Property crash, just maybe it really is different this time

[nirvana]

1 hour ago, One percent said:

Well they can’t keep going up forever, especially when wages aren’t. 

what caused the crash in Japan?? (yeah I know I'm infatuated with the Japs at the mo, but to be fair I called 'turning japanese' years ago ) could the UK actually go the way of Japan?

I believe it's the 'foreign investors' and gimmigrants supporting the rentier capitalists that's only keeping the prices up

[Heart's Ease]

. Moved it to BTL thread.

Edited March 2, 2023 by Heart's Ease

[MrXxxx]

24 minutes ago, nirvana said:

what caused the crash in Japan?? (yeah I know I'm infatuated with the Japs at the mo, but to be fair I called 'turning japanese' years ago ) could the UK actually go the way of Japan?

I believe it's the 'foreign investors' and gimmigrants supporting the rentier capitalists that's only keeping the prices up

I think this is a nice piece by Lyn Alden that explains why a) Japan is an exception to the rule, and b) why the UK won't replicate it:

February 2023 Newsletter: Fixing Inflation - Lyn Alden

[Plan-b]

42 minutes ago, spygirl said:

Otjer way around -  loose bank mortgage lendign from 98- >2014 expanded credit.

90%+ of bank credit goes on real estate.

This has been changed.

Ive been shouted by a ocuple on TO - You dotn udnerstand banking!

But this is how I thkink he BoE wants the mortgage market to work now - 

For every 100k of house the BoE wants 20% buyer deposit, 20% bank capital and 20% from private credit (i.e. a bond for a long fix period). with BoE providing the balance. whcih will be paid own rapidly in the first 10y.

A peak 2008 Brownism, for each 100k of house the buyer was providing £500 (borrowed), the bank was lending 125k (well, need moeny to do it up) with the full lump drawn down from BoE.

 

 

 

 

 

It was an easy way to inject mass amounts fresh currency into the system as they couldn't just plonk it anywhere, what better way than to stoke house prices through Gov. policy and let the feckless do the job for you with more loans and mortgages for ever more property, BTL, extensions & home improvements, holiday homes on and on.....

Since the GFC, the BoE needed inflation, they set that at around 2% to gradually diminish their huge debts, the last thing they could stand was deflation where inflation goes negative and they/the system would have gone bust.

That's all finished now with rampant inflation, I maintain they will eventually need interest rates higher than inflation to kill it.

It's a balancing act, looks like they are hoping inflation will start to come down by itself and thus mitigate the need for ever larger rate rises, for this they will need some demand destruction too much of that could result in recession/depression too little and it won't be enough to tackle inflation.

The BoE are in a dilemma and it's looking like the worst outcome of all may develop - Stagflation, we may already be at this point.

They should have gone at it harder earlier on but they didn't now inflation is embedded at the core and they have a serious problem. By 'they' it really means 'us' at the end of the day if it all goes wrong  they'll just fuck off back to a cushy number at Goldman Sachs and finish out their lives on a golden sun kissed beach somewhere, while we pick up the pieces of a shattered economy and rampant invasion of ever more Dindu's, asset strippers, and HK property carpet baggers.

 

Edited March 2, 2023 by Plan-b

[spygirl]

On 26/09/2022 at 13:11, spygirl said:

Rental yields were always 10%+ - before IO BTL n all that.

For a good reason.

Another of what I think is going to be long series of 'another BTLer exits  in Scabby' - 

https://www.zoopla.co.uk/for-sale/details/62214307/

A portfolio of 11 apartments 3 x one bedroom apartments and 8 x two bedroom apartments and 3 parking spaces. Projected income when all let ( Currently all let except 2 ) £79,900 per annum.

Offered as a portfolio of 11 leasehold apartments and 3 parking spaces within this modern purpose built development in popular south Cliff location on Prince Of Wales Terrace. 3 x one bedroom apartments and 8 x two bedroom apartments. All of the apartments are let on assured shorthold tenancies and if all let would produce income of circa £69,300 per annum.

Now .... Ive not looked into the history of this. It looks refurbed.

However .... theyve already got a ~15% void.

They want 1.3m. ...

An IO mortgage (you wont get one for the whole lot) at @6% would be ~700k/y, more than the current gross income.

For the 70k/y income youd not want to pay more than 500k tops.

And the kicker - 

 The apartments all have 236 years lease remaining. Please note this is not for the total block. There are 23 apartments in total.

UKGOV isnt goign to be increasing  bennies n HB with inflation,.. it more likely to cvut both.

Again.

