laughing_goat

I would not give up work for 3 reasons; 1) We wouldn't be able to afford it despite the fact that Mr Goat earns a good salary. 2) My Mum gave up work to bring me up, and quite frankly it ruined her life. She had few friends, no money and found it impossible to resume her career (as a nurse, yes even short staffed hospitals). But, not wishing to get too personal, my parents slit up when I was about 9 ish and we ended up being quite poor, as my mum was forced into a series of low paid jobs (often very long hours and unsociable). So it can eventually become a false economy. 3) I say, a happy Mum is a good Mum, I would not be happy staying at home. I was a car accident about a week and a half ago, so have been at home for about a week now and am absolutely sick of it (Mr Goat is sick of me phoning him at work). I know it is different, but it is a taster. I like my job and can't wait to get back to it. I think a balance is what is required, it is unfair to say that a working mum is a bad one, but if she is continuosly working overtime then yes I agree that is not acceptable (same applies to Dad though). But I also think that a mother who never leaves her kids wth someone else isn't doing her child a favour either. I still remember that first day at playschool (I know back in the dark ages) and my Mum left me there (I cried a lot). She needed to do it if she wanted me to eventually stand on my own two feet and form opinions based on the views other rather than just those held by my parents. I have issues with people who think societies problems are due to working Mums (hopefully we have moved on from the dark ages), most of the Chavs in my area are from families where at least 1 parent doesn't work, yet they are still hooligans and they still hang around causing trouble (BTW I don't think this is because their parents don't work).

I vaguely remember this idea being discussed in the 80's just before the last crash. I think there was a documentary (or series of documentaries) about it. I was a teenager at the time (more interested in boys than houses), so I didn't pay too much attention to it. I think there were people being fixed together by an agency (or the TV programme). Do any of our more senior members remember this at all?

LL, I think you get a hard time on this forum, largely undeservedly and I think it is harsh that you have been labelled a troll. But sometimes you really don't help yourself. On numerous occasions you have made statements that the HPI will rise again, when asked for evidence you provide reasons that can only be described as assumsions, one I have heard often is city bonuses. No one really knows what city bonuses will be until they get them, but many of my friends who work in the city are not expecting much, this sounds sensible when you consider many companies have issued profit warnings this year. So arguements used for price rises based on the assumsion that city bonuses are going to be high seemed flawed to me. If you could provide me with evidence, I would listen (read) though. I 'want' a crash to happen so I don't have to find that extra £90,000 for a half decent home, I 'think' with an economic upset such as public sector job cuts (or tax rises which could cause private sector job cuts), council tax and utility bill rises it 'could' happen. Many in this country have got themselves into so much debt that IMO it wouldn't take a huge rise in bills to start seeing forced sales apear in larger numbers. This is what I 'think' based on the evidence above, I cannot be sure this will happen, just like you cannot be sure HPI will rise by 5% a year. However, the statement quoted above suggests you 'know' this will happen, but you offer no evidence. This is why many on this thread are taking issue with your post. LG

Yet again Elizabeth, you put it beautifully. I think your point about paying 20-25% over the odds is a good one. I'd also like to add that 'the Colour' said he would pay it if he had it. This is unrealistic in my view, if I were a millionaire then yes I would probably have no issue with the cost of a house. Sadly, most of us (even the STR's) are not walking cash points. Also, the higher you move up the ladder, the more 20-25% is in money terms, see details below; 25% of £100,000 is £25,000 25% of £350,000 is £87,500 25% of £600,000 is £150,000 Most people wanting to buy a family home in the South East would be looking at around £350,000, 25% of that is nearly £90,000. My point is that yes we would probably all be homeowners how if money were no object, but even for the STRs this is not the case. Most of us are here because we cannot justify or afford to mearly give away an extra £90,000 for a property.

A lot of STRs on here have not sold for financial reasons, some have moved job, some have moved in with partners (like me). My partner has never owned a home, but I used to own a small studio flat, so I can bearly be described as an STR (I suppose). Many STRs are looking to reduce their mortgage, but many also needed to move to a larger home (kids, etc) and cannot afford to buy one so rent one instead. Ultimately we are all looking to pay a reasonable price for a home, rather than todays inflated prices. We all work hard for our money and don't want to just give it away. Myself and Mr Goat could buy now, but we would not be able to buy a home big enough to have a family in. I fear that if I bought now I would be in trouble 5 or so years down the line when I needed a bigger one. Also, with low rents I am able to save huge amounts each month. Also, I feel my situation would be no different if I had kept my flat as the money I would need to raise to move up the ladder would have been massive. However, I think this isn't nessesarily mean we don't want the same things. I agree there are some speculators (which is by no means a bad thing, I quite admire them), but most of us STRs and FTBs are concerned about overstretching ourselves with stupidly large mortgages.

