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Outlook for the economy in 2010 and beyond

Discussion in 'Speaker's Corner' started by dirtydog, Jan 3, 2010.

  1. kitch9

    Soldato

    Joined: Aug 13, 2008

    Posts: 6,453

    He won't let facts get in the way of a good argument.

    Now he's banging on about rent caps lol..... Christ almighty. What next interest rate caps? Maybe the government should just seize all the rented out properties out there.

    That'd work.

    True fantasy cloud cuckoo stuff.
     
    Last edited: Sep 6, 2013
  2. silversurfer

    Capodecina

    Joined: Jul 13, 2004

    Posts: 18,776

    Location: Stanley Hotel, Colorado

    Capping anything is not helpful to reducing costs. Neither is subsidy, its ironic but they do more to raise costs and/or restrict supply which ultimately means higher costs. Private landlords or owners of any product, so long as they compete against each other and other private owners will lower costs
     
  3. kitch9

    Soldato

    Joined: Aug 13, 2008

    Posts: 6,453

    Average rent for a 3 bed semi in Doncaster which is in decent nick is £110 per week, not exactly ball breaking.

    London is its own animal, but no different from every other over crowded city in the world.
     
  4. El Pew

    Wise Guy

    Joined: Sep 1, 2009

    Posts: 1,053

    It's funny how you make no attempt to understand what I'm saying, and continue to make ridiculous strawmen.
     
  5. kitch9

    Soldato

    Joined: Aug 13, 2008

    Posts: 6,453

    Not to be funny but to summarize your arguments:

    Rent seeking.

    Landlords don't maintain their properties and make people live in squalor.

    Landlords buy new builds, which doesn't quite tie in with the above statement.

    Rent caps will solve all the problems in the housing market.

    Landlords look to enrich themselves, which you imply to be contrary to everyone else working for payment and providing a service in the UK.

    Out of interest what do you reckon the UK average is for net rental yield percentage on a property for Landords? I'll give you a clue if you are thinking double figures you are thinking too high.
     
    Last edited: Sep 7, 2013
  6. El Pew

    Wise Guy

    Joined: Sep 1, 2009

    Posts: 1,053

    So you can read...

    ...but clearly not very well, comprehension still lacking. I never used the word 'all' to describe landlords who fail to maintain their properties, or buy new builds. Many(see how 'many' != 'all', fyi) do, and it's undeniable that the quality of many rentals, especially in London, is very poor.

    Again, 'many' != 'all'. Rent controls have been used successfully elsewhere so I don't know why you think they imply some sort of communist political policy - they've been introduced in the US before. It says a lot about the priorities of our political parties that this isn't even being discussed as an option.

    I have no objection to people earning a living, per se. But it's the job of everyone in society to strike a balance between individual and collective wellbeing, and the growth of the rental sector has enriched a lucky few whilst increasing numbers of people struggle. Housing is a basic human need, it's too important to be left to the whims of the market.

    I actually have a fair idea what the yield of property trends towards. Historically property yields sub 5% real returns. And here's the funny thing, the returns are actually much lower than other asset classes, even before you take into account maintenance and upkeep. You'd be better off with a decent portfolio of stocks and bonds because they have higher yield - the only reason why residential property makes any sense at all is the leverage effect of mortgages. So not only is BTL bad news for renters, it's not even all that good for the landlord.
     
  7. zoomee

    Soldato

    Joined: Dec 15, 2004

    Posts: 5,773

    Location: Hudds, UK

  8. kitch9

    Soldato

    Joined: Aug 13, 2008

    Posts: 6,453

    You agree that the rental market is not that lucrative and you think housing is a basic human need which should be state controlled, so do you have an issue with food, water, electric, gas, clothing, transport etc etc etc being provided by private individuals and companies then?

    Maybe we should have a pop at the farmers for using their land to enrich themselves on a basic human need? Subsidies? Whats that all about?

    Also rent seeking doesn't mean what you appear to think it means. I'm sure it sounds great down the student union though.
     
    Last edited: Sep 12, 2013
  9. Vonhelmet

    Caporegime

    Joined: Jun 28, 2005

    Posts: 48,109

    Location: On the hoods

    Don't forget that he's misusing that term... It doesn't mean what he thinks it means.
     
