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Einstein71

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About Einstein71

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  1. Fully agree, a certain corner of England has been feeding off of debt and reckless corporate expenditure for too long. On our close we have a family, husband worked as some management consultant, she doesn't work. Two 4x4's, 3 holidays a year usually to Maldives, St Lucia etc and doesn't she just love making sure everyone knows. They sold a house in 2005 for £430k which they paid £185k for in 1998. Bought this house on our close for £480k and have been spending fortunes on extensions, new kitchen etc. Anyway 5 months ago he loses his job. I hear through the grapevine it isn't a problem because he got a huge redundancy payout + he is in demand blah blah blah. Wife in show of defiance swaps 5 yr old 4x4 for a convertible Mercedes SLK..I kid you not Brand New!! Next thing they are off to Thailand, she claims it is 5 star resort but kids let slip that it was some First Choice place. 2 weeks ago house goes up for sale £680k, even the neighbour who is constantly telling me how desirable his house is and the Close is was gobsmacked. Anyway husband still hasnt got job, he is startting to look a bit disheveled and she has no intention of ever looking for a job. How long before the house must go down to £580k and then £500k and then how much do they need to break even because they have been MEW'ing. Scary stuff for them and end of a generation. How long before he realises he needs to reskill or take a job, any job? The very people like them that would buy their overpriced house are all in the same situation. Where do they go and who replaces them?
  2. My take on NI is that it was all a big Nu Labour experiment. TB rode into town, unleashed a Mowlam and a shed load of cash and promises. Here you are Gerry, nice little wage, position in power and some international credibility for you and McGuiness. Mowlam even did deals with the Ulster Loyalists in the Maze. Everyone was paid off but then there was the bigger problem which was poverty created by unemployment. NI was a place no one really wanted to invest in because of the troubles....not to worry Mr Blair will bring us the money and so it came via the Public Sector. Close to 40% of all employment as it stands. And then you have the Victoria Quarter and Titanic Quarter, 1 Billion pounds invested in Belfast...private investors....who are you kidding, read the small print and you'll see it is Laganside Corporation who were publicly funded and all the work has now been taken over by the Dept of social development. Billions of investment. So basically you suddenly get investment in property and everyone is so excited because they believe that this new improved infrastructure means that NI is a wonderful place buzzing with new opportunity and growth. The unfortunate reality is that everything was paid for, it could have been Kosovo, with 2 billion thrown at it and you'll make anywhere appear succesful for a few years. The experiment was propped up by the Celtic Tiger over the border. So when all of a sudden you get BOOM, no more money in the UK PLC Coffers and then BOOM Eire going under it really is going to hit the fan and that is why such HUGE drops have been witnessed in NI. It was its very own bubble which was always going to burst when the money machine ran dry. The experiment ended with Nu Labour, completely polar opposite of the South East of England.
  3. Yes I definitely think it is time to buy. I have spent years expecting certain things to happen which clearly now will NEVER happen. I have listened to people on this forum who talk as if they clearly know what they are talking about and like all economists they do, but it is total theory. In practice the collective will to keep house prices high is just too strong. In my area (Sussex) we haven't seen drops at all but I understand in other areas there have been localised falls where it was just plain silly. If I look at in unemotional manner and in my area only which is the South East I see the following: Rental Market: Rents Rising every year since I entered in 2002 Supply increasing by about 20% Demand increasing by about 35% Conclusion: With big deposits required to buy and students leaving Uni with big debts + Increased living costs, FTB will be a thing of the past. Rental demand is therefore set to increase. With popularity of BTL this will increase but because of low housing stock supply may be restricted in the SE. Average Rents will rise by around 6% per annum with lower rises for low end flats and higher for Mid Level housing. Housing Market: Prices have just flatlined with people buying up and down the ladder with stored equity and BTL investors tempted into the traditional FTB market Conclusion: Prices will bounce along with no rampant rises but no dramatic falls Price of 3 bed semi in Sussex - £250k Rental Cost £1200 - £1500pcm Mortgage 80% £850pcm There are a large number of people on this forum who have started storing water and tinned food in their cellar (rented) expecting World War 3....... sometimes take a step back, take a deep breath and look around you with a clear head. Ask yourself if you want to still be renting in 2030, how much will rent be then? How much of your mortgage would you have paid off?
