Judging by your conversation you have spent to much of your time in one of those sink estates.
I was raised in WA and spent 10 years in England. I lived in NW10 for 3 years, moved to NW9 and then sold and moved to Devon.
I have never lived on a kitchen sink estate, but I know them well.
England is very difficult country in which to make money on property. You have so many things to second guess and there are a million people playing the same game at the same time.
I made good money on UK property but I will be the first to admit that 99% of it was pure luck.
If you believe that you have a fail safe way to get rich in the UK property market, best of luck to you.
BTW it is "too" not "to" when referring to excess.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
Yes, and the price revolution follows each energy revolution. The only significant economic event in the last 700 years in Europe that wasn't driven by energy was the bubonic plague, which made labour so scarce it started the end of the system of indentured servitude.
Except that nearly all of the hydrogen on this planet is currently attached to carbon or oxygen with a strong chemical bond. It takes energy to make hydrogen. All fossil fuels, wood, coal, oil, gas are stored sunlight. Our civilisation runs on stored sunlight. Beneath our feet is uranium and thorium. So, two sources of energy, sunlight or nuclear. Which do you think we will use to make the hydrogen?
Yes, there was always a transition period after the new energy source peaked. Hard to know if there will be long transition period after the end of oil. Certainly shaping up that way at the moment. However, this is a very unusual time for the planet. This is the first time in at least 5000 years that information travels globally almost instantaneously. Any technologies or strategies or lifestyle or philosophical changes that occur will disseminate incredibly quickly. And there is a lot of leapfrogging going on. African countries whose citizens never talked into a landline phone are growing mobile phone networks incredibly fast.
There is a saying that a large enough quantitative change will become a qualitative change. I think the nature of capital itself will change. Capital is just not important enough anymore relative to information and innovation. We are seeing, and will continue to see, a decentralisation in the management and allocation of capital. The current banking system is a dinosaur. The smaller mammal capital allocators will just evolve too fast for the current megabanks. I give the process 15 years at the outside. I don't think this cycle of financial innovation will come from the Western world though. It might start there, but I don't think that is where it will rapidly evolve. The West is full of pampered useless eaters who cry out to their government for help anytime something goes bump in the night.
I am not arguing with you on this point but there are some other factors other than energy that plays a part in economic development such as sanitation. Whilst fuel played a part in these grand waves, the correlation of the change point in the waves was not necessarily only energy related. Factors such as increased demand, food, rising living standard, labour demand, wars, pestilence, climate and crime played a major part in their development.
My preference is to run a methane pipeline up to a nuclear power station and use the steam by product to reform the methane into hydrogen.
Technology and communications may be developing rapidly but I don't think you will ever get away from the the basic inputs for creating economic wealth which are land, labour and capital for equipment. This touches on what I said before you just cant get away form the land component for anything to do with economics.
Thanks for the references, I will check them out.
Jimbo
16 Aug 2014, 10:46 PM
If you believe that you have a fail safe way to get rich in the UK property market, best of luck to you.
I never claimed that I had a fail safe way to invest in the UK. I was making the point that with all of the new banks coming into the market then the supply of credit will be ramped up and thatt bodes well for land values.
As for UK living since you mentioned it, I have spent considerably more time in the UK and central London. I found the residential investment game different in my circles as most investors were investing for cash flow and still got capital growth, sure the prices came back a bit but holding costs were very low. UK yields tended to be higher (I aint talking about Mayfair and the like) no stamp duty for lower end purchases, no rates either, so it tended to be a lower risk strategy making money from the start. The investors I knew were very savvy on finance and because they were investing for cash flow, high LTV loans were very much sough after even after LMI costs.
This touches on what I said before you just cant get away form the land component for anything to do with economics.
I agree, and that is the endgame for the system as we know it.
A bag of sugar will attract ants then colonies of ants, predators of ants, predators of predators etc.
But it all comes down to the bag of sugar. Once that is gone, they are all fucked.
Matthew, 30 Jan 2016, 09:21 AM Your simplistic view is so flawed it is not worth debating. The current oversupply will be swallowed in 12 months. By the time dumb shits like you realise this prices will already be rising.
I agree, and that is the endgame for the system as we know it.
A bag of sugar will attract ants then colonies of ants, predators of ants, predators of predators etc.
But it all comes down to the bag of sugar. Once that is gone, they are all fucked.
An example of how important land is the equation of business development or residential.
Land I purchased in late 2011 which I have just started a development on increased my equity position with the financing by 20% due to increase in land value alone over that time period. This is for a $2 million dollar development. So having an extra 20% equity above my owns funds I contributed is a huge advantage. All It took was securing the right land at the right point for the right price.
The valuation given was also conservative, a true market price I could sell the land for now would be a 30% gain. I can increase these gains though through my development. A conservative estimate is once developed and fully sold I will make a 45-50% profit, 30% of that is the increase in land value from the time of purchase. The rest of the 15-20% is profit via developing the site.
So as you can see buying the right land can make doing large projects easier as it can add significant value and hence equity to finance the project, which in turn returns even greater profits. For this kind of return prices do not have to move from today's levels, if they rise it only increases my profits. If prices fall 10% in the next 9 months then my profit will fall to 30-40%.
You often make your money when you purchase the right land or property at the right price, price growth if it happens is only a nice added bonus. Land value can unlock the capital required to developed the land.
It's greater competition, so it may lead to marginally better rates for deposits and loans. But all it will really do is force them to move more stuff to India. I know amex just recently moved their accounts dept to India. How's that working out for them? They have had several major bank fuckups here with Indian related bugs. Complete loss of service for days. So I expect this to continue.
Still, more work for the likes of me.
Whenever you have an argument with someone, there comes a moment where you must ask yourself, whatever your political persuasion, 'am I the Nazi?'
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