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Everything posted by krosfyah

  1. Does anyone know what i mean? I once found a link to all these headlines detailing in the late 80's/early 90's that basically was saying much of what is said now - FTB's priced out, serious lack of supply, spiralling HPI etc and then the subsequent HPC headline stories too. Does anyone have links to these historical headlines/news stories please? I can't find them for the life of me. Thanks
  2. Asking price of £1,750,000 Spacious three bedroom flat situated on the basement (with rear paved garden), ground and first floor of a red bricked house. The flat is ideally situated in this beautiful garden square within easy walking distance of Harrods and the shops on Sloane Street. Leasehold with approximately 47 years remaining • OWN FRONT DOOR Oh well, jeez, it has it's OWN front DOOR. I guess that makes the 1.75mil and 47 year lease understandable
  3. I read the Guardian and have been lurking here a year or so, posting now and again and more frequently over at the other place now.
  4. Typical of an amateur BTL LL. No sympathy for them whatsoever. If you are going to make it your business to own more than your share of property you better be successful at it, because the social repurcusions of failing in a market where it denies others the right to own THEIR own house means i have what is approaching negative values of sympathy for anyone in this position. Let em all sink to the gloomy depths in their own ill managed property portfolio wet dreams is what i would wish for.
  5. 1) Private 2) £850 3) 2 4) London (Zone 2, Camberwell) 5) £230k (est)
  6. thanks for sharing all, and special thanks to munimula for those interesting links
  7. Between my wife and my own joint net income of £3700, we are saving £1000/month for our deposit, approx 27% of our joint net income. According to this report: Firstrng article FTB's have been worked out to be saving £300/person/month, or at least that's the variable they have used. I personally don't know of anyone else saving for a place now (many of my friends bought already). Anyone care to divulge how much they are saving so i can work out if the Firstrung figure is accurate? It's probably been aggregated for a national savings figure, rather than London. I'm specifically wondering about who is living in London and how much are you saving for your place, for when/if you want to buy after a correction takes place. Edited to add: if mentioning a specific figure makes you (understably, i guess) somewhat uncomfrtable, perhaps we could compare monthly savings/net income as a percentage?
  8. Is it because she thinks HIPS will lead to a slow down/stagnation of property and as a result, the knock on efect is she is out of a job? What's the REAL reason she isn't in favour of HIPS?
  9. If we saw a repeat of the last crash - massive falls in price due interest rate hikes, when would you buy if interest rates were again to shoot up to over 10% say, and prices of everything fell by 30%. What signs do you look for when interest rates are high, with regards to getting back into the market after a IR hike and property price fall? Thanks
  10. http://money.guardian.co.uk/news_/story/0,,1786649,00.html House prices rose by just 0.2% in May and a likely jump in interest rates may lead to a further slowdown in the market, Nationwide building society said today. Although the "sluggish" rise in prices this month was slightly up on the 0.1% increase in April, the society said it was significantly lower than March's 1.1% rise. Prices have risen by an average of £20 a day for the past 12 months, and at £164,632 the average stands £7,500 higher than in May last year, but the annual rate of inflation has slowed to 4.7%. Nationwide said the number of mortgages approved for house purchase remained historically high and that house builders and estate agents continued to report strong demand for homes. However, the society's chief economist, Fionnuala Earley, said there were signs the market may be starting to cool. "Not all drivers are supportive of rising house price inflation," she said. "Apart from well-known concerns about stretched affordability among first-time buyers, and the rising transactions costs that movers face, there are now further reasons to expect some cooling in the rate of house price inflation over coming months." Chief among these, Ms Earley said, were expectations of an interest rate rise in the near future. This has already driven up the cost of fixed-rate mortgages and may be making borrowers nervous. "Tracker mortgage rates tied to the base rate, by definition, remain unchanged, but additional talk of rate hikes is still likely to affect borrower sentiment, particularly when there are increasing reports of job losses and consumer confidence is fairly subdued," she said. "The effects of hawkish interest rate expectations in the financial markets on fixed mortgage interest rates and press reports pointing towards the possibility of higher rates, should contribute to a cooling of house price growth." Earlier this month, the Royal Institution of Chartered Surveyors said it expected prices to continue rising for some months. It said it had seen an increase in the number of enquiries from potential buyers in April, while the number of available properties was down 10% on the same period last year. Howard Archer, chief UK economist at consultancy Global Insight, said while Nationwide's figures suggested the housing market was losing momentum, it was "premature" to read too much into the data. "House prices can be very volatile on a short-term basis," he said. "Indeed, it is still very possible that house prices could see further strength in the near term, given that mortgage activity and buyer interest is still relatively high, and there is a reported shortage of properties in some areas." But Mr Archer added that the figures did support his belief that house prices would level off this year
  11. LMAO good post. On a side note, if you PLAN to get pregnant when financially you don't know where you will be, and you DON'T liquidate your assets when you are struggling (i.e. sell the 2 BTL's) the amount of sympathy i have for you is less than zero. I would dearly love to be able to afford a FLAT in my area, and start a family with my wife at some point, but that's out of the question, so if i sound like a harsh bas*ard, go figure.
