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House Price Crash Forum


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Posts posted by Scooter

  1. what cracks?

    What crash?

    You lot have been predicting a crash for years. When is it going to come? Prices just keep rising and rising. And people can afford them.

    So where is this crash you keep talking about? All you say is "its going to happen, if it goes up, it must come down, wait and see, the bulls are waning, etc etc.

    Get real peeps, no offence, but while you lot are on here wishing for a crash, getting all hot and excited whenever a big shot says "ooo well prices may correct themselves", the rest are out their buying their new homes. You lot want something for nothing. Your not going to get much with that attitude!

    2 years ago, you lot were wishing for a crash.

    I'm certain in 2 years time, its going to be you same lot wishing for a crash, getting all excited when rates go up, or a reporter says prices are a bit too high etc etc.

    Well it is possible. Then again we are probably overdue and it may be you who is unhappy with the situation.

  2. I understood that a lot of British buyers in Spain used MEW on their UK properties (i.e UK bank mortgages) to fund their purchases, not Spanish banks. I would be quite surprised to find that the Union Jack shorts brigade by and large had the wherewithall to apply for a loan in Spanish. The ones I know are proud that they can (only) say "agua sin gaz por favor"


  3. I agree about flats, but this was a very nice victorian one in a 'highly sought after area witha splendid collection of local shops restaurants and transport links and other amenities' :lol:

    As for it feels hard to imagine it happening again, when you re-bought in 1994 did you think a boom was begining? :blink:

    No, the price felt high (as it turns out it was historically low) but I could afford it. I am not sure I analysed that much then but no one thought a boom or bounce back was on the way.


  4. As a survivor of the last crash let me give you some figures to chew on.

    I lived with a friend in a 3 bedroom flat in Chiswick. He bought it for £110,000 in 1987. At the peak of the house price boom he had it valued (for MEW to fund a gap year) at £190,000 and indeed similar properties in the road sold for £190,000 in that year (1999/2000). But by the time he came to sell in 1991/2 he only got £105,000.

    He only lost £5k but from the perspective of an overstretched borrower who bought in 1999 the value of their propertiy halved.

    I haven't seen the graph recently but there was an image from the telegraph or somewhere that documented the falls in London, they were real and worst in places like Chiswick and below. Chelseas etc did quite well but places like Clapham, Stockwell and the gentrified rougher areas were slaughtered.

    I was there, I saw it and lived it. Put an end to the no real falls myth.

    I agree. I remember. Luckily I sold my small, first flat at a loss (bought 1989) and bought a bigger one in a better area in 1994 in the trough. It still feels very hard to see it happening like that again at the peak of another bubble though.


  5. Being mortgage free, can you save more per year than your next type of property is inflating?

    If you can then there's nothing to worry about. I plan to pay off my mortgage (after moving into my btl) withing 3-4 years. After that I may stay put and save hard. I don't think the next rung up will inflate by the amount i'll be saving...not by then anyway.

    But it is only a plan. Like many others, it is not entirely in my own hands.

    I probably can overtake house price inflation through saving but I remember the last crash and it would just be my luck, after putting off moving up for years, to go for the big one (much larger house/flat) just in time for the bubble to burst. Who can know? This could be the same or worse in a years time or the bears could all be celebrating. Hmmm...


  6. If you want to move up but dont want to take on too high a mortgage why not rent yours out and live in a bigger house until the crash.

    Seems you just want a moan.

    Too right I want a moan! :angry: :lol: I have considered renting mine but I am not sure I want the hassle of dealing with tenants and tax complications of letting a former main residence. Perhaps I will just leave it empty and watch it go up in value for ever and ever...


  7. House prices: a vicious or virtuous cycle?

    By Ian Cowie, Personal Finance Editor

    Last Updated: 4:22pm GMT 08/03/2007

    House prices rise

    Most people's homes earned more than their owners did last month.

    The average house price jumped by £3,407 during February, according to Halifax, Britain's biggest mortgage lender. That's nearly £122 per day or equivalent to more than £40,000 a year, tax-free. By contrast, the average wage is less than £24,000 gross.

    advertisementSuch effortless wealth accumulation is, of course, highly agreeable for homeowners and utterly depressing for anyone who has not yet bought but hopes to do so in future.

    Wiseacres who say these gains are illusory have presumably never heard of equity release or noticed how the British love affair with bricks and mortar has spilled over into a second-home property boom in Spain, France and wherever you can reach reliable sunshine on cheap flights.

    Back in the overcrowded British Isles, the iron law of supply and demand has made fools of the house price pessimists once again.

    Only about 160,000 homes were built in England last year while the number of households is thought to have increased by 200,000. Part of this is caused by the trend toward more people living alone.

    Then there is immigration, with the influx of wealthy Russians in London providing the latest boost to the top end of the housing market.

    When rising demand meets fixed supply - and they ain't making land anymore - prices go up. The big question for owners and would-be owners alike is: can it last?

    A combination of high prices, relatively low mortgage costs - and the Bank of England left base rate unchanged in its announcement today - have encouraged first-time buyers to stretch ever further to get onto the property ladder.

    Lenders have relaxed terms and conditions, advancing up to five times borrowers' incomes and allowing repayment periods to lengthen to half a century, importing the idea of deathbed mortgages from Japan and Switzerland.

