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House Price Crash Forum


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Posts posted by Jonnybegood

  1. I have been away for a few months, well more than a few I think it was August / September I last posted.

    Up until then I had been following and posting on this forum almost daily since 2007.

    Before I joined the site, me and wife moved from our £295k property and took on another 5 year mortgage (Total 8 years) and moved to our current home for which we paid £380k back in 2003.

    There were 2 reasons for joining the site, I wanted to buy another property on the coast to which we could retire in around 16 years but rent out from now until then and secondly I could feel things in the economy were not right around mid 2007 and came on here for other opinions, viewpoints, advice etc.

    During those 2 and a bit years on here I spent very little money, tightened our belts so to speak and put off the second home purchase, even though either through luck or judgment I have done well from property over the past 20 years and would never have what I have now had I not bought my first home at 22.

    There were doomsters on here basically saying the UK was toast and some quoting house price falls in the region of 60-70%, even though my gut feeling was there would be great buying opportunities at 20% below peak prices I could'nt bring myself to buy.

    Anyhow I walked away from here mid 2009 and went with my own feelings after making money on banking shares after many here advised against, in November 2009 I bought a pretty run down 3 bed bungalow on the Welsh coast for £190k.

    I spent 3 very cold months transforming the place which to date has cost approx £37k.

    It was valued in February for £290k, a similar sized bungalow sold for £265k last week, but would need modernising.

    Anyhow we are not selling and instead have just signed up a 2 year contract with an elderly couple who have just sold their home and going to rent from us, the rent is covering the mortgage payments and 20%.

    This is just my own experience and must say many of the older posters on here gave some really good advice, but too many were doom and gloom and if allowed can really throw your own judgment.

    My advice, get out there in the real world and see whats happening, the guys on here who said the government would not let the crash happen were always shouted down, but to be honest they were right.If I had been on here in 2003 and not moved house then, I would never be able to afford it now and would still be looking at a 10 year mortgage now.

  2. Don't know why people on here target those already in work when there are thousands who sit at home everyday leeching from the social system.

    Public sector needs a big shake up and many jobs need to go, but at the same time these people are at least giving something back to the system, unlike those who claim to live alone with 2 or more kids whilst the self employed partner turns up a few times a week with a few thousand pound of tax free money in the top pocket.

    They get the council tax paid, they get housing allowances plus all the other bits and pieces, whilst our council tax increases year on year to compensate.

    Lets get back to basics, if you dont work and need government support then you should not have the luxuries in life, no sky tv, no broadband, no car for a start.

    You should not be allowed to top up your allowance, you should live in a house that matches your allowance, some of these people are living in 4 bed detached houses and we are paying 3/4 of the monthly rental charges.

    I hope the conservatives get in and make some drastic changes to the system, labour has failed and got to go before the country spirals even further downwards.

  3. There are too many people in the right positions who want to see a return to normality as soon as, they won't get it that way but there will be a stabilisation of most markets, Oil has come off its lows, Natural Gas prices in the US are rising on demand, FTSE has broken 5000 and still rising, House prices are 20% lower than peak prices after some haggling.

    The only bad news is unemployment rising and repossessions are still there in the background, but it seems the moment someone loses a house there is someone there happy enough to dive in and pick it up at a reduced price happy to pay 30% below peak at auction.

    With unemployment there are job losses here and there but also news emerging of job creation, when has it been in the middle of a recession that supermarkets come out with statements that it will create 1000 new jobs, they know the way the market is heading and peoples buying habits more than anyone else.

    Kingfisher ground yesterday very upbeat about sales and so are next, simples people are still spending.

    If we get more bad news from the financial sector i.e. HBOS then I feel it will be drown out by some more promising news, it will be isolated and not cause the problems seen over the past couple of years.

    Government borrowing 16bn but less than most analysts were expecting, cuts will come from the public sector but the private sector will then be on its way to recovery and so it may mean that the next 2-3 years will be very similar to this year as one sector recovers and another suffers.

