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House Price Crash Forum

devilsadvocate

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About devilsadvocate

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  1. Never understand why parents income has any relevance to how much subsidy a student receives. Personally I would base the amount of support a student gets on the basis of ability. I would restrict government funding to the top 10 -15% of students in each 6th Form or FE College. The rest should self fund, whether it be on the basis of loans or self funding. If you can't afford to go at 18, get a job and work and go back at 22/23 having built up some funds. We need doctors, scientists, engineers, teachers, lawyers to have a good academic background. However would it not be beter for people who are interested in a more practical subject to get a job in that topic first and then work their way up, studying aprt time etc.
  2. Rather than spend billions on propping up banks why don't they pay off a proportion say 25 - 50% of existing mortgages on the proviso that the people live there for a certain period of time. This will mean banks have more money to lend to FTB (on sensible terms) and that interest rates can rise for the prudent saver. If they didn't want to do this they could offer to give a tax rebate for all money paid off a mortgage or saved with a bank. I am thinking that rather than give money directly to the idiot bankers who have created the problem this helps deleverage those in debt and increase the savings ratio. This would benefit the banks by increasing deposits reducing levels of mortgage debts. I know a lot of you are quite smug about having cash, not buying a property etc but we need to come up with a solution that benefits everybody. Lets have your ideas for fixing the situation.
  3. Agree that kids need to spend time with their parents but to say that 1 parent has to stay at home all the time is nonsense. What is a "nonsense" job. Surely kids are better being part of a family where achievement is encouraged rather than with on domineering "breadwinner" parent and the other compelled to be at home all of the time. The "social revolution" you propose sounds like the 1950s when women were seen as not being equal to men. You've shown your true colours.
  4. The old adage is it is neither a profit or a loss till you sell it. If investing for income even at a conservative rent the yield on property is probably better than a savings account/shares. Granted the capital losses on the "balance sheet" might mount up over the next few years but if inflation spikes probably no more or less than if it was in cash in the bank. Agree about liquidity point but if you have a sum of money that you can lock away for 5 years then property is fine. If you need liquid in the interim then you can still (just about) mortgage a BTL easily for about 50% LTV with a decent interest coverage.
  5. Agree with that. Maybe a bookkeeper/cashier but ont a qualified accountant. It's ludicrous to say that a single man/woman would want/should be able to buy an average 3 bed house. The average house price should reflect the "average" household income. If we take a man earning the "average" wage of £24,000 plus the wage of a partner (whether mail or female based at 60% of this = £14,440) that gives a household income of £38,440.(x3.5 = £135,540) so average house could be comfortably £130,000 - 140,000 for most couples. Therfore average house is about £10 -£15,000 over priced) The next argument is "what about if they want to have kids?" Well £14,440 is approx £900 a month net = £10,800 gross. Maternity Pay/Benefit id £120 per week (x4) = £480 + £80 child benefit = £560 so shortfall of £340 per month, which would be probably be offset by cost of lower earnign partner travelling to work and the fact they wouldn't go out so much) A single man/woman should be able to buy or rent a 1 bed flat. Based on £24,000 x 3.75 = £90,000 (therefore the average flat is probably over priced)
  6. What a well reasoned argument. Overborrowing got us into this mess, why do you associate borrowing with enjoying? Where do I suggest overborrowing. I'm certainly not a moron or a numpty. I am going to cancel my membership on here now as most of the people on here are not interested in a balanced view but simply their own. Most people who poste on here from 2003 probably cost themselves a lot of money by not buying and selling. That said this is a site dedicated to those hoping for a houseprice crash so fair enough. One question I will leave you all with is this. If in the next 5 - 10 years house prices crash by 50 - 100% what happens then? Will house prices begin to rise again? Enjoy your pessimism. DA
  7. I live in South East Wales! Most people who live in a 3/4 bed house here will have somebody earning that type of money! People in industrial jobs here are clearing that with a little bit of overtime.
