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Zeno

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About Zeno

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  1. Oh, and I think it's true that houses are in short supply but so are buyers that can afford them. My feeling is that the market for "normal" flats (ie conversions, places with gardens, street properties) is slightly separate from the new-builds. You can pay £250-300K for crappy little newbuilds without gardens, but can still get better "normal" flats in the £200-250K region. I bought at £170K, sold at £210K. I think the sort of people who are buying newbuilds are a bit blinkered to the parallel market of flats. But also different areas are different, and there is an awful lot of newbuild in the East and City areas which is maybe affecting Islington in particular?
  2. Thanks. I'm not under any delusion that the equity makes me safe. I think the more important thing is that the place I bought and sold was ex-LA, whereas this place isn't, and I think the ex-LA might suffer more in a downturn. I do think this place is still a fantastic source of information and opinion, much of which I do respect. But yes, as you say, you need to exercise your own judgment as well and choose who to listen to,
  3. Lovely. A good old-fashioned HPC response of telling anyone who doesn't toe the party line that they are doomed. Thanks for that. Reminds of the good old days in 2004 when very similar things were being said with equal certainty. My point was that I think there may well be falls and they may affect me, but I'm prepared to take the hit for the sake of owning if need be. So in what way does that make me more screwed than renting for the rest of my life would? You don't know a heck of a lot about my situation, so you're making big assumptions. But if I'm screwed it's my own responsibility. I'm not telling anyone else what to do, and I wish anyone who makes a different decision to me the best. If you've made that fortune your signature boasts of, why are you bothered that I'm trying to deal with my own problems in my own different way?
  4. Yes, I sold for £40K more and rebought elsewhere, I'd done about £10K of work (to add perhaps £20K to notional price), and then had luck that the market rose a bit more. I'm not trying to boast, just pointing out that delaying can also cost, and perhaps on a lower income I'd have been worse off waiting at that stage. I think in most of London larger houses hasn't risen since last year, which may explain your Islington experience, but this was a moderate flat, and they have risen a bit. Enough that I wouldn't now have been able to get the mortgage I'd need. Yes, I suppose the trouble with a major crisis is we'll all get hit somehow, and it is certainly possible. Interesting that you say that about stepping out of the market - I occasionally suspect that I see people of modest income here listening to advice that is more relevant for people with far greater assets. I remember the abandoned building sites well, and you're right. That's one reason the average fall will probably be larger this time, the wider national spread of HPI. Personally I think the hardest hit this time will be new-build executive apartments which will go the way of shoddy studio flats from last time. Elsewhere I think the falls will be variable, with better areas perhaps doing a bit better in a flight to quality (as was mostly the case last time). The point I was really trying to make was about the bottom, when prices crawled along the ground for a good few years before there was even a hint of new HPI. Trust me, I'm not saying there won't be a correction. I think there will be. I'm just gambling on buying as sensibly as I can and trying to build whatever equity cushion I can against the falls - rather than waiting, possibly a good long time, for the end of the decline in prices. Others will make different decisions and good luck to them too, as all of us who didn't buy before the boom are in an equally difficult situation.
  5. Well it is and it isn't. If you buy now purely because of that fear, then fair enough that is bubble behaviour. But recommending renting forever is a very different thing to suggesting waiting a few years for prices to subside. I think that this site does a good job in pointing out that rent isn't necessarily dead money and that people need to look at the big picture. But the step from there to saying that the permanent renting option is a good plan is a very big one, and probably not great advice IMO. Admittedly if your ever-decreasing real prices theory comes true, long term renting may be better. Otherwise, for most people it's a matter of trying to time buying correctly. I think it probably does look a bit different to people less wealthy than you. Personally, having bought with a minimum deposit last spring, I'd be a lot worse off right now if I'd listened to the HPC advice to wait last year. In fact I'd probably be priced out of my area once again. Now I have a bit of insulation against possible falls, I suppose I could step out of the market, but that would be a pretty big risk too, so I'm happier trying to consolidate the gamble I've already taken.
