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Van

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Posts posted by Van

  1. 3 minutes ago, simon2 said:

    Over 30% off in Westminster:

    https://www.rightmove.co.uk/properties/106615115#/floorplan?activePlan=1&channel=RES_BUY

    Probably a perennial lack of light due to being in the basement, but I would think at a discount to others in the area. For a young person probably better value than paying the £450k for new builds in outer zones. 

    clearly not everything is on the ad here, as 550k for that flat in that location is way too cheap by usual. It's almost certainly a leasehold property with very short amount of time left on the lease.

  2. TBH Good on them.

    They're overcommitting to a overpriced house, but they are doing it on their own terms with their eyes wide open. 

    They're not basing their future prospects on the hope of ever increasing house prices and are living within their means, so I wish them well.

  3. Hello HPC. Haven't really posted here for yonks, but just thought I would share the anecdote about friends who have just been hit with a roof-repair bill on their ex-council flat in the region of £30k. Didn't see that one coming.

    They should be fine. They're fairly minted and they have plenty of equity. But just goes to show you that the house-owning dream sometimes isn't all its cracked up to be.

  4. Without wage inflation, workers suffer and get robbed just the same.

    Ponzi scheme over. Just the same result.

    People are learning a hard lesson here that wages do no always automatically outstrip inflation. If they did then there would be no recessions, no need to ever reevaluate your spending or to cut back. Sometimes you have to batton down the hatches, economize and wait for better times. Do you think wages were always growing faster than prices during the inflationary peaks of the 70's or 80's?

  5. Oooops, sorry, my mistake, I meant nominal terms.

    I am not confident in the long term value of Sterling, which is why half of my cash is in Euros, bought in 2007 at 1.5 EUR to 1.0 GBP.

    So just like the BTL brigade who confidently predicted all their 2Br hovels would be worth £1m by 2012, you are waiting for a boat that will never arrive.

  6. Similar view here, the only difference is that I think we are still very interest rate sensitive. A new leadership with an "inflation is bad" view or a major economic event such as widespread sovereign defaults can still cause a big change in nominal prices.

    Agreed, but I can see ZIRP lasting longer than any of us believe, as it is now clear that UK (and global) policy is to keep negative real rates and the ones who will really suffer in all this will be savers who will see their savings eroded in the years ahead. That is very unfair on savers, but it is the way it is.

    Another spurt in unemployment (to 3m+) also has the potential to speed up the crash, but here I see that the picture is improving and the private sector is at the moment easily coping with the public sector redundancies. So here again the situation is improving rather than deteriorating, which lends support to sustaining prices at these levels.

  7. Do you expect less than 20% UK HP fall in 2 years?

    Yes I do; I've said before that we are much closer to a nominal bottom than people think. Prices will not fall more than -10% (as measured by Halifax/Nationwide) from their current level, and inflation over the next 3-5 years will do the rest to bring the prices back into line with the long term trend.

    I've been on HPC since day 1 and on the FT forum before that, and I can tell you that I was uber-bearish when it was called for (2005-2007) but as the market has deflated somewhat I now stand against the majority of the HPC view. I will be reminding the perma-bears of my predictions in a 1, 2 and 3 years' time when they are still waiting for the big falls that they have pinned their hopes on.

    People expecting prices to fall back to a bottom of x2.5 average salary like we saw in 1996 are waiting for a boat that will never arrive.

  8. Quick math:

    200K HOUSE

    50K DEPOSIT

    4% MORTGAGE

    25 YRS

    AFTER 5 YEARS:

    130,657 REMAINING

    47,520 PAID

    Wait 2 years:

    160K HOUSE

    50K DEPOSIT

    7% MORTGAGE

    25 YRS

    AFTER 5 YEARS:

    100,278 REMAINING

    46,620 PAID

    +~15,000 rent

    -~3,000 capital interest

    ==

    All well and good... if you are certain that house prices will fall 20% over the next 2 years.

    Bear in mind that this is roughly the same as the peak of the Halifax index to where we are now, and that took 4 years, a credit-crunch, and 5%+ rates.

  9. So how can we be near a nominal low, if real wages continue to fall and the lending taps are not switched back on again?

    Because the group that the Govt/BoE have chosen to shaft this time round are savers - by keeping IRs low, so debt payments are manageable and even comfortable. If you have cash sitting in the bank then you are the real loser in all this.

    Without a rise in IRs or a big jump in unemployment we will not get the forced sales that will cause a bigger slide. That is the reality of what is happening, rightly or wrongly.

  10. So, right on course for the 3-year-grind that I've been predicting then. Nominal falls will not reach double figures again. They probably will not even reach -5%. We are much close to a nominal low than most people here believe. It's all about inflation doing the real work now - unfortunately this won't make anyone richer as real wages continue to fall.

  11. This sort of behaviour is not acceptable.

    EAs are obliged to pass on all offers that are put in writing (unless it falls short of a certain threshold, or some other similar instruction by the vendor), so remind them of this the next time, and tell them that you will make the offer directly to the vendor unless they do so.

    If you don't use the EA's FA services they are still obliged to treat you fairly and are in fact in breach of their code of practice if they do not do so.

  12. The same thing happened to us. The frustrating thing is that they won't tell you WHY it's failed.

    We both had clean-as-a-whistle credit records and credit-ratings of 850+ from experian, but were turned down by both ING and Nationwide. Frustratingly these searches then shows on your credit record.

    We finally got approval from Halifax - also the good thing about Halifax is their online application uses an "soft" search feature, so it won't show on your credit record until you then acutally print and send off the forms to apply (according to our mortgage broker).

