Saturday, 18 November 2017


Today's topic is a departure from the normal betting flavour, but is a subject that is relevant to both me personally (I'm trying to move), and also on the lips of the current government as they try and 'sort' the problem...

Anyway the topic is one that has occupied Britain for decades, and will continue to do so far into the future...

It is ......... housing ....... and rather than wallow in my moving stasis I thought I'd take the long view on the overall situation in the country with a historic lens...

The post will not split down on regionalism, instead looking at the whole of the UK. London property in particular has grown more than regional property - and I believe property in the south of England has gone up rather more than the north.
These might be explored further in later blogs - and of course everyone's individual mileage varies - for now this one looks at overall averages across the whole of the UK.

First up lets have a look at the headline picture - house price growth since 1971: (Source ONS)

The 'crash' of the early 90s is in there (Though it was more of a flatlining in the round), and the 2007 correction. We can also clearly see the mid 90s -> mid 2000s  at least tripling of prices.

Of course wages have also increased from 1971 to now. Here is a plot of the average wage (I'm ignoring skew for the sake of simplicity) added to the house price graph. The source is: ,and both lines have been rebased to the same point.

Rising wages, rising house prices - who'd have thought it ! Although we can clearly see house prices have risen faster than wages. Anyway here is the 'ratio' graph

The local maxima are December 1973, July 1989, September 2007.

But of course there is an additional factor, the bank of England base rate - ostensibly used as a tool to control inflation - here is how that has gone from 1971 to present (The latest 0.25% increase isn't shown as the data only goes to September of this year):

From this the I'm going to derive a slightly contrived function - the average mortgage repayment (As a % of salary). The terms of the mortgage are 25 years, at the BoE base rate + 2% (This reflects that some people will be on offers, and others on bank SVR; and that the banks generally look to make a profit on mortgages !). The mortgage will repay 100% of the capital borrowed, and the mortgage is assumed to be 100% of the property value:

Anyway here goes:

The local mortgage maxima are November 1973, November 1979, the third quarter of 1989 and August to November of 2007.

Conclusion Purchasing a property financially is a game of two halves: The deposit and the mortgage repayments. Right now the deposit required for a property is historically unaffordable, but if ALL the capital could be borrowed then the mortgage repayments are historically somewhere near the global minimum due to the extremely low interest rate currently at the Bank of England.

Looking forward:

Dwelling growth continues to be outstripped by population growth1, hence the general upward trend in wage-house price ratio. Also seeing as people only need one property, the value of one's property doesn't particularly matter providing people can service the mortgage as superior properties will generally cost more, and inferior ones less.
It is also the one general purchase in life where credit almost always makes sense seeing as a use is received from housing over a lifetime, whereas the price is only paid once. This blog post doesn't have the scope to get into Buy to Let arguments beyond noting purchase of property beyond a first is to a large degree speculation.

What should be done:

The historically high house price/wage ratio makes it more difficult than at any time previously to purchase a property, though once purchased the mortgage repayments are not historically onerous. Policies such as help to buy are basically sticking plasters (And could inflate the market yet further as well as exposing the Gov't to house price risk)

A program that encourages housebuilding either directly or indirectly, and a (very) slow rising of interest rates would seem the best way out of this to me so as not to cripple the market but also return long term affordability.

1 (Which has some interesting charts - chart 1 is the one to look at though) & which shows immigration (I understand it doesn't show population growth but that is very highly correlated)

Friday, 16 June 2017

The "cry wolf" election.

