Multi layered question

[sancho panza]

3 hours ago, stokiescum said:

Japan has a massive problem with an ageing population and bad birth rate they are importing 30 year old baby’s into this country at a huge rate 

 

To be fair,household formation in the Western world has suffered over the last decade according to Pula Hodges.Japs are way ahead of us in paying the price for expensive hosue price bubbles.

Their taxpayers own 40% of the JGB's issuance.

 

[sancho panza]

2 hours ago, Agent ZigZag said:

In my opinion the housing sell off will largely be a North/South issue. I consider the current government will deliver Brexit and the North will geographically be on the right side of the world for increased trade away from Europe to the Americas and the rest of world for the first time in nearly 50 years. In my opinion listening to Boris Johnson maiden speech in parliament there appears to be a 1930s style infrastructure spend in the pipe and an area none better to do this will be in a golden triangle from the Birmingham in the South to Leeds in the North and to our ports to the east and west. The south is too expensive whilst  whilst the North is ripe for starting from a blank and very cheap canvas. In the 1970s/80s and early nineties Northern lads and lasses migrated south in search of work. I can see a role reversal coming on. Better wages in relation to housing costs, better quality of life, a better feeling of job security could very well be coming   up the MI and M6.

DB often goes on about how you can buy a terrace for the same price as 04 up in the NE-or is it Spy?

[sancho panza]

8 minutes ago, stokiescum said:

It will go to tender and the care firm

that wins will get it I refused to travel more than 15 miles from my home when the community care firm I worked for got work in a different area ie Staffordshire moorlands Staffordshire east I said sack me lol I do 60 hours a week you will need2 Carer’s to cover me 

When we leave the EU(if),then your wages will ratchet higher v.quickly.I work in the NHS,there's a reason most MP's want to Remain and that's cheap labour.

Caring is a tough job.Fair play to you.

[spygirl]

13 minutes ago, stokiescum said:

It will go to tender and the care firm

that wins will get it I refused to travel more than 15 miles from my home when the community care firm I worked for got work in a different area ie Staffordshire moorlands Staffordshire east I said sack me lol I do 60 hours a week you will need2 Carer’s to cover me 

Why should you?

Old fuckers arent going anywhere. Make tgem live near people caring for them.

Send the fuckers to Afruca. Lots of labour and much lower heating costs.

[King Penda]

5 minutes ago, sancho panza said:

DB often goes on about how you can buy a terrace for the same price as 04 up in the NE-or is it Spy?

I suspect my house is worth no more than what I paid for it nealy 7 years ago which was 49 k however I can prove that the guy before me paid 68 k for it that’s a hefty haircut but the main reason for this is the jailing of a local Muslim preacher for 12 years for a huge mortgage fraud the banks need to sell about 80 terraces to balance the books lol

[spygirl]

9 minutes ago, sancho panza said:

DB often goes on about how you can buy a terrace for the same price as 04 up in the NE-or is it Spy?

Durham

The old mining towns are ok - limited diversity.

My town village is expensive.

Boro is cheap for a reason.

Scarboros offers the best bang for buck and having not too much scum (in areas) and facilities i.e train to york, non kebab eateries

[King Penda]

1 minute ago, spygirl said:

Why should you?

Old fuckers arent going anywhere. Make tgem live near people caring for them.

Send the fuckers to Afruca. Lots of labour and much lower heating costs.

Fair point but it’s my choice where I work at the end of the day I can just leave else particularly when you don’t get travelling time they should employ local 

[spygirl]

Just now, stokiescum said:

Fair point but it’s my choice where I work at the end of the day I can just leave else particularly when you don’t get travelling time they should employ local 

Thats my point.

Travelling is expendive and takes time.

Low paid needs to provide transport and take travel time of work hourd not workers hours.

[King Penda]

7 minutes ago, spygirl said:

Thats my point.

Travelling is expendive and takes time.

Low paid needs to provide transport and take travel time of work hourd not workers hours.

