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the winkler

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About the winkler

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  1. This is exactly what happened in the crash of the early 90s. People who bought at the peak had to wait the best part of 10 years for the negative equity to be eroded. In the meantime FTBs in the early/mid 90s could afford to buy houses and leapfrogged flats altogether ... there was little market for them
  2. Totally agree. If I had a property to sell now I'd take the advantage of this blip in the down trend. You only have to look at the graph on HPC home page to see the property market is a falling knife - the momentum is too great - once the current spate of cash buyers has dried up, the down trend will continue IMHO. So, by buying cash now you may well be into negative returns by next year - 1-2% in the bank risk free looks very attractive in comparison!
  3. I think I qualified my first post by saying the figure for California was the worst. Your graph is misleading. You seem to be comparing US price drops once converted into sterling - surely they should be shown in dollars? ( ie the percentage drops shown in the currency of the country in question) . Now who's comparing apples with pears If our crash has been more severe so far, then what is stopping it being more severe when it's all over? What evidence have you to say the US boom was bigger than the UK boom? I think you will find that the UK house prices went up a lot more in %age terms in the last 10 years than the US. I'm not disputing the fact the California boom was astronomical - just because we haven't seen these sorts of figures in the (worst to be hit parts of the ) UK yet doesn't mean they are not a possibility! We are still 12-18 months behind the US in this. Let's wait and see PS I would concede that if unemployment in California is substantially higher, relatively speaking, than the UK (or certain parts of it) compared to the economic base then this may be a factor in the severity of the drop. Watch unemployment.
  4. Ok, if we assume California was the most overpriced region of the US and compare that with the most overpriced regions of the UK? Take your pick. The rest of the article shows lesser ( but still substantial) %age drops in other regions. Regardless, it clearly shows the effect of massively rising unemployment on house prices generally, in percentage terms at least. With the US being a good 12-18 months ahead of us, perhaps these are the sort of drops we can expect in the very worst locations in the UK (from the peak to a point in time say 12 -18 months out from now). With the UK indices still only at c20% from the peak there is still a way to go IMHO, regards
  5. Take a look at the figures here - the worst part of California has recorded a 68% drop! There is definitely a way to go here, bearing in mind the UK has arguably had a bigger bubble. Those who predict the market bottoming out in the next year or so, or are saying "now is a good time to buy" because property is now "cheap", are living in cloud cuckoo land - unemployment is just kicking in in the UK http://www.marketoracle.co.uk/Article8604.html
  6. Take a look at the figures here - the worst part of California has recorded a 68% drop! There is definitely a way to go here, bearing in mind the UK has arguably had a bigger bubble. Those who predict the market bottoming out in the next year or so, or are saying "now is a good time to buy" because property is now "cheap", are living in cloud cuckoo land - unemployment is just kicking in in the UK http://www.marketoracle.co.uk/Article8604.html
  7. A further anecdote which might suggest markets turn quicker than you might think. I str'd in Aug 2004. The house went on the market early May 2004- quite a few viewings and had under offer in 1 week. The agent left the property open for viewings just in case it fell through. Interestingly, viewings completely stopped within the next 2 weeks... coinciding with a prediction of a further increase in interest rates. If you look at graphs of month on month annualised house price inflation it peaked at around 15% pa in Aug 2004 and then dropped off a cliff, reducing to virtually zero growth 12 months later.... guess what , the BOE reduced interest rates in mid 2005... boosting confidence and starting a further growth spurt. Point I'm making is that when confidence turns in a rampant bull market, it's too late to do anything about it, unless, perhaps you already have your house under offer and and you have people in a trouble free chain who already have their finance arranged, and don't get cold feet and pull out! In my view you need to be about 3 months ahead of the curve ( minimum) ie before the actual turn in the market Hope this helps PS the timing of my sale was due to gut feeling and a fair bit of research at the time .... turns out the market recovered a year later ... but what would have happened if the BOE had'nt reduced interest rates in mid 2005, or even continued to increase them instead? Would the graph have continued on downwards I wonder?.....
  8. Quite correct. However it also depends on what your investment time horizon is and what your current risk profile is (ie the split between the different asset classes you currently hold). I've had a dilemma in having STR about 2 years ago, figuring where to invest cash. I've kept a fair chunk in high interest accounts, in the short term, to see how things pan out over the next year or so. The remaining 40% is in equities/ gold/ other bits and pieces. I agree that holding a large amount of cash is not good over the long term but it's fine in the short term whilst monitoring what's going on and taking time to buy into other assets when it makes sense - especially if interest rates are on the rise anyway!
  9. Absolutely! Whats interesting is that they ( said trolls ) tend to make spurious comments they can't back up with a well thought out and logical argument .... enough said really.
  10. Birmingham Midshires issue 6 internet easy account recently put rates up from 4.95% to 5.2%. There were also doing a 1 year bond 5.3%- worth checking out website as I found their rates pretty competitive ....
  11. I've been researching where and how to invest in gold for a few weeks. Signed up with Bullionvault.com with benefit of an allocated account. Unfortunately took about a week to get set up + transfer funds.... meanwhile spot rate gradually rising from around the $580 mark. Suggests governments not really offloading up to the deadline?. Ideally would have bought last week but as it is in for £10k worth at $591/oz. Agree it may be worthwhile buying more if any dips occur!
  12. Hi, I have been lurking on this site for 6-9 months or so and have become quite addicted to it! Thought I should stop being lazy and start contributing to some of these threads. I've lived in Surrey/ London for the last 20 years and up until fairly recently worked as a Commercial Property Fund Manager for a City institution. As such I like to think I have a pretty good handle on the risk and returns associated with property and other asset classes generally. I sold my house in May 2004 and decided to rent instead of buying again - my research and gut instinct told me that renting posed little downside risk and buying had a much higher potential risk. Despite the recent "reported" upswing in the residential market during 2006 my views remain unchanged ( ie I am bearish). Like some others on the site I believe the market has been perpetuated by a combination of further relaxation of lending and a bullish media which has fuelled the BTL market in particular over the past year. I look forward to contributing to some of the threads shortly.
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