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Forget buying houses it's house DEPOSITS now


Frank Hovis

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This is a new low.

Or high if you work for the BBC.

Instead of comparing house prices to salaries, because the numbers are so high, the comparison is now to deposits.

How long until the average mortgage deposit is 3.5x salary? Will you need a government loan for the deposit?

This can is going to be kicked a long way down that road yet.

Bring on the hundred year mortgage.

 

Raising a deposit remains the main barrier for most prospective first-time buyers. A 20% deposit on a typical first-time buyer home is now around 113% of gross income - a record high," he said.

https://www.bbc.co.uk/news/business-58746951

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HousePriceMania
9 minutes ago, Frank Hovis said:

This is a new low.

Or high if you work for the BBC.

Instead of comparing house prices to salaries, because the numbers are so high, the comparison is now to deposits.

How long until the average mortgage deposit is 3.5x salary? Will you need a government loan for the deposit?

This can is going to be kicked a long way down that road yet.

Bring on the hundred year mortgage.

 

Raising a deposit remains the main barrier for most prospective first-time buyers. A 20% deposit on a typical first-time buyer home is now around 113% of gross income - a record high," he said.

https://www.bbc.co.uk/news/business-58746951

Just another warning sign for me that collapse is imminent.

The worse bits for me is:

1) They must all know that

2) Rishi BallSack's ex GS banker mate is the chairman and weill ramp till the end.

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24 minutes ago, HousePriceMania said:

Just another warning sign for me that collapse is imminent.

The worse bits for me is:

1) They must all know that

2) Rishi BallSack's ex GS banker mate is the chairman and weill ramp till the end.

HPM do you have a site that allows us to track property price changes.I was using property log on chrome but it's blanking otu the numbers now.?

36 minutes ago, Frank Hovis said:

This is a new low.

Or high if you work for the BBC.

Instead of comparing house prices to salaries, because the numbers are so high, the comparison is now to deposits.

How long until the average mortgage deposit is 3.5x salary? Will you need a government loan for the deposit?

This can is going to be kicked a long way down that road yet.

Bring on the hundred year mortgage.

 

Raising a deposit remains the main barrier for most prospective first-time buyers. A 20% deposit on a typical first-time buyer home is now around 113% of gross income - a record high," he said.

https://www.bbc.co.uk/news/business-58746951

and jsut before rates rise.Beeb hierarchy msut have BTL's to shift in central Londinium

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HousePriceMania
24 minutes ago, sancho panza said:

HPM do you have a site that allows us to track property price changes.I was using property log on chrome but it's blanking otu the numbers now.?

and jsut before rates rise.Beeb hierarchy msut have BTL's to shift in central Londinium

I'll DM you SP. OK ?

 

TLA over load...ill send you a message

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44 minutes ago, HousePriceMania said:

Just another warning sign for me that collapse is imminent.

The worse bits for me is:

1) They must all know that

2) Rishi BallSack's ex GS banker mate is the chairman and weill ramp till the end.

 

I would genuinely love to see a collapse and think it inevitable, in real terms if not nominal owing to currency devaluation, but I don't see it as being remotely imminent.

My timescale for upsizing is maybe in 8 to 12 years' time and I'm not even convinced that it will happen by then.

I hope you are right but am genuinely surprised that as a long time HPCer and now here that you feel that you are able to call an imminent property crash with any confidence given quite how many times this has looked to be inevitable and the government has shifted the goalposts in order to prevent its happening.

Even if rates rise as @sancho panza suggests, and I anyway see anything other than a token rise as being unlikley, the government can still differentially keep down mortgage interest rates by acting as a guarantor.

I'm probably ten times bitten ten times shy when it comes to a property crash; though that does mean that if we do get one it will be a lovely surprise. 

Unless I have upsized just before it happens.

 

jim-bowen-bullseye-newcastle-united-nufc

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They’ve also done the classic of reporting the most positive figure even though it is a decline year on year. The Nationwide site has done some good seasonal adjustment. Figures are +0.1% MoM (from +2% MoM last month) but the YoY figure has changed from +11% last month compared to +10% this month.

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HousePriceMania
22 minutes ago, Frank Hovis said:

 

I would genuinely love to see a collapse and think it inevitable, in real terms if not nominal owing to currency devaluation, but I don't see it as being remotely imminent.

My timescale for upsizing is maybe in 8 to 12 years' time and I'm not even convinced that it will happen by then.

I hope you are right but am genuinely surprised that as a long time HPCer and now here that you feel that you are able to call an imminent property crash with any confidence given quite how many times this has looked to be inevitable and the government has shifted the goalposts in order to prevent its happening.

