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Whats Your Opinion. 1St Time Buyer, Buying At Low End Of Wealthy / Saught After Area Near London?


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#16 Si1

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Posted 25 August 2011 - 12:40 PM

Still the mortgage payments were less than the rent so it made sense to buy.


what were the maintenance and ground rent costs?

opportunity cost on your deposit?

I *loathe* flippant comments from people who claim to do the maths but clearly haven't

Edited by Si1, 25 August 2011 - 12:41 PM.


#17 Si1

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Posted 25 August 2011 - 12:42 PM

NE isn't a problem unless you have to sell.


or if you consider your net worth as an issue in the long run

#18 24gray24

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Posted 25 August 2011 - 01:03 PM

The 50,000 question is what value you think the house will be in 5 years time. No one can help you with that, it's your judgement call.

second question is what will you income be in 5 years. If you lose your job in ne, it's bankruptcy.
2012 prediction:

banks fall like dominoes in 2013, as funds are withdrawn into PMs.

Sarkozy, Obama and Merkel all fall from power.

the british housing crash is not gradual and slow, it drops like a stone on the day interest rates rise.

#19 24gray24

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Posted 25 August 2011 - 01:15 PM

The 50,000 question is what value you think the house will be in 5 years time. No one can help you with that, it's your judgement call.

second question is what will you income be in 5 years. If you lose your job in ne, it's bankruptcy.


sorry,forgot to add my worthless view: 50 percent drop (it was 70-90% in 1929) and a good chance one of you (if both need work to pay mortgage) will lose your job.
2012 prediction:

banks fall like dominoes in 2013, as funds are withdrawn into PMs.

Sarkozy, Obama and Merkel all fall from power.

the british housing crash is not gradual and slow, it drops like a stone on the day interest rates rise.

#20 Trampa501

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Posted 25 August 2011 - 02:17 PM

sorry,forgot to add my worthless view: 50 percent drop (it was 70-90% in 1929) and a good chance one of you (if both need work to pay mortgage) will lose your job.


And the prize for optimist of the day goes to.....

Scary thing is, it's hard to fault your logic. :blink:
Chrimbo 2011-12 predictions
Really I do not have a clue. It could all change, or it could stay the same!


#21 Deckard

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Posted 25 August 2011 - 03:42 PM

don't be a tw@t.get yourself a shed and live in the woodz until the world ends.


:D
A new life awaits you in the Off-World Colonies! The chance to begin again, in a golden land of opportunity and adventure!

#22 Crashman Begins

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Posted 25 August 2011 - 07:14 PM

sorry,forgot to add my worthless view: 50 percent drop (it was 70-90% in 1929) and a good chance one of you (if both need work to pay mortgage) will lose your job.


Im also Hedged in case of a SHTF scenario

Differences between great depression & what were are expecting :

There is a lack of a gold standard, which serves as a restriction to how much the money supply can be expanded. The dollar was devalued relative to gold during the Great Depression, so there were attempts to circumvent restrictions on the money supply, but ultimately the gold standard was not fully abolished until 1971, and so the Federal Reserve was a bit more restricted in how much money it could create. This restriction does not exist today.

http://www.dailymark...nd-differences/
precious-metal-investment.blogspot.co.uk

BBB @ Dec 5 2004, 05:30 PM: some credit crunch guys....not my idea of a credit crunch......is it yours?
''first this will happen, then this will happen'' you all said..kind of throws all your baloney theories out of the window doesn't it?

They will do anything to avoid suggesting that the size of the pie is not the real problem, it's the way it is sliced.


#23 24gray24

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Posted 25 August 2011 - 10:39 PM

Im also Hedged in case of a SHTF scenario

Differences between great depression & what were are expecting :

There is a lack of a gold standard, which serves as a restriction to how much the money supply can be expanded. The dollar was devalued relative to gold during the Great Depression, so there were attempts to circumvent restrictions on the money supply, but ultimately the gold standard was not fully abolished until 1971, and so the Federal Reserve was a bit more restricted in how much money it could create. This restriction does not exist today.

http://www.dailymark...nd-differences/

Agreed, the 1929 figure shows a pure deflation of assets. The alternative is inflAtion, such as doubling wages, or devaluing the currency, Zim or Weimar.