I live in Hertfordshire and this senario is becoming very common, infact the house we rent now was originally up for sale and we got a huge reduction on the rental asking price (originally £1200pcm, we rent for £800pcm). Usually, you will see the properties on the market for anything from a month or two to over a year, then they will advertise it to rent as well, the rent always works out much cheaper than the mortgage. There's a bit of a glut of both places available to buy and rent at the moment, so these properties usually stay advertised for months until the owner either gives up completely or drastically drops the price (for both rental and sale). There are an awful lot of people around here looking to retire to a cheaper part of the country, so it generally makes no difference to them if they sell or rent their Herts property.

This might sound stupid but does it have something to do with the popularity of the English language? If you were, say, from an eastern European country and you wanted to go and work in a Western European country, where would you more easily get a job? In the Netherlands where they speak a language you probably haven't been taught or the UK where they speak English (the language of the internet)? Also, I believe a lot of people come to live here for a few years so they can improve their English. Could this have something to do with HPI being inflated here? On another point, what is the personal debt levels in the Netherlands? (If anyone knows)

LL, I don't blame you for being irritated, I would be too. I'm sure there are many people on here who also feel the same way. I too was called a troll by someone who didn't like something I said (I think I said an EA was within his rights to chuck out a seller who had pulled out of a sale). It seems to me that some people on here don't want debate. I am terrible at making up my mind about things and value hearing both sides of the story, especially in a debate. I must admit it is nice to talk to like minded people, but there's nothing more boring and uninformative than a group of people with no one to question/challenge them. I have seen trolls on here but they are rare and they usually only post once and mainly anonomously in the blogs. There posts usually consist of how we are all sad and have nothing better to do that talk about HP's, then they trott back to their forum on some reality TV show. You are definately not in this catagory. So chin up and keep posting! LG P.S. I can't see how the HPI will pick up again in Jan, I guess we will just have to wait and see.

Joe Bloggs is way too busy with his new kitchen!

Hi London Landlady, I'm not sure if you have had this question already (if you have I apologise), but, what do you think will cause property to rise again? I know about the arguements regarding SIPPs (I don't know if that is your reasoning) but I am unsure SIPPs will be that popular with anyone other than cash buyers, I have a friend who has a reasonably senior job in a bank (no not senior counter dolly, head of a region) who tells me that there would be few sensible banks willing to lend for such investments as they can loss the right to repossess the property as it is technically out of there hands when part of a SIPP. If they did lend for SIPP properties, they would probably require the loan to be sucured against another home. For instance, if someone bought a BTL and put it in a SIPP, the loan would need to be secured against the BTLers home or another BTL property (if they have one). As I see things (with my rather dodgy glasses), IR's are unlikely to drop, especially with EU IR warnings and the US IR's continuing to rise. While IR's are so low, even small rises make huge differences to the mortgage payer. I don't think there will be a crash without 'something' happening, but it wouldn't take a big 'something' and there are many things on the verge of happening (IR's up, utility bill rises, council tax rises, job loses). I live in the South East and have many friends who work in the city who know there bonuses are going to be small this year, they tell me this is usually an indication of job losses, and some are being transfered abroad (this seems to be a trend now, esp. at Reuters). There have also been job losses at my firm I'd prefer not to say where I work, but lets just say it is for a service based company. I would be interested to know your thoughts. By the way, what did you do to get the title Troll? If it helps, I have never thought of you as anything other than someone with a slightly different view to me, I don't think that makes you a Troll. IMHO we need people like you and TTRTR to keep the debate alive, so I'm glad you aren't put off by this label. LG

