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House Price Crash Forum


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Everything posted by Martello

  1. There is a real possibility, given the parasites you get on here, that BTLers will swoop in as the market falls and buy up all the FTB stuff - just like they have up until lately. Ultimately there will be an oversupply of rented - there already is a serious oversupply where I live - but these things have a habit of coming out in the wash. Some BTLers have been burned a bit and they seem to be trying to get out now. Anyone who bought a few years ago round here can drop their rents and still carry on. We need the government to recognise BTL is completely skewing the market. There should be punitive taxes on any profit realised from the sale of 2nd homes. No doubt Gordon will realise this one day and stick Capital Gains up to 80% on property disposals.
  2. So the message is: "Carry on as if property prices were not falling - and they won't!" Perhaps if every agent in country met in their respective offices at midnight, knelt down in a circle, held hands and projected the good thought 'house prices can never go down' then we could all awake refreshed in the morning and go straight out and buy a house we can't afford. Good plan.
  3. Sounds like you're young. Do yourself a favour and go and live somewhere civilized where you do not hve to mortgage your life away for the privilege of living in a shoe box. DON'T FORGET - the money you borrow on a mortgage moves straight up the chain to the bank account of the person at the top. So you go into debt for the rest of your life so some 55 year old can retire and live the life of Riley. Do not UNDER ANY CIRCUMSTANCES consider buying a property unless it is affordable in these terms. The mortgage is no more than 2.5 times the higher salary plus once time the lower. If you can do this you can afford your property and have the occasional night out - i.e. enjoy your youth Make sure that if you want to have children you can see the way ahead so that in a few years time - assuming your salaries go up etc - you know you can afford a bigger property And be sure that you will be able to afford for one of you to give up work - at least until the kids go to school - this two parents working all hours society - with kids dumped in childcare - is not, in my opinion, healthy. In fact, its crap all round. What I have described above is how things were when I were a lad - 30 odd years ago. Property needs to halve in price soon before our society disintegrates completely. Already average age of FTB is 34 and we now face a generation of women forced to be childless by economic circumstances. We already have a pension crisis - this will be nothing compared to whats coming up in 20 or 30 years.
  4. The only rental contract I have ever seen says that when the initial contract period expires, if the contract has not been renewed - the contract will continue on the same terms and conditions until one party or the other gives the required notice period under the contract. So, I reckon, the landlord - having allowed the property to be repossesed - unless he gives you proper notice - will be in breach of contract. When the bailiffs come round - I'd squat. Your contract is with your landlord. When the property has a new owner - they have acquired a sitting tenant - especially (I would imagine) if it was bought on a BTL mortgage. They would, by definition, know it was rented and if they want to get you out would have to negotiate. Would have thought you could make a few bob.
  5. Have to agree here. I am mortgage free but that doesn't mean I don't still get through a large amount of dosh each month. The thing that really bugs me is the council tax. I've worked bloody hard all my life and now the council tax is as much as my mortgage when I first started out. But, of course, for youngsters, the mortgage is a massive part of their outgoings. Poor buggers. It was a lot easier in my day.
  6. Now, now, don't be a wally dogbollox. All everyone needs to do is say halve their prices. The only person that will lose out is the one at the top of the chain - and they probably have loads of equity anyway. Good news all round I'd say - except of couse for anyone who bought second properties as an investment.
  7. Whilst congratulating you on your good fortune and wise purchases, this sort of thing always makes me think 'somebody, somewhere, is earning 5 bob an hour' - and then I think - 'lots of people in this country are earning 5 bob an hour as well'. In 20 years time we'll be a third world country.
  8. Glad to see evidence to support my contention the slow down in the South East has been going on for a long time now.
  9. Be interesting to see if the jobs get started. It takes a long time for things to slow down, but as soon as developers find it hard to shift their properties, they'll be thinking long and hard about starting new ones.
  10. Now that sounds damn familiar. Where have I heard it before ... wait, let me think ... yes it was all the way through 1988 and most of 1989. Yet, and this is eerie - this advice, like now, came from people who had a vested interest in enticing more suckers into the game AND IT IS COMPLETELY AND UTTERLY WRONG. As history will prove. I am sitting watching a falling market unfold. I've been here before. Any FTB who buys now is making a BIG MISTAKE.
