BREXIT - Is This Really Still Rumbling On? 😴

rjsterry

TheBigBean said:

Supply and demand sets the rental price. Interest rates set the property price based on the rental price. This is the basics of all property finance. Residential varies a bit, because people like to own homes.

We seem to be ignoring the policies of deliberately restricting the supply of property. The government has literally been recently campaigning on how few homes will be built.

TheBigBean

House prices are falling in real terms.

rick_chasey

wallace_and_gromit said:

rick_chasey said:

Rates have been moving up for a year now. How long do you want to wait?

It does mean that you won’t have as many people in a negative equity scenario. Which isn’t a bad thing.

There’s always a time lag as the impact only hits when fixed rates mature. Supposedly well over half of the impact of rising rates is yet to be felt for this reason. Which might actually be good news as there is “pain” / deflation baked in over the next year, meaning that future rate rises may be less than some headlines currently suggest.

Not sure today's inflation figures were good news for this. Higher than expected, *again*.



UK has an inflation problem.

I dare anyone to come up with a credible case that it isn’t Brexit related.

TheBigBean

rjsterry said:

TheBigBean said:

Supply and demand sets the rental price. Interest rates set the property price based on the rental price. This is the basics of all property finance. Residential varies a bit, because people like to own homes.

We seem to be ignoring the policies of deliberately restricting the supply of property. The government has literally been recently campaigning on how few homes will be built.

Restricting supply affects the rental price and therefore the property price. As I said, the residential market is not that efficient, but this the basics of all property finance.

TheBigBean

rick_chasey said:

wallace_and_gromit said:

rick_chasey said:

Rates have been moving up for a year now. How long do you want to wait?

It does mean that you won’t have as many people in a negative equity scenario. Which isn’t a bad thing.

There’s always a time lag as the impact only hits when fixed rates mature. Supposedly well over half of the impact of rising rates is yet to be felt for this reason. Which might actually be good news as there is “pain” / deflation baked in over the next year, meaning that future rate rises may be less than some headlines currently suggest.

Not sure today's inflation figures were good news for this. Higher than expected, *again*.

High inflation? Who knew?

rick_chasey

wallace_and_gromit said:

rick_chasey said:

Rates have been moving up for a year now. How long do you want to wait?

It does mean that you won’t have as many people in a negative equity scenario. Which isn’t a bad thing.

There’s always a time lag as the impact only hits when fixed rates mature. Supposedly well over half of the impact of rising rates is yet to be felt for this reason. Which might actually be good news as there is “pain” / deflation baked in over the next year, meaning that future rate rises may be less than some headlines currently suggest.

FWIW, this is someone who knows much more about this than I do.

https://twitter.com/M_PaulMcNamara/status/1671408813902032899

https://twitter.com/RickChasey/status/1671430907180245002

https://twitter.com/M_PaulMcNamara/status/1671431708422422528

rick_chasey

TheBigBean said:

rick_chasey said:

wallace_and_gromit said:

rick_chasey said:

Rates have been moving up for a year now. How long do you want to wait?

It does mean that you won’t have as many people in a negative equity scenario. Which isn’t a bad thing.

There’s always a time lag as the impact only hits when fixed rates mature. Supposedly well over half of the impact of rising rates is yet to be felt for this reason. Which might actually be good news as there is “pain” / deflation baked in over the next year, meaning that future rate rises may be less than some headlines currently suggest.

Not sure today's inflation figures were good news for this. Higher than expected, *again*.

High inflation? Who knew?

Higher than expected. Despite the rate rises.

pblakeney

rick_chasey said:

Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.

If a year is too soon, when isn't?

I mean, the GFC housing price dip only lasted what, 18 months?

Based on historical evidence I'd say 18 months might be about right. 😉 As we've been saying the interest rate increases haven't hit the majority of mortgage owners. Yet.

Nice to read that Paul McNamara agrees with me about there being a lag. 🤣

surrey_commuter

rick_chasey said:

Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.

If a year is too soon, when isn't?

I mean, the GFC housing price dip only lasted what, 18 months?

Due to the GFC there are a lot more people on fixed deals and much fewer on interest only, as TBB demonstrated this makes a huge difference. They have also been leaning into the private rental sector which I always thought was the biggest danger to crashing prices. As it is the only people selling are those that have to, the longer it goes on the bigger this number will get.

rick_chasey

pblakeney said:

rick_chasey said:

Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.

If a year is too soon, when isn't?

I mean, the GFC housing price dip only lasted what, 18 months?

Based on historical evidence I'd say 18 months might be about right. 😉 As we've been saying the interest rate increases haven't hit the majority of mortgage owners. Yet.