  6. I just mean that swings in stocks and shares are a bit quicker and more extreme than property. At the low last time (which took four years to be reached at least - the annual average falls along the way were only in the region of 5%, although some areas were worse hit), pretty much no one thought buying was a great idea, and not many honestly expected the subsequent HPI to be so soon or so dramatic. If there are serious falls the same is likely to apply.
  7. That sounds like SM advice. Last time the property market hit a low in about 1993 and sat there for about 3 years (more some places) sulking. It wasn't a "blink and you missed it" kind of bottom...
  8. I actually read a lot of stuff here when I was thinking of buying in early 2005. I learned plenty but in the end made the decision to buy based on looking at my own situation. But I did take note of some useful info. I bought something that needed work in a reasonable area, and spent money doing it up. Now I've sold it at a fairly decent profit (a mixture of the market rising a bit and the work I did) and bought something a bit bigger, which again was slightly cheap as it needs doing up. So hopefully I have given myself a bit of headroom, in that there is a fair bit of equity in the property at current valuation - meaning I can afford falls to some degree from here. For me there was a strong emotional motivation to buy so I decided to buy, but to try and do so in a way that decreased the risk of negative equity etc.
  9. Then I respect your bravery (and powers of persuasion with the other half...). I tend to think you might have timed it right. What would worry me about STR would be how long you might have to wait. Thus far the market has been pretty stubborn, but it could change fast. Good luck anyway. I hope it works out for you.
  10. Exactly. So unless person B can genuinely make so much money from the savings and investments over the years to be ahead of person A (and perhaps a bit more to make up for the emotional difference) then the permanent renting option is usually the worse plan. Short term renting to wait for a correction or to save a bigger deposit is a different matter, but I don't think you should necessarily translate that into "Why don't we all rent forever"...
  11. The stability there sounds good, and way more than most people have on ASTs. I'm sure it's fine for some parents, not saying it's not. My original point was about how many people would STR with kids, which would be a different choice as it would be a switch from owning to renting. Renting can be great sometimes, no doubt. I had some crappy experiences with landlords that put me off. And I think that if you're comparing renting to buying and saying there is no emotional difference, you need to remember that for the majority of people in the UK there is an emotional difference between the two, right or wrong.
  12. Very likely true. The birth rate must be affected by the degree to which people now are choosing to wait or remain childless. The demographic issue will also affect government policy on immigration as a falling population will create other problems, so immigration is likely to be encouraged by governments of the next couple of decades, regardless of any political consequences.
  13. Me too. But it's not just about the actual move. It's about the contrast between owning and feeling in control and renting and knowing the landlord can kick you out any time. If you don't have the choice, renting can work, but most parents would prefer to own. Not saying most parents are right, but I don't think the freedom of renting is generally as appealing to someone with kids.
  14. Do you have a family (meaning kids)? I suspect that many people who do prefer the emotional stability of owning to renting. I'd be interested to know how many people STR with a family - I would have thought it was an upheaval that is easier to take on if childless...
  15. I agree with other posters who point out the low quality of the renting experience in this country - I know people renting in France and it is a very different experience. Short or medium term renting to wait for a crash can make sense, although it can be a problem if you call the top of the market wrong. And if you think (as some here do) that there will be a serious long term decline in property prices, even permanent renting might make sense. But if prices in the long term increase even moderately (more likely IMO), then it may well be worth paying the extra for a mortgage because 25 years of mortgage will leave you with a house, whereas 25 years of renting won't. The extra buys the house, and if there is any capital increase, also gives you a geared increase in wealth. Some may be able to make better money elsewhere, if so good luck. But for me the second-class nature of renting in this country was a strong incentive to buy instead. And most projections I made over the long term for my situation showed permanent renting to be financially worse.
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