Ed Miliband the Labour leader in 2015 had a broad range of policies that were not a million miles off of what Theresa May has in her SDP-Tory hybrid manifesto to bring onboard working class Labour voters.
An energy price cap here, a few modest spending increases there...
The press went after him as they have with every Labour leader forever (Except Blair) - Red Ed, mocking him for the way he ate, his late father being disgustingly attacked as a danger to the country and somehow this impacting on Miliband's standing himself. I also remember the Alex Salmond posters, not the ones portraying Ed in his pocket, but one in Broxtowe where he was shown as a burglar. He of course is nothing of the sort, and the advert for me crossed the line - however as the ASA can't regulate political advertising it could go through.
Of course Ed Miliband was emphatically NOT a danger to the country if he had attained power we'd have had no EU referendum, and Jeremy Corbyn would not be leader of the Labour party.
Anyway Ed was beaten by David and that was all history.

Fast forward to 2017 - Labour through its own incompetence now has a man who is threatening to do a left wing Donald Trump to the country, a tub thumping "For the Many not the Few" machine that has defied all political logic about how campaigns should be run, and like Trump certainly NOT playing by the established media rules. He doesn't use twitter too much himself, but his acolytes and followers do - and I have noticed that once someone succumbs to the Corbyn tendency doesn't give it up too easily. May has called an election that seems far tougher than it ought at the start, and the adoration for Corbyn amongst the young is palpable.
Moreover, he's enjoying the campaign - and I believe the Tory tools that are being thrown at him by their friends in the right wing press are simply not as effective as they should be. Jeremy Corbyn claims to be a man of peace, but he has sympathised far more readily with Britain's enemies than he has with our friends. He did give succour to the IRA, and his right hand man, John McDonnell's comments should make the whole package completely unelectable. Mo Mowlam he is NOT.
But there is a problem. The buckets of slime that were poured over Ed Miliband's head in 2015 are being chucked by the same news outlets again at Corbyn. It looks like the same monstering even though the two crimes they commit are very different - one couldn't quite eat a bacon sandwich correctly, the other finds Hezbollah a respectable organisation.
The right wing press just may have cried wolf one too many times, and perhaps the public are dismissing the warnings because of this.

Corbyn I believe will stay on even with defeat, particularly if Ed Miliband's vote total is increased (I think this will be the case now), and the movement will grow and grow. The redtops - who proclaimed our High Court judges "Enemies of the people" will have no effect on him going forward. In fact they just make his appeal greater.

Sunday, 3 July 2016

Australia; Chaos with the Cons and Brexit...

So it looks like my Osborne prediction went up the swanney, though Brexit was kind bettingwise to me (God knows what the country does though)


A letter to ABC Aus:

Dear Sir/Madam,

I do not understand how the seat of Flynn is being projected for Labour (yet). Taking data from 2013, the 2 party result was Dowd 48352 vs Trevor 37178 = 85530 2 party votes

Now according to the data there were 10492 postal ballots in 2013 - stripping these out yields a result of: 41113 vs 33926 = 75039

54.78% vs 45.22%. According to @_ctnews the postals split 69% to O'Dowd. Which means he overperformed "on the day" by 14.22%

Taking this year's results he has 48.5 (On the day) +14.22 = 62.72% (Expected overperform) for the postal 9518 votes 62.72% = 5969 + 3548 (Beers)

Which yields a net gain of 2421 votes

Which means O'Dowd wins by ~ 363 votes

Also the electorate seems to have shrunk, and taking into account expected informal ballots I actually think O'Dowd will win by more.

Anyway I'd predict all the "in doubt" seats will go Lib coalition (13), with the possible exception of "Grey" to yield a result of

Labor 66
Coalition 78
Xenophon Team 2
Greens 1
Others 3

Lindsay, Longmann not 100% certain yet either - though I haven't done the maths on these.



Can honestly see a repeat in miniature of the Austrian postal 'catch up' here.

Saturday, 5 March 2016

US Race:
No price more visibly demonstrates the utter lunacy of the Betfair markets than Bloomberg being rated as a ~ 0.5% chance for the GOP nominee.

My cat has more chance of being president than this happening. Namely Bloomberg ain't entering the GOP convention. He's very unlikely to run, but certainly not as GOP nominee.

The market has been mad, completely mad.

