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UK House prices: News & Views

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Just watched the first episode, quite shocking really, it's so far removed from any situation I've had to live in.

 

I'm at a loss for what we do with the kind of people featured in the show.

 

On the one hand they seem so hopeless and irresponsible that I can't imagine they'd ever be productive members of society, so paying to keep them away from me on a sink housing estate with just enough money to keep them in a poor lifestyle seems like a reasonable option. It's very hard to think of them as adults capable of rational thinking, beyond short-term gratification.

 

YET (it may be cruel to speak the truth here):

 

YOUR TAXES are at work, providing incentive to EXPAND the size of this population (that you want kept away.)

 

The more reckless breeding like this, the more likely you will find "them" as your neighbors.

 

My solution of REMOVING THE INCENTIVE is the least cruel genuine remedy.

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Just watched the first episode, quite shocking really, it's so far removed from any situation I've had to live in.

 

I'm at a loss for what we do with the kind of people featured in the show.

 

On the one hand they seem so hopeless and irresponsible that I can't imagine they'd ever be productive members of society, so paying to keep them away from me on a sink housing estate with just enough money to keep them in a poor lifestyle seems like a reasonable option. It's very hard to think of them as adults capable of rational thinking, beyond short-term gratification.

 

But then I wonder if that system is just trapping them and making them more helpless and irresponsible? Are they actually better off living on state benefits?

 

Inspired by a post on another website I read, I tried to calculate if someone in the UK could live a life on minimum wage without state help and the result sort of shocked me.

 

My assumptions are based on a person living by themselves working a 37.5 hour week on minimum wage.

 

£11,856.00 Annual Gross Income

(£757.64) Income Tax

(£450.89) National Insurance

(£592.80) 5% Pension Contribution

£10,054.67 Annual Net Pay

£837.89 Monthly Net Pay

 

Monthly Recurring Costs

(£350.00) Private Rent for 1-Bed Flat

(£6.00) Contents Insurance

(£64.00) Council Tax (inc. 25% reduction for single person discount)

(£20.00) Gas utility bill

(£20.00) Electricity utility bill

(£20.00) Water utility bill

(£12.00) Television Licence

(£110.00) Groceries (Based on £3 per day for food, plus £20 for cupboard items, cleaning supplies, toiletries, etc...)

(£10.00) Medical (Medicines, Opticians, Dentist, etc...)

(£55.00) Monthly Bus Pass

(£667.00) TOTAL Monthly Recurring Costs

 

 

£179.89 Monthly Remainder to choose how to split on;

- Savings

- Phone & Internet

- Household items (furniture, electrical, repairs, etc...)

- Clothing

- Haircuts

- Entertainment

- Presents

- Holidays

 

I wouldn't say £40 per week in the UK after you've paid your recurring costs was living, it's just surviving really.

 

What suprised me was quite how much tax would be taken once you've added up income tax, national insurance, council tax and VAT on purchases.

I think there are some months that I live on LESS THAN THAT here in Hong Kong.

 

How?

I own my property, and the management cost of about Pds 150 / month as split with my partner, who has a real job.

 

Your "Monthly Bus pass" of GBP 55 is about HK$600, which gets me 30 round trips to Central by MTR. That's not far from my actual transport in some months. Other travel from me in HK may mean walking.

 

But there are other months where I "splash out" and spend way more than that, but I wanted to illustrate that in a city unburdened by excessive transport costs, and excessive taxation, you can live reasonably well, without spending a lot. HK is a cheap place to live, once you sort out your housing.

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Just saw this post over at HPC:

 

The countess exchanged contracts on the flat she owns in London today.

 

Clapham area.

 

£410K for a 2 bed flat !!!!! Cash buyer.

 

Are people with cash just stupid ?

 

The sold price is top whack and I mean top whack, peak prices + 10%.

 

Also an artcle in today's Indy Unhappy Families: Uk Is Third Worst In Europe For Home Life

 

er, ahead of Bulgaria and Romania.

 

London the City state that lives in it's own bubble!

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I think there are some months that I live on LESS THAN THAT here in Hong Kong.

 

How?

I own my property, and the management cost of about Pds 150 / month as split with my partner, who has a real job.

