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House Price Crash Forum


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Everything posted by DrBob

  1. I looked at several shared equity flats, and got the impression that they were being sold at above the market rate for a similar property. Moreover, the company I looked with wouldn't even consider reducing the price. 'Shared equity' tempts buyers to pay over the odds just because they can afford the place. At 260k for a 2-bed flat, it had better be in a VERY good location! The other concern is arrangements around selling: can the flat only be sold to other 'key workers'? The last thing you want in a falling market is your potential pool of buyers to be limited! Conclusion: Shared equity was one of a number of desperate attempts to keep house price inflation going beyond it's sell-by date. Steer clear!
  2. Letting agents are a bunch of shysters. :angry: Even though you don't have anything in writing, document everything that happened (including the date of the telephone call), and write a formal letter to the letting agent, explaining that you have moved out in June as agreed. If you give the letter a suitably legal tone and make sure it's printed on some decent thick paper, it may well work. After all, you are in the right.
  3. Yep, check your tenancy agreement. If you're going to let people in to view, make sure the landlord/agent know this has to be on your terms, not theirs. Don't feel that you have to change your plans (i.e. stay in/be out at certain times) to suit the LL. In practice, though, I'd probably look for somewhere else. Sounds like the landlord wants out. You may as well stick to your 3rd July date and be able to plan your departure properly rather than spend the next few months anxiously wondering whether your home has been sold or not. Out of interest, whereabouts in the country are you living, when did the landlord buy the place, and what is the rental yield like?
  4. I'm not going to venture to give investment advice (don't have enough experience of it yet), but I've invested in both of these sectors using Exchange Traded Funds. They can be bought and sold as shares on the London Stock Exchange. You can even put them in an ISA to make sure they're capital gains tax free: Water: iShares S&P Global Water (IH2O) - this invests in the S&P Global Water index, an index of the top 30 listed water-related companies. Advantages: wide geographical spread, blue-chip companies, steady income even in downturn Disadvantages: equities are quite high at present so may be due for a fall, might miss out on 'takeover' premiums as the companies are all so large Gold: ETF Securities physical precious metals basket (PHPM) - this invests in gold, silver, palladium and platinum. EFT securities also have a gold-only fund (PHAU). Advantages: low management fee of 0.39% PA, don't have to store the gold yourself, easier to buy and sell than coins Disadvantages: gold is very volatile, if you really think the global financial system is going to collapse you might want to buy physical gold coins etc for yourself
  5. Okay folks, back to topic: I think PG is onto something: We know that the MPC will see May's inflation figures before they decide on interest rates. If PG is right, these might show a further small fall in CPI (e.g. to 2.6%) as lower gas/electricity costs keep feeding through and the recent higher oil prices have yet to bite. On the other hand, input prices are rising, factory gate prices are rising and commodity prices are rising. And for the sceptics out there who think that Gordon retains some influence over the MPC, remember that we're a couple of years away from a general election, so it'd be better to get the pain out of the way now! The question is whether the MPC will take the short-term approach (keep rates on hold) or take the longer-term view and raise rates in expectation of inflation six months down the line. The MPC has the capacity to surprise if they want to (remember January?). I don't think a 'hold' decision can be taken for granted, and would put the chances at 50:50. PS: I have to report a vested interest in this month's decision!
  6. Well, MrPhil, I'm also a habitual loser at betting, and I've just put down £50 for a .25% increase. So one of us will win! If our bad luck is equally balanced, you will probably be the winner, as the return on your bet will be less (odds of approx 1.2 for a hold vs 5.7 for a rise).
