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| The UK housing market: a bubble about to burst? |
Mr Britain
by spindrift
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#1001221
of 3278
 02 Dec 2002
12:56 PM |
Mr Britain,re your comments about the effect on house pruices of asylum seekers with AIDS.
It is extremely difficult for an asylum seeker to register with a doctor, even when GPs will register refugees, according to a research paper by the Royal College of General Practitioners, they will often only register them as 'temporary', even though an asylum seeker may remain in an area for months or years. The RCGP researchers suggests that some GPs do this because they fear losing the income associated with reaching certain targets for cervical screening and vaccinations.
The 1999 Immigration and Asylum Act took away an asylum seekers' automatic right to free prescriptions.
Some asylum seekers are deliberately infected with HIV after being raped.
For you to refer to this fact in the context of the potential negative impact on house prices is distasteful at best. |
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by Pangloss
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#1001220
of 3278
02 Dec 2002
12:45 PM |
| "It is demonstrable," said he, "that things cannot be otherwise than as they are; for as all things have been created for some end, they must necessarily be created for the best end. Observe, for instance, the nose is formed for spectacles, therefore we wear spectacles. The legs are visibly designed for stockings, accordingly we wear stockings. Stones were made to be hewn and to construct castles, therefore My Lord has a magnificent castle; for the greatest baron in the province ought to be the best lodged. Swine were intended to be eaten, therefore we eat pork all the year round: and they, who assert that everything is right, do not express themselves correctly; they should say that everything is best." |
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Hoogie's pornocopia - a credibility test for HJS
by Helen
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#1001219
of 3278
02 Dec 2002
12:22 PM |
To Hoogstraten/Jack Straw (HJS)
I see you have been at the copy and pasting again. Since you seem to be doing little other than wasting your employer’s time, I thought it would be nice if you showed (with posting numbers to back you up) where the CAMP DMs (your names) made their forecasts of a 40% - 70% fall in real house prices and a repeat of the Great Depression.
From my records, I note that their names are Extradry Martini, Engineer, Rob G, Rev.hk, DJW, Sho-Ryuken, Knowledge is Power, Singapore D, Richard Head & Jeff Morgan. I have read all their postings and cannot find much, aside from one by Extradry Martini, to link them any of the extremities alleged by you.
In fact, I tend to agree with Richard Head that a proper reading of Hayek would point to you as the meek-ling, hoping to avoid paying for all the excesses of cheap capital and gormless optimism. As a self-proclaimed capitalist, you of all people should know that capitalism without bankruptcy is like christianity without hell. Any bailouts now will only make the final reckoning that much more painful.
More important, thank you for celebrating my maths book “Tom Thumb’s Musical Maths’ and then using it for your leveraged finance calculations in postings 1177 to 1192.
Just in case any of Sunday’s sleepers missed it, I'd like to mention again that I was most impressed by your decency in proving that buying property is the same thing as buying equities on margin, meaning that while you can make a lot of money if the market goes up, you can end up warming your ankles with Marks and Spencer’s finest if it goes down and you’ve just got in.
This was a most generous act on your part and goes against everything that you have said about property being a free lunch with Eddie’s put option as back-up.
I admire you for this selfless act of highlighting both your own double standards and the risks associated with buying assets which have appreciated in value oh so very sharply in the past four years. Most new-born property owners, I doubt, have even the slightest idea what leveraged finance is, much like they had no idea what they were doing in tech stocks in late 1999.
Your honesty is to be greatly appreciated, I’m sure, and should sere as a warning to anyone foolish enough to think that what goes up will always go up.
For the record, Sho-Ryuken’s central question remains unanswered, three times now -:
When has a market boom not been followed by a bust?
Would you care to answer the question please. Today would be great timing.
Your usual tactic of avoiding difficult questions and waiting to ridicule a faux pas or someone’s name is well known and has had its day.
Your credibility rests on a proper answer.
Show us the money, if you have any!
Yours
Helen |
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for Hoogie AKA Jack Staw
by Singapore D
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#1001218
of 3278
02 Dec 2002
09:08 AM |
I too have a proverb:
"Fools rush in where wise men fear to tread"
Blind optimism despite the lessons of history (recent history in the case of the 89-92 negative equity episode) strikes me as foolish. |
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Pessimism
by NM
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#1001217
of 3278
02 Dec 2002
09:07 AM |
| A pessimist is a well informed optimist |
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The sky is falling down!
by Hoogstraten
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#1001216
of 3278
02 Dec 2002
08:59 AM |
Some of the doom mongers appear to have worked themselves into such a state of pure misery and depression - I am genuinely concerned for their health. Before all the doom mongers slash their wrists, in the interests of the public good I will hit you with a few quotes that might pull you out from the depths of despair on this glorious Monday morning:
“The pessimist may be right in the long run, but the optimist has a better time during the trip.”
