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House Price Crash Forum


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About Bidin'matime

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    HPC Poster
  1. Same old misguided claptrap - I had 100% equity in my house so no mortage, so it was completely free to live there, was it?? Of course not - it was costing me the interest I could earn on the value of the house (known as opportunity cost). The 'value' of the house is only a made up paper figure unless you sell - then with rental yields so low, you can rent for less than the after tax interest you earn - that's what I do - our landlord paid £500k for the house (per land registry), tidied it up, then we moved in paying £1,400 per month rent - you do the maths...
  2. This is absolute b*ll*cks. If you get income from savings, you pay tax, if you have debt, you dont - debt is not a 'tax-free' way of saving - if instead of investing your money in an interesting bearing investment you put it in something that pays nothing at all (eg a current account or a home), then you pay no tax - big deal! If your home goes up in value, then sure that's tax free, but if not, it's worse than a current account. Rich people borrowing huge multiples of their income are (like so many others) just gambling on property inflation - maybe they think that they are better placed to weather a crash - another great tax saving idea...
  3. Can someone tell me how to get my PC to show clips like this properly - I get the sound okay, but the picture is in psychadelic colours. I havent loaded any particular software - it's just windows media player. I've found this problem with other videos.
  4. I'm an STR too and we too rent a more expensive house for less than the net interest on our equity (gross rental yeild = 3.36%). I think your inclusion of 'sold below market value' has scuppered your piece, because who would sell at BMV? We sold above the agents asking price - it may have gone up a bit since then, but it was market value and prices are pretty sticky in this area now - we are not at all sorry that we sold. Your poll appears to be aimed at getting data on people who have been panicked into selling (hence the addition of 'BMV') and few would admit to that, so I suspect that it is doomed to failure.
  5. Just like to add my congrats, FP. It only needs a bit of this kind of exposure to persuade people that perhaps it's not such a no-brainer to 'invest' in property. We exist in this privileged bubble of knowledge and understanding that the vast majority are excluded from by virtue of the vested interests in the mass media - the slightest chink of light getting through to them is going to be like giving a morsel of food to a starving man.
  6. The rent we pay is 3.36% of the price the landlord paid for the place earlier last year... (out of which he has to pay the agents and repairs, insurance etc..)
  7. I assume that this is sarcasm? I know it's possible that somewhere can be priced too cheap, but I wouldn’t have thought it of the one in question. There are loads of houses on the market that are over-priced. I've seen some that have sat on the market for over a year, as vendors think they can 'cash-in'. Many add to the apparent shortage of supply, as they sit empty - particularly BTLs where tenants have not renewed and the place has had a makeover and the landlord is lining it up to realise his paper profits. I read in and article on the newsblog that some owners don’t even let tenants near the place - they buy it as BTL, but don’t let it, just put it up for silly money and wait for a bigger fool to come along. I had my doubts, but mentioned this to someone (not an HPCer) today, who said he knows a BTL landlord who does just that - he puts them up to rent for a while at silly rents in the meantime, so no one moves in...
  8. I'm with Pelican on this one. Inflation is only relevant if the asset you are going to spend the money on is rising in price - otherwise it is a red herring. If house prices stay level, the money put by to buy a house will still buy the same house in a year’s time, even if a basket of bread and DVD players etc has risen in cost. If house prices fall 10%, you get 10% more house for your money, even if the cost of petrol has doubled.
  9. Point taken, but that was in the mid-nineties - having bought in mid eighties, it was probably not much different. We settled on a higher figure anyway, to include her estimates of various improvement expenditure.
  10. This is an interesting point - I had not even thought to warn clients about this - one assumes that people would realise it, although many think that they can claim the interest on the MEW loan used for private purposes, so it is certainly conceivable that they may think repayment of the loan would reduce their CGT...
  11. That's what we want to hear - anyone who still denies that this is a bubble is just stupid. And if it was so good, why did the flipper sell it? He probably bought another one and spent all his profit on this, and stands to lose it all again when the bubble bursts. Those who have sold will inevitably get stick from those who have not, while the bubble expands further, but when it goes pop, the boot will be on the other foot. Watch prices fall back to year 2000 levels...
  12. Thought it worth reproducing a post I made on the newsblog last week, as it underlines the fact that there could be tens, possibly hundreds, of thousands of borrowers who may be just one or two rate rises away from catastrophe - and the decision makers have no idea - they don't appear on anyone's radar - yet... "I’ve just dealt with the tax return for someone who has 2 let properties. She bought the first in the mid 80’s for around £30k, moved out in the mid 90’s, when she was struggling to pay the mortgage, and let it out. History tells us that this was a lucky strike, because when she was back on her feet, she bought somewhere else and kept the first house. All good so far – don’t we all wish we’d done that? But then I find out that house #1 has been remortgaged over and over and now has a mortgage of, wait for it, £144k. Part of that went as a deposit on house #2, but that too has since been remortgaged and now has little or no equity. Meanwhile, egged on by her ‘financial adviser’ she has recently moved out of #2 and bought house #3… After paying all the mortgage interest, repairs etc., there is no profit from the lettings. Her other income is about half the national average, probably insufficient to live on (although she’s single), and she seems to be supplementing this from MEWing. If anybody had taken a good look at her finances, there is no way on earth that she would have been allowed to buy house #3. When I asked her why she kept remortgaging, she told me that she has to change mortgages to get another cheap deal, otherwise she wouldn’t be able to afford the SVR(!) - she just finds it convenient to release a bit more equity as she goes… I told her I was worried about how she would cope with further interest rate rises – she’s confident that (although having never made a profit before), she will be in profit next year… And to think that she doesn’t appear on any, not any, statistics that are used to tell the state of the property market or the economy. Not yet, at least…"
  13. Reminds me of stories of the old ladies who would rob dying men on the battlefields of old, then sell the trinkets to the next lot of soldiers who came along - whether the punters are on the winning side or the losing side, there's always someone waiting to take advantage...
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