>drop in their monthly income. And one in eight adults in this age range
>>has deliberately over-inflated their income to secure a larger loan,
>>according to the YouGov research, commissioned credit reference agency
>>Callcredit.
>
>you mean they made fraudulent representations...just like madelclot
>
That is straightforward fraud. It supports my position. RH
>>Note: The government moves to prop up the economy have merely been
>>putting off the day of reckoning.
>
>why do you believe that is all that it will do?
>
>> The first time buyers market is
>>collapsing
>
>so what?
>what is your definition of 'collapsing'?
When the large majority of people who do not own homes cannot afford to
buy even the cheapest home. Bear in mind that two thirds of the
population are owner occupiers., RH
>
>> - see second article down - new mortgage have reduced
>>dramatically since the ending of the stamp duty holiday, existing
>>mortgagees who need to re-mortgage after the initial "come-on" low
>>interest rate period expires are unable to do so at favourable rates,
>>house prices are dropping and a quarter of home owners are on the
>>financial brink.
>
>which ones? the liars?
A mixture, The liars, those who have been honest but lost their jobs,
those who have become crippled,. Those who have had to give up jobs to
look after children or other relatives. . RH
>what else did you expect from socialist 'new' labour 'policies'?
> as modified to maximise tax while fraudulently manipulating
> indices prior to an election?
>
>shame they are as innumerate as yourself eh!
How ironic that a 1947 vintage valve computer with its minuscule memory
and snail pace processing should be "fretting" over the ability to
compute.... I of course was always against the policies which led to
house price inflation. RH
>
>>It is important to understand that it isn't only those who have
>>purchased a property or who own it outright who are effected. If only a
>>fifth of those struggling to pay their mortgages lose their homes that
>>will be hundreds of thousands of people in need of rented accommodation
>>on top of the hundreds of thousands who are already on council and
>>Housing Association waiting lists. Such an influx will not only
>>increase competition for social housing, it will push up private rents.
>
>so what?...as anw has hinted to you
>
>>The other major effect of reducing house prices will be fewer and fewer
>>new build houses.
>
>a squeeze has already been underway for a year or two
And it will get worse for longer the way things are going... RH
>... certainly since the clown 'promised' to increase housing stocks...
>
>and then of course there is the control freak 'planning' 'laws
> ...and the open borders 'policy'
>
>>The prudent have been subsidising the imprudent since the beginning of
>>this crash.
>
>that's what socialism is all about
No, it's what criminally reckless "greed is good" capitalism is all
about... RH
>
>> Those without mortgages, both those who own outright and
>>those who rent, are paying through depressed wages, lower benefits,
>>reduced public services and the long term debt caused by the excesses of
>>the past 12 years.
>
>that is the sane behaviour
What is? RH
>of those finding themselves in a situation
> where the government is deliberately debauching the currency
>
>>Those who are being subsidised are the people who
>>took out massive mortgages, often by the straightforward fraud of
>>exaggerating their incomes, and/or ran up vast debts by drawing on the
>>equity in their homes.
>
>and of course lived in those houses for years... they'll likely come
>out rather well, all things considered
That was precisely my point. DOh! RH
>
>> The heaviest losers are those who have never
>>owned a house outright or had a mortgage. They have gained nothing
>>during the property boom and have had every rising rents inflicted upon
>>them as property prices inflated unconscionably. RH
>
>inflation always damages the poor disproportionaly....
>socialism
Now, let me just substitute capitalism for socialism.... RH
>always damages the poor and the weak....
>
>regards
--
Hotblack Desiato
"Maria" <falli...@holeinshoe.co.uk> wrote in message
news:d7ednQsiF4SHQTzW...@bt.com...
So .. your underlying problem, like we now have for almost an entire
generation of people, was actually that you couldn't afford to buy a
property? This is the side of the issue which needed addressing back then,
and still needs addressing now, as renting is not a long term solution for
any average working person in the UK ...
There's no real need to 'make money' on a BTL; you're walking away at the
end of it with the total real-estate value plus market adjustment, while the
tenants who have been paying towards your mortgage and costs are walking
away with nothing.
If the tenants have only covered your mortgage then you've managed to
acquire that value for free (minus the maintenance costs which you'd have
incurred from owning the property anyway). If they only cover half, then
you've got a house for half price. whatever way you look at it, you
eventually win. You just need to hang on to your second, third, fourth etc
houses regardless of what the market is doing, until such time as you can
realise enough profit to make the sale worth your while. In a housing boom
like we've seen, that could be a couple of months using 100% borrowed
capital and no tenants whatsoever .. You've put in nothing .. nada .. and
walked away with profit .. but some poor sod has to pick up the bill
Of course, holding second, third and fourth houses out of the property
market creates shortage.. which pushes values up .. another reason to hang
on even if you can't let the property at the time. Your net worth
essentially increases from sitting on your hands.
abelard
<phi...@anywhere.demon.co.uk> wrote:
>In message <tqf2q5pbo1in22a63...@4ax.com>, abelard
><abel...@abelard.org> writes
>>>
>>>Latest research suggested 26 per cent of borrowers aged between 35 and
>>>44 would be unable to meet their mortgage repayments if they saw a £300
>>>drop in their monthly income. And one in eight adults in this age range
>>>has deliberately over-inflated their income to secure a larger loan,
>>>according to the YouGov research, commissioned credit reference agency
>>>Callcredit.
>>
>>you mean they made fraudulent representations...just like madelclot
>That is straightforward fraud. It supports my position. RH
>
>>>Note: The government moves to prop up the economy have merely been
>>>putting off the day of reckoning.
>>
>>why do you believe that is all that it will do?
>>
>>> The first time buyers market is
>>>collapsing
>>
>>so what?
>>what is your definition of 'collapsing'?
>
>When the large majority of people who do not own homes cannot afford to
>buy even the cheapest home. Bear in mind that two thirds of the
>population are owner occupiers., RH
bear in mind most of the population don't live out of doors
in cardboard boxes
>>> - see second article down - new mortgage have reduced
>>>dramatically since the ending of the stamp duty holiday, existing
>>>mortgagees who need to re-mortgage after the initial "come-on" low
>>>interest rate period expires are unable to do so at favourable rates,
>>>house prices are dropping and a quarter of home owners are on the
>>>financial brink.
>>
>>which ones? the liars?
>A mixture, The liars, those who have been honest but lost their jobs,
>those who have become crippled,. Those who have had to give up jobs to
>look after children or other relatives. . RH
this gives little idea of numbers
>>what else did you expect from socialist 'new' labour 'policies'?
>> as modified to maximise tax while fraudulently manipulating
>> indices prior to an election?
>>
>>shame they are as innumerate as yourself eh!
>
>How ironic that a 1947 vintage valve computer with its minuscule memory
>and snail pace processing should be "fretting" over the ability to
>compute....
beat hand waving
>I of course was always against the policies which led to
>house price inflation. RH
which policies are you attributing as causal
>>>It is important to understand that it isn't only those who have
>>>purchased a property or who own it outright who are effected. If only a
>>>fifth of those struggling to pay their mortgages lose their homes that
>>>will be hundreds of thousands of people in need of rented accommodation
>>>on top of the hundreds of thousands who are already on council and
>>>Housing Association waiting lists. Such an influx will not only
>>>increase competition for social housing, it will push up private rents.
>>
>>so what?...as anw has hinted to you
>>
>>>The other major effect of reducing house prices will be fewer and fewer
>>>new build houses.
>>
>>a squeeze has already been underway for a year or two
>
>And it will get worse for longer the way things are going... RH
that also seems likely to me.....but i return to the issue of
cardboard boxes
why do you not instead posit that the market will simply adjust?
>>... certainly since the clown 'promised' to increase housing stocks...
>>
>>and then of course there is the control freak 'planning' 'laws
>> ...and the open borders 'policy'
>>
>>>The prudent have been subsidising the imprudent since the beginning of
>>>this crash.
>>
>>that's what socialism is all about
>
>No, it's what criminally reckless "greed is good" capitalism is all
>about... RH
there is no capitalist advantage in keeping houses empty...
especially if the market is dropping!
>>> Those without mortgages, both those who own outright and
>>>those who rent, are paying through depressed wages, lower benefits,
>>>reduced public services and the long term debt caused by the excesses of
>>>the past 12 years.
>>
>>that is the sane behaviour
>
>What is? RH
borrowing money while the currency is being energetically debauched
>>of those finding themselves in a situation
>> where the government is deliberately debauching the currency
>>
>>>Those who are being subsidised are the people who
>>>took out massive mortgages, often by the straightforward fraud of
>>>exaggerating their incomes, and/or ran up vast debts by drawing on the
>>>equity in their homes.
>>
>>and of course lived in those houses for years... they'll likely come
>>out rather well, all things considered
>
>That was precisely my point. DOh! RH
ok....i missed that in the undergrowth
so...in mass terms...you are suggesting net advantage?
>>> The heaviest losers are those who have never
>>>owned a house outright or had a mortgage. They have gained nothing
>>>during the property boom and have had every rising rents inflicted upon
>>>them as property prices inflated unconscionably. RH
>>
>>inflation always damages the poor disproportionaly....
>>socialism
>
>Now, let me just substitute capitalism for socialism.... RH
i'll always allow you a moderate ration of self-indulgent illusions
>>always damages the poor and the weak....
regards
--
Shaun
wrote:
>Maria wrote:
>> The only mystery to me now is how anybody can get a BTL now and make
>> money on it on the low rents we have - a house the same as mine (big 3
>> storey vic terrace) is available down the street for £450/month and it's
>> been empty for 3 months. It would cost £110k or so to buy it - how much
>> would that mortgage repayment be?
>
> Wrong question. If someone *has* #110K that needs a good home
>[pension fund, redundancy money, whatever -- *you* have been grumbling
>about your local top council bods getting payoffs much larger than that],
>what to do with it? Building societies and banks aren't paying interest.
>Shares are a bit volatile. Well, there *are* other things to do, but
>*one* of them is to buy the house down your street. If it's not sold,
>and the owners need the cash, they would probably take #100K or #90K for
>it. Do it up cheaply but nicely, and let it.
>
Buy land. Its won't burn down, has no maintenance costs, and they've
stopped making it.
Robert Henderson
<ne...@cuboid.co.uk> writes
>Robert Henderson wrote:
>> You are assuming the money is there to make the investment.
>>Commercial investors need mortgages too. Mortgage providers will be
>>very chary about lending in a falling market. RH
>
> You're thinking too conventionally. The money *is* there,
>for two convergent reasons:
>
> (a) Re-possessions are often/usually sold off at auction, "as
>is", with vacant possession and with the bank simply wanting to
>recover its money. So there are lots of bargains to be had, esp
>for those with the know-how to do them up cheaply and get them back
>on the market quickly. IOW, you don't need as much money as when
>buying your next family home.
Oh dear, the limitations of the bounded mind once more to the fore.
You are again assuming that this is a zero-sum game. I have already
dealt with this question in another answer, viz:
"The housing stock is not a static entity, there is no zero-some game.
Just because a property is vacated does not mean that it will then be
occupied by the same number of people who previously occupied it or
occupied at all - there are hundreds of thousands of unoccupied
properties and hundreds of thousands of second homes/holiday lets.
Unoccupied properties quickly deteriorate and become uninhabitable.
