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House Price Crash Forum


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Everything posted by Tommy

  1. yes, it's called democracy, but unfortunately (or fortunately) people only get to choose what party to vote and they do not get to directly vote every single law. In an ideal democracy the government should always do what the majority of people want, this does not always happen. I am sure the majority of people, me included, want to stop illegal immigration. I am not so sure that the majority of people want to stop legal immigration, at most they want to control it a bit more (which is totally understandable and I agree to a certain extent). > Shouldn't the majority of the population decide what happens to their country, not the minority? If you allow me a joke: it's always the minority of the population (the one in politics) that decide what happens to their country...
  2. Some of them might already have friends and family here in the UK and they would feel lost and alone in another country, I do not know... I agree with you that most asylum seekers are not in fear of their lives... ok, I see your point, but I have never said otherwise. The point is that many immigrants are now from Poland. Polish people are not asylum seekers and they do not have to get special permissions to come here... they simply can! They are legal! Some people here have a problem with this. I do not. I am against illegal immigration. I am think legal immigration is good, wherever the person is from, EU or outside EU.
  3. no... I thought you said: why are they all coming here to the UK? What's wrong with France? and I replied saying: there is nothing wrong with France, they are also going there. maybe I misunderstood you then? what was *your* point?
  4. that some of them are definately going to France. Some others are going to Italy, some others to Spain and some others to the UK. They are not all going to the UK. This is my point.
  5. Sure, thanks. I just did not bother wasting time pressing the shift key.
  6. You are right, every nation on earth has had a flow of people coming and going. The fact that you do not like immigration after 1950 is because this is what you have to face! If you were born in 1920, maybe you would not have liked immigration after 1870. Now tell me what is your problem if in your country there are people who have arrived after 1950 and have different cultures? And you should avoid expressions like the above. The british language is vast enough for you to use more adequate expressions.
  7. Yes it is, you are perfectly right. But some of the people who have only British blood in their veins (at least since they can remember) consider the offsprings of immigrants as immigrants even if they were born in the UK and have a British passport, a British accent and a British education... I consider these people British, it would be unfair and close minded not to! I think we should distinguish betwen: - People with indigenous British blood - British people People with indigenous british blood: They have British blood in their veins, at least for a good number of generations back, but they do not have to be British at all. For example the son of two Brits who emigrated to Spain and was born in Spain might have only a Spanish passport it will have British parents and ancestors and so British blood. Many of these people are of course British. Note that this category is more an illusion than anything else. People can claim thay have only British blood but they can only remember a certain number of generations back... British people: These are people with a UK passport, born in the UK (or not) and do not have to have indigenous Birtish blood in their veins to be called British. Some British poeple will have Indian blood in their veins and will be very proud of this (as proud to have indian blood as to be a british citizen). Other will have african blood, and others Polish blood. Of couse then British people will have children and so you might have a British person with both African and British blood. These things are happening now and have been happening in the past. There is not such a thing as pure british, you might have to go back 2 centuries or maybe 5 or maybe 10 or more but at a certain time someone who was not British or from this island is very likely to be in your blood.
  8. I think "benefited" has only one 't' in british english ... The minimum wage is 5.35 pounds an hour: 37.5 hours x 5.35 x 52 weeks = 10432.5 which is 749 pounds per month net. 749 * 2 in a family = 1,498 pounds a month. This is certainly a living wage, you might not have a very high standard of living, but you can certainly afford "a" living. From fist october 2007 the minimum wage will be: 5.52 In the US the minimum wage is much worse! In Kansas is about $2.65 and in most other states is around 5 - 6 dollars an hour. I have certainly been silly, but I have not been insulting. British people should certainly not get out of their own country to make way for immigrants. I did not mean and I did not say this. I was just making a joke. Sometimes when you read something you do not understand it's a joke because you read it in your head in a way that does not sound like a joke...