  11. I am puzzled by some of the comments on here. In the last crash: Several big housebuilders went to the wall or were taken over cheaply to get at their land banks. No-one that I was aware of increased production. Exactly the contrary. Putting up houses is an expensive hobby if you can't sell them. Many builders ended up building just enough houses so that, if they sold them, they could service their debts on the land bank. On the site I was working on we reduced production progressively - and laid off all the workers (they are all self-employed) - until I, as a Site Manager, was sitting in my site office on my own. I even started showing potential buyers around as the sales staff were sacked. Then even this break in the monotony stopped as buyers completely vanished. On the site I am talking about we went from all guns blazing flat out - throw them up in 12 weeks - production to sitting in a quiet and empty field with the last dozen houses (that we built - most of the field did not get built on until years later) finished but unsold - all in the space of about 18 months. I was moved off on to a commercial site and, when this was finished, I was made redundant. Incidentally, wages for the 'lads' halved in this period. Quick and easy - 'I was getting £80 a day on the last job' - 'well its £60 here, take it or leave it.' A few months later it was £50 a day, then £40. Then masses of blokes left to become security guards or cabbies. The developer I worked for went broke a year or so later as they could not service their loans. They had borrowed big in the boom years of the late 80s to make sure they had a decent land bank. As a former site manager I know, as it were, the game. Round here up until about 2 months ago sites were still going flat out - faster than normal from what I could see. I think they were desperate to get finished and get sold because anyone who was involved in the last crash knows exactly what is coming next. Near to my local station they are putting up two blocks of flats. One of them is nearly up to roof level. The other is coming out of ground. On the one coming out of the ground, work has stopped. The building game is a wonderful example of crude capitalist markets at work. Every bloke on the site is self-employed - even the site manager in many cases. You can lay off a whole site in a couple of phone calls. Blokes that thought they still had 6 months work on a site find out on a Friday afternoon they have 6 minutes work left. And then they go home and start the phone calls - 'got any work on mate? Booms and busts are not funny.
  12. The trouble with dogbollox is he pretends not to understand the market. Why would you buy something today even if you only thought it MIGHT be cheaper in 6 months time? And, when you bear in mind that it might be the difference between taking on a 70k mortgage instead of a 120k and not losing your hard saved for deposit in negative equity - it becomes a no-brainer - apart, of course, for people who speculate in the market. Even for ordinary mortals who are just taking on ever-increasing mortgages to move up the ladder - a falling market is an opportunity to wait and move up with a smaller mortgage. Unfortunately, most of the populace seems unable to grasp this. But they will.
  13. I was a site manager during the last crash. This is exactly what happened last time. The big housebuilders forward buy their bricks - either direct from the makers or, more usually, through the big builders merchants - to make sure supplies are available as each project progresses. Looks like the big housebuilders are not forward ordering. We actually had shortages at some stages of the last crash as manufacturers ceased production or slowed it right down. And, just to keep things interesting, they tried to put prices up to maintain their profits even though they were turning over a lot less money. A good and heartening sign.
  14. We're in a market with new dynamics due to the all pervasive media and internet. A savage crash next year dragged slightly slower than it should be by the illiquid nature of the property 'investment'. I reckon - London and South East anyway - down 30% in real terms from the peak. Happy days are here again.
  15. My first buy was a 2 bed maisonette in a West London in 1979. It was in a very nice area (was being the operative word - it is a dump now). It cost me £22600 and I had saved £4600 (having moved back home with Ma and Pa for a couple of years after a relationship break up). So I had an 18k mortgage. At the time I was earning £7.5k - maybe a slightly better than average wage - but certainly not by much. I did not need a partner to help me with the mortgage. My father in law bought a 4 bed detached in the early 60s as his first home. Wife worked part time just to get out of the house. My eldest brother bought a 3 bed detached in the early 70s as his first home. Wife did not work then. My next brother up bought a 2 bed flat for 9k in late 60s - he was earning about £60 a week as a TV engineer at the time. He moved to a 3 bed terrace a couple of years later (11k) and had his two children. Wife did not have to work. Lots of friends - particularly those that got married young (say under 25) moved straight into 2 or 3 bed terraces or semis. I bought a flat at 27, mates who got married a few years before me bought houses. Even then we were conscious of missing the boat as prices moved up dramatically from time to time. I can't understand the people on here who say it was just as big a struggle then. Not in my experience. Now I can't see anyway an average FTB can get started - certainly not in the Southern half of the country. Its very depressing thinking your children are going to have to move hundreds of miles away (or abroad) when they want to settle down.
  16. I reckon they'll either call it very soon or put it off until the 5 years is up (not by choice) if the deck of cards starts coming down sooner than expected. Funny thing is, either way, I think they'll get back in again. We won't get rid of them until we have a catastrophic financial and economic crisis - sometime in the next couple of years is my guess. Politics is all about personalities. 1992 Major against Kinnock - against the backdrop of a HPC and a recession. Major (hardly the most charismatic PM) won because Kinnock was unelectable. Until the Tories come up with an electable leader, they have no chance. You should never overestimate the intelligence of the UK electorate and, of course, our first past the post system ensures we always enjoy minority government. What was it last time? Think they polled 40% of the 60% turnout - that sounds wrong. Seem to remember at the time thinking - so just 24% of people in the country voted for them and again they have a landslide. And we went to war in Iraq to give them democracy - why can't we have some?
  17. Oh dear, oh dear. Do you live in the UK? How on earth is an average youngster earning 15k a year going to save a 20k deposit - while paying rent (and possibly student loans, oh and shouldn't they be starting a pension as well?) And they won't be able to borrow that much. And, if they can, they won't be able to pay the mortgage. Good news all round!