I can't see wages rising, because it's so easy to sack people and replace with cheaper. And currencies can't all devalue at the same time.

So my view is most of the fall will come in house prices.
2012 prediction:

banks fall like dominoes in 2013, as funds are withdrawn into PMs.

Sarkozy, Obama and Merkel all fall from power.

the british housing crash is not gradual and slow, it drops like a stone on the day interest rates rise.

#24 Crashman Begins

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Posted 26 August 2011 - 06:53 AM

Agreed, the 1929 figure shows a pure deflation of assets. The alternative is inflAtion, such as doubling wages, or devaluing the currency, Zim or Weimar.

I can't see wages rising, because it's so easy to sack people and replace with cheaper. And currencies can't all devalue at the same time.

So my view is most of the fall will come in house prices.


Agree with you exept the last bit, currencies are all devalueing togther.. against you know what.

And house prices havent crashed as predicted. They kind of just paused after QE & market manipulation.
precious-metal-investment.blogspot.co.uk

BBB @ Dec 5 2004, 05:30 PM: some credit crunch guys....not my idea of a credit crunch......is it yours?
''first this will happen, then this will happen'' you all said..kind of throws all your baloney theories out of the window doesn't it?

They will do anything to avoid suggesting that the size of the pie is not the real problem, it's the way it is sliced.


#25 Crashman Begins

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Posted 26 August 2011 - 07:38 AM

24gray24
Im glad you brought up those points, I hadnt compared this situation to the great depression before & learned something new that I'd heard over & over again but didnt fully understand why..."there will be Inflation"

Why ? Because theres no limit to the money supply today like there was in the great depression .. GULP :ph34r:

Edited by Crashman Begins, 26 August 2011 - 07:42 AM.

precious-metal-investment.blogspot.co.uk

BBB @ Dec 5 2004, 05:30 PM: some credit crunch guys....not my idea of a credit crunch......is it yours?
''first this will happen, then this will happen'' you all said..kind of throws all your baloney theories out of the window doesn't it?

They will do anything to avoid suggesting that the size of the pie is not the real problem, it's the way it is sliced.


#26 mijas99

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Posted 26 August 2011 - 08:26 AM

what were the maintenance and ground rent costs?

opportunity cost on your deposit?

I *loathe* flippant comments from people who claim to do the maths but clearly haven't


It wasnt a flippant comment, believe me I do the maths

We've had the property 7 years, lived in it the first 3.5 years, been renting it out since then as we escaped left the country, had tenants the whole period.

Ground rent/service charge is 1k per year. Deposit was 10%, Mortgage has averaged around 1100 per month. We rent it out for 1350 per month which covers the mortgage, estate agents fees and service charge. Repairs have been averaging 300 per year. Works fine for me, so far we've paid off over 50k of the mortgage and put very little money into it

We were lucky that we bought in 2003 when the numbers just about made sense. Since then the returns have got much worse.

#27 LiveAndLetBuy

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Posted 26 August 2011 - 08:35 AM

If you like the house, can afford it without stretching yourself, and you can see yourself happily living there for at least 5 years then there's no problem in buying it. Just try to make sure you are in a good position to benefit from any future crash by being able to trade up (as you say, try to stay out of negative equity). I did something similar last year and I'm happy with my decision - I now have somewhere I enjoy living and the mortgage payments are very manageable. I could have stretched to buy a better place, but I'm a bear that likes to get a good night's sleep :)

#28 Crashman Begins

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Posted 15 November 2011 - 10:07 PM

Well its been a few months & my purchase has nearly goine through now.


Sods law its on the brink of round two of the credit crunch.. . but like I said, if deposits are increased any further we'll be stuck in terms of options & would have to look further out
from the area we want to live in.


Some of the headlines on London seem to backup my theory of London as a safe haven / hedge, but as with this crash nothing is certain


http://www.thisislon...ices-to-rise.do

London house prices to rise by 20 per cent in five years

London house prices are today forecast to rise by almost a fifth over the next five years, outstripping every other region of the country.

The capital's property market is expected to remain the most resilient in Britain with the biggest rises seen in the most sought after central London neighbourhoods where they could go up by as much as 23 per cent.