  4. How about a Gay couple with no children and never will have, both earn £40k per annum, should they be restricted to a £120k mortgage when they could quite easily afford to purchase somewhere far more expensive? The state poke their nose in enough as it is.

    But do agree the past decade has seen things really get out of hand, just dont like this max 3x single income thing, individual circumstances must be taken into consideration.

    For example paying £20k more (Borrowing) but living 20miles nearer to work, over 10 years that saving in transport costs alone will offset the higher monthly payments.

  5. I would not be so sure about this. Wage levels in the UK compared to Europe have appeared uncompetitive for a number of years. The fall of sterling has helped but I am not sure that the UK wages can substantailly rise without a does of inflation.

    Globally I feel we will get wage inflation, commodity prices will be increasing and then we move into the next phase of higher prices higher wages.

    Personally where I work we are now making annual savings of £60m just by reviewing our procedures, reducing waste and looking into areas we previously have not.

    These are savings that are here to stay, even when the market recovers.

    If the company makes better profit it will translate into better wages eventually.

  6. It may be worth a few of you going back over some of their earlier predications, houses to fall 14% during 2008, followed by a further 10% during 2009 before stabalising in 2010.

    2008 - Uk may fall into recession early next year but only for a very short time before climbing back to 1% growth early 2010.

    In all fairness they are one of the more accurate predictors out there, not always on the money but pretty close whichever way you slice it.

    The end result is prices are unlikely on average to fall any further than 25% before climbing back to 2007 levels around 2014, its going to be a bumpy ride of ups and downs like we have seen this year.

    Eventually employment will pick up as we exit recession and over the next 5 years we will all be earning a higher wage than we do today.

  7. Its a tricky one:

    My uncle now retired is a comfortable middle classer, good pension, home owner, 2 cruises per year, nice car, nice home etc etc.

    Never ever bought anything unless he was sure he could pay for, no credit cards, no loans.

    But he now gets a free tv licence, free home insulation, free bus pass plus a few other bits and pieces.

    Now one part of me thinks, yes he has worked hard all his life (Work from the age of 16 till he finally retired at the age of 62) and put alot into the system, never had to claim social funding and even now has used the NHS very little (The way he would like it to remain).

    So should he get these freebies? He does'nt need them thats for sure, but he has given more to the system than he has taken out.

    The problem is the more they cut back on these benefits the more it seems pointless working, the time you add up child care, fuel to travel to work and then get stung with everything you buy now and in later life we will end up with a country of more and more bums, so who will then pay for these freebies for the poorer.

    The divide between rich and poor is getting wider and wider.

  8. Not so fast Daddy!!!

    I am prepared to accept that we may enter a break-up boom - but am not prepared to yet accept we have entered one yet.

    My question is how can you tell when you have entered one - all good and well pointing to assett prices going up but that does not prove that its not just a bull trap - if you get my drift.

    When we hit or get very near the previous peak of 2007.

    Bull traps will not usually go back to those levels, only show signs.

    Another £16k (10%) and the Nationwide will be back to peak, quite scary really.

  9. Corus re lighting blast furnance

    10 months since it was originally mothballed, today a decision has been made to relight no4 Blast Furnace at Port Talbots giant steel works.

    This is a big decision, the costs involved in shutting down and restarting equipment on this scale are huge, Corus / Tata must have belief / data to suggest this recovery is more than a dead cat bounce.

    This follows news of production restarting at the Hot Strip mill in Llanwern and Blast Furnace 6 in Holland.

    Steel production is often a very good indicator of global economic conditions, this can only mean that demand for goods is increasing, be it cars , fridges , washing machines , construction.

    Steel giant Corus is to restart the No 4 blast furnace at its Port Talbot works in south Wales, 10 months after it was mothballed amid the recession.

    The company had already announced that it is restarting production at the Llanwern strip mill at nearby Newport, because of improving business.

    One expert called it a sign of growing confidence in manufacturing.

    The Port Talbot furnace was shut down last December, alongside one in Scunthorpe and in the Netherlands.