    Is this a vicious or a virtuous cycle? Once again, it depends entirely on your point of view. Homeowners - many of whom now say they see their property as their pension - are only too happy to watch easy credit and desperate borrowers chase up the price of their biggest asset. Anyone who does not own property feels doubly disenfranchised as prices soar out of reach.

    But both groups should beware that no market moves in a straight line forever. A trend is only a trend until it stops. While mortgage costs today are less than half the 15pc rate which precipitated the last property crash, we have seen three small increases since last summer and most analysts expect more to come.

    Unemployment, at 5.5pc of the workforce, is also little more than half the level it plumbed during the depths of the house price slump in the early 1990s.

    A sharp increase in either interest rates or unemployment could burst the house price bubble. If both jumped as they did 17 years ago the effect would be shocking. But there is no reason to expect either event any time soon.

    For now, while the housing market reaches giddy heights, it seems to be built on solid foundations; demand exceeds supply.

  8. Steady growth in commercial property market

    The UK commercial property market has shown steady signs of growth in recent years, suggesting increased uptake of Commercial Mortgages among property investors.

    According to the benchmark IPD index the commercial property market has seen average growth and rental returns of 12.6 per cent per year over the past ten years, reflective of a generally strong performance and lucrative investment opportunities.

    Strong returns have acted as an incentive for investors in the UK, who have put hundreds of millions of pounds into the commercial property market. To this end a growing number of commercial property London funds are being introduced into the market, offering more opportunities for investment.

    A number of these funds are now worth billions, such as the Norwich Union property trust which has increased to nearly £4 billion in value.

    Despite these positive trends concerns have arisen that the commercial property market could be set for a decline, which could spell bad news for those with Commercial Mortgages.

    "There is only a finite amount of growth out there," explained Ben Yearsley of Hargreaves Lansdown to This Is Money.

    "This is probably not the time to increase your exposure to UK property."

    Exactly! :lol:

  9. Problem is I want to invest more and have to plump for something.

    Already maxed out on ISAs, plenty into Unit Trusts and shares, and some properties abroad. Now I want LEVEREDGED relatively safe investment, so what do I do?

    Rent will cover the mortgage so its just a waiting game until the mortgage is cleared by a tenant, then will enjoy the rent.

    Im concerned such opportunities will become scarcer and scarcer as this country fills with people. Surely there is only so much space for commercial property here in the South East? Once its gone its gone.

    Sometimes sitting on cash and waiting awhile is not stupid IMHO. Right now you could perhaps stick some more (sadly unleveraged) into unit trusts in the UK, Japan, Korea-what I am doing currently-as they are down a bit but who knows...

  10. I initiated my first commercial property purchase 2 years ago (although it was a year before I got the keys), and am now considering another.

    Wondered what people thought of my rationale?

    Firstly Im not talking office blocks here, Im a smalltimer and in any event I would not invest in offices as I see many standing empty over extended periods.

    Im considering either a brand new high street unit (ideal for a Bank, Solicitor, betting shop) on a 125 year lease at £300k which should let for £25 - £30000


    A small brand new industrial unit at under £200000. The first phase was immediately sold out to mainly owner occupiers. The next phase is due shortly. A typical use would be a small bathroom centre or specialist car repairer


    My rational is based on the fact there is very limited supply (compared to homes) and crucially it can be a lot less hassle in that tenants will not bother you from 1 year to the next, whereas residential tenants tend to dwell for short periods only and expect a lot more from a LL.

    Given the self employed proportion is likely to carry on increasing, is this not a smarter move?

    Fine in theory. Unfortunately even the many commercial property professionals, EAs, property fund managers (who are never shy to promote a rising market) are saying this is a brilliant idea you should have had 3 or 4 years ago.


  11. Alan Greenspan made his 'irrational exuberance' speech a few years before the dotcom crash. The Economist and others forecast the same. All were ridiculed by the bulls for those few years - the bulls patiently explained to us that this was a new, different, economy and that traditional value models were incorrect.

    We are certainly in uncharted territory here; I have been loudly predicting a HPC for three - four years, and have become a figure of fun. I actually think that the crash started early 05, but was saved by an injudicious interest rate cut and the arrival of half a million eastern europeans to keep the flagging BTL market alive. The current flat lining is unprecedented, and has never been sustained in any previous asset bubble.

    What the dotcom boom and the current housing boom have in common is low inflation, which seems to have allowed both booms to go to record heights; hence us bears calling the top of both booms early.

    Personally, with the unprecedented volumes of new-build coming on to the market, I see the whole country going the way of Nottingham this autumn if not earlier. At the top of the market sentiment can turn on a sixpence.

    nb. in 1995 I was widely ridiculed by my friends for being a full on propery bull - I was loudly verbally abused by one acquaintance in public when I suggested it was a very good time to buy a house - they had all been burned buying properties at the end of the eighties. If my memory serves me correctly you could pick up a nice three bed house in Oxfordshire for £50k at the time.

    Me too-occasionally ridiculed by friends for saying houses were overpriced 2004 onwards and giving cogent reasons. I was wrong about the HPC (timing at least) sadly. Now I have stopped trying to guess when it will come.


  12. I know someone who didn't pay ANY income tax for 6 years. then Inland Revenue finally caught up with him he was issued a hansard demanding 200K. If he appealed against this tax demand and lost, Inland Revenue would double the amount owed to 400K

    He hired the most expensive tax specialist he could find, appealed and ended up paying..............


    Now there's an accountant I could use! :lol:

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