Nice to read that Paul McNamara agrees with me about there being a lag. 🤣

(I can't wang on about people not knowing what they're talking about and then not share info from people who do know what they're talking about, even if they prove me wrong. Right is right, wrong is wrong)

rick_chasey

https://twitter.com/resi_analyst/status/1671433137706893313?s=46&t=Q7O5dnx-0MXQv9qE3vz1vg

https://twitter.com/resi_analyst/status/1671433500602294274?s=46&t=Q7O5dnx-0MXQv9qE3vz1vg

TheBigBean

rick_chasey said:

pblakeney said:

rick_chasey said:

Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.

If a year is too soon, when isn't?

I mean, the GFC housing price dip only lasted what, 18 months?

Based on historical evidence I'd say 18 months might be about right. 😉 As we've been saying the interest rate increases haven't hit the majority of mortgage owners. Yet.

Nice to read that Paul McNamara agrees with me about there being a lag. 🤣

(I can't wang on about people not knowing what they're talking about and then not share info from people who do know what they're talking about, even if they prove me wrong. Right is right, wrong is wrong)

How does someone cross the threshold of knowing what they are talking about?

rick_chasey

TheBigBean said:

rick_chasey said:

pblakeney said:

rick_chasey said:

Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.

If a year is too soon, when isn't?

I mean, the GFC housing price dip only lasted what, 18 months?

Based on historical evidence I'd say 18 months might be about right. 😉 As we've been saying the interest rate increases haven't hit the majority of mortgage owners. Yet.

Nice to read that Paul McNamara agrees with me about there being a lag. 🤣

(I can't wang on about people not knowing what they're talking about and then not share info from people who do know what they're talking about, even if they prove me wrong. Right is right, wrong is wrong)

How does someone cross the threshold of knowing what they are talking about?

I mean, Paul is an economist by training and is one of the most respected veteran EMD investors on the street, so he spends a lot of time looking at these kinds of indicators for a living, and people pay him to look after their money in doing so.

The resi analyst is an academic who specialises in the UK real estate market, specifically. So again, probably knows what he's talking about.

TheBigBean

rick_chasey said:

TheBigBean said:

rick_chasey said:

pblakeney said:

rick_chasey said:

Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.

If a year is too soon, when isn't?

I mean, the GFC housing price dip only lasted what, 18 months?

Based on historical evidence I'd say 18 months might be about right. 😉 As we've been saying the interest rate increases haven't hit the majority of mortgage owners. Yet.

Nice to read that Paul McNamara agrees with me about there being a lag. 🤣

(I can't wang on about people not knowing what they're talking about and then not share info from people who do know what they're talking about, even if they prove me wrong. Right is right, wrong is wrong)

How does someone cross the threshold of knowing what they are talking about?

I mean, Paul is an economist by training and is one of the most respected veteran EMD investors on the street, so he spends a lot of time looking at these kinds of indicators for a living, and people pay him to look after their money in doing so.

The resi analyst is an academic who specialises in the UK real estate market, specifically. So again, probably knows what he's talking about.

This is a long way from having expertise in the UK housing market.

rick_chasey

TheBigBean said:

rick_chasey said:

TheBigBean said:

rick_chasey said:

pblakeney said:

rick_chasey said:

Ah come on, that’s a bit of a cop out. You can’t say “too soon to say” after a year and not have a timeline in mind.

If a year is too soon, when isn't?

I mean, the GFC housing price dip only lasted what, 18 months?

Based on historical evidence I'd say 18 months might be about right. 😉 As we've been saying the interest rate increases haven't hit the majority of mortgage owners. Yet.

Nice to read that Paul McNamara agrees with me about there being a lag. 🤣

(I can't wang on about people not knowing what they're talking about and then not share info from people who do know what they're talking about, even if they prove me wrong. Right is right, wrong is wrong)

How does someone cross the threshold of knowing what they are talking about?

I mean, Paul is an economist by training and is one of the most respected veteran EMD investors on the street, so he spends a lot of time looking at these kinds of indicators for a living, and people pay him to look after their money in doing so.

The resi analyst is an academic who specialises in the UK real estate market, specifically. So again, probably knows what he's talking about.

This is a long way from having expertise in the UK housing market.

Rather helpfully linked to research form someone who does though...

Stevo_666

rick_chasey said:

UK has an inflation problem.

I dare anyone to come up with a credible case that it isn’t Brexit related.

Energy and fuel costs - mainly driven by Putin. Seem to be easing now though.

wallace_and_gromit

Deleted.

wallace_and_gromit

Rick - re causes of inflation that aren’t Brexit related, labour shortages caused by ill health (either directly or indirectly via caring responsibility) and early retirements post-pandemic are a big driver of services inflation.

TheBigBean

Also in terms of comparison with other countries, Germany's two previous quarters of growth have been -0.3% and -0.5%, so hardly all that rosy.

rick_chasey

wallace_and_gromit said:

Rick - re causes of inflation that aren’t Brexit related, labour shortages caused by ill health (either directly or indirectly via caring responsibility) and early retirements post-pandemic are a big driver of services inflation.