 

Your "Monthly Bus pass" of GBP 55 is about HK$600, which gets me 30 round trips to Central by MTR. That's not far from my actual transport in some months. Other travel from me in HK may mean walking.

 

But there are other months where I "splash out" and spend way more than that, but I wanted to illustrate that in a city unburdened by excessive transport costs, and excessive taxation, you can live reasonably well, without spending a lot. HK is a cheap place to live, once you sort out your housing.

 

I saw that minimum wage in HK was just introduced at HK$28 per hour (~£2.18)

 

http://www.bbc.co.uk/news/business-13248027

 

Could a single HK person live without relying on the state, what would their living arrangement/lifestyle expectations be, what would they do without family?

 

I think you've said before that social housing is the norm for a very large proportion of HK citizens, does it work well?

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Clapham area.

£410K for a 2 bed flat !!!!! Cash buyer.

Are people with cash just stupid ?

Cash buyers deserve a DISCOUNT,

since there is much less risk of the deal failing due to a "break in the chain" etc

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How?

I own my property, and the management cost of about Pds 150 / month as split with my partner, who has a real job.

Well that is certainly a great way to reduce the monthly outgoings. If only I owned my own property outright, I’d save a fortune! :rolleyes:

 

So, back to the good old USofA, we said it could happen, we guessed it probably would happen, and now it seems, it is happening!

 

Illinois plan to cut mortgage debt is making waves

Would helping hand for ‘underwater’ borrowers make a difference?

 

The debt write off (reduction of mortgage debt for the "common" man) begins!

 

http://www.marketwatch.com/story/illinois-plan-to-cut-mortgage-debt-is-making-waves-2011-05-23?pagenumber=1

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...

The debt write off (reduction of mortgage debt for the "common" man) begins!

 

http://www.marketwatch.com/story/illinois-plan-to-cut-mortgage-debt-is-making-waves-2011-05-23?pagenumber=1

 

I'm not sure that proposal makes any sense, the example given is a $180,000 mortgage on a house 'worth' $150,000 that for some reason the bank would be willing to sell to this scheme for $90,000 rather than foreclose to try to recover its 'worth' of $150,000 minus foreclosure costs. Does the foreclosure process really cost the bank $60,000?

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The debt write off (reduction of mortgage debt for the "common" man) begins!

 

http://www.marketwatch.com/story/illinois-plan-to-cut-mortgage-debt-is-making-waves-2011-05-23?pagenumber=1

 

Err more like debt write off could maybe possibly start as long as a whole bunch of things come to pass :rolleyes::rolleyes: :rolleyes:

 

needs the approval of the U.S. Treasury Department to move forward

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What they are selling, they are selling in places like HK and Singapore

 

Yesterday, I actually visited a new project under construction. It was called Woodberry in Manor House.

 

It was rather beautiful, with a 23 story Tower overlooking a reservoir.

 

In fact, it looked at least as nice as the advertising brochures I had seen in Hong Kong.

 

The nice young woman in the marketing suite, was shocked to find a "walk-in" from HK. She did her best to describe the merits of the project. I told her I was yet ready to buy and wanted to have a look around.

 

The price was nearly GBP 500 per sq foot for a high floor flat. 461 per sf, I think it was.

 

That was a flat of less than 900 sf on the 23rd floor, with a view towards the city.

 

My idea was:

If there are enough new flats like this going in, it might "gentrify" the area. I had read about 1,500 new flats to be built. In fact, they are selling under 200 new flats there - a drop in the bucket. The rest are being built new (to a lower spec) and will be turned back to the council for affordable housing.

 

This will be great for the subsidised tenants who will wind up living there. But there will be little gentrification from the effort. Less than 200 new families (with more money to spend) will be a drop in the bucket.

 

After seeing the merits of the new development, I wandered around the area. Across the street, I stopped for lunch at a place called Erics Cafe, and ordered a pork chop. It arrived covered with brown gravy and so were the mushy green peas. It took me almost 5 minutes to scrape it off, before I ate it.

 

The Chinese takeaway next door was closed. Probably for lack of business. Someone from HK or Singapore should buy it. In September 2012, just before the property is completed. The 100+ new owners from the Far East will want a place to eat where they can avoid mushy peas covered with brown gravy.