  4. I know that in 3 years he has received from me what he originally paid for the house 15 years ago. I assume he has paid some interest over the past 15 years so may be another 1-2 yrs rental to cover that. The house is his only house in the UK, he owns a house in Kenya where he has lived for a lot of his life. He isn't a BTL investor he is just somebody who decided to rent his house out rather than sell it. The house is more or less in its original state apart from a new front door and new boiler. For his initial investment of just shy of £50k he now earns himself an income of around £1000pcm (£300pcm deducted for letting fees and maintenance). He was lucky and bought low. My point was that any landlord who had bought 10yrs+ ago is probably covering their initial purchase price with 3-5 yrs rental, if you look at the housing market historically from a pure unemotional perspective you see that it always makes sense to rent your property out rather than sell it. If you believe that house prices will drop by 40% and Interest Rates will rise at the same time as rents dropping for the first time in history and house values will never rise again then I can see why you wouldn't believe it to be a good decision. As someone who has been renting for 7 years now I fully accept that I am a cog in a system that is really unfair and did have belief in the powers that be that something would be done about it. Here I am working my guts out to pay off a mortgage which isn't mine !!!! , how can that be fair? I am now thinking that I was wrong and that the aim is to make BTL as desirable as possible to encourage house building and private rentals to establish a network of flexible accomodation for a growing populace. In some ways this takes the power from a few very wealthy people and on to an army of private "investors". In a sick and twisted way the Government probably believe BTL is an ideal way to solve a number of major problems. It offers a decent return for those holding cash and an alternative to savings and other volatile investment vehicles, as a result it allows them to keep IR's low for the indebted. The guy wanting to rent out his place to a friend should do so immediately, jump on the gravy train. Your friend gets a place where he knows he isn't going to get thrown out in 6 months time and you get your mortgage paid. A whole host of doomday scenarios could happen but these have been around the corner for 7 years now and the same people will just repeat the mantra. You will most likely have the place still in 15 years time, getting £1100pcm for it and the mortgage paid off, you wont care about the £30k it has dropped in value because some tenant mug would have paid that for you anyway :-)
  5. I dont know why people get so uptight about this kind of post on here, I think it must really hit an extremely raw nerve. I discovered that the house I rent was purchased for £47,500 in 1996. I have been paying £1,350pcm in rent for 3 years, very minimal repairs required so I have more or less bought the house for the LL. In 2020 who knows that average rent may be £2000pcm. We may have higher interest rates....but only in my opinion if the economy is on solid footing in which case you may be looking at HPI again, may be not. Eventually if you have the income to ride out the rough patches being a Landlord makes complete business sense, absolutely cast iron sense. The key is obviously buying a house or apartment that is desirable but if you have that then as long as you aren't entirely reliant on capital gains you should be able to cover your expenses with your income which is the fundamentals of business, if that isn't possible even after a few percent IR increase then it is the wrong property . In 20 years you should then own outright an asset which is providing you with a stable income. There is no such thing as a bad business only bad businessmen. I personally never had the desire to get involved but from a purely business perspective the BTL business really is buying an asset and then making somebody else pay for it for you. You have to learn to swallow the fact that as a tenant you are in most cases paying for somebody elses retirement, its wrong but it has been that way since the dawn of time. I need to buy soon because I realise that when I hit my 50's I may not be able to rely upon my interest / investment returns to pay for the roof over my head. Where as if I have bought a roof over my head at least I know I have that !!!