I think that people generally act the same as current running through a copper wire. They always take the easiest route 'available'. Take your average person (lets call him Joe), his kitchen is knackered, it's still usable but the tiles are coming off the walls and the unit doors are falling off. His possibilities are; 1) Live with existing kitchen (maybe patch up the tiles). 2) Save money to buy kitchen and install, 3) Get a loan to cover buying and installing a new kitchen. Numbers 1 and 2, (IMO) would have been the norm in mid/late 70's, the economy was in a poor state, banks would not lend money willy nilly and to some extent there was a stigma attached to loans. So Joe would have little option but to save the money to get a kitchen. Even then he probably would have had more urgent things to spend his money on than a new kitchen and therefore may decide to live with the existing one. Number 3, (again IMO) would happen now, IR's are low (IMO artificially) so banks will lend pretty much without question. Also, (most banks) use heavy direct marketing and TV adverts to push loans for home improvements and luxury items, so they are very available and certainly don't have the stigma attached to them that they used to. My point is that the easiest route to what he 'wants' and his financial priorities have changed dramatically over the last 25 years. The average Joe on the street probably doesn't even follow BOE interest rates, let alone know what rate they pay on their loan. If the money is available then he will more than likely take it, IMO the average Joe does not think about how he will afford the repayments, or for how long he will have to make those repayments. When banks are forced to start tightening up on lending criteria and people are forced to save to get what they need (nevermind what they want) then the Great British public will start saving and/or cutting back again. I'm unsure what will force the banks to tighten up lending criteria. I suppose it will be increases in people defaulting on loans, this trend of people going to court to get their loans written off should also be a factor. I think HP are the same as the kitchen loan (just bigger), over the last few years, saving for a house has ment you have missed the boat as HPI has outstripped savings and mortgage loans are very easy to come by (just think 10 years ago, could you get a 100% mortgage from a high street bank?). When (OK, if) mortgages are harder to comeby people will have to save to move up the ladder and the chances are they will be saving for something more pressing than a bigger house (like the repayments on an existing house).

I know of people who are buying a new house but not selling their old place (renting it out, usually to the local authority). They have managed to get (effectively) a 100% mortgage based on the earnings in rent they get. This works fine if they have a lots of equity, but I can't see how it could work if they didn't as they would be paying a huge mortgage. A lot of them have also done some very dubious sums to calculate the profit they will make over 25 years. It does go to show how the banks are still lending irresponsibly. This is why I think there needs to be some sort of catalist to cause a crash. Due to large levels of debt, it doesn't need to be anything spectaular though, rises in bills and taxes could easily cause it. If there is anything people in this country are poor at doing, it's planning for the 'rainy day'.

I too am unaware of the arguements on the previous threads. I think your post holds a lot of water. It's high time someone pointed out the reality of what the situation is.

To further add to Marina's post, I can't see how either HP and rents are sustainable. Again a little anecdotal but I have noticed both Hp and rents dropping in areas of the south east. Many homes that don't sell get turned into buy to lets by the owners and most are still not getting let (the house I rent now was originally for sale for over a year, also the rent was dropped by 40% before I agreed to move in). At the moment there is nothing (on a major scale) to force people to have to sell. However, the longer stagnation continues the more likely a crash will be as consumer spending will be channeled into servicing mortgages for houses they can't sell (unless they drop the price), meaning that the high street, manufacturing and service industries will be forced to make cut backs as their income slips away from them. This doesn't even consider the rising cost of fuel, pensions or council taxes.

I've just remembered something else about this house. It didn't have a 'For Sale' sign up (don't know why it had been on the market ages), even so, we spotted it straight away. It had 4 of those silly little tree's in pots outside (Bonzi, tree's I think). I believe the House Doctor is to blame for this!

Myself and Mr Goat viewed a house about 1 year ago, it was priced at £25,000 over all the others on the street (you might ask why I viewed it? we thought we could knock the price down), when I asked the agent why, they said it had had extensive home improvements to a high standard and it had possibilities for extension. Anyway, on viewing it we discovered the couple living there (early/mid 20's) had decorated very much to their own taste (grey and white tiled floor throughout, even upstairs). They were very proud of their B&Q kitchen (it was OK, but nothing special) unfortunately the guy had tried to fit it himself and made a very poor job of it (gaps in the worksurface, poorly fitted cupboard doors, etc). They told us we could build an extention on the back of the house but this was obviously not possible (due to the shape of the house and garden). We didn't tackle the vendors about any of this, instead remaining quiet about the defects. The next day the EA phoned and asked for our views. When I told him that it would cost me a fortune to put the house right and I was annoyed about having my time wasted over an extension that obviously couldn't happen, to my astonisment, he agreed. He told me that they've had 4 viewings and the same comments have come back from each (all usually angry at having there time wasted). Is it just me, or does this seem mad?

I'm all for optimism but I don't think factory inflation is the major problem in this case. http://news.bbc.co.uk/1/hi/business/4435016.stm

This is my arguement too, if it was cost of renting didn't make sense, then yes, she might have a point. But at the moment you probably pay less in rent than you do on the interest of a mortgage. My Dad has used the SIPPs arguement with me, I told him SIPPS were getting a bad press and would eventually come unstuck as you effectively give up ownership when you put your property into one.

I think we need some IR rises next year, I don't think an IR at 4.5% will do much to HPI. Hopefully they will be at least 5%.