  10. I am also from Wales and things do feel very different to the 90s, however I said this would be the case.

    Many of the reasons have already been pointed out:

    2 income families, one loses job can still get by

    Children of a working age still living at home (Because of house prices, I know plenty of families where children working in good jobs early to mid 20s still living at home) helping towards household bills etc

    There is still alot of money out there in the system, the baby boomers happy to retire from work with a pension having sold their home for 2.5x its valuation 10 years earlier and downsized

    As above, alot of headline figures of job losses do not take into consideration voluntary redundancies

    Many families better off then this time last year, energy bills down , mortgage payments down , petrol down , offers in the shops

    Hardest hit the construction industry, many getting by doing work on the side and claiming benefits, not hard to find a tradesman cash in hand no questions asked these days

    Public sector not feeling the pain yet, massive employer especially in Wales

    Those in finance and other well paid jobs have been given a golden handshake, enough to see them through these darker times

    Credit cards, esp those with 0% rates will see you through the next 12mths, these days you can pay almost anything with a credit card, bit of breathing space

    Other sectors still doing well, Sainsburys recruiting , amazon recruiting , Tesco recruiting. May not be your perfect job but will see you through and keep you above water.

    Things are different, there are many more things that could be added..........Too many people looked to the past and expected the same. School boy error.

    I made my money on financial stocks back in March, as the saying goes when those are greedy be fearful and when those are fearful be greedy.

    Forgot to add:

    In Wales property prices have always been far lower than the rest of the UK until recent years, anyone who bought an average home in Wales before 2000 would of been looking at £50k tops.

    Silly amounts per month mortgage especially with rates so low, could pay that amount off on benefits

  11. I would of thought this would be the headlines at 1 o'clock but even 5 reports in and no mention of it.

    So if they are up or down its not always headlines or even close.

    So guys don't get cut up about it, BBC is only a VI when it suits your argument.

    Probably more downbeat today then anything, with talk of the recession far from over.........Unemployment to rise further etc

    There it is - Report 7 and lasted all of 16 secs. Case closed

  12. I can't help wondering if the total lack of credit last year meant that the fall last year was unnaturally steep, leading to a mini upward "correction" now that mortgages are more widely available. Gentler falls may resume in due course.

    The "life cycle of an asset bubble" chart shows a small bull trap before a catastrophic fall. I think this cycle will pan out differently, with any falls over 2010 much gentler than over 2008, but perhaps more persistant.

    I am with you on this, still think housing has further to fall and have always said 20-25% fall peak to trough is what we will get, but this will not bottom out completely until 2012.

    By year end we will have a fall of 8%, add to this gentler falls next year with the usual slight pick up in the spring and -6% (average -0.5% per month) next year is quite possible, with a similar situation in 2011, 2012.

    The question is? Will it be worth the wait........ Many of my friends think not and have re entered the market.

    1 was paying £750pm rent since 2005, bought last week for £205k (Down from £245k in 2006).

    With a decent deposit now paying £655pm over 16 years repayment mortgage fixed for 10 years

  13. Sales Volumes England and Wales May 2008 65,023

    Sales Volumes England and Wales May 2009 42,699

    Also the number of properties that sold for over £1M decreased from 453 to 242

    It works both ways, on the way down many were posting LR negative figures on even smaller transactions and that was acceptable.

    Suddenly this lower volume is not acceptable..........Talk about selective memory

  14. Full article here:

    Rents Rising

    It does make sense, those forced to rent out are now seeing a chance to sell and by the looks of it property is getting snapped up quite quickly due to low volume coming to market.

    This in turn gives those left renting out property a better position to raise the rent.

    I know that many property management companies have raised their fees considerably this year, with landlords passing on the rise to their tenants.

    The cost of renting a home is rising as "reluctant landlords" sell-up in the recovering housing market, various surveys have suggested.

    Rents in England and Wales rose by 0.5% in July compared with June - the fastest rate in a year, according to letting agent LSL Property Services.