I keep repeating that Scabby is one of the hot spots of profolio BTL fuckwittery.

I have to double check these listing to make sure Ive not listed them already.

Another one.

https://propertyheads.com/en-gb/properties/2694756/residential-portfolio/

£1,900,000 51 BEDROOM, RESIDENTIAL PORTFOLIOTerraced

 

WG - YO11 2DL A block of 7 self contained unit generating a gross rental income of 30, 400 per annum when fully let.

CT - YO11 2DT A block of 4 self contained flats generating a gross rental income of 20, 612 when fully let.

WS - YO11 2QP A block of 5 self contained units. Three units in need of work but can generate a gross rental income of 20, 400 when fully let.

AW - YO11 1XW A block of 5 self contained flats that generate a rental income of, 19, 500 when fully let.

E14 - YO11 1NW A block of four self contained flats that generate a rental income of, 16, 500 when fully let.

E16 - YO11 1NW A block of four self contained flats that generate a rental income of, 17, 500 when fully let.

AC - YO11 1XX A Block of 8 letting units that generate a rental income of, 36, 700 when fully let.

LPS - YO11 1NP A block of 10 units that are partly finished. We have obtained quotes from contractors and we believe there is approximately 70, 000 worth of outstanding works to complete these units. The property would then generate a rental income of 43, 000 per annum.

For further information, please contact Colin Ellis Property Services on 01723 363565 or info@colinellis. co. uk

 

~200k of rental income *IF* fully let.

And Id bet big money they never get more than ~70% occupied.

Gross yield waay sub 10%.

 

There are loads of ordinary, potless fuckwitted taxi drivers builders, window cleaners who are carrying IO debt well north of 1.5m.

SUb 4% IO BTL SVR - yep they could squeze in and prented they were a millionaire.

SVR north of 4%. PANIC!!!!!!!!!!

I mean, why in fuck try and eell several block of lfats at the same time???

Beyond fuckwitted.

 

 

 

[spygirl]

7 minutes ago, Plan-b said:

It was an easy way to inject mass amounts fresh currency into the system as they couldn't just plonk it anywhere, what better way than to stoke house prices through Gov. policy and let the feckless do the job for you with more loans and mortgages for ever more property, BTL, extensions & home improvements, holiday homes on and on.....

Since the GFC, the BoE needed inflation, they set that at around 2% to gradually diminish their huge debts, the last thing they could stand was deflation where inflation goes negative and they/the system would have gone bust.

That's all finished now with rampant inflation, I maintain they will eventually need interest rates higher than inflation to kill it.

It's a balancing act, looks like they are hoping inflation will start to come down by itself and thus mitigate the need for ever larger rate rises, for this they will need some demand destruction too much of that could result in recession/depression too little and it won't be enough to tackle inflation.

The BoE are in a dilemma and it's looking like the worst outcome of all may develop - Stagflation, we may already be at this point.

They should have gone at it harder earlier on but they didn't now inflation is embedded at the core and they have a serious problem. By 'they' it really means 'us' at the end of the day if it all goes wrong  they'll just fuck off back to a cushy number at Goldman Sachs and finish out their lives on a golden sun kissed beach somewhere, while we pick up the pieces of a shattered economy and rampant invasion of ever more Dindu's, asset strippers, and HK property carpet baggers.

 

Thast not how banks work.

They lend money on demand.

 

[nirvana]

12 minutes ago, MrXxxx said:

I think this is a nice piece by Lyn Alden that explains why a) Japan is an exception to the rule, and b) why the UK won't replicate it:

February 2023 Newsletter: Fixing Inflation - Lyn Alden

that's a bloke mate!

she's a bit too 'deep' for me bruv ie you feel like you're reading through a bloody PHD with her articles.....

I know Japan is an 'outlier' cos of their strange 'fuk off foreigners' 'inbred mentality' but don't you think Europe and particularly the UK would have be better off with that mindset?

Briefly I'm still trying to work out if Japanese monetary policy is being controlled by the US, did u watch Princes of the Yen?

and/or this Abenomics bollox where they buy 'anything and everything' is sustainable?

anyway, if you live in the countryside you can just ignore it all and talk to the plants eh?

PS overriding everything is their rapidly declining population, massive house (re)building program and lots of old farts in the cuntryside so that sort of trumps a lot of the 'economics bullshit' in any case, n'est ce pas?

