lucky

Utter nonesense that 89-90 was the crash that never was! It was huge. I bought a flat in central bristol for 47,000 in 93 that had sold for 80,000 in 88. I bought a house in Bristol in 96 for 43,000 that had been marketed for 80,000 in 89. One of my sisters saw her Surbiton flat drop by more than 33% in value in one year. People who worked for me were still in negative equity in 96 having bought in 89. They were desperate to move but couldn't. That crash seriously affected a lot of people. Anyone who bought late, or who was investing in the market. Rest assured, we are about to see the same thing happen all over again. Lucky

Clifton will not be hit as bad, but it will be hit. I bought a two-bed period property in Clifton in 93 for 47,500. The previous owner had paid 80,000. Anyway, it last sold for 160,000, and at present would be marketed for 200,000+. Those clifton flats will certainly fall a lot, but nothing like the rest of Bristol, where 50%+ drops will not be uncommon. People forget that it wasn't long ago when you could buy 3 bed houses in poorer parts of Bristol for less than 50,000, which is about right considering what lots of people earn or don't earn. Areas that will really crash are bedminster, st werburgs, st pauls, southville. There would normally be a big differential between clifton, cotham, redland, sneyd park and the rest, eg it would cost nearly twice as much for the same amount of space in an undesirable part, but that differential has been eroded, as the cheaper areas have become super-expensive. It will all end in tears. Good luck with it. Lucky

Come on, Jack. Look at what's happening on the ground. Read the FT article (see blog), which explains how, in a falling market, the Halifax can record price increases. It's because almost nothing is selling apart from really desirable stuff. All the usual over-priced houses are not moving, and won't, until the prices drop significantly. I sold to rent and thank god I did. My old place is worth much less, and I did it back in 2003. Both my sisters have just sold properties, and they did it by finishing them immaculately and pricing them cheaply. The market has fallen, and only those who accept it and get rid of their property now will stop themselves getting burnt. Good luck with your house(s). Lucky

I think you'll find it's pints that are different, but gallons the same.

No, they just don't go up in the first place. No conspiracy, just the rules. Lucky

Guys, Any information on sales of period property, especially flats, in Central Bristol would be greatly appreciated. Lucky

Bandwagon, Where does the graph come from? I don't remember interest rates being that high in 89. Lucky

I know someone who is selling a property without problems. My sister. Completion may have happened this week. It's a refurb on a very run-down place in Surrey. She hadn't done any (refurbs) for a while, even though its her business (or part of it - she is also a landlord), because she couldn't find places but at the right price, but she found this one a few months ago and probably made 100K in literally 4 months. However, I would point out that she is a very aggressive seller, and would think nothing of knocking 15% off the asking price if the purchaser was ready to go right away. It will be interesting to see how she fairs in this market, because she has always said that speed is the key, both in getting the work done and the re-sell. She always seems to sell her properties within weeks if not days of their coming onto the market. I can't quite believe it, but she's doing now, with the market as it is. It leads me to believe that there is definitely money to be made in a bear market, even if it is a lot more difficult. The key is always price. If you price it right, someone will buy it. She made money in the last crash and is making money in this one. Her hubby, also a property developer and landlord, is a lot more bearish than she is, and has sold all his rental properties in the UK in the last year apart from the one they live in. I guess they've got their position well-hegded, as my sister has held on to her long-term rentals - all detached houses for corporate lets, even though the yield is low. (Not on her original investment, but on the current market value.) Funny that they disagree on this - the prospects of a serious correction, but in the same way that some people would disagree over whether or not it will rain tomorrow. It's so dispassionate, unlike the posters here. Just an anecdote to let you know that some houses are selling and selling quickly. I, however, am very bearish. I couldn't be tempted to buy without falls of 50% in real terms. Lucky

When I bought my first flat in 93, I borrowed 3 times my estimated earnings (15K), plus put down 2.5K deposit, making a grand total of 47.5K. The same place now costs approx 200K. In order to buy that now, I would need to earn 60K if I stuck with the same ratio of mortgage to earnings. Now, I know we've had some inflation, but 400% increase in earnings in 12 years. Ludicrous. Madness. Plus, if I did earn 60K a year I would expect to be living in a decent sized house with a large garden in a nice area, not a top-floor flat with two small bedrooms. With this memory so clearly in mind, I won't be buying again till prices have fallen 40 to 50% in real terms. Lucky

Each time I sold it was between 1.25 and 1.5%. Most agents will negotiate. Lucky

I used to live in Bristol, so I am curious too. What's the postcode so we can make comparisons with properties sold? Thanks, Lucky

I don' think its fair to say that Kiyosaki is or was ever a total property bull in the sense that he claimed property was always the place to be. He has always struck me as someone simply stating the obvious when you actually read what he writes. From my reading, he always advises doing the maths, and so it doesn't surprise me that he is now advising people to get out of property, not permanently, but till there is a better time to buy. This positiion is in keeping with most posters here, who believe that property is a good investment, just not now. In fact, it was after reading Rich Dad, Poor Dad that I decided to STR. Lucky