  7. There are a lot of negative experiences about renting on this website, and I've certainly had a few. Renting isn't always bad, though, so I thought we should share some positive landlord/landlady experiences. Here's mine: Girlfriend and I are renting a London 1-bed ex-council flat. Sounds horrible, but it's a listed Victorian block, very central (short walk to work, walking distance to the river, South Bank, parliament square etc), quiet area, and with generally nice neighbours who we know by name. Our landlady (Bohemian baby boomer) took £300 deposit between us (no ridiculous admin charges etc); proper signed tenancy agreement and inventory. She put us on her Tate gallery membership, and we have dinner with her and her husband once every few months. The flat is at market rate (not a bargain), but with no rent rise in last 18 months, and none planned a/c to her. Things get fixed when we ask. We found the flat through TheGumTree.com. Having fallen prey to some of the other problems with renting, we made a few rules whilst searching: 1. Do not rent through an agent 2. Make a list of all your requirements & questions you need to ask (how many bedrooms, price, deposit, car parking, council tax etc), and get answers to all of these on the phone. The aim is to only physically visit flats which meet your requirements. This will save you time, and prevent you selecting a flat out of sheer exasperation/exhaustion 3. When you phone the landlord, say 'I'm calling about the flat'. If they ask 'which flat', they are probably an agent, so tell them you're not interested! 4. Wander around the areas you're looking in at night - are the streets dodgy or well-lit? 5. Try and phone the landlord a few times before you commit - are they easy to get hold of? 6. Go with your gut feeling - if you think a landlord or property seems dodgy, walk away! Given the impending BTL fall-out, you might want to add another rule: 7. Look up the property on www.nethouseprices.com. If it's been bought recently and/or the yield is poor (<5%), don't rent it! Chances are the landlord will be in trouble soon and you could find yourself homeless too. It's becoming a renter's market out there, so you can afford to be choosy. You could have a go at bargaining down the rent, too. A lot of landlords are desperate to find a good tenant.
  8. My flirtation with 'city living' lasted just seven months, in a rented Leeds flat (converted warehouse). The bar below wasn't too loud, but the lorries that came to empty the glass bins each morning at 5am were hideous. Impossible to sleep through! I spent quite a few nights on a mattress on the bathroom floor - it was the only room without a window facing the bins! City living really isn't worth it - all the Neff appliances in the world can't make up for having to stepping over vomit on the way out of your front door. There was a reason for residential/commercial 'zoning'. I agree that many of these new build city centre flats will be taken over by housing associations and used as sink estates.
  9. You could save six months' salary, but alternatively you could get a mortgage which allows both underpayments and overpayments. Overpay as much as you can early on, then you can always draw on that capital later by underpaying. Anything to reduce those compound interest costs, and to avoid paying tax on savings interest!
  10. http://www.hemscott.com/news/latest-news/i...=44770739252249 BoE's MPC will see May's inflation figures ahead of interest rate decision - ONS The Bank of England's rate-setters will have seen CPI inflation figures for May ahead of their interest rate decision on Thursday, a spokesperson for the Office for National Statistics confirmed. The nine-member Monetary Policy Committee will be able to see whether inflation moved closer to the bank's 2.0 pct target during the month from April's 2.8 pct. Many analysts believe that if the MPC had seen March's inflation figures, when inflation spiked to 3.1 pct, they would have raised interest rates to 5.50 pct in April rather than in May. Hmmm... Is the implication that PropertyGuru's bird knows something about the May CPI figures - perhaps they've fallen slightly (to 2.6 or 2.7%). This would persuade some of the dithering MPC members to keep rates on hold. Current Betfair odds are 1.2 for a hold, 5.7 for a 0.25% rise.
  11. 20 months on the market . I think you already know the answer to your question.
  12. I see, so an economist at a banking group which is in the process of buying a major UK subprime mortgage lender talks down the prospects of an interest rate rise. No conflict of interest there...
  13. Hmmm. Embattled sellers holding out for a better price in a falling market? What a wonderful reflection of the housing market as a whole!
  14. I'm really hoping that the BoE opts for the asset price fall rather than the permissive inflation option .
  15. One of the bedrooms is so narrow, they couldn't even fit the text "bedroom 2" into the plan!
  16. http://www.spanishpropertyinsight.com/foru...ewforum.php?f=2 If you enjoy reading about the misfortune of others, try this Spanish property forum...
  17. Oracle, you forgot to factor in the following: - mortgage arrangement fee £500 - survey/legal costs £1500 - estate agent fee (for selling) £3000 (approx 3%) So that's a 10k loss before inflation, and not including any money they spent on the property, garden or furniture.
