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Everything posted by chkee

  1. Probably the most sensible reply to the OP. Multiple of salary is a ridiculous yardstick to consider as it doesn't take into consideration affordability, and the reason many short sighted people are in the position of being unable to service their mortgage. Any sensible person should consider at a minimum what their individual disposable cash amounts to each month NOT how much a lender is prepared to offer, such as: Personal circumstances i.e no of Dependants/Children, School Fees Lifestyle i.e. dining out, club memberships (Gyms, Golf etc), running a car, shopping habits, holidays Outstanding Debt/Credit Card payments Living cost: Gas, Elec, Council Tax etc Once they have calculated how much they actually spend each month most people will find that a multiple of salary is probably unaffordable
  2. The Government should be investing in research & development of alternative fuel vehicles with the intention of becoming a world class manufacturer. As soon as a good (speed,range) reasonably priced (i.e. not the Lotus TESLA at £100k) car is available I would buy one. The quicker we get away from our reliance on oil and the transfer of our wealth in buying it from unstable Muslim nations the better.
  3. My neighbour has been offered this as his division is closing but BT have a policy of no redundancies apparently. His salary is £100k so he will receive £25k for his 'sabbatical' . He intends to work as a contractor at a minimum £500 per day, deducting holidays etc thats 230 working days totaling £115k PLUS his £25k so he will be £40k better off. And WE will be paying for this - don't forget, even if your telephone account is not BT, the line rental is still paid to them as operators of the infrastructure!
  4. Have things really changed? or do 1st time buyer have higher expectations of what size/quality their 1st home should be? Just dug out some very old paperwork. My 1st house purchase was an unmodernised (no central heating or double glazing) 2 bedroom terrace in Broom Lane, Levenshulme, Manchester M19 2UF in 1984 and it cost £14,500. My gross salary working in nearby Stockport was £4,350. I paid 10% deposit of £1,450 - equivalent of 33% of my annual gross wage. The remaining balance of £13,050 mortgaged was equivalent to 3 x my salary. Levenshulme was then and remains a less than ideal area of choice but was my only affordable option as a 1st time buyer, I preferred nearby (and posher ) Heaton Chapel but a similar unmodernised 2 bed terraced was beyond reach at circa £18k. The lending rules then were very strict, (I still have all the old passbooks with the handwritten payments and the leaflet outlining the lending criteria) you could not borrow more than 3x gross salary and had to pay a minimum deposit of 10%. The lender also required you to have saved for 18 months, demonstrating that you could afford the mortgage by paying into a savings account the equivalent of the mortgage each month Bring all this up to date and looking at RightMove, terraced houses on Broom Lane have an 'asking price' between £84-£89k so I guess in the current market could be bought for £80k. £80k divided by 3 (i.e. 3 x salary) = £26,600 (looking at recruitment pages a similar job to what I was doing in 1984 actually pays £25-£30k) The 10% deposit of £8k is roughly 30% of a gross salary of £26,600. Moving this on to where I now live and work in Central London and following the same scenario of having to buy slightly further away from work I would choose Woolwich SE18, the cheapest 2 bedroom terraced is 'asking price' £139k so perhaps could be bought in the current climate for £125k £125k divided by 3 (i.e. 3 x salary) = £41,667 (looking at recruitment pages a similar job to what I was doing in 1984 but now looking at equivalent in London pays £30-£40k) The 10% deposit of £12,500 is roughly 30% of a gross salary of £41,667. So the deposit is 3% of gross salary LESS than in 1984 ! YOU HAVE NEVER HAD IT SO GOOD - only kidding
  5. Thanks. Interesting spin on 'expansion' by Taylor Wimpey - lets close 49 outlets and then say we are thinking of expanision, if we open just 1 we have expanded