  15. Its all about cycles, even though we hear calls of peak oil and energy crisis being around the corner I never have bought into it.

    The Oil and Gas industry is massive, worth trillions of dollars and at all levels of the political divide there is involvement.

    The best way to bump up any price is to say its getting less and less and demand more and more.

    Its worked with housing until funding was pulled, its worked with oil and gas until the same funding was pulled and now stories of over supply suddenly come out of the woodwork, they still need to sell this stuff and the only way is to drop prices, but there is a crisis we cant drop prices.

    Ahh its different now we have more reserves than we first thought so this justifies a reduction in prices, please please buy our oil and gas we can not store it any more, go on please.

  16. this is starting to reflect the spring and early summer's figures from Haliwide... so in a sense we've seen these figures already

    it's like watching a snake eat an egg!

    It does however mean that LR figures will show positive well into Autumn early Winter putting more positive spin in the Winter months

  17. Some facts:

    Property is selling

    Mortgages getting easier to obtain

    Prices are rising

    IR currently 0.5%

    Average mortgage rate for new mortgage across all products 4.1% (Long term fixed being the highest)

    LTV average 65%

    Over the last 18mths there has been a dramatic fall in the number of mortgage products available and LTV have fallen quite a bit from April 2007 where the average was 95%.

    Interest only products have all but disappeared from the market also

    So I took some figures and done some mortgage calculations

    All based on £100k over 25 years

    2007 - Fixed rate mortgage @ 5% = £591pm or £416pm IO

    2008 - Tracker @ 4% = £533pm or £333pm IO

    2009 - Best rate tracker mortgage @ 3% = £478pm or £250pm IO (If available)

    For those existing homeowners on an existing tracker 1% above base rate could see a rate as low as 1.5% = £402pm or £105pm IO.

    However many products have a clause that the rate only ever goes as low as 3% no matter what the BOE base rate.

    So those who are saying that IR are having a massive effect on the housing market then just look at how much of an effect an IR of even 1.5% has over 5% on a repayment mortgage £189 per month or just over £2k per annum saved, not that great a saving when you look at the headline BOE 0.5% IR, and that is only if your mortgage rate was to fall as low as 1.5%, many don't.

    Its a bit different with IO mortgages but for the vast majority of repayment mortgages they would of seen very little difference in monthly repayments even though we have historically low IR.

    So the next question how long will it take for IR to get back up to 5%, many commentators are saying 2011 when they see a more clear path to recovery, some even point beyond 2012.

    I personally think IR will remain below 2% until well after the next GE, rising steadily in 2011 to reach 5% by 2012.

    By this time on paper the crisis of 2007 will be 5 years behind us, unemployment have fallen and companies getting back into profit.

    In other words the government will have starved off the worst of the economic fallout and in a position to increase rates and even then as pointed out in the calculations above we are only going to be back to the rates being charged in 2007 for the majority.

    What if rates rise above 7%, this would add £120 monthly to a 5% repayment fixed deal that was taken out in 2007, again for most affordable especially if by 2012 the economic climate has improved considerably and job security that much better.

    Who knows we may all be earning far more by then

  18. A guy at work with me was telling on Friday of the rates he has been offered on a £10k unsecured loan, he assures me he has no CCJs etc and over the last 5 years has had 2 small loans, both repaid in full with no missed payments.

    Best rate on the high street 8.9%, and theres me with £10k sitting in the accounts of one of the banks he mentioned earning a measly 1.7%, Which I am told is a good high street instant access rate in the current climate by my FA.

    This is modern day robbery, when you sit down and look at what a financial institute is giving you and what it is charging others, they have never been in such a good position to beef up their reserve whilst at the same time ripping off all those taxpayers that have albeit unwillingly supported them over the past 18mths.

    Will the day ever come when we do get something back from the banks, at this rate they will be back turning over the profits in no time at all.

    I am very tempted to lend this money directly to this guy at an agreed rate for both of us to benefit, but there are risks and do I really want the hassle, the legality etc.

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