375 days ago
As you know I read the Mail on Sunday so that you don’t have to. Today it has an interesting, if predictably inaccurate and vile, article on buy to let and problems it faces. This I discuss.
688 days ago
Today we are donating £2500 to Rogue Bloggers for Woodlarks. I don’t ask you to follow suit but if you are among the 93% of listeners yet to donate to this cause with just 6 days to the event how about giving a fiver here? Then onto Genflow (GENF) in light of the Hindenburg dossier HERE. Then after observations from Chris Bailey earlier on Barratt (BDEV) I look at house prices and house builders.
2793 days ago
Yes my day is dominated by the suicide note penned by Memery Crystal for the fraudsters African Potash (AFPO), aka its fascist letter sent to me yesterday. I am preparing a response. What is it you say? Aha...wait and see. I also look at Glenwick (GWIK), Eckoh (ECK), Cloudtag (CTAG) and McCarthy (MCS) and what that says about the impending house price crash. I explain why this really is a global asset class and refer you to what is happening across the pond.
3053 days ago
I am sitting here with my father in Shipston. We have just had a long argument about the deaths of Cranmer, Latimer & Ridley. Naturally we both insisted we had the facts right. I am now 1p better off as I was right. My father has gone to the White Bear early in protest. Back to the podcast, I start with US base rates and why the UK will follow and what that means (house price crash, bad for certain equities). Then it is the AIM disgrace of the day Concha (CHA), onto Afriag (AFRI), Inspirit (INSP), Ultimate Sports (USG), Fastjet (FJET), and the shocker of a July IPO Adgorithms (ADGO). It is another day of shame for AIM.
3871 days ago
George Osborne is set to follow Nigel Lawson as the chancellor who created a mega house price bubble. It is fun while it lasts but real pain is on the way. It is only a matter of when.
4263 days ago
My piece on how UK house prices will fall by 30% prompted a range of comments. I am not surprised, house prices and the weather are two defining British obsessions. A couple of folks asked why the media/politicians always talk about rising prices as a good thing when they are patently nothing of the sort.
Incidentally, the reason that they are a bad thing is that unaffordable housing prevents labour mobility thus making the UK economy less productive. Moreover the need to a) borrow vast sums to purchase a place and b) spend vast sums funding and repaying that debt leaves the UK population as a whole far too heavily overborrowed and b) have less cash to do sensible things like save for a pension.
So why do the media and politicians say that rising house prices is good news and vice versa? Simple. Demographics. Younger folk (who cannot afford to “get on the ladder”) and the poorest folk who are equally excluded are far less likely to a) vote or b) read newspapers than those who typically own homes. And thus the newspapers are simply buttering up their readers and politicians are simply pretending to have the interests at heart of those who are most likely to troop down to the polling station. It is naked self-interest, nothing more and nothing less.
Meanwhile a reader in his late twenties emails me to say that a) I am wrong – prices will not fall and b) he is saving vast sums by buying an apartment and not renting and handing over cash to a “fat 50 year old landlord.” On the first matter, assertion is not the same as reasoned argument. But I should also pick him up on the second matter
4265 days ago
Whether house prices are increasing too rapidly or falling, there are always calls for the Government to do something. If they are going up to fast, house builders and The Guardian call for more homes to be built. If they are falling rapidly then the daily mail calls for tax breaks for “hard pressed homeowners.” We never hear calls from the Guardian to knock down empty homes of house prices are falling or from The Mail to provide tax breaks for builders to build more of they are rising. Odd that. This is one asset class which is – for most folks – not actually an investment but where folks from across the political spectrum constantly demand that the free market be distorted in order to make it a risk free investment. But of course it is not risk free. And I fear that in real, and perhaps in nominal, terms UK house prices must fall and by quite a material degree.
For the fact is that the increase in house prices during the past ten years has been unsustainable. According to the National Housing Federation, the average house price has increased from £121,769 in 2001 to £236,518 last year a 94% increase. During that time the average salary has increased from £16,557 to £21,330 – a gain of just 29%. Just looking at those numbers something is not quite right.
4306 days ago
I will give you a clue. The official unemployment rate is 22.5%. Actually that is not a very good clue because like every other economic statistic churned out here in order to obtain/maintain Euro membership it is, ahem… a lie. If I offered you a spread of 25-26 would you buy or sell? Buy you say? You win.
The figures are massaged in a number of ways but here are the main three.