  6. Since the start of the Credit Crunch in September 2007 the UK's residential property builders have continued to build - no option really as it's their only business revenue. Staff were laid off, work purposefully slowed and completion dates on many new developments were put back in their anticipation of a quick recovery, this hasn't happened. These projects are funded by massive borrowings and interest payments, the lack of income through completion of these developments is unsustainable and they will very soon have to bring these developments onto the market at heavily discounted prices, such as Galliard Homes so called half-price sale --- http://www.galliard-homes.co.uk/. Great news for some? FTB'ers - perhaps some prices will be low enough to attract them, especially if deposit incentives are included, but many of these developments were designed with the boom buyers in mind and will not be affordable for FTB'ers, even if heavily discounted = minimal impact 1RM'ers (1st Rung Movers, previous FTB'ers moving up) If, and only If prices are discounted enough and there is mortgage availability = minimal impact EA's /Bulls - Increased market activity/interest will be (falsely) seen as recovery = false hope Bears - Volume of discounted properties flooding the market will increase the current high property-to-buyer ratio further, resulting in further lowering of prices as everybody competes for the same few buyers. = HPC continues
  7. Why should tax payers money subsidise what is essentially a 'luxury' item? so that people can 'keep up with the Jones' The fools who think they will be getting a deal are short sighted beyond belief, the VAT payable and immediate depreciation once driven out of the garage is 30% on a new car, cars registered during the scheme will have a second hand value of £2k less than at present as the second hand car dealers look for an opportunity to fleece sellers, cars previously showing depreciation of 30-40% in 3 years will be have instead depreciated by 50-60%. Enough fleet cars, hire cars etc are registered and sold on with very low mileage for the general public to buy a good car with warranty that has had some of the immediate depreciation absorbed by the first owner. The car industry is said to have fields full of cars that they can't sell and are them costing money as that capital could be used to pay off their corporate loans- haven't they heard of discounts? But instead they are bleating about selling at a loss, every other retailer clears stock they cannot get rid off at a loss. What about every other industry that is struggling? Are we going to see more tax payers subsidies for trade-ins: Sofa's, Kitchen Units, Cookers, Fridges, Plasma TV's - the list is endless BT have announced 10,000 jobs to go - will we get subsidised Telephone Bills and Broadband to save their jobs?
  8. Agreed, my next door neighbours divorced and she bought him out. Comes up on search at what the value was.
  9. Whilst my own home has already, and will continue to depreciate, I am one of those homeowners that HamishMcTavish describes as 'don't care' as I have no intention of selling, it is an irrelevant paper value that I will not be cashing in until well after my retirement which is at least 20+ years way. However, I am in support of further falls in House Prices as I have a 'vulture fund' languishing in Northern Rock in readiness to buy a second home by the seaside, which I intend to do in 2010/11 once we reach the real bottom of the market. His/her point is still valid despite it being unwelcome on this forum, as it represents the majority view. We 'the enlightened' on this forum are, sadly, the minority of the UK population. We have all sat with 'unenlightened' groups of people and listened to their stories of MEW's BTL's Gazumping, Renovation & Flipping, and so on that helped to fuel the boom. Now all they want is either sell their property at an inflated price "as mine is more desirable and not affected like everyone elses" and then immediately buy another at a vastly reduced price. or desperately want the market to recover to retain their perceived 'paper value' or avoid negative equity. Despite this, the public isn't as stupid as the spin doctors think, some will take the bait and there may well be a short term summer increase, maybe even a Bull Trap/Dead Cat Bounce whatever you want to call it. But most people are more concerned about keeping their jobs to consider moving, the most likely buyers will be FTBers or STR's, HPCers who bottle it and dive back into the market 'before it's too late'. Once the darker nights and colder months return with the prospects of a subdued Christmas and more redundancies any summer gains will very quickly be lost. Public service employees and unions are getting restless, high unemployment is expected so winter 2009 could be Mr Brown's 'Winter of Discontent' then we shall really se the market spiral downwards.