This is similar across EU27 no?

Stevo_666

wallace_and_gromit said:

Rick - re causes of inflation that aren’t Brexit related, labour shortages caused by ill health (either directly or indirectly via caring responsibility) and early retirements post-pandemic are a big driver of services inflation.

Who dares wins, as the saying goes

rick_chasey

To be clear, I was referring to the "stubborn, higher than the rest of the developed world" bit of UK inflation.

wallace_and_gromit

rick_chasey said:

wallace_and_gromit said:

Rick - re causes of inflation that aren’t Brexit related, labour shortages caused by ill health (either directly or indirectly via caring responsibility) and early retirements post-pandemic are a big driver of services inflation.

This is similar across EU27 no?

No. It is unique to the UK amongst major economies, perhaps explained by preventative healthcare being most badly affected in the UK due to the unique weaknesses in the NHS vs other systems, cr*p social care provision and much greater flexibility re access to pensions.

rjsterry

TheBigBean said:

rjsterry said:

TheBigBean said:

Supply and demand sets the rental price. Interest rates set the property price based on the rental price. This is the basics of all property finance. Residential varies a bit, because people like to own homes.

We seem to be ignoring the policies of deliberately restricting the supply of property. The government has literally been recently campaigning on how few homes will be built.

Restricting supply affects the rental price and therefore the property price. As I said, the residential market is not that efficient, but this the basics of all property finance.

I know, I'm suggesting this is a deliberate restriction to keep rents high.

wallace_and_gromit

rick_chasey said:

wallace_and_gromit said:

rick_chasey said:

Rates have been moving up for a year now. How long do you want to wait?

It does mean that you won’t have as many people in a negative equity scenario. Which isn’t a bad thing.

There’s always a time lag as the impact only hits when fixed rates mature. Supposedly well over half of the impact of rising rates is yet to be felt for this reason. Which might actually be good news as there is “pain” / deflation baked in over the next year, meaning that future rate rises may be less than some headlines currently suggest.

FWIW, this is someone who knows much more about this than I do.

https://twitter.com/M_PaulMcNamara/status/1671408813902032899

https://twitter.com/RickChasey/status/1671430907180245002

https://twitter.com/M_PaulMcNamara/status/1671431708422422528

On the timing of impacts on house prices, I'm slightly confused as to what you're trying to tell us with this Twitter exchange.

We're saying "too early for rate rises too have had a major impact yet", with which you appear to disagree, with your Twitter expert saying that the impact will hit "soon", which for the avoidance of doubt means it hasn't happened yet, which is consistent with what we're saying.

Are you posting this in acknowledgement that you were wrong initially and we were right?

rick_chasey

I posted it was too soon and then asked Paul since he mentioned it, which does indeed contradict me.

TheBigBean

rjsterry said:

TheBigBean said:

rjsterry said:

TheBigBean said:

Supply and demand sets the rental price. Interest rates set the property price based on the rental price. This is the basics of all property finance. Residential varies a bit, because people like to own homes.

We seem to be ignoring the policies of deliberately restricting the supply of property. The government has literally been recently campaigning on how few homes will be built.

Restricting supply affects the rental price and therefore the property price. As I said, the residential market is not that efficient, but this the basics of all property finance.

I know, I'm suggesting this is a deliberate restriction to keep rents high.

Yes, of course, you actually work relatively close to the subject. If you get yourself a Twitter account you could be considered an expert.

Stevo_666

rick_chasey said:

To be clear, I was referring to the "stubborn, higher than the rest of the developed world" bit of UK inflation.

You said:
"UK has an inflation problem.

I dare anyone to come up with a credible case that it isn’t Brexit related."

We answered.

Just surprised that you came up with such an easy dare.

Stevo_666

TheBigBean said:

rjsterry said:

TheBigBean said:

rjsterry said:

TheBigBean said:

Supply and demand sets the rental price. Interest rates set the property price based on the rental price. This is the basics of all property finance. Residential varies a bit, because people like to own homes.

We seem to be ignoring the policies of deliberately restricting the supply of property. The government has literally been recently campaigning on how few homes will be built.

Restricting supply affects the rental price and therefore the property price. As I said, the residential market is not that efficient, but this the basics of all property finance.

I know, I'm suggesting this is a deliberate restriction to keep rents high.

Yes, of course, you actually work relatively close to the subject. If you get yourself a Twitter account you could be considered an expert.

And be quoted on here as if his views are fact.

pangolin

Stevo_666 said:

rick_chasey said:

To be clear, I was referring to the "stubborn, higher than the rest of the developed world" bit of UK inflation.

You said:
"UK has an inflation problem.

I dare anyone to come up with a credible case that it isn’t Brexit related."

We answered.

Just surprised that you came up with such an easy dare.

Pretty clear he meant vs other countries.