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Everything posted by contrarian

  1. Paying IO sure beats paying rent. It is usually cheaper than rent, and you only get kicked out of your home at the end of 25 years, not after every 6 months of tiptoeing around trying to satisfy some BLT landlord that you are looking after his or her nest egg.
  2. We will get high inflationm, real risk of finanical turmoil (clearing bank default being an extreme case), more wars, economic slowdown, UK house prices will fall in real terms. Interest rates will rise sharply. Taxes will rise. Members of this site waiting to buy will find getting credit (which is now easy) nearly impossible wihtout genuine large deposit and income, and will find our incomes and / or job security under pressure. But there will be nice opportunities for those who are cash rich with funds held in a non-dfaulting bank. Start saving. Does that make me optimistic about a HPC???
  3. Obviously they will not be relying on a discussion board, with 30k at stake they must take professional legal advice. In English contract law in general the chance of getting back a deposit having broken a contract of sale can be a grey area. But in contract law as it relates to property contracts I think it is a bit more predictable that deposits are not likely to be reocoverable. The chances of getting back a 10% depost on a property transaction is very slim indeed. It is of course a theoretical possibility that the vendor can sue the defaulting buyer for any loss over and above that 10%, as mentioned above. However the vendor would have to prove that the market value was (at date of breach, in effect the agreed completion date in most cases) more than 30K less than the agreed price. Which is likely to be hard to prove. So basically if a buyer cannot complete or renegotiate, suing to get the deposit back is likely to be throwing good money (on legal fees) after bad; but in the case of a typical house, the risk of being successfully sued for money over and above that deposit is also small. Hence options are likely to be (a) complete (maybe with bridging loan); ( renegotiate completion date; © lose deposit, with a very small risk being sued for more than the deposit (of course that risk would be greater if property values halved suddenly....) I would add that it seems very unlikely that a solicitor acting for buyers and knowing they did not have a reliable source of money to complete, would not have advised against going ahead. The solcitor should and usually would advise of the risks of going ahead with exchange in strong terms (and would have made a note saying they had given that advice). If the solicitor failed to give that advice, then it would worth consulting another solicitor pronto to get on advice on the prospects of negligence suit against that solicitor. If the advice was given and ignored, there is of course no comeback. As noted, this is general info in this type of situation, it is not intended to be advice and should not be treated as such, your friends need professional advice.
  4. Thanks for those replies. The figures on the homepage here for London, June 06, are Rightmove up 2.1%, Home down 0.6%. It seems to follow from the above replies that sellers think the market is (or may be) rising, and buyers think it is falling. In other words the people in the market - the market sentiment in London - is confused & vacillating between slighlty bullish & slightly bearish.
  5. Recently added statistics show Rightmove reporting a big increase in asking prices in London. And Home reporting a small decline. Does anyone know the explanation for the difference, & which is more accurate?
  6. So says a lawyer. But a lawyer also knows the obstacles to obtaining a remedy would be great where a fair market price is not acheived. However, it may be that in practice almost all mortgagees do in almost all cases obtain something like a market price. Maybe members with relevant experience could say whether that happens.
  7. Shoes are a good idea. If you spend money on a pension you will be keeping humungously well paid fund managers in hand-stitched bespoke shoes at £2000 a pop. And Ferraris. And BTL flats. Can that be an efficient way to invest? If you have £2000 a year for either a pension or a pair of decent shoes, you might as well wear the hand-stitched bespoke shoes yourself. It is better for your feet. (That's the philosophy I live by, anyway).
  8. Of course the bank could chase the debt within the EU easily, a UK court judgment is directly enforceable (without having to go to court again in e.g. Italy) provided the debtor is within the EU. The debt, with or possibly without a Uk court judgment (which would not be hard to get) could probably be sold on to an Italian debt collector. Financially a 'fire sale' to get out of the situation quickly is usually a bad idea, but if for personal reasons or extreme financial distress he wants to go ahead, why not put the house in an auctioneer's hands himself instead of letting the lender do so? That way at least he could set a reserve at say two thirds of market value, which could protect him against the possibility, that that particular lot bombs and sells for a fraction of what it should fetch. If reserve is not met, just put it back in the next auction. I have seen auctioneers knock down a lot cheap to a regular buyer as a favour, that is the kind of risk where the the seller being able to set a reserve would offer some protection.
