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House Price Crash Forum


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Everything posted by Velgud

  1. Yes, I totally agree. However it's all so much easier in theory! I'm only earning around 44k and really have to bust myself to save £24k a year. The whole France idea is really more about an improvement in lifestyle than an investment, and the thought of doing a whole other 12 months scrimping and saving to clear the mortgage by 2009 to then have to do it all over again for a deposit in France is quite an overwhelming prospect. It certainly makes sense but to keep saying "no, I don't need a bigger tv, no I won't get a better car, no i won't finance my latest .com idea" etc etc is really tough! Great point about rent relating to CPI, I hadn't thought about that, fingers crossed! Please excuse my stupidity (I have already confessed to being a noob!) but could you possibly explain further what you mean by "outpace this by investing in inflation beating assets" Many thanks advance!
  2. This is my main conundrum. If it goes as expected and attaining credit in the future becomes more difficult (and costly) then should I really be looking at paying off the credit I have already attained? It would make more sense to just save rather than pay back as, like you say, I will have more flexibility with the savings yet if the money is in a savings account earning 6% and the debt is costing me nearly 8% I'm losing out. £80 per month on £63k worth of property is around 22% of what I would pay in interest were I to borrow that amount, so yes certainly it would make sense and I agree that I should remain patient. Thanks for the input.
  3. A great point, I seem to have a contradiction in my flawed list of options. I guess in such circumstances many of us will be guilty of wanting our cake and eating it. Many thanks for this observation and I thoroughly take it on board. Cheers
  4. Ha! BPO is an American buzzword, it stands for Business Process Outsourcing, not sure if I'm allowed to add a link so I'll advise you search for this term on Wikipedia to get more information. We have a lot of clients in this field, such as Accenture, SXP etc. We have learned a great deal from them in terms of how to best streamline your business processes and are using this model within a web management context. It's good stuff, and makes a lot of sense, particularly with next year's recession - all companies have some form of online marketing and all companies will be looking to cut costs. We've coined the phrase WMO 'website management outsourcing' and are currently promoting this through various thought leadership programmes, it's so 2010, we're just ahead of the game
  5. Good afternoon all, Although this is only my second post to the board I have been visiting and reading for a while now. This really is a great place and I have a huge deal of respect for the members, it would be a privilege to read your views on my current situation. I’m 25 years old, living in Exeter. I moved back to England 3 years ago after living in Italy for 2 years and subsequently had a few troubles obtaining a mortgage – being out of the country with no certified accounts wasn’t exactly ideal. As a consequence I had little choice other than to purchase a shared ownership property in the city centre. I bought 50% for £52k of a one bedroom apartment which I am actually very pleased with – there has been considerable investment in the city centre of late with more to follow and my fellow residents are a lovely bunch of people providing a real community atmosphere. I initially put down an £8k deposit and this year I have managed to pay off £20k to get the balance down to £24k. I generally don’t like to be in debt and could most likely clear the balance within 12 months. My initially low mortgage rate has recently expired and so I am currently on Abbey’s standard variable rate which I believe is 7.8%. This is clearly a high percentage however on such a low balance the difference is trivial and the current setup offers me no overpay fees and obviously there is no commitment giving me a freedom to switch at any time. I pay a subsidised rent on the outstanding 50% of £80 per month. I can purchase the other 50% (or instalments of) at any time but have to purchase at market value and pay for the valuation. Based on similar properties for sale, I suspect estate agents would value the property (assuming 100% ownership) at £140k although I suspect the current sale value to be around £126k. There are no clauses in the lease regarding sale, moreover my 50% can be sold at market value. I have a very strong morality against the buy to let market and feel that BTLers are people who would fail a Prisoners Dilemma test, that is, they choose to profit against the good of the people. I know the troubles I had getting my apartment and more so the fears I had of never getting onto the property ladder due to escalating house prices. I would never want to contribute to the problems others face however would in the future consider short term lets to overseas students etc. My plan is to always keep this property, I’m rather @nal at the best of times, and Exeter is my home town where I have a lot of friends and family and a city centre crash pad is ideal for if I ever move abroad again, move to London or simply buy a family home in the beautiful Devon countryside. *checks length of post thus far* Sorry to babble on, I’m just really interested in your views and want to explain my situation in detail! I wholeheartedly agree with the majority of the board on here that there will at some point (signs indicate soon) be a recession and house price crash – I just cannot see how people can sustain lifestyles with such ridiculous levels of borrowing. The way I see it, my options are: 1) Continue to overpay my mortgage balance until clear and never purchase the other 50% of the property accepting that I will always pay the £80 per month rent for as long as I keep the property – which I can easily see being 10-20 years. 2) Continue to overpay my mortgage until interest rates are dramatically lowered to pull the economy out of recession. At which point, set up a long term fixed interest mortgage and purchase the other 50% added to any outstanding balance I have at the time. 3) Ease my ambition to clear my current balance and start a savings account such that I am ready to pounce when/if the market crashes to purchase a larger property suitable for raising a family. Try to hold on to my share of the apartment and sell once property prices rise again reducing the debt on the larger property. 4) Forget the UK market for a while, save a deposit and buy a large apartment in Rennes – twin town of Exeter and only a 55 minute budget flight away – living there part time and occasionally renting to friends, family and colleagues to help ease the burden. I understand that the best advice to follow is ultimately my own and the context is very subjective, however I would feel very privileged to read your objective views on my circumstance. Apologies for such a long winded thread, I’m not trying to receive free advice in my first post without the intention of giving back. But at this moment I don’t really feel educated enough to reply to other people’s questions as I’m somewhat an economics and property ‘noob’. Many thanks in advance
  6. Good afternoon all, My name is Chris and I'm 25 years old. I work in BPO outsourcing web management services to medium sized enterprises globally. I've been reading for a few months now but have only just signed up as a member. I think it's great to find so many people here with the same mindset as me. I'm certainly no economist, but don't particularly need to be, in my eyes it's simple logic - I just cannot see how people can sustain their lifestyles with such ridiculous levels of borrowing. Personally, a crash will suit me nicely, I'm clearing my mortgage balance as a top priority with about £24k to go and I don't follow the spend trends of my peers which is generally "want it, buy it, worry about the debt another day". I live by this: "if something is too costly to buy, it is often too costly to want" and this mentality seems to give me a lot more stability - which is something I appreciate very much. I'm really concerned for my peers though, they have enough trouble as it is getting on the property ladder already, so I have no idea what they will do next year when all the lenders shut up shop and they can no longer transfer credit card balances and get hit with 15% on 20k debts, it's madness. I suspect in 2008 suicide will be 2007's IVA!! My biggest worry for them is the price of rent, surely when all the BTL landlords find they cannot remortgage at the same low rates, the consequence will be a rent increase to balance the books, and this plus an increase in credit card payments will be an absolute nightmare. I do my best to convince friends to downsize their lifestyles and reduce debts but it would seem that most prefer the comfort of burying their head in the sand. Anyway, I'm here to stay. I think this board is great and there are alot of very intelligent people here whom I can learn a great deal from. Personally I feel there are also alot of scaremongers but then I guess drama is what makes an online forum interesting. I like to take in all views and then make up my own mind. To quote Euripides "the wisest men follow their own direction". Looking forward to chatting to all of you. Take care and don't forget to put your seatbelt on!
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