A lot of firms now start to

include it community care wages are going only one way and that’s up and rapidly

[sancho panza]

https://www.icis.com/chemicals-and-the-economy/2019/07/london-house-prices-edge-closer-to-a-tumble/

 

As the London Evening Standard headline confirms:

“The London property slump has dramatically accelerated with prices falling at their fastest rate in a decade, official figures reveal… The latest “punishing” downward lurch means that more than £21k ($26k) was wiped from the value of the average London house over the period, according to the Land Registry… The number of sales is still in decline with just 5947 recorded in March, down from 7350 a year previously.”

‘Reversion to the mean’ is always the most reliable of investment guides, and the chart shows prices could have some way to fall before they reach this level – and, of course, prices often over-correct after the type of sharp rise that has been seen over the past 20 years:

• Most people have to buy houses on a mortgage, where the ratio of price to income is the key factor
• As the chart shows, prices and ratios have seen 2 distinct periods since 1971 (when records began)
• Prices (inflation adjusted) have had an upward trend since 2000, with today’s 11% fall the worst
• 1971-1999 saw more violent swings – eg between 1983-1993 they doubled and then halved
• The average ratio since 2000 has been 9.3, which would bring prices down by a further 23%
• The average ratio between 1971-1999 was 4.8, which would bring prices down by a further 60%

WHY DID PRICES RISE?
London prices have been boosted by 4 main factors since 1971:

Demographics.  Most fundamentally, the BabyBoomers (born between 1946-1970) began to move into their house-buying years. This dramatically increased demand (as I discussed last week), whilst supply was slow to respond due to planning restrictions etc.

In addition, women began to go back to work after having children, creating the phenomenon of 2-income families for the first time in history. The younger Boomers saw the benefit of this as affordability rose; those who followed them paid the price in terms of higher prices.

Buy to let. London became the capital of ‘Buy-to-let’. UK tenancy law changed in 1988 and by the mid-1990s, parents realised it would be cheaper and better to buy apartments for their student children, rather than paying high rents for shoddy lodgings. Others followed in the belief that property was “safer” than stock markets”.

Falling interest rates (they were 15% during the 1992 ERM crisis) made the mortgage payment very affordable – particularly with tax relief as well. But since 2017, tax relief has been reducing, and disappears next year. And today’s ageing UK population, where nearly 1 in 5 people are now aged 65+, means the Boomers no longer have spare cash to spend on buying property.

The global city.  After the financial crisis, London property appeared an oasis of calm as the Bank of England supported house prices by cutting interest rates to near-zero, dramatically boosting affordability. Everyone knew by then that “house prices only increased”, as memories of the 1970-1980s were forgotten, and so capital gains seemed assured.

This made London, along with other “global cities” such as New York, very attractive to Russians, Arabs, Asians and anyone else who was worried that their government might try to grab their money. Europeans also bought as the eurozone crisis developed. And then the success of the 2012 London Olympics made it the city where everyone wanted to live, especially as its financial sector was booming due to central bank stimulus programmes.

WHAT WILL HAPPEN NEXT?
The question now is whether these drivers will continue.  Brexit, of course, has already cast a shadow over the idea of the UK as an island of stability in a troubled world. And whilst the collapse of the currency since the referendum makes property more affordable for foreign buyers, it means that those who bought at the peak are nursing even larger losses.

And, of course, the fall in the actual volume of sales is another worrying sign. Volume usually leads price, up or down. And housing markets aren’t like stock markets, where you can usually trade very quickly if you want to sell. Instead you have to wait for a buyer to appear – and even then, the UK’s property laws make it possible for them to pull out until the very last moment.

All in all, it would therefore be surprising if prices didn’t continue falling, back to the average house price/earnings ratio of the past 20 years.  A temporary over-correction, where they went even lower, would also be normal after such a long period without a major fall.

Whether they go lower than this, and return to the 1971-99 ratio, probably depends on what happens with Brexit.  If those who believe it will open up a new ‘golden age’ for the UK economy are right, then  prices might well stabilise and could even rise again, after the initial disruption. But if it proves an economic disaster, then a return to the troubled period of the 1970s would be no surprise at all.