  6. LOL What a load of Drama Queens !! At the end of the day it will hardly effect your man in the street one jot. What they are talking about here is a load of banks losing a load of money, some of them will go to the wall, stock markets will fall by about 25%. We will have emergency meetings, the Chinese will get involved and for a week we will have "economic uncertainty" but Brian will still be selling his bread in the bakers and Susan will still work Saturdays down Sainsburys. When the dust settles we will have some people losing billions in investments/pensions, a load of out of work bankers, credit will cease for a month, a few Woolworth type businesses will go to the wall.....nothing extraordinary, no armageddon type scenario. I still hear people talk about the HUGE financial disaster of 2008 !!! What happened? It didn't effect me one bit, if anything I was begging for a little austerity, we needed to end our debt addiction. I havent noticed anything change, I still struggle to book a table at any of the restuarants in my town on a weekend, shops seem packed, new 4x4's still everywhere, every banker/city type I know still has a job or got a new one within a few weeks. This Brink is only the Brink if you are in that financial industry and only really then if you are at the high end. Cameron, Cable, Peston, IMF etc are spending their days with these people and the panic is more to do with the party coming to an end rather than any doomsday scenario.
  7. Yes exactly my point. I dont see distressed sellers, banks will be looking to repossess as few properties as possible and so people struggling to pay will be offered alternative payment schemes. Repossession will be only the action of last resort, the banks want to avoid any downturn in the property market caused by fire sales.
  8. I remember being told about the "crisis loan" in the early 90's and going to Woolwich Benefit Office, collecting my ticket and waiting an hour plus for the hordes of people to collect their £45. The story was always that you couldn't do your weekly shop, you had to say you hadn't eaten for 2 days and then it was guaranteed. You could go back a few weeks later and they could only take £2 or something from your income support and you could end up getting £200, if you played it right you could then avoid having to pay it back. I am assuming this is just a way of them swerving around that payment. Everyone at Woolwich would just go straight into the pub or bookies. If you believe there are people in this country who are genuinely famished then you are an absolute fool, people may choose to spend the money on booze or fags but NOBODY is forced into food poverty in the UK like they are in the US.
  9. But what are you doing in the meantime? Are you renting? Depending on where you live rents are rising by roughly 5 % above inflation, you may have a good deal now but what if your LL decides to take advantage of the rampant rents and puts up your rent by 20% or decides to throw you out? Printy Printy could lead to even lower mortgage rates, with a 30% deposit you could get perhaps 1.49%. What if that meant the house you were renting for £1000pcm could cost you just £300pcm if you bought it? What if governments decided to use banks that they now own to buy up the mortgages of those in default? This would prevent forced selling and save the government having to rehouse those in trouble. I wouldn't put anything past the Government to prevent foreclosures that we saw in the US, they will be well aware of the consequences. Much easier to print more money and take on troubled mortgages. With this as the case scenario NOBODY is going to sell at a price that puts them into N/E. This is exactly what is happening in Spain. Falls are apparently happening but you go around most ex pat areas and nobody will sell below 2004/5 prices even though they may have been up for sale for 2 years+. They will take offers but nothing silly. You have all of these Brits travelling around expecting to see super bargains but there is absolutely nothing (unless you want to buy on an inland ghost community). Without Forced selling the crash is never coming and that is why it could just wheeze along year after year, disaster after disaster and to be honest you could be 5 years down the line and still on here, waiting but £40k out of pocket, a little greyer, a little more jaded. Of course it could all work out for you and if it does I will be very happy, we are certainly in for some bumpy times economically but then aren't we always? As far as I can see when the sh*t hits the fan the Gvt's priority seems to be the homeowner and to hell with everyone else. As a saver who rents I am not sure I am in the right country at the moment, I have certainly picked the wrong team to support.