Unknown
"Better to light a candle than to curse the darkness."
Chinese Proverb
"A pessimist is one who makes difficulties of his opportunities and an optimist is one who makes opportunities of his difficulties."
Harry Truman
"It takes but one positive thought when given a chance to survive and thrive to overpower an entire army of negative thoughts."
Robert Schuller
“When you have seven percent unemployed, you have ninety-three percent working.”
John F. Kennedy
“When it is darkest, the stars come out.”
Unknown
“Optimism is the faith that leads to achievement. Nothing can be done without hope and confidence.”
Helen Keller
“A pessimist sees only the dark side of the clouds, and mopes; a philosopher sees both sides, and shrugs; an optimist doesn't see the clouds at all - he's walking on them.”
Leonard Louis Levinson
RealFakeElvis – you need to listen to the lyrics:
Wise men say
That only fool’s rush in
But I can’t help
Falling in love with property.
Mr Britain – your mails are some of the best on the forum. It usually takes five minutes of belly laughing before I can compose myself to reply.
You throw bile at aids ridden immigrants – and then admit you are an immigrant in Belgium! Extraordinary! I am intrigued by the farmer conspiracy theories you raise – are the peasants actually going to riot and burn the properties (carrying pitchforks and so forth)? You will need to send another mail to further elaborate on this –I find this intriguing. I am pleased for you that Belgium realises all of your hopes and dreams.
Finally, Singapore D (I assume you are another expat?).
You say:
“It seems that Richard Head and all those other critics of your views are getting the upper hand in this discussion. Not surprising since the poll results back them up.”
Lets see what Immanuel Kant said on popularity contests:
“Seek not the favour of the multitude; it is seldom got by honest and lawful means. But seek the testimony of few; and number not voices, but weigh them.”
You say:
“…These are not the conditions under which a first-time buyer should take out a mortgage.”
I will again reply with a quote:
“Generosity gives assistance, rather than advice.”
Vauvenargues
Finally, a thought for the day:
“Whatever you can do or dream you can, begin it. Boldness has genius, power and magic in it….”
Johann Wolfgang Von Goethe 1749 |
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for Hoogie AKA Jack Straw
by Singapore D
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#1001215
of 3278
02 Dec 2002
05:08 AM |
It seems that Richard Head and all those other critics of your views are getting the upper hand in this discussion. Not surprising since the poll results back them up.
It seems to me that you may be making the understandable mistake of denying there is a bubble in the housing market simply because you have a financial interest in the bubble continuing, as indeed does anyone who has taken out a mortgage in the last couple of years (and who have bought with a view to making money rather than having a place to live).
Historically high house prices, record levels of personal debt, interest rates which are extremely low but which can only go up, and a looming recession:
These are not the conditions under which a first-time buyer should take out a mortgage.
Property values may well increase over a 25 year period but to commit to this level of debt when the 5-year outlook may be one of falling property prices, rising interest rates and increasing job insecurity is NOT sensible.
The number of properties to let is high, and rents are falling. This is due to the number of properties bought by speculators and let while they wait for it's value to rise by 20%. When prices start to fall (as they inevitably will), these speculators may panic and dump their properties onto an already saturated market.
Greed and fear drive all markets, and at the moment greed has the upper hand. When fear takes over, the consequences for those left holding a 200,000 mortgage on a property worth 100,000 will be terrible to behold. |
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Mr Hoogstraten
by Mr Britain
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#1001214
of 3278
02 Dec 2002
12:31 AM |
Tony Blair Loves Suckers (TBLS) club are looking for new members and I feel you are wasted under the Purveyor Of Ridiculous Notions (PORN) club. I would be delighted to nominate you for the presidency of TBLS but you will need to prove that you have less than £2000 in assets to qualify.
Do you always twist what members have said ?
What part of Aids and immigrants (with or without Aids) costs money do you not understand.
What part of the IT Bubble popping or farmers being put out of business leads you to come out with comments like “Farmers are going to cause the property collapse” and it was you not me that branded farmers as “evil farmers” I think they do a good job but foot and mouth (Bio Attack) and the 11 September has destroyed there industry. In my comments I mentioned many other factors such as Taxes and Confidence. Since when has India been a part of Latin America or are you talking about the massive loans we have with Argentina.