There is also the point I raised in a previous post, commercial
mortgages are difficult to get at present - many of the inner-city flat
developments started before the slump remain unsold even where prices
have been reduced by a half or even more in some cases.
You would have felt very comfortable in times when mercantilist thinking
dominated."
H
>
> (b) Lots of people have quite large sums of money looking for
>a good home. Pension pots, tax-free lump sums, redundancy money,
>payoffs, .... In the past, this money would often have gone to a
>bank or building society; but there is currently no point, as the
>interest is negligible. #100K or so may not buy much more than your
>flat in London, but it [allegedly] buys a nice 3-bed Victorian house
>in Kettering near to Maria, or a couple of re-possessed and somewhat
>tatty houses, or even a whole street in slum clearance areas. Or a
>pair of shops with flats/offices over.
All of which ignores the points I have raised directly above. RH
Andy Walker
>> You're thinking too conventionally. The money *is* there,
>> for two convergent reasons:
> Oh dear, the limitations of the bounded mind once more to the fore. You
> are again assuming that this is a zero-sum game.
"Again"? This is entirely your invention. You perhaps also
don't realise that there is no interesting distinction between zero-
sum games and other games as soon as there are more than two players.
> I have already dealt
> with this question in another answer, viz:
Your "another answer" might be more relevant if it dealt
with the fact that repos are usually sold off at auction and much
cheaper than the typical conventional sale agreed between willing
buyers and sellers.
> [...] there are hundreds of thousands of unoccupied
> properties and hundreds of thousands of second homes/holiday lets.
Right, but these are not *normally* either the sorts of
property that families are turfed out of or located in the places
where such families want/need to live.
> Unoccupied properties quickly deteriorate and become uninhabitable.
Really? Second homes and holiday lets become uninhabitable?
That's going to be a downer on my next holiday.
> There is also the point I raised in a previous post, commercial
> mortgages are difficult to get at present
And the point made in rebuttal, that houses sold at auction
sell for whatever someone is prepared to pay on the day. If people
can't get mortgages, then prices will drop until the buyers can pay
cash. More accurately, since it is an auction, prices won't rise
beyond what cash buyers can afford. Mortgages are difficult to get
precisely when people are looking for places other than banks and
building societies to invest their money.
> - many of the inner-city flat
> developments started before the slump remain unsold even where prices
> have been reduced by a half or even more in some cases.
Of course. Developers jumped onto a bandwagon that was
about to become a train wreck. There are only so many inner-city
boxen that Young Executives need. You might be happy to stay in
a Travelodge overnight, but you wouldn't want to live permanently
in one -- at any price. Per contra, repo houses are, by definition,
where people want to live and in direct relation to the numbers of
dispossessed families wanting/needing to live there.
>> (b) Lots of people have quite large sums of money looking for
>> a good home. [...]
> All of which ignores the points I have raised directly above. RH
Well, if that was true, it would be unsurprising; note
the levels of quotation. But actually it is relevant, as it means
that commercial mortgages are not needed by these people. Large
amounts of money that would in the past have gone into savings
accounts are today being used to buy property; and people who
buy repo houses are not doing so as second homes or holiday lets,
but to develop or as BTL investments with a view to getting them
occupied ASAP.
--
Andy Walker
Nottingham
Robert Henderson
<ne...@cuboid.co.uk> writes
>Robert Henderson wrote:
>>> You're thinking too conventionally. The money *is* there,
>>> for two convergent reasons:
>>> (a) Re-possessions are often/usually sold off at auction, [...]
>> Oh dear, the limitations of the bounded mind once more to the fore.
>>You are again assuming that this is a zero-sum game.
>
> "Again"?
I refer to your first post., RH
>This is entirely your invention.
> You perhaps also
>don't realise that there is no interesting distinction between zero-
>sum games and other games as soon as there are more than two players.
No useful distinction when you were acting on the basis that the when
property is sold, for whatever reason, the occupation overall remains
the same. RH
>
>> I have already dealt
>>with this question in another answer, viz:
>
> Your "another answer" might be more relevant if it dealt
>with the fact that repos are usually sold off at auction and much
>cheaper than the typical conventional sale agreed between willing
>buyers and sellers.
So what? Most will be picked up by investors who need to sell on at a
higher price or will be used for things such as holiday or other short
term lets. At the moment many properties aren't selling at any price. RH
>
>> [...] there are hundreds of thousands of unoccupied properties and
>>hundreds of thousands of second homes/holiday lets.
>
> Right, but these are not *normally* either the sorts of
>property that families are turfed out of or located in the places
>where such families want/need to live.
The unoccupied, un-saleable ones are. It would also be a mistake to
imagine that many of the holiday lets weren't wanted by the locals as
family homes or were previously occupied by locals. RH
>
>> Unoccupied properties quickly deteriorate and become uninhabitable.
>
> Really? Second homes and holiday lets become uninhabitable?
Sigh. No, the properties which are simply left unoccupied. Hundreds of
thousands of them exist. RH
>That's going to be a downer on my next holiday.
>
>> There is also the point I raised in a previous post, commercial
>>mortgages are difficult to get at present
>
> And the point made in rebuttal, that houses sold at auction
>sell for whatever someone is prepared to pay on the day. If people
>can't get mortgages, then prices will drop until the buyers can pay
>cash. More accurately, since it is an auction, prices won't rise
>beyond what cash buyers can afford. Mortgages are difficult to get
>precisely when people are looking for places other than banks and
>building societies to invest their money.
Very few people will the cash to buy a property outright unless they are
selling one in which case one sale cancels the other. Hardly any first
time buyers can afford property even at heavy discounts because the
price they are discounted from is so high as to leave the discounted
price still out of their reach. RH
>
>> - many of the inner-city
>>flat developments started before the slump remain unsold even where
>>prices have been reduced by a half or even more in some cases.
>
> Of course. Developers jumped onto a bandwagon that was
>about to become a train wreck. There are only so many inner-city
>boxen that Young Executives need. You might be happy to stay in
>a Travelodge overnight, but you wouldn't want to live permanently
>in one -- at any price. Per contra, repo houses are, by definition,
>where people want to live and in direct relation to the numbers of
>dispossessed families wanting/needing to live there.
You ignore the price factor. RH
>
>>> (b) Lots of people have quite large sums of money looking for
>>> a good home. [...]
>> All of which ignores the points I have raised directly above. RH
>
> Well, if that was true, it would be unsurprising; note
>the levels of quotation.
One quote only and one which was absolutely pertinent to your position.
RH
> But actually it is relevant, as it means
>that commercial mortgages are not needed by these people. Large
>amounts of money that would in the past have gone into savings
>accounts are today being used to buy property;
I suggest you look at the current dismal sales figures for houses. RH
> and people who
>buy repo houses are not doing so as second homes or holiday lets,
>but to develop or as BTL investments with a view to getting them
>occupied ASAP.
>
--
Andy Walker
>>> You are again assuming that this is a zero-sum game.
>> "Again"?
> I refer to your first post., RH
Which didn't mention either directly or implicitly zero-sum
games -- nor, indeed, games of any sort. Do you even understand
what a zero-sum game is? No, of course you don't, ...
>> You perhaps also
>> don't realise that there is no interesting distinction between zero-
>> sum games and other games as soon as there are more than two players.
> No useful distinction when you were acting on the basis that the when
> property is sold, for whatever reason, the occupation overall remains
> the same. RH
..., as we see. You provide an illiterate and innumerate
response to something which contained no such basis or action.
>> Your "another answer" might be more relevant if it dealt
>> with the fact that repos are usually sold off at auction and much
>> cheaper than the typical conventional sale agreed between willing
>> buyers and sellers.
> So what? Most will be picked up by investors who need to sell on at a
> higher price or will be used for things such as holiday or other short
> term lets. At the moment many properties aren't selling at any price. RH
Very few, if any, repo properties, can't be sold. If they are
not yet selling, the price is too high. At auction, you will very soon
find out exactly what a house *will* sell for. That may not be a price
that you want to sell for, but the bank is not so particular.
>>> [...] there are hundreds of thousands of unoccupied properties and
>>> hundreds of thousands of second homes/holiday lets.
>> Right, but these are not *normally* either the sorts of
>> property that families are turfed out of or located in the places
>> where such families want/need to live.
> The unoccupied, un-saleable ones are.
If a family becomes homeless as a result of a repossession,
then their home was not unoccupied, nor a second home, nor a holiday
let. Most families that become homeless have been turfed out of a
home in a residential suburb or inner city, only rather rarely from
pretty seaside or country places. Or did you mean something else?
> It would also be a mistake to
> imagine that many of the holiday lets weren't wanted by the locals as
> family homes or were previously occupied by locals. RH
Then if such a property does come up for auction as a result
of an incomer being turfed out, there is a chance for the locals to
buy it up cheaply. There certainly are problems with life for the
locals in places like Cornwall, but these are not specifically to do
with current economic woes.
[...]
> Very few people will the cash to buy a property outright unless they are
> selling one in which case one sale cancels the other.
Pay attention. The dropping of interest rates virtually to
zero has caused huge amounts of money to flow out of banks and building
societies. Where do you suppose that money is flowing *into*?
> Hardly any first
> time buyers can afford property even at heavy discounts because the
> price they are discounted from is so high as to leave the discounted
> price still out of their reach. RH
But we aren't talking about first-time buyers, but about
developers, BTLers, deep pockets looking for somewhere to invest
pension pots and similar.
>>> All of which ignores the points I have raised directly above. RH
>> Well, if that was true, it would be unsurprising; note
>> the levels of quotation.
> One quote only and one which was absolutely pertinent to your position. RH
Quite. You can't *expect* to raise a point in your reply
and have it answered in the article to which you were replying,
though in fact it was answered.
>> But actually it is relevant, as it means
>> that commercial mortgages are not needed by these people. Large
>> amounts of money that would in the past have gone into savings
>> accounts are today being used to buy property;
> I suggest you look at the current dismal sales figures for houses. RH
In normal times, there are around 1.5M house sales per year;
repossessions rose to about 3% of that, and were falling at the last
count. You're confusing two quite different markets, normal buying
and selling, and repossessions. One of these is much larger, even in
the worst of times, than the other, and relies on willing buyers and
sellers and the availability of mortgages. The other is relatively
small, even in the worst of times, and consists of the selling off of
repossessed houses for whatever they will fetch, constituting a good
bargain for anyone with ready cash.
--
Andy Walker
Nottingham
Robert Henderson
<ne...@cuboid.co.uk> writes
>Robert Henderson wrote:
>>>> You are again assuming that this is a zero-sum game.
>>> "Again"?
>> I refer to your first post., RH
>
> Which didn't mention either directly or implicitly
Oh yes you did. You made it clear that you thought houses repossessed
would be occupied rapidly by equivalent numbers of the same sort of
people. RH
> zero-sum
>games -- nor, indeed, games of any sort. Do you even understand
>what a zero-sum game is? No, of course you don't, ...
Translation: I understand very well. It is a simple concept: in a given
situation there is only a certain quantity of X - which cannot be
increased - and consequently all that can happen is that the
distribution of X may change. RH
>
>>> You perhaps also
>>> don't realise that there is no interesting distinction between zero-
>>> sum games and other games as soon as there are more than two players.