Apom, This is a gem of a find. I've always thought he's had a hard time as an economist. Lets hope he remains in the BOE top job for sometime. LG

Hi again, This is going to have to be my last post to day as I have to go to work in about 10 mins (it took me about 5 mins to type all that!). Thanks for the positive response. The LA areas in the St Albans areas are definately close behind the non-LA areas in price. I agree some are nice (and therefore more expensive). I think it's also important to mention that I am generally frustrated with people who are defeatest (this has no reference to anything london landlady has said). You know the kind, I can't do this, I can't get that. I have seen that if you work hard enough and are sensible, you can get/do most things. I know many people like this and it drives me mad. However, in the case of the housing ladder, I am stumped. I am 31, I earn a good Salary (so does Mr Goat), we have worked our way out of student debt and saved heavily. I have lived mainly in rented accomodation in many parts of the UK over the last 10 years. We could get a mortgage to buy a house, but cannot justify it. If we bought a 3/4 bed house now at the present prices we would need to have a mortgage of more than 3.5 times our joint salary (over £270,000), if IR went up even just a little we would struggle to pay, if I had a baby (that is the point of the 3/4 bed house) we would struggle to pay. If we bought a 2 bed place (1 bed plus box room) we could afford the payments easily, but would need to move within 5 years and I think we would struggle to sell. Financially, we are far better off renting as the rent we pay is far less than an IO mortgage on a 2 bed place. So this is a good solution for us, for now, I would like to own my own house but it doesn't make sense at the moment. However, not everyone is as lucky financially as me, I have friends who live in the same area as me (my age) who earn £20,000 and have no choice but to rent and have little option to save for either a house or a pension. This is why I think this website is so popular, there is genuinely no way some people can buy a home at these prices without using a (IMO) dodgy goverment scheme. This is why I think these prices cannot be sustained. Crickey, I'm late. Must go. Bye, LG

I'm sorry but I can't really agree with you there. The council 'stigma' is more to do with areas associated with unruley kids (Chav's), than a few council flats in a new developement. I (and many of my friends) have lived in these areas and had cars broken into (mine was stolen too), windows smashed, mugged etc. I will not live there again unless I absolutely have to. In the case of new builds with there housing assoc allocation, you will find that the houses sold have a mark up to cover the cost of the HA allocation, or in the case of flats the leaseholders have to pay more to cover the cost of the council tennents. My friend had this when the freeholder wanted to replace the communal windows and doors, there were 6 flats and only 3 were leasehold, these three had to pay all the costs, £7,000 each. Please forgive me if it seems like I am picking on you a bit today London Landlady (I hope it doesn't come across that way), but some of your comments on this and other threads today, although obviously well intensioned, do seem a little nieve.

I can see what you're trying to say, but in most cases that isn't an option. When I left uni, I had to move to London to get a job (I come from North Wales), with no family close by (and student debt) my only option was to rent. This is the case for 90%+ of Graduates I work with, if they want a job they must move to a big city (usually London). I know you are going to suggest I should have got a 100% mortgage, but I don't believe you could have got one from a reputable lender in 1995 (when I moved to London). Just thinl, only 10 years ago the idea of getting a 100% mortgage was seen as stupid, now it's the norm.

Mine and Mr Goat household income is over 80K combined and we have deposit of over £100,000, yet we cannot afford a home big enough to bring up a family in. If you live in the South East you need much more money than this. I do know people who have bought yet earn less than we do, but a £380,000 mortgage (yes, mortgage!) is taking things too far IMHO. I also am aware I could buy an ex-local authority place (no comment required). So, yes I could buy if I was desperate, but my god I can't ever see us being that desperate! Another bitter Engineer!

I know a few people who have done this and sadly it has always (without fail) ended in disaster. In one case there were 2 girls who were best friend from childhood but now no longer speak to each other. Some problems are due to one or the other not cleaning up, but in the case I mention above, it was when one wanted to move out. The other one couldn't afford to buy her out and had to move back with her parents. Towards the end they would only speak through solicitors even though they lived in the same flat! Others have had problems with their joint owner not paying bills, some found the intrusion of each other parents a problem (remember most are young FTBers), some fell out over decor, in one case a joint owner was stealing from his house mate. Sharing with a friend in a rented place is very flexible but buying together requires financial cooperation should the other want to move on. When you rent you can simply just move on and 'relatively' easily sort out the financial part and put the loss down to experience, but if for example, your flat mate isn't paying their half of the mortgage, you could end up loosing everything. They all have the same thing in common though, they all went disatrously wrong.