  10. Haliwide? the figures I used and provided a link to were Land Registry, which is actual price sold information and not 'marketing' prices. As for averages, that is what an 'index' is - we are all aware that every house is different, right down to one next door to another. The 'average' is used to signify the market movement, which continues downwards. Your maths don't add up either, a £100k flat will not achieve a 15% yield (which would equate to £1,250 per month after service charges, agents fees etc), at best maybe 5-6% could be achievable. So a further drop in values by your predicted 10% wipes out the next 18 months yield and your £100k 'asset' is now worth £90k. There is the added risk of non paying tenants, plus ther is further capital outlay on purchase costs, possible refurbishment costs, furnture etc. of between £3-5k. So your £100k bargain actually costs £105k. Also more likely is that prices will continue to drop by 2%+ per month and your 'asset' will be worth £84k by December if purchased in April. £105k less £84k = £21K loss of capital - OUCH Whilst £100k in Northern Rock at 2% returns a misery £2,000 your savings will be £102k in December, thats still £23k capital more ! Should your prediction for higher interest rates and inflation be correct, you can of course expect your savings rate to increase also. Data from the previous crash shows that house price recovery did not catch up speed with inflation, so although you may miss out on the 'best' bargains there will be plenty of time to return to the market.
  11. That is a very vain assumption. Prices have fallen on 'desirable' properties, so they were not immune - there isn't some magic level at which 'desirable' homes cannot fall below such as your ideal of 30% from peak ! Despite your claims of superiority in market knowledge on your signature I think you have been duped by the 'Dead Cat Bounce'
  12. Risk to capital - where? Are you saying that house prices will not fall any further over the next 18 months? Have a look at the Land Registry figures http://nds.coi.gov.uk/content/Detail.asp?R...mp;NewsAreaID=2 the 'average' house price is quoted at £153.862 and a further 2% is £3,077 - that's 5 x your £600 fee If you are in London the 'average' is £298,563 so a further 2% fall is £5,971 - in just 1 month !
  13. Try http://calculator.bcis.co.uk/ Have a look at your buildings insurance and it should state wording something like 'reinstatement value' and a figure that looks nothing like any market value. My feeling (today) is that property prices will not fall as low as the build cost in the current recession, BUT should we enter a depression and see large numbers of unfinished building projects then certain property market values could be less than they cost to build
  14. what is its number now? 999a would signify a flat perhaps it was previously divided into two flats i.e 999 and 999a and both were bought and then converted back into a house Oct 2000 999 £48,000 999a £85,000 Total purchase cost £133,000 sold on in Dec 2001 at £179,000
  15. Is it a recent house convertion into 2 or more flats, is there a 999b, 999c and so on? 20 Oct 2000 999 is the entire propery I presume and could be the price registered for the freehold of the property, 999a could be mortgaged equity release for development costs on the 'new' 999a 19 Dec 2001 999a - selling price after conversion
  16. thanks - when Gordon Brown talks of economic stimulus - it's our savings that they are using. Every month our wages sit in the banks and they earn billions from those funds through their investments whilst paying little or no interest to the account holders
  17. excellent idea - I will be there if they organise a mass demonstration through central London
  18. This continual lowering of the BoE rate is just lip service and a blatant back hander to the banks from their 'mate' Mervyn King at the Bank of England. The spin on it being lowered to stimulate bank lending is absolute rubbish. The official stance is that the BoE rate is a 'guide' (to con the public) as banks use the Libor rate to calculate their lending costs. Banks have no intention of generating new lending (even if they have the funds), they have battened the hatches and are consolidating their businesses as they try to figure out how much toxic lending they are exposed to. Those that are lending are of course ignoring the BoE cuts - the present average owner occupier repayment mortgage is at least 5%. A small minority of existing borrowers on trackers are the only ones benefiting from the BoE reduction, but only those without a minimum interest floor rate clause. The REAL TRUTH is that all the BoE rate cuts do is INSTANTLY reduce the banks expenditure by millions on the interest paid on all our savings. Not surprisingly, the speed at which the banks implement the change in interest paid is far quicker than when rates go up! My parents retirement savings add up to about £175k and they were receiving a pre-tax income of about £850 per month - this has now reduced to £300 per month, a fall in income of £550 per month in the last 6 months. Over the millions of savers (from small to large amounts) this adds up to billions of pounds LESS INTEREST being paid to UK savers since October 2008. Lets not forget that the pubic purse is also negatively affected, as less interest paid means less tax collected (40% on the richest savers). Mervyn King - is he the Al Capone of the Banksters ?