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Barratt was down a bunch yesterday, over -5p

 

The recent high was a tick over 120p. And Monday it closed at 111p on moderate-low volume.

 

BDEV-chart

 

A fall thru 100p on high volume would be very negative. Let's see what news that will require,m if we see it.

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I'm not sure that proposal makes any sense, the example given is a $180,000 mortgage on a house 'worth' $150,000 that for some reason the bank would be willing to sell to this scheme for $90,000 rather than foreclose to try to recover its 'worth' of $150,000 minus foreclosure costs. Does the foreclosure process really cost the bank $60,000?

I'm not 100% sure, (maybe Bubb can confirm) but I thought in some areas, the number of foreclosures (and empty houses) was dragging prices lower and destroying whole neighbourhoods. The banks were writing off huge amounts and some "investors" were picking up places for 10c on the $.

Err more like debt write off could maybe possibly start as long as a whole bunch of things come to pass :rolleyes::rolleyes::rolleyes:

 

:D True, but then again, the big UK banks are letting people off large portions of their debt in Eire :(

 

Barratt was down a bunch yesterday, over -5p

 

The recent high was a tick over 120p. And Monday it closed at 111p on moderate volume.

 

A fall thru 100p on high volume would be very negative. Let's see what news that will require,m if we see it.

 

Whole market got hammered yesterday, BDEV back up to 113 this morning.

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Whole market got hammered yesterday, BDEV back up to 113 this morning.

112p now, and threatening to go Red

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I saw that minimum wage in HK was just introduced at HK$28 per hour (~£2.18)

 

http://www.bbc.co.uk/news/business-13248027

 

Could a single HK person live without relying on the state, what would their living arrangement/lifestyle expectations be, what would they do without family?

 

I think you've said before that social housing is the norm for a very large proportion of HK citizens, does it work well?

There's a group that rely on government handouts, and live okay on them.

 

But they aspire towards better, and familes in such a situation want better for their children.

 

I had a neighbor who was a patent attorney and came from a background like that. He said that his family had had it better than the working poor, whose circumstances were just good enough that they did not qualify for the safety net.

 

The thing about the HK system is that it does not seem to create GENERATIONS of benefit-takers, as the UK system does. And there seems not to be a "culture" built around making people feel "just fine" about living off the state, and that they somehow deserve the support they are getting.

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112p now, and threatening to go Red

Bounced up to 12.1 now, threatening to go to 114 :P

 

(PS I was only saying it had bounced back a bit (with the whole market this morning) I wasn't implying it would rise to new highs or anything)

 

The thing about the HK system is that it does not seem to create GENERATIONS of benefit-takers, as the UK system does. And there seems not to be a "culture" built around making people feel "just fine" about living off the state, and that they somehow deserve the support they are getting.

 

There wasn't here 30 years ago, it was shameful to be unemployed.

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BDEV closes at 110.8, a two week low and UK banks feel pain as reality reasserts itself.

 

 

Moody's

...

announced it was reviewing the credit ratings of fourteen UK banks and building societies for a possible downgrade.

 

The reassessment is not driven by either a deterioration in the financial strength of the banking system or that of the government. It

has been initiated in response to ongoing guidance from the UK authorities (the Bank of England, the Financial Services Authority and the Treasury) that banks that fail in the future should not expect capital injections from the public purse.'

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http://www.bloomberg.com/news/2011-05-24/greenwich-s-priciest-homes-languish-with-four-years-of-inventory-on-market.html

Even the Rich See Homes Languish in Greenwich

...

Homes priced at $10 million and above are accumulating on the market in Greenwich, a town about 30 miles (48 kilometers) north of Manhattan that’s known as the U.S. hedge fund capital. They’re moving so slowly that it would take more than four years to sell them all, the biggest backlog since at least 2004, according to Mark Pruner, an agent with Prudential Connecticut Realty. Wall Street’s greater emphasis on deferred compensation, in which a portion of an annual bonus will be paid in the future, has stifled demand, he said.

