northernbear

I guess if we are going to get a bull trap it should be now. I know a few people who in my work are looking at houses or have bought in last month or so. Mostly folk 3-7 years from uni, couldnt buy during the rush and mostly have 15-20k in savings. They are now thinking that they can buyplaces for less than renting, take the little house here as an example. http://www.propertynews.com/brochure.php?r...=1&sort=h2l Decent little terrace, rent it for about 450, or buy for about 500, interest part is about 350. Iknow you have to consider rates, insurance , maintenance etc but people are starting to think this looks like a good deal. My thinking is, these people are probably not the majority in that they have 20k in savings but could be enough to slow down the falls for a few quarters, at least at the entry level. When they wash through the system in about six months, could we then see another wave of drops. what do you think? My vested interest, i rent, i have a small and growing savings pot but no interest in buying as i know there is a good chance that i will be moving around due to work.

this is pretty simple, and devious, you have an asset, the developer and the bank - which is basically the same entity as the developer is on hook for the developers loss both know the house is going to be valued at lets say 100k in three years time. Todays market value is 200k and is unsellable, at aution, 125k. So you concoct pretty much any scheme, and sell it to some greater idiot with 10% protection for 180k. Some will just struggle on to pay it. Some will put down their 20k savings and struggle on for two years before going bankrupt, in the mean time the bank will have the 20k plus maybe another 30k in interest payments, thats 50k more than if they had just held out and let the developer go bust and then to auction in two years time. They are just making the best of a bad job, scraping back value anywhere they can. the overall effect will be irrelevant. A delaying tactic maybe, but outside of a state sponsored disaster it will have no effect.

hopefully, the government will give these people absolutely nothing but the dole. I have friends in this industry and i take no pleasure in seeing them out of work. But, its the only way the building industry can have two years of misery and not ten. let the banks take the developers to bankruptcy, most big developers dont actually have any skills anyway. They can easily be reestablished under different names etc in a mater of days. The only trouble is how fast the banks will move. They will be reluctant to make there write downs final by actually valuing there assets in a fire sale. However, they will. then there assets can be sold off at land prices = 10% what they wear at the peak, then new houses can be built and sold at cost of materials + labour +10k for the land +5k for the developer rather than the current model of cost of materials and labour + 100k for the land + 30k for the developer. Prices will just about be halve then and folk can afford to buy them, live in them, have kids and generally look after them. Any other 'solution' will just prolong the pain. Finally, those who work in the building industry at all levels will have to get used to being paid an honest days wage for an honest days work, they will see wage deflation back to the level thats reasonable. Labourers, same as factory worker +10% as its dirty hard work, quality brickie, carpenter, electrician - factory supervisor, good hairdresser, teacher money. My vested interest - I want to buy a house at some stage but am happy to rent in the mean time while I build up some good savings but I'm more interested to see a society where people live within their means, have a higher quality of mental heath and actually have some time in their week to give their kids some decent life skills. I'll need their kids skills to pay my pension etc at some stage (all things being well)

im using detached recent (5 year) builds within comuting distance of belfast, specificaly in dromore, even though i dont want to live there, just a useful indicator, these were 250 last june, floor looks to be about 185 now. http://www.propertynews.com/results.php?Be...07&refine=1

i am entirely convinced we will see property shows on tv where someone buys a three apartment block at auction and converts it into a 4 bedroom house, the real clever part of the show will be how they knock down the 'extension' which was added in 2003-2007 and formed the third appartment to reveal....... ...... a garden!!!!! 3 stinking little grotty appartments that no one will bid on at 40k each, converted into a large 4 bedroom detached house with a garden and off road parking at 200k. 40k profit for the clever developer...... easy money.

for me right now, renting one room in an apartment, its just so easy. I can walk to work in 20 minutes, healthy and no boring comute, no petrol, no parking charges. No taxis needed, no planning needed to go out anywhere. Appartment is tiny, but im hardly ever here, its just a place to sleep and chill a bit. Almost heats itself in winter with neighbours below and both sides. heating hasnt been on here in months. I have no interest in a garden, there are acres of public gardens if i feel like a stroll (and i never do), i can be standing in a mountain range from here in an hour outside of peak driving, i have no interest in planting flowers or growing veg. summary, its cheap, its easy.

its all in the detail. Imagine a 45 yr private hospital plastic surgeon wants to buy a pad for his daughter to stay in during uni years, agrees to stump up 5% deposit and is requesting salary multiple of 1.5. Going to overpay by 5k a month. No other debt, lives in paid for 2 million pound house in london, retires to 2 million pound country estate at the weekend. Could easily buy it in cash but doesnt want to sell part of his share portfolio for tax reasons just now. Agrgees to use his other property as collateral. There is zero risk in this deal. I'd say it is headline grabbing - nothing else.

definetly interesting to hear peoples views on this. Having only recently escaped from the university system i think like most of those my age think the current university system is broken, teaching masses of people stuff they dont need or want to know with little hope of getting a job over 15k and loading up on debt. Then the employers have to either start over from scratch or look for talent from outside these isles. Personally i didn't mind having to borrow money to go to Uni, I consider it an investment in myself. I dont think people should get a free ride through Uni on the taxpayers back. Had it cost me 60k to go to Uni I would have borrowed it/worked for it, that said I would have expected to have had a far better 'education'. I have no interest in paying for others to booze/drift their way through 3 years of french literature and economics lectures at 8 hours a week and then scrape a pass in the exams with a month of all nighters learning the answers in the previous three years exam questions and to then go work doing a job that they could easily have done without. The current funding system doesnt work, Uni's are forced to teach a bunch of cheap courses and milk foreign students as cash cows to try and fund expensive science/engineering courses. Alas I think sooner or later we will be forced to move to the american system, in truth we are already there. In the mean time I think I'll let the SLC collect their money.

