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Posts posted by Bemused

  1. A few years ago my parents inherited a 3 bed house in a zone 4 London suburb which they have rented out for some time. However for various reasons they are now thinking of selling it. I would estimate the current selling price to be around £300k, though it hasn't been valued yet. They are keen to help me get my own place, and have discussed the possibility of selling it and 'lending' me enough to buy a flat of my own nearer where I work in zone 2.

    Before I discovered HPC I would have jumped at the chance, but now I am not so sure. I do not wish to appear ungrateful but this raises a couple of questions:

    1. Will I be complicit in propping up the crazy London market? I am pretty sure that a lot of people of my age can only afford property because of things like this - eg a friend of colleague was given £400k by her parents to buy a flat in Hackney! Is this kind of thing keeping the madness going, or are there other forces at work?

    2. Would it be better to thank mother and father, but advise them to put their money in a high interest account and I will take a 'rain check' for a couple of years to see what the market does - I just don't really like the idea of being indebted to my parents for that much money, although their view is it is better to borrow from them than from a bank.

    3. Would it be better to offer to become a tenant in the existing house? It's not really suitable for me as it is too large for one person, needs a lot of work and would mean a long commute, but I would be paying a below-market rent.

    Any advice welcome!

    If they are keen to help you out maybe you could buy the house and be a live in landlord to help cover the mortgage payments?

    pay them back monthly from the other tenants rents

    If a few years down you need your own place maybe you could sell it and buy flats - or convert it into 2 flats and let one to cover your own payments

  2. -Retail sales have picked up

    -Crude oil (hence transport fuel) is on the way back up

    -CPI is up 12.5% is one month (2.4 to 2.7%)

    -Stock market and bonuses are at record levels

    -RPI is nearly at 4% resulting in likely inflation busting pay deals

    -Rampant HPI is London and the South East, now rippling out to the rest of the country

    -Record secured lending levels

    -Everything I seem to be buying (except electronics) seems to have rapid price increases

    -Train fares, council tax all up by 5-6%

    -My wife pays £45 for a bog standard haircut these days and then leaves a £5 tip (To balance this inflation effect, I have a DIY job at home with my own clippers).

    Please add some more that I haven't though of.

    I reckon we'll see two IR rises in the first quarter (if not the first two months)

    They will do what they usually do debate all the above, waffle about the US slowdown and all the poor ole retailers it will affect and then decide to keep rates on hold.

  3. I quite agree, and it isn't a trick that we'll be able to pull off a second time. But does that mean it would have been better to take no action and watch our economy nose-dive?

    A crash will come, but the question is when. Five years, ten maybe? What level will prices return to?

    Ah this is the key issue alongside what level of inflation will be prevailant

  4. Are you sure about that RB? I'm not disputing that there have been Shia death squads but all the info I've seen shows that it's the Sunni's who've been deliberately attacking Shia civillians at markets and mosques.

    The Grand Ayatollah al-Sistani has managed to restrain his people so far in the face of extreme provacation. The Sunni's deliberately targeted the Imam Ali Shrine Shia Islams most holy place. They have attacked many religious services. I personally think the Shias have generally shown restraint (not that I'm in anyway condoning the Shia Death and torture squads that have been operating).

    Strange how the unprecendted **** up in Iraq is now all the fault of Iran is it not?

  5. IMO interest rates will be a lot higher by the end of next year (over 6% wait & see) & it won't take very high rates this time to end it all, due to the height & width of that money bubble :blink:

    I am not so sure, but hope you are right. Buying is my last resort to help my savings keep pace with inflation

    there will be no shortage of house when the BTL's run for the hills, some of them are running now :lol:

    take a look through your local property mag, loads of "no chain" "reduced" "vacant possession" "stamp duty paid" "new this week" I have read my local property paper every week since time began, I can see significant changes happening right now B)

    Unfortunately not so in my neck of the woods - if rates went to 6% probably.

  6. so define "some way to no-where near 50%" then please :ph34r:

    ps - you seem to be getting angry...why ? after all this is healthy debait, just because we don't totally agree doesn't mean we have to end up in a slagging match. My replies/humour take a bit of getting used to, but that's why I use smilies :)

    I get grouchy with HPC as there is a very blinkered perspective here.