[A_P]

B- on the copy & pasta

• Not all boroughs are created equally
• No mention of HTB
• immigration
• Flight and impact on the other parts of the country
• Women returned to work after children but no mention of importance of two incomes on mortgages going forward
• Unlocking of LTI retrictions
• etc etc

Overall a very narrow view of what has happend and will/may/could happen going forward

 

[A_P]

A little deeper analysis on house prices if anyone is interested

http://www.acadata.co.uk/assets/uploads/2019/07/LSL-Acadata-EW-HPI-News-Release-June-19.pdf

[sancho panza]

5 hours ago, A_P said:

B- on the copy & pasta

• Not all boroughs are created equally
• No mention of HTB
• immigration
• Flight and impact on the other parts of the country
• Women returned to work after children but no mention of importance of two incomes on mortgages going forward
• Unlocking of LTI retrictions
• etc etc

Overall a very narrow view of what has happend and will/may/could happen going forward

 

Bulls need bears and vice versa.Takes a minimum of two to make a market.

When did you buy if you don't mind me asking?

 

[sancho panza]

5 hours ago, A_P said:

A little deeper analysis on house prices if anyone is interested

http://www.acadata.co.uk/assets/uploads/2019/07/LSL-Acadata-EW-HPI-News-Release-June-19.pdf

Acadata also do a report via LCP that's also worth a read as it covers new build premium.

Acadata's analysis of the price action is the best out of all the big five indices

[A_P]

5 minutes ago, sancho panza said:

Bulls need bears and vice versa.Takes a minimum of two to make a market.

When did you buy if you don't mind me asking?

 

Of course. I personally think it's important though to try and look beyond what we are programmed to. I myself tend to have contrarian tendencies but am trying to be pragmatic and open to other possibilities. I think it's far too easy to get suck(er)ed into looking for patterns and information that match one's hardened beliefs. 

I don't mind you asking, I've certainly not hid the fact we were relocating (from the SE) to buy, reduce hours, improve worklife balance for the missus and hopefully setup a business in the not to distant future. Offer accepted in June.

[sancho panza]

8 hours ago, A_P said:

Of course. I personally think it's important though to try and look beyond what we are programmed to. I myself tend to have contrarian tendencies but am trying to be pragmatic and open to other possibilities. I think it's far too easy to get suck(er)ed into looking for patterns and information that match one's hardened beliefs. 

I don't mind you asking, I've certainly not hid the fact we were relocating (from the SE) to buy, reduce hours, improve worklife balance for the missus and hopefully setup a business in the not to distant future. Offer accepted in June.

The price action is the price action.Money gets made trying to predict the price action and getting it right and vice versa.Agree on not anchoring.

Good luck with the move and the lifetstyle change.You won't regret it.

Me and Mrs P went part time last year and have really enjoyed it,especially with regard to the kids.Lifes too short to spend it working 60 hours a week.

[spygirl]

On 26/07/2019 at 08:19, A_P said:

A little deeper analysis on house prices if anyone is interested

http://www.acadata.co.uk/assets/uploads/2019/07/LSL-Acadata-EW-HPI-News-Release-June-19.pdf

LSL are useless.

18 hours ago, sancho panza said:

Acadata also do a report via LCP that's also worth a read as it covers new build premium.

Acadata's analysis of the price action is the best out of all the big five indices

Bettee going for LR.

Any data or opinion from an EA is bent

[spygirl]

On 25/07/2019 at 22:24, sancho panza said:

https://www.icis.com/chemicals-and-the-economy/2019/07/london-house-prices-edge-closer-to-a-tumble/

 

As the London Evening Standard headline confirms:

“The London property slump has dramatically accelerated with prices falling at their fastest rate in a decade, official figures reveal… The latest “punishing” downward lurch means that more than £21k ($26k) was wiped from the value of the average London house over the period, according to the Land Registry… The number of sales is still in decline with just 5947 recorded in March, down from 7350 a year previously.”