  9. I have heard what the non-vested-interest experts say & believe it. A terrible epidemic could happen any time. Govenments are right to plan for it. The chances that it will come from bird flu are small. Een if avian flu mutates to be easily transmissable human-to-human, it could well lose its potency in the process. The reason this ever-present danger of a flu pandemic got pushed in the past couple of years at WHO, and conveneintly sold to the public through a bird flu scare, (rather than some other time) is that Donald Rumsfeld currently has a big stake in the manufacturers of Tamiflu. The chances of a flu pandemic are serious but no more or less than they were 10 years ago or in 10 years time. Nobody knows when & from where it will come, and bird flu is one of the thousands of possible sources. I accept the bird flu is potentially a very serious issue for the poultry industry. Not for humans.
  10. What is so great about econmic growth? When in history did economic growth begin to exceed population growth in net terms (taking a smoothed overall graph, so allowing for the odd recession)? If it started say 300 years ago, can we project economic growth to exceed population growth in net terms for the next three hundred years? Thousand years? Or could it hit the buffers irreversibly in our lifetimes? Given that the world's poor are probably far more miserable than they were 100 or 300 years ago, would it matter for the human race as a whole if growth hits the buffers soon? Given that we in the UK have enough to go round for a decent lifestyle for everyone (barring massive immigration), would it matter for us?
  11. I think I would take it. They have a cheek not paying interest on the deposit to be returned in Feb 2007, I suppose they would say this is covered by the 7.5k. At least this contract amounts to something in your hand which looks enforceable, and has no obvious holes in it. What more would you get if you took on the cost & stress of suing H for negligence, assuming you win? No much, probably. The cost & complexity of suing the companies is too horrible to contemplate. However you should take legal advice, and my comments should not be construed as legal advice. Of course if you were going to chase this complex case through the courts you would need a very good lawyer, as stated above. On the other hand, if you can find a low-cost high street solicitor to OK the settlement contract for a modest fee that at least gives you an insurance policy (you can sue him if anything goes wrong).
  12. He should complain about the agent, who must have known the statement was nonsense. I agree with the comments above suggesting that it sounds like the agent is desperate to close the deal, and maybe his offer was too high.
  13. GB will never become PM and if he did he would only last a few monhts. He is too technical, on general policy he comes across terribly for the average voter. I heard him doing a wide-ranging pirme-ministerial interview on the Today Programme a few weeks ago and it was a shambles, much less good than when he sticks to economic facts & figures, where he sounds impressive. For my money anyway Tony is in his phase of trashing the Labour party's electability for future leaders, more or less as Thatcher did to the tories by staying too long. Tony is coming out with a fresh piece of demagoguery every day to shore up his own position with Mail-reading middle England, but this will further weaken his party, and further alienate the grass-roots workers, whose work really does count in winning elections .
  14. The figures show an annualised modest rise for London, which is contrary to the view I expressed. Sharper rises in April. And yet my perceptions remain that in the longer term the middle ranking areas are not rising and tend to be falling. Then you get reports of astonishing rises in a few isolated areas.The most compelling figures of course are those which come directly or indirectly from LR. But fine - I could be wrong. As a potential buyer, a falling market would not particularly suit me, I would prefer a stable market. That is not what I see through my bear goggles or otherwise. As for the equity markets, I have no idea where they are going to go.
  15. Well, CPI of 1.8% and HPI of 0.9% on those figures (assuming it for the same period) seems to suggest a modest decline in house prices in real terms. What have Precott & Clark got to with it, you ask. It is like the argument that equity markets respond to hemlines. I have no idea whether there is any truth in these arguments that markets are influenced by 'subconscious' public moods casued by unrelated factors. If I were an investment analyst I would want to find out.
  16. The market is on the way down aside from a few hotspots. But many people, including me, only notice the fact when sentiment also turns. It is in the last couple of weeks I wondered about buying, took a sober look at asking prices, and at the statistics, and saw them in a different (I now think more realistic) light. I did not really the beleive the froth a few weeks ago, but only now can I see as clear as day that in most places I would look at property (reasonably comfortable but not top-dollar parts of London, or Oxford) prices are declining in real terms, and in many parts also in nominal terms, and have been declining for some time. Next question: how long, how fast, and and how far will values fall? And is the change of sentiment in the property market linked to the rapid decline in the political capital of the present government? Or is the co-incidence a random accident?