>> No useful distinction when you were acting on the basis that the when
>>property is sold, for whatever reason, the occupation overall remains
>>the same. RH
>
> ..., as we see. You provide an illiterate and innumerate
>response to something which contained no such basis or action.
Sigh. Yet again an extreme bounded mind fails to understand anything but
the most blatant and immediate implication. RH
>
>>> Your "another answer" might be more relevant if it dealt
>>> with the fact that repos are usually sold off at auction and much
>>> cheaper than the typical conventional sale agreed between willing
>>> buyers and sellers.
>> So what? Most will be picked up by investors who need to sell on at
>>a higher price or will be used for things such as holiday or other
>>short term lets. At the moment many properties aren't selling at any
>>price. RH
>
> Very few, if any, repo properties, can't be sold.
You are not asking the right question, namely, to whom are they sold?
Many are sold not to people who wish to occupy them or rent them out but
to sell on for a quick profit. That is not easy in present
circumstances. RH
> If they are
>not yet selling, the price is too high. At auction, you will very soon
>find out exactly what a house *will* sell for. That may not be a price
>that you want to sell for, but the bank is not so particular.
>
See above. RH
>>>> [...] there are hundreds of thousands of unoccupied properties and
>>>>hundreds of thousands of second homes/holiday lets.
>>> Right, but these are not *normally* either the sorts of
>>> property that families are turfed out of or located in the places
>>> where such families want/need to live.
>> The unoccupied, un-saleable ones are.
>
> If a family becomes homeless as a result of a repossession,
>then their home was not unoccupied, nor a second home, nor a holiday
>let. Most families that become homeless have been turfed out of a
>home in a residential suburb or inner city, only rather rarely from
>pretty seaside or country places. Or did you mean something else?
I meant what I said, viz:
">
> Right, but these are not *normally* either the sorts of
>property that families are turfed out of or located in the places
>where such families want/need to live.
The unoccupied, un-saleable ones are. It would also be a mistake to
imagine that many of the holiday lets weren't wanted by the locals as
family homes or were previously occupied by locals. RH"
You have a very bad habit of editing my answers to either make them
unintelligible or incomplete. I have answered your question in two ways:
first, that repossessed properties are frequently where people wish to
live, eg, city centres - many flat purchasers have lost their flats
since the crash and the holiday lets are wanted by the locals. It is
simply price which prevents people living where they want to live. RH
>
>> It would also be a mistake to
>>imagine that many of the holiday lets weren't wanted by the locals as
>>family homes or were previously occupied by locals. RH
>
> Then if such a property does come up for auction as a result
>of an incomer being turfed out, there is a chance for the locals to
>buy it up cheaply.
Pure fantasy. Prices are so high in comparison with wages that even
reductions of 50% don't bring them within the reach of locals. RH
>There certainly are problems with life for the
>locals in places like Cornwall, but these are not specifically to do
>with current economic woes.
They have been greatly exacerbated by the housing bubble and those
effects are still with us - see above. RH
>
>[...]
>> Very few people will the cash to buy a property outright unless they
>>are selling one in which case one sale cancels the other.
>
> Pay attention. The dropping of interest rates virtually to
>zero has caused huge amounts of money to flow out of banks and building
>societies. Where do you suppose that money is flowing *into*?
It hasn't. The banks and building societies have been using the money
to re-build their balance sheets, Mortgage applications are running at a
fraction of what they were in 2007. I suggest you start reading the
serious financial press regularly., RH
>
>> Hardly any first
>>time buyers can afford property even at heavy discounts because the
>>price they are discounted from is so high as to leave the discounted
>>price still out of their reach. RH
>
> But we aren't talking about first-time buyers, but about
>developers, BTLers, deep pockets looking for somewhere to invest
>pension pots and similar.
Your economic illiteracy nakedly removed. The housing market can only
function efficiently if first time buyers are thick on the ground. They
aren't. This means in the short run would-be sellers holding off selling
to be followed in the medium term by a flood of properties coming onto
the market which will depress prices. Whether prices will be depressed
enough to revive the first time buyers market sufficiently to make the
whole market regain its balance remains to be seen. We could simply be
in for a long period of stagnation with few properties being sold. RH
>
>>>> All of which ignores the points I have raised directly above. RH
>>> Well, if that was true, it would be unsurprising; note
>>> the levels of quotation.
>> One quote only and one which was absolutely pertinent to your position. RH
>
> Quite. You can't *expect* to raise a point in your reply
>and have it answered in the article to which you were replying,
>though in fact it was answered.
>
Your comments in the post to which I responded made it clear you hadn't
taken the re-posted facts onboard. Hence the re-post. RH
>>> But actually it is relevant, as it means
>>> that commercial mortgages are not needed by these people. Large
>>> amounts of money that would in the past have gone into savings
>>> accounts are today being used to buy property;
>> I suggest you look at the current dismal sales figures for houses. RH
>
> In normal times, there are around 1.5M house sales per year;
>repossessions rose to about 3% of that, and were falling at the last
>count. You're confusing two quite different markets, normal buying
>and selling, and repossessions.
The present repossession count is grossly misleading because of the
steps the government has taken to bully mortgage providers into delaying
re-possession and the penally low Bank Rate. That can't last for ever.
In addition, hordes of owners are leaving their cut-rate come on first
two years of their mortgage and not being able to re-mortgage at
reasonable interest rates. More repossessions in the pipeline. Finally,
Bank Rate will have to rise substantially in the next year because of
inflation. The mortgage providers will use the rise to yank up their
rates which will affect all mortgage holders, many of them severely. .
RH
> One of these is much larger, even in
>the worst of times, than the other, and relies on willing buyers and
>sellers and the availability of mortgages. The other is relatively
>small, even in the worst of times, and consists of the selling off of
>repossessed houses for whatever they will fetch, constituting a good
>bargain for anyone with ready cash.
--
Andy Walker
>>> I refer to your first post., RH
>> Which didn't mention either directly or implicitly
> Oh yes you did. You made it clear that you thought houses repossessed
> would be occupied rapidly by equivalent numbers of the same sort of
> people. RH
No, I merely pointed out that you were complaining about
hundreds of thousands of people needing rented accommodation at
the same time as you were pointing out that hundreds of thousands
of houses were becoming empty. Problem mitigated, if not solved.
No "zero-sum game" involved, just plain common sense.
>> zero-sum
>> games -- nor, indeed, games of any sort. Do you even understand
>> what a zero-sum game is? No, of course you don't, ...
> Translation: I understand very well. It is a simple concept: in a given
> situation there is only a certain quantity of X - which cannot be
> increased - and consequently all that can happen is that the
> distribution of X may change. RH
So what does your answer have to do with "game" or "zero-sum"
and what is "X"? And the consequence of "cannot be increased" is not
that only the "distribution of X may change". 3/10, at best. I'll
raise it to a pass mark if you can explain why "zero-sum" is not an
interesting concept for games with more than two players, and what
the significance of "two" is in your explanation.
[...]
>>> At the moment many properties aren't selling at any
>>> price. RH
>> Very few, if any, repo properties, can't be sold.
> You are not asking the right question, namely, to whom are they sold?
> Many are sold not to people who wish to occupy them or rent them out but
> to sell on for a quick profit. That is not easy in present
> circumstances. RH
Your claim was that they aren't selling, not that they are
selling to the wrong people. But you're wrong anyway. In times of
boom, it may possibly pay people to keep property empty in the hope
that the value-added of vacant possession exceeds the loss of rent
and other expenses; but that's far from the present situation. So
the house will be occupied as soon as it can be let. If houses are
not letting in areas where people are looking for rented places, it
can only be because the rents are too high -- but that will reflect
into the price at auction. If the "going" rent for some house would
be, say, #90pw, then that house is worth approx #90K, and *will*
sell for that [less costs], within a small margin, at auction.
[...]
> I meant what I said, viz:
> "> Right, but these are not *normally* either the sorts of
> >property that families are turfed out of or located in the places
> >where such families want/need to live.
> The unoccupied, un-saleable ones are. It would also be a mistake to
> imagine that many of the holiday lets weren't wanted by the locals as
> family homes or were previously occupied by locals. RH"
> You have a very bad habit of editing my answers to either make them
> unintelligible or incomplete.
I do, and did, no such thing. I snip [without editing, even
of layout], as required by netiquette, and always indicate where I have
removed material from the middle of something by using an ellipsis, so
that anyone interested knows to refer to the original if necessary. I
*never* do so with the intention of distorting in any way the article
to which I am responding. In the present case, I made whatever sense
I could of your first sentence, and dealt separately with the sentence
"It would also ...", which you presumably intended to be a new point.
When your sentences are unintelligible or incomplete, don't blame me.
> I have answered your question in two ways:
> first, that repossessed properties are frequently where people wish to
> live, eg, city centres - many flat purchasers have lost their flats
> since the crash and the holiday lets are wanted by the locals. It is
> simply price which prevents people living where they want to live. RH
But if an empty property is in a place where people want to live,
then there is an obvious solution. Of course, if you've bought a flat
for, say, #250K, then you may not want to sell it for #70K or rent it
out for #70pw -- but when it's repossessed, the bank will take what it
can get and the buyer will rent it out for what he can get.
[holiday lets wanted by locals:]
>> Then if such a property does come up for auction as a result
>> of an incomer being turfed out, there is a chance for the locals to
>> buy it up cheaply.
> Pure fantasy. Prices are so high in comparison with wages that even
> reductions of 50% don't bring them within the reach of locals. RH
Then either another incomer will buy it or else the price will
reduce still further. If you've repossessed a property, you don't
hang around. It goes to auction, and sells, whether for peanuts or
for megabucks. What it cost three years ago is irrelevant.
[...]
>>> Very few people will the cash to buy a property outright unless they
>>> are selling one in which case one sale cancels the other.
>> Pay attention. The dropping of interest rates virtually to
>> zero has caused huge amounts of money to flow out of banks and building
>> societies. Where do you suppose that money is flowing *into*?
> It hasn't. The banks and building societies have been using the money
> to re-build their balance sheets, Mortgage applications are running at a
> fraction of what they were in 2007.
Pay attention again. Building societies can't use the money
that has been withdrawn. Nothing to do with mortgage applications,
which are not coming from those with large funds [eg pension pots].
>> But we aren't talking about first-time buyers, but about
>> developers, BTLers, deep pockets looking for somewhere to invest
>> pension pots and similar.
> Your economic illiteracy nakedly removed. The housing market can only
> function efficiently if first time buyers are thick on the ground. They
> aren't.
You're again talking about the normal willing buyers and sellers,
not the repossessions, nor the investors. Meanwhile, prospective FTBs
are renting instead -- they still need somewhere to live.
[...]
>>> I suggest you look at the current dismal sales figures for houses. RH
>> In normal times, there are around 1.5M house sales per year;
>> repossessions rose to about 3% of that, and were falling at the last
>> count. You're confusing two quite different markets, normal buying
>> and selling, and repossessions.
> The present repossession count is grossly misleading because of the
> steps the government has taken to bully mortgage providers into delaying
> re-possession and the penally low Bank Rate. That can't last for ever.
Possibly. But there are still two quite different markets, and
you can't apply the arguments that apply to ordinary buying and selling
of residential property to investment in BTLs.
