jpidding

Off £20 now, but nothing goes straight up. Its a bit worrying that gold is surging at the same time as the USD.....suggests something big may be about to happen

That's why you need silver as well. Even the smallest gold coins (17th of an ounce - or quarter sovereign) are worth £88 at today's spot prices. In a mad max scenario that would probably go up AT LEAST 10 fold, so not the type of coin to exchange bread, milk and eggs for. Silver on the other hand (especially the well recognised 50% pre '47 coins) would make an ideal medium of exchange.

Interest rates peaked in Oct '89 during the last crash. Nationally prices bottomed around '94. So assuming rates peak later this year assume the bottom will be 2028!

Did we get bombed in the early 90's? How about in '08? Stop trolling.

Global debt was 195% of global GDP in 2007. Today its 350%. Much of it denominated in USD. Jerome Powell is determined to keep raising rates until inflation is under control. Traditionally this was done by raising rates significantly above the inflation rate to deter further borrowing and encourage saving. With inflation in double figures they wont get there...instead they are intentionally driving a recession to quell demand. The unintended consequences of higher USD rates it to put a lot of strain on global USD borrowers. Google "Swiss National Bank USD swap lines". Banks are now no longer trusting each other in the same way as '08. When the credit markets freeze up all hell will break loose. No one really knows how this will play out. There will certainly be massive winners and losers. The crisis of '08 was brought on by the default of Mortgage Backed Securities after the housing bubble burst in the US. The bubble was re-blown and is now bursting again. 30 year rates in the US went from 2.6% in 2021 to 7% now. There are multiple bubbles floating around and loads of pins to burst them. Once one goes there will be a knock on effect.

.....and for most people the last thing they're gonna be thinking about is buying a house! Sure, house prices will have to go down....my 15 year fix at 2.55% 3 years ago is now not available and even 5 year fixes are at 6%+. There is no way that this isn't gonna make prices go down. But it looks like there is gonna be a global perfect storm. All of the indicators are that it's gonna be far worse than the GFC of '08. If derivatives blow up (can't see how they won't) the contagion could collapse the entire system. It will take punters with huge cojones to take the plunge and buy when there's blood on the streets. Cash in the bank is gonna be vulnerable to bail-ins. It will also be subject to potentially horrific hyperinflation. In the short term PMs can go down. Bitcoin is a lottery. It will be a jungle out there.

Virgin Money. The 10 years fix was about 2.1%. Glad I picked the 15 year at 2.55%.

I gave up waiting 3 years ago and bought my dream house for 400k which I could easily afford. 161k deposit, borrowed £239k on a fix at 2.55% for 15 years on a 19 year repayment mortgage. Costs me £1320 a month, which is fine compared to the £900 a month I was paying to rent a MUCH less nice place. I didn't really like living where I was and didnt wanna spend any more time there. My thoughts are that I am now sure there will be a house price crash, This will be partly because people have less money because of inflation, but mostly because of a rise in interest rates. Problem for those waiting to buy a house is that unless you are a cash buyer, the new situation doesn't help you much. Lets say prices do crash 40%, which is considered the upper limit of what's likely. The thing is that what is important is how much you repay over the lifetime of the mortgage. If you can even get a 15 year fix now (unlikely) it would be at least 6%. That's 2.3 time higher than what I've got. Now, the capital repayment part of the monthly payment will be reduced by 40%, but the interest component will be 1.3x higher. The actual reduction in monthly payments will be 10% reduced at most. Secondly, the bottom of the market could be 2-3 years away. For me that would have meant spending another 5-6 years in a place that I didn't like. I'm currently paying off the capital at £800 a month (circa £500 of the £1320 is interest at 2.55%). That means in 6 years I'll have paid down £57,600 of my principle. Thirdly, if things get as bad in the economy as it looks like then virtually no one is gonna be brave enough to buy at the bottom. Just seems a bit sad that folks will have waited patiently for the crash all these years and then when it finally comes it wont be the celebration they've been waiting for. JP.

Can't believe all the stuff that's been dragged up on this thread since I started it. I lived through the crash of the early 90's and from around 2000 to 2019 I was waiting for another one so I could snap up a bargain and stick it to the idiots who over-leveraged. September 11th hit and I thought that would crash things....the opposite happened...CB's pumped a load of money....houses went up. The US housing bubble peaked in 2006 and I thought the UK would soon follow. The financial crisis of 08 hit and I thought that this would cause lenders to be more prudent....what happened...the CB's printed a load more money, gave it to the banks and after going a bit "soft" for a while housing started climbing albeit slowly. COVID hit us (just after I bought) and I thought ****, this is defo gonna crash the market and inexplicably it was off to the races again. At the end of the day its about the IR's that borrowers have to pay...nothing else....zip! If the current bout of inflation leads to significant rate rises then the market will undoubtedly fall. My feeling is that it may happen but the government / BOE will step in to save the borrowers (don't forget the government is the biggest borrower of all) at the expense of savers. Is it right? No! I'm just going on my 20 years of watching what the powers that be do. I hope there is a significant correction to allow the good prudent savers on this site to be able to buy without leveraging to the hilt. As I said before, at age 52 I'm out of the game now. I'm fixed for the next 13 years on a repayment mortgage at 60% LTV. Good luck friends, with what ever you decide to do! I sincerely mean that. JP.