One word - There is no point in putting Hillary +ve at the moment, absolubtely none. But don't make her too big -ve right now as she has 3% of Sanders price to absorb.


++ Trump
++ Cruz
+ Biden
+ Kasich
0 Rubio
0 Clinton
-- Sanders

If you are starting De Novo right now, laying Sanders and backing Trump and Cruz might be the best way to go.

Wednesday, 28 October 2015

October update.

An intermittent update.

Corbyn is now the Labour leader, and despite chucking money away by laying him at over 100-1 I managed to buy a couple of pounds at around 500. That represents my total profit on the event and well despite thinking I could have earnt more a grand in hand is worth a thousand pounds.
So thank you very much Jeremy !

He's also worth backing to keep his job in my view (For a while anyway...) betting on the obvious is normally a good way to make money in politics, Victor was 4-6 for him still to be in in 2017 which looks fair enough. Labour are also not doing so well in the polls but they're not in the catastrophic twenties, and the only Labourite who has a pair and would perhaps be willing to launch a coup is Watto who has problems of his own. Take the Victor bet if its still up at anything over 1-2.

The by-election in Oldham West and Royton is a penalty kick for Labour, and Skybet's 2-9 is a very generous price if still available. This is a sub 1-10 bet in reality.

On the London Mayoralty, 5-6;6-5 is probably correct, and I'm currently long Zac. We shall see though closer to the time. If Khan goes above Evens he is a buy but he will probably remain around 8-11.

Now onto Con next leader. I think though there are many runners and riders, one stands out in particular. George Osborne looks like he will run in my book and is a back at the current price of 2-1.

In the States, surely Hilary is unstoppable for the Dems, thankyou Paddy for the 5-6 on Iowa which she must be hot favourite for. I'm positive Clinton and roughly neutral on Sanders. Surely Lessig is in reality a true 1000-1 or longer shot, and there are no other runners.

It'll be Clinton....

The republican race meanwhile is the greatest circus in town with all the fruit loops (Trump; Carson; Cruz) crowding out the more moderate and sensible choices (Bush; Rubio). I'd say lay them all, but one MUST win ! Hopefully Carson will come into single figures soon on the betfair exchange so we can start laying him. Small stakes only on this one.

Saturday, 9 May 2015

Well got the big call wrong, but hey ho - the list as long as your arm of Conservative and SNP constituency bets made sure it was a very decent night *cough*

Anyway this site isn't a record of my p&l, but for predictions:

First one for 2020


Friday, 1 May 2015

Calling it for Ed - Back Con Minority

Right - Time to put my neck on the block.

I'm calling it for Ed:

Here is why:

I fully expect the Tories to win the national vote share. The national polls point to Ed (In aggregate) being ahead on seats or it being too close to call. The likely distribution from the models (UKElect, FIsher, Hanretty) points to a Tory lead on votes and seats. BUT Here is the thing... Con + LD + DUP must equal 323. In order for Ed to NOT become PM he musty abstain the Conservative Queen speech. SNP, PC, SDLP, Green voting it down is even more sure than the Labour party. No doubt if it really is Labour 260, Tories 285 he will give it serious consideration. But then he will put forward a Labour Queen speech and DARE the SNP to vote it down. There will be some Labour rebels who will be expelled, Danczuk, Mann, perhaps one or two others.

The SNP will vote it through.. And thus as Rod Crosby has pointed towards in his constitutional musings Ed is PM. I expect him to remain in post till Holyrood 2016. Past that the SNP may well pull the plug.

However there is enough uncertainty in the whole situation to make CONSERVATIVE MINORITY the best value bet right now at 5.9 on Betfair.

How can I predict Ed, yet recommend Con minority as a bet ?


So in short:

Prediction: Ed Miliband PM.

Bet recommendation: Conservative Minority.

Update: Lab minority more likely with Burnham's comments on R5L this morning.