Take a look at the Pound against the euro and then reconsider your comments that “the Euro isn’t going to happen in the UK in the foreseeable future.” Seems to me that the UK government and Brussels want us in and you just like me, we both feel that we would be better of without it but history has shown that in our so called democracy it’s governments (not the people) that often win the day.
Opps I suppose these comments make me a communists. Take a look on the left of the screen and see all the communists red writing. FTSE down 1.10%. Guess this is just us communists distorting the markets to make it red. You think these result over time will not affect house prices. I think not. Dream on.
It’s not me that need to do my home work when I say that property prices are now 7 times income. do your self a favour and See Homes-On-Line before buying any more property.
What are you trying to say when you say “Downturns are a feature of capitalism – Great Depressions are not” You keep contradict yourself. Can Downturns not turn into Great Depressions by accident or will Mrs T come to our aid and stop this happening just in the nick of time. Please sign me up as a member of “Communist Against Market Practices (CAMP)” if the rest of the world thinks like you and Jack Straw.
Later in your contradictory comments you say that “The current leverage on property in the UK is currently affordable” Paying £150,000 for a two bed property in Cambridge that has no parking or room to swing a cat is affordability that I can do without thank you.
Property prices have helped keep the economy going but this has been fuelled by low interest rates and consumer borrowing. When the party is over debt must be paid back and I don’t care who you are £100,000 is a lot of money to owe and that’s without interest rates going up.
Just for the record I’ve moved to Belgium and got a larger than average 3 bed property for under £60,000 and that includes taxes (10%) and legal fees. Food, Beer, Fags are cheap and most people can speak English. Taxes are sky high but then again I don’t need to earn much because I don’t have a mortgage to pay. |
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Weaklings...
by Richard Head
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#1001213
of 3278
01 Dec 2002
10:43 PM |
Dear Hoogstraten,
You are quick to tell others to learn to read properly - perhaps you should take your own advice?
I have no wish to see a great depression - it is you who has previously stated that a crash in the property market would cause a great depression. For the record, I think it would probably just involve another recession, and am pleased that you agree that that would be natural corrective feature of a capitalist system.
You contradict yourself so often that it is dificult to know where you stand. Now you say that the current leverage on property in the UK is affordable - why then have you stated previously that a downturn in the property market would lead to a great depression? Surely that would imply that excessive risks have been taken?
The longer the property market boom persists, the greater the risk of a serious downturn. This piece of information comes directly from a prominent member of the BOE. I suppose you think you are more knowledgeable than this individual? I think not, since you won't be the next head of the BOE. Postponing a correction, which you clearly advocate, is likely to result in a more serious correction further down the line. We should allow the capitalist system to take its natural course, and eliminate those unproductive agents that have mis-allocated their resources. YOU are clearly the communist if you believe otherwise.
Only weaklings fear a downturn. Your stance makes me think that you fall into this category. Those of us with stong fundamentals look forward to a correction, as it will eliminate the cowboys from the playing field, and open up new opportunities. It is you who appear shrill and hysterical about a correction - this makes me think that you are afraid of one. I simply think that a correction is inevitable and normal.
In future you are welcome to refer to me as Dick - this will remind me what I think of you. I remain yours faithfully,
Richard Head |
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Thank you very much...
by The RealFakeElvis
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#1001212
of 3278
01 Dec 2002
09:38 PM |
It was the real term 14.2% loss between 1989 and 1999 that interested me. I think I’ll stay in my luxurious rented flat which costs me less than the interest would if I took out a mortgage and bought it. I’ll invest the difference in a cash ISA for the time being. This property owning lark’s far too risky at the moment.
The RealFakeElvis has left the building. |
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Communists Against Market Practices (CAMP)
by Hoogstraten
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#1001211
of 3278
01 Dec 2002
09:24 PM |
Richard Head,
I see you classify me as being a Purveyor Of Ridiculous Notions (PORN).
I think you are a doom monger, but the more correct name would probably be Communist Against Market Practices (CAMP). Downturns are a feature of capitalism – Great Depressions are not. You clearly believe (like most of your CAMP supporters) that we are about to enter another Great Depression when you say:
“The last great depression came about partly due to people taking foolish leveraged risks on the stock market. Hopefully the foolish leveraged risks now being taken on the property market will not result in another...”