Spain was a totally different situation to the UK unfortunately. During the boom leading up to 08 they were building more stuff than the rest of EU combined! Our government seem to drag their feet when passing any legislation to make companies build on the land available for development.

Unfortunately I don't think that the BOE / government will allow rates to rise much regardless of inflation...they are wedded to keeping all the bubbles blown. They will keep fudging the statistics, dragging their feet, feeding us BS about transitory inflation etc etc. If you fix a low rate, have a decent deposit and can afford the repayments with some to spare, then money printing / inflation will take care of things for you. Its a sad state of affairs where savers are punished with negative real rates to the benefit of borrowers. I was fed up with getting angry about it and saw something I liked, could afford and suited my needs. If you decide to sit tight, make sure you put your fiat into something inflation proof. Silver is by far the most under-valued asset in the world and has excellent upside potential in an inflationary world that is going electric. Just a pity that the spreads to buy physical are so wide (esp in the UK where VAT is added on new coins / bars).

The market had definitely gone a bit soft. Previous owners bought it in 2015 for £380k. As I said, they tried initially for £440k. They had a sale agreed at £425k but it fell through. The place had been on the market for 9 months or so with two different agents. When I saw it they had already dropped to £425k. I initially offered £390k, then after they dropped to £415k I offered £400k and stood firm. I would have paid £425k if they'd have played hardball.

There's already an en suite...just needs re-doing. And yes, I clean everything myself!

No, it was converted in 1989. Got to meet the architect who developed the 6 properties. He got shafted cos of the 1990-94 crash. He lived in one of the houses until last year when he died.

Cheers. I've done the right thing for me, but of course wish I'd done it sooner....in the same way I wish I'd bought bitcoin many years ago (I have an email conversation with a mate when we were discussing whether to chuck £10k into bitcoin when it pulled back from $1500 to $300!). I've lived in this house for coming up to 2.5 years and am now planning a new en suite and some other renovations. I'll probable be here til I die so money spent now will be well worth it. If anyone cares to check, I'm not a troll...I've been on this site since early 2000's. Look up my historic posts. I used to be and still am a bear on the sustainability of house prices vs incomes. The market can stay irrational for far longer than you think.

You're right...the HPC site is very niche compared to mainstream media. Nothing posted on here will make cent's worth of difference to the market. I'm not trying to troll or piss anyone off by gloating. I could have bought 20 years ago but didn't. I feel really sorry for those who are priced out of the market and are forced to stay in rented. My mother tried to persuade me to spruce up the previous rented place. She suggested some new curtains for the living room. Decent ones were over £500!!! ****** spending that kinda money on someone else's place. So I stayed in the same place with the crappy decor. I was lucky enough that in 2019 the market had softened a bit through Brexit. initially the sellers wanted £440k I ended up getting it for £400. I simply can't imagine why the market seems to have gone up 10% in 2020 and 21. Its madness. By the way, buying a house on my own was about the most stressful and complicated project of my life so far. I'd accumulated so much junk that had to be sorted and taken to the tip. Organising the finance was a lot of hoops to jump through. Another thing to note....I am convinced that only interest rate rises will soften / crash the market. If COVID couldn't dampen sentiment, nothing will. If prices do fall it will be because rates have risen significantly. If I had waited a few more years, maybe I would have got the place for £300k, but the 15 year fix would probably be at 5%+. Total repaid on the mortgage would be no different.