    Without rates hitting 6.5 - 7% (unlikely) or a big recession (possible) prices are very unlikely to halve overnight

    Its very hard to generalise as there will be big differences in the type and location of the property ("shortage" homes - eg family home good area, good schools and new build city centre flats for example) but I can see the regions sobering up to the fact the market is unsustainable and prices dropping. Without an external stimulus though I do not think it will be a rapid affair.

    It could taken 2/3 years and then stagnate whilst inflationary pressures build.

  7. yes, of course ;)

    the second bolded bit.........so you think that HPI with go yoy negative in 2007 ......so what do you think this will cause then? :P or is it different this time, the first time in history that the market will just stagnate for 10 years or so :lol:

    Oh god I forgot how frustrating posting here was compared to theotherplace.com (edit i can not believe that fubra have cencored a competitors website - what does that say about this place!!!)

    Yes I think HPI will go Y-O-Y negative by end 2007

    Yes I think house prices are overvalued

    Yes I think were in a bubble

    Yes I think there will be a correction

    Yes I think it will start in the regions this time not in London

    Yes I think interest rates will rise but nowhere near enough to keep pace with inflation (edit BOE on the day of the largest rise in mortgage borrowing at the tail end of a huge boom keep rates on hold)

    Yes I think sterling will be devalued alongside the dollar

    Yes I think prices will fall but not by anything like 50% (without huge IR increases or a severe global recession)

    Yes I believe lax money supply and accomodative interest rates are here to stay in the the short to medium term

    This leads me to believe that although property is overvalued and likely to fall some way it may be a better inflation hedge than money in the bank. i would rather own property "worth" 300K that falls by 60K and then stagnates for 4 years or so in a high inflation environment than have cash festering in a bank losing its real worth as inflation rages in the wider economy.

    I can not see the future just keeping my mind open so I can gauge the situation as it unfolds.

  8. so we have had another 2 years (almost) of hpi & general inflation, yet you would consider buying in 2007 even though you state that a "healthy correction" should have occurred in 2005.....what sort of correction will it be next year then..... :lol:

    IMO the peak for most parts of the North in certain property categories (detached for example) was 2005.......I am seeing the same houses selling now from 2005....some even cheaper than over a year ago.

    The problem is that if you live in Londinium or South East, you are not seeing what is happening to the rest of the country.

    I see you have skimmed the post and picked out the bits you want to support your arguament - have you been to realistbear school of posting?

    Prior to 2005 a drop looked possible. Since then in my neck of the woods property has rocked to around 50-70K increase. By next year it is likely to increase by another 10-20K.

    It will take one hell of a crash to knock 80K off property in the short term (1 -2 years), unless you are talking protracted falls over several years (which if inflation carries on as it is would decimate savings).

    No I am not in the South East or London

    Read the posts I have made.

    I have already stated that HPI will go Y-O-Y negative in the UK in 2007 dragged down by the regions so the North and North East could well lead the way.

    I have also said I will consider buying if the BOE do not raise rates significantly as INFLATION and a DEVALUATION of £ sterling are far more IMMEDIATE threads to to my current situation that a crash in house prices

  9. Or maybe, just maybe, there aren't as many buyers as we are led to believe...

    Cant comment on the whole country obviously but in the markets I am familiar with London, Bristol and Surrey things are still booming. I really don't buy this whole conspiracy stuff. Obviously the figures are distorted by the obscene costs of and scramble for properties in prosperous areas, but the BBC et al are not involved in some enormous conspiracy headed by Gordon Brown and backed by the mysterious forces in the US as some of the nut jobs here seem to imply.

  10. Do you ever ask yourself how these people buying are affording it?


    they are either streaching themselves to the limit on any number of stupid mortgage "deals " that are available and commiting themselves to a life of servitude and praying rates never exceed 6% in their lifetime - or cashing in on previous huge gains made in property and taking advantage of very low interest rates.

  11. I am 110% bear but next year by quarter 2 if there has been more IR but HP continues to rise I am buying.

    I remember the last crash well and it was over about 4 years and that was caused by double miras creating a bubble,the crash happened in slow motion then.One of the first things BS's did was announce you could take your negative equity with you.