  18. They produce a daily email newsletter called the Daily Reckoning. Apart from some appalling attempts to sell various crappy schemes, it contains some thought provoking and (what sounds like) well researched ideas. Its worth a read for a laugh and because it is informative. They basically believe we are going to hell on a handcart. The believe in gold, gold, gold and often take a contrarian view - hence perhaps their recommendation of a house builder. Or, and I know I am a cynical *******, perhaps they hold shares in house builders. They endlessly pontificate about the debt mountains in the States and here and are convinced we are in for a depression worse than 1929. I've been reading it for a couple of years now and I must say they make a pretty convincing argument.
  19. This is posted elsewhere on the web so I figure its okay to post here: The quotations below, taken from a conversation between characters in the novel Wilderness of Mirrors, published before Dot-com speculation boiled over, provide an explanation of such events. "Value is in the eye of the beholder. People are not always logical, rational. Markets are just a collection of individual psychologies, and are just as susceptible as any mass of humanity to self-delusion, panic and hysteria. Look at Polly Peck. One day it was worth billions, the next day virtually nothing. The same with Maxwell. The trappings of success aren't too difficult to create. Everyone wants a success story. If something approximating one appears, they all leap on to it, turning it into more of a success story, and so the bandwagon rolls on. You might even know it's a bandwagon you're on. That doesn't matter as long as you jump on and off early, as long as there is still a queue of people ready to jump on after you, buy your shares from you at an inflated price." "... Never underestimate people's capacity for ignorance in the face of greed ... Dangle to prospect of making ten million pounds in from of someone and he suspends his critical faculties. It's almost as if the dream is more important than the reality." "The success story, the bandwagon, the share price rising to the stratosphere ... Finally someone takes a really hard look at it and begins to see the flaws, starts pointing them out. Suddenly, everyone tries to sell, the herd instinct takes over, and the share price plummets. This can happen in minutes ... What's the true value of the stock? It's worth what someone will pay. That's not always a rational decision, but it's often predictable, if you understand market psychology, and if you do you can manipulate the market, for a little while." "It's incredible. Everyone always thinks the financial markets are so scientific and high tech, with all the computers and telephones and trading screens and God knows what. No. That's just the trappings, the infrastructure. It's not cold and technological. It's driven by instinct and emotion." Only difference between that above and the housing market is liquidity.
  20. The massive rise in the price of bulbs has been caused by one of the most amazing speculative bubbles in history. Any idea what I am talking about?
  21. One of those people said 'household incomes are rising 5% a year'. Really, from what I can see of our local economy I would say DECREASING by 5% a year would be nearer the mark. Lots of people are earning the same money they were 10 years ago.
  22. There is no doubt the really rich have a whole range of ways of shafting the would-be rich. If you were an executive of a publicly quoted Estate Agency business, would you be buying or dumping shares now? And while you were dumping them would you be saying: 'I'm getting out before the market goes completely to pieces' or: 'The market is undergoing a mild correction at the moment but we look forward to seeing a stable market with a slight upward trend emerging in the new year.' Blimey, I almost found myself believing that as I typed it!
  23. Yes they take a lovely slice. Even in these days of discredited fund managers (how many have beaten the market every year for 5 consecutive years - tossers and thieves the lot of them) - people amazingly will still invest in Unit Trusts where most of them still take 5.25% of your money as an initial fee. The mind boggles. The way those tossers work, it will take two years just to get back to where you started - if you are lucky. They should be forced by law to be rewarded by success. They say 'we're really clever bastards, we really understand all this complicated investment stuff, you trust us and we'll increase the return on your investment.' Well its ******, ****** and more ******. When, as the incompetent idiots at the life assurance company who have had my money every month for the last 17 years (endowment), can't even give you the same returns you could have got putting your money into a building society, it is clear they LIED about how expert they were. They are not experts, they are CON MEN.
  24. Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Ha, ha, ha, ha, Your complete and total naivety is wonderful. Best laugh of the day so far. Thanks. You just don't get it do you. These people are sharks. Loan sharks.
  25. Brilliant! Problem solved then. Don't need to save a deposit! Borrow more than the property costs - enough left over for a bit of DIY, a holiday and maybe a car. Whoops! Silly me. Don't you need to be earning enough to pay the mortgage regardless of how much the Shylock is prepared to lend you. Then, when you want to move up in a few years - no problem, borrow 150% of the next properties value. But wait! Hold on a minute! What if prices went DOWN! The property might be worth less than the loan! Do you think Northern Rock have even considered this? Or maybe lenders like them think: "We don't give a F*UCK about the people borrowing - if they are stupid enough to do it, we're happy to take their interest. And, if the property does go down in value and they end up in trouble we'll repossess it, sell it and then we'll hound the buyer to the ends of the earth for the money we've lost." I have met people who think that in the last crash people could walk away from a property and give the keys to the Building Society - and kiss their debt goodbye. My brother did that, and went self-employed for a few years. As soon as he got a job again (and started paying NI contributions) the Building Society found him, had him in court in double quick time and had an attachment of earnings order on him which, 10 years later, he is still paying off. FTBs, please form an orderly queue.
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