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Caveat Mortgagor

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Everything posted by Caveat Mortgagor

  1. Price dropped today from £190k to £160k Lots of thses kinds of drops round our way (midlands). Think sellers are beginning to lose faith / get fed up / sell ahead of the curve / or perhaps even ZIRP isnt enough to help the struggling finances of the overborrowed!
  2. Some interesting drops in my part of the world in the last 24 hours. 3% drop last week. Another 13% drop today! Drop from £135k to £110k Top end of market isnt immune round here! £50k off today Dropped 3 weeks ago. Another 10% drop today! £200k down to £185k
  3. OK, polar opposite viewpoint, as anyone new to HPC would be in danger of thinking we are all nutters who eat cold beans out of a tin. This is what we have been able to buy because we didnt buy a house. First a bit of background..... We nearly caved in during 2007 and seriously considered buying a 3 bed terraced house in a less than average part of a not very prosperous city. We chose not to do so because I managed to outweigh the 'hpc is never going to happen' voices with the common sense that £180k to live in a house next door undesirables meant that the whole thing really was fecked and surely we werent missing out if the propsective neighbours made us uncomfortable. Being a cautious sort i believe we would have gone with a fixed rate mortgage - in hindsight this would have been disastrous for us - and may have fixed for 5 years (Ouch!) The difference between what we pay in rent and a 5 yr fix on £162k is around £480per month. Now that we have established the difference in monthly outgoings, lets look at the choices we have made with the spare money. By having cash to throw around in the early part of 2009, we got some bargains. I know that at work it felt like the world had stopped turning, so I also knew that if we waved cash at people we could name our price within reason for anything that we wanted. We managed to get married in a castle for next to nothing. At the depths of the despair for business confidence we struck a deal for the castle as our venue that was probably the best deal I'll ever do. We turned down the permission to site a marquis, but this could have been included in the price if we had wanted. Today, if I hired the castle again, just the additional cost of gaining permission to site a marquis would be more than twice the amount we negotiated to hire the whole castle and grounds! I dont think a man has ever been so involved in the finer details of organising a wedding because I just loved saving money, and striking deals was like shooting fish. My now wife had her engagement ring on her finger with a huge smile and saying how much she loved it. The jeweller thought they had a nice easy sale but I still managed to get more than 25% off the price tag. On top of that we have spent money on tv / blu ray player / my wifes car / loads of furniture a dinner service and so may other things. If we had bought, the money for the above would have disappeared to make up the difference between our current rent payment and what would have been our mortgage payment. And on top of all that our 10% deposit would not have been enough to avoid negative equity. So, by not allowing the demons to get to us:- We still have a deposit (now bigger) We have avoided negative equity (But our landlord must be down by in excess of £30k) We've had an extra £480 a month discretionary income We had a lavish wedding that we would never have been able to afford if we had bought. 7 foreign holidays in the last 4 and a bit years. I genuinely feel sorry for the couples who did cave in believing that a huge debt to buy a shoebox was the way to start a life together. It was so very nearly the path we chose. To bring things nicely back to the OPs point: allowing a bubble to happen in the housing market meant ftb's would have to forefeit spending in the wider economy, just as we would have forfeited all the above if we had bought in 2007.
  4. its amazing that confidence can be lost if growth is flat or negative. But if we had borrowed more, we could have created growth through spending on non-jobs and of course the magic 'G-word' means that would mean we'd be good for the extra borrowing!
  5. Dear A. Taxpayer Your agent encouraged this deal. You seem not to understand that your agent does not seek to act in your best interests, but the specific interests of the housebuilding and banking industries. You correctly identify the existence of a parasitic act in this transaction, but you followed the wrong trail.
  6. For a long time this index has been nothing more than a measure of how comfortable new-to market vendors are with their own delusions regarding the value of their houses. I was surprised to hear the beeb reporting the biggest MoM drops were London. We all know that London has been propping the national figures for all indices for a long time. If the fear is starting to hit London, maybe the prop for national headline figures will fall away. This report means the other more meaningful indices will be worth watching for the next few months.
  7. I think the Op is onto something. But perhaps it should be re-worded along the lines of:- Does the inability to provide a stable home life for yourself and family lead to feelings of exclusion? Homeownership is not the be all and end all here. I rent, yet I worried I may have to defend the family home if the unrest spread to residential areas. The difference is I can provide for my family. Hundreds of thousands, nay Millions can only do so by resorting to benefits. Somewhere deep down that must damage male pride and ***** feelings of resentment towards conspicuous consumption such as flash watches, chelsea tractors etc. Edit to add :- D'oh! The ***** stands for a word that means to pierce something with a fine point, if the the swear filter took the word into context, I obviously wasnt referring to street slang for male genitalia!
  8. Hope you dont mind but I tagged on the unspoken part of his statement! It just reminded me of David Brent in the office telling his staff there was good news and bad news. Bad news first: we're closing the office, many of you will lose your jobs, some may be offered re-location to swindon. But the good news is I will be promoted to area manager and will be responsible for that branch!
  9. Back in the spring I had August as the first most possible month for a rate rise. Alas I've long since revised that predicition to Feb next year.