Even if rates rise as @sancho panza suggests, and I anyway see anything other than a token rise as being unlikley, the government can still differentially keep down mortgage interest rates by acting as a guarantor.

I'm probably ten times bitten ten times shy when it comes to a property crash; though that does mean that if we do get one it will be a lovely surprise. 

Unless I have upsized just before it happens.

 

jim-bowen-bullseye-newcastle-united-nufc

It's all down to the IRs and/or Term Funding.

"The extended reference period will run from 31 December 2019 to 30 June 2021 (extended from 31 December 2020)"

Term Funding, for me, is the thing that is supporting the market, it has forced down mortgage rates, made saving pointless for millions and provided the money, risk free, to banks to lend to any subprime moron.

Has it actually ended ?  I thought it had been extended into 2022 but cant find a reference to that.

If so the expect savings/mortgage rates to go up when the banks have lent out their drawdowns.

This is a classic....

https://www.computershare.com/News/Moving on from the TFS CPU May 2019 FINAL.pdf

"How will MUTUALS raise cash when term funding ends..."

"Many anticipate this will drive intense competition and result in increased rates for both savings and mortgages."

 

Everyone's looking at IRs, Im not. I'm looking at Mutual's saving rates. people seem to forget saving rates were 3-5% when IRs were 0.5%, it was term funding ( from that evil list parasitic cunt of man Carney ) that created the 2nd bubble reflation.

 

Edited by HousePriceMania
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7 minutes ago, HousePriceMania said:

It's all down to the IRs and/or Term Funding.

"The extended reference period will run from 31 December 2019 to 30 June 2021 (extended from 31 December 2020)"

Term Funding, for me, is the thing that is supporting the market, it has forced down mortgage rates, made saving pointless for millions and provided the money, risk free, to banks to lend to any subprime moron.

Has it actually ended ?  I thought it had been extended into 2022 but cant find a reference to that.

If so the expect savings/mortgage rates to go up when the banks have lent out their drawdowns.

This is a classic....

https://www.computershare.com/News/Moving on from the TFS CPU May 2019 FINAL.pdf

"How will MUTUALS raise cash when term funding ends..."

"Many anticipate this will drive intense competition and result in increased rates for both savings and mortgages."

 

Everyone's looking at IRs, Im not. I'm looking at Mutual's saving rates. people seem to forget saving rates were 3-5% when IRs were 0.5%, it was term funding ( from that evil list parasitic cunt of man Carney ) that created the 2nd bubble reflation.

 

Good.

That looks like something genuinely new rather than people's exasperation at an unsustainable bubble simply ploughing on.

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HousePriceMania
22 minutes ago, Frank Hovis said:

Good.

That looks like something genuinely new rather than people's exasperation at an unsustainable bubble simply ploughing on.

I genuinely thought it had been extended to 2022, then expected it to be extended again.  If anyone can confirm the end date of Term Funding that would be useful. Or have they bought in a new scam ?

 

Eitherway, what I said holds, savings/mortgage rates fell because the Banks/Mutuals did not need savers money because the BoE funded them directly.  When that ends, so does the bubble.

 

P.S. I keep thinking this is 2020 due to being under house arrest I think

Edited by HousePriceMania
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11 minutes ago, Lightscribe said:

House prices are based on affordability of debt. That added on to the cost of living skyrocketing through inflation will do the damage alone even without interest rate rises or a BK.

Wealth has flowed upwards alongside the boomer generation (surprise surprise considering decade after decade monetary/economic policy in favour of the largest voting demographic)

Firstly until the 80’s-90’s, one breadwinner in a household was entirely possible. After that a whole new consumer base was now available  to push consumerism further with second breadwinners working too. Then after that outsourcing manufacturing and importation of labour for cheaper and cheaper goods kicked the can further.

Gold plated index linked pensions all the while ticking up nicely to buy a second home in Spain and retiring at 50. That always going to fall of the younger generations to pay for and was always unsustainable.

So in conclusion yes, theoretically house owners can buy and sell to one another indefinitely like a big game of monopoly. Still doesn’t change the underlying economic time-bomb however that supports the the whole shebang. Boomers are dying out, and the working younger generation aren’t producing more and more consumers to keep the plates spinning like what happened in the last 40 years. They’re having one to two sprogs at best, a lot opting out entirely.

What that makes is an inverted economic pyramid. Inflation makes that come crashing down by taking out the base. Inflation, coupled with finite resources spells the end for capitalism in its current form.

Yes it is inevitable, it’s just when. The governments know this too and are directing the charade accordingly.