    Now a lot of areas are stagnating but not falling and certainly not showing any signs of a crash.So if the crash were to start today and achieve the falls that I want to see (30%)it would take at least 5 years.

    The problem I have got is that Im 47 and would just about get a 20year mortgage,if I wait a few more years any mortgage I take will be vastly more expensive than renting.

    I agree that personal debt will play a big part in any downturn in the market but all the time lending is lax and people have equity personal debt can be absorbed into their property.

    So I will be looking to buy at auction and watching the local press for those repo adds.

    Ahh refreshing an open mind on HPC!

    I am of similar sentiments but for slightly different reasons. I will be keeping a close eye on what the BOE does and may have to buy as well (maybe not in the UK) this will grieve me no end.

  12. Well, don't look at the BBC if you want anything objective, or the Daily MAil or Daily Express or indeed any report from the CML, NAEA, Haliwide, RICS or any other VI.

    Could it be that *shock*horror* people really are still buying property?

    Go on shout bull, awooga, VI, sheeple, but in my neck of the woods property has been going up steadily. It will continue early next year . If rates dont keep rising in response I will buy (though not nececarily in the UK).

  13. so tell me "why is it different this time" then :D

    Prior to the disasterous decision by the BOE to lower rates in 2005 a healthy correction would have occured. Since then inflation has been growing yet rates are not increasing. (EDIT - significantly). One safe haven is housing. It's stupidly overpriced but in time of high inflation "safer" than cash in the bank.

    It seems to me that Japan has some time to go (maybe 2 years plus) before they raise rates sufficiently to end the carry trade. Lenders are not "tightening lending criteria" - if anything they are getting more lax.

    Inflation is being masked in the UK and rates are not being put up sufficiently to curb borrowing

    To reverse HPI you need the above to change. It does not look likely in the near term.

    I do not have all the answers regarding the movement of house prices but am keeping an open mind. In the short to medium term I can not see a crash. Even if there is one the rampant HPI over the last few years are unlikely to restore housing back to 2004 levels.

    Personally I may get back into property in the new year as to me a crash in sterling and a very real rise in inflation seem far more dangerous to my personal situation in the immediate term.

  14. I think i am just like most of the posters on here.

    1. I work hard and am good at what i do

    2. I earn good money

    3. I only want an average house on a wage that puts me in the top 5% earners.

    I am only asking for a home, something that i cannot be given 2 months notice and kicked out(twice now), i am warning this Government, you keep excluding GOOD people the way you are doing and all hell will break loose one day.

    Everyone has a breaking point, mine has not been reached yet, but i can see why others have reached theirs, all the social problems we have are down to this Country pushing to hard, everyday more decent people are pushed too far and they snap.

    Give someone a purpose and a reason to wake up in the morning and they will thrive, this Labour Government survives on FEAR, "someone else will do your job(polish) if you do'nt want it, borrow more more money than the next man or be left out, lie, spin, cheat, all is fair in love and war, this Government is EVIL(and i choose my words wisely).


    How old are you?

    Do you need a house?

    Have you considered relocating to another part of the country or emigrating?

    Just asking as I believe prices are unlikely to drop to the level many here expect - (If they do fall 50% it will be due to a severe global recession and housing would be the least of your worries), I believe that 2008 we may see real falls but without a big hike in rates property is unlikely to drop to the level most posters here expect.

    Whatever happens you have a couple more years at least.

  15. Sam,

    2007 will be the year. :D

    I just hope that a recession doesn't happen as well, although I think it will & that's bad for everyone. :(

    Ok a off-the-wall prediction:

    2007 will start of strong and areas such as London, The South East and parts of the South West in particular will most likely experience strong growth. Towards the middle of the year it will tail off and stagnate. The end of the year will see the land registry go Y-O-Y negative with the regions dragging down the figures.

    I don't think a full blown crash will happen without big job losses or a large hike in rates (1.5% at least).

  16. I was trying to explain my prediction of HPC to my father, but we had a problem getting beyond crude "supply and demand" arguments. So I wrote this dialogue between a bull and a bear. It took me quite a while, and I'm afraid it will take a few minutes to read.