None of the CAMP believers can come up with any relevant economic or empirical evidence that would suggest that the circumstances now are in any way similar to before the Great Depression. This is because they are not – the doom mongers are just being shrill and hysterical.
The current leverage on property in the UK is currently affordable – this has been shown time and again on this forum. A 40 – 70% real drop in UK property prices is simply not going to happen. Some people were just born to be tenants.
Finally, if you do not like the doom monger or CAMP labels, I am happy to refer to you going forward as "the meek". You would probably like this, as it means that one day you will inherit the earth! |
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vs 80's warp
by The Grand Inquisitor
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#1001210
of 3278
01 Dec 2002
09:07 PM |
The last post is re: issues of timing. Conclusion timing would have help (gross)returns over short, medium and long term.
Also from data on real returns over similar fixed periods returns have been pretty volatile.
Nominal Real
1974-1984 12.3% 0.2%
1978-1988 13.0% 4.8%
1982-1992 7.0% 1.5%
1986-1996 3.4% -1.1%
1990-2000 4.0% 1.2%
1992-2002 8.2% 5.7%
Here is 80's returns comparison to '89 peak to compare against the 94-02 97-02 numbers.
CAGR Nominal Real
1981-1989 12.6% 6.85%
1984-1989 13.6% 7.75% |
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Purveyors Of Ridiculous Notions
by Richard Head
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#1001209
of 3278
01 Dec 2002
08:24 PM |
I recall an article in the national press some time ago that referred to the "property pornography" in the form of all the "buy a home" and home improvement magazines in the newsagents. The idea being that they should be wrapped up and placed on the top shelf so as not to tempt all of the Hoogstratens and Jack Straws out there (though this is flawed as he is probably most likely to come across them in that location).
The lust for increasingly valuable property is clearly one of the major drivers of the current boom, so the pornography analogy is quite a good one. I can think of no other reason why the market should have risen to such an extent, and we all know that "sex sells". Clearly Hoogstraten is aroused by that neat little pair of terraces with matching door knockers.
Since the realists who believe that what goes up must come down are referred to as Doom Mongers (DM, how unimaginative!), it is now time to categorise Hoogstraten / Jack Straw et al as Purveyors Of Ridiculous Notions (PORN). I respectfully suggest that they may find a more welcoming home at the Daily Express. On second thoughts, the recent front-page headlines in that worthy journal may not be to their taste.
The capitalist system is wonderful. Markets are free to go up - and down! So Hoogstraten is wrong to suggest that people who believe that there may be a crash are communists. This is yet more PORN. Downturns are a capitalist necessity, to make the economy operate efficiently by destroying those that take foolish risks. The last great depression came about partly due to people taking foolish leveraged risks on the stock market. Hopefully the foolish leveraged risks now being taken on the property market will not result in another..... |
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Hmmm...
by The RealFakeElvis
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#1001208
of 3278
01 Dec 2002
07:45 PM |
| So, as most of us feel that we are currently in a late 80s timewarp, what should we conclude from these figures? |
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Timing.... any term
by The Grand Inquisitor
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#1001207
of 3278
01 Dec 2002
07:02 PM |
In the long run we will all be rich but some may be richer than others....
Unfortunately, these numbers ignore differences in costs, taxes etc.
All based on Nationwide Average House Prices
Capital gains (gross) from
price changes from:
Nominal Returns
Total Increase
1974-1984 218.8%
1978-1988 240.3%
1980-1990 133.7%
1983-1993 78.4%
1989-1989 21.4%
1992-2002(Q3) 120.9%
Real Returns
Total Increase
1974-1984 2.4%
1978-1988 59.1%
1980-1990 24.9%
1983-1993 8.9%
1989-1999 -14.2%
1992-2002(Q3) 74.7%
Equivalent compound annual growth rate of capital gains on prices of property:
Nominal Returns
CAGR
1974-2002(Q3) 8.89%
1978-2002(Q3) 8.17%
1980-2002(Q3) 7.30%
1983-2002(Q3) 7.39%
1989-2002(Q3) 4.64%
1994-2002(Q3) 9.89%
1997-2002(Q3) 12.78%
Real Returns
CAGR
1974-2002(Q3) 2.11%
1978-2002(Q3) 2.74%
1980-2002(Q3) 2.85%
1983-2002(Q3) 3.43%
1989-2002(Q3) 1.45%
1994-2002(Q3) 7.27%
1997-2002(Q3) 10.16% |
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