> In addition, hordes of owners are leaving their cut-rate come on first
> two years of their mortgage and not being able to re-mortgage at
> reasonable interest rates. More repossessions in the pipeline. Finally,
> Bank Rate will have to rise substantially in the next year because of
> inflation. The mortgage providers will use the rise to yank up their
> rates which will affect all mortgage holders, many of them severely. . RH
Very possibly, but irrelevant. Repossessions coming on to the
market will do so not at what buyers thought they were worth a few
years ago but at a price at which they will sell or rent economically.
--
Andy Walker
Nottingham
Robert Henderson
<ne...@cuboid.co.uk> writes
>Robert Henderson wrote:
>>>> I refer to your first post., RH
>>> Which didn't mention either directly or implicitly
>> Oh yes you did. You made it clear that you thought houses
>>repossessed would be occupied rapidly by equivalent numbers of the
>>same sort of people. RH
>
> No, I merely pointed out that you were complaining about
>hundreds of thousands of people needing rented accommodation at
>the same time as you were pointing out that hundreds of thousands
>of houses were becoming empty. Problem mitigated, if not solved.
>No "zero-sum game" involved, just plain common sense.
Whoooo..here comes the toddler-level bounded mind denial. Try this:
In message <FX9on.5740$1w4....@newsfe29.ams2>, Andy Walker
<ne...@cuboid.co.uk> writes
Robert Henderson wrote:
> [...] If only a fifth of those struggling to pay their mortgages lose
their >homes that will be hundreds of thousands of people in need of
rented >accommodation on top of the hundreds of thousands who are
already >on council and Housing Association waiting lists.
True. But on the bright side, there will be hundreds of
thousands of empty houses being snapped up by "the prudent" [who
are otherwise not being well catered for these days] as BTLs and
made available to people who need rented accommodation.
Hundreds of thousands of the prudent (note "the prudent" not business
investors). RH
>
>>> zero-sum
>>> games -- nor, indeed, games of any sort. Do you even understand
>>> what a zero-sum game is? No, of course you don't, ...
>> Translation: I understand very well. It is a simple concept: in a given
>>situation there is only a certain quantity of X - which cannot be
>>increased - and consequently all that can happen is that the
>>distribution of X may change. RH
>
> So what does your answer have to do with "game" or "zero-sum"
It is a general description of a zero-sum game. RH
>and what is "X"?
Dear oh dear. It is whatever the distributed thing is. Talk about
bounded minds! RH
> And the consequence of "cannot be increased" is not
>that only the "distribution of X may change". 3/10, at best. I'll
>raise it to a pass mark if you can explain why "zero-sum" is not an
>interesting concept for games with more than two players,
Tell that to economic historians ... RH
> and what
>the significance of "two" is in your explanation.
What "two"? The word does not appear in my definition of a zero-sum
situation. RH
>
>[...]
>>>> At the moment many properties aren't selling at any price. RH
>>> Very few, if any, repo properties, can't be sold.
>> You are not asking the right question, namely, to whom are they sold?
>> Many are sold not to people who wish to occupy them or rent them out
>>but to sell on for a quick profit. That is not easy in present
>>circumstances. RH
>
> Your claim was that they aren't selling, not that they are
>selling to the wrong people.
NO, my argument is that people who want to live in them cannot in most
instances afford to buy. RH
> But you're wrong anyway. In times of
>boom, it may possibly pay people to keep property empty in the hope
>that the value-added of vacant possession exceeds the loss of rent
>and other expenses; but that's far from the present situation. So
>the house will be occupied as soon as it can be let. If houses are
>not letting in areas where people are looking for rented places, it
>can only be because the rents are too high -- but that will reflect
>into the price at auction. If the "going" rent for some house would
>be, say, #90pw, then that house is worth approx #90K, and *will*
>sell for that [less costs], within a small margin, at auction.
>
>[...]
>> I meant what I said, viz:
>> "> Right, but these are not *normally* either the sorts of
>> >property that families are turfed out of or located in the places
>> >where such families want/need to live.
>> The unoccupied, un-saleable ones are. It would also be a mistake to
>>imagine that many of the holiday lets weren't wanted by the locals as
>>family homes or were previously occupied by locals. RH"
>> You have a very bad habit of editing my answers to either make them
>>unintelligible or incomplete.
>
> I do, and did, no such thing.
More toddler-level denial.... RH
> I snip [without editing, even
>of layout], as required by netiquette, and always indicate where I have
>removed material from the middle of something by using an ellipsis, so
>that anyone interested knows to refer to the original if necessary. I
>*never* do so with the intention of distorting in any way the article
>to which I am responding. In the present case, I made whatever sense
>I could of your first sentence, and dealt separately with the sentence
>"It would also ...", which you presumably intended to be a new point.
>When your sentences are unintelligible or incomplete, don't blame me.
No one could have discerned what I was saying from your edited version.
RH
>
>> I have answered your question in two
>>ways: first, that repossessed properties are frequently where people
>>wish to live, eg, city centres - many flat purchasers have lost their flats
>>since the crash and the holiday lets are wanted by the locals. It is
>>simply price which prevents people living where they want to live. RH
>
> But if an empty property is in a place where people want to live,
>then there is an obvious solution. Of course, if you've bought a flat
>for, say, #250K, then you may not want to sell it for #70K or rent it
>out for #70pw -- but when it's repossessed, the bank will take what it
>can get and the buyer will rent it out for what he can get.
Untrue. The mortgage holder won't sell readily below the value of the
outstanding mortgage plus associated selling costs. RH
>
>[holiday lets wanted by locals:]
>>> Then if such a property does come up for auction as a result
>>> of an incomer being turfed out, there is a chance for the locals to
>>> buy it up cheaply.
>> Pure fantasy. Prices are so high in comparison with wages that even
>>reductions of 50% don't bring them within the reach of locals. RH
>
> Then either another incomer will buy it or else the price will
>reduce still further.
How little you understand of the real world. People will hold property
rather than sell it for a song. Of course, simplistic market theory
will be meat and drink to you because you are naturally drawn to
mechanical certainty. RH
> If you've repossessed a property, you don't
>hang around. It goes to auction, and sells, whether for peanuts or
>for megabucks. What it cost three years ago is irrelevant.
Untrue. The holder can always rent in out or leave it empty until prices
recover. RH
>
>[...]
>>>> Very few people will the cash to buy a property outright unless they
>>>>are selling one in which case one sale cancels the other.
>>> Pay attention. The dropping of interest rates virtually to
>>> zero has caused huge amounts of money to flow out of banks and building
>>> societies. Where do you suppose that money is flowing *into*?
>> It hasn't. The banks and building societies have been using the
>>money to re-build their balance sheets, Mortgage applications are
>>running at a fraction of what they were in 2007.
>
> Pay attention again. Building societies can't use the money
>that has been withdrawn. Nothing to do with mortgage applications,
>which are not coming from those with large funds [eg pension pots].
Your economic illiteracy is showing nakedly again. The banks and other
financial institutions have been unloading their toxic and other assets
onto the taxpayer for which they have received QE money. RH
>
>>> But we aren't talking about first-time buyers, but about
>>> developers, BTLers, deep pockets looking for somewhere to invest
>>> pension pots and similar.
>> Your economic illiteracy nakedly removed. The housing market can
>>only function efficiently if first time buyers are thick on the ground.
>>They aren't.
>
> You're again talking about the normal willing buyers and sellers,
>not the repossessions, nor the investors. Meanwhile, prospective FTBs
>are renting instead -- they still need somewhere to live.
Often living in B and Bs or with relatives. RH
>
>[...]
>>>> I suggest you look at the current dismal sales figures for houses. RH
>>> In normal times, there are around 1.5M house sales per year;
>>> repossessions rose to about 3% of that, and were falling at the last
>>> count. You're confusing two quite different markets, normal buying
>>> and selling, and repossessions.
>> The present repossession count is grossly misleading because of the
>>steps the government has taken to bully mortgage providers into
>>delaying re-possession and the penally low Bank Rate. That can't last
>>for ever.
>
> Possibly.
Possibly? You think this wholly artificial market situation can last? RH
> But there are still two quite different markets, and
>you can't apply the arguments that apply to ordinary buying and selling
>of residential property to investment in BTLs.
>
>> In addition, hordes of owners are leaving their cut-rate come on first
>>two years of their mortgage and not being able to re-mortgage at
>>reasonable interest rates. More repossessions in the pipeline. Finally,
>>Bank Rate will have to rise substantially in the next year because of
>>inflation. The mortgage providers will use the rise to yank up their
>>rates which will affect all mortgage holders, many of them severely. .
>>RH
>
> Very possibly, but irrelevant. Repossessions coming on to the
>market will do so not at what buyers thought they were worth a few
>years ago but at a price at which they will sell or rent economically.
>
Sigh. If massive numbers of properties come onto the market in a rush
the money will not be there to buy them. I suggest you stick to sums and
don't venture into unbounded areas such as economics. RH
Andy Walker
>> No "zero-sum game" involved, just plain common sense.
> Whoooo..here comes the toddler-level bounded mind denial. Try this:
" True. But on the bright side, there will be hundreds of
" thousands of empty houses being snapped up by "the prudent" [who
" are otherwise not being well catered for these days] as BTLs and
" made available to people who need rented accommodation. "
> Hundreds of thousands of the prudent (note "the prudent" not business
> investors). RH
Yes, "the prudent" -- those who have not maxed out their credit
cards, who did not take out mortgages they were unlikely to be able to
afford, who made provision for their old age, who live sober responsible
lives. Those who saw their pension pots raided by Mr Brown, diminished
by the fall in share prices, and caught in a double whammy by reduced
annuity rates and the fall in interest rates. Those who invested large
sums in ISAs, TESSAs, building societies and assorted bonds and other
relatively safe but now unproductive places. Those who will, if they
are not careful be caught out again in the near future by rises in
inflation caused by "quantitative easing" without corresponding rises
in interest rates. Those who now find themselves assailed by the
"imprudent" as fat cats from whom new taxation must be raised in order
to pay for the continuing economic woes created by this wretched govt
and its disastrous "clunking fist".
Well, there is one crumb of comfort. About 100K of us are
retiring each year with a pension pot or equivalent which includes a
lump sum sufficient to buy property. Not perhaps, in most cases, a
London mansion or even a nice leafy suburban villa. But enough to buy
a repossessed house suitable for a student let or a residential BTL.
Also, you can't directly buy residential property with a SIPP, but you
can buy commercial property. It's all going relatively cheaply. It's
not for everyone, but it seems to be v common among my own friends and
neighbours and relatives. We're not "business investors" -- we just
want somewhere to put our money to good use.
What else would you propose? If you had say #200K going spare,
what would you do with it?
>>>> [...] Do you even understand
>>>> what a zero-sum game is? No, of course you don't, ...
>>> Translation: I understand very well. It is a simple concept: in a given
>>> situation there is only a certain quantity of X - which cannot be
>>> increased - and consequently all that can happen is that the
>>> distribution of X may change. RH
>> So what does your answer have to do with "game" or "zero-sum"
> It is a general description of a zero-sum game. RH
Not one that a game-theorist would recognise. What is the game,
what are the "moves", who are the "players" and what is "zero" in your
description?
>> and what is "X"?
> Dear oh dear. It is whatever the distributed thing is. Talk about
> bounded minds! RH
What, *any* distributed thing that cannot be increased? You're
supposed to define things in relation to known concepts, not by adding
new concepts part-way through.