‘Reversion to the mean’ is always the most reliable of investment guides, and the chart shows prices could have some way to fall before they reach this level – and, of course, prices often over-correct after the type of sharp rise that has been seen over the past 20 years:

• Most people have to buy houses on a mortgage, where the ratio of price to income is the key factor
• As the chart shows, prices and ratios have seen 2 distinct periods since 1971 (when records began)
• Prices (inflation adjusted) have had an upward trend since 2000, with today’s 11% fall the worst
• 1971-1999 saw more violent swings – eg between 1983-1993 they doubled and then halved
• The average ratio since 2000 has been 9.3, which would bring prices down by a further 23%
• The average ratio between 1971-1999 was 4.8, which would bring prices down by a further 60%

WHY DID PRICES RISE?
London prices have been boosted by 4 main factors since 1971:

Demographics.  Most fundamentally, the BabyBoomers (born between 1946-1970) began to move into their house-buying years. This dramatically increased demand (as I discussed last week), whilst supply was slow to respond due to planning restrictions etc.

In addition, women began to go back to work after having children, creating the phenomenon of 2-income families for the first time in history. The younger Boomers saw the benefit of this as affordability rose; those who followed them paid the price in terms of higher prices.

Buy to let. London became the capital of ‘Buy-to-let’. UK tenancy law changed in 1988 and by the mid-1990s, parents realised it would be cheaper and better to buy apartments for their student children, rather than paying high rents for shoddy lodgings. Others followed in the belief that property was “safer” than stock markets”.

Falling interest rates (they were 15% during the 1992 ERM crisis) made the mortgage payment very affordable – particularly with tax relief as well. But since 2017, tax relief has been reducing, and disappears next year. And today’s ageing UK population, where nearly 1 in 5 people are now aged 65+, means the Boomers no longer have spare cash to spend on buying property.

The global city.  After the financial crisis, London property appeared an oasis of calm as the Bank of England supported house prices by cutting interest rates to near-zero, dramatically boosting affordability. Everyone knew by then that “house prices only increased”, as memories of the 1970-1980s were forgotten, and so capital gains seemed assured.

This made London, along with other “global cities” such as New York, very attractive to Russians, Arabs, Asians and anyone else who was worried that their government might try to grab their money. Europeans also bought as the eurozone crisis developed. And then the success of the 2012 London Olympics made it the city where everyone wanted to live, especially as its financial sector was booming due to central bank stimulus programmes.

WHAT WILL HAPPEN NEXT?
The question now is whether these drivers will continue.  Brexit, of course, has already cast a shadow over the idea of the UK as an island of stability in a troubled world. And whilst the collapse of the currency since the referendum makes property more affordable for foreign buyers, it means that those who bought at the peak are nursing even larger losses.

And, of course, the fall in the actual volume of sales is another worrying sign. Volume usually leads price, up or down. And housing markets aren’t like stock markets, where you can usually trade very quickly if you want to sell. Instead you have to wait for a buyer to appear – and even then, the UK’s property laws make it possible for them to pull out until the very last moment.

All in all, it would therefore be surprising if prices didn’t continue falling, back to the average house price/earnings ratio of the past 20 years.  A temporary over-correction, where they went even lower, would also be normal after such a long period without a major fall.

Whether they go lower than this, and return to the 1971-99 ratio, probably depends on what happens with Brexit.  If those who believe it will open up a new ‘golden age’ for the UK economy are right, then  prices might well stabilise and could even rise again, after the initial disruption. But if it proves an economic disaster, then a return to the troubled period of the 1970s would be no surprise at all.

Misses the major factor.

The UK finsec, from bank branches to investment banks, is still in a process of decimation.

Retail banks, life insurers, back offices - gutted. Be it software, bent orgs, higher capital.

London n Se had the most exposure. Indeed, it was not unsual to go to regional towns in south where 50% of private employment was finsec. These jobs, in the main, have gone.

There was no plan B in these towns.

Add to that stuff like MMR which hammers people with high travel costs.

Chuck in congestion  struggle.

[Talking Monkey]

2 hours ago, spygirl said:

Misses the major factor.

The UK finsec, from bank branches to investment banks, is still in a process of decimation.

Retail banks, life insurers, back offices - gutted. Be it software, bent orgs, higher capital.

London n Se had the most exposure. Indeed, it was not unsual to go to regional towns in south where 50% of private employment was finsec. These jobs, in the main, have gone.

There was no plan B in these towns.

Add to that stuff like MMR which hammers people with high travel costs.