  9. Iraq: they are a bit like catholics and protestants in nothern Ireland, they are both Christians but they argue. In Iraq the two main groups are both muslims, but one is Sunnis and the other group is shiites, and they argue! But anyway I do not understand why you are bringing Iraq out, it had a very different history: it had a dictatorship and the dictator was of the minority group! They are now under civil war and they have had an invasion a few years ago. What does this have to do with the UK?! (other than the UK also went there..) US: it's a country were all people are immigrants in my opinion, except a few native americans. Ok, that's a joke, but the point is that the problem in the US is not immigration but "inequality". The US is one of the contries in the world where the people are most unequal. The middle class earns way more than the "under class" (the difference is much greater than any european country by far) and what is more there is no free healthcare and they can only dream about a benefit system like in the UK. Australia: I say the above joke again, only this time is even more true. Other than the joke, I am not too aware of the problems in Australia so I will not comment. London: the higher crime areas are the areas were there is highest number of deprived people. They do not necessarily have to be immigrants. Illegal immigrants will find hard to find a job and will therefore be very likely to fall into crime, but for legal immigrants I think it's completely different. Immigration, contrary to what you are saying, is benefiting and has benefited the UK. > In the real world of business/economics if a job does not pay a living wage, it should not exist!!!!!!!!!!!!!!!!. that is what the minimum wage is for. Actually as far as economics is concerned it would benefit the economy if those kind of jobs existed, we would be able to produce cheaper stuff and export more and have more profits. However, they cetainly do not benefit society as a whole including those people being paid very little and so this is why the minimum wage was introduced. If you do not like foreign people in your own country, you can always leave and migrate to another country.... ooops no! Then you would be part of that country immigration too and you would find someone like you who is very close minded!
  10. No, your imagination brought you to think I said something I did not say. I have not said that there are no native Brits. I have said that "native" Brits in the past have also migrated to other countries so and some still are. I just have a friend who moved to Thailand forever and my neighbours moved to Spain. When Brits move, especially outside EU they also become immigrant. So, from a nation of people who have and still are emigrating to other countries, you sentence was out of place. Regarding the rest of your ... post, I am glad you have such noble and rooted origins, congratulations, what should I say??! I do not really care however, you completely missed my point and I do not understand why you're telling this to us.
  11. Remember that British have been and still are migrants as well. My view is that one thing is legal immigration, which I welcome and consider a good thing especially when controlled a bit, and another thing is illegal immigration which is always bad. Legal immigrants usually will benefit the economy, kicking them out would damage the economy.
  12. True, if I was was a landlord and market price for was 600 but I have a very good tenant that pays 525 I might not raise the rent and piss him off, I might keep the rent at 525 for a couple of more years before adjusting the rent a bit. However, when the market price is 600 and the tenant is paying only 300 or less, then I would immediately slowly try to put the rent up to close the gap with the market price, but this process might take years and you would only piss your existing tenant off if you put the rent up year after year... It's probably too late, you should have not waited this long! In this situation best thing is to end the current contract and put it on the market again, for let's say, 550. Your new tenant might not be as good, but it's 250 more a month, well worth the risk.
  13. During UK the crash of the early 90's rents were generally increasing while sale prices were generally decreasing. On the other hand, during a property boom, everybody wants to get on the housing ladder and nobody wants to rent, so rents usually do not increase. In 2002 for instance it was much cheaper, on average, to buy and do an interest only mortgage than to rent an equivalent propety. Now this is not true anymore as prices have almost doubled but rents have not. During a crash most people want to rent thus pushing the demand higher and so increasing prices.
  14. I think some people on this site have found rents that are a bargain, most rents are not this cheap. I would say that most rents are similar to what the interest onyl mortgate for that property would be based on 15% deposit. Some older properties might have lazy landlords who have a small loan (since they bought long time ago) and they are too lazy to adjust the rent as they are already making profit.
  15. I agree. Benefits are a good thing, but some people are taking too much advantage of them and something should be done!
  16. This is probably true on average, but there are also many immigrants with very good accademic backgrounds who cannot find a job (or the job is not paid well) in their own countries and they come here to compete with pharmacists, doctors, software engineers, etc...
  17. I do not think everyone is saving 1,250 pounds a month. Rent is not cheap. If I rented my house I would pay 600. My interest only mortgage would be 550 (but I do not have an interest only one). When you rent you still have to pay council tax and bills so I if you are saving 1250 pounds a month it's not because you are renting but just because you can afford to.