    But I'd really appreciate any comments on it. I'd particularly appreciate any improved references, or any explanation why I've seen 1989 quoted on this forum as a House Price Crash year, when the Scottish Parliament graph I quote suggests that the peaks were 1979, 1986 and 1995. I think the last few paragraphs are the weakest in terms of drawing conclusions, any suggestions v welcome.

    I've tried to make it a bit witty to lighten the reading. Many thanks for your time!

    I'd remove your mates name, and job title it I were you ... that is if you want him to remain a mate.

    PS for what it's worth Bishopstone is a pretty expensive area. I know of very few people that own there that are not well paid proffessionals. Check the EA's in shirehampton for a more accurate assesment if Eastern Europeans are buying

  17. do you really think that the only way to come across this site is by entering "houseprice crash" into google?

    woolly logic

    I came across this site via another money matters related forum (where it was in fact being ridiculed quite harshly)

    Having recently got myself into a position where I could consider buying a home, I was researching the insane state of the property market and wanted to see another point of view other than the mainstream media, which by and large is bullish. I was hoping to find some kind of reassurance that i wasn't going to waste an awful lot of money on buying a house that was going to dip into negative equity very quickly but that by waiting I would not be priced out

    What I found was somewhere that opinions seem totally polarised with an understandable bias towards the bears.

    it seems some people have reached a place so insecure and intrenched that they have managed to persuade themselves that anyone who appears to disagree with them is kidding themselves and actually deep down agrees with them.

    It could be said that all the bears on this site are secretly bulls, grouping together to reassure themselves that they aren't priced out / didn't make a mistake going STR but deep down are worried that there won't be a HPC in the immediate future. Equally untrue and also wooly logic.

    I spend time on this forum as I do still find some juicy morsels of pertinent info amongst the spinning of VI's on both sides. Doesn't make me a bear (or indeed a bull). There is a difference between being bullish about property in the short term and actually 'wanting' rampant HPI. I believe there will be a correction at some point but the fact that I don't agree it's happening this second or in the next few months apparently makes me either a Bull with no understanding of economics or a Bear in scared Bulls clothing.

    This site has in many ways given me food for thought but the inflexibility and hyperbole of many threads does (imho) go some way towards weakening it's credibility.

    Visit the "dark side" my friend - i rarely post here now due to the dogma that is endemic within this cult. lol

  18. Bet your rent costs increase before my fixed (for life) non interest mortgage repayments. Interest may hit me in the short term but they will also be fixed for life in the medium term in some respects.

    I would also suggest you check your "fixed" rate because you will find it is not as "fixed" as you may think.

    Hint check the small print and the APR

  19. or did I miss it?

    It follows a recent warning from the Bank's powerful governor, Mervyn King, that households should 'think very carefully' about taking out a mortgage.

    He said: 'All lenders and borrowers should think very carefully before they either lend or borrow.'

    Over the last year, there has been a sharp rise in the number of people who are losing their homes, or risk being evicted.

    problem is thats all he does ... talk

  20. I asked the following question recently, and it got moved as though I was a troll (which I am not!), even though I am a long time poster and supporter of HPC.co.uk. Most reasonable people on here thought it was a good point (mostly 'bears' like myself) but it still got moved. I havent bothered looking at the site much recently as I felt harshly treated.

    So here goes, please reply with you honest thoughts.

    When I first started reading HPC.co.uk about 3 years ago, most 'Bear' Economists & posters expected about a 20 - 30% drop in house prices. Since then houses have actually RISEN by about that much. Therefore, should the 'expected' crash happen now, it would have to drop 20 - 30% to be where we started when HPC was born to be back at square one. Therefore, house prices need to drop about 50 - 60% now to justify what people have been saying since day one.

    Can anybody REALLY see this happening?


    Honest answer - you were wrong not to buy 3 years ago. Price falls are highly likely. When they will occur is more tricky to predict. I can honestly not see house prices hitting 2003 levels again. That said if you have popped your cash into a high yeilding investment it could prove far more profitable than housing. If a house is worth the same in 2010 as it was in 2003 then your money could have been working far harder for you elsewhere.

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