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waferthin

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About waferthin

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  1. What blatantly obvious ramping. Though to me 2200% seems like terrible returns if that is the absolute best you could do making all the right moves for 18 years. If you magically picked the best performing stock every day for 18 years, your returns would be in the order of millions of percent.
  2. waferthin

    My Str

    Can't help but think I have missed the boat on gold, and there has to be a risk it will go the way of oil - in 2007 they were talking about $200 barrels the way people talk about $2000 ounces now. Not sure the missus would go for it, she will see it as gambling. Which it is, to an extent.
  3. waferthin

    My Str

    Just sold my house - well, SSTC, but they are cash buyers, no chain either way, so it's relatively unlikely to fall through. 3 bed terrace in a fairly nice area of Berkshire. I bought in 2006 for ~£180k. Listed it for EA valuation of £200k, in my head I expected 10% less, but thought I might get lucky. After a few weeks and a couple of viewings but no offers, we decided to drop the price. Sold for £180k two days later. Looking at Property Bee that seems to be the pattern in our area: drop ~10%, sell house instantly, though most vendors seem to wait months before twigging that they need to drop. I possibly could have dropped less and still sold, but I am glad to be out of the market - plan to rent for a while and monitor the market. The buyers are planning to rent it out. At first I thought I was "dealing with the enemy", but given that they are paying cash they are not fly by night overleveraged morons sustained by low interest rates; I got the feeling they are just a middle aged couple trying to get a decent return on their savings - though of course its entirely likely that they have such a large amount of savings after downsizing a boom inflated property. They should be able to get a decent enough yield, though given I am an HPCer, I didn't discuss my real feelings about their investment in case they decided they agreed with me! The speed with which it was snapped up after the drop did unnerve me a bit, gave me doubts, but one sale does not make a trend, and what did I want, not to sell? Need to remain resolute and be patient. Now looking for the best place to put the c.£75k equity, savings rates are pretty shocking at the moment, which also raises a tiny demon of doubt - ZIRP is a double whammy - propping up the overleveraged and punishing savers. Bit worried that if it is a slow inflation driven real-but-not-nominal crash, then I am going to be no better off than if I'd stayed put. Still, only need a fairly small nominal drop to stay ahead, so I am generally comfortable with my new position.
  4. I generally agree with the first point - size of deposit, the amount you need to borrow, your age, how long you are planning to stay in the house etc. all play a part. And of course the speed and length of the HPC - a 20% drop in a year makes it pretty much a no-brainer, but 20% over 4-5 years makes things less clear cut, and this part of the equation is largely guesswork. There's no shortcut - get out Excel, and do the calculations, work through some scenarios. You'll probably find even a moderate price fall (say 15% over 2 years) means you are better off renting, but your individual circumstances will vary this. If you do want a shortcut: 10% drop in a £200k house = £20k. If you spend less than £20k on rent waiting for that fall, you are "up". Its actually better than that, because while you are renting your deposit money can be earning interest instead of being tied up in a depreciating asset. The second point is extremely naive, unless you are fixing the mortgage for the entire term (you don't give any more detail about the mortgage). Short term affordability is not a good way to assess a house purchase. If it's any sort of variable rate, you have to take into account that we are at a historically low base rate, and you can't rely on it staying that way forever - not for the course of a typical 25 year mortgage. Sure its £900 now, cheaper than an equivalent rental, but what about when interest rates rise by 2%? 5%? 10%? £900 is the *minimum* its ever going to be. Also, if you have a small deposit, you have to consider the "equity trap" where a short term house price drop means you can't move because you have no equity to form a deposit on a new house, even for a "sideways" move - possibly even for a downsize. Renting is much more sensible if you anticipate a price drop of any significance, doubly so if your job or relationship situation is likely to change in the foreseeable future.
  5. The banks are simply returning to sensible lending levels, because they can no longer get away with securitizing the debt and passing the risk on to some other mug. Take a look at this graph of CDO issuance: Hmmm massive ramp up to 2006-2007.... I keep hearing politicians saying things like "the banks must start lending again" - they are entirely happy to lend, but on sensible levels. What the politicians mean is lending like they did in the CDO phase, but thats not going to happen. You are not going to see crazy multiples, liar loans and 100% mortgages, as its now the banks themselves that shoulder the risk.
  6. Note the weasel words "Up to", and note that they don't quote any source for the 25% claim. Could be "we asked 4 people, 1 of them got gazundered". Most likely just a made up from thin air. It is the Daily Mail after all. That aside, regardless of the percentage, any gazundering is a sign that prices are moving in the right direction, and that falling prices are entering the public consciousness; after all, if people still thought prices were going up, they would be much more likely to tell gazunderers to go stuff themselves.
  7. Professor Farnsworth: Good news everybody! Whew! Just caught up - when I started reading the thread was only 24 pages!
  8. Should you not ask for a pay cut of £51? Arbitrary cut off points are annoying - its the same with Stamp Duty, just no logic to it.
  9. I saw the title of this thread and thought "Yes, its crazy. Surely they can't keep dublin and dublin forever." Badoom tish!