  18. true, I agree, but the whole point about your graph was to show that we have reached the peak point (like in 1989). My point was to show you that in terms of affordability we have not. I agree we do not have to reach the peak for a crash to occur. I agree we are most likely going to experience negative "real terms" HPI, I do not agree with you this is necessarily so bad for BTL investors... If I buy a house for 100k, I put 15k deposit and get a loan for 85k. I then have my tenant pay the interest only mortgage on the 85k (I might just break even). Then I get my 2% HPI (let's say inflation is 2.6%). Well, I am getting 2% on 85k : 1.7k which considering my initial investment of 15k is 11.3% and not just 2%. Of course things are slightly more complicated (you have agency fees if you are using an agency, you have capital gain tax in most circumstances although you can have the usual relief, etc..). Also when house prices are falling rents are usually increasing. Of course 20% HPI is much better for BTL than 2% HPI, but if you do the right investment and do your calculations right even 2% is not that bad after all.
  19. Well, you have used the graph which shows house prices adjusted for inflation. This is not really an indication of how affordable a house is as the affordability does not just depend on "real house prices" but also on the interest rate (and also other things like consumer price inflation is not necessarily too similar to wage inflation, lenght of mortgage, etc...) Why don't you draw the same thing using the Affordability Indices from nationwide ( Mortgage payments as a percentage of take home pay ) ? For example the FTB affordability index is 121.3 in Q1 2007 and was 147.6 in Q2 1989. I am sure the last rate hike as put the index up a bit more though, but we are certainly far from 147.6. So houses are still not at their peak in terms of affordability, the only thing that could make affordability worse than 1989 at current house price levels is a few more rises in interest rates (which might actually happen) (Note that Northern Ireland is already worse than 1989!) In my opinion even this graph is not too reliable because the trend is that over time houses will be less and less affordable anyway, we have to accept this fact. Also, affordability is not all, demand and offer is king (but demand mainly driven by affordability of course). In other words there is still room for a few more rate hikes or for some more HPI above RPI-X (but not for both really, at least not for long).
  20. This does not mean anything. Small dips are normal, how can you say that a small dip is the beginning of a great house price crash?! In Q3 2004 the average house price according to nationwide was 153,482, in Q1 2005 was down to 152,790. Was this the beginning of a crash?! No! In Q1 2007 it's now 175,554. At some point house prices will have to stop rising at this pace, but the data you have provided does not mean anything yet. Overall prices are still increasing. We will soon be able to see if the last rate hike had an impact on the property prices or not... We just need to wait and see.
  21. No. One in the beginning of the 90's (and since we are approaching 2008, here comes your 18 year cycle!), one in 1980, and one in 1973. As you can see the other two are 10 and 7 years apart. Note that it depends on your definition of recession. Here I have used as the definition of recession 2 consecutive quarters of negative GDP growth, this is not a widely accepted definition, but it gives the idea pretty well. Also notice that monetary policies to fight recessions are getting better and better. Tommy
  22. I do not think it is very likely for prices to fall by 50% in the event of a crash (anything more than 30% seems almost impossible to me). Also, remember that prices could not fall at all. The house price crash is not guaranteed, you might think it's extremely likely, but nothing is guaranteed in life. Also, you talk about 20 years... 20 years is a very long time; the average house price is about 175k now and was about 40k 20 years ago... As for Germany: Germany has had a recession in 1993, and another one in 2003. Germany has experienced low growth in general over the last 15 years. Germany has recently had huge unemployment. Germany has had a property price crash. Note that for the uk things are currently better: - the economy has experienced very good growth over the last 10 years. - unemployment rate has been very good. - wage rises have been very good. What is more, as mentioned above, you cannot be certain that the uk is going to have a property crash anyway. (but the point is that if the uk is going to have one, it does not have to be as bad as the German one). I think that the situation here is not as bad as people describe it. The average salary is about 26k, so a family would have on average 52k to play with. At a 3.5 x this could get you a loan of 182k and the average house price is 175k. So the average family can buy the average house. Of course many people are priced out, of course many areas are too expensive, etc... but on average things are not horribly wrong. The situation could of course change. The uk could enter a long recession, unemployment might rise, inflation as well, wage rises would not because of unemployment, interest rates would hit 15% to keep inflation under control and house prices would have collapsed by then by over 50%.... It's always easy to paint an apocalyptic picture, but the likelyhood of this happening is slim.
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