  12. There IS a clear difference. If you INTEND to buy and you rent long term VS buying long term, it will be harder for you to own a property outright. With buying, even if you buy at the top of a market, as long as you continue to make payments, one day, even if in many years, you will OWN that property. I believe renting is dead money if it costs less to pay the interest on the capital loan to the bank (which for me right now it would do). However, if i took a mortgage out now, that interest i pay to the bank would be less than the rent i pay now in about 2 years. If - hypothetically - IR's stay the same, as does my rent, in 2 years, renting would be dead money compared to buying from my perspective. Of course this is hypothetical. What i'm illustrating is that sometimes rent IS dead money, sometimes it isn't. For many who bought and got in early - if they had continued to wait, as i have done, renting for them would have been a lot of dead money. To say renting is not dead money without explaining referencing your specific situation could be at worst incorrect and at best short sighted. It varies for everyone in their own situation.
  13. Alot of what you say rings true for me. I think you can learn alot about the way the economy works/has been working/might work in the future, but never forget to take a lot of what you read - both here and by "reknowned" economists with a large wheelbarrow of salt. ANYONE that thinks they can accurately predict the future based on past events should not be listed to. The only people worth listening to are the ones who admit that past events are no predictors to future events and that no one can know whats really going to happen and when. All we can really listen to is threads of thought - i.e. that house prices seem massively overvalued and affordability is completely stretched for most people. Again, it comes back to the common sense thing - if you are on a reasonable wage, then others on a reasonable wage, or less than a reasonable wage are in the same boat. PErsonally it sounds like you are in a good situation to me - living cheaply and saving hard. I'm trying to do the same. It's a struggle but the main thing is, we will all want our own places at some point, be that here, France, the US for me (my wife is American) or Timbuktu, and cash is king - the more you have for your deposit, the less of a financial risk you will be seen to carry, the more preferential rates you may receive, and the lower you monthly mortgage payments. People have been saying there should be a crash any day now for years. I think to hang on trying to predict where property will go will be soul destroying so i try not to do it, but i still check what the market is doing daily, i'm as guilty as the rest. At the end of the day though, we must all live our lives and there is only so much of this whole thing i'm prepared to let consume my day to day life. You just have to get on with it and not let it get to you too much, really, that's the way i look at things. But keep saving, and eventually time will tell you decide to end up settling, and those sorts of decisions will be easier to figure out as and when you are in a position to make them.