>> And the consequence of "cannot be increased" is not
>> that only the "distribution of X may change". 3/10, at best. I'll
>> raise it to a pass mark if you can explain why "zero-sum" is not an
>> interesting concept for games with more than two players,
> Tell that to economic historians ... RH
I would expect [competent] economic historians to know already.
You could just admit you don't know.
>> and what
>> the significance of "two" is in your explanation.
> What "two"? The word does not appear in my definition of a zero-sum
> situation. RH
No, but it should appear in your explanation of why "zero-sum"
is not an interesting concept for games with many players. It may help
you to think of important differences between "two" and "many", such
as "two's company, three's a crowd".
>>>>> At the moment many properties aren't selling at any price. RH
>>>> Very few, if any, repo properties, can't be sold.
>>> You are not asking the right question, namely, to whom are they sold?
[...]
>> Your claim was that they aren't selling, not that they are
>> selling to the wrong people.
> NO, my argument is that people who want to live in them cannot in most
> instances afford to buy. RH
True, tho' not what your claim, still visible above, was. That's
why many/most of those will want/need to rent, and so why those who buy
will mostly do so not to live there themselves but to let out.
[...]
>> But if an empty property is in a place where people want to live,
>> then there is an obvious solution. Of course, if you've bought a flat
>> for, say, #250K, then you may not want to sell it for #70K or rent it
>> out for #70pw -- but when it's repossessed, the bank will take what it
>> can get and the buyer will rent it out for what he can get.
> Untrue. The mortgage holder won't sell readily below the value of the
> outstanding mortgage plus associated selling costs. RH
Then the bank [eg] shouldn't have repossessed it [or perhaps have
mortgaged it in the first place]. The house *is* worth what it will sell
for, no more, no less. If that's insufficient security for the loan,
then it's too late for the bank to do anything about that when the loan
is in default. Tough, but that's the real world. There's no point in
the bank holding on to an empty house -- not, at least, until there is
again a boom in the market.
>> [holiday lets wanted by locals:]
>>>> Then if such a property does come up for auction as a result
>>>> of an incomer being turfed out, there is a chance for the locals to
>>>> buy it up cheaply.
>>> Pure fantasy. Prices are so high in comparison with wages that even
>>> reductions of 50% don't bring them within the reach of locals. RH
>> Then either another incomer will buy it or else the price will
>> reduce still further.
> How little you understand of the real world. People will hold property
> rather than sell it for a song.
Who is the person holding it? I can understand a resident owner
having a sentimental attachment to a place, and not wanting to sell, but
the proposed scenario was a repossession coming up for auction. Banks are
not sentimental in the same way.
>> If you've repossessed a property, you don't
>> hang around. It goes to auction, and sells, whether for peanuts or
>> for megabucks. What it cost three years ago is irrelevant.
> Untrue. The holder can always rent in out or leave it empty until prices
> recover. RH
Banks are not in the habit of running holiday lets and even less
of keeping holiday homes empty. They simply want to make the best of the
bad job that a defaulting loan has left them with. Even if the bank did
have a holiday letting agency, the property is still only worth what it
can be sold for -- there are plenty of other letting companies, private
individuals and developers in the market to ensure a fair price.
[...]
>> Pay attention again. Building societies can't use the money
>> that has been withdrawn. Nothing to do with mortgage applications,
>> which are not coming from those with large funds [eg pension pots].
> Your economic illiteracy is showing nakedly again. The banks and other
> financial institutions have been unloading their toxic and other assets
> onto the taxpayer for which they have received QE money. RH
No doubt. But it isn't the banks that have taken their pension pots
out of banks and building societies and are now looking for alternative homes
for their money.
[...]
>>> The mortgage providers will use the rise to yank up their
>>> rates which will affect all mortgage holders, many of them severely. .
>>> RH
>> Very possibly, but irrelevant. Repossessions coming on to the
>> market will do so not at what buyers thought they were worth a few
>> years ago but at a price at which they will sell or rent economically.
> Sigh. If massive numbers of properties come onto the market in a rush
> the money will not be there to buy them.
You still seem confused. The money *is* there, and if there is a
glut of properties coming up for auction the price will fall until the money
is not only there but is also willing to take the punt. See above.
--
Andy Walker
Nottingham
Robert Henderson
<ne...@cuboid.co.uk> writes
>Robert Henderson wrote:
>>> No "zero-sum game" involved, just plain common sense.
>> Whoooo..here comes the toddler-level bounded mind denial. Try this:
>[...]
>" True. But on the bright side, there will be hundreds of
>" thousands of empty houses being snapped up by "the prudent" [who
>" are otherwise not being well catered for these days] as BTLs and
>" made available to people who need rented accommodation. "
They won't be taken generally by those who need them because those who
need them cannot afford them. SIGH. RH
>> Hundreds of thousands of the prudent (note "the prudent" not business
>> investors). RH
>
> Yes, "the prudent" -- those who have not maxed out their credit
>cards, who did not take out mortgages they were unlikely to be able to
>afford, who made provision for their old age, who live sober responsible
>lives. Those who saw their pension pots raided by Mr Brown, diminished
>by the fall in share prices, and caught in a double whammy by reduced
>annuity rates and the fall in interest rates. Those who invested large
>sums in ISAs, TESSAs, building societies and assorted bonds and other
>relatively safe but now unproductive places. Those who will, if they
>are not careful be caught out again in the near future by rises in
>inflation caused by "quantitative easing" without corresponding rises
>in interest rates. Those who now find themselves assailed by the
>"imprudent" as fat cats from whom new taxation must be raised in order
>to pay for the continuing economic woes created by this wretched govt
>and its disastrous "clunking fist".
No, the prudent include those on low incomes who have never had the
wherewithal to raise the money for a property and those who did so but
lost their property when they lost their jobs in the recession. RH
>
> Well, there is one crumb of comfort. About 100K of us are
>retiring each year with a pension pot or equivalent which includes a
>lump sum sufficient to buy property.
That leaves the large majority without the means. Moreover, most with
such gratuities will already own houses. RH
> Not perhaps, in most cases, a
>London mansion or even a nice leafy suburban villa. But enough to buy
>a repossessed house suitable for a student let or a residential BTL.
>Also, you can't directly buy residential property with a SIPP, but you
>can buy commercial property. It's all going relatively cheaply. It's
>not for everyone, but it seems to be v common among my own friends and
>neighbours and relatives. We're not "business investors" -- we just
>want somewhere to put our money to good use.
>
> What else would you propose? If you had say #200K going spare,
>what would you do with it?
>
It is an absurd question because it depends on circumstances. A person
with a decent house owned outright would probably not want to put it
into property because they would neither want to move nor have the
responsbility of owning a property put out to rent. RH
>>>>> [...] Do you even understand
>>>>> what a zero-sum game is? No, of course you don't, ...
>>>> Translation: I understand very well. It is a simple concept: in a given
>>>> situation there is only a certain quantity of X - which cannot be
>>>> increased - and consequently all that can happen is that the
>>>> distribution of X may change. RH
>>> So what does your answer have to do with "game" or "zero-sum"
>> It is a general description of a zero-sum game. RH
>
> Not one that a game-theorist would recognise. What is the game,
>what are the "moves", who are the "players" and what is "zero" in your
>description?
The players are everyone in the situation, the game is the situation. RH
>
>>> and what is "X"?
>> Dear oh dear. It is whatever the distributed thing is. Talk about
>> bounded minds! RH
>
> What, *any* distributed thing that cannot be increased?
No, only the thing which in a zero-sum situation cannot be increased. Ye
Gods! RH
> You're
>supposed to define things in relation to known concepts, not by adding
>new concepts part-way through.
I didn't but expanding a concept is perfectly legitimate provided it is
acknowledged. RH
>
>>> And the consequence of "cannot be increased" is not
>>> that only the "distribution of X may change". 3/10, at best. I'll
>>> raise it to a pass mark if you can explain why "zero-sum" is not an
>>> interesting concept for games with more than two players,
>> Tell that to economic historians ... RH
>
> I would expect [competent] economic historians to know already.
>You could just admit you don't know.
I suggest you read some economic history dealing with the so-called
mercantilists.... Keyenes has a good chapter or appendix (can't remember
which) on the subject in his General Theory. RH
>
>>> and what
>>> the significance of "two" is in your explanation.
>> What "two"? The word does not appear in my definition of a zero-sum
>> situation. RH
>
> No, but it should appear in your explanation of why "zero-sum"
>is not an interesting concept for games with many players.
On the contrary it can accommodate any finite number of players. All
that is involved is the distribution of X. RH
> It may help
>you to think of important differences between "two" and "many", such
>as "two's company, three's a crowd".
>
See above. RH
>>>>>> At the moment many properties aren't selling at any price. RH
>>>>> Very few, if any, repo properties, can't be sold.
>>>> You are not asking the right question, namely, to whom are they sold?
>[...]
>>> Your claim was that they aren't selling, not that they are
>>> selling to the wrong people.
>> NO, my argument is that people who want to live in them cannot in most
>> instances afford to buy. RH
>
> True, tho' not what your claim, still visible above, was. That's
>why many/most of those will want/need to rent, and so why those who buy
>will mostly do so not to live there themselves but to let out.
That is all part of people who need housing not being able to afford
it.... SIGH..... RH
>
>[...]
>>> But if an empty property is in a place where people want to live,
>>> then there is an obvious solution. Of course, if you've bought a flat
>>> for, say, #250K, then you may not want to sell it for #70K or rent it
>>> out for #70pw -- but when it's repossessed, the bank will take what it
>>> can get and the buyer will rent it out for what he can get.
>> Untrue. The mortgage holder won't sell readily below the value of the
>> outstanding mortgage plus associated selling costs. RH
>
> Then the bank [eg] shouldn't have repossessed it [or perhaps have
>mortgaged it in the first place].
It doesn't work like that. A bank may have to repossess for legal
reasons, eg, a court would not look kindly on a bank which allowed a
mortgagee to run for years without paying, or the mortgage they hold may
not be a mortgage they have issued but one they have bought. Another
thing could be the state of repair. It may not be possible to sell
simply because the property has been allowed to go to rack and ruin.
Alternatively, they may simply get caught with a sudden collapse of the
market. Then they may not be able to sell at any price. RH
> The house *is* worth what it will sell
>for, no more, no less. If that's insufficient security for the loan,
>then it's too late for the bank to do anything about that when the loan
>is in default. Tough, but that's the real world. There's no point in
>the bank holding on to an empty house -- not, at least, until there is
>again a boom in the market.
Banks are like individuals, they are reluctant to sell at a loss. RH
>
>>> [holiday lets wanted by locals:]
>>>>> Then if such a property does come up for auction as a result
>>>>> of an incomer being turfed out, there is a chance for the locals to
>>>>> buy it up cheaply.
>>>> Pure fantasy. Prices are so high in comparison with wages that even
>>>> reductions of 50% don't bring them within the reach of locals. RH
>>> Then either another incomer will buy it or else the price will
>>> reduce still further.
>> How little you understand of the real world. People will hold property
>> rather than sell it for a song.
>
> Who is the person holding it? I can understand a resident owner
>having a sentimental attachment to a place, and not wanting to sell, but
>the proposed scenario was a repossession coming up for auction. Banks are
>not sentimental in the same way.
