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peter_2008

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About peter_2008

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  1. Indeed. It seems nowadays the preferred solution for banks when someone falls into arrears, is to start deduct equity from the house as payment. Say house price £250K, with 20% equity, that's £50,000. Then say monthly mortgage repayment at £1,000. If you cannot afford the payment, the bank can simply take £1,000 every month from your equity for a few years to wait for things to improve. It's a "win-win". With the explosion of various forms of life time/retirement equity release schemes, what I believe I am seeing is that the mortgage industry is changing its tactics, in the sense that it will become common that a lot of people will live under the illusion that they own a house, whereas in reality, they NEVER actually own it. In the end, when they die or go to care home, the banks will take the lion's share of profits. That's the final solution.
  2. That's really sad. RIP I really enjoyed reading the blog and only wished it was more popular.
  3. I agree, though I think 1 is far more influential than 2. There are just too many people thinking buying at anytime is good time, as long as "it's for the long term". We will need another credit crunch to crash the market.
  4. For clarification, I am not saying that my theory is right. It is flawed. The hypothesis that I am suggesting is that rather than the government having a hidden evil plan to inflate house price per se (as many here seem to believe); the way the government behave is because of their belief that it is collectively good that people should spend all their money before they die. And all ill conceived ideas are a reflection of that belief, e.g. raiding your pensions, use you house as collateral for your old age care and medical bills, inheritance tax etc etc. The more they make you spend on yourself, the less the government need to spend on you. And it is all for the greater good. The government have always denied having any policy that specifically targets house price, and maybe in the mind of the government, they genuinely do not have such policy. In which case they may simply see high house price as a consequence of such behaviour, not the intent.
  5. OK, just some thoughts. We can all indulge in the government conspiracy theories that they want to turn all of us to mortgage slaves etc etc. However, I wonder if the real reason is something equally ruthless, but somewhat less evil and less “conspiratorial”? Someone dies debt free is a good thing, right? Of course, we all try to be debt free. And say if we leave human emotion and moral value aside, could one argue that someone dies debt free, but also penny-less – would be a perfect scenario? Because that person is, well, perfectly self sufficient. So, you spend your last penny the moment you die. Or you could say that the moment you drop dead, you managed to spend every last penny. It is not a bad thing, is it? Some may even say that you have beaten the "system". Now, none of us can plan our whole life perfectly. We are in fear of running out of money, so we save, invest and buy properties. Yes, some would die having scrounged off benefits most of their life, but many of us inevitably over-save and would die having worked hard and leave a lot of money we never get to spend. And, here is my theory. Rather than being inherently evil, the government simply do NOT like people over-saving, because it hinders economic growth, so it tax savings to force savers to spend, so if you are not going to spend, the government tax you and spend it for you, because while saving may be prudent on a individual level, collectively, you are bad bad bad for economy. So, the real reason that the government incentivising people to borrow money through every possible measure (from HTB to Retirement equity release), is so that we smooth out our spending over our life time in a way that ideally we all die debt free and penniless. Wouldn't that be a perfect world?
  6. https://www.rightmove.co.uk/property-for-sale/property-77215670.html Yes, you can. That's £4000 loss after 12 years... And Bristol is one of the hottest spot in the country. If it can happen in Bristol, it can happen anywhere.
  7. https://www.rightmove.co.uk/property-for-sale/property-77215670.html Found this one in Bristol. That's £4000 loss after 12 years... in one of the hottest spot in the country. That may well be him.
  8. peter_2008

    I think the wait is over

    Hmm... off the top of my head: 120% mortgage HTB for old properties too Inter-generation mortgage or use parents' properties as collateral PCP (personal contract purchase) equivalent for properties
  9. peter_2008

    Does interest rate really matter?

    No disrespect to your parents, but they probably bought their house for £60k... If we use average house price today, that would be £3k a year...
  10. Bristol is bad, but not that bad. You can still buy something half decent for about £250K in OK areas. With a combined income of £50 to £60K, it is very "affordable" by London standard, which is why so many Londoners (young couples) came. I was actually worried that Bristol could have gone the same way of Oxford. Fortunately, now the bridge toll is no more, it seems many people are moving to Wales. Combined with Brexit (with many European companies in Bristol) its market is falling. I reckon it is already back to 2016 house price level. That's about 10% to 15% fall in real term. But reasonably priced properties sell very quick (like 1 week and gone, quick), so the demand is there.
  11. peter_2008

    Does interest rate really matter?

    From my own experience, I would say the maintenance cost of a house is close to about £50 a month, around £6,000 over 10 years. Roof, fence, boiler etc etc while do not need frequent repair, when they do, it's a few thousands £££.
  12. I work for a major engineering company in Bristol. As I mentioned before, the market rate for starting salary for graduate engineers is around £27K. So his is not actually doing bad. https://jobs.telegraph.co.uk/article/average-engineer-salary/ 15 years ago when I started, salary was about £18k across board. So that's actually 50% wage inflation. The problem is house price went up by 200% in 15 years.
  13. This is a genuine question. I was responding to another thread, and was thinking whether the house price is dictated not by what "typical people" earn, but by what "typical buyers" earn. Therefore, if only 20% - 30% people can buy houses, then what the remaining 70 - 80 % are earning (or average earning for that matter) could be irrelevant to house price. Most third world countries with significant inequality are like that. For example, below is comparison of India vs UK. Note that despite India mortgage rate being close to 10%, its house price, relative to the income, is actually higher than UK. So......What stops the UK turning itself into a third world country, with house price out of reach for the majority of the people AND just stay that way? Buy Apartment Price India UK Price per Square Meter to Buy Apartment in City Centre (1,023.56 £) (3,856.24 £) Price per Square Meter to Buy Apartment Outside of Centre (519.85 £) (2,767.49 £) Salaries And Financing [ Edit ] [ Edit ] Average Monthly Net Salary (After Tax) (345.56 £) (1,777.62 £) Mortgage Interest Rate in Percentages (%) 9.39% 3.23%
  14. Yes, that is true. But my view is that the market is mostly dictated not by what "typical people" earn, but by what "typical buyers" earn. Say if only 30% people can buy houses, then what the 70% are earning is more or less irrelevant to the market. I am not arguing about the morality of this situation. Most third world countries with significant inequality are like that. For example, below is comparison of India vs UK. Note that despite India mortgage rate is close to 10%. Its house price, relative to the income, is the same or higher than UK. Buy Apartment Price India UK Price per Square Meter to Buy Apartment in City Centre (1,023.56 £) (3,856.24 £) Price per Square Meter to Buy Apartment Outside of Centre (519.85 £) (2,767.49 £) Salaries And Financing [ Edit ] [ Edit ] Average Monthly Net Salary (After Tax) (345.56 £) (1,777.62 £) Mortgage Interest Rate in Percentages (%) 9.39% 3.23% UK is getting there.
  15. I know Bristol market reasonably well. Households with a combined income of about £60K are essentially the driving force of Bristol market and the surrounding area. Generally new engineering graduates start with around £27K. And all of them borrow as much as they can; as soon as they can, which is around £200K to £250k mortgage. This is why Bristol market went nuts in the last 5 years. Any half decent house went for £250K minimum; and for HTB, that's £300K. However, for a 2 bed for £240K, I reckon the guy bought at the peak price. It's now about £200 to £220K in OK part of Bristol.
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