  10. Everyone is in their own unique situation. I was always happy renting as long as I knew that the mortgage+costs on the place I was renting was more than the rent I was paying and IF the mortgage did become cheaper any shortfall was more than covered by expected price drops. In my specific area it seems nice places are renting fast and rents are rising, at the same time prices aren't dropping and mortgages are cheaper than ever (3.4% 5yr fix). I did the sums and even taking into account losing interest on my deposit and £2k maintenance I am losing out by around £900pcm by renting. The LL deciding to sell and handing me my section 21 has given me a reality check. It simply isn't worth the emotional stress just holding out for what may never come and like a previous poster I would look for a lower end property and if prices did drop by 40%+ I would simply sell for a loss (or rent out the lower end place) and buy a high end property. Of course the ideal situation would be to just rent and see a huge property crash and then buy a high end property but I have now realised that this is a very big gamble, I still wish it to happen but I genuinely think that it will not be allowed to happen. I know people say "Oh they wont have any choice" but I am now not so sure, I think they can manipulate things to that degree, I think stock markets can crash, banks can go under, countries can default but Joe Bloggs will continue to pay 2.5%on his mortgage and will not sell for 10%+ loss. The first credit crunch should have been the trigger, those people that said "This Boom was fuelled by credit, when that is taken away the whole thing will crash" have been proven wrong. The Credit has gone but there is no crash, not even a shift in sentiment. Sure people are struggling to sell but they still believe in housing and todays Daily Express shows the mood, people genuinely think the market is shifting up by 2-3% per annum, they have no intention of dropping their prices.
  11. I STR'd 7 years ago, joined HPC website in 2005 (I had to change username back in 2008 after forgetting password etc). Apart from holidays I have visited the site every day, I wring my hands with anxiety whenever we get a Haliwide or IR announcement, I am the one argueing HPC until 3am at parties. I am obsessed, friends just think I am a nut job. In 2008 when Northern Rock collapsed I rang around all of my friends, prepared the missus for buying a house in a years time and sat back and waited........nothing!!! A few puppet properties dropped their price by about 10% here in Sussex but nothing more. So I then blamed the whole thing on Gordon Brown. Dont worry I told everyone, as soon as the Tories get in they will let the whole thing collapse and then blame it on new labour, they wont continue this charade........ Anyway here we are again, soverign debt crisis, double dip, rising inflation, unemployment etc. Is this the trigger? Well it is likely that I will be here in 2013 asking the same question. At the end of the day to precipitate a crash you require forced sellers en masse, this in my opinion requires IR's of around 4% which in my area moves mortgages to the same level as rents. This would be political suicide and I dont see it happening. So basically if you want my advice, take a look around, if you see something you like for sale and you can afford the deposit then go and negotiate 15%+ off of the price and just get yourself a home. Whatever you do dont spend/waste the next 7 years of your life hanging around this site, being the bitter one at the parties and pis*ing off the partner/kids. My personal situation, I am looking now and can save around £10500 per annum between rent and mortgage and plus I will have the security of my own home and the ability to personalise it in my own personal style rather than some random LL's style. The usual suspects will spout the "hold tight and enjoy the crash" line but that is because they have only that hope to hold on to, I know because it was the sort of defence i would use on a daily basis. The days of using property as a way of making money via capital gains are over. Dont even think of flipping a property for a quick £30k. In fact with costs and taxes you'll probably sell for less than you paid, even if there isn't a crash and you have updated that kitchen, you'll also take months to sell it if you decide to do so. If you can accept this but you just want a home not an investment then go for it, you'll have the security of knowing you won't be thrown out at any moment with a months notice and you'll have lower outgoings for the forseeable than if you rent, possibly negating any loss in equity...possibly.
  12. OK as you were then. As ever I can only go on what I know in my area (both Mid Sussex and Brighton). In my own research as somebody who has rented on and off for just over 20 years rents are rising at their fastest rate ever. I know in Brighton that a lot of students are staying on after graduation and mopping up cheap flats which is forcing those usual tenants to look at £800+ flats and so on....anything 2 bed and half decent goes within a day. In the South East these are not good days for renters.
  13. Mid Sussex, house I originally rented for £1250pcm just over 3 years ago went up on the market for £1800pcm, I see the old neighbour daily, we had a good laugh about the greedy landlady (she is actually the daughter of the guy who owns it, he lives in Kenya so she gets to keep the money). House is 3 bed semi, went within 2 days, couple from London looking for rural ideal within 40mins of London, she has kid on the way. Job Done. Seeing similar properties that I used to be able to afford now go way beyond my threshold. Personally I am not sure if rents are rising in grotty areas but anywhere nice within commuter distance of London seems to be attracting London overflow and rents have risen accordingly, very disheartening for a veteran renter like me. I believe certain parts of the market have risen 20%+ this year without a doubt.
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