  14. I sit here dreaming, positively dreaming of clicking on bbc.co.uk and seeing "Breaking News - House Prices fall by 40% overnight!" plastered all over the front of the website. But honestly, what does this mean? It would mean that we were in some serious sh1t, no doubt about that, and when i say we, i mean all of us, in the UK, as the economy would have to have gone tits well and truly up for something like this to happen. That would mean jobs on the line (or redundancies), people who have just wanted to get on the ladder and over extended themselves so much that they can't make repayments now (some say it's their own fault, me personally, everyone is different and to look down on someone when they are in that position is just not something i think i would do). Would a CRASH be something really, truly want? Personally, i would like to see a gentle slide - something that in economic terms is unlikely i know, but at least it would allow people time to prepare themselves. Finally here is some food for thought - if 20-40% of the property market is priced out FTB's who are just sitting, waiting and saving and there IS a crash - surely it would only last as long as it takes for those thousands who are just waiting for the moment to pounce, and demand would be so strong from new buyers that HPI would just begin to stabilise straight away and prices would probably bounce back up again. Whichever way you look at it, it's a tough call. On the one hand i want prices to come crashing down, on the other i know that probably won't help my situation out, and a lot of people will be in deep sh1t as a result.
  15. Also, i would imagine that if you plotted the demand for housing by geographic area, most of the demand - and high prices - would be centred around city centres, or areas that were greenbelt around a city. It's quite easy to go and buy somewhere affordable in the middle of nowhere, whether that's a sustainable (or desired) option is what limits people placing demand on that kind of property.
  16. 1 - are you in the right forum? This is typically about the housing market and data related to possible rises and falls of that market. 2 - does it matter? Put money you save into a long term savings account and give it to your kid when you WANT them to have it, not when the govt decides it's right, seems pretty simple to me 3 - make you child get a job at aged 16 instead of having a big pile of cash lumped on them for no good reason, which will teach them about the value of money and what it means to work hard to earn what they want. If parents stopped breaking their necks to give little Jonny a £30k deposit for an overvalued property, the FTB market would dry up enough to put pressure on a correction, instead of just feeding the runaway beast of HPI
  17. God almight, i actually want a crash now more than ever, not so i can get my foot on the ladder, but just so i can wipe the no-knowing, arrogant and condescending smile off Kirsty's face. She literally has bullied people into serious amounts of debt from the programmes i have seen of her, that i can actually bear to watch. She has been successful only because of market conditions and continues to preach her word as if it were gospel. Thank christ for articles like this.... From today's Guardian: Does buy-to-let still make sense? Does buy-to-let still make sense? You can't go wrong, according to the TV programme Where Best to Invest. But can you? Miles Brignall does the maths Saturday May 13, 2006 The Guardian In the TV world inhabited by Britain's favourite property duo, Kirstie Allsopp and Phil Spencer, making money from buy-to-let property is a doddle. Follow a few basic rules, buy a place in a carefully selected city, and just sit back and wait for the money to roll in. Two weeks ago millions of viewers enjoyed an hour-long treatise to put aside their misgivings and invest in a buy-to-let. The show, Where Best to Invest, went on to name the 10 sure-fire winners. The message was: "Invest here and you can't fail to make money." Independent experts, the programme said, are predicting property rises of 40% to 55% over the next five years. After flagging last year, buy-to-let is surging again, and for a property-obsessed nation, it made great TV. So should you really be jumping in? The buy-to-let theory Thousands of Britons have, undoubtedly, made lots of money out of buy-to-let, and many will continue to do so. Investors have to put down a minimum deposit of 10%-20% of the value of the property and take out an interest-only mortgage for the remainder. The lowest rate buy-to-let mortgage now costs £417 a month per £100,000 borrowed. Kirstie and Phil maintain you need an annual rental income equal to at least 5% of the purchase price (otherwise known as the yield). But investors need to take into account a string of other costs that will depress the yield - and wipe out profits - most of which were not mentioned in the programme. Letting agents typically charge 10% of the rent, plus VAT. Any period that the house is empty ("voids" in the jargon) reduces the rental income - typically two weeks to two months a year. Stamp duty costs another 1% on houses bought for £125,000-£250,000, 3% up to £500,000 and 4% on properties above that. There are also maintenance costs. Buildings insurance (£400-£500 pa), an annual boiler inspection (£100) and purchase fees (£600) must be subtracted from the rental income. Most lettings are furnished, so the cost of this should also be factored in. The other big factor is interest rates. They look