The forecasts, from agents Savills, mean that a 500,000 London family house could be worth close to 600,000 by 2016.

Prices are expected to rise much more slowly or even fall outside London, a trend that is deterring thousands of families from making the move to the countryside.

Yolande Barnes, director of Savills residential research, said: "Despite the widening gap between London and the country, Londoners seem increasingly reluctant to move out and there has been a 24 per cent drop in such relocation activity, meaning that values in the South-East are still 12.5 per cent below peak and will only turn upwards as the economy begins to recover." Prices are likely to fall slightly next year because of the pressure on family budgets caused by high inflation and low wage increases, before a slow recovery in 2013.

By 2015 they are expected to rise by six per cent a year. The Savills research suggests that the days of making huge profits from London property are over for the foreseeable future. The expected cumulative 19.1 per cent rise in values in London by 2016 is only two per cent ahead of inflation.
Until the 2008 financial crisis triggered a crash, property values had been rising at an average of 2.5 per cent above inflation for decades.

However, Lucian Cook, director of Savills residential research, said: "We certainly do not believe the trend of inflation-busting house price growth has been consigned to history. By the end of 1995, inflation-adjusted house prices were at the same level as they were 12 years previously. In the following decade they rose by 140 per cent."

Within London, growth is expected to be fastest in the prime central "bullseye" of Westminster and Kensington & Chelsea. Ms Barnes said she could see no signs of let-up in foreign demand for trophy London homes and estimated that 6 billion has flowed into the central London property market from abroad over the past 18 months.
She added: "We believe the influx of foreign wealth in uncertain times still has some time to run and it may even be boosted by the international attention focused by the Olympics."

The average price of properties sold in Westminster has smashed the 1 million mark for the first time.
It becomes the second borough in London where average prices are measured in seven figures, following Kensington and Chelsea.



http://www.bbc.co.uk...siness-15735837

House prices falling outside London, says DCLG


Average UK house prices fell by 0.7% in September, according to figures from the Department for Communities and Local Government (DCLG).

The fall took the average UK house price to 207,326. Prices were 1.4% lower from a year ago.

London was the only region where house prices had risen, with prices up by 2.8% in the year to September.

By contrast, the largest price falls were in Northern Ireland, where prices were down by 12%.

The DCLG figures chime with the results of other monthly house price surveys from organisations such as the Halifax and the Nationwide.

These have also shown that prices have changed little in the past year, in a market subdued by the continued rationing of mortgage funds by lenders.

Experts have explained that the resilience of house prices in the capital has been due to a combination of factors, including the relatively buoyant level of employment and the continued influence of rich foreigners who continue to view houses in London as a good investment.


precious-metal-investment.blogspot.co.uk

BBB @ Dec 5 2004, 05:30 PM: some credit crunch guys....not my idea of a credit crunch......is it yours?
''first this will happen, then this will happen'' you all said..kind of throws all your baloney theories out of the window doesn't it?

They will do anything to avoid suggesting that the size of the pie is not the real problem, it's the way it is sliced.


#29 NuBrit

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Posted 15 November 2011 - 10:36 PM

I'm shocked, guys.

I thought this was housepricecrash.co.uk, not housepriceramping.co.uk.

Let me tell you a story about a man I work with from southern Ireland. Perhaps you'll think I'm full of it, but read it anyway.

Back in 2007 he bought a flat in a very nice area in Dublin for 500k, just when the property bubble started to wobble. The conventional thinking he said at the time was that property might crash in the over supplied areas in the country, but because he was buying a great location in a busy capital, he would be insulated from the crash.

The logic could not have been more wrong. He estimates that the flat he paid 500k for, is worth about 200k and that's if he's lucky. Meanwhile, his job was moved to Belfast, his commuting costs have rocketed, his tax has increased, he's currently contemplating jacking it all in and moving to Oz.

IMHO, London isn't as overpriced as what Dublin was. However, I still think there will be a correction, think 30-40% to go back to normal affordability.

#30 anonguest

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Posted 15 November 2011 - 10:57 PM

Sought not Saught! :blink:


I was thinking the very same thing...... it says something about the world and declining standards that even people with 'wealth' simply cannot spell simple words correctly.




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