  8. Agree with this sentiment. The market is made up of people and sentiment. An intelligent person will take into account a range of views. A lot of people on here make valid points but others just think " I can't afford a house so they must be too expensive, where's my gold and tins of Spam I'm off to live in the mountains"
  9. If you meet the FSA criteria like many insurance or large retail companies do then easily. Tesco has a banking licence as does Standard Life. It was a cartel when banks were supposedly strong but they are not any more. The market will react to demand. There is still a lot of cash out there that needs to be invested.
  10. I bought a house 6 years ago because I needed somewhere to live. Sold it bought another to live in. Don't really care if it's worth less than I paid for it. Can see the appeal of renting to some people but it's not for me. The international money markets point is rubbish. In the next 5 years people will bolster the savings ratio up from a ridiculously low level. In the next year or so you'll see new banks established by entrepreneurial companies/investors. There is only one rule in economics that has any merit and that is supply and demand. People need houses so in the medium to long term builders will supply enough to satisfy demand. People need money to buy houses so lenders will supply enough to satisfy demand. The only caveat is that banks and builders need to ensure that they make that supply profitable. Look at Lloyds. The core non-fancy bank that just took deposits and made sensible loans made £1b last year. Some of you guys are making the same assumptions that the property speculators made in assuming everything will remain the same. It won't. That said lending 4 x salary on the basis of a 5% deposit isn't always going to be a high risk but it will usually be profitable.
  11. I've read quite a lot of the posts on here and some people are clearly quite negative people. Whilst I agree that house prices will undoubtedly fall some of the figures bandied about on here (like 90% across the board!!) are crazy. I wonder whether in 5 - 10 years time when property is starting to rise again the same people will be on here having not bought at the bottom of the cycle moaning that they are "priced out" of the market. Certainly there is an over supply of flats in some cities as a result of BTL speculation. In these areas prices became totally diconnected from the incomes of the people who you would usually expect to live in them. However during the boom most new developments were of flats and the number of new build 3/4 bedroom "family" type homes was not that much greater than the long term average. A very sensible poster has already said that the idea of a "UK" housing market is a fallacy and that there are a number of micro markets. This I agree with. I'd say that for most residentialproperties 20 -25% falls could be expected. Commercial will be probably 50% (on average) I've also read people on here describe 30k per year as a "high earner". This is not a high wage. I would say that in most households one of the earners will earn at least this. I'd also like to ask the posters who expect there to be 90% falls to say why anybody would want to lock in a loss, particulalry if highly leveraged at the worst point in the economic cycle unless they have to? Even if unemployment reaches 25% (which I would say is unlikely) 75% of people will still have jobs. why would somebody who has paid 100k for a hosue with a 95k mortgage sell for 10k unless they had to? Besides this its not in the interest of the banks/govt for prices to drop this much and as they control a huge slice of the supply side of property why would they flood the markets with the properties of those who have defaulted if defaults reach levels that are higher than the 3 - 5% we are seeing now? If defaults hit 25% the repossession strategies would be totally different to now. That said you will undoubtedly see some cheap properties hit the market over the next 3 - 5 years. Lastly I would say to those people who are buying gold, stockpiling tinned food etc. I feel really sorry for you all as you are obviously worried but life is too short. It won't be as bad as you've built up in your head (I bet you all remember Y2K). Look at Northern Ireland. There was a war on there for 30 years but most people still got up, went to work, went to the pub, on holidays etc. This is probably my first and last post so what I would say to you all is stop worrying about things you can't control and go and enjoy yourselves. If you want to buy a house to live in and can afford it go and do it. If you plan on living there for 10 years + you'll in all likelihood not lose that much money and you may even gain a few quid. The sun will rise each morning, the tides will come in and out and sometimes you'll have a pound in your pocket and sometimes you won't. All the best Devils Advocate. Devils Advocate
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