Not on here to do anything except shar my experience of the last 20+ years. My payments are fixed for the next 13 years regardless of IR changes. I got very frustrated with the way the BOE and government refused to let interest rates rise and reduce house prices. I was a saver until 2006 when I moved into PM's. Now I'm more convinced than ever that the government will do all it can to save the borrowers at the expense of the savers. Raising rates from 0.25% to 0.5% in an environment where inflation is at 5+% and due to rise further will do nothing of stop it. Same in the US where inflation measured by the pre-Boskin report changes is at 15%!!! They're talking about 4 quarter point rises this year to get to 1%!!! The powers that be will burn the currency to keep things afloat. Sure, this will cause a bigger problem later on but they just care about the next few years until the election. At the end of the day I'm now out of the game. I have a house I can easily afford and nothing can change that. I have savings / investments that could pay off the mortgage tomorrow but I wont because I'll do better borrowing at a 2.55% fix over 15 years and watching inflation run away. If there is a crisis in 3 years and house prices fall in half I wont care. I'm really not here to gloat or annoy anyone, but lets say prices keep rising then fall 50% That would likely be a fall from £600k to £300k. So by waiting another 5/6 years I might have been able to snap up a bargain at age 55. It would honestly have been worth the 5 years living in a place I like than the shitty rented places I was in. I remember in 2004 / 5 / 6 tearing my hair out watching house prices go up by stupid amounts...I honestly used to lose sleep. Everyone has to make their own decisions...I'm just giving my tuppence worth.

Not married, no kids, so am more flexible than most.

After literally waiting 20 years for a decent pull back, I'd finally had enough of renting and started looking for a place in early 2019. Ended up buying a beautiful converted barn just outside a nice town in the midlands for 400k (at the age of 50). Could have bought outright but didn't wanna liquidate the assets so put down 162k and mortgaged the rest over 19 years with a 15 year fix at 2.55% on a repayment basis. Payments are £1320 a month vs £875 renting a much shittier place. I couldn't believe it when a few months after moving in in Nov 2019 that the world went into a global crisis. Was sure that this would have been the pin to pop the housing bubble, but incomprehensively they're gone up 10% for each of the last 2 years. I would have been beside myself if I had waited and not bought. All this on top of Brexit which should have freed up a lot of housing supply. Markets are just ridiculously fickle things which defy logic. I still think there will be a large pullback someday, but can't wait around for it. I love the place I'm in and have spent time and money improving it. This will be my forever home probably. The size, location and type of house suits me perfectly, just wish I had done it in 2001 or so. I feel for all the people waiting out there for the pullback. My advice would be that if you're in your 20's, 30's, 40's or even 50's, building up a deposit waiting for a pullback then buy something small and cheap as possible in the meantime. Maybe a one or two bed flat or small semi in a not-so-perfect area. OK, might not be what you finally want but you will enjoy having something you own and can improve rather than improving someone else's property. Then, when there is a decent pullback you'll still be in a position to take advantage of it. Alternatively if the pullback never comes you wont have felt like you were in limbo for so long. In many ways renting was good to me...I moved around from county to country for work, but would have liked to have had some sort of base back in the UK. If you decide you're going to be away for an extended period you could rent it out which covers you're rent somewhere else. Good luck friends.

http://www.zerohedge.com/news/2012-11-29/latest-bubble-hong-kong-parking-space-sells-double-average-us-home-price One tenth of this would be huge bubble territory. Just amazing.

I think social unrest is inevitable. Greece is gonna be an interesting test case.

I have about €100k with them. Until a few weeks ago they were giving me 4.55% gross. They have just dropped that to 0.5%. Now with this news there's big incentive to move it somewhere else.

Thanks...its slightly miss quoted....did it from memory....its a classic innit?

....borrowing costs go up significantly. This probably wont happen by the BoE's MPC....they are too tethered by politics...they only have "independance" when house prices are booming and everything's rosey. It will have to happen by the markets forcing the issue by losing an appetite for sterling gov bonds. Once this happens all other rates will climb up too. I have wondered how prices could stay high relative to wages in the worst recession since the great depression. The simple answer is IR's. People are idiots and do not seem to have the ability to consider repaying the capital. People only think about what they can get now. They assume inflation will kick in and wages will rise. If they can survive the next 5-10 years then they'll be on easy street. I cant really see wage inflation any time soon. Government spending and hence public sector jobs will HAVE to be cut. This will not happen before the election, but when it does, the headwind in the jobs market will remove the ability of workers to push for pay rises. Add into the equation the fact that energy (and hence everything else) are becoming scarcer, whilst Chinese growth continues at 10% or so, and you'll have an amazing squeeze on disposable income. House prices WILL fall one way or another. The worry is that IR's are held down so long by QE that our precious deposits are whittled away. For this reason you need to have at least 50% in something tangible....preferable precious metals. I think the seeds for large falls will be sown this year, but you wont see it til 2011. JP

http://www.thisismoney.co.uk/mortgages-and-homes/buy-to-let/article.html?in_article_id=498582&in_page_id=56 Rentals are the liquid end of the market. Contracts are much more flexible and short in duration compared to buying, hence the market reacts to supply / demand imbalances much faster. "House rents fall 5% in just two months" Yelds falling is a great indicator. JP