  10. I think her post nicely demonstrates how utterly clueless people are when it comes to mortgages - "protecting" 3 years IO payments. She honestly believes that the money she has paid "into her house" must have gone somewhere and is slowly but surely pushing her "up the ladder". He assertion that she is a "homeowner" despite the stark financial facts demonstrates the social pressure to buy at any cost. Textbook stuff. She has locked herself in a gilded cage, and doesn't even notice the rust appearing on the bars. The fearsome thing is realising that for every one like her who posts to some forum, there are 100000 more who think just like her.
  11. Well you are forgetting that that 20% deposit will be earning you interest while you rent. Plus the money that will pay for stamp duty and fees, that will earn interest until you fork it out. And 3 years of repairs, maintenance, water rates etc that you don't pay while renting. At the end of the day its not quite as simple a calculation as it first appears, and any calculation you do involves a huge amount of guesswork (25% over 3 years.... what about if its actuall 40% over 2 years, or 20% over 4 years, or 60% over 5 years..... your guess is as good as mine), but the bottom line is that while paying rent is "money down the drain", so is sitting in a house that is losing value even faster. Your question is a little odd too - if the house is listed as £150K but you can get it for £130K then why could you not get the £112500 listed house in 3 years for ~£100K? After 3 years of drops getting a heavy discount should be easier as people will be in a panic by then.
  12. That's one of those stats where the mean value tells you very little. I doubt its everyone thinking prices will drop by 0.1% - more likely 101 people thinking they will go down 10%, and 100 muppets still thinking they will go *up* 10%. I take solace that its the "down 10%" people who might actually be able to sell their houses, and that they are at least finally outnumbering the bulls.
  13. This depresses me a little. I really thought loans like this were a thing of the past. I guess it will take some hard and fast law to stop them. The only thing that might make it vaguely reasonable would be if one of them is likely to earn a lot more in the not too distant future - £15K pa as, say, a trainee lawyer or accountant is qualitatively different to £15K pa in some dead end job. Even then it presumes a rosy picture of the future that just doesn't gel with the current state of the economy. I'd be suprised if they have £100 left each month once they wake up to the reality of maintaining their own house. Washing machine breaks down, bye bye £100. Need a new boiler, couple of grand. Still, there's always credit cards, right?!?
  14. I forgot to post here first too. Posted my situation in the "buy or rent" thread so I won't repeat it. To me, the housing bubble is like a bath where the credit tap was turned on full blast. The tap has now been almost completely turned off and the water level (prices) should be falling, but the government have been doing everything they can to block the plughole as doing anything else would see so many pulled down the hole into oblivion. Yay for metaphors! Not sure it stands up to too close an inspection, but I think it paints a realistic picture. Once the blockage (largely consisting of low interest rates) is cleared, will the water gush out though, or will it lower slowly? The difference between a crash over 1 year or 5 years is huge.
  15. This is a "hello" message as much as anything. Hello. My situation is that I bought in 2006. I knew house prices were ridiculous but was fed up with renting and had a child on the way - we moved in a couple of months before he was born. I borrowed about 3.5x salary, which has been totally manageable. Since then, my salary has just about doubled, and I'd like to upsize. I could "afford" to borrow more I'm not keen on borrowing another £100K+ just to get another 2 rooms, or a slightly nicer area or whatever. My job is also an hours drive each way, so I'd like to move closer to work. My wife is stressing a bit about moving to an area where we plan to stay long term before my son starts school in about a years time, so he does not have to make friends and then be dragged away from them. I think a house price correction is definitely on the way, I'm just not sure whether this will be a crash or a slow deflation over 5 years or so. If it was just me I'd probably sell up and rent, but not sure I want to expose my family to the renting experience unless I have to. I'm probably an overly cautious person in general. I do feel my current salary is inflated - if I lost my job I would probably not be able to get another paying what my current one does. My nightmare situation would be to borrow even a "sensible" amount (say 3.5x my salary now), then lose my job, then IR go up, then prices crash etc., but am I worrying too much? Seems my options are * sell up and rent for a couple of years. Could probably rent my "target" house for current morgage + interest on equity. i.e. upsize without buying * just wait - if prices crash then I will still be better off in terms of the difference to upsize. Potential issue if prices crash too far that my equity would no longer be a big enough deposit, though can probably save a larger deposit easily enough. * move "sideways" i.e. closer to work but to a similar house, upsize when prices drop. Seems inefficient as I would be paying 2 lots of costs (stamp duty etc) to get to my target house * bite the bullet, upsize, hope I remain earning what I do. Maybe put in lowball offers 10-20% under asking price? To be honest, I don't like *any* of my options that much! Leaning towards the sell and rent option at the moment. Any advice/opinions? Does anyone know whether its possible to get longer contract terms on a rental? My main concern about going back to renting is the possibliity of settling somewhere then being turfed out with a months notice. I'd be much happier with 3 months notice each way but don't know whether this is possible, or would at least cost more to arrange since it would differ from the standard boilerplate contract.
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