Edited March 2, 2023 by nirvana

[nirvana]

34 minutes ago, Plan-b said:

Stagflation, we may already be at this point.

mavs been saying that for a while......he reckons the CBs have lost control lol

where's that website that predicts IRs?

edit: actually you don't need that website, just look at the DXY (will it hit 105 today lol) and the US 10 year.....which is back above 4%, which is fekkin hilarious when all the 'crystal ball gazers' called the top back in Jan eh?

 

Edited March 2, 2023 by nirvana

[Guest]

1 hour ago, nirvana said:

could the UK actually go the way of Japan?

One major difference is Japan is very good at building lots and lots of new housing in urban areas.

[MrXxxx]

14 minutes ago, nirvana said:

I know Japan is an 'outlier' cos of their strange 'fuk off foreigners' 'inbred mentality' but don't you think Europe and particularly the UK would have be better off with that mindset?

Well it's not only a case of policy decisions, but also @Right time, right place'. As Alden points out at the bottom [I find her articles far from PhD level, and accessible/well explained; must be something to do with her being a former engineer rather than an economist]:

As an addendum to this newsletter on inflation, it would be worthwhile to address the Japan comparison, which often comes up.

The argument goes something along these lines:

“The situation in Japan has showed us that large public debts and demographics stagnation doesn’t result in inflation. Instead, it results in deflation. That will be the fate of most of the developed world.”

My rebuttal to that goes along three primary lines:

1) Japan Had Slow Money Creation - the majority of its money creation was pre 2020 and contained within the banking [base] money system [non-inflationary] rather than post-2020 fiscal money increase that finds its way into the broad money supply [inflationary].

2) The 2010s Decade Had Abundant and Cheap Commodities - unlike now where they are [especially oil] are expensive and climbing [disinflationary]

3) What is Fine for One is Bad for Many - Japan reached peak demographics during globalization when labour was cheap [disinflationary]

 

 

[nirvana]

1 minute ago, Darude said:

One major difference is Japan is very good at building lots and lots of new housing in urban areas.

and keeping gimmigrants out

[HousePriceMania]

40 minutes ago, MrXxxx said:

I think this is a nice piece by Lyn Alden that explains why a) Japan is an exception to the rule, and b) why the UK won't replicate it:

February 2023 Newsletter: Fixing Inflation - Lyn Alden

Is this Lyn Alden ?

 

 

 

I'm a conservative value investor. I mostly buy profitable companies that pay dividends. I'm big into commodities and real estate. I shun most unprofitable growth stocks (except for a few, small positions). Yet I buy bitcoin. True innovation. Very interested in its potential.

?

[nirvana]

6 minutes ago, MrXxxx said:

1) Japan Had Slow Money Creation - the majority of its money creation was pre 2020 and contained within the banking [base] money system [non-inflationary] rather than post-2020 fiscal money increase that finds its way into the broad money supply [inflationary].

not sure about that, convid was an excuse for the CBs to put the printing presses into hyperdrive

[nirvana]

here's another one

The biggest monetary experiment in history? Most recently, the Bank of #Japan fired up the printing press again to keep long-term interest rates low.

another commentator: Do you think the Japanese are stressed because their Central Bank holds half the JGB issuance?

PS that's only as of April last year, need to find something 'more modern' lmao

 

[MrXxxx]

24 minutes ago, HousePriceMania said:

Is this Lyn Alden ?

 

 

 

I'm a conservative value investor. I mostly buy profitable companies that pay dividends. I'm big into commodities and real estate. I shun most unprofitable growth stocks (except for a few, small positions). Yet I buy bitcoin. True innovation. Very interested in its potential.

?

Everyone is allowed a 'punt' aren't they? :-)))

[MrXxxx]

21 minutes ago, nirvana said:

not sure about that, convid was an excuse for the CBs to put the printing presses into hyperdrive

Exactly, but compare the 'others' with Japan...the 'others' printing presses have have been 'switched on' from 2020, and the majority of the output has gone into the Broad economy i.e. stimmy cheques, furlough etc WHEREAS Japan was printing a lot earlier and pre-2020 the output was into the Base economy. As a result a greater % of the printing [debt] in the case Japan is in the base rather than the broad money supply.

[Democorruptcy]

3 hours ago, One percent said:

Well they can’t keep going up forever, especially when wages aren’t. 