They are about losses. RH
>
>>> If you've repossessed a property, you don't
>>> hang around. It goes to auction, and sells, whether for peanuts or
>>> for megabucks. What it cost three years ago is irrelevant.
>> Untrue. The holder can always rent in out or leave it empty until prices
>> recover. RH
>
> Banks are not in the habit of running holiday lets and even less
>of keeping holiday homes empty.
But it is not just the banks we are talking about. Other commercial
investors who buy properties at auction will do these things. RH
>They simply want to make the best of the
>bad job that a defaulting loan has left them with. Even if the bank did
>have a holiday letting agency, the property is still only worth what it
>can be sold for -- there are plenty of other letting companies, private
>individuals and developers in the market to ensure a fair price.
>
>[...]
>>> Pay attention again. Building societies can't use the money
>>> that has been withdrawn. Nothing to do with mortgage applications,
>>> which are not coming from those with large funds [eg pension pots].
>> Your economic illiteracy is showing nakedly again. The banks and other
>> financial institutions have been unloading their toxic and other assets
>> onto the taxpayer for which they have received QE money. RH
>
> No doubt. But it isn't the banks that have taken their pension pots
>out of banks and building societies and are now looking for alternative homes
>for their money.
>
The banks are using their QE money to cover their bad debts: the rest of
the population, commercial or otherwise, is generally investing in
anything but property. That is why house prices are stagnating,
mortgage approvals half what they were two years ago and commercial
property heading down the pan very rapidly. RH
>[...]
>>>> The mortgage providers will use the rise to yank up their
>>>> rates which will affect all mortgage holders, many of them severely. .
>>>> RH
>>> Very possibly, but irrelevant. Repossessions coming on to the
>>> market will do so not at what buyers thought they were worth a few
>>> years ago but at a price at which they will sell or rent economically.
>> Sigh. If massive numbers of properties come onto the market in a rush
>> the money will not be there to buy them.
>
> You still seem confused. The money *is* there,
Which money is this exactly? People generally cannot afford the high
deposits now being requested. Dear oh dear. RH
>and if there is a
>glut of properties coming up for auction the price will fall until the money
>is not only there but is also willing to take the punt. See above.
>
--
Andy Walker
>> " True. But on the bright side, there will be hundreds of
>> " thousands of empty houses being snapped up by "the prudent" [who
>> " are otherwise not being well catered for these days] as BTLs and
>> " made available to people who need rented accommodation. "
> They won't be taken generally by those who need them because those who
> need them cannot afford them. SIGH. RH
So your proposition is that there are hundreds of thousands
of families with no roof over their heads, and at the same time
hundreds of thousands of empty houses available to rent but at too
high a price? OK, but the fact is that an empty BTL is bringing
in no income at all; and BTL owners are in it for the income. You
may be able to work out what the next stage is.
>>> Hundreds of thousands of the prudent (note "the prudent" not business
>>> investors). RH
>> Yes, "the prudent" -- those who have not maxed out their credit
>> cards, who did not take out mortgages they were unlikely to be able to
>> afford, who made provision for their old age, who live sober responsible
>> lives. Those who saw their pension pots raided by Mr Brown, diminished
>> by the fall in share prices, and caught in a double whammy by reduced
>> annuity rates and the fall in interest rates. Those who invested large
>> sums in ISAs, TESSAs, building societies and assorted bonds and other
>> relatively safe but now unproductive places. Those who will, if they
>> are not careful be caught out again in the near future by rises in
>> inflation caused by "quantitative easing" without corresponding rises
>> in interest rates. Those who now find themselves assailed by the
>> "imprudent" as fat cats from whom new taxation must be raised in order
>> to pay for the continuing economic woes created by this wretched govt
>> and its disastrous "clunking fist".
> No, the prudent include those on low incomes who have never had the
> wherewithal to raise the money for a property and those who did so but
> lost their property when they lost their jobs in the recession. RH
Those who despite their prudence have no assets are scarcely
in a position either to have been assailed on all sides by a govt
which regards them as fat cats [and for that matter by Dr Cable
describing them as pigs] or to invest those assets in such a way as
to maximise their income. Tough.
>> Well, there is one crumb of comfort. About 100K of us are
>> retiring each year with a pension pot or equivalent which includes a
>> lump sum sufficient to buy property.
> That leaves the large majority without the means.
But with easily enough to buy up [if they so desire] all
the repossessed property which comes onto the market.
> Moreover, most with
> such gratuities will already own houses. RH
"Gratuities"? But yes, in most cases we already own houses;
and in many cases we may be downsizing to provide a significant part
of our pension pots. The question for us, and the one you seem unable
to contemplate even as an abstraction, is what to do with our money.
It has to last us and provide us with an income for the rest of our
lives. So it's not for wild speculation, it's not for squandering,
it's not to be kept under the mattress. Buying property is one --
but only one -- of the options.
[...]
>> What else would you propose? If you had say #200K going spare,
>> what would you do with it?
> It is an absurd question because it depends on circumstances. A person
> with a decent house owned outright would probably not want to put it
> into property because they would neither want to move nor have the
> responsbility of owning a property put out to rent. RH
OK, I have a decent house which I own outright and from which
I don't want to move. Not, what do you propose that I should be doing
with my pension pot? Keep it under the mattress? Speculate on the
stock market? Banks and building societies at 0.1% interest? What?
What would *you* do with [say] #200K? Whether the question is absurd
or not, it's a very real question for many pensioners, and one which
*has* to be answered.
[RH's mangled definition of zero-sum games:]
>>>> [...] 3/10, at best. I'll
>>>> raise it to a pass mark if you can explain why "zero-sum" is not an
>>>> interesting concept for games with more than two players,
>>> Tell that to economic historians ... RH
>> I would expect [competent] economic historians to know already.
>> You could just admit you don't know.
> I suggest you read some economic history dealing with the so-called
> mercantilists.... Keyenes has a good chapter or appendix (can't remember
> which) on the subject in his General Theory. RH
Keynes wrote "General Theory" eight years before von Neumann and
Morgenstern wrote what is generally regarded as the first book on Game
Theory. So it seems unlikely that he should be a reliable source on that
theory. But of course a fair number of related results were floating
around at that time; eg Keynes surely knew Grundy, the co-discoverer of
Grundy numbers [1939], though that part of game theory has very little
connexion with economics. But that is all irrelevant to the question of
the importance or otherwise of "zero sum".
>>>> and what
>>>> the significance of "two" is in your explanation.
>>> What "two"? The word does not appear in my definition of a zero-sum
>>> situation. RH
>> No, but it should appear in your explanation of why "zero-sum"
>> is not an interesting concept for games with many players.
> On the contrary it can accommodate any finite number of players. All
> that is involved is the distribution of X. RH
No-one said that there were no many-player zero-sum games, merely
that once there are more than two players, the concept is not interesting.
It's all in "Theory of Games and Economic Behavior" [1944, so not exactly
new, and certainly not my invention].
[...]
>>>> But if an empty property is in a place where people want to live,
>>>> then there is an obvious solution. Of course, if you've bought a flat
>>>> for, say, #250K, then you may not want to sell it for #70K or rent it
>>>> out for #70pw -- but when it's repossessed, the bank will take what it
>>>> can get and the buyer will rent it out for what he can get.
>>> Untrue. The mortgage holder won't sell readily below the value of the
>>> outstanding mortgage plus associated selling costs. RH
>> Then the bank [eg] shouldn't have repossessed it [or perhaps have
>> mortgaged it in the first place].
> It doesn't work like that. A bank may have to repossess for legal
> reasons, eg, a court would not look kindly on a bank which allowed a
> mortgagee to run for years without paying, or the mortgage they hold may
> not be a mortgage they have issued but one they have bought.
Then the bank effectively incurred the loss when they bought up
dodgy mortgages and/or failed to ensure that the house was still worth
enough to be security for the loan. Doesn't affect the fact that the
house is worth whatever it will sell for, not what the bank would like
it to be worth. If the bank is owed #250K on a property that is today
worth only #70K, that's tough, but it still doesn't mean that the bank
should keep the place empty until it falls down.
> Another
> thing could be the state of repair. It may not be possible to sell
> simply because the property has been allowed to go to rack and ruin.
> Alternatively, they may simply get caught with a sudden collapse of the
> market. Then they may not be able to sell at any price. RH
You don't watch "Homes Under The Hammer"! There you will see
burnt-out properties, properties with dry rot, properties with 2ft of
subsidence, public conveniences, churches, overgrown wasteland, ...,
all manner of things being sold. It's a very rare lot that is worth
absolutely nothing --and that certainly wouldn't apply to any normal
repossession, even in very poor condition.
[...]
>>>> If you've repossessed a property, you don't
>>>> hang around. It goes to auction, and sells, whether for peanuts or
>>>> for megabucks. What it cost three years ago is irrelevant.
>>> Untrue. The holder can always rent in out or leave it empty until prices
>>> recover. RH
>> Banks are not in the habit of running holiday lets and even less
>> of keeping holiday homes empty.
> But it is not just the banks we are talking about. Other commercial
> investors who buy properties at auction will do these things. RH
Commercial investors are in it for the money. An empty holiday
let is not bringing in any money. A repossessed holiday home *will* be
sold ASAP and *will* be either let out or sold on [and then occupied]
ASAP thereafter. Every day it stands empty, it is costing money.
[...]
>>> Your economic illiteracy is showing nakedly again. The banks and other
>>> financial institutions have been unloading their toxic and other assets
>>> onto the taxpayer for which they have received QE money. RH
>> No doubt. But it isn't the banks that have taken their pension pots
>> out of banks and building societies and are now looking for alternative homes
>> for their money.
> The banks are using their QE money to cover their bad debts: the rest of
> the population, commercial or otherwise, is generally investing in
> anything but property. That is why house prices are stagnating,
> mortgage approvals half what they were two years ago and commercial
> property heading down the pan very rapidly. RH
Actually, house prices seem to be rising quite rapidly ATM. The
last figure I saw [two or three days ago] was an 8% rise last year. You
are still fixated on mortgages -- people with pension pots and similar to
invest do not need, and indeed do not want, mortgages. You're confusing
the normal housing market -- people who want to move or to get onto the
housing ladder -- with the developer/investor market. As for commercial
property, well, it's a very mixed picture. Certainly some places seem
to be very poor prospects; but I can take you to towns around here that,
for no apparent reason that sets them apart from their neighbours, seem
to be still lively and bustling. Shops, pubs and eateries that are FTB
every day cheek by jowl with apparently similar places that are clearly
struggling, if not already closed. But again, whether a shop will let
is different from whether the property containing it will sell, esp for
potential buyers with money and patience.
>> You still seem confused. The money *is* there,
> Which money is this exactly? People generally cannot afford the high
> deposits now being requested. Dear oh dear. RH
People "generally" are not the 100K or so people retiring each
year with pension pots of considerable size that need to be invested.
Nothing to do with deposits. I refer you back to the question you
refused to answer above -- what should people do with cash assets of
[eg] #200K, in your opinion?