  10. I saw the bloke behind it being interviewed about hospital cuts on a news programme yesterday. Not sure which channel. A guy in my office follows this site on twitter. He retweets some ill thought out nonesense with the same sense of indignation as the original writer. Im afraid people believe it, including some working in the private sector.
  11. The natural conclusion of this assertion suggests that the right time to buy would have been april 2009, and let inflation slowly make the price you paid seem less horrific. But I disagree. Inflation alone does not support prices. Inflation is squeezing budgets, it is not driving up wages and thus reducing the houseprice:wage ratio. The houseprice:wage ratio is reducing slowly because wages are climbing and prices are falling - both at a snails pace. But since everything else households have to buy is increasing, then the ratio of hp:wage that can be sustained is falling...... and falling fast. The effect of the current inflation is to lower the level to which prices will fall if price discovery ever happens. Wage inflation will increase the natural floor on house prices, but inflation alone will not.
  12. Yup, I can only see 4 increases there! 5 sets of figures, but Feb has no comparitor! (incidentally it was down in Feb a measly few hundred quid!) Todays announcement means we have caught up with your proclaimation of 5 increases though. However, i will add that I didnt realise just how much prices have increased this year. I initially stated "hardly surging" yet in 4 month period your figures cover, the nsa prices increased by 4.3%!!! Surely this means the seasonal adjustments have been negative over this period and we have a spate of positive adjustments to come. In which case I cant see nationwide reporting a drop for some time.
  13. Jun 11 0% May 11 +0.30 Apr 11 -0.20 Mar 11 +0.50 Feb 11 +0.30 Hmmmm, not really surging is it? * My guess..... -0.1% Phew! * of course if you are refering to the non SA figure, then its only 4 months!
  14. Sounds like the wedding may have benefitted the chinese.......
  15. Not seen any mention of it yet, but yesterday mornings BBC breakfast had me open-mouthed. Digby Jones had a 2 minute session where he said pretty much the same as Keiser did on the radio. First thing I did was check it was the beeb. Then I thought that maybe sentiment was starting to change, perhaps they were preparing the masses for what is inevitable in Greece...... Or perhaps the BBC's editorial BTL'ers didnt understand the implications of what was being said. Then Charlie Stayt abruptly interrupted Lord DJ saying they had to move to another story. He did it so insistently I thought it was a big strory breaking, I was half expecting the news banner to scroll across the screen stating the Queen had died. Cant remeber what story they went to but it was one of the nice trivial distraction stories like Kate's dress is now on show to the public.
  16. At present there is a chasm between what buyers are willing to pay, and the amount the sellers would like. The sellers are comfortable because of low rates as we all know. But your analysis takes no account of the fact that the prices buyers are willing to pay are also based on low interest rates. Also, the low rates / no forced sales means that sellers have greater power. But when when forced sales happen, there will be a power shift. Prices will not be determined by seller aspirations, but buyer ability. When rates rise, we will have forced sellers, but more and more buyers will see their spending power eroded by higher interest rates. As such, an imaginary buyer with a 4% interest rate (repayment over 25 years) would currently pay £533 for every hundred k he borrows. But if the mortgaged buyer can only borrow at 6%, for £533 a month repayment, they can borrow £82k. People are borrowing based on affordability criteria. I think its clear to see that a 2% increase in interest rates would severely damage the affordability for buyers and mean that prices would have to fall even further in order to get volumes back up. It is safe to say that an increase in rates will force a few sales, but will mean prices have to fall by more than the current gap between sellers aspirations and buyers affordability as the power shift from seller to buyer emerges and buyers have less spending power.
  17. Whats the smell? Is it desperation.................or fear?
  18. If..... .....house prices do not change in a 12 month period and the volumes of houses (by price band) change as per the volumes shown in the Land Registry June 2011 report....... See page 13 What is the effect on the average house price? My best calculation is to guess that all houses in a price band sold at the midpoint and thus came up with a 4.4% increase in the average price despite there being no change in any individual price. If the fall in volumes at the bottom and increase in volumes at the top can have this effect, do we know whether any account is taken to avoid this distortion in the average price figure published by LR?
  19. Different thread on MSE. http://forums.moneysavingexpert.com/showthread.php?t=3319956 Agent has terminated overpriced vendor and put in demand for £460 for HIP!!! It's a scenario I hadnt considered. Vendor admits they havent moved agent becasue they would have to pay for HIP if they either sell or cancel agreement. How many of those overpriced vendors on RM have changed their minds about selling but dont want the HIP bill?
  20. And with an eye to the future....... Any public sector job that is remunerated at or above the national average salary does not come with a pension
  21. I agree. But look at it from a different angle. The government pays out x amount each year in pensions. A large percentage of X is ringfenced and can only be paid to people who have worked in the public sector. The rest is distributed evenly, not amongst the rest of pensioners, but across all pensioners, including the ones who had a share of the ringfenced bit. Why would a socialist think it is ok to rinfgence mony like this to the detriment of millions of vulnerable pensioners? If pensions were to be reformed, if a system was suggested which would ringfence money for people aged 65-75, or pensioners with their own teeth and hair, would anyone consider these systems to be fair? The answer of course is a resounding no! The only reason its acceptable the leftie idealists is because they gain!!!
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