Wages are getting a boost from the inflation, there's been a lot about large pay rises in the media. When you look at house prices, is it that the house costs too much or that the money is just worth a lot less?

http://danielamerman.com/va/HomeWealthOne.html

 

 

[nirvana]

3 minutes ago, MrXxxx said:

Exactly, but compare the 'others' with Japan...the 'others' printing presses have have been 'switched on' from 2020, and the majority of the output has gone into the Broad economy i.e. stimmy cheques, furlough etc WHEREAS Japan was printing a lot earlier and pre-2020 the output was into the Base economy. As a result a greater % of the printing [debt] in the case Japan is in the base rather than the broad money supply.

ja ja ja BUT comrade don't get mixed up in the the 'M2/velocity of money' argument, ooh yeah The velocity of money is usually measured as a ratio of gross domestic product (GDP) to a country's M1 or M2 money supply

massive debt is massive debt innit! we've long known it's a 'race to the bottom' yah? for me I just wanna know if I'm better off in the frog cuntryside or the jappy cuntryside.......I totally know the UK is totally and utterly fukked

[MrXxxx]

2 minutes ago, nirvana said:

ja ja ja BUT comrade don't get mixed up in the the 'M2/velocity of money' argument, ooh yeah The velocity of money is usually measured as a ratio of gross domestic product (GDP) to a country's M1 or M2 money supply

massive debt is massive debt innit! we've long known it's a 'race to the bottom' yah? for me I just wanna know if I'm better off in the frog cuntryside or the jappy cuntryside.......I totally know the UK is totally and utterly fukked

..perhaps I am missing something but Base money supply doesn't have an impact on inflation, whereas Broad money supply does, the former can be adjusted to control inflation whereas the latter once 'out in the system' cannot be retracted. As a result if you have two economies both with 10% inflation, then the one with a higher % of its money supply in a Base form has more control [over inflation] than one that doesn't?

[nirvana]

10 minutes ago, Democorruptcy said:

When you look at house prices, is it that the house costs too much or that the money is just worth a lot less?

all of the above! when inflation is out the bag it takes a massive battle to put in back, witness Volcker......

dipshit Powell is sending the wrong message to the market and the zombies by keep harping on about this disinflation shite.....I notice the ponces in the US government are on it too.......have your mates in the UK started using it yet?

[nirvana]

3 minutes ago, MrXxxx said:

perhaps I am missing something but Base money supply doesn't have an impact on inflation, whereas Broad money supply does,

smoke n mirrors boss, inflation is purely a monetary phenomenon, Milton Friedman......inflation has been going bonkers for decades, witness house prices in the west......they've just managed to conceal it by lying and keeping a relative lid on wages methinks......anyway the zombies don't mind the inflation whilst their precious houses are still going up in value.....time to wake the fuck up motherfukkers 

[Democorruptcy]

5 minutes ago, nirvana said:

all of the above! when inflation is out the bag it takes a massive battle to put in back, witness Volcker......

dipshit Powell is sending the wrong message to the market and the zombies by keep harping on about this disinflation shite.....I notice the ponces in the US government are on it too.......have your mates in the UK started using it yet?

Andrew Wailey yesterday:

Bailey signals no pressing need for more rate rises

[Axeman123]

1 hour ago, nirvana said:

where's that website that predicts IRs?

This one: https://www.cmegroup.com/markets/interest-rates/cme-fedwatch-tool.html?redirect=/trading/interest-rates/countdown-to-fomc.html

Still 69% (MATRON!!) implied probability of the US Fed going 25bps at the next meeting.

1 hour ago, Plan-b said:

They should have gone at it harder earlier on but they didn't now inflation is embedded at the core

Strong signs of demand destruction around already. I expect the fed will be late to pivot just like they were late to start raising rates.

[nirvana]

11 minutes ago, Democorruptcy said:

Andrew Wailey yesterday:

Bailey signals no pressing need for more rate rises

hold on I need my 'no paywall' plugin shit......anyway he's a fukkin muppet/puppet, he'll just do what his yankee masters tell him to, just like the rest of the muppets in the UK......soz bruv, getting political now, I'll go for a walk soon

edit: that's it for anyone interested https://github.com/iamadamdev/bypass-paywalls-chrome

PS his mates were obvs short cable, it's gone sub 1.20 again

Edited March 2, 2023 by nirvana

[Plan-b]

1 hour ago, spygirl said:

Thast not how banks work.

They lend money on demand.

 

I'm talking currency which is created when a loan is made and destroyed later on as the loan is paid off, this done by the lending banks/institutions at the behest of the BoE who extend this facility to them.

The demand is created by the crescendo of, in this threads theme, eager property 'investors;' the Gov then stokes this demand with ever more incentives for the property market the media join in with newspaper puff-pieces and the never ending Kirsty and Phil type TV programmes.

After all of that who could possibly believe anyone could lose in property.