Bitcoin: Now Accepted As Down Payment For UK Houses

A UK co-living company has announced that it will begin accepting down payments made in bitcoin, according to CoinTelegraph, making it that much easier for traders hooked on effortless, outstanding returns to speculate in another bubble-prone market: UK housing.

Co-living pioneer The Collective announced the decision on Tuesday, saying it’s the first developer that will accept payments in cryptocurrency. The company added that it’s exploring how to accept rental payments in bitcoin, which it hopes to implement later in the year. It said that its decision to accept bitcoin was related to demand from international clients.

The company has pledged to perform a “spot conversion” of users’ deposits – a fancy way of saying it intends to hedge its position – so that it bears any financial risk while holding the deposit.

“The Collective's online booking form for its Old Oak living scheme, an ambitious co-living development with 550 rooms, will be accepting Bitcoin as a deposit on the flats.

 

The standard deposit is £500, which equates to about 0.148 at time of publishing. Additionally, with the volatile nature of Bitcoin seemingly holding back its ability to be utilized as a currency, The Collective has pledged “spot conversion,” which means it will bear any financial risk while holding the deposit, returning it at the original value when the tenancy finishes.”

The Collective’s chief executive and founder Reza Merchant said the decision was a bold move for the UK property market.

“The rise and adoption of cryptocurrency globally, particularly Bitcoin, is a fascinating development in how people store value and transact for goods and services worldwide.

 

With many savers and investors now choosing and becoming more comfortable with cryptocurrency, people will expect to be able to use it to pay for life’s essentials, including housing deposits and rent.”

It’s a major step indeed. Housing prices in London have risen 65% since 2011, compared with bitcoin’s more-than 300% climb since the beginning of the year. But we imagine some less risk-averse bitcoin investors might be attracted to the deal, reasoning that it’s a smart way to lock in their investment returns.

But London property values might not be as invincible as the world thinks.

UK’s Land Registry data for three London boroughs shows transaction volumes in London are at all-time lows. Back in December asking prices in London dropped 4.3%, with inner London down 6%. More exclusive areas dropped by as much as 10%.

Between 2006 and 2016, average home prices in the capital grew from £257,000 to £474,000 or by a very substantial 84.4%. These large gains were 'built' on the back of the very large appreciation in prices between 1996 and 2006.

Despite this, the Collective’s head of technology, Jon Taylor, told CoinTelegraph that their company is proudly breaking down barriers to bitcoin’s legitimacy.

“One of the biggest barriers to the popularity of Bitcoin is making it more consumer-friendly, and we believe this will become established as an easy and convenient way to pay deposits.”

According to CoinTelegraph, private property owners in the US have occasionally priced their property in bitcoin in the hopes of attracting buyers, as well as accumulating the valuable digital currency. A well-regarded Miami trader recently placed his house for sale in Bitcoin after first trying to entice the seller to pay him in bitcoin back in 2014.

With the economic threat of Brexit looming in the not-too-distant future, some say the UK housing market is headed for a leveling off if not an outright drop. But who knows, maybe we will see one last leg higher as the crypto traders look to cash in their winnings before the next Mt Gox kills the market.
 

Australia’s Dystopian Future: A Nation Of High-Rise Renters

Authored by James Fernyhough via TheNewDaily.com,

Young Australians are increasingly likely to live most of their lives in high-density rented accommodation – and that’s not necessarily such a bad thing.

That was one of the more controversial findings of a major study into the housing market released in recent days.

The Committee for Economic Development of Australia (CEDA) concluded that capital city home ownership would continue to be unaffordable for at least the next four decades.

It was grim news for many young Australians, particularly those who have bought into the Aussie dream of owning their own house and backyard in a spacious suburb.

But the study argued that a lower level of home ownership, and/or a greater level of high-density living, need not be a bad thing.

In fact, examples from overseas – and even some in Australia – suggest it could be a positive. But this would require a massive shift in policy and, more importantly, attitude.

What clearly emerged from the report is that there is no one culprit behind the property price explosion; rather, the picture is of a tangled mess of convergent causes, most of which will not go away.

CEDA blamed all the usual suspects, including foreign investment, negative gearing, capital gains tax rules, interest rates, increasing urban population, limited land supply, restrictive planning rules, and the tendency of stamp duty to discourage retirees from downsizing.

Professor Rodney Maddock, CEDA’s research and policy committee chairman, said the research showed that “barring any major economic jolts, demand pressures are likely to continue over the next 40 years and supply constraints will continue”.

In other words, if you’re holding out for the “bubble” to burst before you make your move, you may be waiting a long time.

Many of the partial solutions were equally as predictable: replace stamp duty with a land tax; raise capital gains tax on investment properties; loosen planning restrictions; and improve infrastructure to more remote suburbs.

While all of these would help the situation, none would comprehensively reverse the astonishing increase in property prices over recent decades.

The result of all this is that more and more people will be forced to rent – which, indeed, has already been happening.

In 1982, the report showed, just over 40 per cent of 25- to 34-year-olds were renters. Now it’s closer to 65 per cent. The proportion of renters has increased in every age group over that time period, excluding the over-65s.

