Softening house market?

Waffling again Donald away from the farming you have not got a clue.

No I could not but I could buy more land, and improve it. I be allowed to write down the interest on that loan and any improvement costs as well as any investments accross the rest of my farm.

As well if I had a job or another business if there was a loss I could write down that loss against PAYE income from either of them. Not only that I could structure capital allowances to make sure it was the higher rate of tax I was allowing against the depreciation

Or are you suggesting that Cairn are paying coupons on loans to certain investors similar to what used happen with Dr Sir or is it Sir Dr at Fitzwilton decades ago.

Interesting development in the UK that may have consequences for the Irish market:

https://www.bloomberg.com/news/articles/2022-10-18/property-funds-start-selling-assets-to-help-stricken-pensions

Property Funds Start Selling Assets to Help Stricken UK Pensions

• The CBRE UK Property PAIF plans to sell 1 Albemarle Street
• L&G and Abrdn funds also among those selling real estate

ByJack Sidders

18 October 2022 at 16:32 GMT+1

Real estate funds whose investors include UK pension schemes have begun offering properties for sale to meet redemption requests. 

The CBRE UK Property PAIF has appointed broker CBRE Group Inc. to sell 1 Albemarle Street in London’s West End, according to people with knowledge of the process. Legal & General Group Plc’s Industrial Property Investment fund is offering for sale warehouses at Trafford Park in the north-west of England, said separate people, who asked not to be identified as the process is private. A pooled pension property fund at Abrdn Plc is selling warehouses at the Thames Gateway Park in Dagenham, east London, other people said. 

The sales are the latest sign that the turmoil that has rocked the UK pension industry in recent weeks is still reverberating through financial markets. Pensions have been dumping stocks, bonds, collateralized-loan obligations, and pulling money from almost any fund that will give it back. 

Representatives for Abrdn, CBRE Global Investors and L&G declined to comment.

Many defined benefit pension schemes deployed so-called liability-driven investment strategies that enabled them to ramp up leverage and juice returns. The Bank of England was forced to step in to stabilize markets after rising gilt yields triggered margin calls at the funds that came too quickly for them to manage. 

The central bank intervention bought the pension funds extra time to increase their cash buffers. There are around 5,500 so-called defined benefit schemes in the UK, according to The Pensions Regulator, managing around £1.8 trillion. 

The 1 Albemarle Street property in London’s Mayfair district is among the top holdings in the CBRE fund and is valued at about £60 million to £70 million, according to a fund fact sheet. CBRE Investment Management, which manages the fund, deferred redemption payments earlier this month. The Thames Gateway warehouses are among the largest assets in the Abrdn fund. 

1). You decided to inject into the hypothetical scenario that the owner could sell the site for 50k.

2) Given that another person could purchase the site and make 50k on building and selling the house in the hypothetical scenario, do you think that a rational person will pay 50k for the site?

I mean it is very easy to refute any argument if we are allowed add in our own facts to "prove" something. You might as well have said that instead of building the house and making 50k, they should sell the site which cost 100k for a million quid

Apologies, I forgot that this mechanic received him MBA at the Bass school of business. His estimate of costs to fix your car will also include his "required return" along with the rates for his time, the parts, and the interest charge for his premises as if he was mortgaging it today.

That central bank rule was the only thing keeping house prices under control. Bloody dangerous clowns if they change it. Houses are just going to jump by thousands now.

Can't see the logic of this. Enough people exist to buy current housing stock as it is. Now enough people will exist to buy them moetgage approved at 0.5 x income more than before. So that's what, an extra 40k or so?? I think I heard the average joint salary drawing down first time mortgages was 85k or something.

Absolutely, seems crazy.

central bank reacting to threat of falling house prices by encouraging people to borrow more to keep the shitshow on the road. Lessons not learned.

I'm in the same boat. Prices were starting to come down slightly in Cork and they do this. Increasing the amount that can be borrowed will only service to drives prices up....I'm frankly devastated

wow sounds like severe financial distress in the uk pension markets .. potentially knocking onto property markets too .. who knows what direction this will hop..

as for our own CB upping lending ratios at a time of rising interest rates .. it beggars absolute belief ....

I agree that it’s a bad decision. But I really don’t think CBI have been pressured here by either FF/FG.

I also suspect this decision has been a long time coming. The CBI absolutely do not make quick decisions. So this train probably started before recent interest rate rises.

That said banks themselves seem to be much more fiscally responsible these days. I wonder if their own stress tests will bite before the LTI does which would make the change irrelevant. Time will tell.

It's absolutely bonkers. On the one hand you have the ECB engaging in monetary tightening and the local office in Dublin loosening.

And it doesn't matter now when the policy takes effect, prices rise in the morning.

As someone trying to buy a family home, this is a massive kick in the balls. 3.5x was the level of debt that we were comfortable with, just about but now essentially we now have to choose between financial stability in the home or a home of our own at all.

I'm not sure will it affect prices that much, confidence is beginning to wane in the market

I would love to be able to share your optimism, I pray it doesn't make houses jump by 40 - 50 grand over night but I know for a fact housing developments have slowed up big time now and sites not starting new phases with the cost of materials, this dwindling down of the housing stock even more and more money floating around for less stock I believe will make houses prices rise even with rate hikes comming in the near term.

If central banks pivot to bail out the fiancial system that may break soon due to the highering of rates, the injection of liquidty into the markets by lowering interest rates and QE you can bet your life house prices will continue in one way. And inflation will also continue in one way. UP

I'm so pissed off here. Just gone sale agreed and about to make bid on house tomorrow. No doubt the house I want will go up and force me to cancel our agreement. Nothing in writing so OK but feel bad as first time buyer who is buying ours. Price was fair I thought, didn't want to push too much. **** livid.