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House Price Crash Forum


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Everything posted by Goat

  1. This is typical of the economic illiteracy that pervades the left wing/trade unionists/public sector workers. The service sector jobs that you deride bring a very large amount of revenue into the country, they tend to be highly paid because of the greater value added. The lamented productive industries have declined because they can be performed much more cheaply by developing countries; to return to mass production of steel, coal and manufactured goods would require a massive cut in real wages to allow these industries to compete with China etc. The whole point about international trade is that countries specialise in areas where they have a comparative advantage (to the benefit of all countries). Finally, you seem to think that the public sector should be a job creation scheme to avoid a return to mass unemployment instead of a mechanism for providing services. If I were to get rid of most public sector workers I would have them fight for productive jobs in the same way as us poor sods in the private sector already have to do.
  2. This is at the upper end of expectations; 20-30% seems more likely however we could have a reverse bubble effect with expectations of future falls pushing the market below its true value. 30% would bring the average price down to £120,000, which is where the long term trend (up to 2000) indicates we should be.
  3. I suggest that you move out at the earliest point that your agreement allows. Depending upon whether your deposit is held by the (insolvent) landlord or by the agency you may wish to withold your last months rent to guard against the possible loss of the deposit.
  4. Yes, just, however whats at issue is the costs involved to employer. Employee leaves on maternity leave; two choices: 1. Recruit staff on temporary contract for 9 Months, agency fees cost = 15-20% of annual salary (£25,000 = say £4,000); add in the cost of training (both in supervisor and employee time) and the cost is rapidly heading towards £10,000 for the average employee. 2. Reorganise work flow, however for a small firm (say 5 employees) this means 20% more work for everybody (or a extra day per week).
  5. Not really, she is encouraging others to take the risk by betting on ever rising prices; is she gets wiped out then perhaps some of the other "investors" will take note and a bit of reason could return to the market.
  6. If that's the case then a very stiff letter to the EA's supervisor appears to be in order. Is this a sign that the pressure on EA's is so great that they are loosing the plot if a sale falls through?
  7. Or the sound of all of your worldly posessions being carted off by the bailiffs.
  8. Chav One of several excellent articles.
  9. Depending upon your part of the county, in reality that next rung is going to be much further away. If the market does go down steeply then it will take many years for recent FTBs etc to pay off the negative equity and build up enough capital to move onto the next step in the ladder.
  10. New Labour plant: I think we have a winner!
  11. Can I double check this; my contract says that I must give two months notice, I think even if it becomes a periodic tennacy. Is this line void and irrespective of the agreement only one month's notice is required from me?
  12. The slump appears to be setting in a little later than expected however the market now appears to be at (or very slightly past) the top. IMO prices have been mainly supported recently by expectations of further price rises (the bubble effect), with the indicators now heading towards zero or worse this factor is removed. If expectations move to zero then: a) BTL becomes pointless with no prospect of capital gains to offset the negative yields. The rush to be an FTB is slowed because the "now or never" factor is removed. If expectations then become negative: a) Rational buyers will factor in future capital losses into the prices they are willing to pay today. Rational sellers will accept lower prices today rather than hold onto the asset as it depreciates further. It is then possible that a reverse bubble effect could occur with reports of falling values sparking a flood from the BTL market and FTBs similarly put off, every fall pushing expectations downwards provoking greater falls. To summarise: to understand the market today you need to understand the effect of expectations on the price paid, the VIs can talk up expectations for so long but ultimately people will believe their own eyes and won't pay inflated prices in a falling market.
  13. Most mortgages seem to fall into the range of 5.5 to 6.5% (source: Charcol). Assuming that there are no falls in the price of the property (a heroic assumption in my opinion) then in this case it is just about breakeven to buy. Interestingly, from the landlords side his yield will actually be less than 6% because of service charges, repairs, agent's fees and vacant periods; frankly, if he is left with 4% he would be doing well. Once the landlords realise that there will be no further growth and combine this with the miserable returns there could well be a rush from the market, contributing to the anticipated crash.
  14. Could you afford to buy your current flat, assuming that you can't how would buying make you any better off compared to renting, you should be able to rent a much better place than you can afford to buy
  15. Double check the annual percentage rate before you finalise, some less scrupulous salesmen calculate the interest rate to give the minimum headline figure but the apr can end up much higher.
  16. More than enough blame for everybody. Seriously though, the self-certified mortgages are a scandal, as I understand it the salesmen are encouraging the applicants to lie to complete the process so that they can get their commission knowing that when the S*** hits the fan they will be long gone. I think that anything up to £50,000 can be self certified without any sort of evidence. Lieing on the application form is a criminal offence however the banks are effectively committing the same offence by encoraging it.
  17. As I regular listner to the today programme I can say that J H is IMHO totally fed up with a stream of new labour ministers appearing on the programme; lying through their teeth; he is frequently like this. What is noticable is that the GB supporters are increasingly desperate for Blair to resign as early as next year, the reason: GB has lost control of the public finances, the economy is dependent upon ever increasing public spending and in 3-4 years time (in the middle of a HPC driven recession) people will realise that he has been a disaster as chancellor. At that point he can kiss goodbye to his chances of being PM.
  18. Its easy really, buy now and watch all of your capital annihilated (possibly into negative equity) over the next two years or hold your nerve. In six months or so, with property prices beginning the slope to a 20-30% fall she will thank you. If you buy now and the crash happens you will hate her for talking you into it.
  19. I can well believe that prices in that area are low, for Scotland as a whole the average is £117,000 however, the south east (excluding London) of England averages £223,000 (per LR data via BBC). Whilst prices in Scotland still look like good value other parts of the country now look ridiculous on a pure price earnings ratio. I can see that BTL can still make money in that area however down here your BTL for £30,000 would cost £130,000 for the same £550 a month (I'm paying that and the identical house next door is on the market). It is perhaps not surprising that we hold such different views when, essentially, we are looking at totally different markets.
  20. My parents second house was bought in 1985 for £90,000, this was a slightly better than average house in a desirable area, suitable for 35-40 year olds with 4 kids, affordable for a person on a good salary at the time. Today the (similar but not totally comparable) house next door is on the market for £500,000 (down from £550,000 earlier). I simply do not accept this idea that people on good salaries have in the past have been in the same situation as today. The higher earners of our generation find themselves in a situation where even with a 5x salary mortgage they are barely able to afford a terraced house in a very poor neighbourhood. The prospect of moving into the sorts of houses in the sorts of areas where they grew up is very distant indeed because with no prospect of further price rises and high mortgage payments there is simply no hope of building up the £100-150,000 capital required. The situation is unsustainable, the only possible outcome (as capital is withdrawn by retirees to fund their retirement) is a significant fall in prices; the alternative is today's doctors/bank mangers/solicitors living (& bringing up kids) in slums for most of their lives.
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