set to rise. A 1% rise would add £83 a month for every £100,000 borrowed. A 2% rise would throw many investors into deep trouble. To succeed in buy-to-let, you have to generate more in rent than you are paying out - and hope prices will rise to create a surplus at the end. Any profit is still subject to capital gains tax (at 40%), but the longer you keep the property, the less you pay (called "taper relief"). Does it work? Given the recent huge rises in property prices, few investors are going to make much (if any) profit from rental income. Instead, most investors are betting they will make a return from further house price rises. But with the possible exception of Belfast, each of the dream locations named in the programme have already shot up in value, pricing them out of the reach of all but the wealthiest investors. Few of the properties featured in the show are likely to cover their costs. Lee Grandin, managing director of Landlord Mortgages, which approves 300 buy-to-let mortgages a month, watched the programme with disbelief. "I thought the whole thing was a load of drivel. I am happy to talk up the buy-to-let sector all day long because it's my business, but I have no idea where they got their figures from or how they came up with the top 10. "I know the Reading area (number six) very well and was waiting to see some new fact that they had unearthed, but it never came. Reading can hardly be described as an undervalued location just waiting to shoot up." The winners After finding a four-bed house ideal for students for sale for £299,950 in Oxford, Kirstie and Phil breathlessly described it as the "ultimate buy-to-let in the ultimate place to invest". They said it would rent at around £1,200 a month. But even if an investor was able to stump up a generous 20% deposit (£60,000), it is more than likely that once the mortgage and other costs are paid, the property could lose the buyer around £1,000 a year. The loss would be even higher if you factor in furnishings, and the interest lost on the deposit. Suzanne Webb, who manages lettings in Oxford for Cluttons property consultants, didn't see the programme but said it caused great interest in the city. "We are still seeing a lot of people investing in the city, but I'm not sure the figures add up. The rental market is certainly strong for family houses, but less so for flats. One developer is currently selling a big group of flats as investments. They sell for £200,000-£230,000 but achieve rentals of £850-£950 a month, which for most people will be less than the cost of borrowing the money." She admitted that she was involved in a couple of buy-to-lets that have yet to make her any money. "Returns that were 11% a few years ago are now closer to 4%. That said, I have got a one-bed that is making the owner some money, so there are a few jewels out there if you can find one," she says. Perhaps the best chance for investors is Belfast, described as "investment heaven" in the programme. But even there, buyers may have missed the boat. Chrisy Dorman of lettings agency Daniel McGeown says houses are already changing hands for £20,000 above the asking price and each new development has a queue of people outside. She quoted prices that would generate a profit, but warned: "Nice properties go really fast but if they are tatty, they do tend to hang about." Are prices going to soar? The programme told viewers that prices will rise by up to 55% over the next five years. But this week the Bank of England ruled out the prospect of another property boom. Halifax is also currently warning that rising unemployment and higher taxes will take the edge off demand, and predicted an easing of house-price growth in the second half of the year. What programme makers say They say they consulted independent residential property experts, came up with a set of criteria, collated robust statistics from the whole of the UK and used the figures to generate the 10 best places to invest in residential property. Low unemployment and lots of students was a big factor. "The programme was clear that with any area, if you pick the right property in the right place, at the right price and do your research, you should cover your costs and make a profit. We stressed that to maximise profits, you should always view an investment property as a mid to long-term investment." They also said it was it meant as a general guide and that issues such as interest rates or capital gains tax could have made a programme on their own. [email protected] Flat-line for Cherie Given that Bristol has been named in Kirstie and Phil's top 10 places to invest, one might imagine that the city's most famous buy-to-let investor, Cherie Blair, would have made a killing by now. The Prime Minister's wife bought two flats in the block below for a reported £265,000 each in 2002. However, according to estate agents in the area, they have not risen at all in value. To get an overview of the lettings market and the figures quoted in the programme, we contacted David Lewis, partner at Hydes Letting & Property Management in the heart of Clifton in the city. "I doubt we will see 40% increase in prices over the next five years, but it all depends on what you buy. A lot of newly-built flats have come on the market in recent years and they haven't gone up in value at all. "Meanwhile, family houses continue to do very well. There are comparatively few for sale in the best areas, but those that do exist typically cost £400,000 to £600,000, putting them out of reach of most buy-to-let investors."