Predicting this trend will continue, CEDA recommended improving tenancy laws to “provide adequate protection and certainty to long-term renters”.

It pointed to countries such as Germany, the Netherlands and Sweden, where “long-term contracts exist within the private rental market, and termination is only possible in limited circumstances”.

The case of Germany is an interesting one. Only ­52 per cent of Germans own their own home, compared with 67 per cent of Australians. Given Germany is a developed country with a high standard of living, this shows home ownership is not a prerequisite for wellbeing.

At the end of the report, CEDA presents a utopian, and occasionally dystopian, vision of high-density living. It takes the example of an existing high-density development in Sydney’s northern beaches, called ‘The Village’.

A particularly irksome passage talks about a “hierarchy of spaces to create an intuitive sense of public and private space, without excluding non-residents from the residential parts of the site”.

While this vision may be off-putting, the fact is this sort of development is the most logical answer to the problems raised by the report. It makes economical and sustainable use of space, and in so doing solves many of the problems we are currently facing.

However, embracing such an ‘un-Australian’ style of accommodation would clearly require a fundamental shift in attitude.

But if we don’t make this shift, many younger Australians may find their quality of life greatly diminished, as more and more of their pay goes towards servicing massive mortgages, paying inflated rents, and simply getting to and from work.

Hawaii Considers A “Universal Basic Income” As Robots Seen Stealing Jobs, There’s Just One Catch…

Forget social security, medicaid and WIC, today’s progressives have moved well beyond discussing such entitlement relics of the past and nowadays dedicate their efforts to the concept of a “Universal Basic Income” for all…call it the New ‘New Deal’.  You know, because having to work for that “car in every garage and chicken in every pot” is just considered cruel and unusual punishment by today’s standards.

Of course, it should come as little surprise that the progressive state of Hawaii, which depends on easily automatable jobs tied to the tourism industry, is among the first to pursue a Universal Basic Income for its residents.  And while the idea of passing out free money to everyone seems like a genius plan, if we understand it correctly, as CBS points out, there is just one catch…figuring out who will pay for it.

Driverless trucks. Factory robots. Delivery drones. Virtual personal assistants.

 

As technological innovations increasingly edge into the workplace, many people fear that robots and machines are destined to take jobs that human beings have held for decades–a trend that is already happening in stores and factories around the country. For many affected workers, retraining might be out of reach —unavailable, unaffordable or inadequate.

 

Over the past two decades, automation has reduced the need for workers, especially in such blue-collar sectors as manufacturing, warehousing and mining. Many of the jobs that remain demand higher education or advanced technological skills. It helps explain why just 55 percent of Americans with no more than a high school diploma are employed, down from 60 percent just before the Great Recession.

 

Hawaii state lawmakers have voted to explore the idea of a universal basic income in light of research suggesting that a majority of waiter, cook and building cleaning jobs — vital to Hawaii’s tourism-dependent economy — will eventually be replaced by machines. The crucial question of who would pay for the program has yet to be determined. But support for the idea has taken root.

 

“Our economy is changing far more rapidly than anybody’s expected,” said state Rep. Chris Lee, who introduced legislation to consider a guaranteed universal income.

 

Lee said he felt it’s important “to be sure that everybody will benefit from the technological revolution that we’re seeing to make sure no one’s left behind.”

But taking billions from hard working Americans to “spread the wealth around” has never been all that difficult before so presumably this too should prove to be a relatively minor issue.

UBI

 

In all seriousness, where does Representative Lee and CBS figure Hawaii will get the funding for their guaranteed income plan?  Well, as it turns out, Facebook co-founder Chris Hughes made a very generous $10mm donation to support programs just like thisthe only problem, of course, is that Hawaii would need about 1,000 times that amount to fund Chris Lee’s plan for just one year.

For now, philanthropic organizations founded by technology entrepreneurs have begun putting money into pilot programs to provide basic income. The Economic Security Project, co-led by Facebook co-founder Chris Hughes and others, committed $10 million over two years to basic income projects.

 

Tom Yamachika, president of the Tax Foundation of Hawaii, a nonprofit dedicated to limited taxes and fairness, has estimated that if all Hawaii residents were given $10,000 annually, it would cost about $10 billion a year, which he says Hawaii can’t afford given its $20 billion in unfunded pension liabilities.

That said, it’s difficult to argue with Karl Widerquist’s argument that Hawaiians deserve a “beach dividend” for their heroic efforts in being born and continuing the difficult task of breathing day in and day out.

Karl Widerquist, co-founder of the U.S. Basic Income Guarantee Network, an informal group that promotes the idea of a basic income, suggests that Hawaii could collect a property tax from hotels, businesses and residents that could be redistributed to residents.

 

“If people in Alaska deserve an oil dividend, why don’t the people of Hawaii deserve a beach dividend?” he asked.

And while we have little doubt that Widerquist has fully thought through his suggestion that Hawaii just raise an incremental $10 billion every year via a tax on hotel stays…we thought we’d run the math just to make sure his plan holds water.  As it turns out, roughly 3 million families visit Hawaii for a little R&R every year which means each family would only have to pony up an extra $3,400 per hotel stay to cover Hawaii’s Universal Basic Income plan.  Seem more than reasonable, right?