Chuck in congestion  struggle.

How much more of this do you reckon is to come Spy (Finsec decimation), has it largely happened or just getting started

[spygirl]

39 minutes ago, Talking Monkey said:

How much more of this do you reckon is to come Spy (Finsec decimation), has it largely happened or just getting started

Its prob. 50%

Most bank branches have gone.

Life insurers have been wiped out.

Theres a couple of old BSs (Cov bs n Nationwide) and challenger banjs (Metto bank) going to go or massively shrink.

The wholesale syuff is having another lurch back - DB obvious one. But theres still a lot of odds n sods in trading to go as its all moved to software.

Stuff like brexit barely gets a look in. All bollocks. Finsec is not moving to Frankfurt its off to a computer.

 

[Talking Monkey]

1 hour ago, spygirl said:

Its prob. 50%

Most bank branches have gone.

Life insurers have been wiped out.

Theres a couple of old BSs (Cov bs n Nationwide) and challenger banjs (Metto bank) going to go or massively shrink.

The wholesale syuff is having another lurch back - DB obvious one. But theres still a lot of odds n sods in trading to go as its all moved to software.

Stuff like brexit barely gets a look in. All bollocks. Finsec is not moving to Frankfurt its off to a computer.

 

Makes sense Spy, on say a 10 year horizon, loads of work is going to get automated away not just in finsec, There might be some rise in wages as discussed above but with the coming rise in unemployment I would expect that to be limited

[Noallegiance]

10 hours ago, spygirl said:

Its prob. 50%

Most bank branches have gone.

Life insurers have been wiped out.

Theres a couple of old BSs (Cov bs n Nationwide) and challenger banjs (Metto bank) going to go or massively shrink.

The wholesale syuff is having another lurch back - DB obvious one. But theres still a lot of odds n sods in trading to go as its all moved to software.

Stuff like brexit barely gets a look in. All bollocks. Finsec is not moving to Frankfurt its off to a computer.

 

In 2000 there were four call centre/back office bank buildings in my town employing 1000+ per building. There's now only one and is reducing full time staff and running ever more on agency staff.

[spygirl]

10 hours ago, Noallegiance said:

In 2000 there were four call centre/back office bank buildings in my town employing 1000+ per building. There's now only one and is reducing full time staff and running ever more on agency staff.

How bigs your town?

Ive seen towns with 20-30K population, with ~3k/4K well paid finsec jobs 95->2005ish.

Do the (simple) maths - 20k. 50% working age = 10k. 10/20% public sector 2k, leaving 8K. Thats ~50% of jobs.

London/SE post 2008 are facign simialr layoffs as the North did in the 80s.

Its only TCs that are keeping the existing homeowners going.

You go to these towns andthere are so few under 35s working in anything more than NMW.

 

 

[Noallegiance]

9 minutes ago, spygirl said:

How bigs your town?

Ive seen towns with 20-30K population, with ~3k/4K well paid finsec jobs 95->2005ish.

Do the (simple) maths - 20k. 50% working age = 10k. 10/20% public sector 2k, leaving 8K. Thats ~50% of jobs.

London/SE post 2008 are facign simialr layoffs as the North did in the 80s.

Its only TCs that are keeping the existing homeowners going.

You go to these towns andthere are so few under 35s working in anything more than NMW.

 

 

It's big. About 160k. But the impact is noticeable. It's not just the banks. There is a main road that had 10-15 large office blocks with various companies occupying them for years. Since 2000 the companies have disappeared and the offices converted into living spaces.

Seems like lots of places to live but fewer jobs to pay for them. The nail bars, barbers, tattoo parlours and coffee shops only cover so much.

[Talking Monkey]

46 minutes ago, Noallegiance said:

It's big. About 160k. But the impact is noticeable. It's not just the banks. There is a main road that had 10-15 large office blocks with various companies occupying them for years. Since 2000 the companies have disappeared and the offices converted into living spaces.

Seems like lots of places to live but fewer jobs to pay for them. The nail bars, barbers, tattoo parlours and coffee shops only cover so much.

I wonder how long all those nail bars and coffee shops will survive