i'd be interested to hear peoples opinion on how how they think student debt or debt in general will be viewed in the new financial world, particularily if they have first hand experience from the last recession, At present i have about 10k of student debt, and about 15k of savings. I expect i will think about buying maybe in 2-3 yrs time. At that point will it be better in terms of availability of mortages/getting lower rate to have 30k of savings and 10k of student loans or no loans and 20k in savings. At present it makes no sense to pay of the debt as i can beat the cost in interest with gains on savings, plus it provides a saftey net should i lose my job, however the student debt will reset with changes in the rpi so may not be the same position in a few months time. thanks for all advice and opinion

hi all, I was wondering how do you think student debt will be viewed by mortage companies in the future, I'd particularily like to hear from anyone who borrowed after the last recession and their experiences with/without debt. At present i have about 11k in student loans, being paid back at about 50 quid a month or so, interest rate is currently 4.8% but tracks the rpi value of a fixed month so could be up or down depending on the fiddle. At present no real difference in interest gained minus tax on savings and cost to service debt. I have savings of about 15k, saving about 600 a month, (my outgoing are small - basically i just carried on living like a student when i started work.) My question is, will it be 'better' to go asking for a mortage in two years time with 30k of cash for a deposit and 10k of student debt or 20k of cash and no debt. I guess the larger the deposit the less risk for the mortage lender, which should make it cheaper to borrow right? I expect i will be looking to buy a house 100 - 150k, so borrowing 80 - 120, that level of borrowing would be which would be about 3-4 times my income i two years time. I also like holding the cash as would provide a safety net if i lose my job, which is unlikely but not impossible. If my debt was on a credit card etc then i'd wipe it off course but student debt is a very cheap borrowing to service and doesnt need servicing if unemployed. If houses are still crazy priced in two years I'll continue renting and saving but ultimately I'd like my own place. what would you do?

Yup, Ive had a look for sure, overshoot on the upside, undershoot on the way down, not enough damping in the system and too much emotion. in 2000/2001 I remember the likes of the first house I listed was selling for about 45k when fully modernised. My point is just that where people can get jobs the price is headed towards a point where people could buy the things. For those outside of the emotion, lets say the first house there rents out for 350 a month, I would have thought it not too hard to get that for it, I expect folk on benifits would get that kind of allowance, then at a 5% yield gives a value around 85k. To a professional landlord holding cash, thats not too scary a return. There has to be a floor there somewhere. Maybe the floor is 6%, 7% - I dont know. At what % yield would we be happy with the government buying houses to rent to folk - rather than paying to private landlords?

Im thinking some of these are starting to get to sensible/affordable prices, so im wondering are we starting to see some forced sales, or are people just fed up waiting and thinking, lets stick it on 50k less than we want, lets hope we get three people to come have a look, hopefully two of them will fall in love with it and bid it up above the asking? I know folk will still say its twice the price four years ago or whatever... but I can see a situation where people will be able to buy something like these below if they save for two/three years at 3/4 times their salary. My vested interest, would be FTB saving hard.... what do other people think? decent little house in belfast, ok not the 'best' area and you wouldnt want to leave a shiny ferrari on the payment, but I could easily live here (I actually rent not that far from here) http://www.propertynews.com/brochure.php?p=5526HF716956020 In my mind this is an ideal starter/family home, ok its out in a smallish village, but not everyone works in the city. http://www.propertynews.com/brochure.php?p=PNC349510 Or this is a bit bigger, better finished etc at a bit more money, maybe nearer better jobs/city. Maybe a second step house. http://www.propertynews.com/brochure.php?p=PNC286525 still some right dreamers though, in my opinion. http://www.propertynews.com/brochure.php?p=PNC351473 (edit - my english is terrible)

first flag for me was when Blackrock went IPO, there was a very good article on msn about it, the question was 'Do you think these guys are going to sell it cheap'

Heres my take on titanic quarter, I think i'd rather buy just about anything other than a new build in titanic quarter, in fairness, i might rent one, but not for a few years after the first lot are released and not at anything like what i think people will expect. The smell down there is hateful when the wind blows the wrong way and it will be one huge noisy, dusty building site for years. I worked down there for a while and the whole building i was in shook for the weight of the big lorries going up and town the Queens road servicing the docks and the scrap metal merchants at the end! Everyone complained about getting punctures due to the bits of cars that regularily fell off the lorries. I dont particularily like the location at the moment either, sure it may be 'within walking distance of the city centre' but would you dare after dark, the bridges in betweeen are scary. Sooner or later they will half end up in council housing, nothing wrong with that but the housing executive rent will simply not be what the owners expect. Ten/fifteen years from now, they may well be very desirable in fantastic areas and the buyers may do well. I guess you take an opinion, pays your money and take your chances. right now, As for value for money, 260k for two bedrooms in a nosey, dusty apartment or buy one of these in a years time for the same money http://www.propertynews.com/brochure.php?r...p;p=TRLTRL49276 http://www.propertynews.com/brochure.php?r...mp;p=GOCGOC3682 Ten minutes on the bus or 15 cycling would have you there. Which one would you choose?

just to play contrarian, Is there a possibility that 'affordable' cars say sub 1500 will actually increase in price. Less people looking to buy new equals more people looking to buy cheap? Or will the cheap end all be for sale as unemployment means folk will sell uneeded cars to buy food. Im too young to remember the last recession - what happenend then please. (i have also posted this in the northern ireland section where there is a discussion of the local area car prices)