Nice summary :Beer:

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2 hours ago, sancho panza said:

HPM do you have a site that allows us to track property price changes.I was using property log on chrome but it's blanking otu the numbers now.?

and jsut before rates rise.Beeb hierarchy msut have BTL's to shift in central Londinium

Try PATMA its a chrome extension/

image.png.87403763b826c318066df2f4d96a8749.png

Edited by Hancock
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1 hour ago, HousePriceMania said:

I genuinely thought it had been extended to 2022, then expected it to be extended again.  If anyone can confirm the end date of Term Funding that would be useful. Or have they bought in a new scam ?

 

Eitherway, what I said holds, savings/mortgage rates fell because the Banks/Mutuals did not need savers money because the BoE funded them directly.  When that ends, so does the bubble.

 

P.S. I keep thinking this is 2020 due to being under house arrest I think

Worth dropping in on Shaun ricards blog and popping a question on term funding when it's relevant to his days post.He's a real gent and normally replies

Problem is that TFS may have been ended but usurped by another scheme.It's four year money.

One of Shaun's big ciritscisms was that the bulk of the businesses who accessed it via the banks were BTL Landlords.

https://www.bankofengland.co.uk/markets/market-notices/2020/extension-of-the-tfs-with-additional-incentives-for-smes-tfsme

Published on 17 December 2020

The TFSME was launched in March 2020 as part of measures to respond to the economic shock from Covid-19. Reflecting the exceptional nature of developments in the economy, the MPC has agreed a six month extension of the TFSME to ensure it can continue to deliver its objectives. The extension will cover both the Drawdown Period and Reference Period of the scheme..

The extended Drawdown Period will run until 31 October 2021 (extended from 30 April 2021).

The extended Reference Period will run from 31 December 2019 to 30 June 2021 (extended from 31 December 2020).

 

https://www.bankofengland.co.uk/news/2020/april/the-tfsme-will-open-to-drawings-on-april-15-2020

The TFSME allows eligible banks and building societies to access four-year funding at rates very close to Bank Rate. The scheme is designed to incentivise eligible participants to provide credit to businesses and households to bridge through the current period of economic disruption caused by the outbreak of Covid-19.

1 hour ago, Lightscribe said:

House prices are based on affordability of debt. That added on to the cost of living skyrocketing through inflation will do the damage alone even without interest rate rises or a BK.

Wealth has flowed upwards alongside the boomer generation (surprise surprise considering decade after decade monetary/economic policy in favour of the largest voting demographic)

 

Like @Frank Hovis I've been bitten many times and now jsut follow the data.In my investment work for the family I'm constasntly hedging a BK deflationary event in the banking sector but not trying to predict when it will come-and it will.

The game changer here is the cost of living,first time we've had rises in inflation measures in years and we all know that inflation as it's measured doesn't fall across all income groups equally.Young working people are seeing a lot of teh inflation in costs but none in their assets(as they don't have much).

If the transaction data is correct then Dow theory says something is possibly happening ie price spike one way or the other.

Edited by sancho panza
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HousePriceMania
43 minutes ago, sancho panza said:

 

The extended Drawdown Period will run until 31 October 2021 (extended from 30 April 2021).

The extended Reference Period will run from 31 December 2019 to 30 June 2021 (extended from 31 December 2020).

 

If the drawdown period is ending soon then we should expect to see savings rates moving up and mortgage rates to.

Now, if the BoE has to raise interest rates at the same time, then the housing market is facing the perfect storm of

1) Rising mortgage rates

2) Rising interest rates

3) Price inflation

4) Tax rises

5) End of Term Funding/Sub prime lending

6) Recession

7) Extreme prices

8) Surge in supply

9) Return to offices

10) Chinese investor in trouble

 

I called the top of the bubble a couple of weeks ago after seeing the  latestproperty log data, I'll stick by that for now. If TermFunding is dead in the water it's even more likely, I didn't realise that at the time.

More UKPL data should be available early next week.

If that shows a clear rise in listings and price drops across the board again then it's going to be a long winter for the people who bought into the covid bubble then an even longer more worrying summer, followed by divorce and repossession.  Not sure who'll get the £3000 dogs when the divorces happen.

Edited by HousePriceMania
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1 hour ago, Lightscribe said:

House prices are based on affordability of debt. That added on to the cost of living skyrocketing through inflation will do the damage alone even without interest rate rises or a BK.

Don't forget taxes. I expect big rises in council tax come April. You have the NI increases coming in. There's also a strong suggestion that student loan repayments (which are effectively another tax) will kick in on much lower salaries than at present.