    We deduced that the only reason we were turned down from the other lenders was probably that one or both of us didn't have enough credit history (which is ludicrous, of course). We never needed credit because we were sensible to pay cash for most things. The system is FUBARed when the lenders rely on these credit rating agencies with instead and some arbitary score/lending criteria.

  13. As has been said many times on here, if you have inflation without wage increases, then house prices will crash.

    If you get high inflation with equivalent wage increases, then interest rates will rise, and we are going to get a crash in house prices in real terms.

    The only way we will have house prices staying static is if we get wage increases, and low inflation. Do you think that's likely...?

    And as I have said many times, wages will catch up once the inflationary cycle has peaked - company will find their costs are no longer squeezed, and workers will push for higher wages after a period of falling real wages.

  14. For a few months I have been saying 7-8% by year end. This thread gives me the opportunity to re-visit that assertion. I am going to ignore the way these orgs do their YoY and my figures are based on comparing the same calendar month 12 months apart.

    The first thing to note is that they are diverging.

    In the 3 months Jan - April, Halifax is down 3.5% but nationwide is up 2.3% in the same period. as such, they have to be treated seperately, rather than expecting them to perform in the same manner.

    Looking at the Halifax figures, their bottom Apr 09 was £155k. April 2010 was £168,202. April 2011 £160395.

    The annual rate to April is is -4.6%. A figure of -4.6 by year end would leave us a smidge under the April 2009 low! I'll happily take that, but I'm, going to stick my neck out and say £152k which would be -6.1%.

    And now, what do I think the Nationwide will do........

    +5.8%!!! Just ahead of RPI and best of all tax free!!!!! You cant go wrong with bricks and mortar!!! :)

    They both measure the same thing - house prices. How can you expect one to continue going down, and the other to continue going up? It ain't gonna happen. Look back historically to see how closely they follow each other. The last quarter divergence is nothing more than a blip.

  15. Down no more than 3% for the rest of the year as measured by Halifax/Nationwide May not sound a lot but that *is* crash-cruise speed when inflation is factored in.

    The market will continue to be supported in nominal terms by ongoing ZIRP and strong rents.

    I have said it before that I think we are closer to a nominal bottom than many people here think. This HPC is now 4 years in the making. We have had the period of large nominal falls in the first 2 years, a bounce, and now we are beginning the period of the long grind down where the adjustment will be done mainly through inflation with small nominal falls to help it along.

    2nd-half 2011: -3% nominal, -5% real.

    2012 : -3% nominal, -7% real.

    2013 -2% nominal, -5% real.

    2014: flat nominal, -3% real

    Total: -19% over the next 3.5 years that will give us our "50% drop in real terms" from peak.

  16. This little beaut has been on the market for just over a year now.

    http://www.rightmove.co.uk/property-for-sale/property-28670072.html

    265k -> 205k.

    It's this less-than-prime properties that are losing most value, yet because of the way Rightmove & calculates their index reduced asking prices are never factored in, and of course because it can't find a buyer it will never make it as far as RICS/Halifax/NW/LR.

    Attached the Property Bee history.

    ScreenHunter_01 Jun. 17 13.58.gif

    post-31-0-71225800-1308315525_thumb.gif

  17. Cash buyer only. It's a leasehold, Hamptons don't seem to think declaring the number of years left on the lease is relevant?

    The flat is above a shop. At the moment it is almost impossible to get a mortgage on such a property, which is probably why it's going to auction.

    Between Jan - March I relentlessly search for app sub-300k properties with a S or SW postcode, so I know the state of the market pretty well. Asking prices in Jan/Feb were pretty soft, but they picked up again over Spring. Now that bounce is over it seems we are slowly grinding back down again. There are a lot of awful ex-council places available at cheaper prices, but whether you could tolerate living there is another matter. The properties that are in good condition and well priced are fiercely contested by buyers in a position to do so, but in this market no one wants to pay top dollar. The 250k stamp duty band is a real killer - lots of 1br and 2br flats are affected by this.

  18. Cash buyer only. It's a leasehold, Hamptons don't seem to think declaring the number of years left on the lease is relevant?

    The flat is above a shop. At the moment it is almost impossible to get a mortgage on such a property, which is probably why it's going to auction.

    Between Jan - March I relentlessly search for app sub-300k properties with a S or SW postcode, so I know the state of the market pretty well. Asking prices in Jan/Feb were pretty soft, but they picked up again over Spring. Now that bounce is over it seems we are slowly grinding back down again. There are a lot of awful ex-council places available at cheaper prices, but whether you could tolerate living there is another matter. The properties that are in good condition and well priced are fiercely contested by buyers in a position to do so, but in this market no one wants to pay top dollar. The 250k stamp duty band is a real killer - lots of 1br and 2br flats are affected by this.

  19. Not sure about that. I would have to pay 2 grand in moving costs (lots of stuff) and then 4% stamp duty and probably a load to solicitors as well.

    To be balanced about the moving cost, I would also have to pay that if the LL turfed us out.

    Edit to add: Are these deals fee free?

    Fair enough, but someone else might only have to pay £1k in costs and 0% stamp duty.

    Yeah, there are fees, typically £1k. Still cheap, though.

    Example: the flat I've bought can rent out for £1200pcm. I got it for £250k with a 25% deposit with a 3.89% rate (no fee), which works out as £976pcm on repayment, of which £607 is interest. So over the 2 years of my fixed rate I'll pay a total of about £14,000 in interest, vs £28,800 if I was renting, so I save £14,800.

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