--
Andy Walker
Nottingham
Robert Henderson
<ne...@cuboid.co.uk> writes
>Robert Henderson wrote:
>>> " True. But on the bright side, there will be hundreds of
>>> " thousands of empty houses being snapped up by "the prudent" [who
>>> " are otherwise not being well catered for these days] as BTLs and
>>> " made available to people who need rented accommodation. "
>> They won't be taken generally by those who need them because those
>>who need them cannot afford them. SIGH. RH
>
> So your proposition is that there are hundreds of thousands
>of families with no roof over their heads, and at the same time
>hundreds of thousands of empty houses available to rent but at too
>high a price? OK, but the fact is that an empty BTL is bringing
>in no income at all; and BTL owners are in it for the income. You
>may be able to work out what the next stage is.
Yes, the commercial either leaves the property empty or rents it out on
a short-term lease - which is no good to man nor beast if they have a
family - until prices rise. RH
ROTFL! Your evidence for this fantastic belief is.... RH
>
>> Moreover, most with
>>such gratuities will already own houses. RH
>
> "Gratuities"?
Tax free payments at retirement, a common provision for those with
private and work-related pensions. Talk about bounded minds in ivory
towers... RH
> But yes, in most cases we already own houses;
>and in many cases we may be downsizing to provide a significant part
>of our pension pots. The question for us, and the one you seem unable
>to contemplate even as an abstraction, is what to do with our money.
>It has to last us and provide us with an income for the rest of our
>lives. So it's not for wild speculation, it's not for squandering,
>it's not to be kept under the mattress. Buying property is one --
>but only one -- of the options.
But why would you invest in property to provide a pension in the present
circumstances? You would have the cost of buying and renovating, plus
the trouble and cost of managing it or the much greater cost of paying
an agent to do it for you. RH
>
>[...]
>>> What else would you propose? If you had say #200K going spare,
>>> what would you do with it?
>> It is an absurd question because it depends on circumstances. A
>>person with a decent house owned outright would probably not want to
>>put it into property because they would neither want to move nor have
>>the responsbility of owning a property put out to rent. RH
>
> OK, I have a decent house which I own outright and from which
>I don't want to move. Not, what do you propose that I should be doing
>with my pension pot? Keep it under the mattress? Speculate on the
>stock market? Banks and building societies at 0.1% interest? What?
>What would *you* do with [say] #200K? Whether the question is absurd
>or not, it's a very real question for many pensioners, and one which
>*has* to be answered.
With 200K you could still get a return of 5% on your money. The idea
that you would do better investing in the housing market at present is
wild fantasy. RH
>
>[RH's mangled definition of zero-sum games:]
>>>>> [...] 3/10, at best. I'll
>>>>> raise it to a pass mark if you can explain why "zero-sum" is not an
>>>>> interesting concept for games with more than two players,
>>>> Tell that to economic historians ... RH
>>> I would expect [competent] economic historians to know already.
>>> You could just admit you don't know.
>> I suggest you read some economic history dealing with the so-called
>>mercantilists.... Keyenes has a good chapter or appendix (can't
>>remember which) on the subject in his General Theory. RH
>
> Keynes wrote "General Theory" eight years before von Neumann and
>Morgenstern wrote what is generally regarded as the first book on Game
>Theory.
Games theory does not = the concept of the zero-sum. RH
> So it seems unlikely that he should be a reliable source on that
>theory. But of course a fair number of related results were floating
>around at that time; eg Keynes surely knew Grundy, the co-discoverer of
>Grundy numbers [1939], though that part of game theory has very little
>connexion with economics. But that is all irrelevant to the question of
>the importance or otherwise of "zero sum".
>
>>>>> and what
>>>>> the significance of "two" is in your explanation.
>>>> What "two"? The word does not appear in my definition of a zero-sum
>>>> situation. RH
>>> No, but it should appear in your explanation of why "zero-sum"
>>> is not an interesting concept for games with many players.
>> On the contrary it can accommodate any finite number of players. All
>>that is involved is the distribution of X. RH
>
> No-one said that there were no many-player zero-sum games, merely
>that once there are more than two players, the concept is not interesting.
Not interesting to bounded minds which have no broader appreciation of
society. To normal people it is... RH
>It's all in "Theory of Games and Economic Behavior" [1944, so not exactly
>new, and certainly not my invention].
>
>[...]
>>>>> But if an empty property is in a place where people want to live,
>>>>> then there is an obvious solution. Of course, if you've bought a flat
>>>>> for, say, #250K, then you may not want to sell it for #70K or rent it
>>>>> out for #70pw -- but when it's repossessed, the bank will take what it
>>>>> can get and the buyer will rent it out for what he can get.
>>>> Untrue. The mortgage holder won't sell readily below the value of the
>>>> outstanding mortgage plus associated selling costs. RH
>>> Then the bank [eg] shouldn't have repossessed it [or perhaps have
>>> mortgaged it in the first place].
>> It doesn't work like that. A bank may have to repossess for legal
>>reasons, eg, a court would not look kindly on a bank which allowed a
>>mortgagee to run for years without paying, or the mortgage they hold
>>may not be a mortgage they have issued but one they have bought.
>
> Then the bank effectively incurred the loss when they bought up
>dodgy mortgages and/or failed to ensure that the house was still worth
>enough to be security for the loan. Doesn't affect the fact that the
>house is worth whatever it will sell for, not what the bank would like
>it to be worth. If the bank is owed #250K on a property that is today
>worth only #70K, that's tough, but it still doesn't mean that the bank
>should keep the place empty until it falls down.
The nbank has to make a judgement about how the housing market will
perform within the near future. If they believe it will rise within 2
years they may decide to hold o, perhaps recouping some money through a
short term rent. RH
>
>> Another
>>thing could be the state of repair. It may not be possible to sell
>>simply because the property has been allowed to go to rack and ruin.
>> Alternatively, they may simply get caught with a sudden collapse of
>>the market. Then they may not be able to sell at any price. RH
>
> You don't watch "Homes Under The Hammer"! There you will see
>burnt-out properties, properties with dry rot, properties with 2ft of
>subsidence, public conveniences, churches, overgrown wasteland, ...,
>all manner of things being sold. It's a very rare lot that is worth
>absolutely nothing --and that certainly wouldn't apply to any normal
>repossession, even in very poor condition.
Poor old bounded mind. Seeing a few properties sold on TV tells you
nothing about the market in general. RH
>
>[...]
>>>>> If you've repossessed a property, you don't
>>>>> hang around. It goes to auction, and sells, whether for peanuts or
>>>>> for megabucks. What it cost three years ago is irrelevant.
>>>> Untrue. The holder can always rent in out or leave it empty until prices
>>>> recover. RH
>>> Banks are not in the habit of running holiday lets and even less
>>> of keeping holiday homes empty.
>> But it is not just the banks we are talking about. Other commercial
>>investors who buy properties at auction will do these things. RH
>
> Commercial investors are in it for the money. An empty holiday
>let is not bringing in any money. A repossessed holiday home *will* be
>sold ASAP and *will* be either let out or sold on [and then occupied]
>ASAP thereafter. Every day it stands empty, it is costing money.
>
Commercial property companies commonly leave property empty. They often
do it with the intention of developing the site. RH
>[...]
>>>> Your economic illiteracy is showing nakedly again. The banks and other
>>>> financial institutions have been unloading their toxic and other assets
>>>> onto the taxpayer for which they have received QE money. RH
>>> No doubt. But it isn't the banks that have taken their pension pots
>>> out of banks and building societies and are now looking for
>>>alternative homes
>>> for their money.
>> The banks are using their QE money to cover their bad debts: the rest
>>of the population, commercial or otherwise, is generally investing in
>>anything but property. That is why house prices are stagnating,
>>mortgage approvals half what they were two years ago and commercial
>>property heading down the pan very rapidly. RH
>
> Actually, house prices seem to be rising quite rapidly ATM. The
>last figure I saw [two or three days ago] was an 8% rise last year.
The rise has stopped since the stamp duty holiday was removed. RH
> You
>are still fixated on mortgages -- people with pension pots and similar to
>invest do not need, and indeed do not want, mortgages.
They are a small minority of the population. You are in your
taxpayer-funded, middleclass ivory tower .... RH
> You're confusing
>the normal housing market -- people who want to move or to get onto the
>housing ladder -- with the developer/investor market. As for commercial
>property, well, it's a very mixed picture. Certainly some places seem
>to be very poor prospects; but I can take you to towns around here that,
>for no apparent reason that sets them apart from their neighbours, seem
>to be still lively and bustling. Shops, pubs and eateries that are FTB
>every day cheek by jowl with apparently similar places that are clearly
>struggling, if not already closed. But again, whether a shop will let
>is different from whether the property containing it will sell, esp for
>potential buyers with money and patience.
>
>>> You still seem confused. The money *is* there,
>> Which money is this exactly? People generally cannot afford the high
>>deposits now being requested. Dear oh dear. RH
>
> People "generally" are not the 100K or so people retiring each
>year with pension pots of considerable size that need to be invested.
>Nothing to do with deposits. I refer you back to the question you
>refused to answer above -- what should people do with cash assets of
>[eg] #200K, in your opinion?
See my last answer above. RH
Andy Walker
>>>> Well, there is one crumb of comfort. About 100K of us are
>>>> retiring each year with a pension pot or equivalent which includes a
>>>> lump sum sufficient to buy property.
>>> That leaves the large majority without the means.
>> But with easily enough to buy up [if they so desire] all
>> the repossessed property which comes onto the market.
> ROTFL! Your evidence for this fantastic belief is.... RH
The number of wealthy people on the one hand versus the number
of repossessions on the other. *Far* more people have #100K+ in assets
to find a haven for than lose their homes each year.
>>> Moreover, most with
>>> such gratuities will already own houses. RH
>> "Gratuities"?
> Tax free payments at retirement, a common provision for those with
> private and work-related pensions.
"Gratuity" means gift, reward or tip; a strange word to use
for that part of ones hard-earned pension pot with which you are not
required to buy an annuity. At most, you might count the tax which
would have been payable on that [typically] 25%, say 5% of the total
-- so not even a generous tip.
>> [...] Buying property is one --
>> but only one -- of the options.
> But why would you invest in property to provide a pension in the present
> circumstances? You would have the cost of buying and renovating, plus
> the trouble and cost of managing it or the much greater cost of paying
> an agent to do it for you. RH
Because most other investments are either risky or low-yield.
[...]
>> What would *you* do with [say] #200K? Whether the question is absurd
>> or not, it's a very real question for many pensioners, and one which
>> *has* to be answered.
> With 200K you could still get a return of 5% on your money.
If the meerkats are to be believed, then you can get 5% only
as a 5-yr fixed rate bond with an Indian bank. Further, that is not
the real-terms return; you will actually lose out, after tax, if
inflation exceeds 4%pa over the next five years [3% if you are a
higher-rate tacpayer]. Given the extent of QE and the financial woes
of the last two years, would you bet your life savings on inflation
staying below 4% for the next five years?
> The idea
> that you would do better investing in the housing market at present is
> wild fantasy. RH
The difference is that you get to keep the house. If you
have bought a repossession at something near the bottom of the market,
then the chances that you will lose significantly in real terms are
very small. If inflation over the next five years is, unexpectedly,
very low *and* the housing market continues to stagnate over that
period, then you might squeeze an extra percentage point out of a
bond; otherwise, property is almost certain to do much better.