  17. Certain points of fragility in the global financial system are, to be fair, evident to readers of the general press, especially The Economist. The subject is probably seen as too complex and technical for prime time. The point about denominating oil sales in Euros is interesting. Didn't Saddam start selling oil in Euros? That might have been something which concerned the US, when considering whether regime change was a useful objective. In fact the Iraq war was rather convenient for the US because it permitted a right-wing administration to politically justify substantial public spending (i.e. on the war), hence propping up the domestic economy, which on a bearish view was an urgent necessity. It should have been a win-win scenario, because if the peace following the war had been more peaceful, then in various ways the US could have expected to get their money back, as well as keeping a lid on the (dollar) oil price. A futher source of fragility is the complexity of financial markets. The 'cultural' side of the development of complex investment instruments is well described in the 1990s book FIASCO. LTCM and Enron were high profile examples of the risks associated with comlexity in opaqueness. Modern regulatory standards go some way but not far enough to offset the dangers. Of course this is not a news story until something happens which cannot be ignored. It would be irresponsible for governments to talk about it, and on the whole people in the financial world would not find it appropriate to their job description to talk about the apcalypse, except perhaps privately over a beer. It does not follow that policy-makers and other well-informed people are unaware of the risks. Perhaps members who work in the City or who speicalise in these subjects in some way (I do not) will comment or correct me?
  18. Mabye. This is a link to a video interview suggesting US faces a fiscal imbalance with an aging population, which will hit when the baby boomers retire. The imblance will, it is argued, become a problem by 2020 or so - Mr. Walker is vague about dates. The subtext is that policy changes are needed now to head this off. Interesting, though it does not address such key issues as the health of the financial system, the housing market, the oil price, or of the economy in general. But the fiscal issues are an important factor, of course.
  19. Not only are many members of this forum changing their minds , but they / we are doing so in many cases without any compelling logic or change in the facts. Just a natural desperation that we bears have been proved wrong for so long. There is fever in the air.
  20. Combination of personal crisis and belief the market had maxed out. Renting is awful in the UK system. You are liable to be kicked out of your house every 6 months, even if you have lived there for ages. You have to fight for your deposit each time (I think that is changing?). You cannot keep a dog, pull down a wall, install a fireplace, sublet or write rude messages on the wall when you have domestic row. You end up feeling like (and being viewed by homeowners like) a 2d class citizen, with good reason.
  21. That's one way of saying it's hopeless. My theory is that 'Where there's a will there's a way.' I admit this problem is one of the biggest challenges the theory has faced yet. I will read at least one Dolf book to check him out. Thanks to all for adivce. Keep it coming - there must be something one can do. One of my ideas is to buy (if the lender will wear it) a short lease on the basis that shortly before it expires, when it is time to get an extension, any falls in the market will be reflected in the premium one has to pay for the extension. Any thoughts? Also I was wondering about finding land for self-build (I have enough building skills for renovation or self-build if necessary). But I guess there the exposure to the market is no less.
  22. It would be interesting to know where in London. I have not done the nubmers. Friends investing at around the half million mark, and letting among others to foreign corporate visitors, say it would not work now, certainly not on a 10% deposit. It is true that in certain areas, such as St. John's Wood, which seems popular with Japanese visitors, rents asked can be astronomical. Again, maybe someone will reply saying what occupancy levels are like. Has she let it yet? Or are these numbers based on what Estate Agents suggest she should be able get?
  23. New member, ex lurker, my first post. I sold up in Oct. 2002. Friends said, 'You're smart, selling at the top of the bubble.' They were wrong. Now I'd like to buy a modest flat in / near central London. Or maye a house for renovation further out. But I still think prices will fall. There's a lot of financially clever people posting here. Advice please! Can you think of a way of buying (I will almost certainly need a mortgage), and structuring the asset or one's overall affairs, so as to minimize any losses if the market does fall?
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