  18. Interesting article... Guardian article Bank of England governor rules out new housing boom Larry Elliott Thursday May 11, 2006 The Guardian Mervyn King, the governor of the Bank of England, yesterday ruled out the possibility of a new housing boom when he stressed that even after the slowdown two years ago, property valuations looked "remarkably high". His warning came as the Bank's quarterly inflation report - its prime tool for analysing the state of the economy - suggested that households may be faced with slightly higher mortgage rates over the coming months if the government's 2% inflation target is to be met. Mr King's comments in the summer of 2004 about the likelihood of lower property inflation were a factor in cooling the market, and yesterday he rejected the idea that the pick-up in activity and prices over the past nine months constituted the start of a new boom. "House prices are high relative to the measures that help to put them into context - average earnings and incomes. By some measures they are remarkably high," he said, adding that there had been some recent signs that the number of new mortgage approvals was slowing and that there had been a waning of interest among new buyers. In its quarterly overview, the Bank said inflation would move above its 2% target over the coming months as higher energy prices fed into the cost of living. But on the assumption that interest rates move in line with expectations in the financial markets, Threadneedle Street believes inflation will ease back to 2% in two years time. The City is predicting a quarter-point increase in the Bank's repo rate by the end of the year. Mr King said that market expectations should not be considered a forecast of what the Bank's monetary policy committee would decide to do. "No one knows where interest rates are going," he told a news conference after the report was published. "It's a mistake to try and get into this business of nods and winks of where interest rates may or may not go."
  19. Actually it won't. When/if there is a crash, and those of us on here who have been dilligently saving and not following the sheep, will be shouting from the rooftops about how we foresaw everything and "aren't we great for not following the crowd". Maybe not in a loud brash way, but even if just casually mentioned, can you imagine how much villification you would receive if you seemed to be rejoicing while all others around you were losing their paper money? Sure, you can say it's there fault, but in their eyes you will be no better than the BTL *****ers who we villify on this board day in day out. Just some food for thought.
  20. Maggers can you expand a little on these 2 points - i don't quite follow how this is the case and what you are referring to in the second point.
  21. Thanks both. Maggers, that's a very useful idea - you don't happen to have such a spreadsheet already to hand do you? It would be very interesting to try something like that out. And yes, you're right - the idea is to save now and pick the right time to buy (hopefully when prices have fallen, but if not, like you say, rent and then work out how to pay back the morgage in a shorter time scale if we get in after 5 years of stagnation to offset the extended renting period).
  22. Hi - i remember reading the old "rent is not dead money" if you work out that it costs you less to rent than it does to repay the mortgage and associated costs of ownership, and that works out more expensive than renting and saving for a deposit. Can someone help me understand (objectively) what my position would be now, compared to if i buy please? Currently my wife and i pay £850/month for our 2 bed flat. If we were to buy the same property, or similar, it would be in the £220-230k price range or thereabouts (we can't afford this anyway). We are also doing our darnedest to put aside £1000/month for our flat deposit. It's a struggle, but the way i see it, the higher our deposit, the less mortgage we will eventually need when we can afford to buy. Now am i right in thinking i'm doing the right thing, because, even though we have outgoings of £850/month on rent, that would be less than what we would be paying in interest on a repayment mortgage on a mortgage of £220 or £230k (if we could even afford it) with a 10% deposit. Essentially i'm a little confused and was hoping someone could take my cost of living figures and help me understand with more clarity how, even though we are renting, it's not dead money etc. Many thanks if anyone can help.
  23. Just noticed it now... Priced Out.org From the site... Are you Priced Out? Struggling to buy your first home? Next rung of the property ladder moved out of reach? Not prepared to over stretch your finances just for the sake of buying? You are not alone. Thanks to runaway house price inflation UK homes are the most unaffordable they have ever been. The number of first time buyers are at their lowest recorded levels for 25 years as an increasing amount of people are priced out of more and more areas. For homeowners the gaps between the rungs have never been so large. PricedOut.org.uk is the new national campaign for affordable house prices. Find out more about us here.
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