[zero-sum games:]
>> No-one said that there were no many-player zero-sum games, merely
>> that once there are more than two players, the concept is not
>> interesting.
> Not interesting to bounded minds which have no broader appreciation of
> society. To normal people it is... RH
"Not interesting" to anyone who understands that there is no
difference between zero-sum and non-zero-sum games with more than two
players. The *game* may or may not be interesting, but the fact that
it is zero-sum definitely is not. As previously explained, this has
been known since before you were born.
[...]
>>> Then they may not be able to sell at any price. RH
>> You don't watch "Homes Under The Hammer"! [...]
> Poor old bounded mind. Seeing a few properties sold on TV tells you
> nothing about the market in general. RH
Do you understand anything about how properties sell? If you
want to buy at auction, you knock the development cost and your profit
off the expected selling price, and that is how much you are prepared
to pay. It's certainly *possible* for that to be negative, and so for
the property not to "sell at any price", but that's extremely unlikely
for a normal house, even in poor condition, that has recently been
occupied and repossessed.
[...]
>> You
>> are still fixated on mortgages -- people with pension pots and similar to
>> invest do not need, and indeed do not want, mortgages.
> They are a small minority of the population.
Repossessions are a much smaller minority. It's not entirely
your fault that you're in no position to play with the big boys, but
you really are displaying [esp in some of the places I've snipped as
simply not worth a response] your ignorance of the property market.
--
Andy Walker
Nottingham
Robert Henderson
<ne...@cuboid.co.uk> writes
>Robert Henderson wrote:
>>>>> Well, there is one crumb of comfort. About 100K of us are
>>>>> retiring each year with a pension pot or equivalent which includes a
>>>>> lump sum sufficient to buy property.
>>>> That leaves the large majority without the means.
>>> But with easily enough to buy up [if they so desire] all
>>> the repossessed property which comes onto the market.
>> ROTFL! Your evidence for this fantastic belief is.... RH
>
> The number of wealthy people on the one hand versus the number
>of repossessions on the other. *Far* more people have #100K+ in assets
>to find a haven for than lose their homes each year.
And you evidence for this is? RH
>
>>>> Moreover, most
>>>>with such gratuities will already own houses. RH
>>> "Gratuities"?
>> Tax free payments at retirement, a common provision for those with
>>private and work-related pensions.
>
> "Gratuity" means gift, reward or tip;
Literally it means something given for free. RH
> a strange word to use
>for that part of ones hard-earned pension pot with which you are not
>required to buy an annuity.
On the contrary it is entirely appropriate because that is the "free"
part of the pot. RH
> At most, you might count the tax which
>would have been payable on that [typically] 25%, say 5% of the total
>-- so not even a generous tip.
>
>>> [...] Buying property is one --
>>> but only one -- of the options.
>> But why would you invest in property to provide a pension in the
>>present circumstances? You would have the cost of buying and
>>renovating, plus the trouble and cost of managing it or the much
>>greater cost of paying an agent to do it for you. RH
>
> Because most other investments are either risky or low-yield.
Not with that amount of money to invest. RH
>
>[...]
>>> What would *you* do with [say] #200K? Whether the question is absurd
>>> or not, it's a very real question for many pensioners, and one which
>>> *has* to be answered.
>> With 200K you could still get a return of 5% on your money.
>
> If the meerkats are to be believed, then you can get 5% only
>as a 5-yr fixed rate bond with an Indian bank. Further, that is not
>the real-terms return; you will actually lose out, after tax, if
>inflation exceeds 4%pa over the next five years [3% if you are a
>higher-rate tacpayer]. Given the extent of QE and the financial woes
>of the last two years, would you bet your life savings on inflation
>staying below 4% for the next five years?
Buy Gold or other scarce metals. RH
>
>> The idea
>>that you would do better investing in the housing market at present is
>>wild fantasy. RH
>
> The difference is that you get to keep the house.
Houses have large upkeep costs especially if you are not living in them.
. RH
> If you
>have bought a repossession at something near the bottom of the market,
>then the chances that you will lose significantly in real terms are
>very small. If inflation over the next five years is, unexpectedly,
>very low *and* the housing market continues to stagnate over that
>period, then you might squeeze an extra percentage point out of a
>bond; otherwise, property is almost certain to do much better.
>
>[zero-sum games:]
>>> No-one said that there were no many-player zero-sum games, merely
>>> that once there are more than two players, the concept is not
>>>interesting.
>> Not interesting to bounded minds which have no broader appreciation
>>of society. To normal people it is... RH
>
> "Not interesting" to anyone who understands that there is no
>difference between zero-sum and non-zero-sum games with more than two
>players. The *game* may or may not be interesting, but the fact that
>it is zero-sum definitely is not. As previously explained, this has
>been known since before you were born.
Wriggly...weriggly...wriggly... Zero Sum games can in principle apply to
any finite number of players. Fact. RH
>
>[...]
>>>> Then they may not be able to sell at any price. RH
>>> You don't watch "Homes Under The Hammer"! [...]
>> Poor old bounded mind. Seeing a few properties sold on TV tells you
>>nothing about the market in general. RH
>
> Do you understand anything about how properties sell? If you
>want to buy at auction, you knock the development cost and your profit
>off the expected selling price, and that is how much you are prepared
>to pay. It's certainly *possible* for that to be negative, and so for
>the property not to "sell at any price", but that's extremely unlikely
>for a normal house, even in poor condition, that has recently been
>occupied and repossessed.
You have to pay a buyer's premium to the auctioneer.... RH
>
>[...]
>>> You
>>> are still fixated on mortgages -- people with pension pots and similar to
>>> invest do not need, and indeed do not want, mortgages.
>> They are a small minority of the population.
>
> Repossessions are a much smaller minority.
Evidence? RH
> It's not entirely
>your fault that you're in no position to play with the big boys, but
>you really are displaying [esp in some of the places I've snipped as
>simply not worth a response] your ignorance of the property market.
>
--
Day Brown
expected Wall Street to be so corrupt as to rip off so many Republican
voter investments. The manipulation drove many into real estate, where
they thot they knew what they owned.
But outsource enuf jobs, and you can drive a whole state to the brink of
bankruptcy and drive down real estate values while doing it. Government
is not the answer when so many rip off artists have funded the campaigns
of "representatives" who therefore represent lobbyists. On both sides of
the political spectrum. The only diff with the Democrats is the degree
of hypocrisy.
We've seen empires collapse before, and one of the coping strategies
twards the end is the abandonment of upscale housing because so many of
even the elites were driven into bankruptcy. It either stands empty, or
is taken over by squatters.
The smart money gets the fuck outta Dodge. Which is why the fastest
growing Census bureau demographic now is the "X-urb", upscale people who
have moved out to the rural fringe, hoping to be below the radar if the
proverbial shit hits the fan.
As middle class incomes stagnate or fall, the cost of fuel rises, and
even if they already own a home, they cant afford to heat it. Another
coping strategy seen when empire declines, is grown children moving back
in with parents and grandparents cause- even if they have an income, it
is not enuf to support the traditional nuclear family home.
The number of occupied homes declines, but the occupancy of those that
are still lived in rises. And just like Gypsies, homeless nomads wander
now, sometimes in some kind of mobile home. They wont show up on any
census, so there's no way to know how many. Curiously, many still have
their cell phones, and these could be used to organize so that they'll
show up en masse at any given location well beyond the ability of local
law enforcement. So far, they seem to be using National parks, but if
the economy does not stabilize and offer opportunity, they'll create
their own by showing up in places with more resources.
Its a nightmare for anyone with liquidity trying to figure out what to
invest in. Between the power elites in the great power centers robbing
them on paper, or masses of squatters ruining real estate values, the
only option many see left is precious metals. But you cant eat gold.
Time and again, after a great society collapsed, what survivors remain
live in obscure and remote rural villages where there's enuf food and
firewood to tide them over til things get going again. It may not come
to this, but the risk is enuf to make some investors seek such places.
Andy Walker
> [...] *Far* more people have #100K+ in assets
>> to find a haven for than lose their homes each year.
> And you evidence for this is? RH
ONS statistics on (a) distribution of wealth, and (b) numbers
of repossessions each year. There is an order of magnitude difference.
For repossessions, see also:
http://www.thisismoney.co.uk/mortgages-and-homes/
article.html?in_article_id=499505&in_page_id=8
[all one line]. For wealth, see the "Wealth and Assets" survey, at
http://www.statistics.gov.uk/STATBASE/Product.asp?vlnk=15074
and chase the detail in the links given there.
>>>>> Moreover, most
>>>>> with such gratuities will already own houses. RH
>>>> "Gratuities"?
>>> Tax free payments at retirement, a common provision for those with
>>> private and work-related pensions.
>> "Gratuity" means gift, reward or tip;
> Literally it means something given for free. RH
Actually, not that it matters, it derives from the Latin for
"grateful", which is still a strange word to use for something that is
the pensioner's *as of right*, not like a gold watch.
>> a strange word to use
>> for that part of ones hard-earned pension pot with which you are not
>> required to buy an annuity.
> On the contrary it is entirely appropriate because that is the "free"
> part of the pot. RH
It's not "free", it's merely free of tax. Even that is only a
partial truth, as most people retiring up to the 2020s will have paid
tax on part of it under the old pension rules -- around 2/3 of my own
"tax-free lump sum" had in fact been taxed. Would you describe the
personal allowance as a "gratuity"? It's not the usual word for it.
>> [...] Given the extent of QE and the financial woes
>> of the last two years, would you bet your life savings on inflation
>> staying below 4% for the next five years?
> Buy Gold or other scarce metals. RH
Ah, you're from the G. Brown School of Economics, sell when
the price is low, buy when it's high? You expect me to bet my life
savings on gold beating inflation over the next five years? I need
some security in my life, not a roller-coaster ride.
>>> The idea
>>> that you would do better investing in the housing market at present
>>> is wild fantasy. RH
>> The difference is that you get to keep the house.
> Houses have large upkeep costs especially if you are not living in them.
> .. RH
Are you alleging that landlords are running their services at a
loss? It's a point of view, but not the usual one. My own family's
experience is largely with commercial property, but friends who own
ordinary residential/student/holiday BTLs seem to be running quite a
decent life-style out of the proceeds.
> [...] Zero Sum games can in principle apply to
> any finite number of players. Fact. RH
Yes, of course they can. Did you not understand the point?
Once there are more than two players, zero-sum games are no different
from non-zero-sum games, so the concept is of no interest.
>> [...] If you
>> want to buy at auction, you knock the development cost and your profit
>> off the expected selling price, and that is how much you are prepared
>> to pay. It's certainly *possible* for that to be negative, and so for
>> the property not to "sell at any price", but that's extremely unlikely
>> for a normal house, even in poor condition, that has recently been
>> occupied and repossessed.
> You have to pay a buyer's premium to the auctioneer.... RH
Yes, that's part of the cost that you knock off the price you're
prepared to pay. It's still very rare for a house that has recently been
lived in to be absolutely worthless. It can happen if something dramatic
has happened to the site, but that's not a normal reason for repossession.
>>>> You
>>>> are still fixated on mortgages -- people with pension pots and similar to
>>>> invest do not need, and indeed do not want, mortgages.
>>> They are a small minority of the population.
>> Repossessions are a much smaller minority.
> Evidence? RH
See links above.
--
Andy Walker
Nottingham