  18. Here's a speculative scenario to spoil your dinnertime bear-feasts: 1. Joe buys overpriced new-build city centre flat at the top of the market: "Housing market always goes up", "Safe as houses", "Need to get on the ladder", "If I don't want to stay there, I can always rent it out". 2. Housing market crashes, leading to widespread mortgage defaults. Joe loses his job and can't keep up the mortgage repayments. The bank want him out. 3. Joe applies for bankrupcy and registers himself as homeless. 4. Government/local authorities can't cope with all the new indebted homeless, as their council homes have been sold off and no new ones built. 5. Government decides to buy up large numbers of new-build city centre flats to use as new council homes, and puts Joe in one of them. 6. Joe is now a council tenant living in a similar new-build city centre flat to the one he had bought. He gradually works through his bankrupcy. 7. Economy starts to recover, so government offers all the new council tenants the right to buy. 8. Joe buys his new-build city-centre council flat for a fraction of the price he paid for the original one. 9. Joe becomes equity-rich on the next house price boom, and sells/rents out his flat for a healthy profit.
  19. Schadenfreude: a German word meaning 'pleasure taken from someone else's misfortune' I have German friends who can't believe that there's no native English word for Schadenfreude. They consider it one of the most natural and universal human traits (and are probably right).
  20. http://www.telegraph.co.uk/money/main.jhtm...1/cnbanks01.xml Last Updated: 12:13am BST 01/06/2007 Banks are lending to private sector at below the interest rate UK banks are taking the unprecedented step of lending to the private equity and hedge fund sector at below the official UK interest rate. Experts said it was a sign of City institutions' growing desperation to buy into the booming alternative investments market. For the first time since comparable records began, the loans from banks to non-bank financial institutions are being charged at below the base rate, according to figures published by the Bank of England. They are the latest evidence of the frenzy surrounding the sector, and may help explain how private equity groups have managed to fund ever more ambitious takeovers of major companies. High street chain Alliance Boots recently became the first FTSE 100 company to be taken over by a private equity group, after US giant KKR paid £11.1bn. The phenomenon is known to be of concern to the Bank of England, which fears the wide availability of cheap money could contribute to higher inflation. It has said that the statistics may also reflect the fact that big banks are lending money to their subsidiaries at preferential rates. "It's symptomatic of the amount of liquidity in the system. At the end of the day it helps explain why the financial system has remained so active, and why London property prices have remained so high." This irrational exuberance is plain dangerous. If just one major private equity firm goes under, the banks could find themselves holding huge bad loans. Remember what happened to the Japanese banking sector in the nineties?
  21. The uber-Bear view: Q4 2007: International stock markets fall and commodity prices spike due to bird flu or Chinese market crash or major terrorist attack or bombing of Iranian nuclear facilities (or something unanticipated) Q1 2008: Several private equity and unlucky hedge funds collapse, triggering a credit crunch. Interest rates cannot be lowered as commodity prices are still pushing up inflation Q2 2008: Housing market in tatters
  22. A house price fall could go on for many years, and you have to live your life in the meantime. It sounds like you've already done your due diligence, so just a checklist: Make sure you can easily afford the mortgage repayments (so you won't struggle when interest rates rise or if you start a family) Get a flexible mortgage and overpay when you can (saves on interest and gives you a cushion to fall back on if times get harder) Drive a hard bargain with the price (a few more bearish newspaper articles might help you with this one) Avoid a new-build like the plague Buy a house, not a flat Buy in a decent area (one you'd be prepared to stay in for 7-10 years) And once you've taken the plunge, stop reading this forum: it won't help you sleep at night. Seriously though, if the time is right, the place is right and the girlfriend is right, just go for it!
  23. I wonder whether the consumer inflation problem is due to market oligopolies created by the merger/acquisition frenzy. You mentioned your £4.99 antihistamine eye-drops. These cost just a few pence to produce. You are paying what the pharmacy think they can get away with charging. Clearly the 'free market' isn't working here. Could Boots (taken over by a private equity firm in April) be exploiting their market dominance (raising prices to turn a profit for their new over-leveraged master)? Why are supermarket prices rising faster in the UK than in the rest of Europe? I'd suggest that the heavily 'consolidated'/dominated supermarket industry is no longer competing on price. Instead, the supermarkets working like mad to squeeze more profits out of their customers, drive up share-prices and keep the private equity firms from the door (both Sainsburys and Morrisons are private equity targets). There's a worrying degree of 'consolidation' going on throughout British retail. This will fuel inflation by reducing price competition.
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