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House Price Crash Forum

bird101

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  1. I missed it unfortunately - funeral. Did it happen, was it any good?
  2. Hi Fruga Well, we are having kids while renting as it now happens, but we would have preferred to start a family in our own home because we could make it our own; decorate the nursery, put in fitted cupboards, build a nice big sundeck, tree-house, ponds, waterfalls, etc., personalise it to make it a fun environment for kids. That's the environment I grew up in so it's only natural I want the same for my kids. Also, after buying there's a degree of security and control of your home that you simply dont have in renting. Although some people in this topic have said that there are plenty of affordable places in Cambridge, the fact is, having looked at the range on offer, we feel they're way too pokey for the money, claustrophobic little 3/4-bedroom houses with postage stamp gardens. If they were £150k they would seem reasonable, but we're on above average incomes and should be able to afford at least an average house. We cant, and we're not prepared to take on what we consider an above-average liability for a below-average asset.
  3. Read this article in the economist - I think it's explains the global property situation pretty well. http://www.economist.com/opinion/displayst...tory_id=4079027
  4. I've just spent the evening with a couple who are renting at the moment. Between them they earn £90k a year, (pretty good for the provinces) and have £30k in deposit savings. They spent last week looking at local property (Cambridge) to see what was available for their budget of ideally £220k but would go up to £300k for the right property. The answer was, naff all. Tiny terraced houses with no parking in unsalubrious parts of town, or crumby semis in the outlying villages. The only place that appealed was a place in Mildenhall, about 25 miles away, for £250k, and that needed a lot of work and would have meant a hefty commute. They ended their search feeling quite down about the whole thing. Up until now I thought my wife and I simply werent earning enough, we're on £65k combined with a £20k deposit, but my friend's experience hammers it home - if people in their position cant afford to buy, this is a bubble of cataclysmic proportions, and when it crashes, which it must, we're going to hit a depression. We've been holding off starting a family until we had a home of our own, but last month we decided that things are going to get a lot worse before they get better, and if we wait until we're homeowners of a sanely-priced property, we'll be well into our forties before we have kids - and we're not going to let the house-price bubble wreck our future any more than it has done to-date. I found an inetersting article about global property prices on The Economist website - there are a lot of parallels in the US with the lead-up to the 1929 stock market crash, and they're long-term predictions are very gloomy http://www.economist.com/opinion/displayst...tory_id=4079027
  5. All's not said and done yet. The banks attempt to lure BTL's may fail, many may think the good times of rising equity are over and simply not invest. I wouldnt. On the other hand if many do, we'll probably end up with a glut of rented properties in which case prices will fall, and then whoops! all the highly geared BTLers will be totally screwed. Any buyers now will be the late-entry speculators, or 'mugs' as they're known in the industry. They're the guys who buy up all the property/stock to enable all the serious investors to escape with their winnings, and then take the full hit. The market may not be falling, but it's ripe for a fall and we just need a trigger. My money's on late March - There's serious speculation that Israel/USA will attack Iran to prevent them acquiring nuclear capability, which is estimated to be late March (+ to stop the surge in oil trading away from the dollar). The gulf will become a fire zone, oil will cease to flow, horrendous oil prices will plunge us into recession. That's not what I want, believe me, I'm as vulnerable as any other non-home-owner. But I reckon that's the most likely trigger on the immediate horizon. Incidentally, this article is worth reading. http://www.countercurrents.org/eco-lendman240206.htm
  6. I was planning to buy in about 18 months time, on the assumption that prices would have dropped by 15-20% by then. Now I'm not so sure, If BTL's increase their market share and keep the market high beyond it's natural cycle, the crash when it comes could be cataclysmic. I'm hedging my bets. I put half my deposit money, about ten grand, into gold in November (gold always rises before a recession). Since then gold's gone from $420/oz to $552/oz. So that's nice, but right now I cant see an affordable house this side of 2008/9, dammit.