  10. Freakbro

    Capodecina

    Joined: Jul 29, 2010

    Posts: 15,598

    Location: Lincs

    So the ECB have cut their underlying base rate to 0.25% and have not discounted going even further into negative interest rates, all due to the sharp fall in inflation around the Eurozone to 0.7% - and the fear this may be slipping into deflation.

    With Draghi citing that food and energy prices are on a pronounced downward trend, how does that reconcile with what we are being told (and experiencing) here in the UK - where we are told to expect annual 10% increases in energy and food inflation as high as ever?

    Are we just now reaping one of the 'rewards' of QE?
     
  11. Errol

    Wise Guy

    Joined: Jan 7, 2005

    Posts: 2,178

    We haven't had the crash yet. When it happens it will wipe out the entire Western fiat monetary system, forcing massive change and leading to equally massive hardship.

    All that is happening at the moment is the UK/USA desperately keeping the ponzi scheme going by printing money and encouraging debt. It's can't and won't last.
     
  12. kitch9

    Soldato

    Joined: Aug 13, 2008

    Posts: 6,453

    Whilst ever inflation exists it can and will last, its why small amounts of inflation is a good thing.
     
  13. Calabi

    Wise Guy

    Joined: Mar 7, 2008

    Posts: 2,489

    Location: Kent

    Inflation did not exist for hundreds of years even whilst the currencies were being used heavily.
     
  14. Mr Jack

    Capodecina

    Joined: May 19, 2004

    Posts: 17,299

    Location: Kiel, Germany

    Are you one of those silly people who thinks we should have the gold standard?
     
  15. El Capitano

    Mobster

    Joined: Oct 18, 2002

    Posts: 2,577

    Even the Romans had problems with inflation. Spain had serious problems with inflation even on the gold standard.
     
  16. Mr Jack

    Capodecina

    Joined: May 19, 2004

    Posts: 17,299

    Location: Kiel, Germany

    Inflation is not inherently a bad thing, anyway. It's only when it reaches high levels that it does harm. Right now, a moderate level of inflation would be a good thing for the economy.
     
  17. Calabi

    Wise Guy

    Joined: Mar 7, 2008

    Posts: 2,489

    Location: Kent

    Yeah but besides inflation what did they ever do for us.

    No but seriously there have been other later times when their hasnt been inflation for a long time.

    Inflation isnt a universal rule it isnt a requirement, its just a thing which happens sometimes.
     
  18. silversurfer

    Capodecina

    Joined: Jul 13, 2004

    Posts: 18,776

    Location: Stanley Hotel, Colorado

    The Romans debased their coins metal until it was worthless, it relates to modern inflation for similar reasons the currency was biased for advantage to Rome and its soldiers. Citizens were poorer to the point they were glad to be invaded by barbarians

    http://mises.org/daily/3663

    Price instability is the main problem, deflation or inflation can cause that. Even the Fed fears those effects. The problem with their actions in unwinding or even stopping what they've started without causing that disruption they were avoiding initially
     
    Last edited: Nov 14, 2013
  19. El Capitano

    Mobster

    Joined: Oct 18, 2002

    Posts: 2,577

    Could you name some?
    A small amount of inflation is better than deflation or stagnation because it discourages leaving money sitting around doing nothing. If you can point me towards a historical economy that had no inflation at all that we would actually want to adopt, then I'd be very surprised.
     
  20. Amp34

    Caporegime

    Joined: Jul 25, 2005

    Posts: 28,740

    Location: Canada

    Does the rental yield include the capital gain of owning the property after 20 years? That's the big kicker for a lot of amateur buy to letters (who are the problem relative to the professionals), the "free" house after the rental income has paid the mortgage.

    Amateur buy to letters are those that have one or two houses and think that buying a house in a poor state then sticking a lick of paint on the walls is all that's needed before renting it out. I got bored of the number of houses/flats I saw that the person showing me round says of a house that was last renovated in what looks like the 70s "we will stick some new paint on the walls before you move in"... What about the kitchen from the 70, grotty bathroom and mould on the walls...?

    Oil prices are going down, UK gas wholesale prices are still rising... That is why petrol is cheaper and the gas companies are increasing consumer gas prices...

    Personally I don't like the idea of inflation anyway, it's just an exponential increase which is going to have problems at some point. You can't have an exponential increase forever as we seem to be realising at the moment. Rather than inflation and deflation we need to be thinking about other ways of "valuing" our economy and output.