 

“Our market moves very closely with the financial markets,” Pruner, based in Greenwich, said in an interview. “Deferred compensation has totally hammered the over-$10 million market because people just aren’t getting large amounts of cash, and that market has traditionally been a cash market.”

The high end will never be affected... yaddayadda... oil sheiks yaddayadda... :rolleyes:

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There's a group that rely on government handouts, and live okay on them.

 

----------

 

The thing about the HK system is that it does not seem to create GENERATIONS of benefit-takers, as the UK system does. And there seems not to be a "culture" built around making people feel "just fine" about living off the state, and that they somehow deserve the support they are getting.

 

As annoying and unfair as it seems, the millions of end-user benefit takers are only a small part of the problem, and only account for a tiny amount of the money that is spent in the system, they also have little or no political power. Unlike HK, the UK is a country on a downward spiral with an economic system that is fundamentally mal-structured, we use debt from overseas to employ people and companies to farm the unemployed, unemployable, elderly, unfit and criminal classes. The group that really rely on government handouts are the Primary tax consumers that are employed by the benefit system and the Secondary tax consumers(so called 'private' companies that only exist due to state spending) These are the social groups that have done very well during the labour years, and they are the reason why we encourage a benefit culture. It's also the same group of people who benefited the most from the housing boom which Fred Harrison talks about in Ricardo's Law.

 

 

It is essential for government to rewards their own power base in the Bourgeois and Petit-bourgeois for support, otherwise these educated articulate people will organise the proles and lumpenproleteriat in political demonstrations. When this group starts to suffer then I expect we will see real organised political opposition to austerity measures, which will eventually lead to a return to a labour government and more debt and inflation.

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http://www.bloomberg.com/news/2011-05-24/greenwich-s-priciest-homes-languish-with-four-years-of-inventory-on-market.html

 

The high end will never be affected... yaddayadda... oil sheiks yaddayadda... :rolleyes:

 

Not so in Greenwich UK

 

http://www.home.co.uk/guides/time_on_market_report.htm?location=greenwich&all=1

 

I wonder how long it will be before this market comes to a grinding halt. When mortgage interest rates soar I suppose and the first signal of that has come from Moody's.

 

Are UK banks still getting funding from the BoE 'on the cheap' so to speak?

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Not so in Greenwich UK

 

http://www.home.co.uk/guides/time_on_market_report.htm?location=greenwich&all=1

 

I wonder how long it will be before this market comes to a grinding halt. When mortgage interest rates soar I suppose and the first signal of that has come from Moody's.

 

Are UK banks still getting funding from the BoE 'on the cheap' so to speak?

 

Nationwide boss thinks no rate rise till late Nov 2011, then only 2.5% at end 2013.

 

http://uk.finance.yahoo.com/news/Nationwide-CEO-sees-no-UK-reuters_molt-1689326119.html?x=0

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How's this for the VI baseless drivel of the month award?

 

http://propertytalklive.co.uk/house-prices/6353-homeowners-expect-price-rises-over-next-5-years

 

If prices change as homeowners expect, they will increase by on average £4,000 by spring 2013 and £15,360 in 2016 according to latest figures from the LSL / Acadametrics house price index.

 

If prices change as homeowners expect - I feel compelled to keep on repeating that one :blink:

 

 

FWIW:-Second comment down is mine. I only mention this because I'm amazed it was allowed in.

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BDEV closes at 110.8, a two week low

 

BDEV closes at 113.1, just 7 ticks from its 1 year high! :rolleyes:

 

Still, I wont be betting the house on them.

 

How's this for the VI baseless drivel of the month award?

 

Yep, who was it that said, "prediction is hard, especially about the future!"

 

Although, they are just using Acadametrics data (which is one of the better sites), so it's not Acadametrics that are saying the prices will rise, rather a bunch of "home-owners" guessing.

 

Like the comments btw :)

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http://ftalphaville....y-deep-trouble/

 

I was wondering if the article was somewhat exaggerating maybe, no mention of real or nominal though.

 

Indeed, it's hard disagree with Morgan who reckons the likelihood of mortgage borrowing increasing materially is close to zero until property prices return to a reasonable level, which he puts at 22 per cent below their 2010 average.

 

The UK is fubar 100%, house prices will be of minimal concern. laugh.gif

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