Dear g2525. I sold up in Bristol (BS1) in 2003 (August). It was formerly a wonderful area to live in, but I had noticed crime was getting worse - especially car break-ins and even late night muggings, which previously only ever happened in other areas. Also, all the people renting in BS1/BS8 were forced to move, as a relentless supply of owner-occupiers took over the flats, that it made no economic sense for landlords to hold on to. This did not have - for me - a good impact, as we lost the variety of people. Increasingly, young professional with jobs in the money sector and no one else. As regards prices holding up, don't believe it. I lived on Charlotte Street, a wonderful georgian grade 2 listed terrace that leads off from Brandon Hill. I bought my first flat there in 1993 for 47,500. The owner had bought it for 80,000. The good areas also fall, and dramatically. My sister purchased a house in 1992 for 500k that had been valued at 900k (not sold). Looking at the graph, it seems I sold at a good time. I'd always like to buy again. Any guesses how much of reduction I might expect in a couple of years? Thanks, Lucky

The landlord is taking the proverbial. I grew up in Walton and my family still live there. There are places to rent as in any other place, with the same terms and conditions, and yes, you might expect to pay than usual, especially if you are near the trainstation or in one of the exclusive private estates. But not so much anywhere else. Not that different to city-centre Bristol (price wise), where I used to live, when I looked at prices. But honestly, there's nothing there. In Walton. Come to think of it, there's nothing much in any of that part of the world to move there for. And, depending on time of day, it could take ages to get to Heathrow. Only 20 minutes if you time it right, but more than an hour if you don't, unless he's on a bike. He needs to go down the highstreet and look in the countless letting agent windows that have sprung up in the last few years. Plenty of choice. Lucky

Dear Fran, I think it's pretty clear and you know it. The place won't be worth 250,000 18 months from now. Of course they've jumped at your offer. It's not even 10% less than the asking price. Please hold off if you can. Lucky

What is a chav?

Sold Aug 2003 for 224 (on at 235). Paid 90something, no longer sure quite how much, in Aug 98, but spent probably 20k on the place. Currently paying 1150 dollars (US) in rent a month, so this is certainly a much cheaper option. Lost money on my shares though, but getting interest on cash, and have ploughed a wedge of cash into my business, so I now have some better prospects with that. I'm so glad I sold, even though I was reading that prices were still rising, as my mortgage was too big for my income, as I had started a new business, and I could have got into some real bother if interests rates had risen dramatically, and property can become unsellable overnight. I imagine the flat I sold in Bristol is worth about the same now as it was when I sold, although I'm sure it was worth more in the Spring. It had a very small second bedroom, and was always going to be a problem to sell, despite being in a superb location. I certainly wouldn't want to be trying to sell it in this market. Best Lucky

Dear Laurejon, A correction to your idea that you don't need to tell the lender that it is being let out. Oh, yes you do, if you bought as an intended owner-occupier. It costs more to btl, as the risks to the lender are higher. I failed to notify once and when by chance they found out - they had someone come round for some reason - I was informed that they were considering foreclosing the mortgage as I was in breach of the conditions. In the end, they accepted it was a mistake and simply added one or two percent to the mortgage and we carried on as usual. When things get nasty, pity anyone who's letting out a house without telling their lender. They won't be pleased. Lucky, p.s. sorry to hear about your bad tenants

Dear BAB, On what basis do you claim that precious metals are undervalued? I completely agree with your reasoning, and am looking for an undervalued asset class myself, but can't see why precious metals. Cheers, Lucky

But if you think of the likely value of the house, then of course the rent would need to be something like that. Go figure.

I agree with Captain Sensible. That strategy does not and will not work in a falling market. Have you ever bought or sold in a falling market laurejon? Please describe your house and why someone will pay over 300k for it when sanity returns after Christmas and people get serious about selling. I think you're in for a nasty shock. Houses are soooooo illiquid. I mean, houses that are beyond the reach of the overwhelming masses, they have a nasty habit of sticking around for years unless they are bargain basement prices. Sorry to be the bearer of bad news, but you know it's true. Lucky

R, your friends priority should be selling his own place, agressively. There is no bad news here that I can see, because any landlord could decide to sell. As the others said, he has the first six months guarenteed, and then two months after at any subsequent point, or longer if he asks for a year. And, as the owner wants someone in there to cover the mortgage, my guess is he'll let him stay in while he tries to sell it, and there's the real issue, he's going to find that really hard. I mean really hard. In the end, the owner will just be grateful to have someone in there helping with the mortgage. Best Lucky

It seems to me that the only thing stopping their [people wishing to emigrate on their profits] dreams coming true is greed. If they were willing to accept 20% and stipulate a cash buyer, then they could up and go. But no, they want to get as much as they can, despite the fact that many have made 150% and more. As a result, the next two years will soon be passed, and their nest-egg will be worth a fraction of what it is now, and they'll never go. If you want to feel sorry for people, how about those living in Iraq, or stuck on some of Britain's worst housing estates. These people wishing to sell and go are having a luxury denied to them, that's all. I really don't get it. Lucky

If a house has not sold in six or even nine months, then of course Rightmove do not include it for their statistics, as it isn't yet sold - obviously they don't know how long it took. It's just yet one more way the statistics are organised to support the vested interests.