Not to mention the existing marginal rates that can trap the unwary if they hope wage inflation will ride to the rescue. I got 3.5% this year, but my disposable income won't increase a jot. The marginal rate above £50K, if you have kids, means that the only sensible course of action is to dump anything above into your pension.

At some point the massive increase in outgoings has got to start hurting the ability to pay more and more money for shittier and shittier houses.

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32 minutes ago, sancho panza said:

Worth dropping in on Shaun ricards blog and popping a question on term funding when it's relevant to his days post.He's a real gent and normally replies

Problem is that TFS may have been ended but usurped by another scheme.It's four year money.

One of Shaun's big ciritscisms was that the bulk of the businesses who accessed it via the banks were BTL Landlords.

https://www.bankofengland.co.uk/markets/market-notices/2020/extension-of-the-tfs-with-additional-incentives-for-smes-tfsme

Published on 17 December 2020

The TFSME was launched in March 2020 as part of measures to respond to the economic shock from Covid-19. Reflecting the exceptional nature of developments in the economy, the MPC has agreed a six month extension of the TFSME to ensure it can continue to deliver its objectives. The extension will cover both the Drawdown Period and Reference Period of the scheme..

The extended Drawdown Period will run until 31 October 2021 (extended from 30 April 2021).

The extended Reference Period will run from 31 December 2019 to 30 June 2021 (extended from 31 December 2020).

 

https://www.bankofengland.co.uk/news/2020/april/the-tfsme-will-open-to-drawings-on-april-15-2020

The TFSME allows eligible banks and building societies to access four-year funding at rates very close to Bank Rate. The scheme is designed to incentivise eligible participants to provide credit to businesses and households to bridge through the current period of economic disruption caused by the outbreak of Covid-19.

Like @Frank Hovis I've been bitten many times and now jsut follow the data.In my investment work for the family I'm constasntly hedging a BK deflationary event in the banking sector but not trying to predict when it will come-and it will.

The game changer here is the cost of living,first time we've had rises in inflation measures in years and we all know that inflation as it's measured doesn't fall across all income groups equally.Young working people are seeing a lot of teh inflation in costs but none in their assets(as they don't have much).

If the transaction data is correct then Dow theory says something is possibly happening ie price spike one way or the other.

Isnt the govt backing mortgages replacing FFL/TFS?

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HousePriceMania
11 minutes ago, Hancock said:

Isnt the govt backing mortgages replacing FFL/TFS?

Term Funding is basically handing QE money to the banks, which insanely, they lever up IIRC.  I'd hope the mortgage guarantee is just insurance the banks against their losses when they come to repo everyone.

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3 hours ago, Frank Hovis said:

Even if rates rise as @sancho panza suggests, and I anyway see anything other than a token rise as being unlikley

Well Francis you're wrong as Captain Wrong having a wrong day on HMS Wrong's focsle. 

Today my bank (Marcus) notified me that they were increasing the interest I get by 25%

How's that for a lucky day. 

 

 

 

IMG_20210930_163054.jpg

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7 minutes ago, Funn3r said:

Well Francis you're wrong as Captain Wrong having a wrong day on HMS Wrong's focsle. 

Today my bank (Marcus) notified me that they were increasing the interest I get by 25%

How's that for a lucky day. 

 

 

 

IMG_20210930_163054.jpg

Go and login, then choose to add the 1-year 0.1% bonus, and you will be up to 0.6%. hurray, you will be rich.

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13 minutes ago, Funn3r said:

Well Francis you're wrong as Captain Wrong having a wrong day on HMS Wrong's focsle. 

Today my bank (Marcus) notified me that they were increasing the interest I get by 25%

How's that for a lucky day. 

 

 

 

IMG_20210930_163054.jpg

 

Congratulations Funner and I now will eagerly await NS&I doing similar to my premium bonds given that I've just gone back up to the max.

 

(Who thought "Marcus" was a good name for a bank????)

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7 minutes ago, Frank Hovis said:

(Who thought "Marcus" was a good name for a bank????)

It's Goldman Sachs really but they wanted to brand it differently so they named it after Marcus Goldman (or Sachs I can't remember) 

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2 minutes ago, spunko said:

The bubble pop must surely be written in now. I'm seeing 3 bedroom cottages going SSTC round here for over a million quid. There's completely unsustainable and then there's that...

I saw a new build 4 bed go on the market this week in rural Dorset. Tiny rooms, tiny garden, grand designs type thing, built in a plot that used to be someone's  back garden. I would say that it's overpriced at £400k, it is listed at £850k.

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