  7. Interesting point about BTLers taking over the market, that means the speculators are driving prices. Crash may take a bit longer but will be more severe. 1929 all over again. Ugh!
  8. You cant make too direct a comparison between the Aus and UK property market. UK prices have risen nearly twice as much as Aus in the last 5 years, so they've got a lot further to fall. The Aus market may get away wih a 'soft landing', but the UK wont.
  9. Nice one Muttley! I cracked up when I read that! Right on the nail!
  10. Of course sellers dont want to drop their prices - who would? The point is that the recession hasnt really started to bite yet so there are few sellers desperate to sell. That will change. I was is Oz a month ago staying in Venus Bay, a peninsular of holiday homes 2 hours south-east of Melbourne. Land prices there have shot up from $15k to $80k in 4 years, some plots of 500 sq m were going for $120k. But nothing's selling. On Venus Bay 1st Estate there were about 200 properties for sale compared to about 40 when I was last there 2 years ago, but although lots of sellers are selling 'cos they want to cash in on the rises, very few sellers are desperate to sell. Again, as the recession starts to bite, that will change. It's the same old cycle all over again. In '89 it was the same. There's nothing remarkable about it. Hold on to your hats folks!
  11. Thanks Bubble, I'm familiar with the term. However my point is that the new SIPPs rules make BTLs look good for high earners who may have been toying with the idea up to now. But as I said at the start of this thread, however attractive it is, it's not going to be enough to prop up the housing market which is in irreversible decline. All it will do is invite investment and a whole new batch of un-regulated mis-selling of BTLs - which is primed to be the next scandal of this administration. The tragedy is that this government, having claimed it is committed to helping FTB's get into the marketplace, has proved to everybody that it's as meaningless as their commitment to reduce congestion on the roads, or to end the "boom and bust" cycles. They're just full of crap, and now they're desperate with this flimsy effort to hold together the over-inflated consumer economy by this vain attempt to prop up the housing market with subsidised second homes for the wealthy. All projections are that this is going to cost the tax-payer £2-3bn a year. Had the chancellor decided instead to help the beleaguered younger generation of potential FTBs (like myself) with a tax break to help them get into the property market, it might actually have done some good all round. But tragically the labour party cant see past the fact that 60% of the electorate is the baby-boomers - over 50's. Hence the younger generation, already starting our adult lives with huge student debts, poor graduate job prospects, the highest level of direct taxation in British history, an inaccessable property market, AND an expectation to finance the economy to pay the pensions of the already wealthy baby-boomer generation, are now being expected to finance this huge subsidy to the rich. Maybe this whole house of cards is going to hit the floor spectacularly in this upcoming recession, or maybe we'll carry on muddling through and re-float to another boom next week. But my savings are staying in the bank!
  12. LOL Sorry to hear that. With your £40k in the bank on a crumby 3% you'll be earning about £100 a month on it, in the stockmarket you'd be getting 10-12%, £300-£400 a month. But if you had bought your property a month ago your equity would have fallen about 0.2% (that was the fall in September according to the Times), so you would have to add that into your costs for option C - a capital loss of £300 for the month. Assuming that's how things are set to continue, the total cost of option C looks more like £1050 - £1350 once you add that all together. You'd be better off buying yourself a nice big Mercedes to make all those long trips enjoyable!
  13. BTL is a fairly attractive investment in it's own right, and to a high earner thinking about BTL investments this is a 40% discount on what he would have paid for the privilege before. That's a lot of financial insulation! Plus his return on investment is tax free. Hope your pension's working out for you.
  14. Sorry Casual, but if you get a £40k tax rebate for a £100k investment, then if that asset drops in value by £35k you're still better off than if you had just paid the tax. In which case you're covered if the value falls. Please explain why that doesnt work! Also, I agreed with London Loser over the "second tax break" issue as you can see in my last post. So why are you going on about it? Best regards
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