  19. but if the redundancies include security staff, it may encourage tea leafs
  20. Hang on a minute, some major back tracking here, you started this thread saying this was the bottom and have now talked yourself into believing it will be in 6 months - 6 months is an eternity in this present economic climate.
  21. They might not be spectacular numbers (out of a total of 550 staff) but indicative of the Rich cutting back. Who are Fortnum & Masons? Well, Harrods may be the most well known for bling, but Fortnum & Masons is where the 'old money' and Royalty shops. Predominantly a high class grocers, they have been located at the same site on Piccadilly for 300 years, Fortnum & Masons are one of the most successful and prestigious businesses in British history. Founded in 1708, supplying the Royal Household they have held many Royal Warrants since Queen Charlotte's reign in 1761, in the Crimean War, Queen Victoria ordered shipments of Fortnum & Mason's concentrated beef tea be sent to the field hospitals. They are probably the founders of Mail Order business, since the Napoleonic Wars onwards many officers have ordered packaged supplies from Fortnum & Masons for their sustenance on campaign. The store had an 'Expeditions' department supplying provisions to the explorers and adventurers of the day. Champagne and tins of quail in foie gras were shipped out to the men making the first attempts to climb Mount Everest. Today they supply produce reared on the Duchess of Cornwall's Estate (Prince Charles) at Highgrove, have the widest variety of teas and remain the most prestigious hamper supplier in the world. The Snow Queen Hamper for Christmas 2008 was a mere £25,000
  22. Statistics can be very misleading and put to very good use if quoted in a certain way. It is easy for them to say sales were up 6.5% in December as a solitary comparison to November, but what if sales were down say 15% in November compared to October, then sales in December still remain down in comparison to October and perhaps likely also as a year on year comparison
  23. Quote Time only will shew how far those Informations have been well founded. (1771 C. Stuart Letter 15 Apr. in Publications of Mississippi Hist. Society (1925) V. 50) May I kindly suggest that rather than continue your bombardment of post economic analysis that perhaps you should review this post in 3 months time and see if the Housing Market has bottomed at the time of your post on Jan 24 2009, 12:08 AM
  24. A very interesting point of view, which I am inclined to agree with to an extent. My opinion, in a nutshell, for what it is worth. The availability of very very cheap credit for banks to make a margin on was enormous, billions from Asia - India/China, most definately fueled the property boom as borrowing became so easy and multiples on lending increased. But there was so much money available the banks couldn't find enough borrowers, then they (Freddie Mac, Fanny Mae) saw an opportunity to make money lending it to the risky sub-prime market (backed through US policy), making more money by selling this risky lending on disguised in securities to naive and greedy Banks throughout the UK, Europe and beyond. Massive defaults by those sub-prime borrowers and billions of losses later = Credit Crunch, Northern Rock etc Result = House Price Crash But did it (sub-prime lending) do us a favour? as far as cheap properties go, it looks likely. But at what cost? economic instability, unemployment etc So yes, it burst the bubble before it became so large a burst would have had unimaginable catastrophic consequences compared to what we face now.
  25. My freudian slip was meant to highlight their search around looking for work but maybe your interpretation is fairer for the real bankers. Admitting you work for a bank, even in a back office support role has become a cross to bear by many I guess. Will it be the same for those overpaid car salesmen or luxury/gas guzzler factory workers when the car industry collapses. Somebody recently said to me, as I am ex HM forces, "you used to work in an industry specialising in killing people, now you are in an industry that just rips them off" - I am still unsure if it was an insult or a compliment. The paradox is, without the bankers we wouldn't now be benefiting from the crash, although on the other hand perhaps we wouldn't also have had the huge rises, or would we - I can't remember what fueled the rise of property prior to the '90s crash.
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